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Planning, Property & Development

Impact Fee

An impact fee is one of several tools a city can use to fund the costs of a growing city. An impact fee can help ensure that growth does pay for growth. It recognizes that new or expanded infrastructure is required to accommodate growth throughout Winnipeg and imposes some of the costs of this infrastructure on the properties that benefit from the new or expanded infrastructure.

Council passed the Impact Fee By-Law on October 26, 2016, which allowed for the phased in implementation of an impact fee. In Phase One of its implementation, which took effect on May 1, 2017, the impact fee was paid before a building or development permit is issued for residential development was able to take place in New Communities and Emerging Communities, as set out in OurWinnipeg and Complete Communities Direction Strategy identified on Impact Fee - Maps.

On July 8, 2020, 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 any interest earned on the funds.

The City suspended the collection of the impact fee as at July 9, 2020, pending a review of the Court’s decision.

Refunds

The City will begin issuing impact fee refund payments on Monday, November 30, 2020. Refund amounts will include the initial impact fee payment with accrued interest. 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.


Frequently Asked Questions

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How much is being refunded by the City?

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.

Why are impact fees being refunded?

On July 8, 2020, 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 any interest earned on the funds.

When will refund payments be issued?

The City will begin issuing refund payments by mail on Monday, November 30. Refunds will be issued to the party who paid the impact fee to the City of Winnipeg. It is anticipated that most refunds from the City will have been received by December 14, 2020.

How will a homeowner know if they will receive a refund?

If a homeowner believes they are entitled to a refund, they are urged to contact their builder to confirm the details of the home builder's agreement. Refunds will be issued to the party who initially paid the impact fee to the City. If that party is the builder, then they will be responsible for passing on the impact fee refund to the homeowner if they are contractually entitled to it.

Will recipients of the refund receive the impact fee with interest?

Yes – the Court Order indicates that the City is required to refund the fees paid together with any interest earned on the funds.

How much interest has been accrued and how is it calculated?

Accumulated interest as at October 31, 2020 was $693,241.45. The interest has been calculated from the date the impact 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.

Will all homeowners receive an impact fee refund?

The Court Order requires that the impact fee with accrued interest be refunded by the builder to the homeowner, subject to contractual arrangements. Homeowners should contact the builder of their home to review their home purchase agreements.

What if a homeowner believes they paid the impact fee and has not received their refund within two weeks?

If a homeowner believes they are entitled to a refund of the impact fee, they are urged to contact the builder of their home. The City anticipates that most of the parties that paid the impact fee will have received their refund payments by December 14, 2020.

How many refunds are being issued?

The City collected impact fees from 3,569 individual residential building permits and will be issuing refunds for each of these permits.

How much was being charged for impact fees?

The impact fee was adjusted each calendar year based on the prior year's rate of construction inflation or deflation. When established in 2017, the rate was $54.73/ m2. The rates in successive years were $57.47/ m2 (2018), $59.48/ m2 (2019) and $56.51/ m2 (2020).

What happens to the taxes paid on the initial impact fee?

The City did not charge Goods & Services Tax (GST) on the impact fee. A homeowner may have paid GST on the house, but was not charged on the impact fee.

If a homeowner asks for information about the value of the impact fee paid, can that information be released?

If asked by the homeowner, 311 will be able to provide information about individual impact fees and refunds due.

Last update: November 30, 2020

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