UBC Theses and Dissertations

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UBC Theses and Dissertations

An analysis of forest taxation in British Columbia Kidd, George Pirkis 1940

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AN ANALYSIS OF FOREST TAXATION I N B R I T I S H COLUMBIA  \  George P i r k i s  A Thesis submitted  Kidd  i n P a r t i a l Fulfilment of  The R e q u i r e m e n t s f o r t h e D e g r e e o f MASTER OF ARTS i n t h e Department of ••'ECONOMICS' and P O L I T I C A L SCIENCE  #  The U n i v e r s i t y o f B r i t i s h C o l u m b i a .  A p r i l , 1940.  ACKNOWLEDGEMENT The w r i t e r w i s h e s t o e x p r e s s h i s t h a n k s t o P r o f . H. F. Angus f o r h i s h e l p throughout t h e w r i t i n g and r e a d i n g o f t h i s ' t h e s i s ; a n d a l s o t o Mr. W r i g h t o f t h e F o r e s t r y D e p a r t m e n t f o r many u s e f u l suggestions.  An A n a l y s i s o f F o r e s t T a x a t i o n i n , B r i t i s h  Columbia  Table of Contents chapter I. Introduction II.  .page 1  The P r i n c i p l e s o f F o r e s t T a x a t i o n  6  III.  The D i s p o s a l o f T i m b e r i n B r i t i s h C o l u m b i a a. The o r i g i n and Development o f C a n a d i a n Timber R e g u l a t i o n s b. C r o w n - g r a n t e d l a n d s c. T i m b e r L e a s e s d. T i m b e r L i c e n s e s e. T i m b e r S a l e s  IV.  The P r o p e r t y Tax, on F o r e s t s i n B r i t i s h C o l u m b i a 5 5 ""a. G e n e r a l w o r k i n g o f t h e p r o p e r t y t a x . b. I n f l u e n c e o f t h e t a x r a t e . c. The i m p o r t a n c e o f a s s e s s m e n t .  V.  14  The Ground Tax o r R e n t 48 a. T h e o r y and g e n e r a l e f f e c t s o f t h e t a x . b. The p o s i t i o n o f r e n t a l s i n t h e t a x s t r u c t u r e ".• c. The r a t e o f t h e t a x .  TEL..  The F o r e s t Y i e l d Tax i n B r i t i s h C o l u m b i a . a. T h e o r y and f o r m s o f t h e t a x . b. The o p e r a t i o n o f t h e t a x . c. The f l a t r a t e .  VII.  The  Protection tax.  V I I I . Conclusions.'  -  59  76 85.  Tables. No.  1.  Forms o f T i m b e r D i s p o s a l  No.  2.  O w n e r s h i p o f M e r c h a n t a b l e T i m b e r S t a n d s o f B. 1) , A c r e a g e  C.  O w n e r s h i p o f M e r c h a n t a b l e T i m b e r S t a n d s o f B.  C.  No.  5.  i n use  i n Canada t o - d a y  page 17 20  2) Volume.  20 29  No.  4.  Details  o f T i m b e r S a l e s a w a r d e d , 1915-1938.  No.  5.  Relative  No.  6.  Assessment R a t i o s f o r s e l e c t e d  No..  7.  Relative  No.  8..  C o m p a r i s o n o f B r i t i s h 'Columbia' s r e n t a l r a t e s .  54  No.  9.  Comparison of Canadian r e n t a l r a t e s .  54  No.  10.  C o s t of c a r r y i n g  58  No.  11.  Royalties  No.  12.  Relative  No.  13.  Percentage rates  No.  14.  The  No.  15.  United States'  No.  16.  Details  of F o r e s t P r o t e c t i o n  No.  17.  Details  o f -the  importance of the  importance of the  rents  property tax  on  districts  f o r e s t s 33  i n B.  rentals.  .  i m p o r t a n c e of ,the " r o y a l t i e s . o f r o y a l t i e s on t h e  C.  61 62.  c o a s t 1925-39.71  drop i n l o g p r i c e s .  y i e l d tax rates.  73 74  Expenditures  damage c a u s e d by  46 51  i n Canada.  a c c o r d i n g t o f o r e s t d i s t r i c t s i n B.  e f f e c t s of a $1.00  C.  forest fires.  80 81,  Graphs page No. 1. • F o r e s t Revenues as a p e r c e n t a g e o f t h e t o t a l P r o v i n c i a l Revenues.  3  No. 2.  A v e r a g e Stumpage p r i c e s f o r m a i n s p e c i e s  No. 5.  P e r c e n t a g e o f t o t a l T i m b e r c u t by Land S t a t u s 1925-1938.  32  E f f e c t s of changes i n t h e r a t e of t h e p r o p e r t y t a x on t a x r a t i o s .  42  P e r c e n t a g e o f t o t a l T i m b e r c u t by f o r e s t d i v i s i o n s , 1915-1938.  68  A v e r a g e l o g p r i c e s f o r m a i n s p e c i e s and g r a d e s i n B r i t i s h C o l u m b i a , 1925-1938.  70  No. 4. No. 5. No. 6. No. 7s ;  Percentage•,composition of the Forest F u n d , 1912-1938.  1915-3350  Protection . 77  An A n a l y s i s o f F o r e s t T a x a t i o n i n B r i t i s h  Columbia  Chapter 1 Introduction The f o r e s t s o f B r i t i s h C o l u m b i a a r e t o - d a y t h e most v a l u a b l e n a t u r a l r e s o u r c e t h a t t h e p r o v i n c e p o s s e s s e s . S e v e n t y - s i x y e a r s a g o when t h e f i r s t Columbia  Douglas f i r  shipment  of B r i t i s h  was t r a n s p o r t e d f r o m New W e s t m i n s t e r t o  Sydney., f e w p e o p l e dreamed o f t h e i n e s t i m a b l e v a l u e t h e s e f o r e s t s would  some d a y r e p r e s e n t .  But s i n c e t h a t time  "green  ;  g o l d " h a s b e c o m e w o r t h much more t o t h e p r o v i n c e t h a n t h e yellow metal. our m a j o r  From s m a l l b e g i n n i n g s l u m b e r i n g h a s become  i n d u s t r y , now e m p l o y i n g d i r e c t l y and i n d i r e c t l y  about o n e - f i f t h o f our p o p u l a t i o n . . JSist how i m p o r t a n t t h e f o r e s t I n d u s t r i e s a r e t o B r i t i s h C o l u m b i a i s c l e a r l y s e e n when a c o m p a r i s o n w i t h o t h e r I n d u s t r i e s i s made.  The a v e r a g e a n n u a l v a l u e o f p r o d u c t i o n  i n o u r f o u r p r i m a r y i n d u s t r i e s f o r t h e y e a r s 1927-1935 was: Forests-— Mines—  48,644,367.  Agriculture —  47,054,521.  Fisheries  17,724,249.  On t h i s . b a s i s , a n d a s s u m i n g  1.  -$63,308,300.  i n the last analysis  that  R e p o r t o f t h e F o r e s t B r a n c h , D e p a r t m e n t o f Lands^ 1 9 3 7 . pp. M 29 - M 31  a l l v a l u e s d e p e n d on t h e s e f o u r p r i m a r y i n d u s t r i e s , t h e n t h e f o r e s t s a p p e a r t h e most i m p o r t a n t e l e m e n t i n t h e p r o v i n c i a l income d o l l a r . F o r e s t s — — — Mines Agriculture  —-$0.56 0.27  :  —  Fisheries T o t a l p r o v i n c i a l income  0.27 0.10 $1.00  The t a x a t i o n o f t h e f o r e s t , r e s o u r c e s o f t h e p r o v i n c e i s thus a v e r y important part of B r i t i s h a n n u a l Income.  Columbia's  I n the l a s t t e n y e a r s the t o t a l revenue from  t h i s s o u r c e h a s p r o v i d e d t h e p r o v i n c i a l t r e a s u r y on a n a v e r a g e w i t h some t h r e e m i l l i o n d o l l a r s - ^ e r a n n u m ^  And t h i s  figure  to-day r e p r e s e n t s about t w e l v e per c e n t of t h e revenue s i d e of the p r o v i n c i a l  budget.  The p u r p o s e o f t h i s t h e s i s i s t o a n a l y s e t h e v a r i o u s t a x e s w h i c h c o n s t i t u t e t h e f o r e s t r e v e n u e s and a s f a r as  po-  s s i b l e , f i n d o u t t h e a c t u a l b u r d e n o f e a c h t a x on t h e l u m b e r man  and how  fair  and e q u i t a b l e e a c h i s i n i t s ^ v o r k i n g .  2.  S«e G r a p h no. 1 f f t r t h e r e l a t i o n o f t h e f o r e s t r e v e n u e s to the t o t a l p r o v i n c i a l revenue.  These p e r c e n t a g e s were  c a l c u l a t e d by c o m p a r i n g t h e t o t a l s f r o m t h e P u b l i c A c c o u n t s and t h e R e p o r t s o f t h e F o r e s t B r a n c h f o r t h e R e s p e c t i v e ¥ears.  GRAPE NO. 1.  Attention-,tro&, on t h e f o r e s t s  will  be d e v o t e d t o t h e e f f e c t s of. t h e s e t a x e s  i n general.  I t must be p o i n t e d o u t ,  however,  ' t h a t t h e s e t a x e s do n o t r e p r e s e n t t h e w h o l e b u r d e n o f t a x a t i o n -on t h e f o r e s t s , b u t m e r e l y t h e t a x e s ? f h i c h f a l l d i r e c t l y on the  forests.  In addition,  c o r p o r a t e income t a x e s ,  t a x e s , m o t o r t a x e s , and i n h e r i t a n c e  taxes, a l l affect the  f o r e s t i n d u s t r i e s , but they are not treateu For  gasoline  t h e purpose o f t h i s t h e s i s  i nthis  study.  t a x a t i o n has been  c o n s i d e r e d i n i t s b r o a d e s t s e n s e , and a g e n e r a l c l a s s i f i c a t i o n has  b e e n made a t t h e o u t s e t i n a c c o r d a n c e w i t h w h i c h t h e  equity  o f t h e v a r i o u s t a x e s c a n be j u d g e d .  subdivision  includes  economic r e n t  and d e p l e t i o n  c h a r g e s due t o t h e Crown ( t h e  i s t h e y i e l d of t h e f o r e s t s  of e x p l o i t a t i o n .  main  taxes or l e v i e s which correspond t o t h e  government, o r t h e p e o p l e as owners). rent  The f i r s t  The quantum o f t h i s  less the legitimate  costs  Some a p p r o x i m a t i o n t o t h i s , l e a v i n g  a b l e i n d u c e m e n t f o r g o o d management a n d r e a s o n a b l e  reason-  incentives  a g a i n s t w a s t e f u l e x p l o i t a t i o n , I s what i s e q u i t a b l e . Legitimate costs  will  include  r e f o r e s t a t i o n , i f c a r r i e d out  by t h e o p e r a t o r ; o r I f t h e s t a t e i t s rent part  should include  of t h e public  i s t o see t o r e f o r e s t a t i o n ,  t h i s item.  Such a t a x i s r e a l l y "  domain revenue.  I n B r i t i s h Columbia t h r e e f a r e s * taxes the  (following  b r o a d i n t e r p r e t a t i o n m e n t i o n e d a b o v e ) may be s a i d t o come  under t h i s heading. 1)  A property  tax.  S)  A ground t a x or r e n t .  •  3) A y i e l d t a x i n t h e f o r m o f a r o y a l t y . These t a x e s f o r m by f a r t h e m a j o r i t y o f t h e f o r e s t t h e o n l y o t h e r item o f a n y s i g n i f i c a n c e b e i n g  revenues,  "stumpage".  T h i s c a n n o t i n a n y ; s e n s e o f t h e word be deemed a t a x ,  sinceit  it  Crown  i s t h e p r i c e charged  by t h e government f o r s e l l i n g  t i m b e r , and as s u c h I s e q u i v a l e n t t o a s a l e p r i c e .  It is a  f i g u r e r e g u l a t e d b y demand and s u p p l y , and n o t a n o r d i n a r i l y legislated figure like a tax. The  second main s u b d i v i s i o n i n c l u d e s t a x e s or l e v i e s ,  t h e p u r p o s e o f w h i c h i s t o make t h e i n d u s t r y meet i t s r e a l costs.  This i s represented  P r o t e c t i o n Tax.°  I n B r i t i s h C o l u m b i a by t h e  I t i s an Insurance  against d e s t r u c t i o n of  f o r e s t s by f i r e s i n c i d e n t a l t o t h e i r e x p l o i t a t i o n and w o u l d be a n a l a g o u s t o a n y t a x l e v i e d t o meet a s p e c i a l damage t o roads,  e t c . The t e s t o f i t s e q u i t y i s h e r e c o s t . :, With, t h e e x c e p t i o n o f t a x e s f o r s p e c i f i c  i t e m s , as  t h e g a s o l i n e t a x and t h e r o a d t a x , o t h e r t a x a t i o n s h o u l d be n e i t h e r more n o r l e s s t h a n i s b o r n e by n e t c o r p o r a t e earned covered  i n other occupations.  incomes  As s u c h i t i s i n a l l p r o b a b i l i t y  b y t h e t a x on c o r p o r a t e  incomes.  A l l t h e above f o r e s t t a x e s a r e h o t , h o w e v e r , on e v e r y f o r e s t p r o p e r t y o f t h e p r o v i n c e , b u t v a r y to  the d i f f e r e n t land tenures  of t h i s f a c t ,  of B r i t i s h Columbia.  levied  according I n view  s p e c i a l c o n s i d e r a t i o n w i l l be g i v e n t o t h e  rather complicated  system under which t h e timber  of the pro-  v i n c e h a s been d i s p o s e d . 3.  The p r o t e c t i o n , t a x i s n o t i n c l u d e d i n t h e f o r e s t r e v e n u e s , b u t c r e d i t e d t o t h e F o r e s t P r o t e c t i o n F u n d , a s w i l l be explained i n a l a t e r chapter. •  ' .i  CHAPTER The  I n any  11  P r i n c i p l e s of F o r e s t T a x a t i o n  a n a l y s i s of f o r e s t t a x a t i o n the  . that i t i s e s s e n t i a l t o understand .the f o r e s t i n d u s t r y .  first'thing  i s the p e c u l i a r nature  I t d i f f e r s f r o m most f o r m s o f  of  business  e n t e r p r i s e i n t h a t i t takes a c o n s i d e r a b l e time f o r the i n vestment t o mature.  T r e e s t a k e many d e c a d e s t o grww b e f o r e  t h e y become f i n a n c i a l l y m a r k e t a b l e , of c a r r y i n g t a x e s p l u s I n t e r e s t ,  during which time.the  cost  i n a d d i t i o n t o the l a r g e  e l e m e n t o f r i s k i n v o l v e d t h r o u g h ' l o s s by f i r e , , d e c a y , w i n d and  i n s e c t s , a l l mount up.  I t has  i t e m o f r i s k a l o n e comes t o one ' When, t h e f o r e s t -owner r e a c h e s c e i v i n g an a n n u a l  been e s t i m a t e d t h a t  per c e n t o r more - ^ e r a n n u m . ^ t h e p o s i t i o n where he  income.from the p r o p e r t y then, of  t h i s s i t u a t i o n does not a p p l y .  this  i s recourse,  E v e n i f a h owner s t a r t s  from  t h i s p o s i t i o n t h e above f a c t o r s a r e r e f l e c t e d i n t h e e x t r a p r i c e he p a y s f o r t h e m a t u r e Furthermore,  timber.  the lumber i n d u s t r y d i f f e r s from  other  e x t r a c t i v e i n d u s t r i e s i n the n e c e s s i t y of c a r r y i n g a l a r g e s t o c k o f t h e raw m a t e r i a l s u f f i c i e n t t o l a s t f r o m t e n t o twenty years*  Wood-working i n d u s t r i e s i n most c a s e s  carry  o n l y a few month's s t o c k , t r u s t i n g t o t h e lumberman f o r 1;. W h l t f o r d , H . f i . and Cr a i d , R..D.: F o r e s t s o f B r i t i s h , Columbia ; •(^^feetliS^a'waCommission o f C o n s e r v a t i o n , p u b l i c a t i o n , 1918) .' ' . p. 155.. ;  s  s . s u p p l i e s , and t h i s i s a l s o t r u e o f a m a j o r i t y o f t h e i r o n and  steel industries. From a c o n s i d e r a t i o n o f t h e s e f a c t s c e r t a i n c o n -  clusions are evident.  The income o f a l l f o r e s t ovmers i s  d e f i n i t e l y n o t always r e g u l a r , i n f a c t i t i s v e r y l a r g e l y sporadic. gay  T h i s means t h a t a n y t a x w h i c h f o r c e s t h e o?vner t o  o u t l a r g e amounts t o t h e g o v e r n m e n t s o l o n g  y i e l d s him nothing  as t h e f o r e s t  has an element of i n j u s t i c e i n i t .  But  he h a s t h e r i g h t t o t h e l a n d i f n o t t h e u s e o f t h e t i m b e r while i t " i s  maturing.  f o r e s t should  The q u e s t i o n t h e n a r i s e s w h e t h e r t h e  he c o n s i d e r e d  u p o n vifhich i t s t a n d s .  and r a t e d s e p a r a t e l y f r o m t h e l a n d  Like land that contains mineral  f o r e s t l a n d s h a v e b e e n endowed by t h e b o u n t y o f n a t u r e c e r t a i n inherent value  o v e r and above t h a t o f t h e l a n d  wealth, with a itself.  They a r e n o t t h e p r o d u c t o f t h e sweat o f man's brow, b u t a g i f t of n a t u r e ,  and a s s u c h seem t o c a l l f o r a s e p a r a t e  These c o n s i d e r a t i o n s  should  valuation.  be b o r n e i n mind when  we l o o k i n t o t h e b a s i c p r i n c i p l e s o f f o r e s t t a x a t i o n .  By  t h i s t e r m i s meant t h e b r o a d o u t l i n e u p o n w h i c h a t a x a t i o n p o l i c y f o r f o r e s t s may be f o r m u l a t e d .  However, f r o m  this  i t must n o t be assumed t h a t a n y one p r i n c i p l e c a n be t a k e n i n i t s e n t i r e t y and a p p l i e d t o a p a r t i c u l a r d i s t r i c t Taxation simple  or r e g i o n .  i n a n y f o r m * much l e s s f o r e s t t a x a t i o n , i s n e v e r a s  as a l l t h a t .  One p r i n c i p l e may h a v e c e r t a i n f e a t u r e s  t h a t make i t s a p p l i c a t i o n i n e x p e d i e n t  f o r some f o r e s t s and  a n o t h e r p r i n c i p l e h a s t o be p a r t i a l l y e m p l o y e d t o make up  •cnese d e f e c t s > ways made up  As a r e s u l t , , a t a x a t i o n s y s t e m i s n e a r l y a l -  of a c o m b i n a t i o n  o f -two  or more p r i n c i p l e s ,  t h i s c e r t a i n l y h o l d s t r u e i n the case British  of the f o r e s t s  and  of  Columbia. . The  first  t h i n g that i s s e l f - e v i d e n t before  any  t a x a t i o n system i s put i n t o o p e r a t i o n i s t h a t t h e government r e q u i r e s revenue. o f t h e day. e d u c a t i o n and r e v e n u e . ~ The  War  Tnis indeed  seems t o be t h e c r y i n g need  e x p e n d i t u r e s , and  the growing  c o s t s of  p u b l i c w e l f a r e demand i n c r e a s e d amounts o f p e r i o d of h i s t o r y i n the n i n e t e e n t h  e s p e c i a l l y i n the U n i t e d S t a t e s of America,  century,  when b u d g e t s u r -  p l u s s e s , were t h e r u l e r a t h e r t h a n t h e e x c e p t i o n i s a t h i n g of the p a s t .  N a t u r a l l y enough t h e n , b e f o r e any  s i d e r a t i o n s are taken i n t o account,  other  con-  t h e f o r e s t s must  pro-  v i d e revenue f o r t h e government, s h a r i n g w i t h the r e s t of country's  i n d u s t r i e s , t h e c o s t o f r u n n i n g , o u r modern  lization.  '.'The a a n g e r i n s u c h a p r i n c i p l e b e i n g g i v e n  control i s that there w i l l  civifull  i n a l l l i k e l i h o o d be a g r e a t t e n -  d e n c y on t h e p a r t o f t h e s t a t e t o b l e e d t h e f o i e s t d r y . r  s u c h a s i t u a t i o n a t a x ? v i l l be d e s i g n e d l u c r a t i v e from a f i s c a l :  In  t h a t i s t h e most  p o i n t of view, w i t h o u t r e g a r d  any u n f o r t u n a t e c o n s e q u e n c e s i t may :  the  to  have or t o i t s u n f a i r -  ness. -In  order, t h e r e f o r e , t o prevent  such an  extreme  s i t u a t i o n f r o m o c c u r r i n g , a t a x s y s t e m f o r f o r e s t s must i n clude other p r i n c i p l e s ducer  other than t h a t of a revenue  f o r the government.  I t s n o u i a be d e s i g n e d  pro-  so as  to  p r o v i d e continuous: revenue  t o t h e s t a t e and y e t a t t h e same  t i m e r e q u i r e a j u s t c o n t r i b u t i o n from f o r e s t owners.  A just  c o n t r i b u t i o n i s assumed t o be one i n w h i c h t h e b u r d e n i s e q u i t a b l y d i s t r i b u t e d amongst a l l p e o p l e s h a v i n g a n i n t e r e s t i n t h e government o f t h e c o u n t r y .  Furthermore,  the system  must be v r o r k a b l e and e c o n o m i c a l a s Idam S m i t h p o i n t e d o u t over a hundred  and f i f t y y e a r s a g o .  F i n a l l y , t h e Systems  must make t h e o e s t u s e o f t h e f o r e s t s f r o m t h e v i e w p o i n t of  the public I n t e r e s t .  f o r e s t a ' c i o n and e n c o u r a g e If  Does t h e s y s t e m d i s c o u r a g e r e t h e c u t t i n g o f Immature t i m o e r ?  i t does, t h e n i t i s not f o r k i n g f o r t h e i n t e r e s t s of t h e  common w e a l .  Does i t c a u s e f o r e s t p r o p e r t y t o be p l a c e d  on t h e d e l i n q u e n t t a x r o l l s ? g i v i n g s p e c i a l exemptions  Such a r e s u l t i s a s bad a s  t o the forests.  A l l t h i s i s ,of  1  c o u r s e , a n i d e a l , b u t n e v e r t h e l e s s i t i s a l w a y s a#vt&g'a'&>le t o aim h i g h e r t h a n i t i s p o s s i b l e t o a t t a i n , final result w i l l  since then the  be l e s s s h o r t o f t h e mark t h e n i t o t h e r w i s e  would be. So t h a t a t a x may be a good and c o n t i n u o u s  revenue  p r o d u c e r i t must be ie$£d a t s e t t i m e s and n o t a t t h e c o n venience of the taxpayer.  The u n i t o f t i m e h a s g e n e r a l l y  come t o be a c c e p t e d a s t h e y e a r , t h o u g h payments faay b e made q u a r t e r l y or s e m i - a n n u a l l y as t h e l a w so d e c r e e s . seen t h a t f o r f i n a l purposes  Having  t h e t a x must t o a l a r g e e x t e n t  be a n n u a l , t h e n e x t t h i n g I s t o d e t e r m i n e u p o n .what b a s i s t h e tax  will  be l e v i e d .  themselves.  F o r any d i r e c t t a x . t w o b a s e s  suggest  -101)  Capitax  H) Income I n t h e case o f f o r e s t s , c a p i t a l f o r t a x a t i o n purposes i s t h e p r o p e r t y , t h a t i s , , t h e l a n d p l u s t h e timber, on i t , income i s t h e r e t u r n from t h i s i n v e s t m e n t . always  be t a x e d , b u t t h e l a t t e r  I s a n i n c o m e t o be t a x e d .  while  The f o r m e r c a n  c a n o n l y be t a x e d when t h e r e  As a r e s u l t t h e i d e a o f a n a n n u a l  p r o p e r t y t a x on f o r e s t s seemed t h e b e s t means o f p r o v i d i n g s u r e and c e r t a i n r e v e n u e s e a c h y e a r . government's problem,  b u t i s v e r y o f t e n u n j u s t and i n e q u i t -  able i n i t s operation. might appear a t f i r s t  This t a x solves the  Many p r o b l e m s t e n d t o d i s t o r t what, g l a n c e t o be a f a i r and j u s t t a x i n t o  an e x t r e m e l y burdensome one.  These w i l l  be f u l l y  i n r e l a t i o n to British•Columbia i n a/later The  second  chapter.  b a s i s , t h a t o f income has l e d t o t h e  development of t h e p r i n c i p l e of t h e "severance term  discussed  i s a very composite  onefanbraeing  tax"?.  This  s e v e r a l forms of taxes  on income.. I t may be i n t h e f o r m o f a g r o s s Income t a x , a *  3  net income t a x o r a y i e l d t a x  on the; q u a n t i t y and q u a l i t y  of t h e n a t u r a l r e s o u r c e t h a t i s being;severed original resting place.  from I t s  Such a t a x i s a l i c e n s e o r p r i -  y ^ l e g e .tax, and as such d i f f e r s r a d i c a l l y I n p r i n c i p l e t h e p r o p e r t y tax,.  from  The j u s t i f i c a t i o n f o r s u c h a t a x l i e s i n  2.  So named b e c a u s e o f t h e L o u i s i a n a S e v e r a n c e A c t o f 1920.  5.  The t h e o r y o f t h e y i e l d t a x and i t s a p p l i c a t i o n i n B r i t i s h C o l u m b i a i n t h e f o r m o f r o y a l t i e s w i l l be discussed i n a l a t e r chapter.  '. - 1 1 t h e f a c t t h a t ; a n y n a t u r a l r e s o u r c e i s a n a t u r a l g i f t and n o t a r e s u l t o f human e n d e a v o u r *  As a c o n s e q u e n c e t h e  sovereign  a u t h o r i t y ought t o p a r t i c i p a t e I n t h e " u n e a r n e d r e s o u r c e "  and  so t h e t a x becomes a "Quid p r o q u o " l e v i e d I n r e t u r n f o r t h e ^ • p r i v i l e g e of severing  the p a r t i c u l a r natural resource.  : burdensome "such a t a x w i l l i n addition t o the property i n the l a t t e r ,  be depends o n w h e t h e r i t i s l e v i e d t a x w i t h o u t a subsequent  reduction  and n a t u r a l l y t h e r a t e o f t h e s e v e r a n c e  I t i s i n s t r u c t i v e t o n o t e what P r o f e s s o r F a i r c h i l d , the leading  How  tax..  F. R.  f o r e s t t a x economist'of the United  S t a t e s , has t o say concerning t h e a d d i t i o n a l l e v y of a severance tax.  .  "There i s no j u s t i f i c a t i o n f o r a s e v e r a n c e t a x , i n a d d i t i o n t o p r o p e r t y or other adequate tax,, i n t h e c a s e o f f o r e s t s , e x c e p t p o s s i b l y a s a measure t o be a p p l i e d t o f o r e s t s d e s t r u c t i v e l y e x p l o i t e d without p r o v i s i o n f o r restocking." 4 The  d e s t r u c t i o n o f a n a t u r a l r e s o u r c e and t h e p o s s i b l e  damage done t o t h e s u r r o u n d i n g d i s t r i c t siderations.  are important  A f o r e s t i s not n e c e s s a r i l y a wasting  l i k e a m i n e , b u t may be s o i f w a n t o n l y c u t . the :  con-  asset  I n such cases  e f f e c t s on t h e p r o d u c t i v i t y o f a l l n e a r b y l a n d  through  d e n u d i n g w a t e r s h e d s o f t h e i r s t r e a m s i n t h e s e a r e a s , may be serious  4.  indeed.  Then a g a i n ,  disastrous  c l i m a t i c c h a n g e s may  F a i r c h i l d , F.R. a n d A s s o c i a t e s : Forest Taxation i n the U n i t e d S t a t e s . ( W a s h i n g t o n , U.S. D e p a r t m e n t o f A g r i c u l t u r e , M i s c e l l a n e o u s P u b l i c a t i o n No. 2 1 8 , 1 9 3 5 ) p. 635 -- h e r e a f t e r c i t e d as F a i r c h i l d " F o r e s t Taxation."  -12r e s u l t from'complete  stripping  of f o r e s t s .  F i n a l l y , there .  a r e t h e f u t u r e g e n e r a t i o n s t o be c o n s i d e r e d .  Have we to-da>y a  to.complete^waste a n a t u r a l r e s o u r c e , which but f o r our wanton d e s t r u c t i o n c o u l d h a v e s u p p o r t e d o u r sons a n d g r a n d s o n s ? h a r d l y appears  It  j u s t t h a t we s h o u l d t u r n o u r c o u n t r y I n t o  another Sahara D e s e r t , b r i n g i n g about such a ; m e r e l y f o r t h e sake o f p r e s e n t g a i n .  metamorphosis 1  These p o i n t s 3.X© 3,11  v e r y c l e a r l y summed up i n a n o l d Roman l a w maxim:"Sic wtere t u o , u t non alienum l a e d a s "  5  No man h a s , t h e r e f o r e , a r i g h t t o w a s t e t h e f o r e s t f o r . h i s own e n r i c h m e n t t o t h e d e t r i m e n t o f t h e p r e s e n t o r a n y f u t u r e generation T h i s b r i n g s u s r i g h t up a g a i n s t t h e q u e s t i o n o f •whether  c o n s e r v a t i o n i s t h e n a sound p r i n c i p l e f o r a f o r e s t  taxation policy. first,  Such.a  p r i n c i p l e c o u l d t a k e two f o r m s ,  a t a x i n t h e form of a p r o t e c t i v e bah, or second, a  t a x t o encourage r e f o r e s t a t i o n .  -The c o m p l e t e a p p l i c a t i o n o f  the former would i n a l l p r o b a b i l i t y , depending, of course, on t h e s t e e p n e s s o f t h e t a x , l e a d t o a c e s s a t i o n .of f o r e s t cutting.  T h i s w o u l d r e a c t much more s e v e r e l y o n t h e g o v e r n -  ment t h a n o n t h e f o r e s t owner f o r h e c o u l d s e e k o t h e r  avenues  o f employment f o r h i s c a p i t a l , w h e r e a s t h e g o v e r n m e n t w o u l d l o s e a l l the f o r e s t revenues. t h e n be i n e x p e d i e n t .  A t a x o f t h i s n a t u r e would  B u t t h i s does n o t mean t h a t p a r t o f  t h e f o r e s t t a x a t i o n s y s t e m c a n n o t be d e s i g n e d t o i n c l u d e  5.  "You must BO u s e y o u r p r o p e r t y a s n o t t o i n j u r e t h a t of your neighbour."  --15this principle. it  Some f o r m o f s m a l l , p r o t e c t i o n  does n o t h i n d e r l e g i t i m a t e  favour.  tax providing  o p e r a t i o n s h a s much i n i t s  L e t u s t u r n now t o t h e s e c o n d t y p e , a. t a x w h i c h  encourage r e f o r e s t a t i o n .  will  S u c h a t a x w o u l d be i n t h e v e r y  b e s t i n t e r e s t s o f sound f o r e s t r y p r a c t i s e a n d o f t h e f u t u r e good o f t h e s t a t e .  B u t no t a x h a s y e t b e e n d e s i g n e d t o  approximate anything very close  t o such an i d e a l s i t u a t i o n .  L e g i s l a t i o n t o provide rules f o r reforestation i s nearly a l ways n e c e s s a r y .  So many men a r e i n t e r e s t e d  p r e s e n t a n d c a n n o t be c o n v i n c e d t h a t i n t e r e s t s t o p l a n t seed t r e e s . not  only i n t h e  i t i s t o t h e i r own f u t u r  A minimum t a x w o u l d ,  therefore  a c c o m p l i s h r e f o r e s t a t i o n and m i g h t e v e n r e s u l t i n t h e  o p p o s i t p e f f e c t by o f f e r i n g a g r e a t e r o p p o r t u n i t y t o q u i c k .wealth.  The. p r i n c i p l e o f c o n s e r v a t i o n f o r a f o r e s t  scheme i s s o u n d a n d must be i n c r e a s i n g l y i u d i e d  taxation  i n order t o  p r e s e r v e our p r e s e n t f o r e s t r e s o u r c e s and p r o v i d e f o n our future  forest  resources.  Fromffithls o u t l i n e o f t h e p r i n c i p l e s o f f o r e s t taxation, evident.,. :  taxation  t h e complexity of t h e nature of t h e t a x problem i s So many t h i n g s system that  e l i x i r . t o solve way  h a v e t o be a c h i e v e d i n a n y f o r e s t  i t i s i m p o s s i b l e t o f i n d one m i r a c u l o u s  allproblems.  Much h a s t o be done i n t h e  o f t r i a l a n d e r r or, and o f t e n what i s l e a s t h a r m f u l h a s  t o be a c c e p t e d .  But u n d e r l y i n g  a l l t h i s , the principles  a l r e a d y mentioned each attempt t o seek a l e v e l ? / l t h one a n o t h e r .  compatat-ivo  -14.» .j The A. The  D i s p o s a l of.Timber  O r i g i n and In  CHAPTER 111  . ' In B r i t i s h  Columbia  Development o f C a n a d i a n T i m b e r  Regulations  the v a r i o u s e x i g e n c i e s of the n i n e t e e n t h  whether p o l i t i c a l , m i l i t a r y ,  s o c i a l or commercial,  any  o f c o n s e r v a t i o n w i t h r e g a r d t o n a t u r a l r e s o u r c e s was precluded. was  t h a t t h e q u i c k e r t h e f o r e s t was  entirely  c u t , j u s t so much q u i c k e r And  as t h i s was  be t h e b e s t f o r m o f s e t t l e m e n t f o r a p r o s p e r o u s  People  beheld the  natural.  The  land.  This process  lumberman was  This i d e a of c l e a r i n g  ness.  settler*  the l a n d f o r the s e t t l e r  what seems i n our day  the h e i g h t of  ridiculous-  t h o u s a n d f e e t p e r i i a g r e d m u s t be f e l l e d  passed  each y e a r i ' ,  l e s t t h e l a c k o f a good m a r k e t o r t r a n s p o r t a t i o n f a c i -  .11 t i e s d e t e r c u t t i n g  o p e r a t i o n s , i t was  :'.tw6 o r i g i n a l p r o v i n c e s o f Canada t o f e l l order to c l e a r the l a n d . was  at  the i n s e r t i o n of a clause i n a l l c u t t i n g t h a t a  minimum o f one And  necessary  B o t h i n U p p e r Canada and '•Lower -Canada l a w s were  directing  trans-  seemed t o them o n l y  t o be t o l e r a t e d as a  e v i l b e c a u s e he p a v e d t h e - w a y f o r t h e  times reached  to  s p e c t a c l e of a f r o n t i e r g r a d u a l l y  -moving w e s t w a r d s and. o f a. f o r e s t l a n d b e i n g c l e a r e d and formed i n t o f a r m i n g  deemed  Canada o f  t h e f u t u r e , t h e f o r e s t s were f r o m t h i s a n g l e o n l y a bar progress.  policy  The m a i n i d e a I n t h e " m i n d s , o f t h e r u l e r s o f Canada  would a g r i c u l t u r a l s e t t l e m e n t proceed. to  century,  destroyed  q u i t e comm.oh i n t h e s e and  burn timber  As a c o n s e q u e n c e much f i n e  in  timber  i n t h i s manner.  1. L a w l e r , J : H i s t o r i c a l S k e t c h o f Canada's T i m b e r I n d u s t r y ( F o r e s t r y B r a n c h C i r c u l a r , No. 15) p. 3.  -15With these i d e a s i n view a d i s t i n c t l y Canadian  system  o f - l e a s i n g t i m b e r l a n d t o lumbermen f o r t h e p u r p o s e o f c u t t i n g t h e t i m b e r t h e r e o n , wras I n t r o d u c e d .  A certain specified  time  was a l l o w e d f o r c l e a r i n g t h e la.nd o f t i m b e r , p r e p a r a t o r y t o the a r r i v a l of the s e t t l e r . of  principle  t h e lumberman p l a y i n g t h e r o l e o f t h e f r o n t i e r m a n l a y i n  the f a c t t h a t the farmer Indefinitely.  vation.  c o u l d not push him i n t o the i n t e r i o r  Somewhere.the t i m b e r l a n d s w o u l d e n d .  furthermore, a l l types  and  The f a l l a c y i n t h i s  And,  of l a n d a r e n o t s u i t a b l e f o r c u l t i -  A c l a s s i f i c a t i o n of lands suitable f o r a g r i c u l t u r e  t h o s e v a l u a b l e ; o n l y f o r t h e i r t i m b e r w o u l d h a v e been.a  w i s e r c o u r s e t o .have f o l l o w e d .  For otherwise the lumbering  J  i n d u s t r y u n d e r t h e f r o n t i e r p r i n c i p l e c o u l d o n l y be a t r a n s i t o r y i n d u s t r y , w h e r e a s we know t o - d a y t h a t b o t h f a r m i n g and lumbering  can develop  alongside e a c h o t h e r  However, i n a l l f a i r n e s s t o t h e l e a s i n g  system i t  must be a d m i t t e d t h a t i t s a v e d t h e l a n d f r o m b e i n g ly  alienated.  permanent-  As a r e s u l t a t t h e p r e s e n t t i m e , l e s s  than  s e v e n p e r c e n t o f t h e t i m b e r l a n d s o f Canada a r e p r i v a t e l y owned, a v e r y f a v o u r a b l e f i g u r e i n c o m p a r i s o n the United States of America.  w i t h t h a t of  O n l y i n Nova S c o t i a  some s e v e n t y - f i v e p e r c e n t o f t h e l a n d i s p r i v a t e l y and  i n New BrunsYvick  h e l d ) was t h i s  system  t w e n t i e t h century..  (where owned)  (where a b o u t f i f t y p e r c e n t i s p r i v a t e l y n o t adopted  u n t i l w e l l on I n t o t h e  ;  -16I n more r e c e n t y e a r s t h e r e has g r o w n up t h e of d i s p o s i n g , of timber under a t i m b e r by p u b l i c t e n d e r s o r p u b l i c a u c t i o n .  practice  contract, annually Under s u c h a s y s t e m  the timber i s a l i e n a t e d , , the l a n d remaining under t h e of the p r o v i n c i a l a u t h o r i t y of i t s l o c a t i o n .  The  only  control  application  o f t h i s method i n B r i t i s h C o l u m b i a i s s p e c i f i c a l l y d i s c u s s e d In a l a t e r  s e c t i o n of t h i s chapter.  i s w o r t h n o t i n g , t h a t i t has  F o r Canada g e n e r a l l y i t  come i n t o f a i r l y g e n e r a l r e c o g -  n i t i o n by t h e s e v e r a l p r o v i n c e s as t h e most sound p o l i c y t i m b e r d i s p o s a l b o t h f r o m t h e s t a n d p o i n t o f good p r a c t i c e and t h e b e s t i n t e r e s t s o f the:, p e o p l e . d e p i c t s t h e s y s t e m s o f t i m b e r d i s p o s a l i n use and  The  T a b l e no. i n Canada  Quebec, Nova S c o t i a and New  several provinces. A c t one  o f t h e e x c l u s i v e powers g i v e n t o t h e  legislatures "The  America  was:.  b e l o n g i n g t o t h e P r o v i n c e , and wood t h e r e o n . "  .  of the timber  •  B r i t i s h N o r t h A m e r i c a A c t 1867. V i c t o r i a c. 3, s e c . 92, s u b s e c .  50 5.  and'31  by  the  provincial  management and s a l e o f t h e P u b l i c  to-day^  been s i n c e  of the p r e r o g a t i v e s of  According t o the B r i t i s h North  1,,  Brunswick.  r i g h t t o d i s p o s e t h e f o r e s t l a n d s has  t h e t i m e o f C o n f e d e r a t i o n one  2,  forestry  i t i s t o be n o t i c e d t h a t t h e t i m b e r s'sale i s e m p l o y e d  a l l a u t h o r i t i e s except  of  Lands and  -17/ -* '  T a b l e No.' 1  FForms o f T i m b e r D i s p o s a l - i n use. I n Canada t o - d a y  PROVINCE Nova  •  NATURE OF TENURE  S c o t i a : Annual renewable  . BASIS OF COMPETITION Non-competitive  license  New B r u n s w i c k: 1. S a w m i l l l i c e n s e s : 2. P u l p o r p a p e r  Public  Auction  Public  Auction  licenses  : 5. C rown t i m b e r l i c e n s e s :  a l l a n n u a l & renewable.  : 1. A n n u a l r e n e w a b l e : . l i c e n s e :-. 2. S p e c i a l . l i c e n s e :  Quebec  Ontario  Annual renewable l i c e n s e :  Manitoba  1. A n n u a l t i m b e r s a l e : contract: .2. A n n u a l r e n e w a b l e : license :  : S a s k a t c h e - . 1. A n n u a l , t i m b e r s a l e c o n t r a c t : wan • 2. A n n u a l r e n e w a b l e : license : 1. A n n u a l r e n e w a b l e license 2. A n n u a l p e r m i t b e r t h . S. T i m b e r s a l e  Alberta  British. .Columbia  ; ; 1. 1 y e a r r e n e w a b l e timber sale 2. 1 y e a r h a n d - l o g g e r s ' license (non-competitive) :  . Competitive tender Public  Auction . '" ..  Public tender.  Public tender  1. P u b l i c t e n d e r 2. Open p u b l i c auction  :  Source:  Dic&son,. J .R: "Timber D i s p o s a l R e g u l a t i o n s i n Canada '. i n r e l a t i o n t o F o r e s t Management". The F o r e s t r y C h r o n i c l e . V o l . X. pp. '51-42. - a n d S t a t u t e s o f B r i t i s h Columbia.  T h i s does not:, -however,, i n c l u d e a l l t h e l a n d i n e a c h v i n c e as c e r t a i n l a n d s were ceded t o t h e D o m i n i o n  pro-  govern-  ment a t t h e t i m e o f t h e C o n f e d e r a t i o n and t h e s u c c e e d i n g mittances t o the union of the other p r o v i n c e s . Columbia  In  ad-  British  by t h e t e r m s o f t h e A c t o f U n i o n , t h e p r o v i n c e  t r a h s f e r e d t o t h e f e d e r a l government 10,976,000 a c r e s known as t h e R a i l w a y B e l t and  extending twenty m i l e s e i t h e r  of the p a t h f o r the Canadian head-of B u r r a r d I n l e t ;  and  side  P a c i f i c R a i l w a y , up t o t h e  3,468,000 a c r e s i n t h e P e a c e  R i v e r i n l i e u o f l a n d i n t h e R a i l w a y B e l t w h i c h had  pre-  v i o u s l y b e e n a l i e n a t e d by t h e p r o v i n c e . ^  which  This land  c o n t a i n e d some v a l u a b l e t i m b e r t o g e t h e r w i t h c o a l r e s o u r c e s was  r e t u r n e d t o the p r o v i n c e i n 1930.^  .  Apart from t h i s the r e s t of the l a n d of Columbia  British  comes u n d e r t h e a u t h o r i t y o f t h e p r o v i n c i a l  govern-  ment as p r o v i d e d f o r i n t h e B r i t i s h N o r t h America. A c t . warious  The  forms of l a n d t e n u r e - f o r d i s p o s a l of t i m b e r l a n d s  t h a t have developed and must be  i n t h i s province are r a t h e r complicated  explained In order to c l e a r l y understand  the  t a x a t i o n o f f o r e s t s i n B r i t i s h Columbia.  Four main of t y p e s  o f t e n u r e a r e t o be f o u n d i n o u r p r o v i n c e  to-day:-  3.  Order  o f Her M a j e s t y i n C o u n c i l , W i n d s o r ,  May 16,  4„  M u l h o l l a n d , F.D•: The F o r e s t Re s our c e s o f Br i t i s h C o l u m b i a . - ( V i c t o r i a , K i n g ' s p r i n t e r , 1937) p. 34.  1871.  -19-  1) C r o w n - g r a n t e d l a n d s . 2) T i m b e r l e a s e s 3) T i m b e r  licenses  4) T i m b e r  sales.  Of t h e s e , o n l y t h e l a s t named i s employed a t t h e p r e s e n t  time,  a l t h o u g h the tenures g r a n t e d under the f i r s t  to  t h e i r r e s p e c t i v e a b o l i t i o n are s t i l l no.-2  and  timber noted  no.  3, t h e a c r e a g e and  three p r i o r  i n existence.  the volume of m e r c h a n t a b l e  i s g i v e n f o r the t e n u r e s under d i s c u s s i o n * t h a t the u n a l i e n a t e d land i n c l u d e s timber  p r o v i n c i a l lands not disposed  In tables  i n any  It i s to  s a l e s and  of t h e o t h e r t y p e s  other  of  tenure. B.  Crown-granted Lands.  I n B r i t i s h Columbia the e a r l i e s t form of l a n d d i s p o s a l was  t h a t of the crown-grant.  This permanently  a l i e n a t e d l a n d s o l d i n t h i s manner, g i v i n g t h e new land i n fee simple.  Such t i t l e ,  A c c o r d i n g l y , much v a l u a b l e t i m b e r was r a t e s as o r d i n a r y l a n d , w i t h o u t royalty.  5.  same  even the r e s e r v a t i o n of a noted:  "In the e a r l y days of the P r o v i n c e  public estimation."  t o the l a n d .  a c q u i r e d at the  As a R o y a l C o m m i s s i o n i n 1910  l a n d s seem t o h a v e had  owner t h e  too, c a r r i e d w i t h I t the  r i g h t s t o a l l the n a t u r a l resources appurtenant  little  timber  o r no v a l u e i n t h e  5  F i n a l R e p o r t o f t h e R o y a l C o m m i s s i o n o f I n q u i r y on T i m b e r and F o r e s t r y 1 9 0 9 - 1 9 1 0 , p. 1 1 .  be  -20OlNERSHIP OF MERCHANTABLE TIMBER STANDS OF B.C. / i t e T a b l e No. 2 1 Ownersnip  Class  ACREAGE  : per: :per A c c e s s i b l e ;cent I n a c c e s s i b l e :cent T o t a l  u n a l i e n a t e d Crown 4,799,600 .: ;58.0 12,279,200 timber.' Timber and  Licenses Leases  2,162,800  Crown / G r a n t s and 1,315,100 Indian Reserves TOTALS  8,275,500  26.1 :. 1,254,700 :15.9:j  85.4 17,078, :75.4 800 '. 8.6  866,400  6.0 100  14., 580,500  100  :per :cent-  5,597, 15.0 500 2,179, 500  9.6  22,655, 100 500  T a b l e No. 5 . . 2.  Ownership  Class  THOUSANDS OF BOARD-FEET  per :Per per A c c e s s i b l e c e n t I n a c c e s s i b l e :cent T o t a l c e n t f  U n a M e h a t ed I C B own timber 44,803,9,00. ,40.8 100,655,800 Timber, L i c e n s e s and L e a s e s  50,902,400 46.4  109,758,200 100 T0I1LS \rl,/,. • • ''••...,••] M u l h o l l a n d , F.D. Columbia."  21.5  51,124,800  '82.2 7,203  Grown G r a n t s and .: 14,031,900 12.8 Indian Reserves :  Source:-  145^4 69.5 S-9576C 5 7 . 1  12,980,400 144,761,000  :  9.0 27,01 10.7 2,3K0 100  '254,4 99 , 200100  "The F o r e s t R e v e n u e s o f B r i t i s h  Percentage f i g u r e s c a l c u l a t e d  from  a c r e a g e and v o l u m e f i g u r e s o b t a i n e d f r o m t h i s  book.  . Other  • -21- ,  l a r g e a l i e n a t i o n s i n c l u d i n g some v a l u a b l e  f o r e s t l a n d were a l s o made f o r t h e encouragement o f a s p e cific  project.  Most o f these- were g r a n t s i n a i d o f . r a i l w a y s '  and t o a l e s s e r e x t e n t , r o a d s .  The h i s t o r y o f t h e l a n d s  g r a n t e d t o t h e D o m i n i o n government and t h e i r . r e t u r n t o t h e p r o v i n c e ' h a s been d e t a i l e d . .  subsequent  Besides  this,  . h o w e v e r , 8,203,410 a c r e s were g r a n t e d t o v a r i o u s r a i l w a y c o m p a n i e s , o f w h i c h 4,065,076 acres;, were, a f t e r w a r d s r e purchased.by  t h e g o v e r n m e n t , l e a v i n g a permanent  t o t h e r a i l w a y s o f 4,138^534 a c r e s .  6  r  alienation  Of t h e r e m a i n i n g  rail-  . way g r a n t s t o - d a y , t h e most i m p o r t a n t i s t h e g r a n t o f 1884 t o the ESquimalt m i l l i o n acres.  and Nanalmo R a i l w a y , c o v e r i n g o v e r two T h i s g r a n t i n c l u d e d Some o f t h e f i n e s t  of Douglas f i r i n B r i t i s h Columbia, passed  stands  much o f w h i c h h a s s i n c e  i n t o t h e hands o f p r i v a t e c o m p a n i e s . / The  first  attempt  t o prevent f u r t h e r  a l i e n a t i o n o f t i m b e r l a n d s came i n 1884.  wholesale  By t h e p r o v i s i o n s  o f t h e Land A c t o f t h a t y e a r i t was d e c r e e d "No  ' •"•  that:  l a n d c h i e f l y v a l u a b l e f o r t i m b e r s h a l l ' be , 7  d i s p o s e d o f by p u b l i c o r p r i v a t e : s a l e . " 6.  7.  The o r i g i n a l r a i l w a y g r a n t s w e r e : N e l s o n a n d F o r t t S h e p p a r d 'Railway B r i t i s h Columbia Southern Railway Columbia and Western R a i l w a y K a s l o and S l o c a n R a i l w a y Columbia and Kootenay R a i l w a y E s q u i m a l t a n d Nanalmo R a i l w a y Total L a n d A c t 1884. 47 V i c t o r i a c, 16.  550,783 a c r e s . 3,755,733 1,348,225 250,022 188,593 2,110,054 8,205,410 a c r e s .  B u t t h i s a c t Remained v e r y l a r g e l y a dead l e t t e r s e q u e n t a c t o f 1888  imposed r o y a l t y c h a r g e s  A sub-  and r a i s e d t h e  p r i c e o f l a n d i n g e n e r a l f r o m $1.00 t o $8*50.  Since  these  p r i c e s d i d n o t t a k e i n t o c o n s i d e r a t i o n what t y p e " o f l a n d i t was,. s o t i m b e r l a n d c o u l d s t i l l  be s e c u r e d a t t h e same p r i c e  as a n y o t h e r l a n d .  A s t e p i n t h e r i g h t d i r e c t i o n was t a k e n  i n 1 8 9 1 by l i m i t i n g  a l l types o f l a n d purchased  f r o m 160 t o 640 a c r e s and a s e c o n d  purchase  to sections  was n o t p e r m i t t e d  u n t i l t h e f i r s t had been Improved t o an e x t e n t e a u a l i n v a l u e to  the o r i g i n a l p r i c e of the l a n d .  9  Timber l a n d , under  l e g i s l a t i o n was s t i l l n o t . c l a s s i f i e d a s s u c h a n d c o u l d be p u r c h a s e d acre.  at the price of f i r s t  this still  c l a s s l a n d I . e . $5.00 p e r  I t was n o t , however,, u n t i l 1896 t h a t t h e p r i n c i p l e o f  s t a t e ownership  o f t h e f o r e s t s o f B r i t i s h C o l u m b i a was r e c o g -  n i z e d by l a w .  From t h a t -date- - onwards a l l " t i m b e r l a n d " w a s  reserved from  s a l e or pre-emption.  The s t a t u t o r y  definition  Of t h i s , " t i m b e r l a n d " was f i x e d a s l a n d c a r r y i n g 8000 boa^d f e e t t o t h e a c r e w e s t o f t h e C a s c a d e Range, and 5000 board, 1  f e e t t o t h e a c r e e a s t o f t h e Cascade•'• R a n g e } These r e g u l a t i o n s are s t i l l  i n f o r c e to-day.  U n t i l g o v e r n m e n t i n s p e c t i o n vras  e s t a b l i s h e d i n 1918 some t i m b e r a r e a s were, s e c u r e d , b u t t h e g e n e r a l aggregate  o f C r o w n t i m b e r h a s s i n c e 1896 r e m a i n e d  intact.  8. Land A c t Amendment A c t 1 8 8 8 . 5 1 V i c t o r i a c l 6 . 9. Land, A c t Amendment A c t 1 8 9 1 . 54 V i c t o r i a c. 1 5 . 10. L a n d A c t Amendment A c t 1896 59 V i c t o r i a c , 88. 11. The C a s c a d e Range by s t a t u t e i n c l u d e s t h e C o a s t M o u n t a i n s , w h i c h b o r d e r t h e P a c i f i c c o a s t and l i e n o r t h and'west o f t h e F r a s e r R i v e r .  C. T i m b e r L e a s e s I n 1870 t h e l e a s i n g s y s t e m o f t i m b e r  d i s p o s a l was  IP i n t r o d u c e d i n t o B r i t i s h Columbia.  The a d v a n t a g e s o f t h i s  s y s t e m o v e r t h a t o f t h e c r o w n g r a n t were v e r y g r e a t f r o m t h e p o i n t o f view o f t h e government, s i n c e i t s t i l l  r e t a i n e d po-  s s e s s i o n of t h e l a n a o n l y l e a s i n g t h e c u t t i n g r i g h t s .  Further  more, t h e L e g i s l a t u r e h o p e d , t o o , ; i t w o u l d e n c o u r a g e t h e building, of sawmills.  I n d e e d , by 1888 t h i s was d e f i n i t e l y a  p o l i c y " o f t h e p r o v i n c i a l , government f o r a n a c t o f t h a t 7  1  year ^  made t h e e r e c t i o n o f a s a w m i l l a n e s s e n t i a l c o n d i t i o n . o f t h e  granting of a lease.  To g i v e t h e l e s s e e s a s e c u r i t y o f t e n u r e  . c o m p a r a b l e w i t h t h a t o f owners o f c r o w n - g r a n t e d l a n d s , t h e t e r m o f t h e l e a s e s were s e t a t t h i r t y y e a r s .  A f u r t h e r ex-  t e n s i o n o f t h e l e a s i n g system i n 1891^^ g r a n t e d cut hemlock f o r t a n n i n g t h i s type  purposes.  the right to  The d i f f e r e n c e s b e t w e e n  o f l e a s e and t h e o r d i n a r y Tease a r e n o t  important  enough t o w a r r a n t d e s c r i p t i o n h e r e . The  term o f tenure  of these  l e a s e s as i t e x i s t s  15 t o - d a y was f i x e d i n 1 9 0 1 .  I n t h i s year  l e a s e s c o u l d be r e n e w e d f o r c o n s e c u t i v e of t?fenty-one y e a r s , might impose. enjoy 12. . 15. 14. 15.  the Land Land Land Land  i t was p r o v i d e d and s u c c e s s i v e  s u b j e c t t o such taxes  that periods  as t h e government  The o l d t h i r t y - y e a r l e a s e s were p e r m i t t e d t o  same p r i v i l e g e i f t h e y s u r r e n d e r e d t h e i r o l d l e a s e O r d i n a n c e o f 1870. A c t Amendment A c t 1 8 8 8 , 51 V i c t o r i a c. 16 A c t Amendment A c t 1891,. 54 V i c t o r i a c. 15 A c t Amendment A c t 1901 1 Edward V l l c. 50 -  -24w i t h i n one y e a r .  Five years l a t e r the granting  16 was d i s c o n t i n u e d , b u t a l l l e s s e e s were a l l o w e d u •'. leases granted 1901.  of l e a s e s to retain their  t o t h i s time on t h e c o n d i t i o n s o f t h e a c t of  The r e a s o n . f o r , t h i s a c t i o n was t h a t t h e l e a s e - h o l d  system had been p r i m a r i l y designed t o p r o v i d e  sawmill  owners  w i t h a d e f i n i t e s o u r c e o f l u m b e r a t cheap r a t e s , b u t w i t h t h e I n t r o d u c t i o n of the l i c e n s i n g  system ( d e s c r i b e d  t h i s was no l o n g e r n e c e s s a r y .  i n s e c t i o n D)  T h i s s y s t e m h a d done i t s p a r t  i n helping t o e s t a b l i s h the lumbering i n d u s t r y .  Wow t h a t t h e  i n d u s t r y was e s t a b l i s h e d i t s u s e was l a r g e l y o v e r .  Another  c o n t r i b u t i n g f a c t o r i n I t s a b o l i t i o n was t h a t i t was a v e r y wasteful and  system of timber  disposal.  One l e a s e o f f i v e  thous-  a c r e s m i g h t c o n t a i n f i v e , t e n o r e v e n more s c a t t e r e d  areas i n a f o r e s t d i s t r i c t , a couple o f hundred acres s e c t i o n s were t h e r e b y to the province,too  some f?f w h i c h w o u l d be l e s s t h a n  i n e x t e n t . ' Much o f t h e c h o i c e s t  s e l e c t e d l e a v i n g t h e areas i n between  s m a l l i n many e a s e s t o be p r o d u c t i v e l y  Operated. One o t h e r t y p e o f l e a s e t h a t e x i s t s t o - d a y , b u t under a d i f f e r e n t type of t e n u r e , i s the_ .wood-pulp l e a s e . i n order Columbia.  deserves a t t e n t i o n .  I t was. f i r s t g r a n t e d  t o encourage pulp  That 17  i n 1901,  and p a p e r i n d u s t r i e s I n B r i t i s h  The l e n g t h o f t e n u r e  was tvventy-one y e a r s a n d t h e  e r e c t i o n o f a p u l p - m i l l was c o m p u l s o r y . B e f o r e t h e a b o l i 18 t i o n o f t h i s t y p e o f l e a s e I n 1 9 0 3 , some 355,250 a c r e s h a d 16. Land A c t Amendment A c t , 1 9 0 6 . 6 Edward. V l l c. 24. 17. Land A c t Amendment A c t , , 1 9 0 1 1 Edward V l l C. 50. 18. Land A c t Amendment A c t , 1905-04. 5 and 4 Edward V l l c. 5 9 .  -25b e e h d i s p o s e d - ; o f I n t h i s manner.  A l l these leases which  day c o v e r a b o u t 535,000 a c r e s ' w e r e ' r e n e w e d i n 1936  to-  for a period  19 of  eighteen years.  Although  t h i s f o r m o f t e n u r e has  never  b e e n r e v i v e d , i n 1912 was  a licen§e f o r t h e d i s p o s a l o f p u l p 20 g r a n t e d i n the form of a timber s a l e c o n t r a c t . •  D.  The C o l u m b i a was  Timber L i c e n s e s  o r i g i n of the timber l i c e n s e i n B r i t i s h  the o l d "general l i c e n s e " , designed  t h e s m a l l and i n d e p e n d e n t a  to  enable  lumberman t o o b t a i n t i m b e r .  " g e n e r a l l i c e n s e " s u c h men  could a f f o r d , t o operate  Under where-  as t h e y c o u l d n o t a f f o r d ' , t o t a k e o u t a l e a s e w i t h i t s c o n d i t i o n of t h e e r e c t i o n of a s a w m i l l . thousand  With a l i m i t of a  a c r e s t h e s e l i c e n s e s were, f i r s t  a four-year tenure.^c o n d i t i o n s except  1  I n 1888  g r a n t e d i n 1884  on  " s p e c i a l l i c e n s e s " o n t h e same  t h a t t h e y ivere r e n e w a b l e a n n u a l l y , were  introduced. The l i c e n s e s was,  amount o f t i m b e r l a n d t a k e n up u n d e r  these  h o w e v e r , v e r y s m a l l and m i g h t h a v e r e m a i n e d  s o b u t f o r t h e c o n d i t i o n s o f t h e time..  Towards t h e end  t h e n i n e t e e n t h c e n t u r y and d u r i n g t h e f i r s t t w e n t i e t h c e n t u r y , t h e r e was ment and r a i l w a y e x p a n s i o n ,  decade of  of  the  a p e r i o d o f g r e a t r u r a l d e v e l o p - .:' and  as m i g h t be e x p e c t e d  the  c o n s u m p t i o n o f l u m b e r b e g a n t o r e a c h more t h a n n o r m a l heights.  The  r e s u l t was  a "timber famine."  government of B r i t i s h C o l u m b i a s e e i n g :li'$. 20. 21.  :  Therefore,  t h e enormous a r e a s :  1  :  :  ;  M u l h o l l a n d op. c i t . p. 54. ~~ F o r e s t A c t , 1912. 2 G e o r g e V c . 17 T i m b e r C u t t i n g A c t , 1884, 47 V i c t o r i a c. 3 2 .  the of  -26t i m b e r l a n d "xx-i t h e p r o v i n c e l y i n g i d l e and r e c o g n i z i n g f o r the f u t u r e t h e s e r i o u s n e s s of a "timber famine",  perceived  a n o p p o r t u n i t y t o r e l i e v e t h e s i t u a t i o n a n d a t t h e same t i m e secure thereby an i n c r e a s e d revenue f o r t h e t r e a s u r y .  According-  ly,  e a r l y as 1894 t h e p r o v i s i o n f o r s t a k i n g l a n d s f o r 11-  censes  was p a s s e d , ^  and i n s u c c e s s i v e y e a r s b y making t h e l i -  c e n s e t r a n s f e r a b l e and r e n e w a b l e f o r t w e n t y - o n e y e a r s . a r e s u l t , M i e n t h e " t i m b e r f a m i n e " became a c u t e , w i l d  As spe-  c u l a t i o n t o o k p l a c e and f o r a t i m e t h e r e was a l a r g e boom. But a s was i n e v i t a b l e t h e a c q u i s i t i o n o f t i m b e r f a r o u t r a n t h e requirements  of t h e market.  F i n a l l y i n 1907, t h e government,  a l t h o u g h t h e y were r e c e i v i n g t h e g r e a t e s t r e v e n u e s i n t h e i r h i s t o r y f r o m t h e s t a k i n g o f t h e s e l i c e n s e s , saw t h a t t h e f u t u r e r e s o u r c e s o f t h e p r o v i n c e were b e i n g e x p l o i t e d f o r g a i n i n t h e p r e s e n t , a n d 'that b e i n g t h e c a s e w i t h d r e w t h i s o f t e n u r e by o r d e r - i n - c o u n c i l . ^  form  3  I n t h e 'worst y e a r s o f t h i s w i l d  s t a k i n g (1304-  07) S3»me ISiOOO s q u a r e m i l e s o f t i m b e r l a n d were s o d i s p o s e d 00© by t h e g o v e r n m e n t , and t h i s a r e c o n t a i n e d a b o u t feet of timber.  200,00Q.board  I n 1904 t h e r e were o n l y 1 4 5 1 l i c e n s e s i n  e x i s t e n c e , b y 1 9 0 7 t h i s number h a d i n c r e a s e d t o o v e r 15,000.  Although the p r i v i l e g e of staking f u r t h e r  licenses  was w i t h d r a w n i n 1 9 0 7 , a l l e q u i t i e s i n l i c e n s e s were k e p t i n 22.  22.  Land A c t Amendment A c t 1 8 9 4 , 57 V i c t o r i a c. 24. A p a r a l l e l s i t u a t i o n i s t o be f o u n d i n t h e U n i t e d S t a t e s a t t h e same t i m e i n t h e Homestead and T i m b e r and S t o n e Acts O r d e r - i n ^ c o u n c i l , 1907 7 Edward V l l l .  -27  tact.  S i n c e t h a t d a t e t h e y have g r a d u a l l y - . d e c r e a s e d i n  number t h r o u g h b e i n g a l l o w e d t o l a p s e o r t h r o u g h t a x d e l i n q u e n c y , and t o - d a y t h e r e a r e o n l y a f e w t h o u s a n d - i n e x i s t e n c e Another form o f l i c e n s e o f minor w h i c h h a s t o be m e n t i o n e d  because  importance, but  i t isstill  day i s t h e h a n d - l o g g e r s ' l i c e n s e .  i n existence to  The o r i g i n a l t e r m s  w h i c h t h i s f o r m o f l i c e n s e was g r a n t e d a r e w o r t h y s i n c e t h e y imposed  no r e s t r i c t i o n s  under  of note  as t o a r e a o r methods  o f l o g g i n g t o be e m p l o y e d . "The  C h i e f Commissioner  may, u p o n t h e payment  o f t h e sum o f $10 t h e r e f o r , g r a n t a g e n e r a l l i c e n s e t o a n y p e r s o n t o c u t t i m b e r u p o n Crown l a n d s , n o t b e i n g t i m b e r l i m i t s , w i t h o u t a n y r e s e r v a t i o n as t o area—-and  s u c h l i c e n s e s h a l l be i n f o r c e f o r one  y e a r f r o m t h e d a t e t h e r e o f , and no l o n g e r . " 2 4 The  R o y a l C o m m i s s i o n o f I n q u i r y on Timber  and F o r e s t r y  1 9 0 9 - 1 0 recommended t h e d i s c o n t i n u a n c e o f s u c h  licenses,  but t h i s a d v i c e has never been f o l l o w e d by t h e p r o v i n c i a l government.  Except f o r r a i s i n g  t h e l i c e n s e f e e and p r e -  s c r i b i n g c e r t a i n minor r e s t r i c t i o n s  they remain  to-day  much a s t h e y were i n 1 8 8 8 . By t h i s  l i c e n s e much f i n e t i m b e r h a s b e e n i n d i -  scriminately cut;  The l a n d , t o o , i s d e s t r o y e d f o r f u t u r e  u s e s i n c e many o f t h e t r e e s t h a t a r e c u t n e v e r r e a c h t h e water*, because  24.  o f a n amendment w h i c h f o r b a d e t h e u s e o f  Land A c t amendment A c t , 1 8 8 8 . 5 1 V i c t o r i a c. 1 6 .  s t e a m power.  'The  f i r e hazard from  s u c h d e b r i s i s enormous.  '  An e s t i m a t e by t h e C o m m i s s i o n o f C o n s e r v a t i o n i n 1918. f o r a t w e n t y - e i g h t y e a r p e r i o d i s e n l i g h t e n i n g on t h i s 500,000,000 b o a r d 300,000,000  »  800,000,000  matter.  f e e t marketed «  c u t and  "  i n d i r e c t l y destroyed fire  and  a l l o w e d t o go t o w a s t e through  -windfall  From a t a x a t i o n p o i n t o f ' v i e w , t h e y c e r t a i n l y not  justified.  I n t h e l a s t f o r t y y e a r s t h e y have p r o v i d e d  a n n u a l l y a few t h o u s a n d  d o l l a r s i n l i c e n s e f e e s and :  f i f t e e n to-'twenty-thousand very l i t t l e  are  i n comparison  dollars i n royalties. w i t h t h e damage done.  reason t h a t t h i s form of tenure i s perpetuated s y m p a t h y f o r t h e s m a l l man. E.  f  from  This i s The  probable  i s out  of  '  Timber S a l e s . .  With the p r o h i b i t i o n of timber l a n d a l i e n a t i o n , /  under t h e crown g r a n t , , t i m b e r l e a s e or t i m b e r j linces"e r e :  s p e c t i v e l y , no method r e m a i n e d by w h i c h f o r e s t l a n d c o u l d secured,  A c c o r d i n g l y , t h e F o r e s t A c t o f 1912  the system day,  be  Introduced  o f t e n u r e by w h i c h t i m b e r i s d i s p o s e d o f t o t h i s  the timber s a l e c o n t r a c t .  This tenure g i v e s the .  h o l d e r t h e r i g h t t o c u t and d i s p o s e o f t h e t i m b e r on t h e l a n d w i t h i n a s p e c i f i e d p e r i o d o f t i m e , u s u a l l y f r o m two years.  25. 26.  to  T h i s t e n u r e , h o w e v e r , c a r r i e s w i t h i t no r i g h t  W h i t f o r d and C r a i g , op. c i t . pp. 94-95. F o r e s t A c t , , 1912,' 2 G e o r g e V, c. 17. See a copy of t h i s c o n t r a c t .  appendix  five to  for  -29the l a n d on*which t h e t i m b e r stands.  These t e n u r e s a r e a l l  d i s p o s e d o f by p u b l i c t e n d e r o r open p u b l i c - a u c t i o n  depending  on t h e amount o f t i m b e r . o f f ' e r e d . The number and a r e a o f t h e s e t i m b e r s a l e s each y e a r has g r a d u a l l y i n c r e a s e d . the f o r e s t revenues i.e.  granted  About f i f t e e n p e r cent o f  t o - d a y come f r o m t h e i t e m o f stumpage,  t h e s a l e p r i c e o f t h e t i m b e r s o l d under t h e terms o f a  timber sale contract. of t h i s  The g r o w t h  i n e x t e n t and i m p o r t a n c e  type of tenure i s c l e a r l y depicted i n the f o l l o w i n g 0  t a b l e o f t i m b e r s a l e s awarded.' ' :  YEAH  T a b l e No. 4  :PER CENT SAW-TIMBER (F.B.M) : STUMPAGE00F :TOTAL REVENUE  : NO. CF SALES : ACREAGE l  1915 : :  .98..  : 12,990  94,550,000  :  5.5$.  594  : 121,690 : 440,649,755  :  7.0$  613 v.  :: 94,015 *  189,022,514  -: - -15.2$  : 1930 :  866  : 162,043  199,485,000  : . 15.-0$  1935 :  1357  1920 : 1925:  :  . 231,958 : 260,851,000  i  11.0$ 11.7$  •  . 1936. :  1443 ,  252,624 \ 558,804,000  :  1937  :  1449  278,988 : 450,798,000  •15.1$  *958 \  1501  272,424 \ 415,747,000  >  Much o f t h e p e r c e n t a g e I s due t o t h e r i s e  :  15.8$  increase i n the t o t a l  i n stumpage p r i c e s .  revenue  This i s e s p e c i a l l y  n o t a b l e up t o 1925 as r e f e r e n c e t o g r a p h n o . 2 w i l l  show.  A c t u a l l y ^ s i n c e 1925 t h e s e p r i c e s h a v e d e c l i n e d somewhat, b u t 27.  R e p o r t s o f t h e F o r e s t B r a n c h , 1 9 1 5 , 2 0 , 5 0 , 55-58. The l a s t c o l u m n was c a l c u l a t e d f r o m t h e t o t a l f o r stumpage and t h e g r a n d t o t a l r e v e n u e f o r e a c h y e a r .  saoiJH  t h i s has been: o f f s e t by more t h a n d o u b l i n g t h e number and acreage  o f t i m b e r s a l e s awarded- e a c h y e a r . Another  i m p o r t a n t f e a t u r e has b e e n t h e  amount o f t i m b e r c u t f r o m t i m b e r s a l e s . r e p r e s e n t e d o n l y 9.2  former l e v e l .  t o t a l cut, the  The t o t a l c u t , b r o k e n up a c c o r d i n g t o t h e m a i n 29  t y p e s o f t e n u r e i s shown i n G r a p h no. 1925-1938.  5,  f o r the  period  F i g u r e s f o r t h e p r e v i o u s t e n y e a r s 1916-25  were u n f o r t u n a t e l y n o t  29 •«  figure  p e r c e n t , more t h a n d o u b l e  •• • '  28,  In.1915 t h i s  per cent of B r i t i s h Columbia  b u t t o - d a y i t amounts t o 19.9  growing  available.  V a l u e s i n G r a p h nov 2 were o b t a i n e d f r o m t h e R e p o r t s of the F o r e s t B r a n c h f o r the r e s p e c t i v e y e a r s . The p e r c e n t a g e s i n t h i s G r a p h were c a l c u l a t e d f r o m t h e t o t a l s f o r each type of l a n d s t a t u s i n the Reports of t h e F o r e s t B r a n c h f o r t h e y e a r s 1925-1938.  -531  The  Chapter IV  P r o p e r t y Tax on F o r e s t s I n B r i t i s h C o l u m b i a 'A. G e n e r a l w o r k i n g  of the property t a x .  Whilst i n the United States of America the property t a x a s a t a x on f o r e s t s h a s r e c e i v e d a l m o s t g e n e r a l r e c o g n i t i o n , i n Canada i t s a p p l i c a t i o n h a s b e e n l i m i t e d .  In B r i t i s h  Columbia t h e s t r a i g h t p r o p e r t y t a x produces o n l y about a t e n t h o f t h e f o r e s t r e v e n u e s , and t h i s p r o p o r t i o n h a s r e m a i n ed f a i r l y c o n s t a n t f o r t h e l a s t t w e n t y - f i v e y e a r s .  The  1  f o l l o w i n g t a b l e demonstrates t h i s very T a b l e No. 5 YEAR  : % OF TOTAL, FOREST REVENUES: % OF TOTAL FOREST TAXES  1915  :  ,-9'a..  1920  _:  •••'8*6 "  1925  .:  10.2  '.; 1950  to  clearly.  :  :  i  5  ;  .12.5  1955  •:  10.7  1956  :  8.7  1957  :  8,8  1958  8.6 One r e a s o n  9.8  -  :  10.5* •  10.5  . 1:  14.9 .  •  12.5 - 10.5  *  10*8  "  10.7  :  :  that t h i s proportion i s not l a r g e r i s  t h a t i t I s a p p l i e d o n l y t o one f o r m o f t e n u r e , t h a t o f t h e cro?m-granted, timber 1.  land.  •• The a b o v e p e r c e n t a g e s I n c o l u m n 1 w e r e c a l c u l a t e d f r o m t h e f i g u r e s f o r each t a x and t h e t o t a l s g i v e n i n t h e Reports of t h e F o r e s t Branch f o r t h e r e s p e c t i v e y e a r s . The s e c o n d c o l u m n was o b t a i n e d b y a d d i n g t h e t o t a l s f o r t h e p r o p e r t y tax,/, r e n t a l s and r o y a l t i e s , and t h e n c o m p u t i n g t h e p e r c e n t o f t h e p r o p e r t y , t a x f r o m t h i s t o t a l amount.  -54On a l l t i m b e r l a n d  2  .  o b t a i n e d i n t h i s manner a one and a h a l f  per cent t a x on i t s a s s e s s e d v a l u e i s charged.  Morever, i t i s  n o t t h e s o l e , t a x on c r o w n g r a n t s , a s s u c h l a n d i s a l s o s u b j e c t t o c e r t a i n r o y a l t i e s as w i l l be- d i s c u s s e d i n a l a t e r chapter.  I t i s worthy of note, t o o , t h a t t h i s t a x i s ad-  m i n i s t e r e d by t h e F i n a n c e  D e p a r t m e n t and n o t t h e Lands De-  partment as a r e t h e o t h e r f o r e s t  taxes.  Such a t a x on p r o p e r t y s a t i s f i e s t h e g o v e r n m e n t ' s need f o r a steady  stream  o f revenue each y e a r , but has q u i t e  d i s s i m i l a r e f f e c t s on d i f f e r e n t t y p e s o f f o r e s t p r o p e r t i e s . I n o r d e r t o a n a l y s e t h e s e " ' e f f e c t s * ' f o r e s t p r o p e r t i e s may be c o n v e n i e n t l y d i v i d e d i n t o t h r e e b a s i c c l a s s e s . 1)  Annual sustained y i e l d  properties.  c l a s s of f o r e s t p r o p e r t y the annual  In this  income i s r e g u l a r l y  s u f f i c i e n t t o e q u a l t h e I n t e r e s t on t h e . c a p i t a l v a l u e of t h e p r o p e r t y . 2),/ DDef e r r e d y i e l d p r o p e r t i e s *  Here t h e a n n u a l  income i s . n o t e q u a l t o , b u t l e s s t h a n t h e i n t e r e s t on the c a p i t a l value of the f o r e s t . accumulated t o t h e detriment  C a p i t a l i s , being  of present  income, which  i s t o be d e f e r r e d f o r some f u t u r e d a t e . 5)  DDepletion y i e l d p r o p e r t i e s .  In this  final  c l a s s t h e income i s g r e a t e r t h a n t h e i n t e r e s t on t h e c a p i t a l v a l u e , a n d as a r e s u l t t h e c a p i t a l i s b e i n g d e p l e t e d f o r an i n c r e a s e i n c u r r e n t i n c o m e .  2. 5.  T h i s means s t a t u t o r y t i m b e r l a n d as d e f i n e d i n C h a p t e r 111. These t e r m s a r e e m p l o y e d by F. R. F a i r c h i l d i n " F o r e s t T a x a t i o n i n t h e U n i t e d S t a t e s " , t h o u g h u s e d i n p a r t by". other w r i t e r s .  ,.  A * s i n g l e p r o p e r t y may n o t r e m a i n p e r m a n e n t l y i n  one  class.  The d e f e r r e d y i e l d f o r e s t o n m a t u r i n g  come a n a n n u a l  may b e -  sustained y i e l d , which i s the i d e a l  situation,  and. t h e a i m o f most f o r e s t e r s , o r y e t a d e p l e t i o n y i e l d , t h e most d e s t r u c t i v e , t y p e . F or t h e purpose of i n v e s t i g a t i n g t h e i n c i d e n c e ,of t h e one and a , h a l f p e r c e n t f o r e s t p r o p e r t y t a x o f B r i t i s h C o l u m b i a i n r e l a t i o n t o e a c h o f t h e above t y p e s o f p r o p e r t i e s c e r t a i n a s s u m p t i o n s must be made.  L e t each of t h e t h r e e  pro-  p e r t i e s be w o r t h $12,000 i f no p r o p e r t y t a x were i n e x i s t e n c e The  i n t e r e s t r a t e may be, t a k e n a t a f a i r l y  3 per cent.  level  P r o p e r t y No. 1 g e t s 3 p e r c e n t p e r p e t u a l l y f r o m  his  f o r e s t l a n d , i . e . §360 p e r annum.  his  i n c o m e f o r 15,f  to  conservative  4  P r o p e r t y No. 2 d e f e r s  y e a r s when h i s c a p i t a l h a v i n g  $19,090, he o b t a i n s a p e r p e t u a l a n n u a l  Increased  income f r o m i t a t  t h e r a t e o f 3 p e r c e n t , i . e . $572.70 e a c h y e a r .  The t h i r d  p r o p e r t y p r o d u c e s a n a n n u a l i,ncome o f ^$2400 f o r j u s t  over  f i v e s y e a r s , a t w h i c h t i m e a l l t h e c a p i t a l i s d e p l e t e d , and no f u r t h e r income i s f o r t h c o m i n g .  From, t h i s " i t • w i l l be s e e n  t h a t these three p r o p e r t i e s represent the three types lined  out-  above. Now t h e p r o v i n c i a l l e g i s l a t u r e I n t r o d u c e s a I f p e r  c e n t p r o p e r t y t a x , and f o r t h e s a k e o f c o m p a r i s o n i n t h i s s t u d y , a n a l t e r n a t i v e o f a s t r a i g h t and u n p r o g r e s s i v e p e r c e n t income, t a x . 4.  I n t h e case  33/£  o f each p r o p e r t y , t h e v a l u e  T h i s odd f i g u r e i s o n l y u s e d f o r c o n v e n i e n c e o t h e r amounts.  i n computing  -36of the c a p i t a l ' i m m e d i a t e l y decreases  t o $8000, s i n c e t h a t i s  a l l t h a t anyone would---pay f o r e a c h p r o p e r t y , a f t e r the e f f e c t all  of t h e t a x .  Such a p u r c h a s e r  t h e f u t u r e t a x e s and  tained yield class,  the Incidence The  property, the annual of e i t h e r  SS^g  tax  Now  de-.  the value  of  per cent r e -  on t h e o t h e r hand t h e 1-| p e r c e n t  property  on t h e c a p i t a l v a l u e o f t h e p r o p e r t y , when s u b t r a c t e d  assumed i n t e r e s t of the c a p i t a l  r a t e of 3 per c e n t .  from t h i s  0.015X -  Taking  "x»  at  the  as t h e  value  0.03x  " x " i s $8000 and  a" l j p e r c e n t p r o p e r t y t a x i n  B r i t i s h C o l u m b i a w o u l d e x a c t $120, o f $560.  t o t h i s Value  then: 360—  cent  the p r o p e r t y tax.  income f r o m $360 t o $240, and  must l e a v e enough income t o c a p i t a l i z e  and  sus-  p e r c e n t income t a x  t h e c a p i t a l f r o m $12,000 t o $8000, j u s t 33^g spectively.  i s i n theory  income.  of the f i r s t  o r income t a x I s t h e same. creases the annual  would have t o bear  the v a l u e of the c a p i t a l  thetsum o f i t s t o t a l f u t u r e n e t In the case  discounting  j u s t t h e same as 33^g  T h e r e f o r e , i n the case  of an annual  per  sustained  y i e l d p r o p e r t y , a 1-| p e r c e n t p r o p e r t y t a x i s e q u i v a l e n t t o a 5 5 ^ , p e r c e n t income t a x . The p r e s e n t w o r t h of o t a x on t h i s p r o p e r t y i s a c c o r d i n g l y 5 5 ^ per cent of 5  either the  c a p i t a l v a l u e b e f o r e t h e i m p o s i t i o n o f t h e tax.. The  deferred yield  rather different  picture.  (No.  2) p r o p e r t y p r e s e n t s  H e r e t h e $12,000 f o r e s t  nothing f o r 15| years, butthencefor#krd A 55^  a  yields  $572.70 p e r annum.  p e r c e n t i n c o m e t a x on t h i s p r o p e r t y w o u l d  produce  n o t h i n g for..*15f y e a r s and t h e n e x a c t $190.90 a n n u a l l y . this  Under  s t r a i g h t income t a x t h e p r e s e n t w o r t h o f a l l f u t u r e t a x e s  w o u l d a g a i n be $4000, o r 55;teper c e n t o f t h e v a l u e o f t h e c a p i t a l b e f o r e t h e i n t r o d u c t i o n o f t h e t a x as i n p r o p e r t y 1.  But. t h e p r o p e r t y t a x does n o t a c t i n t h i s manner.  No.  It is  p a i d a l l t h r o u g h t h e 1 5 f y e a r p e r i o d w h i l e t h e owner i s i n r e c e i p t o f no i n c o m e . first  To f i n d t h e b u r d e n o f t h i s t a x we  o b t a i n the value of the c a p i t a l .  Now  must  the f u t u r e per-  p e t u a l income o f $572.70 m i n u s t h e I f per c e n t t a x must be , e q u a l t o 5 per cent of the v a l u e of the c a p i t a l .  Solving  t h e e q u a t i o n as b e f o r e : . .  .......  572.70 - 0 . 0 1 5 X The •'".value, o f t h e c a p i t a l  .  0.05x  (x) comes t o $12,726,66 and  a i f  p e r c e n t p r o p e r t y t a x on t h i s i s $190.90, t h e same as u n d e r t h e 53/% p e r c e n t i n c o m e tax..  On t h i s . b a s i s o f a i f per  p r o p e r t y t a x - the present worth  o f t h i s v a l u e i s t h e amount  w h i c h w i t h i f p e r c e n t f o r t a x e s and will for  3 per cent f o r i n t e r e s t .  equal-$12,7,26.66 i n 1 5 | y e a r s , o r t h a t sum  discounted  t h i s p e r i o d a t 4 f p e r c e n t s i n c e money d o u b l e s  years at 4f per  cent  i n 15'|;  5  c e n t ; t h e r e f o r e , t h e -present. w o r t h ' i s h a l f  t h i s f i g u r e , $6365.53.  Erom t h i s t h e p r e s e n t w o r t h  if  p e r .cent p r o p e r t y t a x i s t h e o r i g i n a l c a p i t a l  5.  .The p u r p o s e o f t h i s odd number o f y e a r s w i l l evident.  of t h e  less  now  be  * /his  -38- • •  :  amount '($12,000 - 6363.33) w h i c h i s $5637.67.  This  f i g u r e represents the incidence of a l l f u t u r e property t a x payments on t h i s d e f e r r e d y i e l d . p r o p e r t y , and i t amounts to  46.98 p e r c e n t o f $ 1 2 , 0 0 0 , a c o n s i d e r a b l e d e g r e e h i g h e r  t h a n t h e 53^g p e r c e n t b u r d e n on t h e a n n u a l  sustained y i e l d  property. F i n a l l y , there i s the t h i r d type, the d e p l e t i o n y i e l d property.  From t h i s f o r e s t t h e owner i n o u r example  r e c e i v e s $2400 a y e a r f o r f i v e y e a r s and t h e r e m a i n i n g ital  o f $1200 t h e s i x t h y e a r .  cap-  The income t a x o f 3 3 ^ p e r  c e n t w o u l d t h e r e f o r e p r o d u c e $800 f o r f i v e y e a r , $400 t h e s i x t h y e a r and. n o t h i n g a f t e r t h a t .  The p r e s e n t v a l u e o f  t h e s e amounts i s $4000 o r 3 3 ^ p e r c e n t o f t h e c a p i t a l to  the l e v y i n g of the t a x .  annual  previous  T h i s i s j u s t t h e same as. i n t h e  s u s t a i n e d y i e l d and d e f e r r e d y i e l d p r o p e r t i e s .  o p e r a t i o n o f t h e \\ p e r c e n t p r o p e r t y t a x i s v a s t l y This tax w i l l  The  different.  t a k e e a c h y e a r a n amount s u f f i c i e n t " t o make  the c a p i t a l f o r the f o l l o w i n g year, before s u b t r a c t i n g the $2400 income payment, l a r g e r t h a n what i t was t h e p r e c e d i n g y e a r b y 4 j p e r c e n t , I . e . 3 p e r c e n t i n t e r e s t and 1^ p e r cent t a x .  Then t h e v a l u e a f t e r t h e p r o p e r t y t a x has been  discounted w i l l  be 5  2400 / 1 - ( X 0 4 5 ) " V 1200 _ 1.045 ( 1 (1.045^ / "(1.045) 1  t  w h i c h s o l v e d comes t o $10,536. t h e p r o p e r t y t a x has reduced  b  From t h i s i t i s e v i d e n t  the value of the c a p i t a l  $464  (12,000 - 1 0 , 5 3 6 ) , w h i c h f i g u r e s r e p r e s e n t o n l y 4.52 p e r cen€ o f . i t s v a l u e .  -39-  From t h i s a n a l y s i s o f t h e s e t h r e e t y p e s perties  of pro-  the i n c i d e n c e of the I f per cent property, t a x c l e a r -  l y I s d i f f e r e n t I n each case.  The s t r a i g h t 33^g p e r c e n t  income t a x t r e a t e d each u n i f o r m l y .  Assuming i t r e m a i n e d a t  t h e same r a t e t h e owner o f e a c h p r o p e r t y c o u l d h a v e p r o v i d e d f o r a l l h i s f u t u r e t a x e s by p u t t i n g away a f u n d e q u a l t o onet h i r d of h i s c a p i t a l before the i m p o s i t i o n of the t a x .  But  v / i t h t h e p r o p e r t y t a x t h e b u r d e n was n o t e q u i t a b l y d i s t r i b u t e d . The p r e s e n t Yvorth o f t h i s I f p e r c e n t t a x on e a c h p r o p e r t y and  a c c o r d i n g l y the per cent o f " h i s c a p i t a l before taxes^  each  owner w o u l d h a v e t o l a y a s i d e i n o r d e r t o meet a l l h i s f u t u r e taxes  ( t h e t a x r a t i o ) was as f o l l o w s : 1) A n n u a l s u s t a i n e d y i e l d  property  2) D e f e r r e d y i e l d property:*' 3) D e p l e t i o n y i e l d p r o p e r t y ,  33.33 p e r e e n t .46.98  "  "  4.52  "  "  The c o n c l u s i o n s t o be d r a w n f r o m t h i s  inequitable^situation  are not very pleasant.  i s the f a c t that the  Most s t r i k i n g  w a s t e f u l owner c o m e s , o f f b e s t .  Then i t i s a l s o o b v i o u s  the p r o p e r t y t a x d i s c r i m i n a t e s a g a i n s t the d e f e r r e d f o r e s t i n favour of those y i e l d i n g come, as No. 1 o r No.  that  yield  some f o r m o f a n n u a l i n -  2.  One a m e l i o r a t i n g c o n d i t i o n s h o u l d be m e n t i o n e d i n t h i s connection. f u l l y understood  I f the e f f e c t s of the p r o p e r t y t a x are and t h e r e s p e c t i v e p r o p e r t i e s f u l l y  c a p i t a l i z e d t o meet them, t h i s u n e q u a l I h i r d e n l a r g e l y d i s .__  .  —  ••  -  •  ,  ~  ~~  T h i s a n a l y s i s f o l l o s s t h a t o u t l i n e d by F.R. F a i r c h i l d i n " F o r e s t T a x a t i o n i n the U n i t e d S t a t e s " , but a l l c a l c u l a t i o n s are original  -40appears. in  However, t a x e s a r e r a r e l y " c a p i t a l i z e d .  T h i s i s due  l a r g e measure t o t h e - i n b o r n t e n d e n c y o f o p t i m i s m  among t h e  b u y e r s and s e l l e r s a n d t h e u n c e r t a i n l y o f j u s t what t h e f u t u r e may h o l d i n t h e way o f t a x a t i o n . tax to  As a r e s u l t , t h e p r o p e r t y  d i s c r i m i n a t e s against d e f e r r e d - y i e l d investments encourage e a r l y f e l l i n g  and t e n d s  o f t r e e s as i n a d e p l e t i o n y i e l d .  How g r e a t t h i s w i l l be depends t o a g r e a t d e g r e e o n t h e l e v e l of t h e t a x r  EL The  Influence of the t a x r a t e  q u e s t i o n now a r i s e s : w h a t  effect w i l l  a change  i n t h e t a x r a t e , up o r down, h a v e on e a c h t y p e o f f o r e s t perty.  pro-  T h i s i s a v e r y p e r t i n e n t q u e s t i o n as t h e t a x r a t e  ' s e l d o m r e m a i n s t h e same f o r any l o n g p e r i o d o f t i m e . B r i t i s h C o l u m b i a t h e p r e s e n t r a t e on.-timber  In  land of I f per  cent o f i t s a s s e s s e d v a l u e has o n l y been i n e x i s t e n c e s i n c e 1925.  From 1917 t o 1925 i t was 3 p e r c e n t , and p r e v i o u s t o  t h a t date 2 per cent.; Taking  t h e same t h r e e e x a m p l e s u s e d i n s e c t i o n A,  Yie c a n d i s c o v e r t h e t a x r a t i o a t a n y g i v e n t a x r a t e .  For  t h e 1917-1925 p e r i o d o f a 3 p e r c e n t r a t e t h e s e r a t i o s were ;  as  follows:1) A n n u a l s u s t a i n e d y i e l d p r o p e r t y • , 2) D e f e r r e d y i e l d p r o p e r t y 3) D e p l e t i o n y i e l d p r o p e r t y  The  50.0 p e r c e n t 76.2  "  "  8.7  "  "  d i f f e r e n c e b e t w e e n t h e s e r a t i o s and t h o s e f o r a , l | p e r  c e n t t a x r a t e i s most n o t i c e a b l e i n t h e c a s e  of the deferred  -41y i e l d p r o p e r t y , and l e a s t n o t i c e a b l e i n t h a t o f t h e d e p l e t i o n y i e l d property.  The r e d u c t i o n o f t h e r a t e f r o m 3 p e r c e n t  t o 1-g p e r c e n t i n 1925 t h e r e f o r e b e n e f i t t e d t h e d e f e r r e d  yield  p r o p e r t i e s m o s t , b u t • w o u l d - . g e n e r a l l y • t e n d t o make t h e i n e q u a l ities  b e t w e e n each, p r o p e r t y l e s s as c a n be s e e n by a n exarnin7  a t l o n o f G r a p h No. 4. The.cutting  i n h a l f o f t h e r a t e i n 1925 h a s t e n d e d  t o make t h e i n e q u a l i t i e s b e t w e e n e a c h t y p e o f p r o p e r t y aggravated  to-day,  although i n e q u a l i t i e s  still  exist  less  where  c a p i t a l i z a t i o n o f t a x e s i s , n o t c o m p l e t e as w a s - p o i n t e d o u t previously.  I n d e e d , a s e a r l y a s 1 9 1 9 , t h e 5 p e r cent; r a t e 8  was  d e n o u n c e d by a B o a r d o f T a x a t i o n .  the  l o w e r i n g o f t h e t a x r a t e may h e l p t o i r o n o u t i n e q u a l -  ities,  t h e u n c e r t a i n t y f o r d e f e r r e d y i e l d f o r e s t s remains  pronounced.  The r i s k due t o a n upward o r downward movement  i n t h e t a x r a t e over very great. of time  a long p e r i o d f o r such a p r o p e r t y i s  As t h e income may be d e f e r r e d f o r any l e n g t h  over t e n y e a r s , t h e p r o p e r t y t a x s u b j e c t s t h i s  perty t o a r i s k completely o t h e r two.  8.  pro-  out of p r o p o r t i o n t o t h a t of the  T h i s i s u n j u s t where, t n e y i e l d i s b e i n g  on a c c o u n t o f t h e i m m a t u r i t y 7.  However, e v e n t h o u g h  of the trees.  deferred  However, where  G r a p h No. 4 d e p i c t s t h e t a x r a t i o f o r e a c h t y p e o f p r o p e r t y a t t a x r a t e s v a r y i n g from per cent t o three per cent. These v a l u e s were computed on t h e b a s i s o f t h e o r i g i n a l a s s u m p t i o n s made f o r e a c h . p r o p e r t y i n s e c t i o n A of t h i s chapter. Reports of t h e Board o f T a x a t i o n ( V i c t o r i a , King's P r i n t e r , 1 9 1 9 ) p. y 99  -42-  -43the f o r e s t " i s being h e l d f o r a r i s e i n p r i c e s , there i s a justification. isAnother i n f e r e n c e t h a t c a n be d r a w n f r o m a c l o s e s c r u t i n y of these  t a x r a t i o s w i t h v a r y i n g t a x r a t e s , i s the  e f f e c t on m a r g i n a l  properties.  L e t us t a k e , f o r e x a m p l e , a  property close to wild land condition. o f $10  per a c r e f o r use  over  have a  value  as a d e f e r r e d y i e l d f o r e s t p r o -  p e r t y o r $6 p e r a c r e as g r a z i n g l a n d . r a t i o i s not  I t may  As  l o n g as t h e  tax  40 p e r c e n t , t h e f i r s t use w i l l a l w a y s  be  c h o s e n as b e i n g more p r o f i t a b l e , b u t t h e m i n u t e i t g o e s above t h i s mark t h e rate w i l l  s e c o n d w i l l be  selected.  A high property  tax  t h e r e f o r e t e n d t o so s h i f t t h e m a r g i n f o r d e f e r r e d  y i e l d , t h a t l a n d e c o n o m i c a l l y s u i t e d f o r such use employed Otherwise.  How  important  will  be  t h i s w i l l be i n any  region  d e p e n d s u p o n t h e r a t e o f t h e p r o p e r t y t a x on t h e t i m b e r  land  there.  C . The The  Importance of Assessment  a d m i n i s t r a t i o n nf the p r o p e r t y t a x i s  very important  another  f a c t o r i n the d e t e r m i n a t i o n of the e q u a l i t y  o f t h e t a x b u r d e n on e a c h c l a s s o f f o r e s t p r o p e r t y . essence,  In  t h i s a d m i n i s t r a t i o n depends u p o n t h e a c c u r a c y  the assessment. emphasized.  I t s importance,  t h e r e f o r e , , c a n n o t be  over  SEven under, t h e m i l d e s t o f t a x r a t e s i f t h e  assessment i s f a u l t y or i s c a r e l e s s l y c a r r i e d out,  there  w i l l r e s u l t i n j u s t i c e i n t h e t a x b u r d e n as b e t w e e n one p e r t y and  of  another.  pro-  . -44By- t h e l a w s o f t h e p r o v i n c e o f B r i t i s h C o l u m b i a an annual  assessment r o l l i s prepared  b a s e d on t h e r e t u r n s r e n d e r e d timber land i s assessed . m  i n each assessment  by e a c h owner.  district  Like other land,  a t "the a c t u a l cash value of the l a n d  • 9 money." The m a i n p u r p o s e o f t h i s a s s e s s m e n t i s t o f i n d o u t  the v a l u e of a l l timber ly,  land subject t o taxation. Theoretical-  the v a l u e of a n y t h i n g i n economics i s t h e q u a n t i t y of  some goods o r s e r v i c e w h i c h c o u l d be o b t a i n e d i n exchange f o r it.  To o b t a i n t h i s as a c c u r a t e l y a s p o s s i b l e , a s s e s s o r s u s -  u a l l y have access cruising  date.  to sale realizations,  and s u r v e y and t i m b e r  B u t a t b e s t any a s s e s s m e n t i s a judgment, an  attempt, t o a p p r a i s e t h e v a l u e o f something. If p r o p e r t i e s are overassessed, valent to raising converse  t h e t a x r a t e , and i f u n d e r a s s e s s e d ,  i s true.  l e v e l t o another, properties.  then t h i s i s equi-  I f one p r o p e r t y i s a s s e s s e d  at a  the different  t h e n t h e r e , i s i n e q u a l i t y b e t w e e n t h e s e two  The p r o b l e m t h e n becomes one o f d e t e r m i n i n g  accurate assessments a r e .  how  On o b t a i n i n g a " t r u e value?', we  c a n f r o m t h i s c a l c u l a t e s r a t i o b e t w e e n t h i s f i g u r e and t h e assessed value. ratio."  Such a r a t i o i s known a s a n " a s s e s s m e n t  P e r f e c t assessment would i n t h e o r y r e s u l t  in a  r a t i o o f 100 p e r c e n t . Now i n t h e a s s e s s m e n t r a t i o t h e n u m e r a t o r i s a l w a y s knovm, s i n c e i t i s t h e amount a t w h i c h t h e p r o p e r t y i s a s s e s s ed on t h e t a x r o l l s  of t h e p r o v i n c e .  T a x a t i o n A c t , R.S. 1924. C. 254. s i .  But t h e denominator,  -45-  the  " t r u e v a l u e " i s not a matter, o f r e c o r d .  b y two m e t h o d s , f i r s t l y  by t h e e s t i m a t e s  a p p r a i s e r , and s e c o n d l y ,  o n l y way i n w h i c h a n y t h i n g The f i r s t  o f an  experienced  by a c o n s i d e r a t i o n o f s a l e v a l u e s .  B o t h "methods: a r e open t o s e v e r e  obtained.  I t c a n be f o u n d  c r i t i c i s m , but they are the  like this  " t r u e v a l u e " c a n be  method was i m p o s s i b l e f o r t h e ' w r i t e r , so  t h e s e c o n d i n as f a r as i t was p o s s i b l e h a s b e e n a d o p t e d . S a l e f i g u r e s were c o l l e c t e d f r o m v a r i o u s brokers  and lumbermen.  timber  Data i n s u f f i c i e n t q u a n t i t y  (ranging  f r o m 2 t o 12 s a l e s i n any d i s t r i c t ) were o n l y o b t a i n e d f o r six  assessment d i s t r i c t s ; .  l i m i t these  I t would have been d e s i r a b l e t o  f i g u r e s t o s i n g l e year  p e r i o d s , b u t t h i s was  p o s s i b l e due t o t h e p a u c i t y o f m a t e r i a l i n any one So t h r e e p e r i o d s were s e l e c t e d , n a m e l y 1925-1930* and  1936-1938.  not  year. 1951-1934,  These f i g u r e s were t h e n compared w i t h a v e r a g e  a s s e s s m e n t f i g u r e s f o r t h e r e s p e c t i v e p e r i o d s and a s s e s s m e n t r a t i o s c a l c u l a t e d from these  1  two g r o u p s . ^  I t must b e / c l e a r l y u n d e r s t o o d t h a t t h e r e s u l t i n g assessment r a t i o s are o n l y an i n d i c a t i o n of the accuracy a s s e s s m e n t i n g e n e r a l , and must n o t be c o n s t r u e d present  The l i m i t a t i o n s o f t h e s e  sale f i g u r e s are"nu-  To b e g i n w i t h any s a l e a l t h o u g h  a b u y e r and a s e l l e r 10.  to re-  any i n j u s t i c e i n i n d i v i d u a l a s s e s s m e n t s i n a s i n g l e  district. merous.  of  Is not i n i t s e l f  a c o n t r a c t between  "prima f a c i e "  evidence  See T a b l e No.-6 f o r - t h e s e a s s e s s m e n t r a t i o s f o r t h e s i x assessment d i s t r i c t s .  -46-* )  T a b l e No. 6  AssBisMeMcl R a t i o s f o r S e l e c t e d D i s t r i c t s  i nBritish  Columbia  1925 - 30 Assessment  D i s t r i c t : Av. A s s , : Av. S a l e : v a l u e p e r Ac. : v a l u e p e r A c : :  $57.47  . ;::  49.80  . Cowichan  :  Nana imp  :  Alberni Gomox  Vancouver  :  :  i  ; $ 56.45  •  101.8$  :  • 56.00  :  88.9$  69.46  :  78.66  :  88.3^  46.18  :  40.00  :  107.-9$  100.41 __  •Victoria  90.2$ •  •  —  1 9 s i - 34. Av. As s . : Av. S a l e :: A s s e s s m e n t D i s t r i c t : v a l u e s p e r Ac:value per Ac; Ratio  Assessment - Alberni  :  $ 66.66  :, $ 74.07  Comox • ..  :  50.69  •  i-'s  Cowichan  :  72.18  :  ; 84.45  Nanaimo  :  , 55.63  a  Vancouver  :  - ——  :  Victoria  :  Assessment  Assessment Ratio  5 9 9d e  59«52  \  90$  •  84.6$  : :  85. '5$  « :  39.46  45.00  :  87.7%  1935 - 3 8 Av. A s s . : Av. S a l e : Assessment D i s t r i c t : v a l u e p e r Ac: v a l u e , p e r Ac: Ratio  .Alberni  . :  :  •  Comox  $ —  • .:  42.35  :  50.20  :  84.4$  *  Cowichan  :  51.65  :  56.80  :  90.9$  Nanaimo  :  35.86  :  44.60  :  80.4$  Vancouver  :  ___  1 • Victoria  :  •  /  r  /  •  :' •  -46(b)-  ,' :  Source: The a v e r a g e a s s e s s m e n t v a l u e s p e r . a c r e were  cal-  c u l a t e d from t h e average a s s e s s e d v a l u e f o r each year pub l i s h e d i n the Reports pective years.  of the F o r e s t Branch f o r t h e r e s -  I n a s much a s t h e y a r e a v e r a g e s  of averages,  t h e y a r e n o t 100 p e r c e n t a c c u r a t e , b u t t h e d i s c r e p a n c y over a p e r i o d o f a few y e a r s i s v e r y  slight.  The a v e r a g e s a l e v a l u e s p e r a c r e w e r e from  calculated  s a l e p r i c e s o b t a i n e d f r o m t i m b e r b r o k e r s and lumbermen.  I n t h e c a s e o f t h o s e on t h e i n s t a l l m e n t b a s i s , t h e p r e s e n t w o r t h was computed.  Where t h e t e r m s o f t h e s a l e i n c l u d e d  an i n t e r e s t i n t h e p r o p e r t y , t h e p r e s e n t v a l u e was e s t i m a t e d , w i t h t h e a s s i s t a n c e o f t h e lumbermen c o n c e r n e d .  Most v a l u e s  a r e t h e a v e r a g e o f f r o m .5-to 10 s a l e s , b u t i n no c a s e h a s a n a v e r a g e f o r a n y d i s t r i c t b e e n u s e d where t h e r e were l e s s than 2 sales Assessment R a t i o _ A s s e s s e d Value ~ Sale, V a l u e  expressed  as a  percentag  -47o f t h e value* o f t h e p r o p e r t y b e i n g p a r t i e s may resulting  a©ld.  In the s a l e both  n o t h a v e e q u i v a l e n t b a r g a i n i n g power, and  s a l e p r i c e i n such cases w i l l  the  conform t o the p a r t y  w i t h t h e l a r g e s t b a r g a i n i n g power r a t h e r t h a n t h e a c t u a l market v a l u e of t h e p r o p e r t y .  Furthermore,  some p r i c e s w i l l ,  i n a l l p r o b a b i l i t y , r e p r e s e n t f o r c e d s a l e s and  accordingly  w i l l n o t be a measure of t h e m a r k e t v a l u e a t t h e t i m e . and  above t h e s e r e a s o n s ,  Over  there i s the f a c t that a l a r g e  number o f s a l e s , a r e made o n t e r m s ,  sometimes t o be p a i d i n a  l i m i t e d number Of y e a r s > and. a t o t h e r t i m e s , g r a n t i n g a p e r centage of the t o t a l c u t i  So, t h o u g h t h e a s s e s s m e n t  ratios  c a l c u l a t e d from these  s a l e f i g u r e s s e r v e as an  f o r g e n e r a l purposes,  t h e y must not. be a c c e p t e d , " i p s e  t o p r o v e any  indication, dixit",  s p e c i f i c i n e q u a l i t y as b e t w e e n one d i s t r i c t  and  another. The  g e n e r a l i n d i c a t i o n from these assessment  ratios  i s t h a t on t h e w h o l e t i m b e r l a n d i n B r i t i s h C o l u m b i a i s assessed  b e l o w r a t h e r t h a n above i t s a c t u a l v a l u e .  w o r d s , t h e a s s e s s o r s t e n d t o be c o n s e r v a t i v e .  In other  This r a t h e r  l e a d s to. t h e c o n c l u s i o n t h a t owners o f c r o w n g r a n t s have complaint  i n . t h e matter  of over-assessment.  No  no  conclusions  as t o d i f f e r e n c e s b e t w e e n d i f f e r e n t a s s e s s m e n t s c a n be from the r e l a t i v e l y s m a l l m a t e r i a l a v a i l a b l e f o r t h i s  drawn study.  Chapter The  V  Ground Tax  o r Rent  A. T h e o r y and g e n e r a l e f f e c t s o f t h e t a x . The a n n u a l l y and area.  g r o u n d t a x or r e n t i s a f l a t  come i n t o  a " t a x and t h e p r o p e r t y t a x now  The  d i f f e r e n c e between  becomes e v i d e n t .  at such  Whereas a  on a s q u a r e m i l e o f f o r e s t l a n d u n d e r t h e l a t t e r  may  v a r y f r o m y e a r t o year-•as t h e a s s e s s m e n t v a r i e s (assuming r a t e remains c o n s t a n t ) , under the former c h a r g e i n e a c h j u r i s d i c t i o n and  I s not v e r y easy.  characteristic  To  the  I t i s a blanket  does n o t v a r y e a c h y e a r .  To g i v e a c l e a r c u t p i c t u r e o f t h e t h e o r y o f tax  of  general  i s t h e s q u a r e m i l e , so t h a t . t h i s t a x i s l e v i e d  a c e r t a i n r a t e per square m i l e .  tax  exacted  computed on t h e b a s i s o f some s p e c i f i e d u n i t  I n C a n a d a , t h e u n i t o f a r e a t h a t has  acceptance  charge  start with, i t s f i r s t  i s that i t i s levied annually.  this  important As--s«eh, jshere-'  f o r e ^ p a r t o f i t s d e s i g n i s t o be a r e g u l a r r e v e n u e p r o v i d e r for  the government.  Furthermore,  although i t d i f f e r s  from  the p r o p e r t y t a x i n the e s s e n t i a l p o i n t of being a f l a t as opposed t o a p e r c e n t a g e  rate  r a t e on a n a s s e s s e d v a l u e , as i&as  e x p l a i n e d a b o v e , i t n e v e r t h e l e s s has  a marked r e s e m b l a n c e t o  t h e p r o p e r t y t a x i n o t h e r ways.  r e n t i s charged  The  on  the  u n i t a r e a o f l a n d and n o t on t h e t i m b e r , a l t h o u g h t h e amount o f t i m b e r p e r u n i t a r e a d e f i n i t e l y h a s a b e a r i n g on t h e mate r a t e o f t h e t a x .  Notwithstanding  rather than the timber  on i t i s t h e a c t u a l b a s i s o f t h e t a x ,  and  t h i s f a c t , the  ulti-  property  i n t h i s r e s p e c t i t i s a type of p r o p e r t y t a s . T h e r e i s , h o w e v e r , one  f u r t h e r element I n the  ground  -49t a x , t h a t of a t a x i n the form of a l i c e n s e f o r o p e r a t i o n . I n p r i m i t i v e s o c i e t i e s the wealth  p r o d u c e d by a savage i s n e a r -  l y i y : a l l wages, v e r y l i t t l e g o i n g rent.-  t o i n t e r e s t and none t o  With the e v o l u t i o n of progress  increasing f a c t o r i n wealth.  r e n t becomes a  I t r e p r e s e n t s the v a l u e of  o p p o r t u n i t y t o accumulate r i c h e s .  munificent Creator at the beginning The  thereon.  i n h e r i t e d from a  o f t i m e enhanced by  the  owner o f t h e l a n d f o r t h e  p e r i o d of h i s s e i s i n , h a s a monopoly over produce w e a l t h  the o p p o r t u n i t y  Although  profit.  t h e c o n d i t i o n s of i t s o p e r a t i o n ,  g e n e r a l e f f e c t s a p p l i c a b l e u n d e r n e a r l y any As an a n n u a l  c o u r a g e q u i c k c u t t i n g and  circumstance  t a x i t w i l l always tend t o discourage  certain can  en-  h o l d i n g the l a n d f o r the  timber t o mature or f o r a second.crop.  S i n c e the i d e a of  d e v e l o p i n g , t h e f o r e s t as a c r o p r a t h e r t h a n a w a s t i n g the aim  un-  t h e e f f e c t o f s u c h a t a x depends v e r y  l a r g e l y on t h e r a t e and  be o b s e r v e d .  to  In the r e n t a l there i s a c c o r d i n g l y ,  an element of t h e l i c e n s e t a x i n an attempt t o t a x t h i s earned o p p o r t u n i t y f o r  the  This value i s not a s t a t e  c r e a t i o n or a p e r s o n a l c r e a t i o n , b u t a v a l u e  outcome o f s o c i a l p r o g r e s s . T  steadily  asset i s  o f modern f o r e s t r y , s u c h e f f e c t s a r e by no means i n  t h e b e s t i n t e r e s t s o f sound f o r e s t r y p r a c t i s e .  I f we  the three types of p r o p e r t i e s described i n the l a s t  consider chapter,  this, tax l i k e the property, tends t o d i s c r i m i n a t e i n favour o f a d e p l e t i o n y i e l d p r o p e r t y , as a g a i n s t , an a n n u a l y i e l d p r o p e r t y or a d e f e r r e d y i e l d p r o p e r t y . i t must n o t  be c o n s t r u e d  sustained  But f r o m  this  t h a t the t a x i s n e c e s s a r i l y " i p s o  -50f a e t o " u n j u s t ' , s i n c e t h e most i m p o r t a n t determining  single factor i n  t h e j u s t i c e or i n j u s t i c e o f such a t a x i s t h e r a t e .  •From t h e g o v e r n m e n t ' s p o i n t o f v i e w t h e t a x has much .to commend i t .  Wot o n l y does i t b r i n g i n a n a l w a y s r e -  c u r r i n g amount o f i n c o m e . t o t h e p r o v i n c e ' s c o f f e r s , b u t i t i s much l e s s c o s t l y t o a d m i n i s t e r t h a n t h e p r o p e r t y t a x .  As i t  i s a f l a t r a t e per square m i l e a l l t h a t i t i s necessary t o know f o r c a l c u l a t i n g t h e t a x i s t h e a r e a o f t h e p r o p e r t y t o be t a x e d .  There a r e no e x p e n s i v e  ;  assessment: costs  t o be met  e v e r y y e a r , and t h i s s a v i n g i s o f no small, importance government. favoured  t o any  As a r e s u l t , many j u r i s d i c t i o n s i n Canada have  t h i s method, and adopted i t i n p r e f e r e n c e t o t h e  straight property t R. The p o s i t i o n o f r e n t a l s i n t h e t a x - s t r u c t u r e * I n B r i t i s h C o l u m b i a t h e a n n u a l r e n t a l i s l e v i e d on three types  o f t e n u r e , namely t h e t i m b e r l e a s e , t h e t i m b e r  l i c e n s e and t h e t i m b e r  sale."  I t p a r a l l e l s on t h e s e  t h e p r o p e r t y t a x on oroim-granted funds  lands.  i t has g r a d u a l l y been d e c l i n i n g  As a s o u r c e  i n importance.  of a c e n t u r y ago about t h r e e - q u a r t e r s o f t h e f o r e s t '•cane f r o m t h i s  o r i g i n , whereas t o - d a y  o n l y . o n e - f i f t h of these reveues. i t s r e l a t i v e importance  the figure  The the the 25,  of t a x A quarter  revenues  represents  The f o l l o w i n g t a b l e shows  i n t h e f o r e s t r e v e n u e s and f o r e s t t a x  structure f o rthe l a s t twenty-five years.  1.  tenures  1  p e r c e n t a g e s i n t h e f i r s t c o l u m n were c a l c u l a t e d f r o m f i g u r e s f o r e a c h t a x and t h e t o t a l s o b t a i n e d f r o m R e p o r t s o f t h e F o r e s t B r a n c h f o r t h e y e a r s 1 9 1 5 , 20, 3 0 , 35-38. T h o s e i n t h e s e c o n d c o l u m n were o b t a i n e d  -51-  Table  No.,7  :Year : % o f ' T o t a l . F o r e s t Revenue :  % of T o t a l Forest  1915 :  65.2  1920  49.9  - 'j  . 59.8  1925 :  51.9  \  45.8  1950 :  28,1  —  55.9  1935 :  18.5  1956 ;  20.5  1937 : 1-957 • :• 1958 i  19.8  -  70.6  25.5  -  21.5  The m a i n c a u s e  :  for. t h i s decrease  •  25.8  \  22.9  -•  :  26.2  i s t h a t both timber  licenses  and t i m b e r l e a s e s , as was e x p l a i n e d i n C h a p t e r 111 a r e no longer granted.  S i n c e t h e y p r o v i d e a b o u t 95 p e r c e n t o f t h e  t o t a l r e n t a l f e e s , a s t h e y l a p s e o r a r e g i v e n up so t h e t o t a l of r e n t a l s d e c r e a s e s .  The amount o f r e n t a l s from, t i m b e r  i s i n f i n i t e s i m a l and h a s i n c r e a s e d l i t t l e years.  An a v e r a g e  following  i n the l a s t t e n  f o r t h e t e n y e a r p e r i o d 1929-1958 g i v e s t h e  c o m p o s i t i o n f o r these ground Timber l i c e n s e r e n t a l s  I  sales  taxes.  87.2 p e r c e n t  Timber l e a s e r e n t a l s  9.5  "  ».  Timber s a l e r e n t a l s  5.5  "  "  ( C o n t . ) b y a d d i n g t h e t o t a l s f o r a l l r e n t a l s , r o y a l t i e s and p r o p e r t y t a x f i g u r e s and c o m p u t i n g t h e p e r c e n t o f r e n t a l s i n t h i s amount. 2.The a b o v e p e r c e n t a g e s were c a l c u l a t e d a f t e r a v e r a g i n g t h e t o t a l s f o r each r e n t a l source f o r t h e t e n year p e r i o d * 1929-1958 as p u b l i s h e d e a c h y e a r i n t h e R e p o r t s o f t h e Forest Branch.  -52'  C-.  The  r a t e of the t a x .  T h e r e a r e two m a i n r a t e s c h a r g e d t h i s province.  for rentals i n  West of t h e C a s c a d e M o u n t a i n s t h e r a t e i s  per square m i l e , w h i l e e a s t of the Cascades i t i s o n l y per square m i l e .  The  $140  $100  o n l y e x c e p t i o n s t o these r a t e s are  those  on p u l p l i c e n s e s w h i c h a r e h a l f of t h e s e r a t e s i n t h e r e s p e c t ive  r e g i o n s , i . e . $70 The  first  on t h e c o a s t and $50  i n the  p o i n t worthy of examination  interior.  i n t h e above  r a t e s i s t h e d i f f e r e n c e "between t h o s e e a s t and west o f t h e Cascades.  T h i s r e d u c t i o n o f $40  i n t h e i n t e r i o r i s due  s m a l l e r volume of timber- t o t h e a c r e i n t h i s r e g i o n .  t o t h e .. The  s t a t u t o r y d e f i n i t i o n of t i m b e r l a n d t h e r e i s o n l y 5000 b o a r d f e e t t o t h e a c r e as a g a i n s t 8000 b o a r d f e e t t o t h e a c r e on coast.  From t h i s d i f f e r e n c e _aione we  divergence  i n t h e two In  c a n see a b a s i s f o r t h e  rates.  o r d e r t o a n a l y s e t h e s e two r a t e s more  t h e f o l l o w i n g method has b e e n a d o p t e d . method: was  The  this  out what p e r  c e n t o f t h e v a l u e t h e t a x t o o k i n any, one y e a r . calculating  closely,  purpose of  t o compare t h e two r a t e s by f i n d i n g  a c h i e v e d by f i r s t  the  This  t h e a v e r a g e number o f  was  board  f e e t - t o t h e s q u a r e m i l e f r o m t h e t o t a l s t a n d and a r e a f o r each r e g i o n .  Then t a k i n g t h e a v e r a g e stumpage p r i c e  (to the  n e a r e s t e v e n number) f o r B r i t i s h C o l u m b i a t i m b e r s a l e s f o r t h e ' y e a r 1938, age  and  v a l u e o f one  computing from t h i s a f i g u r e f o r the  s q u a r e m i l e on t h e c o a s t and  H a v i n g o b t a i n e d t h e s e f i g u r e s , t h e n i t was c e r t a i n what p e r c e n t $140  and  $100  i n the  aver-  interior.  p o s s i b l e to as-  appropriated respectively  of t h e a v e r a g e v a l u e s f o r a s q u a r e m i l e w e s t and C ascades.  This i s i l l u s t r a t e d The  $100  east of  i n d e t a i l i n T a b l e No.  0.92  8.  r e s u l t s o f t h i s a n a l y s i s t e n d t o show .that t h e  "rate i n t h e i n t e r i o r i s t h e h i g h e r o f t h e two..  t h e r e o f 1.95  the  per cent  The  rate  i s more t h a n t?vice as h i g h as t h a t of  p e r c e n t on t h e c o a s t .  Considering too, the f a c t  stumpage v a l u e s i n t h e i n t e r i o r a r e o f t e n l o w e r  than  that  on  the  c o a s t , whereas i n t h i s t a b l e the average r a t e f o r the whole of B r i t i s h C o l u m b i a was  u s e d , t h e h i g h e r p e r c e n t a g e would i n all.;,  p r o b a b i l i t y be r a i s e d . and  Only f i g u r e s f o r merchantable  i t s a r e a were u s e d h§re as t h e y were t h e o n l y ones o b t a i n -  able f o r both regions. - a d d i t i o n o f v o l u m e and a l t e r these it  I t i s , however,  I t i s p e r t i n e n t now r a t e s compare w i t h t h o s e  r a t e s of these areas Brunswick  situation a against the  t o i n q u i r e how  i n other provinces  j u r i s d i c t i o n s besides  New  the would  r e s u l t s t o an a p p r e c i a b l e * d e g r e e . u FFrom t h e above  would appear t h a t t h e r e i s i n t h i s  other  u n l i k e l y that  a r e a f i g u r e s f o r immature t i m b e r  I n e q u a l i t y , the d i s c r i m i n a t i o n being  The  timber  certain interior.  British  Columbia'  o f Canada.  t h i s , p r o v i n c e l e v y ground  Four taxes.  a r e as f o l l o w s : $8  per  square m i l e  Quebec  $3  «  »  Ontario  $5  "  "  "  D o m i n i o n l a n d s $5 " .••»'. « ( b u t $128 s i t u a t e d i n B r i t i s h Columbia.  f o r lands  On t h e f a c e o f i t t h e s e r a t e s a p p e a r v e r y l o w comparison t o those  on t h e P a c i f i c .  But  in  a n a l y s i n g them i n  T a b l e No. 8 rnm^rison  BT±t±sh^o^^M-^I^^^•  Merchantable : Timh^r ( b d . f t . ) :  TD /~\ rr ~i /~\Y")  Kegion  of  »  *  • 155,128,800,000  :  Area  A v e r a g e No. o f f e e t per so. mi. fsw. M i . ) bd. :  12,512  s  12.599,724  Coasx.  4,308.512 : 1 q q ^ - 7 0 /inn.000 : 23,088 interxui . ^ » ^ • ~ m i ™ s 1 and 2 are fr.om M u l h o l l a n a < s "me Source: ? ^ f i s h C o l u m b i a , " e x c e p t that c o l u m n 2 i s here e x S e f s e d S s a u S e m i l e s i n s t e a d o f a c r e s . The a v e r a g e S f ™ r a e e v a l u e i s the a p p r o x i m a t e f i g u r e f o r 1958 t a k e n g o T t h l R e p o r t o f the F o r e s t B r a n c h . The r e m a i n i n g c o l u m n s are computed f r o m t h e s e . T a b l e No. 9 Corn-Paris o n o f C a n a d i a n _ R e ^ t a l ^ R a t e s .  province  : Accessible • :Merchantable Timber: Area (bd. f t . ) :  j\] eW Xjl UXlDW XOJi-  •  9.601.000,000  t  A v e r a g e No. o f b d ( s q . mi).: . f t . p e r s q . m i . ( 717,403  13 585 T  i An.740.000.000  : 215.500  ' >  284.496  • S3.260.000,000.  :  56.101  •  59.287  Quebec Ontario Source:  average D U U I U J J U V ~ ~ - , , W Q The r e m a i n i n g i n t h e " F o r e s t r y C h r o n i c l e " f o r 19o8. The D o m i n i o n c o l u m n s a r e a g a i n computed f r o m t h e s e 6  t o b a s e c a l c u l a t i o n s c o u l d n o t be ° £ ^ i n e a .  S f f i r E f t S ! cent.  i  i  n  f r o m 40 t o 60 p e r c e n t , and so t h i s and 3 p e r  ^ e n i a g e d «  t o between  -54-  A v e r a g e Stumpage v a l u e per.1000 bd. f t  Average v a l u e . p e r sq.. m i . $15,  . $1.20 1.20  '. $140.00  119.67  5, 169.97  «  Rental Rate  100.00 '  Tax p e r c e n t of v a l u e 0.92$. 1.93$ ,  *  Avera^je Stumpage : A v e r a g e V a l u e : R e n t a l • Tax p e r c e n t . V a l u e p e r 1000 bd.. f t :per sq. m l . . : .. R a t e of v a l u e •  i j>X»25  • , $896.75  : $8.00  0.89$  1«25  •  355.62 .  :  3.00  '  0, 85$  1.70  :  100.79 ,  :  5.00  :  4.96$  '.  -55- • t h e same mariner  as p r e v i o u s l y  shows t h a t t h e f.140 r a t e com-  p a r e s v e r y f a v o u r a b l y t o them.  O n l y i n O n t a r i o does t h e  r a t e seem r a t h e r burdensome.  This demonstrates t h a t c o n t r a r y  t o t h e b e l i e f o f some p e o p l e ,  t h e §140 p e r s q u a r e m i l e i s no  heavier than the;seemingly vinces.  lovrer r a t e s i n t h e e a s t e r n  pro-  The a c t u a l p e r c e n t a g e f i g u r e s w o u l d change w i t h t h e  r i s e and f a l l  i n stumpage v a l u e s , . b u t , a s s u m i n g t h e s e  only  change r e l a t i v e l y , t h e a l t e r a t i o n i n t h e p e r c e n t t h a t t h e t a x takes  i n e a c h p r o v i n c e w o u l d be p r o p o r t i o n a l i n e v e r y Despite the low percentage that t h i s  case.  analysis'shows."  t h e $140 r e n t t o e x a c t , i n p r a c t i s e t h e b u r d e n i s much h e a v i e r . As ,was p o i n t e d ' o u t i n s e c t i o n B, t i m b e r most 90 p e r c e n t  of these taxes.  l i c e n s e s supply a l -  Now by f a r t h e m a j o r i t y o f  t h e s e l i c e n s e s a r e u n d e r 640 a c r e s i n e x t e n t and no r e d u c t i o n i n t h e ground t a x i s a l l o w e d  on t h i s a c c o u n t .  As a r e s u l t ,  t h e $140 o r $100 r e s p e c t i v e l y i s p a i d i n a l a r g e number o f p r o p e r t i e s f o r some f r a c t i o n o f a s q u a r e m i l e . of course,  T h i s would.,  i n c r e a s e the percentage of the value which t h e  tax confiscates. T h i s same p r i n c i p l e i s i n e v i d e n c e of t a x r e d u c t i o n s . each y e a r  4  By l a w t h e a n n u a l  i n the question  r e n t a l may be r e d u c e d  by t h e o m i s s i o n f r o m i t s c o m p u t a t i o n o f s i x  h u n d r e d and f o r t y a c r e s o r a n y m u l t i p l e t h e r e o f , w h i c h h a s been logged  o f f t o t h e s a t i s f a c t i o n of t h e M i n i s t e r of Lands.  Again t h e s m a l l l i c e n s e h o l d e r s cannot take advantage of t h i s  S. 4.  See t a b l e No. 9. F o r e s t A c t , 1912 2 G e o r g e V, c . 1 7 .  r e d u c t i o n . - ••• The  f l a t r a t e has  on d i f f e r e n t t e n u r e s , v a l u e i t may  also a decidedly varying  r e g a r d l e s s of what p e r c e n t a g e o f  be a p p r o p r i a t i n g .  o n l y a few y e a r s  effect  The  timber  s a l e which,runs f p r  b a r e l y f e e l s the burden of the t a x .  be l i k e n e d .to.-a d e p l e t i o n y i e l d  p r o p e r t y , and  p r o p e r t y t a x a g a i n comes o f f b e s t .  the  It  as u n d e r  the  On t h e o t h e r h a n d , a l i -  c e n s e or l e a s e i s u s u a l l y h e l d o v e r a number o f y e a r s . sequently,  may  Con-  the e f f e c t : o n annual sustained y i e l d p r o p e r t i e s  e v e n more so on d e f e r r e d y i e l d p r o p e r t i e s becomes v e r y  bur-  densome i n c o m p a r i s o n t o t h a t on a t i m b e r , s a l e . .. I n t a b l e 10,  t h e c o s t o f c a r r y i n g r e n t a l s i n B r i t i s h C o l u m b i a and  other provinces In order valued  for periods  to obtain  at 3 per  out h i s t a x b i l l  fil&rly  cent. i f he  f r o m 10 t o 100  years  and  No. in  i s given.  c o n s e r v a t i v e f i g u r e s money h a s  been  Prom t h i s t a b l e t h e lumberman c a n  find  defers h i s y i e l d  f o r some f u t u r e d a t e  or i n t e n d s t o r e t u r n , f o r a second l o g g i n g i n t h e f u t u r e . A s s u m i n g a lumberman owns one coast, h i s tax b i l l  f o r any  s q u a r e m i l e u n d e r l i c e n s e on  the  such o p e r a t i o n i n the f u t u r e i s  somewhat p r o d i g i o u s . " In 20.years  The  #3763  " 40.  "  $10,560  » 80  "  $46,176  "100  "  $85,082  l o n g e r the p e r i o d of w a i t i n g f o r t h e a c t u a l l o g g i n g ,  f a s t e r the t a x b i l l  grows.  The  i n c r e a s e f o r each t e n  p e r i o d i s . p r o p o r t i o n a t e l y g r e a t e r as t i m e goes  on.  the  year  -57~-There i s ong f i n a l c o n s i d e r a t i o n w i t h r e g a r d s t o the r a t e .  That Js t h e p r o b l e m  present system,  of t a x delinquency.  Under t h e  i f t h e t a x i s n o t p a i d i n a n y y e a r $1.25 a  month i s c h a r g e d  f o r e a c h month u n t i l t h e t a x i s p a i d .  After  one y e a r o f d e l i n q u e n c y t h i s p e n a l t y i s r a i s e d t o $10.00 a month.  A t t h e e n d o f two y e a r s t h e l i c e n s e o r l e a s e i s t h e n  w i t h d r a w n f r o m i t s owner. of  The b i l l  one y e a r i s n o t v e r y g r e a t  second  f o r p e n a l t i e s a t t h e end  ($15), but t h e r i s e f o r t h e  y e a r c a n o n l y be j u s t i f i e d  on two g r o u n d s , s a p u n i s h -  ment f o r non-payment, o r i n o r d e r t o p r e v e n t t h e t a x e s accumulating  t o the extent that the security of the property  becomes i n a d e q u a t e . reached  The l i k e l i h o o d  of t h i s s i t u a t i o n being  i n two y e a r s w o u l d n o t , h o w e v e r , a p p e a r v e r y g r e a t .  A f t e r two. y e a r s , t h e p e n a l t y b i l l a c t u a l t a x e s owing, almost on t h e c o a s t .  The r e s u l t  i s $135, o u t s i d e o f t h e  the cost of another  year's  taxes  of t h i s p o l i c y has been t o f o r c e  many l i c e n s e s t o r e v e r t t o t h e crown, and h a s c o n t r i b u t e d i n no s m a l l measure, t o t h e c o n t i n u e d d r o p i n t h e number o f t h e s e licenses i n the last  quarter of a century.  W h i l e much o f t h i s  t i m b e r l a n d may h a v l b e e n w i l d l y s t a k e d i n t h e e a r l y hundreds, t h e p e n a l i z i n g e f f e c t ' o f t h i s delinquency  nineteenu policy  5 seems r a t h e r h a r s h .  5.  I n 1937 t h e r e p e a l o f s e c t i o n 44 o f t h e " F o r e s t A c t " '" r e i n s t a t e d many l i c e n s e s l o n g i n a r r e a r s , b u t t h i s p r i v i l e g e ' w a s w i t h d r a w n , a f t e r r u n n i n g f o r o n l y . a f e w months.  Table No.  10  Host of C a r r y i n g R e n t s i n Canada-  * Rent  Tifiri q d i c t i o i l  1^ Llv> MC- V-x . — l Ontario : Dom. l a n d s o u t sice: o f B- C. : tvtow \2  W  "RTiinswick ,)..J-1-  1  vv - - ^-*-  3 ,  : 10 y r s . : 20 y r s . : 30 Y r s . :  3.00  :  34  :  81  \  143  5.00  :  57  :  134  :  238  8.00  :  92  :  215  :  381  *  50.00 Pulp license -i ri+. p t i o r ( B. C. ) Pulp l i c e n s e n n a s t (~B. C.) r > p _ Pimn  1344  2380  573 803  \  1882  : 3332^  '.  1147  \  2688  4760  1468  \  3441  • 6093  3763  i  l a n d s i n B.C \128.00  Source:  ,  : 70.00- :  I n t e r i o r •100.00  B. C. - c o a s t  :  :140.00  \  1606  6664  The a b o v e v a l u e s were d e r i v e d f r o m t h e formula:-  following  1  S _ a ( i.Qv l - 1). T7op w i ; where " a " t h e a n n u a l r e n t a l payment, " n " t h e number o f y e a r s , and "p" t h e p e r c e n t ( i n t e r e s t ) a t w h i c h t h e r e n t a l i s t o be compounded.  -58-  •  40 y r s :  50 y r s  ,226  ::  559  577  :  564  *  : 60 y r s . : 70 y r s . : 80 y r s : 90 v r s 489 :  816  : .. :.  692 :•  990 :  1154 :  1649 :  1331 :  100 Y r s . 1825  2218 : . 5059  •  : 605  :  5771  5641  .5280  :  7545  \  ... 9655 ': 10,560  903  l  !  1505 8156  7898 , i 11,419 11,285  j 16,515  :  1846 .  ' 11,556 j 16,150  2659 :  5549 :  4862  16,492 ': 22,18,0 . 30,586' 25,088 i 51.052- 42,541  25,072 ! 52,985 : 44,560: 60,775  14,442 ': 20,881  S 29,552 : 42,218  15,796  ; 52,501 j 46,176 :' 62.104! 85.082  : 22,858  S 6 . 7 8 1 : 77,789  -59-  "  .  The  * '  Chapter V I  F i b r e s t X I e l d Tax i n B r i t i s h  Columbia  A, T h e o r y and f o r m s o f t h e t a x . .  As a r e s u l t o f t h e i n h e r e n t i n e q u a l i t i e s o f t h e  p r o p e r t y t a x as a p p l i e d t o f o r e s t s , w i d e l y d e s i r e d by f o r e s t owners.  some/new t y p e  o f - t a x was  The m a i n t h e o r e t i c a l ob-  j e c t i o n t o t h e p r o p e r t y t a x i s t h a t t h e t a x h a s o f t e n t o be p a i d b e f o r e t h e r e c e i p t o f a n y income f r o m t h e p r o p e r t y . A c c o r d i n g l y , t h e i d e a o f a f o r e s t t a x b a s e d on income r a t h e r than p r o p e r t y f i n d s c o n s i d e r a b l e support Having proceeded t h i s f a r , t h e next b a s e s h o u l d be g r o s s outstanding  or n e t income.  advantages.- F i r s t l y ,  among f o r e s t owners.  q u e s t i o n i s whether t h e The f o r m e r p o s s e s s e s  i t i n s u r e s a more r e g u l a r ,  t a x a b l e income f o r t h e government, and s e c o n d l y , easier t o a s c e r t a i n than the rather w i l l r e a l n e t income.  two  i t i s much  o' .wisp f i g u r e o f  I n most j u r i s d i c t i o n s where i t h a s b e e n  adopted, t h i s t a x has been r e s t r i c t e d i n i t s a p p l i c a t i o n t o t h e stumpage v a l u e o f t h e t r e e s and t h e f o r e s t p r o d u c t s , a t the time  of t h e i r c u t t i n g .  a type of severance tax.  As s u c h , t h e f o r e s t y i e l d t a x i s I t s most i m p o r t a n t  asset i s the  f a c t t h a t i t e x a c t s nothing, u n t i l a f t e r t h e r e c e i p t o f income. The use  essential characteristic  of t h i s plan i s the  o f ailftrt income b a s i s i n p l a c e o f a p r o p e r t y b a s i s . I t s  a d o p t i o n c a n be i n e i t h e r t h e p u r e f o r m o r a m o d i f i e d f o r m . I n t h e p u r e f o r m b o t h t h e l a n d and t h e t i m b e r the computation of the tax. f i e d form only t h e timber  are u t i l i z e d i n  On t h e o t h e r h a n d , i n t h e m o d i -  i s t a k e n i n t o a c c o u n t and t h e l a n d  is left  still  s u b j e c t t o an annual  tax.  I n t h i s s i t u a t i o n the  y i e l d t a x a p p l i e s t o t h e a c t u a l c u t o f t i m b e r and o t h e r products.  forest  T h i s v e r y t a x u n d e r t h e name o f " r o y a l t y " i s t h e  type_ o f y i e l d t a x i n o p e r a t i o n i n B r i t i s h  Columbia.  A pure y i e l d t a x although i t might a t f i r s t  appear  t h e more l o g i c a l and s i m p l e o f t h e two i s on t h e w h o l e l e s s advantageous t h a n t h e m o d i f i e d form. uses than the f e l l i n g and  of the timber,on  a n i m a l and f i s h p r e s e r v e s .  F o r e s t l a n d s have  other  themy s u c h a s g r a z i n g  A g a i n , t h e y may be u s e d f o r  t h e i r t i m b e r w h i l s t t h e l a n d i s b e i n g h e l d as a s p e c u l a t i o n f o r increased value i n the f u t u r e e i t h e r f o r a g r i c u l t u r a l or r e s i d e n t i a l p u r p o s e s .  The e x t r a v a l u e t h e f o r e s t  gains  from' t h e s e p r e s e n t  or f u t u r e uses i s not t a x a b l e under a pure  y i e l d t a x system*  B u t by p a r t i a l l y k e e p i n g  a t a x on t h e l a n d  ( e i t h e r t h e p r o p e r t y t a x o r r e n t a l as i n B r i t i s h t h i s i s taken care o f . a definite  source  Columbia)  Under t h e m o d i f i e d f o r m o f y i e l d t a x ,  o f r e v e n u e i s a l s o a s s u r e d f r o m some t y p e  of.land tax. ; T h i s b r i n g s u s r i g h t up a g a i n s t t h e f i r s t  obstacle  i n t h e way of- a y i e l d t a x s y s t e m , t h e d a n g e r o f i r r e g u l a r revenue.  Any t a x oi\ i n c o m e w i l l t e n d t o -vary, w i t h - c h a n g i n g  business conditions.  T h i s has n o t been a d e t e r r e n t t o i t s  o p e r a t i o n i n B r i t i s h C o l u m b i a f o r two r e a s o n s . proportion.of old-growth  timber being  F i r s t l y , the  cut i s quite-high.  Where t h e f o r e s t s a r e m o s t l y young g r o w t h and t h e c u t i s c o n s e q u e n t l y s m a l l t h i s t a x runs p o i n t of view.  Secondly,  i n t o d i f f i c u l t i e s from a f i s c a l  t h e t a x i s l e v i e d p r o v i n c i a l l y and  -61n o t b y e a c h ' s e p a r a t e m u n i c i p a l i t y o r c i t y as i n p a r t s o f t h e U n i t e d S t a t e s of America.  T h i s means t h a t t h e h e a v y  c u t of  one d i s t r i c t w i l l h e l p t o "balance up t h e s m a l l c u t o f a n o t h e r district.  The  i m p o r t a n c e o f t h i s f a c t c a n he s e e n f r o m t h e  c o m p o s i t i o n o f t h e r o y a l t y f i g u r e s f o r 1938. T a b l e Mo.  District  :  11  '.  F o r e s t Area  :  Royalties  . :'  6,539,700 Ac.  j  11,216,787.01  P r i n c e Rupert  i  8,490,200Ac.  ;  99,559.55  F o r t George  :  14,867,900 Ac.  :  55,503.01  :  4,542,400 A c  :  6,048,000 Ac.  :  Vancouver  Kamploops Nelson  -  '••:.  .  81,S72,67 95,365.59 -  On t h e a s s u m p t i o n t h a t e a c h o f . t h e s e f o r e s t d i s t r i c t s  were  a s e p a r a t e c o u n t y u n i t . r u n n i n g i t s own f i n a n c e s , ' a y i e l d w o u l d n o t be p r a c t i c a l f o r P r i n c e R u p e r t , F o r t G e o r g e , loops or Nelson.  tax  Kamp-  They w o u l d be f o r c e d t o employ a l a n d t a x .  t o o b t a i n s u f f i c i e n t revenue.  r  But m hen t h e s e r e v e n u e s  p r o v i n c i a l these sectional differences lose their  are  prominence.  The t r u t h ; o f t h i s i n B r i t i s h C o l u m b i a i s e v i d e n t from the c o n t i n u a l growth i n the importance of r o y a l t i e s  as  a f o r e s t r e v e n u e p r o d u c e r and i n t h e f o r e s t t a x s t r u c t u r e . I n no y e a r have t h e y b e e n t h e c a u s e o f a s h o r t a g e i n e x p e c t e d 1.  R e p o r t s o f t h e F o r e s t B r a n c h , 1938, and ; I M u l h o l l a n d "Forests of B r i t i s h Columbia." .".'•"•  ;  -68-  f o r e s t t a x r W e n u e , but r a t h e r the o p p o s i t e . t a b l e shows t h i s v e r y  clearly. T a b l e No.  Year  :  1915  :  12  % o f T o t a l F o r e s t Revenues . % o f T o t a l F o r e s t Taxes.  1920 1925 .  -  18.3  19.6  25 •1  29.B  42.6  1930 :  The f o l l o w i n g  1935 )  .. . .;  43.7  42.5  51.2  54.9  64.0  1936  :  55.9  1937  :  54.3  66.3  1938  -.. :  50.3  63.1  65.9 :  Another o b s t a c l e i s the d e s t r u c t i o n of the b a s i s f o r c o m p a r i n g t h e t a x b u r d e n on f o r e s t p r o p e r t i e s , w i t h o t h e r of l a n d investment.  T i m b e r owners t e n d t o l o s e a p r o t e c t i o n  against unequal tax treatment a uniform  i n comparison w i t h t h a t under  p r o p e r t y t a x on a l l t y p e s  done much t o p r e v e n t  types  of l a n d .  This reason  i t s more w i d e s p r e a d a d o p t i o n  has  i n the  U n i t e d St &Xi e s . F i n a l l y , t h e r e i s t h e problem of i t s a d m i n i s t r a t i o n . The  p e r c e n t a g e t a x has  t o be c a l c u l a t e d on some measure o f  the  2.  The p e r c e n t a g e s i n t h e f i r s t c o l u m n were c a l c u l a t e d , f r o m t h e f i g u r e s f o r e a c h t a x and t h e t o t a l F o r e s t Revenue g i v e n i n the Reports of the F o r e s t Branch f o r the r e s p e c t i v e years. The s e c o n d c o l u m n was o b t a i n e d by a d d i n g t h e t o t a l s f o r t h e r o y a l t i e s , r e n t a l s and t h e p r o p e r t y t a x , and t h e n computing the per cent of t h e r o y a l t i e s from t h i s t o t a l amount.  -63- • stumpage v a l u e , t h e d e t e r m i n a t i o n o f w h i c h w o u l d be by no means an e a s y m a t t e r . these.would  E v e n i f i t were b a s e d on t h e p r i c e o f l o g s ,  v a r y f r o m day  t o day  i n different localities,  a c c o r d i n g l y , make any c o m p u t a t i o n s  somewhat c o m p l i c a t e d .  top of t h i s there i s the d i f f i c u l t y , o f determining amount o f t h e c u t .  B r i t i s h C o l u m b i a has  c u l t y by a d o p t i n g a f l a t r a t e p e r 1000  the  got over t h i s  board  diffi-  feet cut.  p r a c t i s e d i n the p r o v i n c e , g e t s over t h i s o b s t a c l e . c e r t a i n l y no p a n a c e a , t h e f l a t r a t e p e r 1000,  B. The  On  exact  This  t o g e t h e r w i t h t h e h i g h l y e f f i c i e n t method o f government  plained i n a later  and,  scaling  Yet i t i s  as w i l l be  ex-  section. The  o p e r a t i o n of the t a x .  main schedule  of r o y a l t i e s a p p l i e s t o timber  on t i m b e r l e a s e s , t i m b e r l i c e n s e s and t i m b e r s a l e s .  As  with  t h e g r o u n d t a x , a s e p a r a t i o n i s made b e t w e e n t h e r e g i o n s and w e s t o f t h e C a s c a d e M o u n t a i n s .  In the former,  the  t i e s are l e v i e d a c c o r d i n g t o s p e c i e s o n l y , but i n the  cut  east  royallatter,  the grade of each t y p e of l o g i s a l s o t a k e n I n t o c o n s i d e r a t i o n . On t h e a v e r a g e , $0.60 p e r 1000  these r o y a l t y charges board  t a i l e d schedule  feet cut.  r a n g e f r o m $1.50  to  Besides t h i s , there i s a  f o r p o l e s , p i l i n g ; , hewn r a i l w a y t i e s ,  de-  mining  p r o p s , f e n c e - p o s t s , cordwood, e t c . Crown g r a n t s a r e , h o w e v e r , on a d i f f e r e n t  footing.  T i m b e r c u t f r o m l a n d o b t a i n e d i n t h i s manner p r i o r t o 7, 1887,  April  i s f r e e f r o m any r o y a l t y , b u t i s s u b j e c t t o a  manufacturing  oax, a l l o f w h i c h ,  except  1 per c e n t , i s r e -  -64b a t e d i f the* t i m b e r i s m a n u f a c t u r e d  w i t h i n the p r o v i n c e .  0  This t a x , a l t h o u g h not a r o y a l t y , i s a l w a y s . i n c l u d e d i n the r o y a l t y f i g u r e s f o r each y e a r .  Crown g r a n t s bought: f r o m  1887  t o 1914  pay a f l a t r o y a l t y o f $0.50 p e r 1000  cut,  r e g a r d l e s s o f s p e c i e s or g r a d e .  Any  board  land granted  feet sub-  s e q u e n t t o t h i s d a t e f a l l s u n d e r t h e same r e g u l a t i o n s as  the  other tenures. This preferred p o s i t i o n with regard to r o y a l t i e s which the e a r l i e r crown g r a n t s possess •Admittedly',, t h e e x e m p t i o n p r i o r t o 1887 from,. 1887 at  which  i s an awkward  and t h e l o w e r r a t e  t o 1914' were p r o v i d e d f o r by s t a t u t e a t t h e t h e t e n u r e was  under which  t h e l a n d was  purchased..  But a s p e c i a l  v e s t a permanent p r i o r i t y f o r a l l t i m e .  privilege  times.  good f o r t u n e o f p r i o r p o s i t i o n i n t h e p a s t c a n n o t  of  owner has  however, l i e s  The itself  I f t h i s were a l l  t h a t c o u l d be s a i d , t h e s i t u a t i o n w o u l d be r e l a t i v e l y difficulty,  time  g r a n t e d , and were t h e c o n d i t i o n s  once g r a n t e d i s s u r e l y r e v o c a b l e w i t h c h a n g i n g  The  problem.  i n the f a c t t h a t the  i n many e a s e s s o l d t h e l a n d , and  the  easy.  original  subsequent  p u r c h a s e r has p a i d f o r t h e v a l u e of the p r i v i l e g e i n the sale price.  Despite t h i s f a c t , the l e v e l l i n g  of t h e s e r a t e s  w i t h t h o s e i n e f f e c t on o t h e r t e n u r e s w o u l d seem a d v i s a b l e . B e f o r e t h i s c o u l d be...achieved > t k e l a n d t a x on c r o w n g r a n t s  3.  The t a x i s c a l c u l a t e d a c c o r d i n g t o g r a d e a t a f i x e d sum p e r 1000 b o a r d f e e t c u t . S i n c e I t i s n e a r l y a l l ( e x c e p t 1 per c e n t ) r e b a t e d i f the timber i s manufactured i n the p r o v i n c e , i t i s I n r e a l i t y an e x p o r t t a x on t h e raw product.  -65anu t h e o t h e r t e n u r e s w o u l d have t o be p u t on a u n i f o r m  basis  A l l w o u l d h a v e t o be s u b j e c t t o a u n i f o r m p r o p e r t y t a x o r g r o u n d t a x as. m i g h t be d e c i d e d .  Then t h e r o y a l t i e s c o u l d be  p l a c e d on a n e q u a l b a s i s . R o y a l t i e s have s i n c e t h e i r v e r y i n c e p t i o n g r a d u a l l y been r a i s e d .  But t h i s does n o t mean t h a t t h e t a x b u r d e n h a s  b e e n made more h e a v y , f o r w i t h t h e c o n t i n u e d i n c r e a s e d of  stumpage, t h e government c e r t a i n l y h a d a r i g h t t o s h a r e i n  t h i s unearned increment. of are  As one B r i t i s h C o l u m b i a M i n i s t e r  Lands s a i d - w h e n - t h e r o y a l t y was a b o u t t o be r a i s e d ,  "we  c l a i m i n g a modest s h a r e i n t h e r i s i n g v a l u e o f W e s t e r n  stumpage."  S i n c e 1925 no f u r t h e r . r i s e i n r o y a l t y h a s b e e n  legislated.  The r a t e s i n e f f e c t a t t h a t d a t e have l a s t e d t o  "  the  value  5  end o f 1939.  .As a m e a s u r e o f t h i s r i s e i n stumpage  v a l u e s up t o 1 9 2 5 , r e f e r e n c e t o G r a p h No. 2 shows t h e a v e r a g e s a l e p r i c e of crown t i m b e r f o r each y e a r .  These f i g u r e s ,  while not representing the r e a l value, represent i t proportionately. C.  The f l a t  rate.  . I n t h e f o l l o w i n g a n a l y s i s of the f l a t  r a t e of  r o y a l t i e s p e r 1000 b o a r d f e e t c u t , two aims h a v e b e e n k e p t i n view.  The f i r s t  a i m i s t o a t t e m p t t o a s c e r t a i n how h e a v y  t h i s y i e l d t a x i s i n comparison t o other y i e l d taxes i n 4. 5.  R o s s , W i l l i a m R: B r i t i s h Columbia Forest P o l i c y . Speech! d e l i v e r e d on F e b r u a r y 1 0 , 1913. p. 1 3 . A c t u a l l y i n 1925 t h e r o y a l t y r a t e s were o n l y made t o l a s t u n t i l t h e end o f 1 9 5 8 , b u t a n amendment ( F o r e s t A c t Amendment Act,' 1958. 2 G e o r g e V I . e. 18) l a t e r e x t e n d e d them t o t h e end o f 1 9 5 9 .  -cooperation." has  'And s e c o n d l y , t o see'what e f f e c t s t h e p r e s e n t t a x  on l u m b e r i n g The  1939, time.  i n general.  p e r i o d c h o s e n f o r s t u d y i s t h a t f r o m 1925 t o  s i n c e the r o y a l t y r a t e s remained s t a b l e throughout r  I n o r d e r t o f i n d o u t m hat p e r c e n t a g e  this  of t h e v a l u e  these  r o y a l t i e s t o o k d u r i n g e a c h o f t h e s e f i f t e e n y e a r s , i t was n e c e s s a r y t o o b t a i n some s t a n d a r d by w h i c h t o measure t h e v a l u e f o r that year.  T h i s was done by p r o c u r i n g a v e r a g e l o g p r i c e s  f o r t h e main s p e c i e s and t h e i r d i f f e r e n t grades t h r o u g h t h e c o u r t e s y of the B r i t i s h Columbia Loggers A s s o c i a t i o n . must-be c l e a r l y u n d e r s t o o d  6  It  from the s t a r t t h a t i n - u s i n g these  f i g u r e s this, a n a l y s i s i s subject t o a c e r t a i n margin of e r r o r , s i n c e t h e y do n o t i n c l u d e e v e r y i n d e p e n d e n t p r o d u c e r  i n the  province.  B u t w h i l s t t h e y do n o t r e p r e s e n t a m a j o r i t y o f t h e  producers,  due t o t h e l a r g e number o f s m a l l i n d e p e n d e n t men  o u t s i d e t h e o r g a n i z a t i o n , t h e y do r e p r e s e n t t h e m a j o r i t y o f the p r o d u c t i o n , which i s the important  thing f o r this  study.  T h i s , t h e r e f o r e , i s t h e b e s t d a t a o b t a i n a b l e under t h e c i r c u m stances . The  n e x t q u e s t i o n was t h e a r e a t o be s e l e c t e d .  c o n s i d e r a t i o n , t h e c o a s t r e g i o n a p p e a r e d much more than the i n t e r i o r , c u t comes f r o m t h i s  6.  s i n c e so g r e a t a percentage section.  After  suitable  of the t o t a l  This f a c t i s d i s t i n c t l y  demon-  T h e s e I n c l u d e d a v e r a g e s f D I D D o u g l a s F I r , g r a d e s 1, 2 and 5} C e d a r g r a d e s 1, 2 a n d 3, Hemlock and a g e n e r a l average f o r a l l s p e c i e s .  -67s t r a t e d i n > G r a p h .No. 5, w h i c h s e p a r a t e s  the cut according to  t h e two r e g i o n s i n p e r c e n t s .  Consequently, only  r o y a l t i e s a r e employed  study.  sult; should,  i n this  coast  The g r a n d t o t a l r e -  on t h e w h o l e , r e p r e s e n t t h e p r o v i n c e u n d e r a l l  these c o n d i t i o n s just o u t l i n e d . Now, t h e f i r s t  n e c e s s i t y was the; a v e r a g e l o g p r i c e s  Then, t a k i n g r o y a l t y f o r e a c h s p e c i e s and g r a d e f o r w h i c h t h e r e - w a s a n a v e r a g e l o g p r i c e , i t -was p o s s i b l e t o compute the per cent  of t h e r o y a l t y , o r , i n other words, t h e per cent  the r o y a l t y c o n f i s c a t e d . ,  T h i s was done a s f o l l o w s :  R o y a l t y on a s p e c i f i c s p e c i e s and g r a d e x 100=rate of A v e r a g e l o g p r i c e o f t h a t s p e c i e s and g r a d e :'.'  The r e s u l t s o f t h i s p r o c e s s  f o r t h e f if.fee en y e a r s , 1925 t o  1939 a r e shown i n t h e T a b l e No. 1 3 . The f i r s t ion  c o n c l u s i o n t o be g a i n e d  from an I n s p e c t -  o f t h i s t a b l e i s t h a t the. p e r c e n t a g e r a t e i s o b v i o u s l y  not even, but v a r i e s from year t o year.  And by c o m p a r i s o n  w i t h t h e a v e r a g e l o g p r i c e s on G r a p h No. 6, i t c a n be s e e n t h a t t h e r a t e I s a t i t s h i g h e s t l e v e l when l o g p r i c e s a r e at  t h e i r '."lowest.. ..This means t h a t t h e t a x i n c r e a s e s when t h e  lumbering turns. example*  business  i s b a d a n d . d e c r e a s e s when p r o s p e r i t y r e -  -The d i f f e r e n c e , t o o , i s b y no means s m a l l . l e t us t a k e  Grade 1 C e d a r .  I n 1 9 2 9 , t h e r a t e was  5.3 p e r c e n t , b u t by 1 9 3 4 , i t was n e a r l y d o u b l e t h i s at  10.1 p e r c e n t .  to  show t h i s  7.  AS a n  figure  Numerous. O t h e r examples c o u l d be c i t e d  same e f f e c t .  See G r a p h No. 6.  -68GRAPH NO. 5.  -60The  s o l u t i o n t o t h i s problem of keeping  the adoption  o f some f o r m o f s l i d i n g  p r o p o r t i o n a t e l y w i t h t h e r i s i n g and  the r a t e even l i e s  s c a l e , which w i l l falling  in  vary  log p r i c e s .  A n o t h e r f a c t o r t h a t s h o u l d be t a k e n i n t o c o n s i d e r a t i o n i s t h e p o i n t t h a t c o s t s do n o t move i n t h e same r a t i o as -fcbsslog prices.  When t h e p r i c e d r o p s a d o l l a r  not decreased a t a l l .  The  o r more, t h e c o s t s  converse i s , however, not  t r u e , f o r when t h e r e i s any  altogether  considerable r i s e i n log p r i c e s ,  t h e demand f o r h i g h e r wages on t h e p a r t o f t h e l o g g e r s almost i n e v i t a b l e consequence. crease with r i s i n g p r i c e s . corporate  The  Some a t t e m p t , t h e r e f o r e , t o i n -  ' -"  scale for royalties  •'  e f f e c t o f t h e change i n l o g p r i c e s f r o m y e a r  year e m u n d e r the present  to  f l a t r a t e of r o y a l t i e s have s e r i o u s  c o n s e q u e n c e s on b o t h t h e lumberman and  the government.  example t h e d r o p I n l o g p r i c e s o f $1.00  w i l l be  such a d r o p i s not an e x c e p t i o n a l c i r c u m s t a n c e f r o m t h e l o g p r i c e s shown on G r a p h No. T a b l e No.14, t h e e f f e c t o f t h i s $1.00 has  i s an  As a r e s u l t , c o s t s t e n d t o i n -  t h i s cost factor i n a sliding  would appear j u s t .  are  6.  As  taken. is  That  evident  Accordingly,  in  drop ( f o r convenience i t  b e e n assumed t h a t t h e d r o p i s e v e n i n a l l s p e c i e s and  though i n p r a c t i s e t h i s would v a r y good p r o p e r t y .  an  s l i g h t l y ) has  been  for  a reasonably  I n t h i s example, the  man  a t f i r s t makes p r o f i t s t o t h e amount o f $280,000.  grades,  analysed lumberHow-  e v e r , when t h e p r i c e o f l o g s d r o p s $1.00, he makes $230,850 if  a l l g r a d e s a r e c u t , and  are cut.  The  $237,600 I f o n l y t h e h i g h e r  grades  n e t r e s u l t o f t h i s i s t h a t he w o u l d o b v i o u s l y  not  «3 W  CV3  <M  rjl 03  O  Qi  CD H  CD H  03 H  -70-  >H  O H  • (sKVTioa ia)saoiJH  CO  to  GRAFK NO 6.  . -71-. p e r c e n t a g e ' r a t e s o f R o y a l t y t a x e s on t h e C o a s t 1925-59 T a b l e No.  13  :FFIR  :  CEDAR  Year: G r a d e l : Gracle 2 Grade 3 Grade 1 Grade 2 :Grade 3 :Hemlock 1925: 6.5$  :  8.S%  1926 6.6$  :  8.9%  5.8$ :  :  5.2$  : . 7.8$ :• :.. 6. 6$  :  6.0$  5.9$  :  5.6$  :  9.1$  :  8.8$  :  5.4$  6.0$  :  6.'2$m  9.4$  > 9 . 4$  :  6. 3$  5.9$ :  5.7$  :  8.0$  6. 8$  5.7$ 5•  1927: 6.6$  9.C %  1928 * 6.6$ :  8.9  •1929: 6.5$ !  8.7 $  i  5.7$ :  5.5$  :  7.5$  5. 9$  1950- 6.5$ \  9.2$  :  6.5$ :  6.7$  :  9. 9$  9. 2$  • 11.2$  :  8.4$ :  1951: 7.7%  % ::  1 9 5 2 : 8.7$ ': 12.9$ 19551  7.1%  I  I  10.5 %  '  6.5$  8.4$ \ 15.5$  10. o $ ; .  6.7$  : -11.0$ \  8.7%  \ 12.8$  10. 8$  : 8.6% \  7.2$  :  1954 \ 7.8% ': 11.1 %  \  8.2%  1955 \ 7 v 5 $ -! 1Q.9 %  I  8.4$ :  1 9 5 6 ; 6.1$  A • 6.1$  :  9.0 %  1957;: 5.4$ ;:  8.1 %  1958: 5.8%  •  8.6  1 9 3 9 \ 5.7£  I.  Source:  ;  % \ 8,8% \  9.9$  7.1$  6. 9$  . 7.1$  : 10.1$:*: 1 4 , 2 $ . 10. 9$ :  •  7.3$  8.5$ \ 11, 0$  8. 4$  7.2$  7.4$ ': 10.4$ ;  9. 0$ ;  7.7$  5.2$ :  5.7$ \  8. 5$ '. '6. 5$  5.4$  5.8$ :  6.1$  :  8.9$ :  6. 6$  7.5$  6.0$ \  b.8%  \  :8,4$ :  6. 2$ ;  6.3$  The above p e r c e n t a g e s were c a l c u l a t e d f r o m t h e a v e r a g e l o g p h r i c e s i n G r a p h No. 6.  The r o y a l t i e s i n e a c h  Case were a s f o l l o w s : F i r g r a d e s 1 and 2, and C e d a r g r a d e s 1 and 2 — $1.35 p e r 1000 b d . f t . c u t F i r g r a d e 3 and C e d a r g r a d e 3 and Hemlock  =  $0.60 p e r 1000  bd.ft.cut  I n 1935 t h e r e was a 15 p e r c e n t r e d u c t i o n i n a l l r o y a l t i e s , w h i c h has been t a k e n I n t o account.  -72-  bother t o take out the lower grades.  The l o s s t o t h e l o g g e r  i n t h e above example i s n o t v e r y g r e a t , b u t i n p o o r e r g r a d e p r o p e r t i e s becomes a much more i m p o r t a n t f a c t o r . all  .TThis i s a f t  o n l y one h a l f t h e damage done. '"Now, l e t u s c o n s i d e r how  t h e g o v e r n m e n t f a r e d f r o m a t a x a t i o n p o i n t o f vieTf. b e g i n n i n g , w h e n a a l l ' g r a d e s were l o g g e d t h e y w o u l d  At t h e  collect  r o y a l t i e s as follows-; >  -  F i r Grade 1 - 15,000 a t $1.55 p e r M Fir  Grade 2 - 10,000 a t  $20,250  1.55 p e r M  13,500  F i r Grade 3 -  4,000 a t  0.60 p e r M  2,400  Cedar Grade 1 —  8,000 a t  1.55 p e r M  10,800  Cedar Grade 2 -  5,000 a t ' 1.35 p e r M.  6,750  Cedar Grade 3 -  3,000 a t 0,60 p e r M  1,800  Hemlock  5,000 a t 0.60 p e r M  5,000  TOTAL  $58,500  .;-  But when t h e p r i c e s d r o p p e d  $1.00 t h e y w o u l d l o s e t h e r o y a l -  t y on g r a d e 5 F i r and Cedar and Hemlock.  T h i s amounts t o  $7,200 o r a b o u t 1 2 f p e r c e n t o f t h e t o t a l r o y a l t y b i l l i f a l l ggades h a d b e e n - c u t .  Such a l o s s i s o f n o i m p o r t a n c e and  c o u l d be overcome by some f o r m o f s l i d i n g on t h e l o w e r g r a d e s w h i c h a r e m a r g i n a l .  A  scale,  especially  The a d j u s t e d t a x  would n a t u r a l l y d e c l i n e i n d e p r e s s i o n y e a r s , but t h i s  would  be i n c o n f o r m i t y w i t h a n y income t a x ; a n d , f u r t h e r m o r e , t h e l a n d t a x e s ( p r o p e r t y t a x and r e n t a l ) w o u l d r e m a i n f a i r l y  con-  s t a n t , t h e r e b y i n s u r i n g t h e g o v e r n m e n t o f a c e r t a i n po_r;ti,cinai o f i t s r e g u l a r r e v e n u e , w h i l e a t t h e same t i m e , e x a c t i n g t h e same b u r d e n f r o m t h e lumberman's y i e l d a s i n n o r m a l t i m e s .  T a b l e No. The  14  E f f e c t s o f a &L.00 cirop I n l o g  cnpcies Fir  Amount o f : : G r a d e : T i m b e r M.b.f.: :  1  :  2  :  •  Fir  prices Royalty : T o t a l Costs p e r M.b.f.: per M.  15.000  :  $1•55  :  $10.85  10 000  :  1.35  :  10.55  4.000  :  0.60  *  •  T  •  9.80  Fir  -  3  flpdsr  :  1  \  8.000  •  1.35  !  10.55  Cedar  •  2  '•  5.000  i  1.35  i  10.35  P.pdpr  :  3  '  3.000  :  0.60  •  9.60  •  Hemlock  ;  -  :  9.25  •w* w  The  V-t-  total  0.60  costs 1.  are  e s t i m a t e d and  include  the  following:  Royalty.  2.  Average l o g g i n g  cost  of  $8.  3.  Approximate purchase p r i c e of timber f o r assumed y e a r .  The l o g p r i c e s a r e a p p r o x i m a t e d a c c o r d i n g t o r a t i o o f t h e s e p r i c e s f r o m G r a p h No. 6 f o r an assumed y e a r .  r  an  -73-  Net stump- T o t a l P r i c e o f :' age p e r M. : P r o f i t Logs p e r M ISO. 00: 15.00  ;  ,20.00  $9.15 .  |L57,250:  $8.15  4.45  44,500  5.45  0.70  10.50 .  9.45 3.65  14>0Q  p i . 00 d r o p I n l o g p r i c e s :Net Stumpage : P r o f i t on :Loss on : p e r M. : :upper g r a d e s : Lower grades  •  2,800  : 75,600.  10.00  !••  0.40  .\  1,200 \  - 0.60  9.50  •  0.25  \  1,250 •  -0.75  Net p r o f i t Net p r o f i t  ___  $  —  -  1,200  67,600  8.45 2.65  :  54,500  :  = 0.50  '. 18,250 i  $280,850  : $122,250  13,250  :  _,. -  & P  •  $237,600 6,750  i f lower grades a r e c u t $230,850 i f lower grades are n o t c u t $237,600  p  :  1.800  •  5.750 $6,750  _74. F i n a l l y , we-come-to t h e q u e s t i o n o f d e t e r m i n i n g how h e a v y t h e t a x i s . R e f e r r i n g a g a i n t o t a b l e No. 1 5 , t h e h e a v i e s t burden appears  t o be on t h e second g r a d e s .  These  a r e t a x e d a t t h e same f l a t r a t e s as t h e f i r s t g r a d e s , a l though t h e y s e l l a few d o l l a r s p e r 10®board f e e t i n each case.  Some a d j u s t m e n t  cheaper  h e r e m i g h t w e l l be i n o r d e r .  But i f B r i t i s h C o l u m b i a ' s  f l a t r a t e r o y a l t y po-  s s e s s e s c e r t a i n i n e a u a l i t i e s and h a s some b a d e f f e c t s i n i t s o p e r a t i o n as have j u s t been e x p l a i n e d , , i t admits portant assuaging c h a r a c t e r i s t i c — i t  o f one i m -  i s not a high tax.  On  the average, t h e e f f e c t i v e r a t e ranges from 6 t o 9 per cent. T h i s does h o t , o f course., i n c l u d e t h e w o r s t y e a r s o f t h e d e p r e s s i o n o r y e t t h e most p r o s p e r o u s  times.  The t r u t h o f  t h i s statement; c a n b e s t be s e e n when we compare t h e B r i t i s h -Columbia  r a t e t o t h e percentage  rates that are i n existence  i n f o u r t e e n of> t h e s t a t e s s o u t h o f t h e border..  I n the f o -  8 l l o w i n g t a b l e these are given. T a b l e No. 15. :  State  ;  . :  : Alabama  10 p e r c e n t  :  . Connecticut  2 - 10 p e r c e n t  ;  12-g p e r c e n t  :  Idaho Louisiana:..  6  ii  ti  Massachusetts  6  it  ii  "  "  Michigan 8.  Y i e l d Tax Rate-  ' F a i r c h i l d , F, R. pp. 596 - 4 0 1 .  10  :  :  "Forest Taxation I n the United States,  -75-  State  : : Y i e l d Tax  Rate  Minnesota  :  10 p e r c e n t  New  :  6 per cent  Ohio  ;  5  jt  ii  Oregon  :  isi  n  I!  Pennsylvania :  10  1!  1!  Vermont  :  7 - 10 p e r c e n t  Washington  :  12i  Wisconsin  :  10  York  per cent n  n  The p r o v i n c i a l r o y a l t y r a t e i s c e r t a i n l y , t h e r e f o r e , a v e r y h i g h or c o n f i s c a t i n g  rate.  not  -76Oh&pter V l l The..'Protection The  Tax.  f o r e s t p r o t e c t i o n tax levied i n B r i t i s h  on t h e owners o f a l l t y p e s so many c e n t s p e r a c r e . F o r e s t R e v e n u e s , and  of timber  tenures,  is a flat  tax,of  I t i s n o t i n c l u d e d as an i t e m i n t h e  r e a l l y Cannot c o r r e c t l y be deemed r e v e n u e ,  since the t a x funds thus c o l l e c t e d are reserved the use  Columbia  of f o r e s t p r o t e c t i o n .  solely for  T o g e t h e r.'with a sum  b u t e d a n n u a l l y by t h e g o v e r n m e n t , t h e y a r e p l a c e d  contrii n the;  F o r e s t P r o t e c t i o n Fund as e s t a b l i s h e d i n 1912.1 JfLst t a k i n g , i n t o c o n s i d e r a t i o n t h e r a t e , t h e f o r e s t p r o t e c t i o n tax i s abnormally l e v i e d i n 1912, t h e r a t e has  t h e r a t e was  high.  1 p e n t c par.  When i t was  acre.  per a c r e , s i x times  first  Since that time  g r a d u a l l y i n c r e a s e d u n t i l t o - d a y , i t has  t h e amount o f 6 c e n t s  present  reached  the o r i g i n a l r a t e .  I n c o m p a r i s o n t o s i m i l a r . t a x e s i m p o s e d by other- a u t h o r i t i e s in  Canada, t h i s i s v e r y s t e e p .  O n t a r i o has  a r a t e o f $6.40  p e r s q u a r e m i l e w h i c h i s e q u i v a l e n t to. 1 c e n t p e r a c r e ; Brunswick charges | cent S c o t i a ha-s a s l i d i n g a c r e , and  on e a c h a c r e o f t i m b e r  New  l a n d ; Nova  s c a l e w h i c h a v e r a g e s a b o u t 2^ c e n t s  per  the Dominion l e v y y i s a t a x . e q u i v a l e n t t o h a l f the  c o s t of p r o t e c t i o n . T h e r e a r e .two this disparity.  The  f a c t o r s , however,, t h a t t e n d t o  first  of t h e s e  age  of each year's  1.  F o r e s t A c t , 1912-. 2 George .V. c.  Is the I n c r e a s i n g  offset percent-  p r o t e c t i o n f u n d s w h i c h t h e government  17.  has  -77-  GRAFH NO  '•xvsA sxqq. punji uofq.oaq.oja: oq. saoTq.nqfaq.noo O H  7.  rec o n t r i b u t e d ' t o t h e F o r e s t P r o t e c t i o n Fund.  For the f i r s t  nine  y e a r s o f t h e e x i s t e n c e o f t h i s f u n d t h e government c o n t r i b u t ed an e q u a l amount t o t h a t c o l l e c t e d u n d e r t h e p r o t e c t i o n t a x f r o m t h e owners o f t h e d i f f e r e n t t i m b e r t e n u r e s .  .But s i n c e  t h a t t i m e t h e amounts s u b s c r i b e d by t h e p r o v i n c i a l government h a v e i n c r e a s e d t o t h e e x t e n t t h a t t h e y now cent of the t o t a l revenues of t h e fund 7 shows t h e p e r c e n t a g e tax  f r o m 1912  f o r m about 70 Graph  No.  c o n t r i b u t e d by t h e government and  the  t o t h e p r e s e n t day.  each y e a r .  per  From t h i s i t i s e v i d e n t  t h a t t h e 6 c e n t s p e r a c r e p r o t e c t i o n t a x o n l y d e f r a y s 30  per  c e n t of. t h e f o r e s t p r o t e c t i o n e x p e n d i t u r e s , .  The  second f a c t o r i s the extremely h i g h c o s t of  p r o t e c t i o n i n B r i t i s h Columbia, Is  The  p r i m a r y aim of the  n a t u r a l l y enough t h e e s t a b l i s h m e n t  efficient  and m a i n t e n a n c e of  s y s t e m o f f i r e p r e v e n t i o n and f i r e c o n t r o l .  a c c o m p l i s h t h i s end  fund  To  i s no i n e x p e n s i v e o r e a s y m a t t e r .  The  f o r e s t s of B r i t i s h Columbia are v e r i t a b l y s c a t t e r e d over w h o l e l e n g t h and  b r e a d t h of the p r o v i n c e , which covers  enormous scea:of 234,403,000 a c r e s . m o u n t a i n o u s and  the  the  This area i s f u r t h e r very  r o c k y and t r a n s p o r t a t i o n f a c i l i t i e s a r e i n  many p l a c e s e n t i r e l y l a c k i n g .  Again, l a r g e s e c t i o n s o f  province are unpopulated,  a c c o r d i n g l y , i n such  and,  t h i s f o r m o f p o t e n t i a l f i r e - f i g h t i n g h e l p does n o t  2.  an  M u l h o l l a n d . op.  c i t . P.  39.  the  localities exist.  -79F i n a l l y , , "the l o n g c o a s t l i n e o f some 7000 m i l e s i n l e n g t h w i t h i t s l e g i o n o f i n l e t s and difficulty  in fire-fighting  small i s l a n d s presents a  and  real  i n c r e a s e s t h e c o s t s due  to  the  extensive patrols required. An a n a l y s i s o f t h e s e f o r e s t p r o t e c t i o n e x p e n d i t u r e s w i l l demonstrate the heavy c o s t s i n c u r r e d .  According  to  the  F o r e s t B r a n c h of t h e p r o v i n c e t h e r e are t h r e e main l i n e s  of  a c t i v i t y t o he p r o v i d e d f o r by t h e F o r e s t P r o t e c t i o n F u n d , '  1)'  Prevention.  T h i s i n c l u d e s t h e c o s t of upkeep  o f t h e t o o l s and  e q u i p m e n t ; t h e making of  telephone  lookout posts; p u b l i c  and  lines,  any n e c e s s a r y  2) O r g a n i z a t i o n ,  trails,  education  improvements.  This item covers  the  salaries  and.expenses of the o f f i c i a l s . f o r both the manent ... and g)  per-  temporary p r o t e c t i o n s t a f f ,  Suppression.  In t h i s  a c t u a l c o s t s of  category are included  the  fire-fighting.  In the f o l l o w i n g t a b l e these funds are d e t a i l e d t h e manner p r e p a r e d  3. 4.  by t h e  department.  R e p o r t o f t h e P F o r e s t B r a n c h , 1935. R e p o r t s o f t h e F o r e s t B r a n c h , 1915,  4  p z. 3 1 . 20, 25, 30,  35-38.  in  -80T a b l e No. 16 P a t r o l s arid F i r e PreT o o l s and: FireImproveTotals vention Equipment F F I g h t i n g : . ment s included $ 1914- -15 1228,352.00 under 145,461.00 51,585.00 00 improve403,198. 1919- -20 198,172.35 ments 165,688.80 28,597.4558: 592,858. 1924- -25 544,532.39 25,418.54 [ 258,055.66- 5,689.64 635,674. 25 Year  :  1929- -30  575,416.71 , 45,401.56  1954- •35  207,535.05 . 15,600.52. 127,580.59  3,847.75 554,561. 69  1935- •36:  254,255.37 : 59,048.72  8,254.62 586,444. 95  1956-  37  255,175.75  20,548.26  150,495.44 10,555.44 416,550. 87  1957-  38:  524,426.12  DO,859.62  28,555.87. 11,257.57 464,899. 18  Fire-fighting  494,645.42 22,570.79-: 956,054. 48  24,908.24  i s t h e most v a r i a b l e amount and h a s a  very large share i n the determination of the t o t a l f o r e s t p r o tec tionexpenditures. mendous.  From a n i n s p e c t i o n o f t h e n e x t t a b l e , some i d e a o f 5i  this  The damage done by t h e s e f i r e s i s t r e -  :  c a n be g a i n e d . '  that f i r e formation.  I t must, o f c o u r s e , be b o r n e i n mind  s t a t i s t i c s are, t h e l e a s t a a e l i a b l e o f a l l f o r e s t i n Many f i r e s , a r e n o t s e e n by f o r e s t e r s , b u t a r e  o n l y r e p o r t e d t o them.  M o r e o v e r , t h e f o r e s t o f f i c i a l has not  s u f f i c i e n t t i m e i n t h e e x e r c i s e o f h i s d u t i e s t o make a d e t a i l e d a s s e s s m e n t o f t h e damage s u f f e r e d , and i n many c a s e s , has  n o t t h e t r a i n i n g n e c e s s a r y , where he i s o f a v e r y s u b -  ordinate rank.  R e p o r t s o f t h e F o r e s t B r a n c h , 1 9 1 5 , 20, 2 5 , 3 0 , 55-58.  -81T a b l e No. 17 Area Burned Ac.  Timber Burned If, b. f .  1915  1031  244/189  T i m b e r ; DDamag e O t h e r Salvato Damage Total ble Forest Damage M .b.f. 187,250 43,030 ''108,875 $57,774 $166,647  1920  1251  389,846.  229,255  1925  2521  1,023,783 (3/524,508 350,770 2^21,672 625,518 2,747,190  Yea: 'No. o f Fires  1930- . 2 2 7 1  602,675  590,978  49,575  485,185 473,900  959,865  25,216 1,408,185 337,909 0,746,092  1935  1111  47,871  26,115  1936  1547  '. 455,902  952,808  1937  1193  ;  1938:  2412 : 711,818 1 0 4 7 , 5 4 1 400,527; 1555,849 675,166 2251,015  54,845  15,265  14,559:  .68,-399 221,144  25,814 11.09,475 - 565:  289,545  66,189 3,175,662  56,584 119,380  155,764  A f a c t o r t h a t c a n n o t s u c c e s s f u l l y be r e p r e s e n t e d i n the  above t a b l e i s t h e damage done t o young s t a n d s .  g a r d i n g t h e e x c e p t i o n a l case where"the agricultural  Disre- .  f i r e clears land f o r  purposes, the loss i n p o t e n t i a l value f o r the  future i s very great.  F o r example,  t a k e a s t a n d t h a t i n 100  y e a r s w i l l c o n t a i n 30,000 b o a r d f e e t t o t h e a c r e .  The a v e r a g e "  a n n u a l g r o w t h I n s u c h a c a s e w o u l d be 300 b o a r d f e e t t o t h e acre. per  I f t h e p r e s e n t s a l e p r i c e i n t h a t r e g i o n a v e r a g e s $1.25  1000 b o a r d f e e t , a n d t h e r o y a l t y a v e r a g e s $1.00 p e r b o a r d  f e e t c u t , t h e n assuming  the prices stay at this l e v e l f o r  some t i m e t o come, a young s t a n d w o u l d i n 50 y e a r s t i m e be worth i n revenue 2.25 x 300 x 5 0 - §33.75 p e r a c r e 1000 A l l t h i s f u t u r e p o t e n t i a l revenue v a l u e i s l o s t t o t h e government.  And t h i s l o s s i s q u i t e h e a v y , i n d e e d .  -82A t a x t o meet a l l t h e s e p r o t e c t i o n  expenditures  w o u l d seem e s s e n t i a l , a n d t h e p r o t e c t i o n t a x h e l p s t o s e r v e t h i s purpose.  But t h e r e  of-consideration.  i s another element t h a t i s worthy  Each year i t i s always found n e c e s s a r y t o  Spend q u i t e a c o n s i d e r a b l e dinary  private property.  forested as  amount f o r t h e p r o t e c t i o n o f o r A,fire that  s t a r t s on a n o n -  s e c t i o n o f l a n d h a s t o be e x t i n g u i s h e d  one t h a t  s t a r t s on t i m b e r l a n d .  share i n the support of the costs  j u s t a s much  Y e t s u c h owners do n o t of forest  protection.  Whether, t h i s s i t u a t i o n w o u l d be made more e q u i t a b l e c o n t r i b u t i o n from these lands i s hard t o say. really, cost  by some  I t depends,  on two t h i n g s ; f i r s t l y , w h e t h e r p r o t e c t i o n i s a r e a l  o f ^ i n d u s t r y , and s e c o n d l y , whether t h e t a x i s n o t i n a  way l i k e t h e workmen's c o m p e n s a t i o n l e v i e s , and t h e g o v e r n ment's c o n t r i b u t i o n t h e n c o v e r s p r i v a t e  property.  -83•}  Chapter  Vili  Conclusions Equitable taxation i s a l l that the forests and  can expect.  should  S i n c e , h o w e v e r , most s e c t i o n s o f t i m b e r  y i e l d only p e r i o d i c r e t u r n s , t h e bulk of t h e t a x should l e v i e d a t the time the timber w i t h t h e r e c e i p t o f income.  be  i s c u t , so t h a t i t c o i n c i d e s Under s u c h a p o l i c y , t h e i d e a  of t r e a t i n g t h e f o r e s t as a c r o p r a t h e r t h a n a wasting l i k e mining, w i l l gain strength. r e m a i n t h e permanent h e r i t a g e i£ a i m i s e s s e n t i a l .  land  asset  And i f o u r f o r e s t s a r e t o  of the race, the adoption  Notwithstanding  of t h i s  t h i s f a c t a. c e r t a i n p e r -  c e n t a g e o f t h e t a x must be l e v i e d a n n u a l l y i n o r d e r  to insure  t h e g o v e r n m e n t a r e g u l a r i n c o m e and n o t make i t d e p e n d e n t u p o n the w i l l If  o f t h e lumberman a s t o when he w i s h e s t o c u t h i s  our f o r e s t s ever r e a c h  a p o i n t of complete annual  y i e l d , where a y e a r ' s c u t c a n be h a r v e s t e d t h e n t h e a n n u a l t a x c o u l d be w i t h d r a w n .  i n Steady  timber.  sustained succession,  But u n t i l such a time  comes t o p a s s i t w i l l h a v e t o r e m a i n p a r t o f t h e f o r e s t t a x s y s t e m , a s y s t e m w h i c h . . w i l l be a c o m b i n a t i o n o f a n a n n u a l t a x on t h e l a n d and a y i e l d t a x on t h e t i m b e r Of t h e t h r e e  taxes  severed.  l e v i e d f o r revenue purposes i n .  B r i t i s h Columbia ( t h e p r o p e r t y  t a x , t h e r e n t a l , and t h e r o y a l -  t y ) n o t one d e s c e n d s t o t h e n a d i r o f u n f a i r n e s s , o r y e t , a t t h e ame t i m e ,  reaches the z e n i t h of equitableness.  case of t h e p r o p e r t y  tax, d e s p i t e the best  In the  of administration,  t h e .study o f .assessment r a t i o s f o r s e l e c t e d d i s t r i c t s i n t h i s province  tend  t o shov,- t h a t t h i s i m p o r t a n t  part o f the admini-  -84f  stration is fairly  operated;  elements of I n j u s t i c e .  i t possesses c e r t a i n inherent  The tendency o f t h e t a x i s a l w a y s i n  t h e d i r e c t i o n o f f a v o u r i n g q u i c k e c u t t i n g , and i s most b u r d e n some o n d e f e r r e d y i e l d f o r e s t s . provided  An a l l e v i a t i n g f a c t o r was  by t h e c u t t i n g o f t h e r a t e i n h a l f i n 1926, b u t t h e  i n j u s t i c e s as b e t w e e n one t y p e o f p r o p e r t y and another, t h o u g h l e s s marked, s t i l l The  remain.  other l a n d t a x , t h e r e n t a l , has t h e g r e a t  advantage o f being  a f l a t r a t e , and i s bound t h e r e f o r e t o e x -  a c t v a r y i n g burdens on d i f f e r e n t p r o p e r t i e s . rates i n existence, i f anything, low,  dis-  Of t h e two m a i n  t h e c o a s t r a t e a p p e a r s t o be  or the i n t e r i o r r a t e t o o high.  Some e q u a l i z a t i o n betv/een  e a c h r a t e , e i t h e r b y r a i s i n g t h e f o r m e r o r l o w e r i n g the. l a t t e r , w o u l d seem a d v i s a b l e . . Compared t o o t h e r r a t e s  operative  t h r o u g h o u t Canada, B r i t i s h C o l u m b i a ' s m a i n r a t e ( t h e c o a s t i s not high. timber  I t h a s , h o w e v e r , a much h e a v i e r  i n c i d e n c e on  l i c e n s e s , s o many o f w h i c h a r e l e s s t h a n one s q u a r e  m i l e I n e x t e n t , t h a n i t has. on t i m b e r  s a l e s and t i m b e r  leases.  Such- l i c e n s e s a l s o a r e a t a d i s a d v a n t a g e  i n availing  ves  The t a x d e l i q u e n c y  of t a x reduction f o r cut-over  Bules  rate)  a l s o h i t them h a r d e r  land.  than a timber  themsel-  s a l e , and t h e h i g h  ,  c h a r g e i n t h e s e c o n d y e a r , f o l l o w e d b y c o n f i s c a t i o n and l o s s o f t h e l i c e n s e c a n o n l y be j u s t i f i e d to  stop the charges from accumulating  no  longer adequate.  on p u n i t i v e g r o u n d s , o r till  the  securityi s  F i n a l l y , the cost of carrying t h i s  ground  t a x i s , as i n t h e c a s e o f t h e p r o p e r t y t a x , much more b u r d e n some a n t h e d e f e r r e d y i e l d f o r e s t and t h e a n n u a l s u s t a i n e d  yield  . -85t h a n i t i s on a d e p l e t i o n y i e l d  property.  W i t h t h e r o y a l t y yre come t o t h e f a i r e s t o f t h e f o r e s t t a x e s , one which i s o n l y l e v i e d when t h e r e i s income t o meet it...  The r a t e a t p r e s e n t  i n o p e r a t i o n i n B r i t i s h Columbia i s  c e r t a i n l y n o t h i g h , and t h e t a x i s v e r y e f f i c i e n t l y ed.  administer-  The o n l y f a u l t i s t h a t t h e r a t e a g a i n i s a f l a t  rate  r a t h e r t h a n a p e r c e n t a g e r a t e , a n d , as a r e s u l t , h a s a v a r y i n g e f f e c t i v e p e r c e n t a g e r a t e e a c h y e a r d e p e n d e n t on t h e m a r k e t p r i c e of l o g s . . U n f o r t u n a t e l y , the worst e f f e c t of t h i s r a t e i s seen i n t h e d e p r e s s i o n ,  flat  when i t c a n l e a s t be a f f o r d e d .  T h i s i n e q u a l i t y c o u l d be n i c e l y overcome by some f o r m o f s l i d ing to  s c a l e for. the ' r o y a l t y charges, the p r i c e of l o g s .  w h i c h w o u l d be s e n s i t i v e  Such a scheme w o u l d n o t o n l y be more  f a i r t o t h e lumberman, b u t more a d v a n t a g e o u s t o t h e g o v e r n ment i n t h a t i t w o u l d i n s u r e t h e c o l l e c t i o n o f r o y a l t i e s the low grades, that otherwise The  from  m i g h t n o t be c u t .  p r i m e n e e d i s some f o r m o f u n i f o r m i t y as b e t w e e n  t h e t a x e s a n d t h e i r r a t e s on t h e d i f f e r e n t t y p e s  of tenures.  Some c l a s s o f a n n u a l l a n d t a x b a s e d on t h e v a l u e , o f t h e l a n d and  the type  a l l tenures  of f o r e s t investment concerned, that a p p l i e d t o i n p l a c e o f t h e two l a n d t a x e s now i n u s e w o u l d  be t h e f i r s t s t e p . .  Then a l l r o y a l t i e s c o u l d be p l a c e d  on an  e q u a l f o o t i n g , and a l l . s p e c i a l p r i v i l e g e s w i t h regards t o r o y a l t i e s t h a t have been extended t o e a r l y crown g r a n t s , abrogated.  O n l y when t h i s comes .about w i l l i t be p o s s i b l e t o  make c e r t a i n t h a t t h e r e i s , i n r e s p e c t t o t a x e s p a i d , a n  E q u a l i t y o f s a c r i f i c e by e a c h t y p e o f t i m b e r l a n d s t a t u s .  -86In c o n c l u s i o n , t h e r e I s t h e q u e s t i o n of t h e prot e c t i o n tax.  The p r e s e n t r a t e i s v e r y h i g h , b u t i s n e c e s s a r y  f o r t h e c o s t l y . w o r k o f f i r e p r o t e c t i o n , and e v e n a t t h a t p r o v i d e s l e s s t h a n a t h i r d o f t h e expenses r e q u i r e d each y e a r . Where a p o s s i b l e i n j u s t i c e r e s t s i s I n t h e f a c t t h a t many n o n - f o r e s t p r o p e r t i e s r e c e i v e t h i s p r o t e c t i o n w i t h o u t maki n g any c o n t r i b u t i o n towards i t s upkeep.  The e q u i t y o f t h i s  s i t u a t i o n depends l a r g e l y on w h e t h e r o r n o t t h e government c o n t r i b u t i o n covers  this.  As a w h o l e , t h e f o r e s t t a x a t i o n s y s t e m i n B r i t i s h Columbia i s n o t a t y r a n n i c a l Draconian exist,  b u t t h a t i s t o be e x p e c t e d .  must be c o n c e n t r a t e d mutandis."  code.  Inequalities  For the f u t u r e a l l e f f o r t  i n reforming these I n e q u a l i t i e s ,  "mutatis  -—  PROVINCE OF BRITISH COLUMBIA.  APPENDIX  —  FOREST BRANCH.  DEPARTMENT OF LANDS.  TIMBER S A L E CONTRACT X. Forest District  :  Description of Timber—1.  ©i|tS JfttfrpttfttrJp,  made the  King (herein represented and acting by  .  ,  _day of :  , A.D. 19  who, with his successors in office, is hereinafter called " the Licensor," of the one part, and with.—  _  , between His Majesty the  —, Deputy Minister of Lands for the Province of British Columbia), .'.  , who together  _—..executors, administrators, and successors, is hereinafter called " the Licensee," of the other part.  W I T N E S S E T H that, in consideration of the payments and stipulations to be made and observed by and on the part of the Licensee 'and of the Licensee's offer to purchase made under and subject to the provisions of the "Forest Act," the Licensor doth hereby grant unto the Licensee, subject to the provisions of the said Act, and for the term and subject to the reservations and conditions hereinafter provided, a licence to cut and remove all the dead timber standing or down, and all the live timber designated for cutting by a Forest Officer, merchantable as hereinafter defined, upon an area which is agreed to comprise (see particulars) acres, situated and described as follows, and shown upon the map annexed and thereon coloured red: (see particulars), from the date hereof, for the term of (see particulars) years thence ensuing. Payments—2. In consideration whereof the Licensee hereby covenants, promises, and agrees with the Licensor as follows: shall pay to the said Licensor the several sums at the times and in the manner following, namely:— (a.) A stumpage price for the timber at the following rates, payable immediately upon receipt of account: (&;) A n annual rental, based on (see particulars) acres, at the rate of  .  The Licensee (As bid.)  _per acre, amounting to $ (see  particulars) ; further payments to be made annually in advance on the.». —day of : in each year hereafter during the continuance of the licence hereby granted: Provided that such annual rental is to be reduced in each year by the omission from its computation of six hundred and forty acres or any multiple thereof as provided in the " Forest Act." (c.) A l l forest-protection dues as provided in the "Forest Act";'and amendments, payable annually in advance on the..— 1 day of . , an each year during the life of this contract. (d.) The cost of cruising and advertising incident to this contract, being the sum of $ (see particulars), (e.) Royalties as provided in the "Forest A c t " and amendments, payable immediately upon receipt of account. (/.) The cost of scaling, payable immediately upon receipt of account. Conditions—3. ;  And the Lessee further covenants, promises, and agrees to cut and remove said timber in strict accordance with the following conditions and with all regulations and provisions governing timber sales in the " Forest A c t " and amendments:— . (a.) No timber will be removed from the sale area until it has been conspicuously marked with the following registered mark issued for this timber sale: (See particulars.) (6.) Stumps will be cut so as to cause the least practicable wast, and will not be cut higher than the diameter of the tree, at the point where it is cut, and in no case higher than (see particulars) inches on the side adjacent to the highest ground, except in unusual cases in the discretion of the officer of the Forest Branch in charge. A l l trees will be utilized to as low a diameter in the tops as practicable, so as to cause the least waste, and to the minimum diameter of (see particulars) inches when merchantable in the judgment of the officer of the Forest Branch in charge. Log lengths will be varied so as to provide for the complete utilization of merchantable timber. (e.) . A n y (see particulars) tree which, in the judgment of the Forest Officer, contains a net total scale of (see particulars) per cent, or more of the total volume of the tree suitable for the manufacture of (see particulars) shall be considered merchantable under the terms of this contract, and may be designated for cutting by the Forest Officer. (d.) A l l trees, designated as hereinafter defined, shall be cut: (See particulars.) (e.) No unnecessary damage will be done to young growth or to trees left standing. So far as practicable, trees will be felled uphill, and no trees will be left lodged in the process of felling. If trees designated to be left standing are badly damaged through carelessness during the process of logging, or are cut, they will be paid for at the rate :  of $ . . per tree. (/.) When operations are begun on any natural logging area the cutting on that area shall be fully completed to the satisfaction of the Forest Officer in charge before cutting may begin on other areas, unless such cutting is authorized in writing with the requirement that cutting shall be completed on the area left unfinished as soon as practicable. (g.) As far as practicable, all branches of the logging operation shall keep pace with one another, and in no instance shall brush-disposal be allowed to fall behind cutting, except with the written consent of the Forest Officer in charge. (h.) Unless other arrangements are made in writing with the District Forester at (see particulars), all timber will be scaled before removal from the sale area in accordance with the provisions of the " Forest A c t " and amendments, and in no case will any timber be manufactured or sold until it has been properly scaled as provided in the " Forest A c t " and amendments. (i.) Trees designated for cutting in clause (d) which are left uncut, timber wasted in tops and stumps, trees left lodged in process of felling, and any merchantable timber which is cut and not removed from any portion of the cutting area after logging on that portion of the cutting area is completed shall be scaled, measured, or counted as hereinbefore provided, and paid for as follows: (See particulars.) (j.) Brush will be disposed of as follows: (See particulars.) (k.) Provisions for fire-protection: As provided in the "Forest Act." (I.) Other clauses: (See particulars.) [over.  •j  Provided that, upon the expiration of the  4.  „nr ly.;<r-M-a n f the Licensee hereunder shall absolutely terminate, and f£ t s ^ ^ ^ " t h e absolute property of the Licensor: Provided  said-^jf  Provided further that, unless such amounts are reduced in writing by the Minister, at cut prior to  ; at least (Date.)  at least  . (Feet B.M., cords, etc.)  l e a s t _ _ _ _ _  j  - ^  ..shall be  shall be cut prior to (Feet B.M., cords, etc.)  shall be cut prior to  ,  ; (Date.)  ,—, (Date.)  The Licensee agrees that the sum of $ which accompanied tender for timber covered by this contract, shall be held until the completion of the contract; and provided that the contract has been faithfully carried out to the satisfaction of the Licensor will be refunded; otherwise this amount will be subject to such deductions as the Licensor may find necessary in order to carry out the full intent and provisions of this contract; or otherwise will be forfeited. Except as may otherwise be provided by any Statute or Order in Council that may from time to time be in force, all timber cut under this contract shall be used in this Province, or be manufactured in this Province into boards, lath, shingles, or other : sawn lumber, to such an extent to be of use in the trades without further manufacturing, except in the case of piles, telegraph and telephone poles, ties, and crib timber, which may be exported under an Order in Council. The Licensee covenants with the Licensor:— (a.) That he will not assign or transfer the licence hereby granted or any interest therein without the written consent of the Licensor first had and obtained: (6.) That no person of the Chinese or Japanese race shall be employed in or upon the cutting or removal of any timber under the terms of this licence, subject, however, to the rights of any such person under any treaty having the force of law in Canada: (c.) That in carrying out his operations under this licence he will in no way block, obstruct, or damage any road, trail, or other property, and any obstruction caused or damage done by him will be removed and repaired forthwith by the Licensee at his own expense. The decision of the Minister of Lands will be final in the interpretation of any of the terms and conditions of this contract. The Forest Officer in charge, by giving notice to that effect in writing to the Licensee, or to the person in charge of logging operations upon the area, may suspend any logging operation conducted upon this area, should violation of any of the terms, covenants, provisoes, or conditions of this contract have occurred; and such violations shall render this contract liable to cancellation by the Minister of Lands. Provided further that the interest, rights, and privileges of the Licensee in the said hereditaments, tenements, and premises shall be construed as subject always to all the provisions of the " Forest A c t " and amendments thereof. In witness whereof the parties hereto have hereunto set their hands and seals the day and year first above written.  Signed, sealed, and delivered by the ) Licensor in the presence of— j  Signed, sealed, and delivered by the ) Licensee in the presence of— j  SEAL.  SEAL.  (Licensee or Purchaser.)  on behalf of the corporation and be accompanied by the signature of these omc ~k Form 99A, F.B.—4M-1087-8451  Bibliography Books Fagan, E.D. and Maey, C.W. (Ed.): P u b l i c Finance; selected readings. (New Y o r k / Longmans, G r e e n , 1 9 3 4 ) . Roth, F i l b e r t : F o r e s t V a l u a t i o n (Ann A r b o r , p r i v a t e l y p u b l i s h e d , 1916) ' The T a x a t i o n o f F o r e s t s - P a p e r s and D i s c u s s i o n a t a F o r e s t C o n f e r e n c e i n W h i t e M o u n t a i n s , J u l y 1 2 t h , 1912. ( C o n c o r d , S o c i e t y f o r t h e P r o t e c t i o n o f New Hampshire F o r e s t s , 1912.).  'Government P u b l i c a t i o n s . F a i r c h i l d , F.R.: Forest Taxation i n the United States. ..••(Washington,; U. S. Department o f A g r i c u l t u r e , M i s c e l l a n e o u s P u b l i c a t i o n No. 218, 1 9 3 5 ) . F i n a l R e p o r t o f t h e R o y a l C o m m i s s i o n o f ; I n q u i r y on Timber T and F o r e s t r y , 1909-1910. ( V i c t o r i a , King's ~ P r i n t e r , 1910.). ." ', L a w l e r , James: H i s t o r i c a l S k e t c h o f Canada's Timber I n d u s t r y . ( O t t a w a , Department o f t h e I n t e r i o r , F o r e s t r y B r a n c h , C i r c u l a r No. 1 5 . ) . M u l h o l l a n d , F.D.: The F o r e s t R e s o u r c e s o f B r i t i s h ( V i c t o r i a , K i n g ' s P r i n t e r , 1937.).  Columbia ~  Public. Accounts of the p r o v i n c e of B r i t i s h Columbia, 1938. R e p o r t s o f t h e F o r e s t B r a n c h , Department Reports of the Board of T a x a t i o n . : 1919.) ~ R o s s , Hon.  of Lands,  1900-  1912-1938.  ( V i c t o r i a , King's P r i n t e r ,  W i l l i a m R.: B r i t i s h Columbia F o r e s t P o l i c y - speech o f 1 0 t h F e b r u a r y , 1913.  S y n o p s i s , o f R e p o r t and F u l l R e p o r t o f R o y a l C o m m i s s i o n on T a x a t i o n , 1911. ( V i c t o r i a , K i n g i s P r i n t e r , 1912.) S t a t u t e s o f t h e p r o v i n c e o f B r i t i s h C o l u m b i a , 1871  -  1958.  W h i t f o r d , H .N. and C r a i g , R.L.: F o r e s t s of B r i t i s h Columbia. ( O t t a w a , C o m m i s s i o n o f C o n s e r v a t i o n p u b l i c a t i o n , 1918.)  Articles A l l e n , E.T:.. : " F o r e s t P r e s e r v a t i o n and i t s r e l a t i o n t o Taxation". P r o c e e d i n g s o f , t h e C a n a d i a n ; Tax? . Conference ( C i t i z e n ' s Research I n s t i t u t e of Canada) 1927, pp. 60 - 655 B a r n e s , O.F.: " P r o p o s e d S y s t e m o f F o r e s t r y T a x a t i o n , ," P r o c e e d i n g s o f t h e N a t i o n a l Tax A s s o c i a t i o n , v o l . x v . pp. 143 - 149. B e d a r d , A.: " F o r e s t P r e s e r v a t i o n and i t s r e l a t i o n t o T a x a t i o n , (Quebec)" Proceedings of the Canadian Tax C o n f e r e n c e , ( C i t i z e n ' s Research I n s t i t u t e o f Canada) 1927. pp. 5 7 - 5 9 . Siark,J.F.: "Woodland T a x a t i o n . " J o u r n a l , v o l . 1, pp. 159  Canadian F o r e s t r y - 172  ;  Dickson,  R.J. : "Timber D i s p o s a l R e g u l a t i o n s i n Canada i n r e l a t i o n t o F o r e s t Management." The F o r e s t r y C h r o n i c l e , v o l . x , pp. 31-42  Dickson,  R.J-7: "S ummary o f CChanges i n T i m b e r D i s p o s a l Regulations." The F o r e s t r y C h r o n i c l e , vol. v i i - xv. (1931 - 39);  F a i r c h i l d , F.R.: " S u g g e s t i o n s f o r a P r a c t i c a l P l a n Of Forest Taxation" Proceedings of the . N a t i o n a l Tax A s s o c i a t i o n , v o l . v i . pp. 371 - 393 Fernow, Dean B.E,:, " F o r e s t T a x a t i o n and C o n s e r v a t i o n as p r a c t i s e d i n Canada." P r o c e e d i n g s of the • N a t i o n a l Tax A s s o c i a t i o n , v o l . 1 1 , pp. 93 - 98 Frost, JJE.: " T a x a t i o n and R e f o r e s t a t i o n . " Proceedings o f t h e N a t i o n a l Tax A s s o c i a t i o n , v o l . x x i . pp. 359-6 4 Howe , C D .  : " F o r e s t r y P r e s e r v a t i o n and i t s r e l a t i o n t o . T a x a t i o n ( O n t a r i o ) " Proceedings of the Canadian Tax C o n f e r e n c e . ( C i t i z e n ' s Research I n s t i t u t e "of Canada.) 1927, pp. 54 - 57.  

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