Development tax for new homes proposed for Winnipeg

It could cost thousands of dollars more to build new homes in Winnipeg if city council approves a new development tax, but at least one councillor already opposes the idea.

Senior city officials pitched the idea of introducing a one-time development fee for new houses — one that could add between $5,000 to $12,000 to the final bill, according to numbers floated by the mayor and some councillors.

Coun. Scott Fielding says a development tax would prompt new homeowners to leave Winnipeg and settle in communities just outside the city.

"I think that it's a new tax. Whether you put $10,000 or $12,000 on a new home-build is something that, I think, will hinder some development here in the city of Winnipeg," he said Monday.

"What you could hear is a giant sucking sound of people and investment dollars going outside the city of Winnipeg."

According to City of Winnipeg officials, most major cities in Canada are charging some kind of "growth development charge" to fund new infrastructure, or additions to existing infrastructure, related to new developments.

"You have to support growth, and trying to support from property taxes is not sustainable. That's why we have such a huge infrastructure deficit," said Mayor Sam Katz.

Staff say people building homes in new neighbourhoods need city infrastructure to expand — like transit, libraries and recreational facilities — in order to reach them.

"The philosophy behind a Growth Development Charge (GDC) is that growth should pay for its share of providing growth-related infrastructure. Without growth being present, this cost would not arise," the city stated in a news release.

But the Manitoba Home Builders' Association says it hopes the city doesn't go ahead with a development tax.

"When one looks at what's the fair share, I would contend already we pay our fair share," said Mike Moore, the association's president.

Moore says developers already foot the bill for everything from parks, water and sewer, streets, lighting and other utility connections.

The Manitoba government would have to approve any new development charge.

In an email, a provincial government spokesperson told CBC News that officials are "not looking at any changes to the Winnipeg Charter that would introduce new fees or levies."