Mr. REID:

I do not mind the Prime Minister taking me to task and telling me I am wrong, but I think his statement as to a political point of view was uncalled for. It was purely on behalf of the settler, and as one who was at one time president-

Mr. BENNETT:

I was not talking about the settlers, I was talking about Vancouver.

Mr. REID:

Well the point that arose in my mind was not political. As one time president of the union of municipalities we had this case in hand and were told j^ear after year that crown lands could not be taxed.

Mr. BENNETT:

That is true yet.

Mr. REID:

In reading the bill I thought crown lands were being made liable to taxation and so subject to sale. Interpreting the bill in that way I was wondering if the same thing could not be done in connection with land held by harbour commissions. I am quite aware that leaseholds can be taxed, including leaseholds of harbour property, but the fight between the municipalities and the government has been as to the right of the government to set aside harbour lands and lands under the soldier settlement board and evade the payment of taxes simply by saying that crown lands cannot be taxed under the British North America Act.

Mr. BENNETT:

I am sorry to correct the hon. gentleman again. It is perfectly clear that it is open to the city of Vancouver, and always has been open since the determination of the privy council in the Three Hills case, to tax the leasehold interest of every person occupying harbour commission lands on the water front of Vancouver. But by their legislation they endeavoured to treat them as

fee simple lands, which was a contravention of section 125 of the British North America Act. The distinction is clear. The interest that another has in crown property is taxable. The property which is held by the crown is not taxable, and until the British North America Act is amended at Westminster neither this parliament nor the province nor the municipality can change that condition.

Mr. REID:

So that I may have it clear I wonder if the Prime Minister would tell me if I am correct in this: Will not this statute make it possible for crown lands to be sold by a municipality, and the municipality to become owner of those lands?

Mr. BENNETT:

No, not crown lands. Lands held by the director of soldier settlement as a corporation sole, just as lands held by John Jones, would be liable.

Mr. HANBURY:

Or by the farm loan

board.

Mr. BENNETT:

Exactly. The distinction, which I trust the hon. gentleman will have clear in his mind even though it is a legal distinction, is this: If the property is held by the director as an instrumentality of the crown, that is as an agent of the crown, it is crown property and therefore not taxable. If it is held by him as a corporation sole- and we have made him a corporation sole by our legislation-in that capacity he has no immunity from taxation.

Mr. NEILL:

Will the Prime Minister not agree with what I started to say, that possibly a soldier settler will be in an even worse condition? I do not know the laws in the east, but in British Columbia the municipal laws require that municipalities shall hold a tax sale every year, and they will sell these men out at the end of this year for taxes incurred in 1933. That is the law. Under the old system the government did have power to carry these settlers along without rescinding their agreement, and they have done that for four or five years. Now they are going automatically to rescind the agreement. Would the Prime Minister say whether that is not so?

Mr. BENNETT:

That is covered by the third principle which I should have mentioned. My colleague was going to deal with that, but he suggests that since I have taken part in the discussion I had better deal with this point as well. The right of redemption is still in the crown as well as in the settler.

Soldier Settlement Act

Mr. STEWART (Edmonton):

That will be governed by the provinces?

Mr. BENNETT:

Yes, it is entirely under provincial laws, but by this statute the right of redemption may be exercised by the crown as well as by the settler.

Mr. STITT (Nelson):

I appreciate the

sympathy that is being shown to soldier settlers by hon. gentlemen opposite, and I may say that I have always availed myself of every opportunity to assist this class of returned men. At the same time I must say that I have always been at a loss to understand why, because a man goes on the land, he should be entitled to all sorts of consideration. What about the returned solder who went into town and took a job in a sawmill or on the railway or some place else, who bought a lot and built a little home? He gets no consideration at all. To my mind this legislation has been discriminatory from the very start. I recall a case in my own home town. Two brothers came home from the war. One had some training on the land, and was able to go down south and get a loan from the soldier settlement board with which to buy a farm, stock, implements, seed and everything else. He got a fairly good start in life; he has done well, and I believe he owns his farm clear. The other fellow did not happen to have any training in agriculture; he was a fisherman. When he went to the war of course he sacrificed his outfit worth many hundreds of dollars. When he came back there was no provision for helping him to get a start. Nobody bought him any nets or provided him with gear to go to work.

The same thing applied to trappers, who required several hundred dollars to get themselves established, and to prospectors and others, and just as long as this discrimination exists I am going to be in something of a dizzy spin to appreciate just why these soldier settlers should be entitled to special consideration. If you are going to give returned soldiers consideration give it to all of them or do not give it to any. The man on the land is not entitled to any more consideration than the poor soldier in town, who is fighting just as hard as the other fellow is. I know of a good many cases of abuse by soldier settlers; I heard of returned soldier settlers who have been driving around in cars all summer and not paying their taxes; they said the government would pay them. That has been the case right along, and I think the time has arrived for a showdown; there should be a line drawn some place. The municipalities have had a very 74726-243 J

hard time to get by with the taxes they have been able to collect. The hon. member for Comox-Alberni (Mr. Neill) stated that this legislation compels the municipalities to hold tax sales. He must know as well as I know that hundreds of municipalities in Canada have not held tax sales for several years, and do not intend to hold sales this year. I could name several municipalities which have not held tax sales for the last few years. I find that the municipalities are very reasonable, and all in all I think the government have gone quite a long way in looking after this class of returned soldiers. I commend them for having done so, but I do not think any great hardship will be worked if this legislation is passed.

Mr. SPEAKMAN:

If I understand the

provisions of the bill aright there can be only one main result from it; that is that through the director of soldier settlement the state will be obliged to pay the bulk of these taxes as action is taken by the municipalities. As I understand it all lands, the title of which is vested in the director of soldier settlement, whether they be abandoned lands, wheat lands, rented lands or lands held under agreement for sale, will be in the same position as lands held by private corporations, and sold or handled by those corporations. The title of those lands, of course, is still with the director. It seems to me that the natural result will be that wherever the equity of the state is sufficient the state itself will be obliged to pay those taxes, for if a sale should result the entire equity of the crown would be wiped out, and the land would come into the hands of the municipalities who would sell it as ordinary land. Under such circumstances, of course, the contract with the soldier settler would be wiped out automatically, because it would cease to be the property of the director and would be put in the position of any other land. As I see the situation, in the majority of cases the equity of the crown in the land is still such that in the final analysis the crown will be obliged to step in and protect that equity by paying the taxes. Certainly that would benefit the municipalities but I doubt whether, in the majority of cases and under such circumstances, the settler himself would be the final sufferer.

As for making a new contract with the settler, would it amount to this? That when proceedings have been taken and the settler has been declared in default, the state owning

Soldier Settlement Act

the land would be in a position to renew the contract with the settler or to make any other disposition of the lands that it saw fit?

Mr. GORDON:

There is nothing to stop

that being done.

Mr. SPEAKMAN:

So, as a matter of fact, the discretion would still lie with the director to practically the same degree as at present, and there would be the same power of protecting the settler and the same power of perpetuating the contract. It would simply be that the same discretion existed but under somewhat different conditions.

Mr. GORDON:

I would say so.

Mr. BROWN:

Some of those very same

difficulties have been passing through my mind. It may be difficult for those of us who are not lawyers to grasp all these fine points. The Prime Minister has said that the right of redemption would still remain with the crown as well as with the settler. I presume that that right of redemption would only be exercised in case the crown felt that its equity in the particular piece of land was worth preserving. It would seem to follow that in some cases the equity would not be considered worth preserving, as I believe it would not be in some cases. I think it would also follow, as the hon. member for New Westminster said, that land sold for taxes might come into the hands of the municipality. These are some of the things that seem to me likely to happen.