Growth fees would stifle city

Hey there, time traveller!
This article was published 27/06/2016 (3676 days ago), so information in it may no longer be current.

As part of the recent Federation of Canadian Municipalities conference in Winnipeg, Mayor Brian Bowman and Calgary Mayor Naheed Nenshi conducted a series of interviews in which the subject of growth fees was front and centre.

Both indicated strong support for this new form of taxation, in addition to advocating for a new funding model from the provincial government.

Bowman reiterated his belief new growth does not pay its fair share, and Nenshi spoke of development charges recently implemented in Calgary — many of which are already being paid for by new development in Winnipeg and some others that are not relevant here because of geographical differences.

“Growth fees” are, of course, a euphemism for a tax, this one directed on housing developments.

Proponents argue these taxes are directed at builders and developers. The reality is they will impact those buying these new homes, making it harder for those starting out in our city and more expensive for those looking to move or downsize.

For decades, Winnipeg has been growing slower than its neighbours. As a city, we are heading down the right path, but this measure is the equivalent of pumping the brakes, unnecessarily slowing us down.

Toronto, Vancouver, Edmonton and Calgary have all had their 21st-century maturations and booms. Why not Winnipeg? The answer lies in the name of the tax itself, as if growth is something that needs to be taxed, punished and discouraged.

Winnipeggers should look east and west to see the good that growth brings, and hope to one day reach the point where our growth is maximizing benefits.

There have been numerous studies done by credible local consultants that demonstrate the positive economic impacts of new development. As a matter of fact, one is done for every new neighbourhood for information and acceptance by the City of Winnipeg.

Developers don’t just build homes, they build communities. Of course, they have a role and responsibility in building the communities they develop. They already pay for the needed municipal infrastructure that allows new communities to be built. All of the infrastructure within new communities is already funded by the developer, which is ultimately covered by those who choose to live in these new communities. New communities sustain themselves. Together, Winnipeg can do the same.

First-time home buyers, young families, downsizing seniors and new Canadians working toward a dream are the Winnipeggers who will be most impacted by this risky and unnecessary tax increase. Adding an extra burden, with an increased price, to the dream of home ownership will not benefit our city. It will blunt our momentum and move us from drive to neutral.

“Growth fees” are risky.

Municipalities across Canada are looking for more stable and predictable revenue sources. New developments offer an expanded tax base, in perpetuity, that cities such as Winnipeg need. Impediments to growth will come at a long-term cost. It wasn’t so long ago we saw this play out in Winnipeg. Bedroom communities grow, Winnipeg’s tax base stagnates, and city hall reframes the conversation to what other taxes need to be raised because Winnipeg has just stopped growing. Isn’t this one of the reasons we have an entertainment tax — a need for new revenue?

Making housing in Winnipeg more expensive is not a solution to city hall’s spending habits. A tax on new properties will result in a limited supply and create higher prices on existing homes. City council could potentially be the biggest economic development agency for neighbouring rural municipalities. Winnipeggers will move to such communities to get the home and lifestyle they want while avoiding our taxes. Of course, these commuters will still use our roads and transportation networks but without helping to pay for it.

We know “growth fees” aren’t about covering the cost of new communities — developers already do that. They aren’t a tax on builders and developers. Because they increase the cost of purchasing a home, they are a tax on all Winnipeggers. “Growth fees” aren’t a tax to avoid taxes, they are simply the first in a flood of additional taxes that will follow.

Mike Moore is president of the Manitoba Home Builders’ Association.