City of Winnipeg ordered by court to refund close to $30M in impact fees
WINNIPEG -- The City of Winnipeg has been ordered by the court to refund millions of dollars in impact fees to developers and builders.
On Wednesday, Court of Queen's Bench Justice James Edmond handed down his 119-page decision on the controversial impact fees which have been in effect since 2017.
Impact fees imposed a development charge on developers and builders of $54.73 per square metre of floor area.
Mayor Brian Bowman pushed for the development charge, arguing the new communities were not covering the costs of related infrastructure and services.
The Manitoba Home Builders' Association, along with several other development companies, questioned if the city had the legal authority to impose impact fees.
In his decision, Edmond writes that the bylaw and resolution regarding the impact fees "imposes a constitutionally invalid indirect tax and is not saved as a valid user fee or regulatory charge."
Edmond wrote in his decision that the city is now required to refund impact fees to the developers and builders that paid the fees together, along with any interest earned on the funds while they were deposited in the city's Reserve Fund.
Those developers and builders must in turn pass it on to those homeowners who paid the charge.
As of the end of 2019, the city has collected $29.7 million of impact fee revenue.
"I really think that this is representative of a lot of things that we have seen at City Hall," said Coun. Janice Lukes.
Money from the fund was earmarked to help pay for a new firehall in Waverley West. Lukes, the area councillor, voted against the impact fee’s implementation.
She told CTV News, she’s been assured the court decision won’t impact the plan for a station.
"If the impact fees weren't available, the city would take out debt to fund the fire hall," she said.
In a statement to CTV News, a spokesperson for the City of Winnipeg said the city just received the decision Wednesday afternoon.
"We are disappointed in the decision, but will need to take more time to review the decision and consider our next steps," the statement reads.
Mike Moore, the former president of the Manitoba Homebuilders' Association, told CTV News the decision comes with a sense of relief after three years of legal battles.
"The whole court application was really about seeking clarity about the city's authority to implement this fee, and today we received that clarity," Moore said.
"The work is really just beginning – we've got the clarity, now it's time to do the work."
Moore said both parties are now going to have to sit down and make sure they understand all aspects of the decision.
"This is about fairness and a clear process, and there is obviously – as we saw – a gap in the planning process, but we all need to work together," he said. "This is not a 'this side won, this side lost, and that's the end of it' – not at all."