Alberta Gets ’em Going and Coming
Perhaps federal s quand ermaniacs envy Alberta s orgy of versatilityl
With such enormous and varied revenues wouldn’t you expect Sunny Alberta’s citizens to be rolling in wealth? But ordinary expenditures have almost dectupled in less than two decades
CHESTER ABBOTT BLOOM
IN 1906, when the population of Alberta was slightly less than 300,000, there were forty-one automobiles within the province. Taxed at $3 each, they produced a gross revenue of $123.
In 1923, the number of automobiles in Alberta had increased to 41,933, the tax raised to a figure varying from $15 to $35 a car, and the gross revenue totalled $742,575.50.
In the period of eighteen years between and inclusive of these two dates, the province has collected a total sum from this source of $4,635,888.10.
That is one fairly “normal” tax, but there are scores of others. In fact, if there is any tax the present and past lawmakers of Alberta have not attempted to impose, it is simply because they have not the authority.
Alberta has a land tax, called euphemistically “The Supplementary Revenue Tax”; a tax on gasoline, on theatres and amusements, on corporations, on railway mileage, on soft drinks, on mineral leases, on the unearned increment of property sales, On “wild lands,” on timber areas, on mine owners, on slot machines, a tax for educational purposes, not to speak of such things as liquor profits, land titles fees, succession duties, and innumerable other small licenses and fees.
There is not one of these taxes that has not yielded a steadily increasing revenue in the last ten years, and most of the taxes, themselves, have been steadily increased in incidence.
Alberta’s population, which was only
73,022 according to the federal census of 1901, jumped to 374,663 by the federal census of 1911, and in 1921 it was given as 588,454. For the purposes of the Dominion subsidy, it is estimated for 1924 at 645,700. That population, about equivalent to our largest eastern city, is scattered over an area reaching from the forty-ninth parallel (the international boundary on the South) to the sixtieth parallel of latitude on the North, a straight reach of 750 miles north and south; east and west, between Saskatchewan and British Columbia, there are distances varying from 180 to 400 miles in width. Alberta’s territory embraces 255,000 square miles, or more than twice that of Great Britain and Ireland, and larger than that of either France or Germany.
Two-Thirds of Million to Bear Burdens
T ESS than 650,000 men, women and children must '' carry the financial load of administration for that immense area. True, Alberta has had substantial assistance from the federal government. Dominion subsidies from the date of formation of the province in 1905 to 1923, inclusive, have totalled $31,189,493.
But this province has lived up to its spaciousness of territorial area with soaring ambition.
Alberta has a two and a half million dollar parliament building at Edmonton, and four million dollars invested in a university in the same city. Alberta has splendid stone court houses, and steel bridges, and good roads, costly gaols, magnificent institutions for the mentally unfit and the deficients, a Mothers’ Allowance Act which .pays our needy widows with children from $40 to $60 a month, a new and as yet virtually unused Technical Institute at Calgary costing close to a million dollars, a health department which spent more than $800,000 in 1922, and a small army of government inspectors to see that the complicated machinery is kept' running at high speed. To show how meticulous the province is on this subject of inspectors, the legislature has recently been busily engaged in passing an “Act for the Prevention of Contagious Diseases Among Bees,” with a force of puissant inspectors to see that no diseased bee immigrates to Alberta. Alberta has a system of government railways and telephones all its own.
Of course, these things cost a lot of money, but nothing is too good for the west!
Here is the method by which the province gets some of its money:
The Motor Vehicle Act, as noted, produced $742,575.50 last year and its scope is being enlarged considerably at
this session of the legislature.
But Alberta’s greatest revenue -producer is the land tax. Up until the end of the year, this province had always boasted that it had no such direct tax. But, during the war, when every section of the country was vying with others in contributions to the Patriotic Fund, the legislators conceived the bright idea of making it fair for everyone by producing the contributions in the form of a Patriotic Tax, levied on a two cents an acre basis. It worked splendidly. When the war ended, the idea was too good to be abandoned, so the legislators thought, and they continued it under the name of the Supplementary Revenue Tax.
This tax is imposed on the basis now of two mills on the equalized assessment value of all municipalities and cities, determined by a special board of assessment. Here is its record of growth from a revenue standpoint:
The tax on theatres, amusements, circuses, professional hockey, and other enjoyments is a splendid revenue producer. This province has been boosting it from the original seven and a half per cent., just a little from time to time until now the motion picture fan, theatre-goer and hockey attendant pays an average of ten to eleven per cent., in addition to the price of his admission ticket, over to the province. And here is how this lusty new tax infant has grown:
The legislators sincerely hope to get more from each
of these foregoing taxes next year, because they certainly need the money. Alberta had a deficit in 1921 of $2,118,209.66 and in 1922 another deficit of $1,910,302.49, a combined deficit for these two years of $4,028,512.15. But let us deal with that a little later when speaking of our gross bonded debt of $67,373,279.
Let us get on with the taxes. If there is one thing a westerner prides himself upon, it is that arrogant corporations don’t get away with much out here. Just for examp’e:
The Mine Owners Tax. It was started in 1918 on the basis of five cents a ton, and boosted in 1922 to ten cents a ton. A lot of the mine owners got mad and wouldn’t pay , so eventually a compromise was reached on the basis of two ¡:er cent, on gross revenue. It has worked fine -from the government standpoint of
1921 1922. 1923
Total ________________ $4,24,484.25
Alberta sincerely hopes for more next year, especially if this province can sell a lot of coal down in Manitoba and Ontario.
The Corporation Taxation Act is a real “bearcat.” The province taxes its banks $1,200 a year for their head offices and $200 for each branch. It collects onehalf of one per cent, on the gross income of all loan and trust companies and forty cents on each $1,000 invested by land companies. It takes two per cent, of the gross returns of the telegraph companies, one-quarter of one cent for each 1,000 feet of natural gas produced by the big Natural Gas companies, $50 from each elevator in the province, and two per cent, on all the gross premiums of fire and life insurance companies. These are a few of the big ones. None of them escapes because on all “other” companies the province collects forty cents on each $1,000 of their authorised capital.
Does it work? Well, Alberta only got $43,022.33 from these taxes in 1907, but by 1914 they had increased to $130,453.35 and touched the quarter of a million mark in 1918 when there was collected from our corporations $251,331.18. In 1923, the tax went to high water mark with a total revenue production of $475,609.36. Since its inception, in 1907, there has been collected under the Corporation Taxation Act $3,172,060.08.
Even Railways “Soaked”
ALBERTA “nails” the
railways under a special mileage tax. The C.P.R. has lots of money and runs through valuable territory, so the province assesses that haughty corporation $13,500 per mile and taxes it one per cent, on the assessment. That corporation is now paying on 1,109 miles. The old Grand Trunk and Canadian Northern thought they could beat the tax, but the province went right to the privy council and they have had to pay $300,000 in back
Att’y-Gen’l Brownlee of Alberta, writes:
No government has ever worked more conscientiously or sincerely in an effort to curtail expenditure than the present government of this province, and we have succeeded in materially reducing the annual budget of expenditure, but not so os to effect any reduction in taxation. Services have been created in the past which involve very heavy expenditures and the same people who are crrying out for government economy would protest with equal vigor if the Government attempted to cut out any of these services.
I would suggest that magazines like your own could perform a real public service and very greatly assist governmental bodies by pointing out to the people the relationship between the electorate and the government and that if economies are to be effected which will reduce taxation, then the people must be prepared to give up certain services which they may consider quite necessary, and cease making demands on governmental bodies for extension of these very services.
taxes of which they paid more than $100,000 in 1923. Starting with a revenue of $60,730 from this tax in 1906, it produced $149,715 in 1923 plus the $100,000 back tax payment or $249,715. For the whole period from 1906 to 1923, inclusive, it has produced $1,778,122.85.
These details grow wearisome. Let us take the others more briefly:
The unearned increment tax, five per cent, on the increased value of property every time it is sold, supplied a revenue of $5,446.50 in 1915 when it was started but grew to $73,232.28 in 1923 and produced a total of $761,977.83 for the ten years.
The healthily growing gasoline tax imposed in 1922,
at two cents per gallon, is very cheering to the legislators. For the first six months of that year, it brought in $185,118.53 but nearly doubled in 1923 to $241,247.77, bringing in a total of $426,366.30 for the eighteen months.
The province did not do very well with its tax on Mineral Rights which it tried to put on last year at the rate of two cents per acre on oil, gas, coal, and other leases. The Hudson’s Bay company and the C.P.R. told the authorities to “take a jump in the lake,” or words to that effect, and are still asking the federal government to disallow it. The small fry followed their lead and, consequently, there has not been collected any of the $300,000 this tax was estimated to yield. But Alberta has hopes.
The soft drink manufacturers also proved recalcitrant when the province tried to collect three per cent, on their gross revenue last year. They went to court about it and only $160.22 of the $50,000 estimated revenue resulted; but the province is still fighting them.
A delicate subject—Liquor profits—delicate, because the people voted on November 5 last to disallow the bone dry prohibition law and go back to the old revenue producer of a license system, and the legislators are in the throes of interpreting their will in a Liquor Control Act. But, at that, Alberta did not do half badly under the Prohibition Act when sick citizens spent the following
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sums for their “medicine.” Here is the record:
1918 ........ $ 143,387
1919 ........ 1,967,439
1920 ........ 2,766,182
1921 ........ 2,111,248.
1922 ........ 1,624,888.
By an Educational “General” tax, Alberta started in 1918 with collections of $107,009.62, increased to $222,109.03 in 1923 with a total of $811,589.93 for the whole period. Educational taxes on “leases” brought in $33,186.01 in 1918, grew to $24,018.34 by 1923 and produced a total of $205,909.87 for the period.
Then there is the Wild Lands Tax. That was put on in 1918 to rap the speculator who holds uncultivated lands. Some dry land farmers in the South who let lands lie fallow a good many years are sometimes aggrieved about it, but it brings in the dollars. Here is the revenue record of the Wild Lands Tax in the six years since its inception:
Rolling in Wealth?
THE Succession Duties Tax is levied on the estates of deceased persons on a complicated sliding scale which has been slightly increased from time to time since it was started in 1906. In that year it produced only $1,054.62 but it has grown steadily year by year until it yielded in 1920 the sum of $273,179.61. Over the whole period up to 1921, inclusive, it had produced $1,496,906.39 and with the 1922 and 1923 returns, will total for the period about $1,750,000.
Then there are the land titles fees— true, not a tax, but nevertheless paid by all persons who have transactions of any nature at the land titles offices. There are two offices, Calgary and Edmonton. Calgary, the largest, produced earnings of $15,270.58 in 1915 which grew steadily to the high water mark of $223,173.15 in 1922, but fell off slightly in 1928 to $209,881.07. The Edmonton office ran slightly behind these figures, but over the nine-year period, the two offices have produced the grand total revenue of $3,924,506.10.
Looking over these immense revenue figures—not to mention the Dominion subsidies and payments which amounted to $2,148,666 in 1923 and have totalled $31,189,493 since the organization of the province in 1905—one could readily imagine this comparatively youthful government rolling in wealth, Such is not the case. The combined deficits for 1921 and 1922 were $4,028,512.15. On top of that, Premier Greenfield estimated last year that the deficit for 1923 would be another $1,016,239.15. Enforcement of tax recovery proceedings, however, it is believed will show a reduction of this estimated deficit to perhaps one-half.
In the meantime, the general revenue or direct debt has grown from nothing in 1911 to $44,186,316 in 1922, and the public accounts of 1923 when tabled in the legislature will show the addition of several more millions.
But that is only part of the debt record. For there is, in addition, a direct debt of $23,186,963 in 1922 for Government telephones which are now being operated at a loss. Then there is the Irrigation Debt, a new baby which started out last year with a total of $5,850,000. That is counted as an indirect debt and in the same category one might put the university debt of $4,000,000, drainage district debt of $587,000, and lastly the railway debt of $17,000,000—also accounted as an indirect liability.
That railway debt needs a little further explanation. Let it go for a moment and look at the growing interest bill. Starting in 1908 with $746.30 interest payments, there was expended for interest alone in 1922 the sum of $2,535,230.87. It will be more for 1923.
No wonder! For, beginning in 1905 with ordinary expenditure of $150,021.10 and capital expenditure of $12,701.83, in 1921, there was attained the amazing annual expenditure of $10,605,155.91 for ordinary expenditure and $12,177,270.66 capital expenditure. That was going some for a province of 588,000 population. Of course, the capital expenditures includes some borrowings for refunding purposes, but $5,000,000 of it in that year was for advances to the white elephant northern railways. It was in this period that the burdened citizenry revolted against the increasing tax burdens and gave the province a Farmer’s government pledged to economy and reduction of expenses.
Still Piling Up Deficits
BUT in their very first year of office, the Farmer government increased ordinary expenditure in 1922 to $11,235,192.22 though they did reduce the capital appropriation to $8,018,877.59. And at the same time, they presented the province with a deficit of $1,910,302.49. The answer was not reductions in expenditure, but more taxes, and they produced the soft drinks, mineral rights, and slot machine tax. As noted, the first two have failed to produce revenue and the slot machine tax, a straight tax on gambling, at the rate of $50 per machine, produced only $35,075. Something has to be done about it, so the legislature has been visioning big profits from the new Liquor Control Act. The Farmer government claim they have cut down the wage bill of the province $738,000 since August, 1921, but are faced with steadily increasing interest charges on the enormous expenditures of the past.
Here is the graphic record of that growth in expenditure.
Annual Expenditure, Since 1905
1905 ____________$ 150,021.10 $ 12,701.83
1906 ____________ 1,279,041.44 206,872.15
1907 ......... 1,839,064.04 611,311.25
1908 ............ 2,079,707.20 744,122.76
1909 ............ 2,632,935.53 1,067,809.88
1910 ............ 3,696,826.86 1,171,356.55
1911 ............ 3,037,618.45 1,644,898.92
1912 ............ 3,293,496.35 2,354,860.10
1913 ........... 4,409,795.18 2,181,553.32 -
1914 .......... 4,318,855.00 1,980,801.44
1915 ........... 4,742,374.81 1,435,149.04
1916 ...... 5,002,071.82 1,164,937.00
1917 . 5,712,529.08 1,511,694.64
1918 ____________ 7,127,493.96 1,031,889.55
1919 . .. 7,905,330.47 2,328,140.28
1920 ..... 8,544,052.16 6,642,335.19
1921 . 10,605,155.91 12,177,270.66
1922 .. 11,235,192.22 8,018,877.59
1923 .......... 10,990,830.00 3,835,123.04
1924(Est. ).. 11,771,353.71 3,930,278.44
The railway debt is the chief bugaboo.' Listed at $17,093,700 as an indirect liability, the four northern lines have been a veritable sink hole for money. They comprise the Alberta and Great Waterways o 282 miles, the Edmonton, Dunvegan and British Columbia of 408 miles, the Cen' r il Canada Railway of seventy-two nu. s, and the Lacombe and Northwestern oí forty-nine miles. None of them pays ics way. The practice is to me; t the annual charges of defaulted interest, loans for reconditioning, and other items out of annual capital borrowings which thus become a direct charge in the general revenue debt.
Attorney General J. E. Brownlee told the legislature in February that the total combined direct and indirect liabilities of these railways were $30,334,999.75, and that the debt is being “pyra aided” each year by the addition of approximately $1,400,000 annual corporate loss—that is, loss through operation, maintenance, and so on. The C. P. R. is operating the Edmonton, Dunvegan and B. C. for the province under a five-year operating contract which expires in 1925 with an option to purchase the line at that time. Alberta’s last hope appears to be to get the big corporation to take it over, along with the Lacombe and Northwestern, for which negotiations are in progress.
But Alberta keeps right on spending more money every year for ordinary expenditures, and devising new taxes to foot the bill.