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The Municipal Business Tax in Canada*
Published online by Cambridge University Press: 07 November 2014
Extract
The nature, origin, development, and possible justification of the municipal business tax in Canada are the topics considered in this paper. These subjects are all the more interesting because there has been no comparable development in the United States. Statistics as late as May, 1947 indicate that New York City is the only city in the United States with a business tax comparable to the municipal business tax in Canada.
The term “municipal business tax” generally is used in Canada to refer to a tax on premises occupied for business purposes. Three bases are in use: a fraction of the assessed value of the premises, the annual rental value of premises, and square feet of space occupied.
- Type
- Aricles
- Information
- Canadian Journal of Economics and Political Science/Revue canadienne de economiques et science politique , Volume 14 , Issue 4 , November 1948 , pp. 491 - 501
- Copyright
- Copyright © Canadian Political Science Association 1948
Footnotes
*
This paper was presented at the annual meeting of the Canadian Political Science Association in Vancouver on June 19, 1948.
References
1 Hillhouse, A. M. in collaboration with Muriel Mageissen and other staff members of the Municipal Finance Officers Association, Where Cities Get Their Money (Chicago, 1945), p. 109.Google Scholar See also Hillhouse, A. M., 1947 Supplement to Where Cities Get Their Money, pp. 4–7.Google Scholar The tax in New York is levied to raise funds for a restricted purpose and the rate is less than ½ of 1 per cent.
2 R. S. O. 1937, c. 272, ss. 1 L and 8.
3 Halifax Charter; An Act Respecting the Levying, Assessing and Collecting of Rates and Taxes in the City of Fredericton, New Brunswick Statutes, 1926, c. XLVI, as amended, s. 14 d; Saint John City Assessment Act 1942, as amended, parts III and IV.
4 See, for example, Charter of the City of Montreal, 1942, s. 363; The Winnipeg Charter, 1940, s. 291; the Brandon Charter, s. 56; R. S. M. 1940, s. 1060; the Edmonton Charter, 1931, s. 321, as amended.
5 City of Moncton Assessment Act, 1942, s. 4.
6 Vancouver By-Law 3047, s. 3, 1948. This by-law is pursuant to the Vancouver Incorporation Act, 1921, s. 163, subs. 141 d as amended in 1947.
7 Winnipeg Charter, 1940, s. 292.
8 See also W. S. Newton and Co. v. Winnipeg, (1937) 2 W.W.R. 351, in which this point is emphasized.
9 The City Act, R.S.S. 1940, c. 126, s. 463 subs 7.
10 Winnipeg Charter, 1940, s. 290 subs a.
11 Ibid., s. 290, subs b, and s. 291.
12 The charging sections of the various laws under which the tax is levied make this clear. In “The Assessment Act” of Ontario, for example, the charging section reads in part as follows: “every person occupying or using land for the purpose of … business … shall be assessed for a sum to be called ‘business assessment’.”
13 See, for example, Winnipeg Charter, 1940, s. 299.
14 See, for instance, R.S.O. 1937, c. 272, s. 8, subs 11.
15 Montreal—1876, c. 52, s. 1; Quebec—1887, c. 57, s. 14; Sherbrooke—1892, c. 51, s. 55, subs b; St. Hyacinthe—1895, c. 52, s. 93.
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17 Manitoba Statutes, 1893, c. 24, s. 8.
18 Manitoba Statutes, 1900, c. 35, s. 2; 1906, c. 53.
19 Report of the Ontario Assessment Commission, 1902 (Toronto, 1902), p. 5.Google Scholar
20 Ibid., p. 20.
21 Ibid., p. 24.
22 Ibid., p. 35.
23 Ibid., p. 12.
24 1904, c. 23, s. 10.
25 An Ordinance to Incorporate the City of Edmonton, Ordinances of the North West Territories, 1904, c. 19, title XXXII, ss. 1 and 3.
26 Report of the Board of Valuation and Revision on Systems of Assessment and Taxation (Winnipeg, 1917), pp. 8–9.Google Scholar
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31 1921, c. 78, s. 1; Saint John City Assessment Act, 1936, part III; Report of the Commission to Investigate Taxation in the City of Fredericton, 1947 (Fredericton, 1947), p. 37.Google Scholar
32 Vancouver By-Law 3047, s. 3, 1948. This by-law is pursuant to the Vancouver Incorporation Act, 1921, s. 163, subs. 141 d as amended in 1947.
33 R.S.O. 1937, c. 272, ss. 29 and 30; R.S.O. 1937, c. 363, s. 62.
34 Board of Education of Windsor v. Ford Motor Co., (1941) 3 D.L.R. 721, A.C. 453.
35 Goldenberg, H. Carl, Provincial-Municipal Relations in British Columbia (Victoria, 1947), p. x, 74.Google Scholar
36 Ibid.
37 It is recognized that in general a substantial proportion of both the business and property tax are shifted by the persons legally responsible for the tax. In the writer's opinion, the extent of the shifting is usually exaggerated in theoretical treatment of the property tax, because of insufficient attention to the imperfections of the market for real estate. The issue of tax shifting in relation to the business tax cannot be discussed in this paper because of the limitations of space.
38 City of Vancouver, Financial Statements and Annual Reports, 1936–1946.Google Scholar
39 Goldenberg, , Provincial-Municipal Relations in British Columbia, p. x, 74.Google Scholar
40 In both cases these figures refer to a lot of standard depth of 120 feet. These figures were supplied by A. T. Dalton, assessment commissioner for Vancouver.
41 Goldenberg, , Provincial-Municipal Relations in British Columbia, p. x, 74.Google Scholar
42 Marshall, Alfred, Principles of Economics (8th ed., London, 1920)Google Scholar, appendix G, pp. 794-804. In Canada this distinction has been stressed in the admirable writings of W. E. Hobbs of the Hudson's Bay Company, Winnipeg.
43 Final Report of His Majesty's Commissioners Appointed to Inquire into the Subject of Local Taxation, England and Wales (London, 1901), pp. 11–12.Google Scholar
44 Ibid., p. 14.
45 See Clark, R. M., A Brief on the Proposed Business Tax By-Law for Vancouver (Vancouver, 1948)Google Scholar, for statistical analysis on the subjects of graduation and classification of business tax rates—a preliminary study.