POS City Committee “of the Labor-Progressive Party to ‘Taxation. “cc only two mills.” The following article in slightly condensed form is from the brief of the Vancouver the Goldenberg Commission on provincial-municipal finance. It deals specifically with th®se monopoly concerns which ‘get under the wire’ in tax evasion, and also presents a number of proposals whereby the city’s revenues could be greatly improved by equalization of taxation. property system is not the tax-gathering Sadly in YANCOUVER’S real taxation enly part of its apparatus which is ‘need of major indeed, there is one field in which the city is even “more hopelessly behind the times than it is m its assessments and tax improvements. convention. We refer to the cityS policy towards the two large public utility companies which operate in and near Van- couver: The B.C. Electric (and subsidiaries) and the B.C. Tele phone Company. As might be expected, the citys only apparent policy to- wards these monopolies con- tinues to be a sort of tender Solicitude for them—a determin- ation. to see that they the least possible service to the public at the highest possible rates. render An essential prerequisite for such taxation aS we have in mind, would be the public owner- ship of these utility companies. Within the past year a splendid opportunity was afforded to the city by the Provincial Govern- ment to embark upon a coop- erative scheme whereby the Hileetric Utility was to be taken over by the Province and the Municipalities. A practical “plan to accomplish this purpose was set forth in the Report of W. C. Gilman and Co, New York Engineers. True to its reac- tionary tradition the City Coun- ceil rejected the Gilman report, thereby, ending the immediate POssibility of public ownership of hydro-electric resources. Despite this fact the revenue potential of the utility com- panies for the city is huge, as we Shall presently prove. : e Dealing first with the B.C Electric, we note that in 1944 it paid to the city a gross sum of $500,349.35. This figure in- cludes: taxes $357,199.97, licen- ses $1,500.00, and percentages G-e. payment for use of streets for cars and busses) $130,300-00. Small miscellaneous items make up the balance. In 1945 the gross figure was $516,038.27, a very slight in- erease over 1944. The 1944 figure is only 3.3 percent of the citys gross rev- r account is enue. And when taken of the fact that the city > a= > 2p = o eo J wT 45 43 Ba City Edmonton ......-.-... $503,182.89 Calzaryae ay ee 174,389.78 Sv -vepbakeh -’ Saunas ose se Saskatoon, =--.--4----- 86,650.70 AWiAbevai eye! soo555555555 436,906.00* Wancouver essa = 500,349.35 paid back to the B.C. Electric $290,527.42 for street lighting and other services, it will be realized that the net yield of this big utility company to Van- eouver’s budget is only $209,- 281.93, or 13 percent of the citys eross revenue. It is an even smaller percentage of the Companys gross revenue. These figures by themselves might not be of great signifi- cance. But when they are com- pared with these from other Canadian cities where public utilities are publicly owned, or where they are in some measure controlled, the true picture of WVanecouver’s heavy revenue los- Ses is seen to emerge. * S = x B= o 3 yes) TN gy is 3 5 8 $ tS) Z 2 pecs * (o} z = = = ae S32 98 25 on S Ss 8 Mn Sc) Se $245,796.24 $248,979.13 14.4 447,966.22 732,356.00 26.2 913,036.38 913,036.38 42.3 578,132.46 664,783.15 42.8 310,000.00* 846,906.00* 8.3* 500,349.35 3.3 *_Amount shown are for the publicly owned system only, the privately owned operation also makes a substantial payment. - From this table one can easily see that the B.C. Elec- tric does not yield a revenue which is even comparably close with that which other Cities derive from their elec- tric utilities. Im short, the B.G. Electric simply does not contribute an even remotely reasonable amount to the cof- fers of the City. How much money, it will be asked, does the City lose by not properly taxing the B.C. Elec- LTTE UT TT @ Feature Section SEE 5... @ TROIS RIVIERES tric? If we take the City of Calgary for purposes of com- parison, we see, that in 1944 it derived $732,000:00 or 26.2 per= cent of its gross revenue from its electric utility. Calgary had a population about one-fourth of Vancouver’s. On a per cap- ita, if Vancouver had operated Similarly to Calgary, the revy- enue would have been $2,928,000 and not a scant $500,000. Here, in short, is a loss of nearly $2,400,000 per annum! So far as the B.C. Tele phone Co. is concerned, we note with feelings of mingled amusement and concern that With 10 large buildings, nine of them telephone exchanges, the Company only paid $83;- 148.00 in taxes to the city in 1944. The B.C. Electric pays little enough, but the B.C. Tele phone Go. might as well not be taxed at all! We do not have available figures which would enable us to compare the Vancouver sit- uation with that in cities other than Edmonton where the Tele- Phone Co. yielded $272,967 in 1944. Qn this basis we are sure that the BC. Telephone Com- pany pays far less to the City than its income from the citi- zens warrants. ill BUSINESS TAX Another important source of revenue which the city is now largely overlooking could be established if a business tax was imposed. To make clear our conception of such a tax it is necessary to distinguish between it and the License By-law. AS we understand it, the li- cense by-law originated not as a source of revenue, but rather aS a method for regulating cer- tain businesses. In time, as the City’s financial - needs grew larger, the license by-law was amended so as to provide additional sources of revenue from certain businesses. The result has been a hybrid growth which is neither a le- not have a business tax. More- over, the yield to the other cities from their respective business taxes, while it varies consider- ably is nevertheless substantial. if Vancouver, for example, was to impose a business tax de- signed to yield 11.6 percent (the Ontario average) of gress rev— enue, the income derived would be $1,798,000 (based on 1944 figures). Even if the license fees of $703,506 were totally eliminated, the City would still find itself with a new increase of over $1,000,000. In Short, if the City inaugurated a business tax on the same basis as that | which has existed for "many years, in Ontario it could pro- cure for itself an extra million dollars per annum. back to the city council’s brief to your commis- sion and in particular to that part which asks for a return to the city of revenues which Referring are derived from beer parlor licenses, it should be pointed out that by proper use of a business tax the city could eas- ily tap the liquor business for revenue. Finally, as to the form which the proposed business tax. by- proper business tax. To illus- trate the extreme disproportions and injustices wrought by the by-law as it now exists we cite the following: Business or Annual item taxed Ticense Trans-Canada Riwys $ 500-00 Street railways ......... 500:00. Telephone Company .... 500.00 “Wholesale dealers ..... 300.00 Law Offices ............. 25.00 Retail dealers (depend- ing on sidelines ... $25 to $85 Dogs Cnale) = soe 2.00 Musie teachers ......... 5.00 *Depts -Stores: 2.0 = = 8 6500.00 Gas Companies ......... 500.00 ubrybbevebetss = cocasc555o5 S55 100.00 In 1944 the city received $703,- 506 from this license by-law. or 46 percent of gross revenue. Again, comparisons with the sit- uation in other Canadian cities “will be useful. In those cities we find that _ the license by-law provides an insignificant source of income, but that there is a Separate by— law imposing, a business tax for revenue purposes. The figures for some 37 Canadian cities are gitimate license by-law nor a as follows: =| o a 3 = gE oo S Rw G2) es) o — on wm is) > is) S iS) o ® at 2 fg =i = SS mrs =| WMAMONntOn! <= sees: eee 324,647 71,318 395,965 7.85 WANCOUVED «32. 246 $ $703,506 $ 702,506 46 Montreal, 652535256622 ees 2,906,291 8115197 3,717,488 6.7 Winnipes sso. ssc eee 1,036,388 184,677. 1,221,066 11.5 Re sing: eh. sc gees es 280,610 47,029 327,639 15.4 Saskatoon ................. 151,045 151,045 - 7 Calgary ee se 259,614 66,408 326,022 11.7 Toronto and 29 Total Assessment ...... $1,948,835,000 11.6 other Ont. cities Business Assessment .. 227,209,000 From this table it is clear Jaw: could take, we were im- ‘that Vancouver is the only large pressed with the simplicity of city in the country which does. the Edmonton bylaw under which provision for a straight percentage of the annual rent paid by a business, to be charged as the business tax. We think your commission ought to recommend that Van-— couver immediately revise its License By-law and establish a business tax by-law along the lines of that in force in Hd- monton. Vancouver’s largest Single item of expense is for “fixed. charges on debt.” It alone takes over 27 percent of the city’s entire budget, i.e., out of every $1.00 bill spent by the city 2746 cents goes for fixed charges .on debt. While the eity’s bonds are almost all “non-callable”? and- hence the interest rate cannot be reduced without consent of the money lenders, we are sat— isfied that as each issue of the bonds or debentures matures, the city could, if it would,: ne- gotiate with its ereditors for refinancings.-at far lower rates. Our conclusion is ‘that you should recommend re-negotiation of the city’s present debt and also that a limit be placed {say 3 percent) upon the interest rate Which can in future be paid out by the city. In these matters Provincial assistance for the city would be both usefut an acceptable. i Burrard Bridge, one of -Vancouver’s prize white ele- phants. Cost $2% million to build on a bond issue at 4.6 percent interest. To date Vancouver citizens have paid double its cost to build in interest charges, and the end is nowhere in sight. The lower deck in the picture is symbolic of “capitalist planning”—it isn’t there!