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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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to require the specification in the Voters' List as to whether a person is
an owner or a tenant. Only owners have the right to vote on by-laws
referred to the electorate which have to do with the expenditure of
money. Both men and women who are twenty-one years of age and are
owners of property assessed at not less than $400 are entitled to vote on
such questions. The qualifications for voters in cases where money by-laws
are not involved, are less strict. Both owners and tenants may vote.
To be a tenant one must rent real property which has an assessed value
of at least $300. A tenant is " not merely a lodger, boarder, or temporary
occupant of rooms." He is described as the proprietor of an independent
housekeeping establishment. By administrative regulations it has been
decided that a husband cannot be considered a tenant of a wife's property :
that is, she votes and he does not if he lives with her in her house and does
not own additional real estate in excess of the prescribed minimum.

The information contained in the Voters' List as to the number of
tenants compared with the number of owners seems never before to have
been compiled. An analysis of the list for 1913 yields the results shown
in the following table:

OWNERS AND TENANTS AMONG THE VOTERS OF VANCOUVER

IN 1913 (a)

Percentage
Ward. Owners. Tenants, of Owners.

First 2445 2^994 4L7 ~

Second 1,279 4,236 23.2

Third 1,235 1,136 52.1

Fourth 3,925 2,617 60.0

Fifth 3,930 1,384 74.0

Sixth 5,367 1,859 74.3

Seventh 5,132 162 97.3

Eighth 1,506 313 82.8

Total 24,519 14,701 60.0

(a) Compiled from the official Voters' List for 1913.



(1) Cf. supra, p. 174.



206

These figures reveal a high percentage of owners, but a percentage
which is not higher than that in several other cities in the section.

Ward One is described as a high-class residence district; Ward Two
as a business ward; Ward Three as half residence and half business;
Wards Four and Five as middle-class residence districts; Ward Six as a
residence ward of very mixed character; and Wards Seven and Eight as
suburban property recently developed.

One of the elements in the situation which is said to have operated to
encourage home ownership in Vancouver is the eagerness of the people to
take advantage of the increase in land values. During the boom period
rents were high, real estate was rising in value, and every person who could
command the necessary cash or credit found it to his advantage to build
rather than to rent. It is said that by buying a piece of land, erecting a house
suitable to his needs and by occupying that house for a few years, he usually
found himself in a position to dispose of his property at a price which
would reimburse him for all the expenses in the way of taxes and carrying
charges during the period, giving him his house-rent free, and sometimes
something in addition.

Non-Resident Ownership of Land

Non-resident ownership of Vancouver land has always been present
to a considerable degree. At present, according to the estimate of Assess-
ment Commissioner Painter, fully twenty-five per cent, of the total land area
of the city is credited on the tax rolls to non-residents. Thus far the land
taxes have evidently not had the effect of frightening non-resident owners
into a surrender of their holdings.

Speculation

It was found impossible to secure any information as to the effect of
the tax upon speculation other than the opinions of persons interviewed.
The consensus of opinion seems to be that, during boom times, the tax was
not noticed by the persons who bought land for speculative purposes, but
that those speculators who find themselves in a position where it is necessary
for them to carry over vacant land through the period of depression are
being somewhat embarrassed. ( 1 )

Employment

As in the other cities of the Canadian Northwest, the employment situa-
tion in Vancouver has been very acute during the summer of 1914. The
seriousness of conditions there is heightened by the fact that a very large
percentage of the working men are in the building trades. There are
very few manufacturing enterprises. The lumber industry employs exclu-
sively Asiatic labor for practically all the processes except the actual logging
in the forests. The Indians and the Asiatics divide between them the oppor-

(1) E. g., cf. infra, pp. 216, 218, 219.



207

tunities for labor offered by the fish industry. The trade unions make no
attempt to organize Asiatics and Indians. These facts must be understood
in order that the testimony of trade union officials as to the unemployment
situation may not be misinterpreted. There are no municipal or provincial
employment agencies, so that reliable general statistics as to the amount of
unemployment are unobtainable. The story of the union leaders is very
dark. Mr. J. H. McVety, the president of the Trades and Labor Council,
is authority for the statement that over fifty per cent, of the union men
in Vancouver were out of work in August. In some unions this percentage
runs as high as ninety per cent, of the members. The large number of people
who have left Vancouver during the six months just passed has had little
effect in relieving the situation, because business activity, particularly in the
building trades, is constantly decreasing.

Mr. R. P. Pettypiece, editor of the F ederationist , the trade-union
journal, and a man who is in very close touch with the unemployment situa-
tion, estimates that at least twenty-five hundred union men left Vancouver
during the first eight months of 1914. Large numbers of workmen who
originally came to Vancouver from the United States have returned south,
while others who have saved enough to make the trip have pursued their
search of work to Australia and New Zealand.

Mr. J, Reginald Davison, industrial commissioner of Vancouver, ex-
pects the unemployment situation to become even worse as the winter comes
on. During cold weather not only does the city have its own citizens who
are out of work to care for, but it also has to contend with the problem
caused by the influx of large numbers of men from over the mountains —
" floaters " from the prairies where the winters are extremely severe. The
mild weather makes Vancouver an attractive haven to these men.

A general survey of the economic condition of Vancouver at the present
time reveals little prospect for immediate relief. As has been pointed out,
the great bulk of the workers in Vancouver have been engaged in the build-
ing trades. All but a very small part of the labor force of the city has
been engaged either in erecting the buildings of the city or in constructing
the streets and other public improvements. The prospect for another era
of active building operations is far from bright. In the first place, most
of the work has been done with borrowed money and the war has added
to the difficulties which were already present in the way of borrowing.
When a large proportion of the population has been devoting its energies
to building the city, and it becomes impossible to continue building opera-
tions, it is evident that the people must turn their hand to some other
type of employment or seek work elsewhere. That the laboring men
themselves realize the situation is shown by the wholesale exodus which is
now going on, as well as by the testimony of their officials and by the tone
of their press. The following excerpt from an editorial in the British
Cohimhia F ederationist, issue of May 29, 1914, shows that the working-
men have no illusions as to the situation :



208

There is, practically speaking, no construction work either in
promise or in progress, with the exception of a few big jobs which
are fast approaching completion. When they are done it looks as if
the building trades will be confronted with a still more difficult situa-
tion. It is all very well for the real estate agents to " jolly " the
people along, but printed optimism does not, and will not fill the
stomachs of working men whose daily domestic expenses are equal
to their wages, even when employment is good.

The city aldermen of Vancouver are constantly besieged by their out-of-
work constituents. As a result, the city attempts to relieve the situation
by engaging the men upon public works. One of the arguments used in
the summer of 1914 against the proposal that the city spend $15,000 for addi-
tional fire apparatus was that the money could be better used in providing
work for those who needed it.(l) The possibilities of such public relief
are limited very strictly, however, by the public credit situation and by the
pressure of the burden of taxes and special assessments already carried by
the property holders. (2)

Few of the laboring men impute a direct connection between the employ-
ment situation and the tax system. They do not hesitate to say, however,
that if the tax system is responsible for the excessive building boom through
which the city has just passed, it is responsible for considerable distress
among the laboring men through thei attraction to the city of a force of
workmen too large to be retained indefinitely in the service of building up
the city.

General Prosperity

POPULATION (a)

1886 1,000 1896 19,000 1906 52,000

1887 5,000 1897 20,000 1907 60,100

1888 8,500 1898 22,000 1908 66,500

1889 10,500 1899 24,000 1909 78,900

1890 12,000 1900 24,750 1910 93.700

1891(b) 13,685 1901(b) 26,133 1911(c) 111,240

1892 15,000 1902 29,640 1912 122,100

1893 16,000 1903 34,480 1913 114.220

1894 17,000 1904 38,414 1914 106,110

1895 17,862 1905 45,000

(a) Population figures are given for the end of the year specified.

(b) Dominion Government census.

(c) Dominion Government census figures pve the population for 1911 as 123,902.

SCHOOL ENROLLMENT (a)

1898 2,724 1906 6,437

1899 3,117 1907 7,370

1900 3,393 1908 7.984

1901 3,710 1909 8,845

1902 4,087 1910 9,942

1903 4,416 1911 11.385

1904 4,994 1912 12.393

1905 5,609 1913 12,990

(a) The figures given for the school enrollment are for the month of October in
each year. Eleventh Annual Report, Vancouver City Schools, 1913, p. 73.

(1) Vancouver Sun, August 18, 1914.

(2) Cf. supra, pp. 186, 195-197.



209



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210

POSTAL RECErPTS— GROSS REVENUE(a)

1893 $26,731 22 1904 $86,592 16

1894 27,109 79 1905 98,076 95

1895 29,375 55 1906 121,083 57

1896 32,635 08 1907 (9 months) 111,975 72

1897 37,712 03 1908 191,703 14

1898 52,82137 1909 205,000 00

1899 53,237 92 1910 257,36164

1900 54,989 66 1911 350.372 66

1901 56,823 28 1912 428,256 00

1902 67,645 94 1913 530.465 00

1903 70,593 61 1914 519,000 00

(a) Before 1908 the figures represent the receipts during the fiscal year ending June
30th. The figures for 190/ represent the receipts for the nine months preceding March
31st. From 1908 to 1914 the figures are for the fiscal year ending March 31st. The
figures are taken from the annual reports of the Postmaster Greneral and from the
27th Annual Report, Vancouver Board of Trade, 1913-14, p. 72, checked by post-ofifice
authorities in Vancouver.



211
PUBLIC OPINION

Newspaper Alignment

As is inevitable in the case of a question which has become some-
thing of an issue in poHtics, the newspapers of Vancouver have aligned
themselves for and against the system. The World, the personal organ of
ex- Mayor Taylor, has espoused the single tax from the beginning and to the
support of this paper must be credited in large measure the present form of
the system. Opposed to the World on practically all issues of politics is
the Province, a paper of much more conservative type. The attitude of
the News- Advertiser has usually been favorable to the plan, but its posi-
tion has been less positive than either the Province or the World. The Sun
has been on the whole unfavorable.

Summaries of Interviews

Perhaps the best method of judging the present alignment of public
opinion in Vancouver is to examine the detailed interviews with various
public officials and citizens, selected to reflect the points of view of the vari-
ous economic classes of the community.

The Aldermen

1. I thoroughly favor the present plan and believe that it would not
be well to go back to taxing buildings, unless the necessity should arise for
greatly increasing the present rate. In that case I would favor a plan which
would secure some revenue from buildings to pay for certain expenses such
as those of the fire department. I make no pretense at being a thorough-
going single taxer; I do not favor confiscation of land. Ex-Mayor Taylor
should be given credit for carrying through the proposition to remove the
tax on buildings entirely. It was made something of an issue in the 1910
campaign. The proposition was adopted mainly because the city lacked
substantial buildings and it was thought that this plan would assist in
encouraging building enterprises. It has had this effect. It is possible to
discern no effect on speculation, however. I believe that the present
reaction against the system is not formidable; if a plebiscite were taken on
the subject at present the majority would be in favor of retaining the pres-
ent system.

2. The single tax has stimulated building but is only one factor amongi
a number which have had that effect. Few buildings have been put up which
would not have been built under the old system of taxation. The buildings
which I myself have constructed would certainly have been built irrespect-
ive of the tax element and, in general, I believe that taxes have been very
little considered by builders. The system to some extent encourages and
rewards the man who " does well by the city " by building and penalizes
the man who refuses to improve his property. It has, on the other hand,
operated to discourage the use of land for gardens and yards. On the
whole the system has worked very well. I see no possibility for the success
of a proposal to restore the tax on residences. Personally I favor some
scheme to make the owners of skyscrapers contribute to the extent of pay-
ing for fire protection at least. A very important element in the situation
is the difficulty which is being experienced by many citizens in paying their



212

taxes. The present land tax, together with the heavy special assessments
which they are called upon to pay, forms a burden which is all the property
owners can carry. The question of increasing the millage rate is a very
serious one.

3. I favor a return to the full taxation of buildings as soon as possible
because the single tax bears too heavily upon the little owner. In prosper-
ous times the plan seemed to work out fairly well but under present condi-
tions it is far from successful. A man who is in a position to put up a big
building on the lot opposite mine is also in the position to pay more taxes
than I am with my small building. Moreover, his big building takes away
my tenants and leaves me in an even worse position than before. The only
way out of our situation which I can see is to go back to taxing buildings.
It will come very soon. The present rate of taxation is all the property
owner can stand. I would not advise the adoption of the single tax any-
where else.

4. I approve of the single tax in general but favor modifying it to
some extent in Vancouver and would support some scheme to tax the higher
buildings on their upper stories in order to pay for fire protection and to dis-
courage their construction. The building of the larger structures has had
the effect of emptying the smaller buildings and this is a bad thing.

5. I am strongly in favor of the system. It makes for more and better
buildings and it tends to reduce speculation. It is possible that the city
may go back to taxing buildings but personally I do not favor such a move.
I would not tax even the high building. The fire-protection argument is
largely a fallacy because the high buildings are practically unburnable and
so need little fire protection.

6. I am decidedly in favor of the single tax. It has stimulated build-
ing, causing more and better buildings. " Vancouver would not be what
it is to-day were it not for the single tax." There have been no specific
effects other than a stimulus to building. There will be no reversal of
policy ; the single-tax plan will continue.

7. The tax rate should not go any higher and therefore a return will
probably be made very soon to the old plan of assessing buildings. The
sentiment against the single tax is growing. It is not fair and just that the
lot with a small building should pay as much as a lot with a large one.

8. Some scheme for assessing business blocks in order to make them
contribute toward the expenses of fire protection would be a good thing;
the restoration of the tax on residences would not. The single tax is en-
couraging people to build better houses but it also overstimulates building in
general.

9. I have always taken a more or less unfavorable attitude toward the
single tax. The city will have to go back to the old system sooner or later.
The council would have gone back this year had it not been that the mem-
bers were afraid of public sentiment. I myself did not urge going back
this year because, since the system was in operation, I favored giving it
another year of trial. The results of the trial do not justify the continuance
of the experiment another year. It would not be to my personal economic
advantage to go back but nevertheless I favor the plan. The fiscal exig-
encies of the situation will make the return to the old system imperative.
Expenses are steadily increasing. The assessed value of the land cannot
be raised much. This year the tax rate was increased and there is a dis-
tinct limit to further increases. There is no reason why the expenses of
the fire department and a certain percentage of the expenses of the police
department should not be met by contributions from the buildings. A ma-



213

jority of the business men favors keeping the tax on land alone. The tax has
had no effect upon building activity. " No one in this western country is
philanthropic enough to build a building unless he thinks he can make some-
thing out of it." In the case of the two apartment houses which I built I
did not consider the tax situation an incentive.

10. I favor the system as it now stands and would not vote for a re-
turn to the old scheme. It stimulates building and prevents the retention
of obsolete buildings. There have been no discernible effects upon specula-
tion. Many people are in favor of retaining the present system because of
anxiety lest the many changes should create the impression that conditions
are very unstable in Vancouver.

11. The present system encourages building. " It has caused so many
buildings to be built that they cannot rent them all." I do not favor a
return to the old system of taxing buildings. The eagerness to encourage
building finds some explanation in the fact that vacant lots are often wooded
and make good hiding places for rascals. Rents have come down since
hard times began in 1913 and the men who have put up buildings are not
making big returns. It is a new city and much building has been done in
anticipation of future growth.

12. " The whole thing is a farce. It seems like a fool propo-
sition to me. If all buildings were residences there might be some sense to
it ; but when there are a number of skyscrapers the situation is different.
If I own a vacant lot the owner of a big building could afford to pay me not
to build." Buildings should be taxed at their full value minus some allow-
ance for depreciation. The tax will be put back upon buildings within the
next two years. There has been no effect on building or on speculation.
" The system has not built a building in this town."

13. I was in favor of taxing buildings at twenty-five per cent, of their
value in 1914, but the question did not come to a decisive vote. Tall build-
ings are the direct cause of considerable expense in sewers, water mains,
and fire apparatus and they should pay something toward meeting such ex-
penses. The proposition to restore the tax on buildings would carry a
popular election like a whirlwind. " In a city it is impossible to penalize
the man who owns vacant land without injuring the interests of the small
householder."

14. The eagerness to get at the speculator is responsible for some of
the sentiment in favor of the present system. The system is an incentive
to building and an inducement to an owner to pull down old fire traps and
replace them with good buildings. There is some opposition from the
owners of small homes but most of the opposition comes from the rental
agents and owners of cheap buildings. There is a clash of interest be-
tween the owners of two-story business structures and the owners of larger
buildings. The opposition of several of the aldermen is explained by the
fact that they are the owners of cheap structures. I myself do not favor a
return to the taxation of buildings and believe that no return to the old
scheme will be made.

15. I did not favor the plan of removing the last twenty-five per cent,
of the tax on buildings in 1910. The system operates to burden the little
man and to allow the big man to escape with low taxes. At present there
is a proposition under consideration to buy a water tower for the fire depart-
ment at a cost of $15,000. The little piece of property pays more than it
would if business houses were taxed. I do not know whether it has stimu-
lated building or not but think it probably has had some influence in en-
couraging building in suburbs. I notice, however, that the same people



214

who have been putting up buildings are now beginning to oppose the single
tax plan. My particular plan would be to tax twenty-five per cent, of the
value of the buildings lying within a radius wide enough to include the busi-
ness district and little else. An especially heavy tax should be levied on
buildings of six stories or over, or on buildings costing over $6,000. If,
however, the proposal were brought into the council to tax all buildings at
twenty-five per cent, of their value I would support it. There is a strong
sentiment in favor of a modification of the present plan. If the question
came to a vote at the polls the present system would be done away with.
" The laboring men are beginning to realize that they are paying for the
water towers."

16. The system as it now stands is a curse. It bears too heavily upon
a man who owns a lot and wishes to improve it. No one can improve his
lot under present conditions. It does stimulate building but it over-stimu-
lates it. I would like to see a tax on at least all buildings over four stories
in height. The city will go back; to some sort of a tax on buildings very
soon. People are now taxed all that they can stand on their land and more



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 22 of 31)