If the Doer government follows Martin Hak's recommendations, annual land rental rates for thousands of cottage lots across the province could jump as much as 500 per cent, bringing the province several million dollars in new revenue.
Cottagers in provincial parks have been preparing for a significant increase, but will fight to have it phased in slowly.
In a report released yesterday, Hak said cottage lots on Hecla Island were worth about $38,000 in 1997, but cottage owners are still being charged four per cent of the 1981 appraised value of $7,500. Using the latest appraisal could send annual rents skyrocketing from $300 to $1,520.
The situation is similar in many provincial parks, where most of the province's 6,000 cottage lots are charged rents of four per cent of the 1981 appraised value.
Hak's recommendation comes after a hard-hitting report last fall from provincial auditor Jon Singleton on Hecla land deals, which involved allegations of fraud and conflict of interest by some islanders who may have acquired the Crown-owned cottage lots inappropriately.
Hak acknowledged yesterday any increase in fees would be unpopular with cottage owners who may have bought their lots expecting rental fees to remain relatively stable. But he said it's a question of the province managing its assets for the benefit of all taxpayers instead of giving cottagers in parks a much better deal than cottage owners would get outside a park, where municipal taxes apply.
"That's the conundrum. If you're a taxpayer who doesn't own a cottage, you would expect the government to be dealing with its assets on either a fair market value basis or a clear policy basis as to why they're charging less than fair market value."
Conservation Minister Stan Struthers said yesterday he is not prepared to make a decision on cottage lot rents until more progress has been made on setting up a new Crown lands agency. The agency was announced in response to the auditor's scathing report on the Hecla deals.
Struthers said it could be another year before the special operating agency has consolidated all the functions now spread among several departments.
The Doer government will be under pressure to resolve the issue before it follows through on plans to open another 1,000 cottage lots.
"They want to be able to have blue-collar workers afford a summer home," said Doug Neal, president of the Manitoba Association of Cottage Owners.
If rental fees escalate, "only rich people will be able to afford a summer home," he said.
Jack McRobie, president of the Whiteshell Cottagers Association, said this is not the first rumbling his group has heard about hiking rental fees.
He said it would be a nightmare for the province to appraise every cottage lot, but each one is unique.
If the province wants to increase the raw land value, it should decrease the percentage charged and then work back up slowly, McRobie said.
Conservative MLA Glen Cummings said there might be arguments for reviewing rental fees, but "let's not encourage the government to make a cash grab out of it."
McRobie said the province seems to be putting less money back into parks than it used to, so cottagers are getting fewer services for their money. He said park cottagers do not get municipal services like garbage collection and fire protection that other cottagers get for their municipal taxes.