Manitoba builders win fee battle

July 21, 2020

This July Manitoba home builders won a major court victory as the City of Winnipeg was ordered to repay millions of dollars in “impact fees” to residential developers.
The impact fee came into effect in May 2017. It imposed a development cost charge of $54.73 per square metre of floor area (about $5 per square feet), payable when the builder takes out a building or development permit. The fee applied to most new home building in the city.
The legal battle was launched in 2017 when the Manitoba Home Builders’ Association (MHBA) and the Urban Development Institute’s Manitoba Chapter filed affidavits with the Manitoba Court of Queen’s Bench to review of the city’s impact fee bylaw. Developers Ladco, Ridgewood West Land Corp. and Sage Creek Development Corp. were also involved in challenging the fees.
The builders argued fees were invalid on the grounds that the City of Winnipeg Charter did not provide the City the authority to enact it. The application also stated the bylaw was an indirect tax on Winnipeg homebuyers and that it is discriminatory in its collection of the impact fee.
The court agreed.
Justice James Edmond stated in his July 8 decision: “The bylaw and resolution imposes a constitutionally invalid indirect tax and is not saved as a valid user fee or regulatory charge.”
Edmond ordered the City to refund the $29.7 million in impact fees it had collected as of the end of 2019—with interest.