Winnipeg, MB -
The City of Winnipeg is exploring the introduction of a tool used by many other municipal governments in Canada and around the world to finance new infrastructure that is related to growth and new development.
Today, members of City Council heard a presentation from the Public Service on this type of funding tool.
Winnipeg is a city experiencing moderate growth, and is expected to be home to 200,000 more people, which represents growth of 27 per cent, over the next 20 years. A mix of new residential types and commercial development will provide the homes and employment premises for these new people to live, work and play in our city.
Charging development a one-time fee enables a city to continue building growth-related infrastructure that is needed to add capacity to existing infrastructure. The philosophy behind a Growth Development Charge (GDC) is that growth should pay for its share of providing growth-related infrastructure. Without growth being present, this cost would not arise.
Most major cities across Canada are charging some form of GDC (more generally called development cost charge) to fund their costs of growth. Our neighbouring rural municipalities are using powers under The Planning Act (Manitoba) to charge for growth. This legislation does not apply to Winnipeg, therefore, amendments to provincial legislation would be required in order to implement a GDC. Internationally, there is also a variety of practice that seeks to charge the cost of growth to development. In the United States, it is commonly known as Impact Fees; in Australia and New Zealand, it is commonly known as Development Contributions or Financial Contributions.
Where there are no other funding sources, property tax currently pays for both the renewal of existing infrastructure and the additional capacity needed for growth. To ensure the provision of growth-enabling infrastructure (such as rapid transit, regional roads, bridges, and recreational facilities), a specifically dedicated funding tool is required. This would preserve property tax funds for the renewal of existing infrastructure.
In a GDC model, restricted reserve funds would be set up to hold the revenue received through GDCs. This way of holding specifically dedicated funds is similar to the Local Street Renewal Reserve, set up by City Council in 2013, which dedicates a portion of property taxes directly and solely to the renewal of existing streets, back lanes, and sidewalks.
Growth Development Charges may be the way to provide a sustainable and more equitable funding arrangement to have necessary growth-related infrastructure, without compromising the funds needed to maintain our existing infrastructure.
A majority of Councillors agreed that the Public Service should approach the Province to amend legislation to enable the use of Growth Development Charges.