Premier Pallister raises red flags over Winnipeg's proposed growth fees

Premier Brian Pallister warns Winnipeg may be unaware of the consequences of the growth fees Mayor Brian Bowman intends to begin charging as soon as New Year's Day.

Winnipeg's proposed growth fees will put Manitoba at a competitive disadvantage, the premier suggested as he advised his municipal counterpart to look within to manage his government's finances.

"Our competitive tax environment matters when it comes to achieving attractive new investment, whether it's in capital or it's skill development," Pallister told reporters at the Manitoba Legislature on Tuesday.

City council is considering a plan to institute "impact fees" that would add $18,300 to the cost of a new 1,800-square-foot home on Jan. 1. The proposal is slated to come before council's executive policy committee (EPC) Wednesday morning.

• Growth fees coming to Winnipeg on Jan. 1, pending council approval

• ANALYSIS: For Brian Bowman, it's growth fees or bust

Pallister said those fees would be new taxes. He urged Bowman to find ways to cut Winnipeg's costs instead, noting the province is facing difficult financial decisions of its own.

"I mean no disrespect whatsoever to the mayor or his administration, but it would be inconsistent for me to suggest it is not in the realm of possibility for the city to find savings in other areas rather than going to a new fee or tax," Pallister said.

The premier also said Winnipeg may not appreciate how new fees will affect new developments as well as the affordability of new homes.

"When I see the potential consequences of development moving from certain parts of our city to other parts as a result of this, that also concerns me. And when I see the potential for development moving out of our capital region and moving somewhere else, that also concerns me," Pallister said.

While the Pallister government has expressed little enthusiasm for Winnipeg growth fees before — just last week, Indigenous and Municipal Relations Minister Eileen Clarke said the province is reviewing the legality of the proposed charges — the premier's comments on Tuesday amount to the strongest condemnation of the mayor's plan to find another means of financing new municipal infrastructure.

Winnipeg's development and construction industry, as well as some city councillors, have also criticized the speed at which the city appears to be planning to bring in the new fees. Bowman said last week he is prepared to ask EPC to put off approving the fees until more consultations take place and amendments to the plan are made.

For example, the mayor said he would like to see some means of promoting infill development in Winnipeg instead of applying the fees to all areas of the city like a blanket.

Correspondence obtained by CBC Manitoba reveals Winnipeg planning, property and development director John Kiernan criticized that aspect of the plan in August and said it wasn't consistent with Our Winnipeg, the city's long-term planning framework.

On Tuesday, Kiernan said the firm Hemson Consulting came up with that plan and suggested it may be replaced with a "more nuanced" version after further review and more consultations.