Bowman claims some victories after court rules against Winnipeg's development fees

Mayor Brian Bowman says a court decision that quashed the collection of impact fees from developers and homebuyers in new Winnipeg suburbs actually sets precedents in favour of the city.

On Wednesday, Court of Queen's Bench Justice James Edmond ordered the city to refund approximately $30 million collected in fees, calling the bylaw that created them a "constitutionally invalid indirect tax."

Bowman acknowledged the judge ruled against the city on how it imposed the fees through its bylaw — but didn't say the city doesn't have the right to do so.

Winnipeg's mayor says the judgment was also a victory in the city's effort to make "growth pay for the cost of growth."

"[It is] a precedent-setting judicial decision that confirms our legal authority to impose an impact fee … as well as confirming growth is not covering the cost of growth — something some have argued for many many years," Bowman told reporters Thursday afternoon.

Bowman says that will bring some relief to residents who feel they are paying for an unfair share of the city's expansion.

"For those property owners who have felt that they have been unfairly subsidizing the cost for suburban sprawl, this decision does provide a roadmap forward and some light at the end of the tunnel for existing homeowners," Bowman said.

'Premature' to speak of refunds

Bowman pushed for years to bring in what the city called an "impact fee" to help pay for infrastructure projects in new areas of the city.

Winnipeg began charging the fee on new residential developments — about $500 for every 100 square feet — in several neighbourhoods at the fringes of the city in 2017. The Urban Development Institute and the Manitoba Home Builders' Association launched a legal fight against the fees that year.

In his decision, Justice Edmond said 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 Edmond ultimately sided with the developers and ordered the city to refund the millions of dollars it collected through the fees — plus whatever interest developed while the money was kept in a reserve fund.

He also agreed with the city's position that more costs should be covered by homeowners and business that directly benefit from growth in the city.

But he found that the fees weren't focused on regulating development or growth, but were "aimed at raising revenues to support the operations and infrastructure of the city as a whole."

He ordered the city to refund the money it recouped through the fees, along with interest developed while the money was kept in a city reserve fund.

Michael Jack, the city's chief corporate services officer, says in a demonstration of good faith, the city suspended the collection of the impact fees this morning.

But Jack said it is "premature at this stage to speak of refunds" to developers or home owners.

Both Jack and Bowman say the city is examining the judgment closely, and would not make any statements on whether there will be an appeal or whether the bylaw could be rewritten.

Bowman was asked who should be held responsible for how the bylaw was written, which appears to have been a significant part of why the judge ruled the city had imposed an "invalid" tax on developers.

"Ultimately council approved the bylaw … and [it was] council's decision to introduce an impact fee, as well as take the position that growth wasn't paying for growth," Bowman said.

Bowman says much of the difficulty around creating a fee that is clear and works for all parties could be resolved if the provincial government amended legislation and allowed the city to have those powers.

That's a power Bowman says many municipalities already have around the country, and in the capital region around Winnipeg.