Canada's most ungrateful tax: The Chinese 'head' tax
From Tax Me I'm Canadian by Mark Milke and the staff of the Canadian Taxpayers Federation
There are a few things more ugly than ungratefulness. In 1885, after the completion of the Canadian Pacific Railway across Canada, and to the British Columbia where that portion was built mainly by Chinese labourers, thousands of whom died in the process, the Canadian government passed the Canadian Immigration Act.
The Act stipulated that most Chinese immigrants must pay a "capitation tax" before being granted the right to disembark. Certain occupational groups such as merchants and clergy were exempted (and later, teachers) but the "Chinese head tax," as it is more commonly known, was set at $50 in 1885, raised to $100 in 1890, and to $500 in 1903. Given the exemptions, it was mostly labourers who paid the head tax.
To understand how costly that was to workers of that period, a labourer in 1885 worked an average of 60 hours a week for an annual salary of $290. By 1905 when the tax bill was $500, the average annual earnings of a production worker in Canada were $375. So, depending on the year, the head tax was equivalent to between two months' and 16 months' worth of an average labourer's salary.
The effect of the federal legislation was to restrict the flow of Chinese immigrants - not to exclude them entirely but even that restriction was not enough for some. At the time, labour leaders and politicians in B.C. lobbied repeatedly for the full exclusion of the Chinese, sentiments they said were grounded in "concern" over competition for jobs, but stark racism was also, clearly a factor in the late 19th century. From the inception of the Act in 1885 until 1923, over 82 000 Chinese, mostly male, paid the tax, which contributed $18 million to federal coffers. A worse law -- the Chinese Exclusion Act -- that completely banned the entry of Chinese immigrants then replaced the earlier 1885 legislation.
In addition to the federal tax the British Columbia government also instituted a "Chinese tax" which collected over $7.7 million. The money was not insubstatntial, either for those forced to pay it or for the government that collected it. At its revenue peak in British Columbia, the provincial tax brought in over $1.7 million in 1913 -- or about 18% of the total $9.6 million in provincial revenues that year. The provincial "Chinese tax" was the third largest revenue source behind mainly timber royalties (31%) and the sale of timber and land (24%).
In addition to the obvious discrimination, the head taxes were tragic in other ways. The demographics of the Chinese who entered Canada (mostly male) meant there were limited opportunities for marriage given the relatively few single Chinese women (And the almost complete absence of interracial marriage). The high cost of the head tax also meant that many who were already married could not afford to send for their spouses.
Various Chinese associations have long pressed for redress and repayment through the courts and through Parliament, but the legal claim was rejected by the Ontario Superior Court in 2001 on the grounds that the 1982 constitution could not be applied retroactively. The judge did note that there was certainly no question about the inherent facism of the 1885 legislation.
Parliament could not refund the tax to Chinese descendants, but this brings up a dimlemma for today's taxpayers. To refund a voluntary tax, even one as offensive as the Chinese head tax which began in 1885 and ended nearly 8 decades ago, could open a Pandora's box where today's taxpayers might be required to compensate many for the sins of politicians of generations ago. And many of today's immigrants would pay for the policies enacted long before they or their ancestors arrived in Canada, some with equally tragic histories from the countries they fled.
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