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City of Winnipeg increases impact fees by 5 per cent

City of Winnipeg increases impact fees by 5 per cent
WATCH: A City of Winnipeg bylaw allows for an annual increase in growth fees for new home construction. However, the Manitoba Home Builders Association said the industry was caught off guard when fees went up in January without any notice. Global's Brittany Greenslade reports.

Winnipeg developers and home builders are preparing to pay more for new homes after the city raised impact fees an additional five per cent.

A city spokesperson confirmed to Global News the increase took effect on Jan. 1, 2018.

READ MORE: City growth fees making more money than anticipated as city hall faces cash crunch

The impact fee bylaw allows for increases each year “by the rate of construction inflation for the previous year as determined by the Chief Financial Officer, and that the annual increase be capped at five per cent per year.”

However, the Manitoba Home Builders Association said the industry was caught off guard and there was no public announcement made by the city.

“The City of Winnipeg did not directly notify the MHBA of the increase,” CEO and President Lanny McInnes said in a release to members.

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While the bylaw allows for a maximum increase of five per cent, members worry there was no rationale given by the city as to how it arrived at that specific increase this year. There is also concern the city will always increase fees by the maximum.

READ MORE: Winnipeg’s controversial growth fees kick in

City Council approved the controversial impact fees in 2016 and they took effect on new homes as of May 1, 2017.

The initial rate was $54.73 per square metre. With the five per cent increase that raises it to $57.47 per square metre.

As of Feb. 15, 2018, total fees collected by the city since the implementation of the fee is $5,835,006.87 — $4,097,128.43 collected in 2017 and $1,737,878.44 collected so far in 2018. The fees collected are credited to the Impact Fee Reserve Fund.

More information about impact fees is available on the City of Winnipeg website.

On Nov. 30, 2017, the MHBA and the Urban Development Institute (UDI) Manitoba Chapter filed affidavits with the Manitoba Court of Queen’s Bench for the review of the Impact Fee By-law.