The tax levy in Montana for state tax purposes is limited to three and one-half mills. It used to be two mills; now it is three and one-half, and it is not sufficient to meet all state expenses. They have bonded the state to some extent five million dollars. and the interest on bonds and indebtedness is growing, and the state tax levy is not keeping up with the running expenses of the government, to meet the interest payments. They are somewhat in the same condition that they are down in Ohio under the Smith law, with which I think a number of you are familiar. That is the situation out there now.

They have a constitutional amendment pending, to be voted on at the special election in December, authorizing the appointment of a tax commission-they called it the state board of equalization but it is practically a tax commission-with the same duties that tax commissions generally possess; and it looks as though that would be endorsed by the people at their special election, so that the present state board of equalization, the members of which are elected for other purposes, will be relieved of the duty now imposed upon them.

I will say that I have found it rather difficult to work with a board of that kind. It is not like sitting down with two other men and going over the returns of railroads and making the state assessment of counties and coming to a conclusion. I have been able to get them together a few times, but they have dispersed without taking action too many times.

I am glad to meet with you again. I want to say that the report that went out last year that I was sick and died was not exactly true. I was not quite well, and I went back to Wisconsin, and in the salubrious climate of Wisconsin I picked up immediately, and this year I have spent out in Montana, and I have taken care of myself in that altitude better than I used to do here, and I am glad to be here again.

CHAIRMAN LESER: I am sure we are glad the report of Mr. Haugen's death was exaggerated. We now adjourn to two o'clock this afternoon.

(Adjournment)

THIRD SESSION

TUESDAY AFTERNOON, SEPTEMBER 19

CHAIRMAN LORD: We are now a half-hour over the assembling time, and I think perhaps we had better get to work. The secretary has a couple of announcements to make.

(Secretary makes announcements)

CHAIRMAN LORD: For more than a century the United States and the Dominion of Canada have presented an object lesson to the world showing how two great people may get along peacefully side by side and live as good neighbors should, and it is a very gratifying thing indeed to be able to say that five of the great provinces of Canada are represented at this meeting. The oldest, or one of the oldest provinces in Canada represented here is the Province of Ontario, and it is not only one of the oldest but is also the most thickly populated province in the Dominion, and 1 have the pleasure of requesting Mr. J. T. White, the solicitor to the treasury of Ontario, to preside at the meeting this afternoon—Mr. White.

(J. T. WHITE presiding as temporary chairman)

CHAIRMAN WHITE: Mr. President and gentlemen, I am very thankful for the courtesy shown me and the Canadian delegates this afternoon in offering me the chair at this meeting. For the benefit of those who do not know where the Province of Ontario is, I will explain that it lies along that boundary to which the president just referred, which stands as a monument to the peace-loving inclination of the Anglo-Saxon race. That boundary extends between the United States of America, the greatest republic the world has ever seen, and that commonwealth of nations known as the British Empire, and the Province of Ontario occupies no mean part of that boundary. We extend from the New England states on the east to the State of Minnesota on the west; and I want to say further as regards the courtesy shown Canada at this meeting, that your courtesy extends not only in matters of this kind, but 1 have found it extended to monetary matters.

For some four years past, in coming over here to attend your conventions, I found that my hundred or two hundred dollars t

started with was worth probably ninety, or one hundred and eighty. Your American dollar has very kindly come down, considering the weakened condition of the Canadian dollar, owing to our tremendous war exertion. When we started to convalesce and started creeping up again to parity with the American dollar, we found the American dollar came down and met us half way, and that is the reason we are par again.

Now, gentlemen, before Judge Hough starts asking me any more embarrassing questions, as he did last night, I want to remind you of a little story about a Scotch boy. The judge was questioning him regarding a charge against his father of fighting in public. He said, "now Donald, just tell us all you know about this fight." So Donald said, "well, Judge, you ken Aberdeen Street?" Yes, lad, I know Aberdeen Street very well." "You ken as you go along Aberdeen Street and get to High Street that McDonald's saloon is on the corner?" "I ken me McDonald's place very well." "You ken you then go up High Street until you come to the old pump?" "I know the pump very well, Donald." Said Donald, "Judge, you ken to pump that, because you can no pump me." Therefore, I am going to leave the program to the gentlemen on it this afternoon, and I am calling on Professor MacGibbon, University of Alberta, to read a paper which he has prepared for this meeting.

RECENT ATTEMPTS OF ALBERTA CITIES TO SECURE A WIDER TAXATION BASE

D. A. MAC GIBBON
University of Alberta

Professor Haig's report in 1915 and Professor A. B. Clark's in 1920 upon taxation in Western Canada make it unnecessary to sketch in the background, except in the barest outline. There are six cities within the province, but two of these are scarcely goodsized towns. Each city operates under its individual charter. There is no general cities act. In the main, however, no marked differences appear between the individual development and the problems of these cities. In fact, this has become so clearly recognized that I understand a general cities act is being prepared for submission to the next session of the legislature.

Certain general considerations must first be noted as they throw light upon the present situation. First, the federal government's extensive recourse to direct taxation has greatly narrowed the field open to the provincial governments. This has made the latter unwilling to grant wide taxing powers to the cities for fear that grants of power might be in the way of the legislature's own schemes of taxation.

In the second place the last few years have not been years of growth and progress but years of retrenchment and depression. Population has either stood still or increased very slowly. The roaring boom of pre-war days has given place to post-war lassitude. Land values have fallen greatly; and high costs have discouraged building activity.

Finally, the situation was markedly aggravated, not only by the after effects of wild speculation, but also by the general swing to a narrowed basis for taxation. As is well known, this movement was closely connected with the theory of the single tax upon land values.

In 1915 it was still possible to study Alberta cities as examples of the trend towards single tax. But in 1920 a minister of the Crown for the province could refer without political annihilation to single tax as the "curse of Alberta." Further a special report on assessment and taxation prepared last year and signed by the mayor and city commissioner of Edmonton dubbed the single tax, a complete failure" and pointed out that-"the nearer a city (in Western Canada) went towards the adoption of the single tax, the greater is its financial difficulties today, and its arrears of taxes are proportionately higher than in other cities." In 1915. 88% of the total revenue of Edmonton was derived from land; in 1921, 54% while 16% came from a tax on buildings assessed at 60% of their value. Alluding to these figures the city commissioners in their annual report observed "the sooner the difference between these limits is lessened the better it will be for the city's financial position." The change has been more marked in Edmonton than in Calgary, which never went so far in the direction of single tax. There the single tax idea reached its turning point in 1915. In Lethbridge the turn came in 1917. Substantially the swing away has been sharp and is general to all the cities of the province.

The circumstances under which such a thorough-going reversal of policy has taken place are as follows: real estate speculation led to the continual addition of new subdivisions to the areas of the various cities and increased their extent to practically double that actually required by business and population. Moreover, attempts, made with more or less success, by interested speculators to especially develop certain portions of each city led to a very scattered and irregular growth of the communities as a whole. The inevitable results followed: heavy charges for streets, sidewalks and public utilities; city debts increased very rapidly; city utilities became more expensive to operate; a comparatively large revenue became necessary.

But as the boom flattened out, tax collections became very difficult. Arrears mounted up. Cities were forced to acquire a great deal of land in lieu of taxes, for the land in many instances was

not worth as much as the taxes that had accrued against it. For instance, up to and including the 1920 tax sale the city of Edmonton bought in property assessed at $8,709,937, upon which tax arrears amounted to $3,961,291. Eventually the city was expected to recoup itself, but in the meantime city lots were a drug on the market and the city treasury went bare.

Under these circumstances it became quite obvious that a wider basis of taxation must be obtained. With the disappearance of the assessed value of land it was necessary to look for other sources of revenue.

Concurrently with the search for other sources of revenue a movement to change the conditions and reduce the valuations upon which land was taxed occurred. As it is being worked out in Edmonton the plan has been to classify land as suburban and intraurban. The suburban classification includes nearly 12,000 acres. The owners of property within this classification, provided the same is not subdivided, may apply to the public utilities commission for a reduction in the amount of the assessment and the board may direct that such property shall be assessed upon a certain basis and that such land be taxed at a lesser rate than adopted generally throughout the city." Applications covering 1200 acres have been approved to date. The new assessed value of the land varies from $100 to $150 per acre according to its agricultural value, and from $10 to $20 per acre for land included in ravines. The rate of taxation on suburban land has been placed at twenty mills, or about one-half the current city rate. It has not been considered feasible to reduce the city's limits, as the city is the owner of a large block of land within the suburban area, upon which, if it were excluded from the area of the city, taxes would have to be paid to the adjoining municipality.

The valuation of intra-urban property has also been lowered. In all, the reduction in the assessment from 1913 to 1921 in Edmonton has been from $188 m. to $61 m., or a reduction of 67%. It is conceded that it is still far higher than it should be. The reduction in the assessed value of land is not particular to Edmonton, but is common to all Alberta cities. In 1917 the total municipal assessment for the six cities was $226 m.; by 1921 this had been reduced to $129 m., a reduction of approximately 43% in five years. This phase of the movement may be briefly summarized as an attempt to assess land at its actual going value and to levy a tax theron that will actually be paid. The mill rate, however, continues to be considered very high, the average for the four larger cities being 40.5 mills, varying from 34 mills for Medicine Hat to 46.975 mills for Calgary (1921). The land owner is still bearing a very heavy share of the burden of taxation, and the opinion-is expressed that "the tenant occupant is getting off very lightly."