$37 million in impact fees with accrued interest to be refunded beginning November 30
Winnipeg, MB – The City of Winnipeg will begin issuing impact fee refund payments with accrued interest today.
Refunds will be issued to the party who paid the impact fee to the City. If a homeowner did not directly pay the impact fee to the City and believes they are entitled to a refund, they are urged to contact their builder to review the details of the home builder’s agreement. The Court Order requires that a builder or other party who receives the impact fee refund from the City return it to the homeowner, subject to contractual arrangements. It is anticipated that most refunds from the City will have been received by December 14, 2020.
As at July 9, 2020, the date the collection of fees was suspended, the City had collected $36.3 million in impact fees and have accumulated nearly $700,000 in interest, for a total of $37 million in the City’s Impact Fee Reserve Fund. Impact fees have been collected on 3,569 residential building permits since the fee took effect on May 1, 2017.
Interest on impact fees has been calculated from the date each fee payment was received, compounded monthly, to the present date utilizing the City’s bank interest rate. The accrued interest portion of the refund amounts have been calculated by a third-party professional services firm.
Council passed the Impact Fee By-Law on October 26, 2016, which allowed for implementation of the impact fee. The impact fee was charged on residential building or development permits issued for developing regions of Winnipeg, set out as New Communities and Emerging Communities in OurWinnipeg and the Complete Communities Direction Strategy identified on Impact Fee - Map.
On July 8, 2020, the Manitoba Court of Queen’s Bench ruled that while the City has the power or authority to impose an impact fee generally, the by-law and resolution regarding the impact fees "imposes a constitutionally invalid, indirect tax” and ordered the City to refund the fees paid together with accrued interest. The City then announced the decision to suspend collection of the impact fee, pending a review of the Court’s decision.