Winnipeg Growth Fees Update

What is Happening with Growth Fees around Winnipeg?

Mayor Brian BowmanThe buzz circulating about the growth fees around Winnipeg continue to increase. There is plenty of misinformation out there too and people are afraid. Others are angry because of how they believe it will affect their business. These businesses and consumers have a significant ally on their side. The Manitoba Home Builders Association plans to file a challenge against these growth fees.

They are taking on the City of Winnipeg and it has created quite a division among residents. Some feel the development industry and Mayor Bowman are finally getting what they deserve and it is time to get them taken care of. It is time to show them this this growth fee isn’t accepted or necessary.

Ongoing Debate

In October of 2016, the City Council of Winnipeg voted in favour (10 to 6) for this growth fee. The favourably vote means for every 100 square feet of new residential space, there would be a fee of $500 imposed. This would apply to various sections of Winnipeg, with the start date for the fees being May 1st of 2017. The City of Winnipeg believes such fees are necessary to help with the payments for the infrastructure to be enhanced around Winnipeg.

According to their sources, the area has grown, and that is very encouraging. Yet it has grown beyond its means and they are concerned it will reduce the quality of life, the value of homes, and the ability to encourage new businesses to the area. The plan is to take these growth fees and use them to enhance selected elements around Winnipeg.

In various discussions and public forum meetings, the City of Winnipeg Council has stated the money generated from the growth fees will be used to create offices, commercial areas, to expand industrial businesses, and for new institutional businesses to be introduced. This is how they funds would be dispersed into 2018.

The plan for 2019 would be expanded to also use the funds to help develop the older neighbourhoods around Winnipeg so they wouldn’t appear ran down and their values could increase. The main focus of this facelift would be the downtown Winnipeg area.

Opposition in Force

The City Council has faced forceful opposition to the growth fees since it was first introduced. The biggest area of opposition stems from the collaborative efforts of several well-known developers in the area. One of them is Qualico who is a high-profile entity in this area of Manitoba. The developers informed the City Council from the very start they would challenge them on the growth fees.

The don’t believe the City Council has a right or the legal authority to add those fees and mandate they are paid. They also don’t feel the City Council has the legal right to mandate how those funds would be spent. After the vote was completed and unanimously in favour of the growth fees, the Manitoba Home Builders Association wasted no time getting a legal challenge in place.

Legal Challenge Position

Thomas Dorfman Sweatman, LLP, was hired to take on the legal aspects of this challenge. It is focused on three key areas. First, it states the City Council continued with the growth fee in spite of the information and opposition from the various developers in the Winnipeg area. This challenge is expected to start unfolding in the early part of 2017.

The filing of the challenge is the first course of action, and it is being done in the very near future. Some believe it will be done no later than next week. Developers have several arguments the would like to express as they oppose these fees. First, they have sent a detailed report to the City Council stating that what they are doing is very different than other cities around Canada.

In those other areas, there is legislation that offers very specific authority relating to the planning and implementation of such costs and how they will be used. They don’t believe the City Council should have the authority to charge the fees and that they are quite different from the typical zoning regulatory fees.

With this in place, they plan to be able to prove the growth fees are illegal. They plan to prove the City of Manitoba doesn’t have any legal right or authority to impose such a fee and it needs to be done with.

City of Winnipeg Position

The previous Mayor was Sam Katz, and he is said to be one of the people that started the concept of this growth fee. He had posed questions about the ability of the City of Winnipeg to legally impose such fees. They were trying to get permission from the province to be able to get those fees in place.

Katz was denied that by the NDP government, led by Greg Selinger. They stated there was no interest in backing this because they felt Winnipeg already had enough methods of taxing that it didn’t need to implement this method as well. When Bowman took over as Mayor, he decided to take another look at it and to try to justify whey the growth fees were necessary.

He was successfully able to persuade enough of the City Council that it was a good way to generate money for the various projects they needed revenue to proceed with. The proposal he gave to them stated it was important for Winnipeg to continue to grow both in an orderly fashion and in a safe manner.

The language in the proposal though is quite broad, and it states the City Council is able to do what they feel is appropriate in an effort to help take care of any current and future issues that may arise in the Winnipeg area. In this regard, they feel these growth fees are really the same as zoning fees and regulations, including building codes. All of them are used to help grow a city in an orderly fashion.

Future of the Growth Fee

Many wonder where Brian Pallister stands on all of this. When the Manitoba Premier first took office, he was speaking out about the City of Manitoba and this growth fee. He also stated he planned to look into the legality of the process. However, he later stated those results were inconclusive about them being legal or not.

Once that information was shared, Pallister has stayed quiet on the issue. He doesn’t want to be involved with any comments or decisions that have to do with this plan being approved and legal or being illegal and removed. It isn’t likely the providence is going to get involved with the challenge or the legal elements of this case. However, they are definitely going to keep their eye on the outcome of this intense legal battle.

Many of the experts believe this issue regarding the growth fees in Winnipeg will have to be decided in the Supreme Court. The battle is going to be a lengthy one with both sides very passionate about their position on the issue. There is no doubt the city is in dire need of money to take care of certain projects, needs, and upgrades. Yet the question remains if the Mayor and the City Council has the authority legally to impose obtaining it in this particular manner.

It is important to point out the growth fee plan wasn’t created by any of the Winnipeg city planners. Instead, it was the creation of their financial team. If the city was to win this, it would make the urban planning element virtually useless. Many worry about how the funds would actually be used.

This is based on the fact that Winnipeg has a history of not sticking to the plans and goals set in motion. For example, there is no downtown dog park which was promised. The Mayor also implemented a plan for getting Portage and Main open again for pedestrians but that still hasn’t happened. For many, his credibility isn’t something they feel they can count on.

What would be in place to ensure the money went to the projects that needed it the most? Who would determine those priorities, oversee the allocation of funds, and verify the work was done up to code? The plan doesn’t seem to address these very important issues and that has many worried.

While there are other cities out there with growth fees, they are considerably less the what the City Council in Winnipeg agreed upon. Those other cities use the funds for development and not in an effort to increase overall revenues. As a result, the plan could backfire if the City of Winnipeg wins the case.

Many experts believe this would cause their overall profit margins to actually be less than they are now. This is because of the loophole where more of the development would actually be taking place outside of the city limits, thus being outside of the area for the growth fee to be imposed.