Mr. REID:

I think the situation is a

little more difficult than the hon. member for Comox-Alberni (Mr. Neill) has made out.

Soldier Settlement Act

Under our tax sale laws in British Columbia the ordinary settler who is notified that his property will be sold for taxes can, prior to June 1, upon paying one year's taxes keep that property off the tax sale. My information is that many of the soldier settlers are one, two, three, four, five and six years behind with their taxes. Immediately this bill goes through, they have no recourse; they cannot go to the municipality and by offering one year's taxes keep the property off the tax sale.

Mr. GORDON:

If I might interrupt the

hon. member so that he may have the correct situation; he has been misinformed. All the back taxes of the soldier settler were paid up to the end of 1931 and they will be taken care of up to the end of 1932.

Mr. NEILL:

By the government?

Mr. GORDON:

Certainly.

Mr. REID:

That alters the situation and

makes it much easier, but my information from some of the municipalities was to the effect that many of these soldier settlers were away behind with their taxes. .

Mr. GORDON:

The municipalities were

wrong.

Mr. REID:

Last year in British Columbia only 40 per cent paid their taxes in spite of the fact that the government offered dollar for dollar, and that shows that many of the soldier settlers must be in bad shape indeed. My first point, however, is still correct, that they will not be able this year by paying the municipality one year's taxes to keep their property out of the tax sale; that is, they are two years behind. But this point has been discussed for a long time in British Columbia. Seeing that the Prime Minister is in his seat, I would like to put this question to him, because it arises out of this bill. By this legislation land which was originally looked upon as crown land is now being taken out of that status and being placed under a different category

Mr. BENNETT:

No.

Mr. REID:

Clause 2 so states:

To have been held by the said director of soldier settlement as such corporation sole and not as an agent of the crown in the right of the Dominion of Canada.

In reading that I would be inclined to think this will make soldier settler land in future subject to tax sale and not the property of the crown. I was just wondering whether that could be done also with land under the harbour commissioners.

Mr. BENNETT:

Well, as usual the hon.

gentleman is wrong.

Mr. REID:

Not as usual.

Mr. BENNETT:

I have always noticed

the hon. gentleman's desire to make some political capital warps his judgment. If he had really taken the trouble to read this he would have found that the situation was entirely different. The property, all of it, has passed from the crown. It is not subject to taxation at all unless it does. Once having passed from the crown either to some third person who owned it, or to the soldier settlement board as a corporation sole, it is subject to taxation if we do not provide that it holds it as agent for the crown; if the corporation holds as agent for the crown it is believed that it is not taxable. The harbour board does not hold the Vancouver property, it belongs to the crown, and as such under the British North America Act it is not taxable and cannot be taxed by this parliament or any legislature or municipality

I think I should make a few observations with respect to this matter generally, because the hon. member for Comox-Alberni (Mr. Neill) seems also to misunderstand the situation.) There are members of this house who will recall that when the Soldier Settlement Act was originally passed it was stated by the government of that day that as a result of t'he soldier settlement board holding the land as trustee for the crown the municipalities were not to suffer. So the crown has paid taxes; the hon. member for West Edmonton (Mr. Stewart) as Minister of the Interior will recall that under his direction a bill was passed to make provision in certain directions. Valuations have -been reduced by direction of this parliament, but last year, the year before, and in fact for the last seven or eight years I was going to say, the municipalities of western Canada have been pointing out to the government that they had no recourse against the land and in some cases were bang very badly exploited under conditions to which they objected very strenuously. They said to the government, as they had said before: We ask you by appropriate legislation to place these lands in exactly the same position as the lands of other settlers in the community; so (hot while we always had the right to sell the interest of the settler in the land for his taxes, as long as you held the title in the form I have indicated there was no power of sale of the land as such. For many years it was contended that the municipality could not sell the interest of a settler for taxes if the land were owned by the crown or through the instrumentality of the crown. Finally, how-

Soldier Settlement Act

ever, in a case that went to the privy council from Saskatchewan, and a like case that went from one of the other provinces,-the Three Hills case will be remembered by some hon. members from Saskatchewan-the privy council held that the interest of a settler could be sold for taxes, that he had a property in it that enabled the taxes to be realized if possible from the sale of his interest.

We, that is the crown, have paid the taxes. Last year again the municipalities pointed out that by reason of the existing legislation the payment of their taxes was retarded; except such as Ihey got from the crown; and if the crown did not pay, the machinery for the sale for taxes of the settler's interest was very complicated and difficult. They thereupon said to us: We are entitled to have you decide one of two things; first whether your interest is sufficiently important to warrant your paying the taxes yourselves, or secondly, whether you are willing to abandon your interest and leave it between the settler and the municipality. The officers of the municipality being settlers in the same community as the soldier settler, knowing him and understanding his conditions, would be able to deal with him from local knowledge on the spot in a much better manner than the government if they abandoned their interest as I have indicated, selecting the second alternative mentioned.

The question was, what form of legislation should be enacted and when it should become effective. We have undertaken, and in the supplementary estimates propose to make provision to pay the taxes on such areas as we believe taxes should be paid upon up to the first of January, 1933. Then we leave it to the municipality and the settler.

Mr. NEILL:

They have not been paid to date?

Mr. BENNETT:

We have paid to January 1, 1933. Last year's arrears do not render the property liable to be sold for taxes, that is only one year back.

Now I can answer the point that the hon. member for Comox-Alberni has made in a very simple way, by pointing out to him that when the matter is left between the municipality and the settler it rests with the municipality to take the action. If the municipality takes the action suggested then of course there is no longer any contract between the crown and the settler. But the Department of Justice, in order that there may be no likelihood of anyone being misled, have added the worlds that the hon. gentleman has directed attention to, so that it is quite clear 74726-243

and beyond peradventure that the effect of action by the municipality taking proceedings to sell the property will be, as we believe the soldier settlers are anxious it should be, that we are eliminated from the transaction and the matter then is between them and the municipality.

Mr. NEILL:

Does it not also eliminate the leniency of the crown?

Mr. BENNETT:

But it substitutes the leniency of the municipality where the man lives.

Mr. NEILL:

They have not any, they have to hold tax sales.

Mr. BENNETT:

But in the first instance it rests with them how they shall be made, what payment shall be made on account and so on. As a matter of fact they all exercise discretion, whether rightly or not I do not know; small payments have been held to be sufficient to take it out of the compulsory phase of the law and substitute the purely discretionary phase. The effect is, I point out again, that the crown must exercise its discretion as to whether or not, having regard to the extent of its interest in the property, it will pay the taxes. This is simple and clear, is it not? In arriving at the conclusion of course the crown takes the report of its inspectors as to the value of the property, whether it is occupied or not and all those factors that usually determine the judgment of men in matters of that kind. The crown has put 838,000,000 by rebates and reductions under the statute into these properties. We still shall pay this year $654,000 for taxes to the first of January, 1933.

The second alternative is this. If the crown determines that the property, for reasons I have suggested, is not such as to warrant the payment of taxes, it abandons its interest, that is the effect of it, and the settler settles with the municipality. That is the position. The effect in law of course is that when the municipalty does take proceedngs, if owing to the paramount right of the crown there might be some question as to the validity and legality of them, the Department of Justice makes it clear that the effect is to eliminate the crown from the transaction and leave it between the settler and the municipality.

Mr. BROWN:

Do we understand that the crown will deal with individual cases on their merits, or that the same policy will apply to all lands?

Soldier Settlement Act

Mr. BENNETT:

The general policy, as the hon. member for Lisgar (Mr. Brown) knows, has been to leave to the crown discretion with respect to the payment of taxes always. That is if the land is not worth paying taxes on, has been abandoned or anything of that sort, the crown can either let the property go or pay the taxes. There has always been a discretion exercised by the crown in connection with all these properties. Values could never be made for instance on the basis of a rule that endeavoured to deduct a certain percentage. The committee will perhaps recall that we appointed the registrar of the supreme court to act as a judge of the exchequer court for the purpose of making a final determination in respect of some of these matters.