The CHAIRMAN: They have been doing it; I suppose their attention is not called to the rights of the municipality.

Mr. FULLERTON: I am not acquainted with the manner in which King street was opened up.

The CHAIRMAN: Queen street was also a public highway, and municipalities have been mulcted in perhaps half a million dollars in that crossing.

Mr. FULLERTON: The cost of the last subway was perhaps $130,000 odd.

The CHAIRMAN: To enable the railway companies to get safely across the municipal property?

Mr. FULLERTON: All I can say is that there the city had gone to the Railway Committee, had been referred back and an agreement was being made by reason of that reference back when it came into my hands.

The CHAIRMAN: I know the whole history of it.

Mr. FLEMING: There is a more glaring case even than that, that is the Dundas bridges, where the city has to pay nearly $100,000.

The CHAIRMAN: There was no original highway there.

Mr. FLEMING Yes, and the bridge was put up by the railway company, but the city foolishly had entered into a bargain with them.

Mr. FULLERTON: It was a trespass roadway that had grown up into a highway.

Mr. JUSTICE MACMAHON: That was the mistake there. Accidents became so numerous that there was a demand for a subway, and then the Railway Committee said, "The inhabitants of Toronto demand that they should be protected, and we are going to protect them, but we will make them pay."

Mr. FLEMING That subway was built largely because of the acts of the railway endangering people's lives, and there was an agreement entered into; the bridge was supposed to cost $150,000 and the railway was to pay $75,000, but anything in excess of that was to be paid by the city, and the result of that was that the work cost over a quarter of a million dollars.

Mr. FULLERTON: I was going to give a further illustration of the house at Queen Street subway. The arbitrator took into consideration how much it would cost to drop the floor of the house, to deepen the cellar, to rebuild the walls, and leave the building in the same position to the highway as it was before the subway was there Working it out in that way he got at that result. The evidence showed more, in fact; he was moderate when he took that way of computing, but I thought it was an unfair way of getting at the result.

The CHAIRMAN: Has anyone else anything to say on the subject of local improvements or any other subject that has not been before us?

Mr. GEORGE J. BRYAN: Mr. Chairman and Gentlemen ;-Yesterday afternoon a number of speakers drew your attention to some extent to the principle of local option in taxation. I take it that you are desirous of having all the light that is possible to be thrown upon this subject Having given it a little study for some years, I think I may shed a little light upon the question, which may cause you to be favourable to the suggestion made. This principle is not new. In various countries the principle has been embodied in law. In British Columbia, since the year 1896, they have brought that principle into play, and right up to the present time it has worked with the greatest possible satisfaction. The principle is not worked out in its entirety, it is only partially applied; but so far as it applies it has given great satisfaction. Under it a number of municipalities have the option of changing the mode of assessment, and in so far as these changes have been made, there have been no conflicts whatever. As an illustration, one municipality may levy a tax of say 25 per cent. upon the value of improvements; another may levy a tax of 50 per cent. on improvements. There has been no conflict whatever in that case, thus shutting off the possibility of any confusion arising from differences of the methods employed in different places. In the Northwest Territories as far back as 1896, I believe, the principle was tacked on to the law. It applies throughout the whole Territories; every municipality is permitted to change, reduce or abolish the taxes on buildings, personalty, merchandise, tools of trade and income. This law may be brought into operation by a vote of the Municipal Council or by a percentage of the voters petitioning for it. I must say that in this Territory no municipality has availed themselves of the

law, for the reason, as I understand, and as I am informed by a member of the Northwest Legislature, that they do not quite understand the methods of taxation in all its bearings. I would draw your special attention to the country in which this principle is working to-day, that of New Zealand. In 1896 the law was introduced by the Hon. Mr. Sedden, and from that time up to the present the Legislature has amended the law in various particulars, making it more workable in operation. Since the law has been applied each year one or more municipalities have availed themselves of it, and to-day there are over twenty different municipalities, taxing bodies, who have availed themselves of the law. I have gone carefully over the records as to the working of the law, and I have not yet been able to find one objection against it. A short time ago I had the pleasure of talking with the Hon. Mr. Edward Withey, who stated that in various municipalities since this law has been put in operation the incidence of taxation has been changed, giving the advantage to the municipality; that it has wiped out in many cases injustice which, under the old law as it worked, could not have been treated with, and the voters as a whole express themselves as satisfied with the changes that have been made. The law as it stands is in effect what I have stated applies partially to British Columbia and the Northwest Territories. It permits the Municipal Council to reduce the tax upon buildings or wipe it out altogether. In that country there is no tax upon personal property, thus a great part of the difficulty has been wiped out of the way. In 1893 there was a tax upon personal property levied by the Colonial Government that has since been wiped out. At that time there was also a general property tax levied upon buildings and real estate that has been wiped out, but they have a tax of two or three pennies on the pound on land which returns considerable revenue to the Government. The CHAIRMAN: You are distinguishing between the Government tax and the municipal tax?

Mr. BRYAN: That has really nothing to do with the local option feature. There is no tax levied on personal property municipally in New Zealand.

Mr. JUSTICE MACMAHON: Then the tax that went to the hands of the Government was the real property tax?

Mr. BRYAN Yes, sir.

The CHAIRMAN: So that there was a Government tax on real estate, and besides that a municipal tax.

Mr. BRYAN: Yes, sir, that was a general property tax.

Mr. JUSTICE MACMAHON: It was a fixed tax?

Mr. BRYAN: Yes, it was a fixed tax. That was wiped out at the time of the great changes in Government which took place about 1893 At that time New Zealand was in a very bad plight, and the Government saw fit to make these changes I have indicated. The CHAIRMAN: And that was followed by prosperity ?

Mr. BRYAN Yes, sir. Referring to the tendency of thought along this line, I may say that in the United States, foremost reformers in taxation have been advocating this principle as a mere solution of the tax problems that have presented themselves. In the various State Legislatures the question has been brought out in the form of a resolution, notably in six or seven States-New York, California, Washington, Kentucky, Colorado, Minnesota, Ohio and one or two others-and wherever the question has been brought up the Legislatures have endorsed the principle by a majority vote. In those various States, however, there is a Senate which again passes upon these questions, and as the Senate is not a representative body and, as a consequence, is composed of class interests, when this question came before them, without exception they defeated this principle, but notwithstanding their opposition the agitation is still continued. The effort to bring this principle into practical working is not applied to any section of the community at all. I noticed here yesterday two or three gentlemen, as single taxers, suggested this; but I may say from knowledge of the question that not alone do single taxers support this resolution, but business men, real estate boards, legislators, tax commissioners, have invariably taken a stand upon this question and supported it, so that it is not in any sense what it is sometimes termed, a single tax measure. It is proposed because it will enable municipal authorities in the best and easiest possible manner to arrive at a solution of those problems which seem to be most difficult of solution. I want to quote here the opinion of the Hon. David A. Wells, who was well known as an economist, and who recently passed away: "I am greatly in favour of the local option principle, and as your

proposed by law is framed I can see no objection to it. It is, in fact, a novel method practically of educating the people in respect of good and bad methods of taxation, and not merely the local taxpayers of New York but of the whole country. As it is, the taxpayer is bound down to a system to which no elasticity can be given except by knavery and perjury; it is contrary to the world's experience and best judgment of those who have carefully studied the subject, and he has no incentive to reason for himself with a view to obtain anything better, because he feels that he cannot get the Legislature to pay any attention to his conclusions. If permission to experiment on a smaller sphere is granted by the proposed bill, the taxpayers will take an interest in the subject and results will certainly be achieved to which the Legislature will give attention, because the argument of mere theory can no longer be urged in opposition." I think that opinion should carry a great deal of weight. But there is one point that bears here, that wherever these questions have been brought before the Legislature at any time to get a satisfactory solution, there have been continued amendments and re-amendments of the law that have been invariably in the wrong direction.

The CHAIRMAN: You think the Municipal Councils are wiser than the Legislature Mr. BRYAN: They are better fitted.

The CHAIRMAN: Why -It is the very business of the Legislature.

Mr. BRYAN Because they know their needs better than any Legislature.

The CHAIRMAN: Then they should send men there that could represent their needs. Mr. BRYAN: You must understand, Mr. Chairman, that the legislator has to treat with a thousand and one questions during the session, and the knowledge that he hasThe CHAIRMAN: That is what they are there for. You would not distribute the whole thousand and one among the municipalities so far as they are concerned? Mr. BRYAN: No, but my simple contention is

The CHAIRMAN: That would be chaos, wouldn't it -you would abolish the Legislature; it would have no function if you would let every municipality be its own Legislature.

Mr. BRYAN: The simple point is this, that the community to-day have the power of the law to expend their moneys any way they see fit to a certain amount; they have a right to go ahead with any public improvement they desire, and it is not the business of the Legislature nor of any municipality to interfere with their right in this respect. The laws sanction this power, but it does not give them power to say how they shall pay for those improvements. I maintain that they should have this power. We have to meet the expenditures involved; we are best able to say how these expenditures should be met; the Councils of this community know the sentiment existing in the community better than any farmer, who represents a country district and who comes before the Legislature and wants to produce a law applying to Toronto that he knows nothing about.

The CHAIRMAN: He wants option in his own municipality.

Mr. BRYAN: He gets it. The majority of the members of the Legislature are residents of the farming districts. They have passed laws invariably in their own interests. As an instance of this, there is the taxation law which applies to the farming community, where exemptions are made largely in the interest of the farmers; but I question very much whether these same farmers would be fair enough to say, "Because we have these exemptions we also maintain that the cities and towns should have the same privilege." They pass laws in their own interests, but they are not prepared to pass laws in the interests of the cities and towns, notwithstanding the fact that it makes no particle of difference to them how Toronto or any other city raises its revenue-none of their business whatever. In 1894 or 1895 I invited the opinion of Hon. W. R. Meredith, now Chief Justice, in respect to this local option, and he replied to me and said, "I see no reason why any municipality should not have the right to raise its taxes as it saw fit." I wish to give the opinion of Mr. Thomas G. Shearman, a name very high among authorities. He says:"The simple, safe, reasonable and practical solution of this question of local taxation is to commit it to local governments for decision. There are further reasons for this course

The CHAIRMAN: He is speaking in reference to his own country?

Mr. BRYAN: Yes, sir. "Although all Europe has tried and discredited taxation of personal property, our own people have grown up ur der an opposite theory. Every state

tries to tax it. No American has any personal experience of the system which does not pretend to taxation. Few Americans can know or care anything about the experience of other nations. As an experiment this proposition must be treated, and it is decidedly wise to make fiscal and social experiments on a small scale in the first instance. If there is any doubt as to the wisdom of the change it is much better to try it in the country first rather than in an entire state. Eminent authorities on political science have emphatic ally expressed their belief in experiments on social problems in the sections instead of the entire country." The advantage of a local option law in this Province is that it does not commit the whole Province to any definite plan of taxation. If any municipality does not desire to avail themselves of the law in making any change in the mode of assessment, they are at liberty to maintain the old method, but if, say, the city of Toronto or the city of Hamilton or any town desired to reduce the taxation on the buildings, for instance, they should have that right; and if they do make these changes—and no matter in what way the changes are made-there is no conflict, there is no confusion, there can be no more confusion in the mode of assessment than there is in our present assessment.

Mr. JUSTICE MACMAHON: I dare say that in rural municipalities local option could be very easily managed. In large cities and towns it may be somewhat difficult to deal with local option.

118.

Mr. BRYAN: I venture to differ with that expression.

Mr. JUSTICE MACMAHON: I am putting it forward in order that you may enlighten

Mr. BRYAN: Well, I would illustrate it in this way. Assuming the present law as it stands; we desire in this community to make a change; for instance, a percentage of voters would sign a petition that taxes upon merchandise, personalty, be abolished; this petition would be presented to the council; the council would have power under the law to say that personalty shall be abolished; or it may have the question determined by submitting it from the referendum to the people. They then by a majority vote decide how the change shall be made, whether they favour that change or not; it lies with the citizens. Surely they are in a position to know their needs in that particular respect. A8suming then that the change were made, that the taxes upon merchandise ceased to be, according to their express will, it then lies with the city authorities to say just the tax levied so that the loss from that particular source will be made up by spreading it over the remaining property which is taxable, and as was pointed out, there is such a small percentage of personal property which bears taxation that the amount to be made up is s comparatively small that it would not be felt. So with respect to any other changes. The CHAIRMAN: Your subject is gradually getting a little broader.

Mr. BRYAN: It has more or less bearing on the point, in reply to the question of Mr. Justice MacMahon.

Mr. JUSTICE MACMAHON: It is just the general proposition that struck me, that it would be somewhat difficult to deal with local option in cities

Mr. BRYAN I have not found it out by reading the opinions of men—

Mr. JUSTICE MACMAHON: You appeal to the referendum.

Mr. BRYAN: I have confidence in the people.

Mr. JUSTICE MACMAHON Certainly, and the small holders would say,

Oh, here are all the rich merchants, I think we will put the tax on their stocks." The rich merchants say, "There are corporations here that are monopolies, I think we will just put the taxes on them." You get the referendum, it would work in about that shape.

Mr. BRYAN: I have suggested this principle with a certain amount of limitation, For instance, I would not include in any local option bill the power

Mr. JUSTICE MACMAHON: You see, to work it out to its logical conclusion, the local option must work as well in New York as it works in Toronto or as it would work in Hamilton or London or Brantford or any of those places. Now the State Legislature said two or three years ago, "We will tax the Central Railway $12,000,000 for entering into New York" That ended that. That is, the State Board found that the railway for its entrance, including passage from New York, ought to pay that amount. If that was to go to a referendum how would it be treated?

Mr. BRYAN: I don't wish you to misunderstand me. I offer this principle of local option with certain limitations. In the first place

Mr. JUSTICE MACMAHON: You would make so many exceptions that the local option would not be operative.

Mr. BRYAN I believe the people are not certainly advanced in some directions sufficiently to push forward the principle in its proper sense as relating, for instance, to the taxing of franchise, the taxing of other corporations, or singling out for taxing special corporations. For instance, I would not delegate the power to the community to levy a special tax directed against departmental stores. I would say that they are usurping the powers of government, and the Government has not a right to single out any special class for special taxation. No, it is simply to take property which is possessed is by the average citizen, which comes under the head of his real estate and his personalty and his income; these are the factors which I would embrace in this law which I would allow the municipalities to determine for themselves. Personally I should be disposed to wipe out entirely the taxes upon business personalty, but assuming that the community were not sufficiently advanced to agree to that proposition, I would leave it to the municipalities to determine. Then again, with regard to the exemption applied to churches and educational institutions. Now the Legislature may deem it right that these exemptions should exist, but the consensus of opinion in this Province, I believe, is opposed to the whole exemption applied to these institutions, therefore I would say that if the Legislature would go this far, that it would leave it to the people of the municipality to determine whether these institutions should have that exemption, I believe their wisdom would soon bring about a solution of it. There are some other questions that might be involved. Mr. JUSTICE MACMAHON: We are getting into exemptions again.

Mr. BRYAN Pardon, me, sir, I am not one of those visionary gentlemen. Then again, with regard to the rental tax, it is optional with municipalities to apply that. So far the Council has not seen fit to adopt it, I believe because it has not been thoroughly

understood.

Mr. MACKAY: Has it been adopted?

Mr. BRYAN: It has not been adopted in any town or city, but in some smaller municipalities they have practically made a little application of it. I should be inclined to make it optional with a municipality to continue that optional feature of the business rental tax, and put it in this way: any municipal corporation may have the right to change, reduce cr abolish the taxes upon buildings, upon merchandise, upon personalty or upon income, or they may tax any interest, or they may apply a rental tax to make up any deficiency. I would make it sufficiently elastic so that there would not be any difficulty in understanding it, or any difficulty whereby it might be put in operation.

Mr. BUTLER: Would you limit it so that there must be equality of taxation? Mr. BRYAN I am of opinion that every individual, whether he possesses property or not, is a taxpayer.

Mr. BUTLER I mean to say would you apply it in such a way on any given property? Mr. BRYAN: I would apply it on the single vote principle by which under the present law the ratepayers determine these questions

Mr. BUTLER: You would leave it so that a section, for instance, that sought to punish one particular line could do so if they chose?

Mr. BRYAN: I fail to see that they are going to do anything rash in that respect. Mr. BUTLER: Assume they want to do it, would you leave them the power to do it! Mr. BRYAN: As a matter of fact they have the right, but under this submission that I make that would not be possible.

Mr. BUTLER: You would give them the power ?

Mr. BRYAN: It would not be possible; I would limit it. At one time the Toronto Globe expressed itself in this way: "It seems a weak point in our municipal system that it precludes the possibility of experiment. And as changes are effected from year to year they must be made for better or worse by every municipality in the Province. But the provisions of the Provincial capital are so exceptional in many respects that it affords no opportunity of comparing the respective merits of different systems working under similar difficulties. When opinions are diverse and even chaotic, as they are upon many questions of municipal policy, the policy of experimenting might prove advantageous. There would be no danger attending a slight relixation in the laws which impose absolute uniformity in all things." I may say to Mr. Butler that I would not suggest local option if I thought for a moment that it would delegate to some members of the community the power to apply oppressive measures to any other section of the community; and I believe it is within the power of the men who will draft such a bill to avoid that, so that there would be no danger at all.