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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which the business tax is the most important, are used in almost every
town. ( 1 )

In a word, improvements may not be taxed at more than sixty per
cent, in the towns of Saskatchewan ; they may be taxed at a lower figure if
the towns so desire. Approximately three-fourths of the towns have elected
not to exercise their option and these retain the assessment at sixty per
cent. The other towns have reduced the assessment to various percentages,
the lowest being twenty-five per cent. No town, so far as could be learned,
has reduced the tax on buildings to the full extent possible under the law.
Finally, less than one- fourth of the towns are sufficiently impressed with- the
merits of the plan to contemplate further reductions.

The Cities
There are no special charters in Saskatchewan. All of the cities operate
under the general City Act.

The provincial tax legislation affecting the cities is practically identical
with that affecting the towns, which has just been described. Thus, as pro-
vided at the session of 1908-09, the City Act specified that improvements
should not be assessed at more than sixty per cent. Similarly in 1910-11,
an amendment was passed permitting this percentage to be reduced at a
maximum rate of fifteen per cent, annually. (2)

As will appear from the following statement all of the cities of Sas-
katchewan had, in 1914, exercised their right to reduce the tax on improve-
ments to some extent :


Moose Jaw 45

Regina 30

North Battleford 30

Weyburn 30

Saskatoon 25

Prince Albert 15

Swift Current 15

(1) Only two towns, Assiniboia and Radisson, out of 57, reported no business tax
levied. The situation is somewhat complicated by the presence of illegal undervalua-
tions. Thus the town of Craik reported land assessed at eighty per cent, instead of at
full value and Kamsack reported buildings actually assessed at fifty per cent, instead
of sixty, the nominal percentage.

(2) Rev. Stat., Saskatchewan, 1909, c. 84; 1910-11, c. 181. The subjects of taxa-
tion, as specified in the Town Act, are lands, businesses, income and special franchises.
City Act, s. 308. The exemptions are the same as in the case of the towns. The
language of the section dealing with the reduction of the tax on buildings is identical
in the two acts. City Act, s. 310. Cf. supra, p. Z6.


Regina and Saskatoon are reserved for full treatment. ( 1 )

The reduction from sixty per cent, to forty-five per cent, in Moose

Jaw (population 30,000) was made in 1913. In the opinion of the assessor,

Mr. W. J. Moffat, further reductions will probably not be made. The

following excerpt is from a letter, written by Mr. Moffat dated January 8,


I may say that a couple of years ago when things were booming,
and there was a great scarcity of stores and offices, there was quite
a sentiment in favor of the single tax, but conditions have changed
somewhat, and seeing the effect single tax has had upon some of the
cities where it has been tried, I think the majority of people are
very well satisfied with the assessment as it stands to-day.

North Battleford (population 6,000; total revenue, $243,333.84; total
tax levy, $165,062.02; tax rate in 1914, 18 mills), reduced the assessment
of buildings from sixty per cent, to forty-five per cent, in 1912 and to thirty
per cent, in 1913. Mr. H. W. Dixon, the city clerk, writes as follows
under date of July 9, 1914 :

I believe that a majority of the taxpayers in this city are in
favor of the gradual abolition of the taxes on improvements, but
now that times are hard and most of them are holding unimproved
real estate as well as improved property, they may not take very
readily to the idea of an increasing tax rate; but I may say that I
expect the percentage of improvements assessed will be probably
reduced next year.

In Weybum (population in 1913, 5,343 ; total receipts, $450,223.81 ;
total taxes, $202,319.01 ; total assessment, $10,025,350.00; tax rate, 20 mills),
where improvements are assessed at thirty per cent., there seems to be no
disposition toward further reduction. Frederick Inwards, City Clerk,
states that no change in the percentage assessed will be made in the next
two years.

In Prince Albert (population, 10,000; total receipts in 1913, $365,000;
receipts from taxes on real estate in 1913, $303,481.08; total assessed valua-
tion in 1914, $28,694,386; tax rate in 1914, 11 mills), where improvements
are assessed at fifteen per cent., there seems to be a feeling that the city
has gone too far and a disposition to return to a higher assessment. Mr.
J. S. Woodward, a member of the city council, stated that he expected to
see the percentage increased to thirty in 1915 and retained for some time
at that figure. Mr. W. M. Trail, the city assessor, under the date of
July 3, 1914, wrote that he had recommended that the assessment of
improvements be increased to at least twenty-five per cent. The assessed
value of land showed a slight decline in 1914 (from $28,442,225 to $27,962-
443), while the assessed value of buildings remained practically stationary
($526,225 in 1913, and $526,400 in 1914). This desire upon the part of
some of the citizens of Prince Albert to return to a higher assessment has

(1) Cf. infra, pp. 40, 55.


raised an interesting question as to the possibility of so doing under the
terms of the City Act. The provincial officials express the opinion that
there is no authority in the act for increasing the assessments once reduced.
It is seen, then, that, although all of the cities have reduced the tax on
buildings to a substantial degree, the downward movement has been arrested
and there are some indications that a reaction has begun in favor of higher


1. Regina


Regina received its certificate of incorporation as a town in 1883. At
this time the population was about 400; by 1903 the population increased
sufficiently to justify its incorporation as a city. Its growth during the last
ten years has been truly remarkable. The Dominion census of 1911 gave
the city a population of 30,210. The official estimate of the present popu-
lation, as given in the city manual, is 50,000.

The town is situated on a flat prairie in the midst of a great grain-
producing area, and is served by three railroads, the Canadian-Pacific, the
Grand Trunk Pacific, and the Canadian Northern. Moreover, the Great
Northern, in conjunction with the Grand Truck Pacific Railway, has made
arrangements to provide direct railway connection with Minneapolis and
St. Paul.

The city is well situated for the distributing business, and good use has
been made of the opportunities offered. Regina claims to be the greatest
distributing center for agricultural implements in the world, the value of
the shipments in 1913 being approximately $20,000,000. In addition to the
two hundred wholesale and commercial houses, there are in the city thirty-
six manufacturing concerns. The city has been greatly handicapped, how-
ever, in its attempts to secure the location of manufacturing plants, because
of the lack of cheap power. At present the rate on power supplied by the
city plant varies from three to five cents per kilowatt hour. Negotiations
were under way in the summer of 1914, looking toward the acquisition by
the city of a supply of cheap natural gas which, it is hoped, will enable
Regina to compete successfully with Winnipeg. A boot and shoe factory
was established in Regina last year, and at present efforts are being made
to secure the location of a packing plant.

The city fortunately owned a considerable portion of the town site.
Even as late as December 31, 1913, the city retained the ownership of
marketable land valued at $3,125,008.88. Some time ago the city laid out
districts which it divided into plots and offered as sites for. industrial plants
on very attractive terms. Moreover, the city has spent considerable sums
for advertising. In 1913, $13,000 was spent through a publicity commission
for the purposes of attracting population and industries.

The accounts for 1913 show that the total city receipts amounted to
$1,756,608.79. The city owns the street railway, the light and power plant,
the water works, and the receipts of all of these concerns are included in
the above figure. The receipts of the " Fire, Light and Power Committee "
amounted to $305,430.18; of the "Street Railway Committee" were
$185,420.79; and of the "Water Works Committee," $122,315.52, making
the total receipts from the " commercial " activities of the city $613,166.49.


Of the remaining receipts, $1,143,442.30, $994,832.56, or approximately

87%, are credited in the accounts to taxes. This sum includes $93,507.37

received from frontage taxes. The taxes proper, amounting in all to

$901,325.19, were distributed as follows:

General $618,112 10

Public School Board 193,049 14

Roman Catholic Separate School 20,651 40

Collegiate Institute 46,341 69

Public Library Board 23,170 86

$901,325 19

The operation of the street railway in 1913 involved a loss of $60,118.39.
The other utilities showed no loss.

The total outstanding debt of the city on the 31st of December, 1913,

amounting to $7,553,607.29, was distributed as follows :

Water Works $848,023 31

Electric Light 560,111 12

Street Railway 1,475,000 00

Local Improvement Debentures 1,048,186 17

General 3,622,286 69

$7,553,607 29

The indebtedness incurred during each of the last four years is shown
in the following statement:

1910 $586,500 00

1911 492,200 00

1912 1,785,800 00

1913 2,933,000 00

$5,797,500 00

The amounts paid on the debt during the same years were as follows :

1910 $21,258 02

1911 21,477 38

1912 2,7,066 58

1913 22,682 18

$102,484 16

In addition to the outstanding bonded indebtedness, the city, because
of its use of short-time treasury notes, was confronted with a liability on
December 31, 1913, of $1,189,343.38, treasury bills payable. The rate of
interest on the outstanding indebtedness varies from four to six per cent. ;
six per cent, is being paid on issues made in 1891 and 1894; five per cent,
is being paid on money borrowed in 1913 ; and from 1909 to 1912 the city
was able to secure its funds at four and one-half per cent. The interest
and sinking fund charges on the indebtedness of $2,883,134.43, incurred for
the " commercial " enterprises of the city, are being cared for by those
enterprises, except in so far as the loss on the operation of the street railway
company may be considered to offset this statement.

The total cost of the debt service to the city in 1913 was $453,519.48.
The charges occasioned by the " non-commercial " debt, as paid by the
finance committee, in the same period amounted to $287,320.26.

The indebtedness of the city is restricted by the provincial act under
which it operates to twenty per cent, of the net assessment. The local
improvement debentures and the resources of the sinking fund may be
deducted from the city debt in computing the borrowing power of the city.


Difficulty was experienced by Regina in 1914 in floating upon satis-
factory terms its issue of debentures. Because of the large discounts which
were demanded on long term bonds, and because of the reluctance of the
city to finance its operations entirely on short-term notes, the city's con-
struction program was substantially curtailed. These financial difficulties
aggravated, of course, the serious unemployment situation already present
in Regina.


As has been seen from the statements given above, ( 1 ) Regina depends
for the great mass of her ordinary revenue upon her millage tax. Frontage
taxes, however, in 1913, yielded $90,880.56, or approximately ten per cent,
of the receipts from the millage rate. Licenses are credited with the sum
of $17,608.00; and poll and dog taxes together yielded only $7,053.60.

Sums collected on the frontage tax basis in 1913 included $12,103.04
for water mains, and $78,777.52 for sidewalks, pavements and sewers.
The city pays out of general funds the cost of the large trunk sewers and
the large water mains. The cost of the other types of water and sewer
mains, and of sidewalks and pavements, is paid on the frontage basis, except
that the city pays from general funds for the expense of improving the space
opposite lanes and for intersections, and in addition pays one-half of the
cost of improvements along the front and side of corner lots. The street
railway company is charged with the cost of paving a strip as wide as the
rails and a foot outside.

Because of the fact that all materials for the construction of local
improvements must be brought considerable distances, and because of the
necessity of sinking water mains to a considerable depth, the cost of improve-
ments is somewhat high. It is estimated by the assessor that the annual
charge in frontage taxes for local improvements on a typical twenty-five
foot lot amounts to approximately eighteen dollars. The soil of Regina is
such that conditions in wet weather are extremely bad. Paved streets are
almost essential. The high cost of local improvements is pointed out by
some citizens as one of the causes of the high price of land and the narrow
lots which are used for building.

The general tax rate is levied on a base which consists of land taxed at
its full value; improvements assessed nominally at thirty per cent, of their
value, but actually somewhate under-assessed; businesses assessed upon
floor-space basis ; and upon certain classes of income. It had been the well-
defined intention of the city council in Regina to reduce the assessment on
buildings still further, but such action has been postponed until some future
time. Before 1911 the legal rate of assessment on buildings was sixty per
cent. ; in that year it was reduced to forty-five per cent. ; and in 1912 to
thirty per cent., at which figure it still remains. Regina operates under the
provincial city act, which has already been analyzed. (2) The business tax
is said to have been copied from the Edmonton system. Businesses are classi-

(1) Cf. supra, p. 41.

(2) Cf. supra, p. 27.


fled and assessed on an arbitrary amount per square foot of the floor space
occupied. Banks, brokers and financial institutions are assessed at the
highest rate of eight dollars per square foot of floor space, and lumber yards
are assessed at the lowest rate of fifteen cents per square foot of space
occupied. The premises are measured by the assessor, and the assessment
entered on the tax books.


Improve- Busi- Total (b) Total
Lands. ments. ness. Income. (Gross). (Net).



























$1 1,378,805 (c)









































(a) The statistics were furnished by City Assessor R. A. Lennox. The total as
given by Mr. Lennox in some cases exceed the figures usually published. The explana-
tion is that additions are sometimes made late in the year after the assessment figures
for that year are announced.

(b) The figures given in this column include the value of property exempt from
taxation, which in some cases is very considerable, as will be seen from the last

(c) Includes value of improvements.

The figures for improvements given in the above table represent the
percentage of the value of the improvements actually taxed, not the full
value of the buildings of which a percentage is taken. The legal rate of
assessment for improvements prior to 1911, it will be recalled, was sixty
per cent. ; in 1911, it was made forty-five per cent. ; for the past three years
it has been thirty per cent. But these percentages, according to the testi-
mony of the assessor, have always been applied to a very conservative
valuation of the buildings, and in order to get the full, fair value of the
buildings it would be necessary to add at least ten per cent, to the capital
value implied by the assessment figures quoted.

The legal rate of assessment for land has always been one hundred
per cent. The assessor believes that the 1914 assessment approaches very
closely the full cash value of the land. In his estimation, the 1912 and 1913
assessments were approximately ten per cent, below cash value, and
in the years preceding 1912, the land was under-assessed at least fifteen
per cent. The prevailing opinion among the business men of the town
among whom inquiries were made was that the assessment for 1914 was
somewhat above selling value. The assessment of land in 1914 is practically
identical with that of 1913. The testimony of the assessor seems to indicate,
therefore, that there has been something of a shrinkage in land values in
the last year.


It should be noted that in 1911 when the first reduction was made in
the building assessment, the tax base almost doubled due to the enormous
increase in the assessed value of land. The assessed value of buildings
showed a slight increase in spite of the reduction in the percentage of value
assessed. In 1912, the further reduction of the tax on buildings resulted in
a slight contraction of the assessed value of buildings, but the increase
in the assessed value of land was so great as to make this decrease insig-
nificent and the tax base more than doubled.

The assessment figures for Regina must be used with caution, not only
because of the fact that they include property exempt from taxation, but also
because part of the land assessed may not be taxed at the full rate. Under
the terms of an agreement entered into between the city and the owners of
an outlying tract, special tax concessions were given to this area when it was
brought within the city limits in 1911.(1) It was agreed that all lands
within this tract should be subject to the full rates levied for the Collegiate
Institute (high school), library, and the schools, but should in the year 1912
pay only one-tenth of the municipal rates, an additional one-tenth being
added each year until in 1921, when the property should be subject to the
full tax rate. It was provided further, however, that in case street railway
service was extended to the new section, the land lying within a zone a few
blocks wide along the tract should be subject to the full rate. ,

The tax rates applied in Regina during the past thirteen years are shown
in the following table :


Total Total
Separate (Public (Separata
General High Public (Catholic) School School
Municipal. School. Library. School. School. Sup- Sup-
porter), porter).

1901 .. .. .. .. 22. 23.35

1902 .. .. .. .. 24. 25.

1903 .. .. .. •. 25. 26.5

1904 .. .. .. .. 22. 22.

1905 .. .. .. .. 20. 20.

1906 10. .. .. 5. 5. 15. 15.

1907 8. 1. .. 6. 6. 15. 15.

1908 10. 1. .. 4. 6. 15. 17.

1909 7. .6 1. 6.4 6.4 15. 15.

1910 9.6 1. .8 6.6 6.6 18. 18.

1911 12. .5 .5 5.1 5.1 18.1 18.1

1912 12.2 .43 .25 3. 3.5 15.88 16.38

1913 10. .666+ .333+ 3. 4. 14. 15.

1914 9. .75 .25 3. 3. 13. 13.

(a) The tax rate for years from 1906 to 1914 were supplied by Assessor Lennox.
The figures for the years preceding 1906 were taken from the Municipal Manual of
1914 p. 30.

As will be noticed, the amount of the tax rate levied depends upon
whether an individual is a " public school supporter " or a " separate school
supporter." The separate school rates have seldom diflFered greatly from

(1) The details of this arrangement are set forth in Proclamation of the Lieu-
tenant-Governor in Council, dated March 9, 1911.


the public school rates. An individual can indicate whether he prefers to
be taxed for the support of the Catholic school or for the support of the
public school, except that a Catholic must pay the separate school rate. The
tax on the property of corporations, in the absence of any declaration of
preference, goes to the public schools.

In 1911, when the assessment on buildings was first reduced, the rate
was advanced very slightly, one-tenth of a mill; in 1912, when the second
step was taken, a decrease of over two and two-tenths mills was possible.

On December 31, 1913, the item of unpaid taxes amounted to
$193,919.03, over twenty per cent, of the taxes levied in 1913 ($901,-
325. 19). (1) Of the sum in arrears, $171,002.88 were taxes levied in 1913,
and $22,916.15 were unpaid taxes from previous years. These large amounts
would seem to indicate that the taxes were bearing heavily upon the citizens
of Regina.

According to the statement of the assessor, the annual taxes upon a
house and lot, such as is purchased by the workingman of moderate income,
amounts to approximately thirty-two dollars. In addition to this, as has
been seen, his special assessment charges are approximately eighteen dollars,
making his total annual payment to the city about fifty dollars.


Building Operations
The following table shows the number of building operations in Regina

since 1904:


No. of
Permits. Value.

1904 162 $210,000 00

1905 346 750,000 00

1906 420 2,000,000 00

1907 480 1,177,840 00

1908 253 516,656 00

1909 282 749.479 00

1910 573 2,351,238 00

1911 959 5,099,340 00

■Jan $23,180 00

Feb 66,450 00

Mar 339,850 00

Apr 664,045 00

May 407,415 00

June 1,048,830 00

July 1,068,319 00

Aug 1,004,319 00

Sept 531,210 00

Oct 411,275 00

Nov 271,670 00

Dec 2,209,675 00(b)

8,046,238 00

(a) The statistics for the years 1912 to 1914 were transcribed from the records
of the building inspector; statistics for other years are taken from the Municipal
Manual, 1914, p. 38.

(b) Grand Trunk Hotel and part of McCallum-Hill building included.

(1) Financial Statement 1913, Schedule No. 16.

1912 1,215


No. of



Jan. .

Feb. ,





July .



Oct. .




Jan. ,



503^ Apr.

1 May

L June

$71,450 00
181,200 00
440,845 00
707,850 00
513,790 00
810,995 00
215,025 00
259,895 00
352,025 00
385,300 00
51,050 00
28,925 00

$3,850 00

62,900 00

90,000 00

408,100 00

615,120 00

175,150 00


$4,018,350 00

1,355,120 00

It will be noticed that 1911 and 1912, the years when reductions were
made in the assessment on buildings, were the two largest years in the
history of the building trade of Regina.

The details of the character of the buildings constructed in 1912 and
1913 are shown by the following statement taken from the reports of the
building inspector:




























, ,




















Blocks, stores, offices, schools and theatres..

Warehouses, factories, workshops etc

Apartment blocks and terraces

Dwellings (brick, brick veneer and frame) . .

Churches, schools, jails etc

Alterations, repairs, additions and removals.



Repairs, alterations and additions to Parlia-
ment buildings

Repairs to blocks, stores, offices, churches and
warehouses from effects of cyclone

Repairs etc. to residences after cyclone

(a) During the ten months ending October 31st of each year.

No building permits are isued for work involving the expenditure of
less than one hundred dollars. The figures for the value of buildings con-


structed are doubtless under-valued somewhat, particularly in the earlier

One striking fact about the character of the buildings in Regina is the
large number of one-story structures in the business section, which are

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 4 of 31)