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Appendix Assets . . . , Analysis of succession duties Annuities, sale of Arbitration proceedings Appeal by Dominion dismissed Brewers' licenses Common school fimd Estimated receipts, 189G " expenditure, 189() Expenditures, 1895 Indian claims' Immigration expenditures Liabilities presently payable License receipts Legislation, increased cost of Ontario's appeal sustamed Other claims by Dominion disallowed Printing and binding, 1891-1895 Public institutions' expenditure < Quebec's claim disallowed Ileceipts, 1895 Reduction in yearly expenditures . . . . Railway aid certificates Satisfactory results re awards SucceBsion duties , Successful sale of annuities Second award »iurplu8 PACK. 45 40 14 17 29 If) 3() 42 42 21 32 34 41 15 23 33 35 24 2t) 37 7 28 45 39 10 19 32 41 f f FINANCIAL STATEMEINT OF HON. R. HARCOURT, Legislative Assembly, Toronto, 19th February, 1896. Me, Speaker, — Honourable members will not be surprised when I say at the very commencement of my address concerning the finances of the Province in general, with special regard to our present position, and to the operations of the year just closed, that I do not expect for a moment to be able to present to the House anything either new or of unusual interest. Honourable members are so familiar with every detail of all our unaiiuial questions, so full and complete is the published information placed in their hands from year to year ; so ample are the facilities which each Session affords for detailed criticism, investigation and enquiry, that it becomes proportionately difficult to impart to the subject, important though it be, either novelty or interest. I do hope, Sir, however once move to be well able to satisfy the House completely, and the Province at large as well, that our financial con- dition now, as always heretofore, is exceptionally sound and satisfac- tory, and that while our aflfairs have been uninterruptedly adminis- tered with what I may well call courageous economy, we have, at the same time, in no sense disregarded those reasonable well-founded claims for increased expenditures or for new expenditures which our growing needs from time to time demand. 6 It would be an easy task for me, Sir, to show that in this regard this Province stands conspicuous and alone ; that it is admitted on all sides by men holding high place and position in both political parties in the sister provinces, and elsewhere, that the Province of Ontario has long and continuously enjoyed to the fullest extent the many and inestimable benefits which result from careful, prudent and successful financial administration. I well know that we are agreed in the House concerning the leading principles which have always guided this Government in its expenditures of public money. For example, we all unite in vigorously deprecating the disposi- tion, wherever it exists, to vote the public money for this or that object indiscriminately regardless of the public needs, and without any reference at all to the cirumstances of the ratepayers from whose pockets it must ultimately come. It has been well and tersely said that public expenditure )« after all only private expenditure under another name ; that the State has no funds except what it takes from the purses of its citizens, and therefore that it behooves us always to act with the caution proper to those who know that they are being liberal with other peoi)le'8 money. And we are also agreed that the truest economy is consist- ent at all times with fullest justice ; that it has happened, and that it may happen that cases will arise under which the State, in the long run, will save more than it spends, and likewise that it may be the fact that unless expenditure — and it may be large expenditure — is incurred, some important public right will be infringed. And we are further agreed, I venture to say, that it is a very for- tunate thing for us in this Province that we have resolutely and systematically indulged the habit of paying our way as we go ; of resolutely suppressing all votes of money which are not clearly and unmistakeably in the public interest, and in this way of preserving carefully the equilibrium between revenue and expenditures. Our persistent adherence at all times to these first principles of sound finance, our determination, fortified as we have been by our knowledge that in so doing we have always had the approval of the 7 House and the fullest sanction of the cout try, to resolutely refuse to depart on any consideration from this cleai course of safety, have en- abled us year by year to present to the peoole a satisfactory balance sheet . The opposite policy, the policy of the spendthrift, of drawing huge cheques on the future, heedless of the serious burMien they impose, of piling up a great loid of debt for posterity to pay, accompanied by large present annual interest charges, in themselves a burden, of wasting the resources of the country and impairing its credit, and all this without any adequate compensating advantages, or indeed any advantages other than mere transitory party gain or the enrichment of a favored few, has wherever tried, and apt illustrations of such a policy are, I regret to say, near at hand, invariably proved harmful and disastrous. What I have to say, Sir, this afternoon, and I hope to be very brief, concerning the financial operations of this Province of the year 1895, will amply and in every regard support and verify these preliminary observations. Last Year's Receipts. I will, first of all, Sir, make some reference to the receipts of 1895. RECEIPTS, 1895. Subsidy 81,116,872 80 Specific Grant 80.000 00 !?l,lim,H7L> 80 Interest on Capitai. helm, am> Ukim's due uv tmk Dominion to Ontaiuo 262,274 82 Interest on Investments 41,184 74 ;{03,459 nf) Crown Lands Department: — Crown Lands 43,583 91 Railway Lands 718 42 Clergy Lands 6,259 60 Common School Lands 13,942 51 Grammar School Lands 1,512 43 Rent re Lands 26,106 12 Woods and Forests 853,179 86 Fishing Licenses 365 GO Cullers' Fees 240 00 Casual Fees 442 42 Refunds 1,596 80 947,947 07 8 Aluoma Taxks 2,183 34 Law Stamps 74,70100 LiCKNSEs 272,809 12 Education Department 52,271 63 PcuLio iNHTiTcriONs Rkvenue : Toronto Lunatic Asylum 38,639 71 Mimico " 1,422 89 London " 10,870 69 Hamilton " 11,667 54 Kingston " 6,574 35 Brockville " 1,147 !»8 Orillia " .S, 439 14 Reformatory for Females 3,166 93 Boys 585 00 Deaf and Dumb Institute 125 00 Central Prison Industries 26,395 21 104,034 44 Casual Rkvkni'k :— Provincial Secretary "s Department. 14,213 72 Provincial Registrar's Branch 113 25 Registrar-General's Branch 148 00 Fines, etc 4,098 89 Division Court Fees 5,678 63 InsTirance Companies' Fees — Ontario Act and 1892 Act 15,988 01 Surrf)gate Courts' Surplus Fees 1,972 56 Public Officers' Surplus Fees (57 Vict., cap. 9) . . 4,999 66 Offices of Local Masters 1,940 35 Shooting and Fishing Licenses (Fishing Licenses, additional §365. 0(», See Crown Lands De- partment) 1 ,506 25 Official Gazette 12,9(51 88 Private Bills 7,481 65 Statutes 886 73 Ground Rent 2,000 00 Sale of B. N. A. Acts 164 75 Incidentals 30 37 Dundas and Waterloo Road Debentures ,.. 1,801 00 Insurance Companies" Assessments re Expendi- ture for Insurance Branch 2,999 99 Removal of Patients to Asylums 5,813 31 84,799 00 Succession Duties 298,824 99 Mercer Reformatory— Capital Account. Refund re Expendi- ture 65 25 Drainage Wobks Assessments 7,349 41 $3,345,317 61 B3 34 01 00 09 12 71 63 9 Dkaina(;k Debkntukks 40,389^99 Tile 8,435 00 Brewers' Lk'ENsks (R. S, O., cap. 194, mc. 51) 19,637 50 Salh ok Annuities 171,520 00 313,58.5,. SCO 10 ,034 44 84,799 OO ;98,824 99 65 25 7,349 41 J45,317 61 We received from Crown lands last year t'^47,947. Our estimate was $825,000. We received therefore nearly -SI 23,000 more than we expected. And yet it is the first year in nine years in which this receipt has been less than a million of dollars. From 1883 to 1886 inclusive it was less than a million, but from 1886 until last year it has quite exceeded a million. The condition of the lumber trade of course largely accounts for the fluctuations in these receipts. We had a sale of limits in October, 1892, and hon. geii^"> men well re- membar how unprecedentedly successful it was, ami during that year and the following year we received by way c*"' bonus very Hrge sums. We received as bonus in 189J., $l,;317,79o ; in 18P", il§986,- 372 ; in 1894, ^,69,415, and in 1895 |76,570. Tht imber dues alone for the same years have broti^ht us in 1892 .8797,680; in 1893, $707,746; in 1894, S844,216, and in 1895, $715,106. The receipts by way of ground rents have been, as we would ex- pect, steady, and have increased somewhat year by year. We re- ceived in this way in 1892, $59,112; in 1893, $62,886; m 1894, $06,865, and in 1895, $61,493. During this same period mining leases have given us by way of rent considerable sums. Our interest receipt is, it will be seen, less than that of some former years. The interest receipt from the Dominion on account of the capital sum it holds in trust for us is less than that of last year by the sum of $47,746. In other words, we did not receive last July the half-yearly payment of interest hitherto regularly received on some of the funds the Dominion holds in trust for us This amount is withheld for the time b^ing only, pending the settle- ment of the arbitration which is now proceeding. 10 I will take occasion later on at some length to refer to this arbi- tration, to the subject matter of it as well as to the results thus far ascertained. The interest receipt from our ovvn investments, from deposits in banks and from drainage debentures is also less than that of last year. We had smaller average balances in the banks, and we ob- tained a lower rate of interest than we did in 1894. Onr schedule of receipts, viewed generally, shows here and there considerable change during the last few years. It discloses in some of its main features both flexibility and variableness. The Succession Duties. For example, we received in 1891, only four years ago, not a dol- lar from succession duties. Last year we received the large sum of $298,825. Our tirst receipt from that source was in 1892. Thus far under this head our receipts have been as follows: — In 1892, $758; in 1893, $45,507 ; in 1894, $150,754, and in 1895, $298,825. Our estimate for 1895 was $175,000. Altogether we have, up to the close of last year, received in this way the considerable sum of $503,319, all of which, I remind the House, we have of course applied, in accordance with the provisions of the statute which creates these duties, towards the maintenance of our hospitals and asylums. This handsome receipt amply proves how useful and fruitful our legislation has been. Next to our Grown Lands roceipc, and leaving out of considera- tion our annual fixinl subsidy given us under the B. N. A. Act, succession duties constitute in 1895 our most important and valuable source of revenue. And what is better, Sir, it will continue here- after, beyond any dcubt, to grow in volume and importance. I cannot, however, expect, I must frankly say, that 189G will yield as large a return as 1895, and this because we received in 1895 $134,- 693 from one estate, the estate of th6 late Allan Gilmour, of Ottawa. More than two-fifths of our total receipts for the year thus accrued from one very lar^e estate. We may not, of course, receive so large a sum from any one estate for several years to come. ;j* I 11 f In passing I wish to say that to thit larsje estate there were no direct heirs, no v^ife or child entitled. Indeed there were no indirect heirs even, no biood relations of any de<.;ree, the largest beneficiary, I may well say sole beneficiary, being a complete stranger in blood to the deceased. Would any one in this House, or out of it, for a moment think of even questioning the fairness or the wisdom of our legislation when applied to this, the most important case which has arisen under it 1 And further, as an illustration of the fact that this kind of reve- nue is easy of collection and of administration, I may add that in the case of this, our largest estate since the Act came into force, we agreed on the valuations, determined the interests of the different parties and adjusted the amount due the Province with but little difficulty and trifling expense, and were in actual receipt of the duties within five months of the date of the death of the deceased. The fact, then, that this will in a few years, if not immediately, prove to be our most important source of revenue —the Dominion subsidy and Grown Lands revenue, of course, excepted — warrants me in adding somewhat to what I have already said on previous occasions concerning it. I do not mean, of course, by way of justi- fying it, since we have long since passed that stage. It needs neither apology nor defence. On all sides it is at once admitted that no means of raising revenue more fair, desirable or justifiable has ever been devised. This means of raising revenue long ante-dates all modern political economy. In addition to its many other virtues it has that of anti- quity on its side. It has been thoroughly tested in several countries of Europe, it is each year growing in popularity, it essentially embodies true demo- cratic principles. England, France, Switzerland, Holland, Belgium and even Italy, Prussia and Russia have long availed themselves of it. On this continent the States of Pennsylvania, New York, Maine, Massachusetts, Connecticut, New Jersey, Delaware, Ohio, Oalifornia, West Virginia and Tennessee, enjoy considerable receipts from it. 12 W. It is at the same time, all admit, capable of abuse, and in this re- spect it does not vary from any other mode of raising revenue. Under certain conditions it might even become the thin end of the social- istic wedge, harmful and dangerous. In France, for example, as much as fifteen per cent, or twenty per cent, even is taken from the value of a single succession and there is no deduction even for debts, but in this and other respects France is a conspicuous exception to the almost universal rule. Different schools of economists 'at variance as to many questions of taxation, revenue and finance, fully agree as to the wisdom and fairness of this legislation. For example Prof. Ely, of Wisconsin University^ a well known writer and admittedly high authority in such matters, warmly approves of it. Andrew Carnegie, the equally well known capitalist and millionaire, goes to extremes in supporting it. He vigourously meets the arguments of those who object to inheri- tance taxes because they constitute a tax upon capital. Not long ago in a lecture delivered in New York City, speaking on this very point he used these words : — " Every dollar of taxes required might be obtained in this manner (viz,, by inheritance taxes) without inter- fering in the least with the forces which tend to the development of the country through the production of wealth." And many years ago John Stuart Mill not only advocated progressive inheritance taxes, but contended also even that there should be a limit to the amount which anyone should be allowed to take either by inheritance or bequest. It is well argued, we should bear in mind, that we should regard succession duties not as a tax on property, but as a condition of inheritance, a regulation of inheritance, a regulation of bequest. For many reasons this legislation is popular, it well accords with unquestionably sound theory, since under it those pay, and those pay most, who are most able to pay. No means of obtaining revenue can be less oppressive. In what other way would payments be made more willingly ? Succession duties take nothing from the heir which they have actually enjoyed, they deprive them rather of something which they never had. And 13 of And further, in the case of distant relatives it is not a very easy matter to give a perfectly satisfactory reason for \he existence of intestate inheritance. When property is acquired accidentally and perhaps unexpectedly, the heir is more able to pay, and does pay with but little reluctance. Moreover, it is difficult to evade payment, and it leaves but little opportunity for fraud. We readily see how important this is when we notice to what extent income taxes, for example, are evaded. For instance, the one per cent, tax on direct inheritance in New York, which applies only to personal property, realized $700,000 from the Jay Gould estate. His personal property in his lifetime had only been assessed for $500,000 for property tax purposes, but after his death it was valued at 140 times that amount. Pennsylvania has had an inheritance law for seventy years. Dur- ing the fiscal year ending November 30th, 1895, its receipts from this source were $1,117,974. New York State received in this way, during its fiscal year ending September 30th, 1895, $2,126,894. Massachusetts received from collateral legacies and successions in 1894 $239,368, and in 1895, $399,292. New Jersey, which occupies a unique position among the States of the Union, in that it has no tax for State purposes and is practic- ally out of debt, received through succession taxes $204,695 in 1894, and $121,339 in 189"). This fortunate little State derives nearly all revenue fr^ — i taxes on railroads and other corporations. The sister Province of Quebec received as succession duties : — $40,313 for year ending June, 1893, $149,283 for year endin^r June, 1894. and $162,535 for year ending June, 1895. The exempt estates range from $250 in Maryland to $10,000 in Massachusetts and Ohio, Tennessee being the only estate which allows no such exemption. In New York inheritance taxes amount to twenty and one-half per cent, of all the State taxes, and contribute nine per cent, of its total State expenditures. * 14 In Pennsylvania they amount to more than twelve per cent, of all the State taxes, and six and one-half per cent, of all the State expenditures. Well-known writers, who have given special attention to this ques- tion, confidently assert that the experience of New York State makes it plain that inheritance taxes and corporation taxes together could in the majority of the States of the Union be fairly made to pay all the State expenses. Analysis of the Duties. I know that hon. gentlemen will be interested in an analysis of our succession duties receipts of last year. This analysis will fully bear out my statement that our Act is a very moderate one ; that it is chiefly characterized V)y generous exemptions, and that in its work- ing it is fully consistent with that soundest of economic principles, "ability to pay." Upon analyzing the returns made by the Olerks of our Surrogate Courts I lind that 3,145 wills were proved and 1,519 letters of administration vere issued during 1895. Our Courts in this way adjudicated upon 4,664 estates. The number the pre- vious }ear was 4,815, and 4,574 the year before. Out af these 4,664 estates reported in 1895 only 87 were dutiable under our Act. The number which escaped duty was 4,577, the number which paid duty 87. Only one estate out of every 53 came within the provisions of our Act. In no less than twenty of our counties in 1895 not a single estate came within its provisions. Of these 87 estates which paid duty twenty-two were reported as from the county of York, eight from the county of Went worth, six from Brant, six from Oxford, five from Middlesex and tive from Northumberland. Taking the Pro- vince altogether, I. find that in more than one-half of the counties last year there were no estates liable to euccession duties. A few counties contributed nearly all of the revenue. In these counties, of course, there are large centres of population. This fact, let me again observe, proves that our Act contains large and generoa& ex- emptions. We received from Oarleton county last year $162,778, 4 IT) or more than 54 per cent, of our total receipt from Oxford county $42,679, or more than 14 per cent, of our tot; 1 receipt ; from the county of York $35,984, or more than 12 p(>r ctut. or the gross re- ceipt. From these three counties alone we received more than 80 per cent, of all our succession duties during 1895. We apply, as the statute provides, the revenue from succession duties toward the maintenance of hospitals and asylums. Of last year's revenue 8190,221 sufficed to meet our grants for the year to hospitals and charities. The balance, viz., $108,604, assisted in defraying our large asylum expenditures. License Receipts. It will be noticed that wp received from liquor licenses |272,883. The previous year we received $277,330, while in 1893 we received $294,516. The municipalities received from liquor licenses during the same three years re.spectively, viz., 1893, 1894 and 1895, $289,- 970, $282,473 and $272,101. We are issuing year by year fewer licenses, and, therefore, we have a falling revenue. We granted last year liquor licenses, all told, in ninety-iive districts. In twenty- seven of these districts there was a slight increase in the number of licenses granted as compared with 1894 ; in forty-three districts there was a decrease, while in the remaining twenty-tive the number remained stationary. We granted 3,151 licenses in 1894, as against 3,276 in 1893, a decrease of 125 licenses in a single year. The following table will show at a glance the steady and considerable reduction in the num- ber granted during each of the last five years : Tavern. Sh(,p. Wholesale. Total. 1890 3,073 428 134 3,523 1891 2,990 403 21 3,414 1892.. 2,966 378 2.-) 3,369 1893 2,888 357 31 3,276 1894 2,785 337 29 3,151 We issued 372 licenses last year less than we did five years ago, a decrease of more than ten per cent. If this falling oflF continues, and all indications lead me to think that it will, the many and serious i 16 difficulties connected with the liquor traffic, will in a few years, to a great extent, solve themselves. We issued last year one license for each group of 670 of our population. In the Province of Quebec there was issued a license for each group of 548 of its population. We have in this Province, all told, 810 municipalities, and in 190 of them no license of any kind was issued. One-fourth of the Province, therefore, last year was not under license. The Statistical Year Book of Canada for 1894, only recently is- sued, gives a schedule of convictions for drunkenness in the several Provinces. On page 1022 of this volume having regard to this schedule of convictions the following statement is made ; — " It appears from this table that in 1894 out of every group of 667 of the inhabitants of Ontario one had been convicted of drunk- enness, out of every group of 359 of the people of Quebec one had been convicted of drunkenness, while in the Province of Nova Scotia one out of every group of 361 had been so convicted. Ranged ac- cording to position with respect to sobriety, as tested by convictions, the Provinces stand thus : Ontario, Prince Edward Island, the Ter- ritories, No\a Scotia, Quebec, Manitoba, New Brunswick and British Columbia." Brewers' Licenses. Apart from the year's license isceipt, to which I have just referred, we received $19,637 from licenses taken out by brewers' agents. In referring to this subject a year ago I stated that the constitutional question which it involves was then in the form of a special case before our courts. The constitutional question arose as follows: In the year 1878, in the case of Severn vs. The Queen, the Supreme Court held that the Province had no right to require brewers, distillers, and dealers in liquor holding licenses from the Dominion Government, to take out Provincial licenses. Subsequent decisions of our courts, notably those in the cases of Hodge v.y. The Queen, Molson vs. Lambe, ard 17 to a e for lebec ,tion. 90 of /ince, ly is- jveral ) of au: )up of drunk- le had I Scotia »ed ac- ictions, he Ter- k and referred, nts. In itutional cial case ear 1878, leld that d dealers t, to take s, notably konbe, ar.d Rpgina tv. Halliday, threw doubts on this decision of our Sui)reine Court. To settle the important question of jurisdiction, therefore, the three following questions were, at the instance of the brewers, submitted as a test case to the Court of Appet 1 : (1) ''Is sub-section 2 of section 51 of tht Liquor License Act, - Revised Statutes of Ontario, chapter 194, requiring every brewer, distiller, or other ])erson duly licensed by the Government of Canada, as mentioned in sub-section 1, to first obtain a license under the Act to sell by wholesale the liquor manufactured by him when sold for consumption within the Province, a valid enactment 1 (2) " Has the Legislature of Ontario the power, either in order to raise a revenue for provincial purposes or for any other object within provincial jurisdiction, to require brewers, distillers and any other persons duly licensed by the Government of Canada for the manu- facture and sale of fermented, spirituous or other liquors, to take out licenses to sell the liijuors manufactured by them, and pay a license fee therefor ? (3) *' If so, must one and the same fee be exacted from all such brewers, distillers and persons ? '' ' Judgment was given on the 14th of January last. The first two questions were answered in the aflirmative, and the third in the negative, so that the contention of the Province in this regard has thus far been sustained in all points. The brewers have appealed, as it was expected they would, to the Privy Council. Sale of Annuities. It will be noticed that we once more sold annuities during 1895, and thus realized 3171,520. It will be remembered that we are onpowered, under the Act of 1884, to defer payment of our accruing railway liabilities in any one year by the issue of new forty-year certificates to take the place of the old certificates maturing during; the year in question. We have, I need scarcely say, very exten- sively aided railways in this Province, our payments in aid up to the preeent date exceeding $6,266,000. The Sandfield Macdonald 2 Ji. 18 f: Government, while it set apart a railway fund, did not pay out a single dollar in aid of railways. The matter of payment was one of the legacies he bequeathed to his successors. These railways have been a great factor in opening up our country, in extending our trade and commerce, and in developing our resources generally. This class of expenditure will especially benefit those who come after us, and it was therefore deemed reasonable and prudent that provision should be made for deferring these railway liabilities in order to be able more easily to meet the pressing and increasing needs of a growing and prosperous Province. No new liability, we must remember, was created or sought to be created by this Act of 1884. No new liability, not even to the extent of a single dollar, has been in fact created by the Act authorizing the sale of these annuities, and nearly eleven years have gone by since the Act was passed, It merely authorized, I repeat, the deterring or postponement of each year's railway obligations. Wp have, in fact, only availed ourselves of its provisions in seven out of the twelve intervening years. We were fortunately able in 1888, 1889, 1890, 1893 and 1894 to meet the maturing railway certificates out of funds in hand, and without resorting to this Act which allows us to defer payment. And during these same twelve years, be it remembered, we have erected these Parliament Buildings, as well as the large, new, com fortable, substantial and imposing Asylums for the Insane at Orillia, Mimico and Brockville, not to speak of considerable other perma- nent public works entailing, all told, a capital expenditure of more than 85,000,000. We have been thus, year by y( ar, making very important addi- tions to our fixed permanent wealth, and substantially adding to our assets, and all this without increasing our liabilities or appreciably lessening our surplus. The Honorable E. B. Wood, Treasurer of Mr. Sandfield Macdon- ald's Government in 1869, and again in 1871, boasted, and of course < 11) y out a vas one jountry, esources 10 come ent that ilitiea in ling needs »ht to be sn to the the Act ears have I repeat, oligations. g in seven ely able in ig railway :o this Act 3, we have new, com ; at Orillia, her perma- ire of more ortant addi- Iding to our appreciably 3ld Macdon- ,nd of course I do not use the word otlensively, of the large capital expenditures of his Government. In 1869 he stated that they had spent $486,000 on capital account during the previous two md a half years, and again in 1871 he stated that their expenditur«s on capital account during three and a half years had footed up to vhat he calls the very large sum of $S09,86G. Every one knows, Hir, that our capital expenditures have reached much greater proportions, averaging for years together sums two or three times as large as those named by Mr. Wood. I refer to this simply to show that our growing needs, our doubled territory, oar increased population, and our progressive legislation have from time to time inexorably demanded larger and still larger expenditures. A Successful Sale. • I will once more invite your attention to our last sale of annui- ties. The Treasurer in 1884 expressed the opinion that we could issue new certificates on a basis of four and a half per cent. The first sale, that of 1884, was effected exactly on a basis of four and a half per cent., and each succeeding sale, you will be glad to know, on a more favorable basis. In 1892 I succeeded in effecting a sale at less than four per cent., and last year's sale, that of 1895, was on a basis of less than three and a half per cent. We realized at our first sale $1,848 for every 6100 of annuity, and at our last sale $2,144 for every .$100 of annuity. The purchaser at our last sale will receive less than three and a half per cent, interest on his investment. I make bold to say, Mr. Speaker, that at no time, on no occasion in our history, has the Dominion, or any one of its Provinces, or any city within its borders, effected so favorable a sale of securities. The purchaser at this, our last sale, is a resident of this Province, and we were, therefore, absolutely at no expense what- ever on account of exchange or commission. Brokerage fees, stamp duties and exchange add materially to the rate of interest when a foreign investor is the purchaser. I will give an illustration : the <^uebec Government negotiated a loan of $5,333,976 in Paris in December, 1894. The net proceeds of this loan amounted to 20 .$4,104,803. Apart from various contingent expenses connei ted with it, $53,329 was spent in commissions and advertising. The Pari"* capitalists realize more than four per cent, on their investment. I take these figures from a recent official return of the (Quebec Legislature. Our railway obligations in years to come will be much hjss than they have been. For example, the certilicates maturing and paid in 1885 amounted to ii?"250,808 ; those maturing in 1895 amounted to $159,403. We paid for railway aid during the last four years $610,529, while for the period of four years just preceding that time we paid $990,825. The near future will witness considerable further reductions. We will pay lor example next year in retiring maturing railway certificates $20,552 less than we will be required to pay this year. In 1898 the amount maturing will be lessened by a further reduc- tion of $28,513. In 1899 the amount will again be diminished to the extent of $14,432, and the yearly reductions thereafter up lo and including 1904, continue to be considerable. The amount we will be called upon to pay this year is $159,157 and the amount payable in 1904 is $32,741, a decrease in eight years of $126,416. The smaller items of revenue do not call for extended remarks. On other occasions I have given some explanations concerning them. We received nearly $10,000 less from law stamps than we did last year, and nearly $5,000 more from the Education Department. Our casual revenue, and we include under that term a dozen or more of minor sources of revenue, exceeded our expectations. It reached a higher mark than it did the previous year. The revenue from our public institutions also exceeded our estimate, the excess being mainly due to the very good results attending last year's operations at the Central Prison. All told, our receipts for the year were very satisfactory. We estimated that our total receipts would be $3,149,372. The actual receipts have proved to be $3,364,955. We are, therefore, as the result of the year's operations, so far as our receipts are concerned, $215,583 better off than we expected. d with e Pari=i ent. I (^)uebec ss than paid in unted to ir years ing that ons. railway B year, ler reduc- nished to ter up to Qount we e amount 26,416. ' remarks, ling them, e did last apartment. ;en or more It reached le from our ;ing mainly ions at the story. We The actual a, so far as ixpected. i i 21 In these receipts I have not included receipts by way of payments to the Province on account of drainage debentures, nor the proceeds of our sale of annuities, since these items were not included in my estimate of the year's receipts. '^ I now invite the attention of hon. members to last years' expen- ditures. Expenditures, 1895. Civil Government. $ 244,72(5 47 Legislation 150,058 G7 Administration of JutsticH 453,564 99 Education 693,042 95 Public Institutions Maintenance 799,222 15 Immigration 7,ject to a trust for the Indians ; and also to that part of paragraph nine which says that any payments of increased annuities properly made by the Dominion since the union are to be charged against Ontario as of the dates of payment. , B ^ ■" - " "• 34 This appeal was argued in May, 1895, and judgment given sustain- ing the appeal in December, 1895. In his judgment, delivered December 9th, 1895, Chief Justice Strong of the Supreme Court says : — " This appeal must be allowed, and the award must be varied by substituting for the sixth paragraph thereof the following: — The ceded territory mentioned became the property of Ontario under the 109th section of the British North America Act, 1867, absolutely, and free from any trust, charge or lien in respect of any of the annuities, as well those presently payable as those deferred and agreed to be paid in augmentation of the original annuities, upon the condition in the treaties mentioned. And, further, by striking out the seventh and ninth paragraph of the award. " The Province of Ontario is entitled to the costs of this appeal, to be paid by the Dominion." The judgment of the Supreme Court supports the contention of the Attorney- General, Sir Oliver Mowat, as communicated to Mr. Blake, then Minister of Justice, in 1875, that the claim on the part of the Dominion, if any, is a liability of the late Province of Canada and that Ontario alone is not to bear the ultimate burden of the in- creased annuities. The Dominion has taken steps to apply durmg this month to Her Majesty's Privy Council for leave to appeal against this judgment. The Province of Quebec is applying to be heard before the Privy Council as a party interested. Immigration Expenditures. Three other matters, relatively speaking, of much less importance than the interest question, or the question involved in the Huron and Superior treaties, were next taken up by the arbitrators. The first of these concerned certain immigration expenditures. The Dominion claimed from Ontario a refund of $68,635 under an agreement made in January, 1873, for the transport of immigrants from Quebec to points in Ontario during the years 1878-79 and 1880. This case was argued at Quebec on the 12th of February, 1895, and 35 an award made on tl e day following disallowing 8^)5,549 of the claim. When the account i i taken it is expected that it will be found that Ontario is entitled to recover a small balance. The second was a laim preferred by Ontario against the Dominion for an unpaid balance of $21,444 belonging to the Upper Canada Municipalities Fund, which in 1866-G7 and 1868 had been misap- plied. The award of February, 1895, on this head allows $15,732 against the Dominion, and directs that amount to be credited to Ontario as of date, July 1, 1872. The third of these minor claims was that made by the Dominion against Ontario to recover a balance on some interest coupons paid in London in 1861 by the late Province of Canada and assumed by the Dominion at Confederation. These coupons were collected by Ontario, but the proceeds were not paid over to the Dominion. The award as to this matter is against Ontario, and orders that the Do- minion of Canada be credited with $16,781 as of date, December 3l8t, 1892. Other Claims. Two other claims of the Dominion against the late Province of Canada have been argued and decided. The one, a claim for $21,083, was made on behalf of the Delaware Indians for lands drowned at Dunnville in 1829-33. This case was heard at Quebec last November. The arbitrators disallowed the claim in toto. The other was made on behalf of the Mississagua Indians, of the River Credit, for the value of Indian lands sold between 1826 and 1858, it being alleged that the Province of Canada received the proceeds, but did not pay them over to the Indian Department. The amount thus claimed was $78,774. Ontario not only denied all liability, but also tiled a counter-claim against the Dominion on the ground that the Dominion had improperly charged $5,582 against the Widows' Pension Fund and credited it to these Mississagua Indians. This case was argued last November in Quebec. The arbitrators dis- missed the claim of the Dominion, and allowed in part the counter- «laim of Ontario. 3(i Common School Fund. The questions concerning the Common School Fund furnish the only other important matter which has been presented to the arbi- trators up to the present time. Shortly stated, the origin of the Common School Fund was that in 1841 an Act was passed providing for the establishment of "a permanent fund to consist of such monoys as may accrue from the sale or lease of any lands which, by Legislature or any other com- petent authority, may hereafter be granted or set apart for the en- dowment, maintenance and support of Common Schools and of cer- tain other moneys." The division of the fund between Upper and Lower Canada was to be made l^y the Superintendent of Education. This was amended fn ^843 by 7 Vict., chap. 9, which provi 3,000 00 $470,883 89 Common Schooj. Fdnd :— Collections by Dominion 1,520,950 24 Collections by Ontario, paid over to the Dominion in 1889 and 1890, after deducting Land Improvement Fund and 6 per cent, for collections 936,729 10 2,758,135 15 Ontario's share according to population, 1891 3. Bank Balances : — Current Accounts Special Accounts. $2,457,679 34 1,441,882 90 4,200,018 05 87,580 89 350,000 00 - 437,580 89 $5,108,482 83 41 LIABILITIES OF THE PROVINCE AT PRESENT PAYABLE. 1.— Balance Due to MrNioiPALiTiES re Surplus Distribution 51,-91 dU 2.— Land Improvement Fund :— Balance du< to Municipalities under 45 Vict. C ip. 3 and 49 Vict. Cap. 6. . . . S3, 256 57 Bala,n(;e due to Municipalities under 54 vi-on..« _i;'^^ „,„,,,, 3.-QrEBEc's Shark of Collections by Ontario on Account of Common School Lands in 1890-91-92-93- 94-95:— Collection on lands sold between the 11th June, 1853, and 6th March, 1861 $55,3r.6 55 Leas 6 per cent, cost of management 3,,321 39 52,035 16 Leas •ue-juarter for Land Improvement Kund ^13^0,S^9 $39,026 37 CoUecti'^ns on lands sold since 6th March, 1S61 1.^578 17 Less 6 unr cent, cost of management 934 69 14,643 48 $53,669 85 Quebec's proportion according to popu- iation.1891 _!!:!!_!! Total ^29^02^ S-^rnlus o* asw*;p .niter deducving Liabili- Ues present's nayabie ■ ii^^^lgQJ:^ We hold drainage and other debentures to the amount of $470,883. These are for the most part, of course, municipial debentures, and can be readily sold at a premium. I place the item of capital held in trust for us by the Dominion at the same figure as last year, viz., $2,768,00^ T can speak more positively of the item than I could a year ago. ': h^> item of $2,000,000 is, as stated only an estimate ■ 42 In the light of the arbitration proceedings I can safely say that $2,000,000 is not an excessive figure. There can be no doubt what- ever as to the amount of our interest in the Common School Fund being at least as large as the figure stated. It may be found that I have considerably understated our assets in this schedule. My total, therefore, of $5,108,482 will not be questioned. The liabilities, amounting to $29,502. similar in character to those of other years, need no explanation. After deducting these liabilities we have, therefore, a ver)- substantial and real surplus of $5,078,980. Honorable members will be plep ,dd to observe that at the end of the year we had at our credit in the banks a comfortable cash balance of $437,580. Estimated Expenditure FOR ''9^, A very brief reference^ Sir, to the current year j ynditures will suffice, since more extended reference will be made to them when we reach the Committee stage. We ask for authority to expend $3,483,000. Deducting the exceptional item of $40,000, which the Attorney-General asks for statute consolidation, and this item appears but once in ten years, we have as our estimate for the expenditures of 189G a sum very little in excess of the estimate of last year. Compared with last year the votes we ask for Legislation and Public Institutions mainten- ance remain practically the same, while those for Civil Government, Agriculture, Education and Administration of Justice are increased. We invariably keep well within thu fsti mates. For example, we spent in 1893 $200,041, in 1891 6150,741 and in 1895 t22,G62 less than was voted. ESTIMATED RECEIPTS, 189G. Subsidy.. $1,196,872 80 Interest on Capital held, and Debts due by the Dominion to Ontario $262,000 00 Interest on Investments 40,000 00 302,000 M 43 Crowx Lands Department :— Crown Lands Clergy Lands Common School Lands, (rrammar School Lands Woods an. I Forests . , . ? 55,000 00 5,000 '30 13,000 00 2,000 00 725,000 00 Public Institi noxs :- Toronto Lunatic Asylum S 39,000 00 London Kingston Hamilton Mimieo Brockville Orillia Reformatory for Females . Boys Central Prison 12,500 00 6.500 00 12,000 00 2,500 00 1,200 00 3,400 00 3,500 OC oOO 00 20,000 00 Education Department Casual Revenue Succession Duties Tavern Licenses Brewers' '' Law Stamps Algoma Taxes Assessments, Drainage Works .... " Insurance Companies •• Removal of Patients 800,000 00 101,100 00 5C,000 00 80,000 00 200,000 00 270,000 00 20,000 00 80,000 00 3,000 00 10,000 00 3,000 00 t;,ooo 00 Total 83,121,972 80 We estimate our receipts for the current year at §3,122,000. We place Grown lauds at $800,000, licenses at $290,000 and succes- sion duties at $200,000. Our total estimate will, I am .sure, prove to be a moderate one, and, as in the past, so in 180G, the actual receipts will be found to exceed the estimate. We commence the year, as I have said, with a cash credit balance in the banks of f 437,580, to that we can safely expect from the receipts of the year to be able to provide efficiently for all our varied needs. I ask honorable members to discuss our finances with fairness, and in a spirit, devoid of partizanship. I am well convinced that honor- 44 able gentlemen sitting opposite to me, irrespective of party, in their hearts believe, as we do who sit on this side of the House, that the Attorney-Genoral, who leads this House, has always most conscien- tiously done everything which possibly could be done to secure for this Province economical and efficient administration, and that he is as anxious, and that he has always been as anxious, as they them- selves possibly could be to avoid even the appearance of waste or extravagance. His signal and unvaried success for so many years in securing the one and avoiding the other has won for him over and over again the confidence and esteem of our people. Some one has said that economy in a public sense, at any rate, is a lost art, and there is good reason to fear that there is, generally speaking, much truth in this observation. However that may be, we in this Legislature may well congratulate ourselves that the spirit of true and enlightened economy still survives, and bids fair long to survive, in the Province of Ontario. (Applause.) 45 APPENDIX. Statement showing amounts payable annually for Certificates, issued by the Treasurer of the Province of Ontario, for " Aid to Rail vays " and " Annuities." \ Year. 1896.. 1897.. 1898.. 1899.. 1900.. 1901 . . 1902.. 1903.. 1904.. 1905.. 1906.. 1907.. 1908.. 1909 . . 1910 . , 1911. 1912 . 1913. 1914. 1915. Railway Aid Certificates. A.nnuities. Year. 159,157 52 138,605 66 110,092 66 95,660 27 89,587 26 57,781 85 41,624 25 33,l.-)6 57 .32,741 28 32,741 2S 32,741 28 32,741 28 32,741 28 32,741 28 32,741 28 32,741 28 32,741 28 32,741 28 32,741 28 32,741 28 c. 82,200 00 82,200 00 82,200 00 82,200 00 82,200 00 i 82,200 00 82,200 00 82,200 00 82,200 00 82,200 CO 82,200 00 82,200 00 Forward Forward 1,1)8,561 40 82,200 00 : 82,200 00 82,200 00 : 82,200 00 82,200 00 82,200 00 82,200 00 82,200 00 1,644,000 00| 1 1916.... 1917..., 1918..., |1919... ;i920... il921... |1922... !l!l23... 1924... ,1925... 1926... 1927... 1928 . . . 1929... 1930... 1931 . . . 1932... 19.33 . . . 1934... 1935... Railway Aid Certificates. Annuitie.«. !5 c. 1,118,561 40 32.741 28 32,741 28 32,741 28 32,741 28 32,741 28 1 32,741 28 1 32,741 281 32,741 28 1 32,741 281 32,741 28; 32,7- !. 28 32,7' 1 28 32,741 28 32,741 28 32,041 68 28,543 68 ' 21,547 68 I 18,749 28 16,650 48 4,757 28 Totals . . . . 1,644,000 00 82,200 00 82,200 00 82,200 llO 82,200 (.0 82.200 CO 82, 200 "00 82,200 00 82,200 00 75,500 00 61,800 00 48,6.n0 00 36,2" 00 30,000 00 30.ooa 00 30,000 00 23,000 00 12,000 00 S,000 00 8.000 00 4,000 00 1,699,229 40, 2,668,800 00 JVo<«.— Present value of Railway Certificates— (interest 2g per cent. half-yearly) $1,298,376 89 Present value of Annuities— (interest 2i per cent, half-yearly) 1,435,774 31 C. H. SPROULE, Provincial Auditor. Provincial Auditor's Office, Toronto, February 19th, 18?G, i