Co-operative Commonwealth Federation (C.C.F.)
Yes, we did.
Subtopic: AMENDMENTS TO EXTEND BENEFITS AND PROVIDE CHANGES IN ADMINISTRATION
Yes, we did.
Mr. Hamilton (York West):
We keep on doing it every year.
I would say your memory is at fault.
Mr. Hamilton (York West):
have been away that day.
We find ourselves in the position where our Conservative friends are deciding that now is the time, now is the hour, to make an issue out of something that should have been made a real issue a year ago. Certainly, I agree with the hon. member for Cape Breton South in respect to
Municipal Grants Act
the division of taxes and the fact that we should have more decentralization of industry and let the provinces share industrially rather than on a taxation basis.
The reason for my rising at this time is that two years ago I had the pleasure, at the time the minister introduced a bill along similar lines, to commend him for it. In these circumstances I am very happy to see this bill before us at the present time.
I am not a member of the banking and commerce committee, and therefore there are some questions that do come to me with respect to this bill and I should like some clarification on at least one or two of them. One has to do with the spelling out of the lands or buildings that would be taxable so that municipalities would be in a position to know whether they are taxable or not.
The parliamentary assistant was in the committee when I was there as a guest and I passed along a question to one of his colleagues, who was good enough to present it, as to whether telecommunication stations were taxable, and it was not determined whether they were or not. I have one in the riding which I represent and that, of course, makes it desirable to find out whether they are taxable.
The hon. member for Fraser Valley, who is in the fisheries committee at this time, asked, I believe, whether experimental stations were taxable as such, the land or buildings, or both, and to what extent. We understand that Polymer is fully taxable and yet certain other crown companies are not taxable at all. Possibly, if the parliamentary assistant would spell this out it would be of some help to the committee.
Another reason for my rising at this time is that on February 15 of this year I had the pleasure of raising a question in the house which the Speaker declared was out of order. My question had to do with a clipping from the British Columbian of February 12, the heading of which read:
Credit Failure Stalls Hospital.
I do not wish to read the whole of this clipping, sir, but I feel that I must read some of it because of the fact that on that day the minister was good enough to make a statement following the Speaker's declaration that my question would not be allowed. He said, as reported at page 1322 of Hansard:
I think I can answer the question by saying that the facts that appear to be put on the record are not known to me. If my hon. friend will write me a letter. I shall answer it promptly.
Well, I did write that letter quite promptly and to date I regret that for some reason I have yet to receive an answer. Therefore, I must avail myself of this opportunity to
present the facts as I see them in the hope that possibly the minister has the answer. I understand that he is in the process of preparing the letter but I have not received it yet. Possibly the parliamentary assistant is in a position to answer.
Part of this clipping goes on to say this:
Surrey is the municipal district in which the hospital was being built. I continue:
Surrey council was informed yesterday by their fiscal agents, A. E. Ames and Company, that it was impossible to sell the hospital bonds or any other large municipal debenture issues on the Canadian market.
The only alternative suggested by the agents is for the municipality to place the issue on the American market, which would cost the taxpayers 6i per cent interest plus per cent bonus rate on American funds.
That, Mr. Chairman, is a most unfortunate situation and probably the parliamentary assistant recognizes it as such. It does make it very difficult indeed for the municipalities who find themselves in the position of having to erect public buildings. It is not a question of wishing to build a hospital or wishing to build additions to their schools, but when you have a district such as the one in which I live where the population has increased by over 20,000 in the past four years, you find that they require more schools.
I see the parliamentary assistant shaking his head. I suppose he is indicating that he feels this is completely out of order. I am satisfied that probably in the true sense the remarks may be out of order but, Mr. Chairman, I would say this. In view of the fact that we are discussing the finances of municipalities and the assistance to municipalities at this time, this bill is intended to alleviate their condition, and we do have certain proposals which would augment municipal finances and assist them to a greater degree. I intend to come to that very shortly.
I do hope that the parliamentary assistant finds the time to make a statement on a situation such as this where municipalities in general across Canada find themselves in the position of having to go to a foreign market in order to sell their bonds so that they can carry on the work that they have been set up to do.
I realize full well that the minister from time to time has said that the municipalities are the creatures of the provincial governments. Certainly, the municipalities are the creatures of the provincial governments but at the same time the federal government is the creature of the provincial governments owing to the fact that we would never have had a federal government if it had not been for the decision of four of the provinces
to go ahead and form a dominion, and in so doing we have arrived at this position.
We might debate for some time as to who is responsible, but that would not answer the problem in so far as the municipal officials are concerned. The answer to this particular problem, I feel, might well be found in the communication I received from Mr. E. R. Parsons, the reeve of the corporation of the township of Richmond. The council of Richmond passed a resolution, a copy of which was sent to me. I expect copies were sent to all members from British Columbia. It reads as follows:
Whereas the federal government of Canada has deemed it desirable that standards of safety, health, housing and welfare be raised within this country:
And whereas the federal government, through the enactment of new legislation, and through the administration of existing statutes, has withheld its support of and participation in both private and public community development projects, where such schemes are jeopardized by inferior municipal services:
And whereas the majority of the municipalities of Canada are anxious to achieve the high standards of safety, health, housing and welfare which the federal government deems desirable;
And whereas it is no longer economically feasible for municipalities to borrow money from nongovernment sources the funds necessary to provide urgently required public services:
Therefore be it resolved that the government of Canada establish a fund from which municipal corporations may borrow money at a nominal rate for the following purposes:
(a) sewers and sewerage plants,
(b) water mains and works,
(c) roads, bridges and street lighting,
(d) parks and recreation facilities.
I am satisfied, sir, that hon. members will recognize in this resolution a proposal that has been made not only on one occasion but on several occasions by members both from this group and other groups in the house.
Certain of the provinces have recognized their responsibilities and they also have what we term a revolving fund to assist some of the municipalities; but the very fact that this government recognizes the need for further municipal assistance, which is indicated by the introduction of this bill, is indicative itself of a recognition of the need, which is only being partially met, and very partially, by the government of today in the way in which the hon. member for York West mentioned just a few moments ago.
Certain of the municipalities that have these public buildings are going to receive that assistance while others which have very few or no public buildings will receive very little benefit from it. It is not helping them in any way, shape or form.
It is not necessarily my plea that only those municipalities that are fortunate enough to have taxable buildings or property under the terms of this act should receive
Municipal Grants Act
benefit from it. I feel, as do hon. members of this group, that each and every municipality across Canada should have means made available to them whereby they can receive money at a low cost in order to carry on with progressive construction in the continuation of their work.
Before closing my remarks, Mr. Chairman, I should perhaps add in fairness to the Minister of Finance that when I raised this other question with respect to the letter he promised in return-I believe he was writing to my district to get in touch with Ames and Company-I appreciated that this would take some time. However, I think that for the information of all hon. members if the parliamentary assistant could make a statement on the subject it would be of value to each of us.
Mr. Johnston (Bow River):
Mr. Chairman, before the clause is carried I would like to ask a question. Since the purpose of Bill No. 158, according to the footnote, is "to increase the grants on federal property up to the full tax equivalent", my question is this. While Banff is located in a national park, for the purposes of collecting hospital and school taxes it is considered as a municipality. That arrangement was entered into when hospital service was introduced in Banff and of course it has been considered in that light for a long time as far as the collection of school taxes is concerned.
Perhaps the parliamentary assistant could answer the following questions. Will the people of Banff be able to collect taxes for school and hospital purposes under this new schedule of rates? I understand a new schedule of rates will be created or at least the assessment will be increased and the overall amount of taxes collected will be considerably greater. The position of Banff is unique in that the town is located in a national park. I wonder if the minister could explain just how this is going to apply in the town of Banff? Will the people of Banff now be able to collect a higher rate-for their schools and hospitals under this legislation?
Perhaps I could answer that now. My hon. friend will know that the Municipal Grants Act ever since its enactment and even under the amendments proposed specifically excludes from a grant in lieu of taxation a park, historical site, monument, museum and other public amenities of that kind; but I am able to tell my hon. friend that irrespective of this legislation the Department of Northern Affairs and National Resources has been negotiating with the school district to which my hon. friend refers. I understand there are approximately
Municipal Grants Act 17 children living in government dwellings and going to school in the school district to which he referred. I believe an arrangement has been made through the Department of Northern Affairs and Resources to pay to the school district the equivalent of the nonresident fee that would be set by that school district for someone who did not reside within it but whose children for some reason required schooling.
Mr. Johnston (Bow River):
I know that
arrangement exists, Mr. Chairman, but that applies only to the 17 children who are attending school there. These are the children of people who live in government-owned houses in Banff. Under this new legislation the federal property will become subject to tax. For instance, there is a post office there and an administration building. If they were located outside the park, let us say in Calgary, there would be no question but that they would be subject to tax on their assessment. Is that not so?
That is so with respect to the type of property to which my hon. friend refers but I point out to him that in no municipality would this act be applicable to such a property as a park, a historic site, a monument, a museum, a public library, an art gallery or an Indian reserve.
Mr. Johnston (Bow River):
But the point is that the buildings the parliamentary assistant has itemized are exempt and there is no indication that a post office or an administration building is exempt. When you come to put a value on the post office building, the administration building and other such buildings excluding those which the minister mentioned, there is a vast difference as far as Banff is concerned. The federal government is now paying the tax on only these 17 children.
That is right because all the land is federal government park land.
Mr. Johnston (Bow River):
Certainly when the federal government has property such as a post office and an administration building situated in Banff and they are supplied with all the utilities then the buildings are put in a different category. That is my point. I want to know at this time whether the people of Banff are going to be treated in the same way as the people in any other municipality.
What utilities outside of the school services of the school district are provided within that area that are not paid for by the Department of Northern Affairs and National Resources?
Mr. Johnston (Bow River):
The water and sewerage system and the gas and electricity,
for instance. Certainly it cannot be said that the federal government is paying its share for the water and sewerage, just to take one example. I mentioned this before but I think it bears repeating. The federal government has now gone in on its own and is going to extend the water and sewerage system in Banff, making it approximately two or three times as large as it was before. That is not being done to accommodate the people of Banff; it is being done to accommodate the increased tourist trade that will be there for two or three months each year. The people of Banff are expected to pay half of that and their rates have been doubled. The rates in Banff are now higher than those in Calgary for equal service.
I believe that under this legislation Banff should be considered as any other municipality would be considered at least for the purposes of the application of this tax to educational and hospital services. Certainly the people of Banff should not be required to maintain school services and pay for them merely to accommodate these 17 children who attend school there because they are the children of departmental officials who live in government-owned houses.
The federal government owns a vast amount of property in Banff. Other municipalities have been recognized under this legislation and that has been the fight all the way through right here in the city of Ottawa. The fight has been that the federal government should pay its fair share of taxes on government property within the municipality of Ottawa. Why should not the same thing apply to the town of Banff, because the situations are similar?
I am not suggesting that the federal government is not paying a good share of the cost of the Trans-Canada highway, but let me point out again that the Trans-Canada highway and all governmental expenditures of that kind are not designed for the benefit of the people of Banff in particular but rather for the benefit of all the people of Canada and with regard to the tourist trade. Why should the parliamentary assistant say this is a service for which money is spent to accommodate the people of Banff when it is not so? The people of Banff have to maintain the exceptionally good educational and hospital services which they have there. In fact, a new hospital is being built at the present time. The town of Banff is now sharing in the hospitalization scheme inaugurated by the provincial government. When that system was brought in it was stated that Banff was to be recognized as a municipality for the collection of those taxes. The same thing applies to the collection of school taxes.
Surely in this case the government should recognize some responsibility in this regard. The federal government has large holdings. There is a beautiful administration building and a fine new post office. I am not suggesting that these buildings are not beautiful but they are located on government property and they receive the services to which I referred from the public utilities. I say that they should pay an increased proportion of the tax in regard to this, and I have mentioned hospitalization and schools. I think there should be some consideration given to that, and at this moment.
Mr. Chairman, in rising to take part in the debate on this bill I should like to point out that this is of particular importance to the municipalities in my riding because there are large and extensive federal holdings in the area. Owing to the rapid growth in the area of the past few years these municipalities have not always been able to qualify for the minimum grants given previously. We welcome this very small increase in federal assistance to the municipalities.
Peel county has enjoyed the second fastest rate of growth of any county in Ontario, the first position being occupied by Halton county immediately to the west. Every municipality in these two counties is faced with the problem created by rapid development.
I think it would be of interest to the committee to see the amount of taxes collected by the municipalities and compare the expenditures they are required to make, and also the taxes collected by other branches of government. I should like to refer to the consolidation of public finance statistics put out in March, 1957 by the dominion bureau of statistics. This gives the revenue and expenditures of all governments for the year ending December 31, 1954.
In that year the federal government obtained $4,204,469,000 and was required to spend $4,056,161,000, slightly less. When we go to the lower levels of government we find that the provinces collected $1,054,979,000 but were required to spend $1,349,385,000, which was in excess of what they collected. When we consider the municipal tax picture we find that they collected from their limited tax fields $885,082,000 and were required to spend in the provision of municipal services $1,214,033,000. That rate of required spending, and I say it is required spending, cannot continue without there being other sources of taxation available to the municipalities. I suggest that the municipalities must look to that branch of government which has the broadest base of taxation, that is, this government.
Municipal Grants Act
There is probably more value obtained from the municipal dollar than from the dollar of any other level of government. That is because of the people who occupy municipal councils and who are able to give more direct attention to expenditures. In some measure this act recognizes that assistance should be given to the municipalities, but it should go even farther than it does. This matter was touched upon slightly by the hon. member for York West who referred to interest charges.
Municipal taxes must be based upon estimated expenditures for the year, and those estimated expenditures include interest charges on debentures. This government is saying that they will pay full municipal taxes and as a potential municipal taxpayer they should be interested in seeing that the municipal tax rate is kept down. One effective way of doing that I suggest is to lower the cost of money to municipalities. Mr. Chairman, I think that keeps me entirely within the rules.
I urge this government to consider seriously the setting up of a municipal fund similar to that set up by the provinces to permit municipalities to borrow money at low rates of interest. There are services which must be provided in the development of areas such as sewers, water and, what is most important, education. In referring to the expenditures by municipalities under various headings I indicated that $1,214,033,000 had been spent by the municipalities during the year ending December 31, 1954. Of that amount
$426,620,000 was spent for educational purposes, or one-third of the municipal budgets across Canada. In many areas the percentage is higher than that.
In its recent legislation providing for educational grants the province of Ontario has recognized this, and one municipality I have in mind for the first time in the past five years has been able to hold its tax rate because of the increase in educational grants. I urge the government to take some steps along these lines and make similar benefits available to the municipalities. It might be interesting to compare the expenditure upon education by the federal government in that same year which amounted to $27,536,000, a considerably smaller amount.
The source of taxation for municipalities is based largely on real estate, which includes homes. In 1954, the municipalities were required to levy a tax of $651,859,000, on real and personal property, and total receipts were $885 million. That is an indication that there is a direct levy on home owners, on the type of person and the type of activity that we wish to encourage in this country.
Municipal Grants Act
As a matter of economics, home ownership is one of the basic methods of attacking the situation which this government itself describes as inflation. I would suggest that aid to the municipalities to enable them to hold the line in real property taxes would encourage home ownership, which in itself would be one step to assist in meeting the problem which the government has created, and which apparently its own measures have not been successful in meeting. If hon. members will note, the cost of living index for January is up again, which shows that the steps taken by the government have not yet been effective.
Another suggestion I would like to put forward concerns some federal property held for non-immediate use, property which, if it were in the hands of private persons or municipalities, could be productively used and not held vacant. If the government is serious in its wish to help municipalities then I suggest it should review its real estate holdings, and where those holdings are not being put to the best use they should be released either to municipalities or to private individuals, receiving in return, of course, if the property is being released to municipalities, some nominal value, and if it is being released to private persons, the whole market value of the property.
In my riding I refer specifically to the area known as the Long Branch rifle range. Over the years there have been some promises that these properties will be released for development. They are ideally located for good development, and if good buildings were put on the land now occupied by the ranges they would be of practical assistance to the municipality in providing increased tax returns. While the present bill pretends to assist municipalities, I suggest that taxes on vacant land are obviously considerably less than taxes on developed land.
There is recognition in part in the bill, Mr. Chairman, as to the education tax rate. In the committee, in answers to questions, it was indicated that there would be no separation of the cheque given by the federal government to a municipality indicating how the amount was arrived at, and it was explained that if it was going to the same municipality it did not really matter. I would point out that the average municipal tax bill clearly indicates on its face the amount levied for education and the amount levied for general purposes.
Under the complex formula set out in the act for determining the educational payment I suggest that there would be different interpretations in different municipalities, and for clarification it would be very material to indicate, if only in the letter enclosing the
cheque, that X dollars is for the general rate and Y dollars for the educational rate. There are areas where there are public and separate schools and it would be in those cases, where the same municipality must take the cheque and divide it among those schools, that difficulty would arise. But if a division was clearly set out in the letter accompanying the cheque I think it would overcome this potential problem.
As I said before, Mr. Chairman, this legislation has come about as a result of repeated demands by members of the opposition. It is again a case of the government being forced to act when it is approaching an election.
Mr. Gauthier (Portneuf):
I am glad the deputy whip agrees with me. I wish that in matters such as this we could have just a little farsighted leadership instead of the government always leaning back and having to be pushed from behind.
Mr. Smith (Battle River-Camrose):
Mr. Chairman, I would like to ask the parliamentary assistant whether or not the Wainwright municipal district will receive grants from the federal treasury as a consequence of an army camp being within the boundaries of the municipal district?
Mr. Chairman, we have a special section dealing with what are called "self-contained defence establishments" I imagine that Wainwright is one of these establishments. The arrangements then are different from those made with regard to property of the federal government of other descriptions. The government itself generally provides the usual municipal services required at such military camps, so what is done is to arrange to pay on the value of the land only, and to accept an assessment with respect to the dwellings occupied by its personnel. That is done because among families in these dwellings there would be people getting schooling from an organized school board. But as to these self-contained military camps, in this bill they are specifically excluded from the normal assessment. Under the amending bill the federal government will simply be assessed on the land and, roughly, additionally on the dwellings occupied.
Mr. Smith (Battle River-Camrose):
Suppose this land happens to be under lease to the federal government? How does that fit into the picture?