City of Winnipeg won’t appeal court decision ordering repayment of millions in development fees

By | July 15, 2020

The City of Winnipeg won’t appeal a recent court decision on growth fees that will see millions of dollars flow from city coffers back to developers, builders and homeowners.

Mayor Brian Bowman said Wednesday that though there are legal grounds to do so, the city won’t appeal the ruling. He said he won’t sign off on appeal after reviewing the decision with city council members.

In his 119-page written decision last Wednesday, Court of Queen’s Bench Justice James Edmond found what the city called impact fees to be “a constitutionally invalid indirect tax.” 

He ordered the city to return all fees, plus interest, it has collected since the impact fee framework was imposed in 2017.

As of February this year, the city had collected upwards of $30 million from the development of new housing subdivisions, mostly at the fringes of the city.

Bowman had pushed for the creation of the revenue-generating tool since he was first elected in 2014 as a way of covering the rising costs of suburban sprawl.

Revenue from the fees was meant to help offset costs of public infrastructure projects in new areas — fire halls, sewers, water mains and more.

In 2017, the city started charging the fees on budding residential developments, which added about $500 for every 100 square feet in new builds in several growing neighbourhoods, including Bridgwater and Waverley West.

These townhouses at Waverley Pointe, which were subject to growth fees, were under construction in 2018. (Holly Caruk/CBC)

The move was met with resistance from some councillors and industry early on. It set off a legal debate in 2017, when the Urban Development Institute and Manitoba Home Builders’ Association took the city to court. 

The president of the latter organization said he was encouraged by the mayor’s comments Wednesday.

“We’ve indicated to the mayor that we are ready and willing to work with the city in terms of finding a cost-sharing mechanism that works … for industry and that works for the city, and will help us collectively move forward and grow the city in a sustainable way,” said Lanny McInnes.

The legal decision seemed to be a victory for industry, but the mayor has claimed a couple wins for himself. 

Bowman said Wednesday Justice Edmond’s decision showed growth isn’t paying for growth in Winnipeg.

The City of Winnipeg lost a court decision last week ordering it to return upwards of $30 million, plus interest, it had collected through impact fees since 2017. (CBC)

The decision also found it was reasonable for the city to believe it could impose impact fees on developers, based on council’s authority through the City of Winnipeg Charter, which is provincial legislation — but not in the way the existing impact fee bylaw was written. 

Bowman said the city will revisit and address the bylaw issues Edmond raised, and he hopes to work with developers on a way forward.

“[I’d] like to see us around a boardroom, not a courtroom,” the mayor said.

The Manitoba Home Builders’ Association wants that, too, said McInnes, but he also hopes the path ahead doesn’t involve a renewed impact fee.

“Our concern would be to go down that road again,” he said. “Our hope is that rather than looking at or attempting to tweak the failed impact fee bylaw, that he will meet with us sit down with us work with us to develop a solution.”

The association and other industry partners are expected to meet with their legal teams to review the decision in detail this week.

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