Mr. MACPHERSON: Or a pagan.

Mr. LYNCH-STAUNTON: You are not talking about religion, you are talking about secular matters then; paganism is not religion.

Mr. MACPHERSON: The difficulty I find is this, that if I happen for instance to be a Presbyterian I would be very glad to see the Presbyterian exempt from taxation, but you belong to another religious body, I don't know what it is, but I understand it is a religious body, and you are anxious for exemption in that. Now what we want to get at is the most equitable way of raising taxation, and my opinion is that the most equitable way is to make no exemptions at all of religious bodies. If I am disposed to subscribe money to a Presbyterian church or a Methodist church or to any other church, and the non exemption makes it necessary for me to subscribe a little more, I feel that I am a very poor religious man if I am rot prepared to pay my additional share of the tax.

Mr. LYNCH STAUNTON: But some people are not.

Mr. MACPHERSON: It says very little for a religious person.

Mr. JUSTICE MACMAHON: I suppose it is in order to get at those who won't subscribe to the church. They send their children there.

Mr. LYNCH-STAUNTON: That is the way it works.

Mr. MACPHERSON: But they must have the feeling that they get no credit for that in heaven?

Mr. LYNCH STAUNTON: Why on principle should a man be taxed that has no children going to school? The theories all go to smash when it comes to practical application of them. He is taxed for the same reason, because it is a public good.

Mr. JUSTICE MACMAHON: It is for the national benefit that every man should be educated.

Mr. LYNCH-STAUNTON The same rule applies to the church

Mr. WELLINGS: The increase of population certainly increases land value, and the man who has a large family is doing more for the increase of land value than the man who has not.

Mr. FLEMING: Should not the man with a large family then pay less taxes?

Mr. WELLINGS: Hear, hear.

Mr. HUTTON: I take a somewhat different stand, I think, with regard to the taxing of church properties to that of any gentleman who has spoken here to-day. They have principally confined their views and their arguments to the taxation of land only. You might at once in'er from the few remarks I have made on former occasions that I go further than that. I say tax it all at its value. The statement made by Mr. LynchStaunton in regard to the particular church property that he refers to in Hamilton is not quite within the facts He said that the land immediately around this b'ock-and by the way, they have a whole block, they pay taxes on half of it because half of it was held by the judge to be not in use with the church-the land opposite that is taxed $5 per foot less than the land in the next block which has no breathing space in front of it. Now I say that is the fact.

Mr. LYNCH-STAUNTON: I say it is not a fact, because I examined it.

Mr. HUTTON: Mr. Lynch-Staunton is as much at variance with the fact in that as he is in the matter he wrote to the paper about this morning. The exemptions in Hamilton

on buildings amount to $150,000, and on land $790,000. If this was taxed you could quite readily see that it would bring under the tax laws something that is not now that would go materially to reducing the rate, because you must remember that not to tax is to tax; what we do not raise in that way we have to raise some other way and make everybody contribute whether they will or not through the general taxes. Mr. MacPher son instances the fact that he belongs to one denomination and Mr. Lynch Staunton to another. Well, I belong to a denomination, although not representing officially, but just speaking as an humble member, that believes in the taxation of all church property, and one of which in Toronto regularly sends their cheque for taxes every year-I refer to the Baptists. The entire separation of church and state is one of their principles, and this is one of the things they think would be beneficial, that they would not be ander any obligation to the state whatever if they paid the taxes.

The CHAIRMAN: That is the principle on which they pay their taxes?
Mr. HUTTON: That is the principle on which they pay their taxes.

The CHAIRMAN: They would not take a free grant from the Crown for a church site!

Mr. HUTTON: Well, I don't know as to whether they would or not, but if they did— The CHAIRMAN: They couldn't, on the principle you have laid down.

Mr. HUTTON: I do not know that they ever have done so. They have taken grants from individuals, but I do not know that they ever took a free grant from the Crown. Mr. WILKIE: That is only local option.

Mr. HUTTON: That is only local option. In looking over the matter in the library this morning I found that most ot the states of the Union have practically the same law as we have in reference to the exemption of churches. So they have in England, as judged from the report of the Tax Exemptions Commission that was printed in 1878. With the exception of California, which taxes everything, and even went so far as to attempt to levy taxes on the federal property-which of course was held to be not good— the same as your honour pointed out this morning, that in Ontario we would have no power to levy taxes on Dominion lands, whatever they may do of their own volition in the payment of taxes as they have done in England. Therefore I think that all church property should be assessed and taxed, and will advocate that. If it was found that it was impossible or impracticable and that public opinion would not bear us out in thatfor after all that is what we have largely to look to, although some gentlemen before the Commission think not-I see that Mr. McKelcan and some others who spoke to that effect-I can see no reason why land should be withdrawn from taxes. If I own a piece of land to-day it pays taxes; if I sell it to a church to-morrow it still pays taxes; bat when they build on it it does not pay taxes, although it is still liable for the local rate, which of course is another species of taxation. We are just starting the local improvement system in Hamilton, and from that cause three or four churches are now contributing some towards the taxation, I think possibly only four, while the others are not pay ing a copper as yet; but as the local improvement system grows and the roads and sidewalks and sewers, etc., are bailt in front of their properties, they will in a greater degree pay more taxes than they are at present. And after all, the bringing in of the local improvement system-I know it is the case in Hamilton-is only a means of keeping down the general tax rate; so I fail to see the difference why if they are liable for local improvement they should not be liable for general rates. In regard to the further section of the Act which exempts universities and church grounds, etc., I am not an advocate of the taxation of the great universities and colleges which are kept up by the state, but I am rather in favour of the law as they have it in Massachusetts.

The CHAIRMAN: The University of Toronto is the only state institution. The others are not.

Mr. HUTTON: They are not, but they are not operated for profit. The law In Massachusetts exempts all educational institutions except where they distribute any profit they may have to shareholders in those institutions. This view does not effect Hamilton because at present we have not in Hamilton any institutions of that kind, but I understand in Toronto and other places where they have corporations of this kind, which I think are not educational institutions as meant by the Act, but Church institutions formed by a number of gentlemen for the purpose of making a few dollars, I do not think that they should go free. Anything of that kind which is operated for a profit I think should pay their taxes. Of course on the broad grounds of education it might be objected to, but I think the state and the great institutions of learning are quite able and capable of providing all the tuition that is necessary to put any of our boys and girls in a position for life, and I do not think it is necessary that gentlemen should get together and run educational institutions for profit.

Mr. MACPHERSON: There is no objection to that as long as they pay taxes.

Mr. HUTTON: No, certainly not. I say that because they do that there is no reason why they should escape. In Hamilton a gentleman was assessed for personal property and income on a school, and he said, "Well, now, I can easily escape this by getting two or three gentlemen and forming myself into an incorporated company, and I think I will." He has not done so yet, and he is probably considering the matter. At present it does not affect Hamilton, although we do not know what it may do, but on those broad general lines I think any of these educational institutions that are run and divide profits among their shareholders should pay taxes. My experience in regard to the ground surrounding churches and institutions of that kind operating as to the increase of value is not altogether what Mr. Lynch-Staunton points out. We have had on several occasions

gentlemen before the Court of Revision who have run down their property on account of it being round institutions that have much vacant spice that way. They have argued it from several grounds, and I rather fancy that the placing of churches, such as Knox church happens to be now, and one or two churches I could instance in Hamilton, in a position that when the city grows it rather stops business, it rather keeps down the price of land than otherwise. In Hamilton we have, south of James street, two churches and the YMCA. which effectually block the growth of the business centre towards the railway station, and thus keeps down the price of land. That has been very clearly instanced, in fact Mr Lynch-Staunton appeared as counsel in one of these cases, and it was pointed out that the holding by churches of land that way-not the holding of the land, but the very fact of them being there when towns were inclined to grow-kept down the price of land.

The CHAIRMAN: You think that the money value of the town or of the city would be less by reason of those institutions, take it as a whole ?

Mr. HUTTON: I think yes, take it as you say, the money value in dollars and cents. The CHAIRMAN: Of the whole city?

Mr. HUTTON: Would be less?

The CHAIRMAN: The city would be better for the absence of those institutions! Mr. HUTTON: No, I did not say that.

The CHAIRMAN: Isn't that the same thing?

Mr. HUTTON: No, I don't think money is everything.

The CHAIRMAN: You mean in certain localities.

Mr. HUTTON; Yes.

The CHAIRMAN: You say it has checked the growth of value at that particular point?

Mr. HUTTON: That particular point is checked.

The CHAIRMAN: But the same increase in value would occur in some other direction, would it not?

Mr. HUTTON; Well, I am not so sure of that.

The CHAIRMAN: Every building or institution which is in itself a value to the city is surely an advantage to it in a pecuniary point of view-adds to the actual value of land in that particular city?

Mr. JUSTICE MACMAHON; I hardly think that that is the case.

a railway station is situated, it drives away business from that locality.

Take a case where

The CHAIRMAN: From that spot, but surely it brings business to the city?

Mr. LYNCH STAUNTON: It is a growing business in Toronto.

Mr. JUSTICE MACMAHON: I understand Mr. Hutton's remarks are addressed to the fact that in the vicinity of where churches are the value of the land as residential property or otherwise is not enhanced; he lays down that single proposition.

Mr. HUTTON: Yes.

Mr. MACPHERSON More particularly in business centres.

Mr. JUSTICE MACMAHON: Although that would not apply to very large cities like New York or Chicago.

Mr. MACPHERSON: No; but in Toronto and Hamilton we realize that putting pub

lic buildings of that nature in the centre of the oity is a disadvantage.

The CHAIRMAN: But if an institution of that kind is a good thing in itself for the city to have, is not the city advantaged by it in a money point of view, in money and land, when it is divided over the whole ?

Mr. MACPHERSON: Oh, certainly, but there might be an advantage if that were further from the city limits.

Mr. JUSTICE MACMAHON: That is, the nearer the church the further from grace. The CHAIRMAN: There is no scarcity of land in Hamilton, is there?

Mr. HUTTON: No, sir; we can enlarge the boundaries, and along the present boundaries there are a couple of thousand acres of land that are not built on yet. We cannot go south and north very much; we can go east and west.

The CHAIRMAN: I would like to know how you distinguish between educational institutions and churches. You say that educational institutions ought not to be taxed except where they are run for profit. Churches are not operated for profit.

Mr. HUTTON: No.

The CHAIRMAN: Then why should there be any distinction between churches and educational institutions? You would tax one but not the other. Is a church not an educational institution in your view?

Mr. HUTTON: In certain lines, yes. But we all have to have an education in order to do business. We do not have to have religion to do business.

The CHAIRMAN: We would be better for it.

Mr. HUTTON: Quite true, we would be better for it.

The CHAIRMAN: And that is all you can say cf education?

Mr. HUTTON: I don't know. The State has made it compulsory. They have not made religion compulsory.

The CHAIRMAN: But the State considers religion a good thing.

Mr. HUTTON Certainly, or they would not have exempted churches, I suppose. Mr. JUSTICE MACMAHON: It is said that the great educator is books, as expounded in the churches.

Mr. HUTTON I would go this far, although perhaps it would not receive much approval; I would tax all educational institutions except what are State owned.

The CHAIRMAN: A man builds a building for an art gallery, open to the public, or a great library for the benefit of the public; you would tax that, too?

Mr. HUTTON; I don't know that I would if it was free; it would practically be State.

The CHAIRMAN: No, it is private property.

Mr. HUTTON; I wou'd not of course exempt the land, because the land would be still in the same position, and the rates and all that would have to be taken up. I do not believe in withdrawing any of it from taxation. Were we to exempt only the build. ings we would not be taking anything from the taxable value, because that would be put on afterwards.

The CHAIRMAN: If when a private person announced his purpose of erecting a large building for a public library or for an art gallery the municipality made him a grant to assist him in doing it, it would be a good thing, would it not?

Mr. HUTTON: It would be a good thing, yes.

The CHAIRMAN: If they exempt him from taxation wouldn't that be a good thing too?

Mr. HUTTON: I think not.

Mr. JUSTICE MAC MAHION: When Mr. Carnegie made the grant of a large sum to Edinburgh they immediately exempted it from taxation.

Mr. HUTTON: You might still go further. The Massey Hall here thought they were going to get free of taxation because they were going to do an educational work.

Mr. JUSTICE MACMAHON: Partly, and partly for profit.

Mr. HUTTON: They claim there is no profit in it, although you have to pay to get into it.

Mr. FULLERTON: Massey Hall came before the Court on that ground, and we held it was within the Statute; it was not entitled to exemption.

Adjourned at 1 p. m, to 1.30.

On resuming.

The CHAIRMAN: Does anyone else desire to be heard on these two exemptions, namely, religious institutions and educational institutions? Were you proposing to address us upon those, Mr. Fullerton ?

Mr. FULLERTON: Yes, Mr. Chairman. There are some figures that I will ask to be put in later. I want first to direct your attention to the first subsection of ɛec. 7 of the Act, and there are some other sections that I want to deal with that are perhaps outside of the range of the general discussion this morning, but which I propose generally dealing with while I am on ny feet. I want to point out the way that this first sub-section is worked, I think. unequally and unfairly in certain cases different from others. Whether Crown proper ty should pay or should not pay, I think there is some property that should pay. Take for instance the land directly vested in the Crown, Upper Canada College. It has ceased to be used for the purpose for which it was created. Take the old Parliament Buildings; they have also ceased to be used for the purpose for which they were built; they are now

held by the Government, I am informed, fo sale, and are being off red for sale, and are therefore in competition with other land for the same purpose for which all other lands are in the market; and in cases of that kind whatever conclusion you should come to in regard to Crown property generally, I very strongly submit that that should be liable for taxation, for all taxation, and in any event that that should be particularly liable for local improvements and schools.

Mr. JUSTICE MACMAHON: If they are tenanted the tenants are liable.

Mr. FULLERTON: They are probably not tenanted. Let us assume they are tenanted, they are simply held; if they are tenanted the tenants are liable, but that is only a delusion and a snare, as I shall point out in a moment, because tenants are generally in the position merely of caretakers, and the assessment against them becomes of no importance, because the income does not pay, and it is no lien on the land. That has worked in one instance in a very peculiar way. The lands of the University are vested in the Crown as a trustee, and by two decisions, and which incidentally affect the question of taxation suggested by the President of the Board-Regina vs. County of Wellington, 17 Appeal Reports, 421, and Quirt vs. The Queen, in 19 Supreme Court Reports, 510—it has been held that land vested in the Crown, although the Crown is not the beneficiary but only acting as trustee, is equally free from taxation with land that the Crown owns in an official character. The result then comes in this way: The University loans money; by the way, I want to call your attention to two other sections that bear on the point, that is Section 23 of the Act and Sections 188 and 189 of the Act. The result then is, so far as the University is concerned, that they act as a loaning company. They loan their money in Toronto and elsewhere, they take mortgages. If the mortgage is not paid they foreclose; whatever taxes are behind they say "This cannot be a lien on this land because this is now foreclosed and vested in the Crown, you cannot recover your back taxes; we hold this land." They hold it, they sell it or dispose of it at a later period. Whatever length of time they hold it for it is free from taxation and the back taxes are cut out in that way. In three cases at least this has worked out.

The CHAIRMAN: The back taxes are a lien against the land, are they not?

Mr. FULLERTON: No, not as against the Crown.

The CHAIRMAN: I mean as against the private owner?

Mr. FULLERTON: They are not collectable against the private owner because of foreclosure.

The CHAIRMAN: They must make the city a party in foreclosing and give the city a possibility of redeeming.

Mr. FULLERTON: That might be, but would that help us any? The liens are not on the interest of the Crown.

The CHAIRMAN: They are just like any other encumbrance.

Mr. FULLERTON: No, my Lord, I believe not. (Reads section 189.) Sɔ that apparently we cannot affect their mortgage, and their mortgage cuts out our title for taxes and leaves us unpaid. I submit that that is an anomaly, possibly not expected by those who passed the Ac. At any rate, it has grown up and it should be corrected. Now, that is specially in addition to what I pointed out with such places as Upper Canada College, the Parliament Buildings and other unoccupied lands that are not held far any Governmental purpose.

The CHAIRMAN: If a man were to buy a piece of land on which there were arrears of taxes, would that cut the taxes out?

Mr. FULLERTON: Well, I submit it would.

The CHAIRMAN: I think not, It would require something very express in the Statute to have that effect. Why should it cut out taxes and not any other kind of lien ?

Mr. FULLERTON; But the case that I am putting is hardly that. The case that I am putting is the Crown taking a mortgage and the taxes accruing after the mortgage has been put there, and during the continuance of the mortgage, while the Crown has an interest there, and I think that distinguishes it and makes it so that, as far as the mortgage is concerned and foreclosure under it, subsequent taxes are cut out. Probably as to previcus taxes what your Lordship suggests would be right. What I have said covers sub section 2. I desire to say just a word on sub-section 3. Some question has arisen about burying grounds, and while it would at once suggest itself to one's mind, as