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Robert Murray Haig.

The exemption of improvements from taxation in Canada and the United States [electronic resource] : a report prepared for the Committee on Taxation of the City of New York online

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It will be noticed that after 1904 when the value of buildings was
stricken from the assessment roll, the assessment of business and income
doubled and the assessment of land more than doubled. So, in spite of the
loss in building value, the tax base was greatly increased. After 1910, when
the income tax was abandoned, the tax base showed an enormous increase.
Again, after 1911, when the business tax was eliminated, another large
increase is evident in the tax base. The increase in 1913 was due in large
part to an extension of the city limits which had been made in 1908 when
approximately 4,000 acres were added, with the understanding that they
should not be subject to taxation until 1913. Moreover, in 1913 the city
limits were even further extended to include a district of a thousand acres.
The increase in the tax base in 1912 was of course due in large part to the
amalgamation with Strathcona.(2)

It will be noticed that in 1906 the assessment of land was increased from
$5,314,405 to $15,268,347. Late in 1905 there began a period of great busi-
ness activity which had a very favorable effect upon land values; but the
1906 assessment is said to have approached very closely the full selling value

(1) Sec. 323.

(2) The area of Edmonton in 1905 was 5,000 acres; in 1908 it was increased to
9,000; in 1912 to 15,000 acres; in 1913 to 27,000 acres; and in 1914 to 27,640.



93

of the land. Following 1906 the assessed values, according to the testimony
of the assessor, were for a number of years from ten per cent, to fifteen
per cent, below cash values. In 1912 the assessments on the Edmonton
side of the river were once more near cash value, but on the Strathcona
side of the river they were probably about twenty-five per cent, below that
standard. In 1913 the assessments were equalized, the Strathcona figures
being brought up to the one hundred per cent, basis. The legal rate of
assessment all through this period has been one hundred per cent.

In 1914 the assessment committee of the council appointed a commis-
sion of real estate men to assist the city assessor in determining land values
for taxation. The universal testimony in Edmonton is that the assessments
which resulted in 1914 were " optimistic." Real estate men and bankers, as
well as the city officials themselves, frankly admit that the assessment has
" gone a bit beyond actual values." This is not because the assessment was
raised to any considerable extent in 1914, but because there has been some
decrease in the selling value of land.

In 1913 there were approximately 190 appeals from the figures arrived
at by the assessor. In 1914 there were 211 appeals.

The legal limitation upon the tax rate in Edmonton is twenty mills,
" exclusive of debenture rates, school rates, and local improvement rates." (1)
Moreover, a special rate of not more than three-fourths of a mill may be
levied for parks. (2) It will be noticed from the table which follows that
a decrease of one mill was made in the Protestant tax rate in 1905, the year
after value of buildings was eliminated from the tax base, while the Catholic
rate increased the same amount; that a substantial decrease was made in
1911 after the income tax was abolished; and that the rate was still further
decreased in 1912 after the business tax was done away with. An increase
in the millage rate was found necessary in 1913 because of the increase in
expenditures and still further increases were made in 1914. If error would
be avoided, care should be taken to associate the tax rates with the propor-
tion of real value represented by the assessment figures.

TAX RATES
(Mills)









School.


Total




















General.


Debenture.


Libraries. Protestant.


Catholic.


Protestant.


Catholic.


1892


8.00








8.00


8.00


1893


7.50


1.33^


2.50


5.00


11.33^


13.831^


1894


10.00


2.05


4.00


5.20


16.05


17.25


1895


6.00


2.33^


4.50


5.20


12.83^


13.53^


1896


5.01


3.29


6.00


5.33^


14.30


13.63H


1897


3.00


5.85


7.00


7.00


15.85


15.85


1898


9.40


3.55


4.05


7.00


17.00


19.95



(1) Sec. 353.

(2) Sec. 359.



94





General.


Debenture. Librar


School.

A.


Total






ies. Protestant.


Catholic.


Protestant.


Catholic.


1899


6.60


^.ZZVi


5.60


7.70


15.531^


17.63^


1900


9.00


5.25


5.25


10.75


19.50


25.00


1901


9.50


4.50


7.50


8.50


21.50


22.50


1902


8.00


4.00


7.50


8.50


19.50


20.50


1903


8.00


2.00


6.50


5.00


16.50


15.00


1904


8.25


2.25


6.50


4.50


17.00


15.00


1905


10.00


2.00


4.00


4.00


16.00


16.00


1906


7.25


.75


2.50


2.50


10.50


10.50


1907


8.00


2.50


2.83^


2.83^


13.331^


13.33H


1908


6.20


4.60


3.70


3.70


14.50


14.50


1909


9.98


4.08


3.44


3.44


17.50


17.50


1910


8.90


3.90


4.20


4.20


17.00


17.00


1911


6.90


3.60


3.20


3.20


13.70


13.70


1912


6.74


3.06


2.20


2.20


12.00


12.00


1913


8.55


3.75 • .5(


) 3.20


3.20


16.00


16.00


1914


7.71


5.17 .3^


\ 4.28


4.28


17.50


17.50



From the table which follows the great increase in the sums raised from
the tax on land are clearly seen. The particularly heavy increase in 1913
was occasioned by the necessity of paying for a number of items which were
inadequately provided for by the levy of 1912.



1892,
1893,
1894,
1895,
1896,
1897,
1898,
1899,
1900.
1901.
1902,
1903,



TOTAL TAXES LEVIED

$6,200 07 1904 $75,695.52

13,877 72 1905 115,637 90

18,982 73 1906 192,548 89

18,034 72 1907 328,442 39

14,582 27 1908 375,377 03

15,913 74 1909 482,506 Z7

20,696 27 1910 563,494 88

21,588 84 1911 686,571 84

28,216 19 1912 1,530,205 96

33,389 11 1913 3,471,444 59

37,252 58 1914 3,769,970 36

54,824 70



The last three years have seen a steady increase in the amount of taxes
uncollected. At the end of 1911, $208,174.60 was outstanding. ( 1 ) In 1912
this sum amounted to $447,506.16(2), and in 1913 to $1,082,745.59.(3) On
December 31, 1913, some taxes were still unpaid which had been levied in
1905. Edmonton has not had a tax sale since it has been a city. Until
recently unpaid taxes have not been a problem, but the city is now face to
face with the necessity of selling lands to make good its revenues. This is
good evidence that the system has been pressing more heavily upon the



(1) Financial Reports, 1911, p. 31.

(2) Ibid.. 1912, p. ZZ.

(3) Ihid., 1913, p. SZ. The collection of taxes usually begins on September 1st. A
discount varying from five per cent, to ten per cent, in different years is given if pay-
ment is made before November 1st. During November a smaller discount is given.
Taxes are accepted at par during December and after January 1st a penalty of five
per cent, is added. An additional five per cent, is imposed if the taxes still remain
unpaid after July 1st.



9S

people of late than was formerly the case.(l) The increase in appeals
against assessments is also indicative of the same condition.

The man of small income is unable to get a lot in Edmonton lying within
the area served by sewers, light, and water for less than $1,000. At the 1913
rate the taxes on his property would amount to $16.00. This does not take
into consideration the charges to which he is subject for local improvements,
which, as has been seen, amount to more than the charge for taxes in cases
where the lots are fully improved. (2)

DATA FOR JUDGING THE EFFECTS OF THE SYSTEM

In connection with the data which follow it should be remembered that
in 1912 the city boundaries were extended to include Strathcona. An effort
was made to secure corresponding data for Strathcona, where improvements
were exempted in 1907 ; but this was not available in all cases.

Building Operations

The building statistics for Edmonton include the permits issued for
repairs and alterations and for all new constructive projects of a value
exceeding one hundred dollars. The moving permits are not included. All
cancellations have been eliminated. The tables which follow show the
number and value of building permits by months from 1907 to date and the
types of buildings erected for 1913 and 1914. No figures for Strathcona
are included.

BUILDING OPERATIONS

No. of
Permits. Value.



1907



Jan 32 $127,135 00

Feb 65 373,790 00

Mar 198 131,547 00

Apr 139 316,938 00

May 142 415,250 00

June 93 425,275 00

July 73 155,775 00

Aug 62 88,695 00

Sept 47 43,300 00

Oct 73 77,125 00

Nov 62 84,925 00

Dec 24 40,455 00



1,010 $2,280,210 00



(1) The question of tax arrears has been rendered more acute by the war. The
following is an excerpt from a letter written by Thomas Walker, city assessor, under
the date of March 16, 1915 :

There is nothing particular to report since July, except, of course, that the
war has caused a tremendous shake-up in the speculative values of real estate.
Little more than half of the 1914 taxes have been paid, and the amount of the
arrears is now somewhat alarming.

(2) Cf. supra, p. 90.



96



No. of
Permits. Value.



1908



Jan 27 $18,915 00

Feb 31 1,281,415 00

Mar 51 57,020 00

Apr 87 197,453 00

May 79 77,362 00

June 63 97,645 00

July 63 368,765 00

Aug 70 103,352 00

Sept 75 123,425 00

Oct 75 98,735 00

Nov. yj 80,505 00

Dec 35 45,255 00



1909



1910



1911



693 $2,549,847 00



Jan $20,240 00

Feb 112,400 00

Mar 179,395 00

Apr 210,890 00

May 368,005 00

June 201,290 00

July 274,355 00

Aug 99,707 00

Sept 505,19900

Oct 83,535 00

Nov 63,365 00

Dec 9,785 00



■Jan 32 $44,090 00

Feb 38 29,030 00

Mar 86 264,435 00

Apr 113 252,196 00

May 96 231,055 00

June 92 233,670 00

July 126 460,066 00

Aug 108 133,900 00

Sept 138 169,863 00

Oct 121 146,874 00

Nov 72 52,606 00

Dec 31 141,321 00



Jan 23 $38,405 00

Feb 55 83.825 00

Mar 130 276.825 00

Apr 174 359.027 00

May 236 504.420 00

June 182 357,929 00

July 159 474,909 00

Aug 207 611,440 00

Sept 216 369,970 00

Oct 225 389,650 00

Nov 89 131,125 00

Dec 61 74,735 00



fjan 39 $83,600 00

I Feb 119 212.850 00

I Mar 301 899,972 00

Apr 523 2,002.670 00

I May 504 1.772.535 00

J June 469 2,567.235 00

1912 I July 354 1,412.590 00

Aug 343 1,214.275 00

Sept 322 2,023.675 00

I Oct 323 821,950 00

1 Nov 228 754,935 00

t Dec 129 680,532 00



2,128,166 00



1,053 2,159,106 00



1,757 3,672,260 00



3,654 14,446,819 00



97



No. of
Permits.



Value.



fjan.
I Feb.
I Mar
I Apr.
May



91
137
315
473

576



1913



J June 343



July
I Aug.

Sept.
1 Oct.
I Nov.
LDec.

Jan.

Feb.

Mar.

Apr.

May



275
237
318
214
123
78



1914



1Z

60

221

318

313

jui^ ....!!!!!!!!!!!!!!!!!!!]!! 192

248

82

52

82

32

5



3,180



July

Aug.

Sept.

Oct.

Nov.

Dec.



$241,815 00

250.485 00

746,675 00

2,080,380 00

1,597,400 00

1,428,650 00

776,150 00

393,470 00

746,150 00

546,925 00

286,950 00

147,400 00

$118,250 00

107,775 00

383,350 00

750,922 00

1,461,800 00

740,750 00

733,630 00

211,050 00

40,600 00

323,200 00

39,200 00

2,750 00



9,242,450 00









1,678





4,913,277 00




TYPES


OF BUILDINGS


CONSTRUCTED


IN


1913 AND 1914


Number.








Value.


1913.


1914.


r~


1913. 1914.



10



14

i4
1
1
1
1
2
1,550

'4
2
1

72
2



6 Apartment Houses

1 Armory

1 Bank

1 Bakery

1 Blacksmith's Shop

Basements

1 Cattle Barn

7 Churches

College

Convent

Creamery and Dairy

1 Depots

Dormitories

568 Dwellings

1 Engine Room

1 Factories

2 Fire Halls and Police Stations.
1 Freight Sheds

43 Garages

Garages and Rooms

1 Gravel Plant

1 Green House

1 Hospitals

3 Hotels (or Additions)

Laundry

1 Machine Shop

1 Market Building



$228,000 00



150,000 00



30,800 00

254,806 "66

40,000 00

20,000 00

6,000 00

30,000 00

177,000 00

3,268,310 00



$234,000 00

280,000 00

2,200 00

5,500 00

800 00



47,000 00
50,000 00
10,000 00
110,425 00
22,400 00



345,000 00

145,000 00

1,000 00



2,800 00
35,900 00



3,000 00

i,854,i66'66

10,000 00
68,000 00
24,000 00
2,000 00
76,050 00



5,000 00

2,500 00

10,000 00

40,000 00

10,666' 66
55,000 00



98



Number. Value.



1913.


1914.


1




9


2


2






2


1


1


1


1


1




8


1




1


15


5




1


1,046


585


188


49


89


32


Z1


19


34


16


1






1




2


30


15


32


2


1





1913. 1914.



Xsoo'oo


3,566 '66


8.000 00


6,725 00


5,666 '66


20,000 00


257,000 00


2,600 00


198,202 00


49.150 00


63.550 00


370,400 00


582,800 00


"3,666" 66


445,000 00


171,200 00


4,500 00



Nurses' Home 60,000 00

Offices 41,700 00

Packing Plant and Additions 25,000 00

Pavilions

Power Houses 8,000 00

Public Buildings 500,000 00

Round House 20,000 00

Rooming Houses 72,500 00

Saw Mill

Schools and School Additions 676,000 00

Sheep Shed

Small Buildings and Alterations 505,120 00

Stables 101,580 00

Stores 270,075 00

Stores and Apartments 343,000 00

Stores and Offices 1,055,500 00

Theatre 20,000 00

Undertaker's Parlor

University Buildings

Warehouses 565,440 00

Workshops 30.800 00

Y. M. C. A 12,000 00

3,180 1,678 $9,242,450 00 $4,913,277 00

In 1911 and 1912, when steps were taken toward the land tax, the
building statistics show remarkable increases.

The movement toward the construction of apartments has not pro-
ceeded far. The building inspector estimates that there are now twenty-
five apartment buildings in the city, not counting a considerable number of
buildings whose upper floors are used for living purposes. The number
is expected to increase rapidly, however.

The following sections limiting the heights of buildings are in force :(1)

Section 30

1. No non-fireproof building or structure hereafter erected shall
exceed fifty-five feet in height, nor the heights specified for non-
fireproof buildings of the several respective classes mentioned in Sec-
tion 106 of this By-law.

2. No building or structure herein erected, except it meets the
requirements of Section 106 of this By-law, shall exceed fifty-five
feet in height, or if to be used above the ground floor as factories,
warehouses or stores for the storage of merchandise, shall it exceed
one hundred feet in height.

Section 106
6. No building shall exceed ten stories in height above the street



level.



(1) By-Law, no. 417, first edition, 1912.



99

Credit Conditions

The sources of loanable funds in Edmonton are the same as those in
other western Canadian cities. It is estimated that the Hfe insurance com-
panies and the mortgage and loan companies divide between them eighty
per cent, of the business, probably somewhat more than half of this share
coming from the life insurance companies. Approximately twenty per cent,
of the funds come from private sources. No loans are made upon vacant
land unless that land is within half a mile of the centre of the city. Even
then the loan is restricted to one-third of a conservative valuation. Loans
upon improved property do not exceed fifty per cent, of a conservative
valuation of the land and the building. There is no disposition among
bankers and real-estate men to connect the tax system with the credit con-
ditions. The sources of loanable funds seem not to have been afifected by
the tax system.

Rents

As in other cities in the region, rents in Edmonton were, until recently,
extremely high. It was often almost impossible to secure housing accommo-
d.ations at any price and many people were forced to live in tents or tem-
porary shacks until houses could be built. Lately, however, the supply of
buildings has increased, with the result that rents have fallen. No effort is
made in Edmonton to trace a causal connection between the tax system and
the high rents which existed a few years ago or the relatively low rents
which exist to-dav.

Congestion

The building inspector estimates that there are 15,000 buildings in
Edmonton and that about one building in each fifteen covers more than one
lot. As there are approximately 75,000 lots in the town, this seems
to indicate that only about twenty-one per cent, of the lots are built upon.
The standard lot, it will be recalled, has a frontage of thirty-three feet
and the average house, according to the inspector's statement, covers a plot
twenty-four by twenty-four feet. The building regulations require that the
house be placed three feet from the adjoining property line. From these
figures it will be seen that the houses in Edmonton are not so crowded as
in several other western cities.

A map prepared by the municipal officials divides the city into half-
mile zones and calculates the population per acre in each zone. From this
analysis the following results were obtained:

Inhabitants
Per Acre.

1.92

9

45

157



1st zone


Inhabitants
Per Acre.
20


5th zone


2nd zone


11.2


6th zone


3rd zone

4th zone


5.35

3.95


7th zone
8th zone



100

In 1914 the population was 72,516 and the area 27,640 acres. This
means a density of 2.6 persons per acre. It will be seen that the problem of
congestion is not at present a pressing one in Edmonton.

Home Ownership

In order to get an estimate of the number of persons who own their
homes the opinions of the building inspector and of the official in charge
of the municipal census were sought. The building inspector estimated
that between sixty and sixty-five per cent, of the citizens of Edmonton
live in their own houses. The estimate of the census taken was that three-
fifths of the people were home owners. The two estimates are in substantial
agreement. The Voters' List for 1912 contained approximately 18,000
names, 12,500 of which were property owners. 2,731 of the property owners
were non-residents, however, so that these figures confirm the estimates
of the city officials.

N on-Resident Ownership

The assessor estimates that approximately one-half of the lots in the
city are owned by non-residents. But this statement is made on the assump-
tion that the Hudson's Bay Company be considered a non-resident. Except
for the sale of part of the land of the Hudson's Bay Company in 1912,
there is little evidence of any tendency on the part of non-residents to
relinquish their holdings.

Speculation

In addition to the statements made in the preceding paragraph, which
are of interest in this connection, it may be said that according to the
estimate of the assistant assessor approximately one householder in every
six in Edmonton owns an extra lot which he has bought for speculative
purposes. The testimony of the citizens is practically unanimous in asserting
that the tax system has not affected speculative activities to any considerable
degree.

Employment

The unemployment problem is acute in Edmonton. The extreme
activity of building operations formerly present and the force of high
prices for common labor resulted in attracting many persons to the city who,
in a period of depression, cannot gain employment. There is a municipal
employment agency. In July there were on file 1,400 applications for posi-
tions. During the first eighteen days of July the agency was able to supply
work for 400 people. It is claimed by some citizens that most persons who
are out of work are not really residents of the town but persons who drift
from place to place in search of a job. The records of the employment
office, however, show that seventy per cent, of the applications are from
residents of thfe city.



101



1901.
1902.
1903.
1904.
1905.
1906.
1907.
1908.
1909.
1910.
1911.



General Prosperity
POPULATION (a)

Edmonton.
2,626(b)



5,445



14,000
18,000
20,000
23,000
27,000
30,000 (c)



1912.
1913.
1914.



Strathcona.
l,550(b)



S,579(b)

Greater

Edmonton (d).

53,611

67,243

72,516



(a) Except where otherwise noted the figures are those of the municipal census.

(b) Dominion census.

(c) The population, according to the Dominion census, was 24,900.

(d) Strathcona included.

SCHOOL ENROLLMENT



Public Schools.



Edmonton (a), Strathcona (c).



Catholic
Schools (b).



1905
1906
1907
1908
1909
1910
1911
1912
1913



1,224

1,538

1,850

2,164

2,430

3,021

4,120(d)

7,229



652
670
752
925
1,392



299
284
454
524
599
691
826
956
1,414



(a) The figures for 1906 are for the month of November. For the other years
they are for the month of October.

(b) The figures are for December 31st of each year.

(c) The figures for 1908 are for September; all others for October.

(d) Does not include the enrollment of the Strathcona schools which were not
amalgamated until a year after the municipal governments were consolidated.

Bank Clearings

Even before consolidation Strathcona did not maintain a separate
clearing house, all of its clearings being made through Edmonton, The
following table gives the clearings in Edmonton from the time of the
organization of the clearing house in 1907.

BANK CLEARINGS

1907 $45,716,792.62

1908 38,496,510.12

1909 51,561,019.67

1910 71,635,125 .97

1911 121,438,391 . 16

1912 220,707,625.00



102



1913



1914



Jan $18,394,721 .79



Feb.

Mar.

Apr.

May

June

July .

Aug.

Sept.

Oct. .

Nov.

Dec.



15,952,282.63
16,360,215.60
17,820,897.92
18.418,175.86
18,859,990.74
18,405,035.26
15,770,803.41
17,037,172.52
17,680,454.13
20,277,788.66
18,075,778.52



Jan $15,609,722.27

Feb 12,791,319.94

Mar 14,249,340.40

Apr 14,527,254.78

May 14,809,080.25

[ June 15,135,944.93



$213,053,317.04



1910
1911
1912



1913



Jan. .
Feb. .
Mar.
Apr.

May
June
July
Aug.
Sept.
Oct. .
Nov.
Dec. .



1914



Jan.
Feb.
Mar.

Apr.

May

.June



RECEIPTS FROM STAMP SALES



$15,135.00
14,673.00
14,680.00
15,645.00
15,905.00
14,090.00
15,150.00
14,838.00
15,311.00
17,355.00
16,100.00
23,910.00

16,360.00
15,402.00
16,860.00
16,366.00
15,956.00
16,257.00



$83,411.00
113,031.00
171,044.00



192,792.00



97,201.00



GROSS POSTAL REVENUE (a)



Year ending June 30, 1900

" " 1901

" 1902.... I

" " 1903

" " 1904

" " 1905

" " 1906

Nine months ending March 31, 1907.

Year ending Mar. 31, 1908

" " 1909

" " 1910

" " 1911

« " " " 1912

" 1913



$4,
5,
6,
8,

13:

15
25
34
58
67
75
93
134
182:



,542.96
102.56
039.36
,958.16
,104.48
,254.15
,494.03
,459.45
801.51
,713.26
,046.89
,656.22
652.33
,607.72



(a) Data compiled from the reports of the Postmaster-General.



103

The above data shows that the years of change in the tax system
were years of great activity and prosperity which the tax changes did not
retard to a noticeable degree.

STATUS OF PUBLIC OPINION

Summaries of Interviews

A high city official :

AH taxes should rest on land values. This policy is good because
it throws the burden upon the non-resident owner of vacant land who
is profiting by the growth of the community. The system has been an
incentive to building but in some cases it encourages a very undesirable
type of building, vis., the one-story " tax-payers." The way to con-
trol this, however, is through proper building regulations. The system
has had little or no effect upon speculation. There has been no appre-
ciable effect upon the minds of the investing public traceable to the
tax system in Edmonton. The city's credit in New York City has
been adversely affected, however, by the fact that the utilities are owned
publicly rather than privately. Edmonton has the single tax because
it happened into it. The people really have known no other system.
Business buildings should not be taxed because this would be taxing
industry. The council has for years been under the sway of profes-
sional real estate interests. They have misused their power in con-
nection with the street railway system, so manipulating extensions as
to redound to their private advantage rather than to the advantage of
the city as a whole. The lines have been extended at great cost to
the capital account into territory which even now is entirely unpeopled
and which cannot possibly be made remunerative for some years.

An alderman:

The system was originally adopted in Edmonton because it offered
a weapon which the people could use against non-residents and the



Online LibraryRobert Murray HaigThe exemption of improvements from taxation in Canada and the United States [electronic resource] : a report prepared for the Committee on Taxation of the City of New York → online text (page 10 of 31)