Mr. JUSTICE MAC MAHON: Then what you would suggest is that the Legislature should pass a tenative measure applicable to a certain portion of the Province in order that local option might be tested?

Mr. BRYAN: Exactly, and here is another point: we have seen from many years of experience of our present methods of taxation that there is a great deal of perplexity and confusion arising from it, that the opinions are very diverse. Under the operation of this law we would have an opportunity within the course of a year or two of finding out just how the changes are working in the different municipalities, no matter what changes were made in Toronto or Hamilton or in similar towns the Legislature would be in a position after a few years trial of the changes made, of knowing whether the thing was workable or not. You simply have to refer to the experience in New Zealand to know that they are working satisfactorily there, but we want to try here. We don't see why we should not have that opportunity.

Mr. MACKAY: It would cause competition between municipalities somewhat similar to the bonus system.

Mr. BRYAN: That question arose in the Legislature some years ago when Mr. Waters was introducing the bill on the abolition of the personalty tax. That point is a little debateable. It might have a tendency, for instance, to place Toronto in a specially advantageous position, or Hamilton in a specially advantageous position. If Hamilton saw fit to exempt all capital from taxation I believe as a result capital would largely gradually move in the direction of Hamilton where taxation is light and where it was encouraged to locate industries. Well, if other municipalities saw that Hamilton was profiting by the introduction of new capital and necessarily gaining as a result over other municipalities by thus encouraging fresh capital, I believe other municipalities would wisely adopt the same plan that Hamilton adopts. Therefore the temporary objection would be eliminated by the general benefits, and results that would follow to the other municipalities who saw the advantages of the working system. That is the point, we would immediately have the lesson before us; if the plan worked satisfactorily in one or more municipalities and they are deriving a great gain and people are profited and it is bringing great prosperity and wealth to the municipality, then it stands to reason that other municipalities will adopt the plan. Then we as a community, as a Province, would be in a more advantageous position than some States in the American Union where they still impose taxation on wealth. I may say further that a great number of the newspapers support this principle in our own midst. The Canada Farmers' Sun has expressed in its favour, the Toronto News and Toronto World have expressed themselves favourably to us in this matter.

Mr. JUSTICE MACMAHON: The other great exponents of public opinion are silent?
Mr. BRYAN: I don't know. Some of them are and some of them are not. I think

I have devoted sufficient time on this question.

The CHAIRMAN: You have presented the case with great force, Mr. Bryan. Mr. R. J. FLEMING (Assessment Commissioner, Toronto): There is a matter I would like to speak of for a moment, just a couple of suggestions I would like to make. The first was, I thought perhaps it would be an improvement to the Assessment Act if you were to give assessors and assessment commissioners power to ask for a declaration as to a man's personal property or i- come assuming that the present law remains upon the statute book, and if it were changed to a business tax and a tax upon income, a declaration would be just as essential. At the present time the assessors have the right to go into a man's store and value his goods, a very hard thing to do exactly, and sometimes assessors are sceptical as to the value of the goods that the owner says he has upon the premises. There is the remedy. If the assessor goes into a store and the owner says, "My goods are worth $10,000 but I owe $8,000 upon them," it may be a man whose rating is given in Bradstreets as being a great deal better than that, and the assessor is not justified in taking his statement, and he cannot protect himself from the Council or Court of Revision if the case would come up if he were to take the statement, so he has to assess the man for $10,000 and go to the trouble of making the man come before the Court of Revision. We think sometimes that is a hardship, and if we had the power to ask the man to give a declaration as to his exact standing it would facilitate very much the work of the department. The second suggestion is as to the investigation of a man's accounts in public. I think that system is wrong. The assessors go into a merchant's

office and sit down and he tells exactly the position of affairs, and frequently he will say, "Now, I don't want to make this public because if I did it will injure me in the bank, I have had a bad year and business may be better next year," and the Assessment Department assess the man for what is right and fair. Now any man has a right to appeal against that man's assessment and bring that man before the Court of Revision and to the County Judge and discuss those matters in public. I think the County Judge should have the power of investigating that man's accounts in private and trying the case in private, or that just such representatives as he really thinks in the interest of the public should be present. I think that suggestion is in the right line. I think perhaps that change that you speak of may be embodied in the sections of the Act that you are preparing.

Mr. MACPHERSON: You ask people now, merchants, to make declarations?

Mr. FLEMING: No, we very rarely do. We have the power to do it. We go in and ask a merchant for his goods. He says, "I have only $2000 worth of goods," and we see $20,000 worth of goods there, and we have either to put a large assessment on him and make him go before the Court of Revision—a thing which we don't like to do— and we think if we had the power to take a statutory declaration as to his standing it would be a better way to do it.

Mr. FULLERTON: Sections which appertain to this are sec. 47, 48, 49 and 50 of the Assessment Act, and the inadequacy of these sections would be very apparent on reading the fines imposed by 8. s. 2.

Mr. MACPHERSON: You must remember it is very hard for any merchant to give a statement of exactly how he stands.

Mr. FULLERTON: Possibly. Is must be to the best of his knowledge and belief approximately, and then that will be subject to the discretion of the Commissioner, who in most cases I take it wouid be fairly discreet in dealing with matters of that kind; but there should be some means of getting from each firm or corporation a statement to the best of their ability. It is the only means of getting at incomes and personalties so as to establish equality. If the person makes a private inquisition we think they should make that.

The CHAIRMAN: You think the penalty is wholly inadequate?

Mr. FULLERTON: I dɔ, I think the penalty ought to be repeated and repeated until the statement comes.

The CHAIRMAN: In your experience have the penalties been imposed in numerous cases?

Mr. FULLERTON: No case has come to me where the penalty has been imposed.
The CHAIRMAN: Even the small penalty?

Mr. FULLERTON: I knew of one case a short time ago where they were threatened; I never knew of that being imposed.

Mr. FLEMING: We have asked for these and we have been told that we would not get them. We have known what the penalty is and we have not desired to make it public, and we have suffered rather than let every person know that they could refuse to give us a statement on payment of such a small sum.

The CHAIRMAN: You would increase those penalties?

Mr. FULLERTON: I do not know that the penalty should be increased, but I think the penalty should be repeated day after day until the statement comes. When the matter is brought up the magistrate should be able to impose a fine of $100 a day until the statement is brought in.

Mr. JUSTICE MACMAHON: With power to remit?

Mr. FULLERTON: Certainly. As it stands to day this is no obligation at all; it gives no power to the Assessment Commissioner; it simply leaves them to laugh at us in case we talk of taking proceedings where the tax is large.

The CHAIRMAN: There would be some discredit besides the penalty?

Mr. FULLERTON: Possibly that might amount to something.

The CHAIRMAN: Does not that mean a great deal?

Mr. FULLERTON: It depends on the man. To some men it would mean a great deal. Mr. CHAIRMAN: Take the average man.

Mr. JUSTICE MACMAHON : I suppose the man ought not to be considered at all. If it is dealt with as is defrauding the revenue of the country it might just as well be dealt

with as defrauding the revenue of a city. In paying the duty on goods a man has to make a declaration or take an oath that the statement is true. He has to produce evidence that his statement is correct, and he pays the duty to the Government on the statement so made, or he is guilty of fraud.

The CHAIRMAN: There is a very large forfeiture.

Mr. JUSTICE MACMAHON: There is a very large forfeiture. I don't see why there should not be some sort of measure whereby the owner of goods who wants to defraud the city government should pay.

Mr. FULLERTON: I do not think the disgrace would be as much as you suggest, Mr. President. Suppose a board of directors direct a statement not to be given by the Secretary; the Secretary comes into court and says, "I cannot give that." The fine is imposed of $100. What particular discredit is it to him? The $100 is paid and there is an end of it. Nobody would take his word a bit the less; indeed they would think a man that would refuse to give a statement and say anything that was untrue, and would pay $100, would be entitled to credit for it. Some of them might have a poor opinion of the moral force of it.

The CHAIRMAN: If the penalty is not enforced you cannot tell what the effect of it would have been.

Mr. FULLERTON: I know what the effect would have been if it was wrong.

The CHAIRMAN: You know what the effect would be if it was defrauding the revenue of the country?

Mr. FULLERTON: There the penalties are more effective because they have means of finding out what the amount is, and I know in England the same plan is adopted, but there the officer gets the affidavits as to income, etc. There is this further, I believe that there is a particular officer sworn to keep secret the results that are sword to him. The CHAIRMAN: The present penalty is for not delivering a statement, and also for delivering a false statement?

Mr. FULLERTON: Yes.

The CHAIRMAN: Are there any instances in which a statement has been refused?
Mr. FULLERTON: I am told there are dozens of them, that every year they are refused.
Mr. FLEMING : Scores of them.

Mr. FULLERTON: We don't get half of them.

The CHAIRMAN: I am surprised that the penalty has not been imposed when a statement has been refused. However, your argument is that the penalty is too small?

Mr. FULLERTON: I think the penalty ought to be increased. I think the statements instead of being made in writing should be a sworn statement.

The CHAIRMAN: What would be the use of increasing the penalty if if is never enforced?

Mr. FULLERTON: Of course the reason for not inflicting the penalty up to date is that it was undesirable to make it generally known that it was so small. The CHAIRMAN: So small that it is assumed it would be useless?

me.

Mr. FULLERTON: That has been the assumption, and that is what has always struck

Mr. JUSTICE MACMAHON: Suppose the declaration is brought in under the perjury class, there would not be many false declarations.

Mr. FULLERTON: There would be none among the respectable members of the community. Managers of corporations and heads of financial and commercial institutions would not be guilty of that.

The CHAIRMAN: There is no prosecution for either non-delivery or for false delivery? Mr. FULLERTON: There have been none for either

The Commission adjourned at 12.30 till 10.30 to-morrow, to hear the manufacturers on the subject of their assessment.

FIFTEENTH DAY. THURSDAY, NOVEMBER 29TH, 1900.

Commission met at 10.30 a.m.

Present :-All the Commissioners.

The CHAIRMAN: This day was appointed specially to hear what the Manufacturers had to say to the Commission, and the Commission is now ready to hear any body on their behalf.

Mr. P. W. ELLIS: Agreeably with the understanding arrived at when we appeared before you last week, we have communicated with the members of the Association throughout the Province of Ontario and have prepared in writing the substance of the replies we have received from them.. If you wish, I will read the memorial we have prepared and place it in your hands, and we can discuss it.

The CHAIRMAN: Very good, that will be a convenience to us.

Mr. Ellis then read the memorial as follows:

TORONTO, NOVEMBER 29TH, 1900.

TO THE ROYAL COMMISSION APPOINTED BY THE ONTARIO LEGISLATURE TO INVESTIGATE THE SUBJECT OF ASSESSMENT FOR THE PROVINCE OF ONTARIO.

Memorandum of the views of Ontario manufacturers presented through the Canadian Manufacturers' Association.

The Canadian Manufacturers' Association includes in its membership leading representative concerns engaged in every line of manufacture and situated in every part of the Province of Ontario and has taken the trouble to ascertain the views of such members upon the important subjects engaging the consideration of your Honourable Body so far as the same specially affect manufacturers.

As was to be expected there is considerable divergence of opinion on some of the points involved. The Association however presents in this memorial only the points on which there is substantial unanimity among its members.

It will be understood that the views presented are not those of men having any favorite theory to advance or advocate but are the views of an Association the prosperity of whose members is dependent on the progress of the Province and whose interests are therefore best served by an equitable and simple system of assessment and taxation.

1. In the first place it is practically the unanimous expression of manufacturers that the present system of assessment of personalty is unfair and unjust and that its enforcement would be destructive to the industries of the Province.

Your Honourable Body has been addressed by so many other interests on this point, that the Association deems it unnecessary to go into the arguments in detail, contenting itself with giving its full endorsement to the views on this subject already presented from other quarters and adding a few considerations growing out of the practical experience of its members.

The theory of the present law apparently is that all capital invested in manufacturing should for municipal purposes be taxed, and taxed not like many other investments on it income or profits but on the principal. This would mean, speaking roughly, that those using their capital in manufacturing must pay a municipal tax equal to two per cent. thereof each year. Manufacturing business in this Province could not possibly bear such a burden and the enforcement of such a law would drive outside the limits of the Province such factories as could be moved and would absolutely extinguish a large proportion of those remaining.

Industrial progress has been possible only by the connivance of municipal officials in the systematic violation of the law. Such a state of things lowers public morality, puts

a premium on dishonesty and favoritism, and clothes municipal officials with a discretion, and imposes on them a responsibilty never intended by the law, and whieh cannot be justified on any sound principle. This state of things is specially injurious to manufac turing interests because it discourages the investment of capital in such enterprise where the toll to be taken for municipal purposes in effect depends upon the individual opinion -possible upon the caprice-of the person occupying for the time being the position of assessor of the municipality; and because in most lines the manufacturer has to compete with goods produced outside the Province by concerns who not only contribute practically nothing to municipal taxation in Ontario, but who are for the most part entirely free from any taxation of personalty where the manufacturing is done.

2. Should it be the view of your Honourable Body that municipal requirements in this Province are such as to necessitate additional source of taxation besides real estate, the Association submits that a business tax based upon rental values as determined by assessment is in every way preferable to the existing system. It could not be evaded; admits of no falsification or fraud, and involves no inquisitorial inquiry into the affairs of any business concern.

Such a tax if imposed should in the view of the Association be obligatory on all municipalities so as to secure uniformity.

It has sometimes been urged that such a tax would bear more heavily on the retailer than on the manufacturer or wholesaler. That is a detail which might require consideration on the part of those who frame a new law; but it is to be observed that the competition of the retailer comes for the most part from retailers in the same municipality and they would at least be on equality as between each other. The competition of the manufacturer on the other hand comes not only from other parts of the Province but from points outside the Province by manufacturers who have no such burden of municipal taxation imposed on them as the law of this Province imposes.

It should also be noted that the retailer for the most part does his business and earns his profits in and from the municipality. The manufacturer on the other hand usually does his business and makes his profits from a larger area and gathers business into the municipality which is benefited thereby in many ways.

3. The only other point with reference to which the Association finds it necessary to address your Honourable Body has relation to municipal exemptions to manufacturing industries. It will be clear on consideration that the repeal of the present onerous law of personalty assessment would tend to greatly minimize the importance of exemptions and bonuses. They owe their existence partly at least to the necessity for the mitigation of the hardship involved in taxing personalty.

Referring however to present conditions, the members of the Association are praotically unanimous in urging that the municipalities should retain power to grant exemptions to industrial concerns, but with equal unanimity they object to the provisions of the law requiring the assent of a certain proportion of voters qualified to vote in the municipality, instead of a certain proportion of those actually voting, for the reason that the present statute makes the granting of exemptions feasible in small municipalities while it is practically impossible in larger ones.

The Association strongly urges that the law should be so framed that not only in theory but in practice it shall be equally applicable to all municipalities, thereby securing uniformity.

All of which is respectfully submitted.

On behalf of the Canadian Manufacturers' Association.

P. W. ELLIS,

President.

T. A RUSSELL,

Secretary.

Mr. ELLIS: Now, Mr. Chairman, there are several other members here who may wish to say something upon any discussion that may arise over this memorial, and we would ask your kind permission to permit our members to address you after some discur sion has already taken place, and that may lead to some points that may arise. I would now ask Mr. D. E. Thomson, the solicitor of our Association, to address himself to you. Mr. D. E. THOMSON, Q. C.: Mr. Chairman and gentlemen of the Commission, as you