On Oct. 26, city council approved the implementation of a growth fee bylaw after receiving several presentations by the consulting firm Hemson.
This bylaw states that new development is charged a fee to cover costs of additional infrastructure required to maintain the development. The council passed it by 10 votes to six. These fees are already in effect in most municipalities in Canada, with the exception of Montreal and Quebec.
Jason Bevan, a registered professional planner with Hemson consulting, says the current process is a bit abnormal.
“The situation in Winnipeg is such that property taxes have historically, over the last 15 years or so, been paying for both new infrastructure and existing infrastructure,” Bevan says. “That existing infrastructure as we all know by reading in the press (is facing a) backlog. Other communities (which use growth fees) can better focus their taxes on existing infrastructure.”
In Canadian cities other than Winnipeg, these growth fees are used to pay for the infrastructure new developments require, such as roads, water and and sewer mains, and amenities such as community centres.
Property taxes then cover the cost of maintenance and replacement of these infrastructures. In Winnipeg, property taxes are used to pay for the new infrastructure as well as the maintenance and replacement of existing infrastructure.
Several members of the development community are challenging the vote and intend to take legal action against the city. John Stefaniuk, the legal representative of the Manitoba Home Builders’ Association (MHBA), believes the City of Winnipeg Charter does not grant the city the authority to impose these fees.
The president of the MHBA, Mike Moore, also claims the fees were arbitrary.
“Our contention is that growth does pay for growth,” Moore says. “New homeowners, as in homeowners of new homes, more than pay their fair share as it relates to their contributions to city coffers. Placing an arbitrary fee or tax based on the lack of proper attribution and cost sharing … would not be acceptable without a proper plan.”
He points to a report done by MNP LLP, an accountancy and business advisory firm, where errors were found in the fee attributions.
The report states that the information on which Hemson built their report were based on developments, which were not approved by council, that had already been completed or were said to cost more than the approved budget. Moore also says the city does not have a concrete plan to move forward.
Bevan says there was nothing done in the Winnipeg study that was different than what was done in any other communities.
“It is common to include prior projects in a growth fees calculation,” Bevan says. “There are cases where we’d agree with the building community, where a project should have been completed a few years ago, and deductions in calculations have been done. We won’t charge future growth for the fact that there wasn’t funding for past projects. Typically, those deductions would not be done in past studies.”