Re-thinking the value of farm plates for pickup trucks

Your pickup is licensed to farm, but are the benefits worth the price to plate? 

“We recommend that our members – and all farmers – really look at what they use their truck for,” said Ian Nokes, Ontario Federation of Agriculture (OFA) transportation policy analyst.

If the trucks are more for personal use than farm functions, he said it might be wise to transfer them to a passenger vehicle registry and save the $157 farm plate cost.

“When there was very little difference between farm plated vehicles and passenger vehicle validation costs, farmers just went for the slam dunk,” said Nokes, because the benefits outweighed the cost.

Why it matters: Farmers are advised to take a good look at how they use their pickup trucks on-farm because they could reduce or eliminate vehicle license fees.

In February, the Ontario government announced it would eliminate passenger vehicle and light-duty truck licence plate fees and issue refunds for 2020 and 2021. Commercial or farm-plated vehicles were not included in that change. 

Light-duty pickups under 3,000 kilograms are exempt, but those same trucks with farm plates are automatically placed in the next weight class (3,001-3,500 kg) to qualify for the commercial plate. 

“If I’m using it (a truck) to ship inputs to my farm or inputs between my farm and different lots of acreage, or production to market, that’s all commercial activity,” said Nokes.

“I can either do it myself or hire a commercial driver. It’s a commercial activity, so I need commercial plates.” 

Farm plate costs are lower than those for a traditional commercial plate, he said, allowing owners or farm staff with a Class G driver’s license to drive a D truck (vehicles over 11,000 kg) while providing limited dangerous goods exemptions for transportation. And the producer could write off the value of the vehicle at tax time. 

“Farm-plated trucks can transport farm production equipment supplies year-round but only during September through November can you be paid to transport farm products for another farmer,” he said. “The remaining months, you can do that for them, but you can’t charge them any money.”

Farmers are also finding it a challenge to update validation stickers and work out retro-fees for the March 2020 to March 2022 period. 

Farm-plated vehicles don’t keep e-logs of hours like conventional commercial vehicles do. Instead, producers tell Service Ontario how often the vehicle is driven – usually the four months during harvest – to receive a pro-rated fee.

“Even if I have a vehicle that I didn’t drive at all, I still have to go on the deferred payment plan,” said Nokes. “That’s my opportunity to tell them if I drove the vehicle all the time, every month or the amount I always drive it, which was maybe six months, or if I didn’t drive it at all.”

Ontario’s heavy vehicle deferred payment plan online allows producers to inform Service Ontario how often they used their farm vehicles between March 2020 and March 2022. It then calculates the back fees owed.

Unlike passenger vehicles, farmers paid their 2022 farm plate license renewals by Dec. 31, 2021 – before the announcement regarding cancelled personal license fees and back-fee collection, said Nokes. 

In March, farmers received letters indicating the amount in back fees owed for 2020 and 2021, and a secondary letter followed with directions to access a web portal to pay or set up deferral payments.

Service Ontario has a weight chart that outlines fees for each vehicle class, and while farm plates are cheaper than commercial plates, some can cost several thousand dollars a year. 

“You can find out that, ‘Gee, I suddenly owe $6,000 for the last two years and this year’,” said Nokes.

Producers found the system confusing, and because they believed they’d paid already, many initially thought the letter was a scam.  

The OFA reassured members that the process was legitimate. As a result, there was an uptick in producers accessing the site to pay the fees in a lump sum or agree on quarterly, semi-annual or annual instalments over 24 months ending Dec. 31, 2023.

Producers can make the payments after that deadline, said Nokes, but interest is applied to the balance.

Nokes said paying retro-fees is one aspect, but farmers also need to register personal vehicles with Service Ontario to be legal even without the validation payment requirement.