FROM THE MAYOR'S DESK: Winnipeg's Growth Comes at a Cost

When a city grows, does this growth end up paying for itself?

A new external consultant report released today from the City of Winnipeg confirms that growth in our city is not fully paying the infrastructure costs associated with growth.

This is an important issue for all Winnipeggers.  Why? Because Winnipeg and its surrounding municipalities are on track to grow steadily and strongly over the next 25 years, and are expected to surpass one million people strong by 2035. In fact, over the last ten years, our city’s population has been growing at a rate we haven’t seen for many, many years!

Our city is growing, and population growth is certainly good. However, we need to begin planning and building today in a way that positions our city and prepares us for a future that we know will have more people and more homes. And with immigration continuing to fuel a significant portion of Winnipeg’s projected population increases, our diversity as a community will only increase as well.

All of this growth comes at a cost, and we need to determine how best to pay for it.

Right now, existing property owners are having to pay for all the infrastructure costs associated with a growing city.  I don’t think it’s fair to expect existing property owners and existing home owners to pay all these costs through significantly higher property taxes. I believe these costs need to be better shared, and better balanced, between those driving the need for new or expanded infrastructure and existing property owners so existing property owners, themselves, are not responsible for all these costs.

Please keep in mind that growth fees, and other revenue tools like them, are not an additional cost incurred by existing home owners. Actually, they are one way to stabilize the use of property taxes because they help rebalance responsibility for paying the cost of new or expanded infrastructure required as a result of a city’s population growing onto those driving these infrastructure needs.

Without these fees, existing home owners and existing property owners have to cover all these infrastructure costs through their property taxes. As I said earlier, I don’t think this is fair, but this is how the City of Winnipeg has primarily funded and paid the cost of new growth.

It is important to remember that every single municipality surrounding Winnipeg already has a mechanism in place to help recover the cost of new growth. For example, East St. Paul charges $19,200 per new single family home, and Springfield, Tache, MacDonald, West St. Paul, Headingly, and Richot all have similar mechanisms in place that range from $3,380 to $14,350 per new single family home.

And across Canada, the municipal landscape is no different. Just about every major city in Canada recoups and pays for the cost of growth through similar fees and charges, and it ranges from over $80,000 in eastern Canada to $25,000 in western Canada.

Using growth fees or other similar mechanisms in Manitoba is neither new nor novel. It is very common, and it has not had a devastating impact on growth rates in municipalities who have introduced them. In fact, this tool better prepares municipalities to build and have in place the infrastructure necessary to support a growing population, and this is good for both new home owners, developers, and the municipality as a whole.

Just to be clear, I believe existing property owners still have an important role to play in rebuilding our city. Collectively, we need to continue chipping away at the years and years of neglect that our existing infrastructure has been subjected to, and this is best done through the use of property taxes.

However, existing property tax payers cannot be expected to shoulder responsibility for rebuilding our city after years of neglect and then also pay all the infrastructure costs associated with a growing city.

If we want to build Winnipeg for the future and build a city we can be proud of, status quo isn’t an option.
For me, it really is a question of how we want to pay the cost of being a growing city, and how we can ensure the infrastructure necessary to support this growth is there when we need it. Even though interest rates are at an all-time low right now, I do not want to mire our city in mountains of debt. I also do not want us to raise utility rates, such as water and sewer, even further.

For me, it comes down to a choice between significantly higher property taxes for everyone or higher new home prices for some. And it is about taking advantage of a tool almost every municipality in Canada is currently using to grow and build their cities.

How do you feel we should be paying the costs of new growth?