Winnipeg's growth fees will 'probably end up at the Supreme Court'

A non-practising lawyer who's part of Mayor Brian Bowman's inner circle says a legal challenge of Winnipeg's new growth fees will probably wind up before the Supreme Court of Canada.

St. Vital Coun. Brian Mayes said while he believes the City of Winnipeg has the authority to implement the growth fees council approved last week, he doesn't blame developers planning to mount a court challenge.

"I think we have a strong case. I don't blame the developers for saying they want to go to court to test it out," Mayes said Monday at city hall. 

"I don't think this a slam dunk by any means for the developers. Is it a slam dunk for us? You never know. You go to court, you never know who you're going to get and it'll probably end up at the Supreme Court."

• Council approves growth fees in the face of legal threats from developers

​On Oct. 26, council voted 10-6 to approve a bylaw that would allow Winnipeg to apply fees to new residential developments in specified areas of the city starting on May 1, 2017. The charges amount to roughly $500 for every 100 square feet of new residential space.

Developers vowed to challenge the bylaw. Mike Moore of the Manitoba Home Builders Association said his legal counsel, John Stefaniuk, has determined the city does not have the authority to impose the fees.

When Sam Katz was Winnipeg's mayor, city officials took the same stance, opining the province would have to amend the City of Winnipeg Charter before the city can impose growth fees.

Senior officials now claim the charter does in fact allow the city to collect those fees. Communications manager David Driedger said the city determined it has the authority after conducting a legal review of court cases involving government fees.

"More recent judicial interpretation of the powers of governments to impose fees has demonstrated a greater willingness to recognize the legitimacy of fees to defray the costs of comprehensive regulatory systems, broadly defined," Driedger said in a statement issued on Friday.

'It's a fair strategy'

The section of the charter governing fees gives the city authority to impose what it now calls "impact fees," he added.

"This authority is separate and distinct from any power to impose development cost charges through planning legislation," he said, adding "it does not depend on the province to make any legislative changes or to provide any approvals."

Premier Brian Pallister has said he has obtained differing opinions about the city's ability to impose the fees.

Mayes, who describes himself as a "non-practising lawyer," said he conducted his own review of the legal precedent and believes the city is on strong footing because it does not plan to funnel the proceeds of the new fees — expected to be $7 million to $10 million in 2017 — into general revenues.

"If you take the dough and you put it into general revenue, that is a tax. If you take the fees and you implement them in accordance with a complex regulatory scheme, then that is an acceptable fee," Mayes said.

"We are implementing a fee in conjunction with a regulatory scheme. We aren't just taking the money and spending it on gravel lanes or pension payments."

Mayes said he's not concerned Winnipeg may lose a court challenge, given the relatively modest amount of revenue at stake and the fact it takes years for cases to wind up before the Supreme Court.

"I would challenge it if I were the developers. I think it's a fair strategy. I don't fault them for that," he said.

Mayes also expressed mystification the city has declined requests for interviews about its legal basis for imposing growth fees. Chief operating officer Michael Jack and chief administrative officer Doug McNeil also refused to speak to reporters about the issue on Thursday.

"I think people get concerned here we might be giving away our legal strategy. To me, that seems a little odd. The cases are out there," Mayes said. "I don't think there's any great strategic advantage in holding back."