2013 Growth Development Charges
The following is a summary of previous work conducted by the City of Winnipeg, and does not reflect the parameters of the 2016 study. For more information, visit 2016 Growth Study.
Growth development charges (GDC’s) are a form of infrastructure charge that seeks to recover the cost of growth-related infrastructure from growth itself.
The underlying basis for infrastructure charges can be summarized as:
- Growth automatically increases the need for public infrastructure and services and this has a cost that needs to be funded
- These charges ensure developments include the full cost of their impact on public infrastructure when deciding whether to proceed
- They move the funding burden for growth infrastructure from property tax to new development
- They create opportunity to enhance the service levels of infrastructure for everyone
Revenue from GDC must be specifically dedicated and used solely for the purpose of providing growth-related infrastructure. In this way it should help the City provide infrastructure that will enable development.
Developments do not pay for all their impact on public infrastructure through existing development agreement parameters. Looking just at the road network - they do pay for 100% of all internal roads in the development. They do pay for intersection upgrades where internal roads intersect with existing roads. They do pay to upgrade part of the existing road along the frontage of the site. They do not pay for the regional road network that connects the development to other parts of the city. They do not pay for Rapid Transit, which adds significant capacity to our road network. They do not pay for bridge widening arising from capacity constraints.
Background
The City of Winnipeg is the only municipality in South-Eastern Manitoba that is not able to charge the capital cost of growth to development. Our neighbouring rural municipalities have used provisions under The Planning Act to establish various growth charges that pass on the cost of growth infrastructure to development. This act does not apply to Winnipeg and The Charter Act does not currently contain the same provisions.
GDC (more commonly called development cost charges) are in common use across Canada with most major municipalities having some form of growth funding tool. The following is a table that outline other municipalities’ infrastructure charges:
Manitoba Municipalities
RM | Year | Single family |
---|---|---|
East St Paul | 2013 | $19,200 |
Springfield | 2014 | $14,350 |
Tache (Lorette) | 2016 | $14,000 |
MacDonald | 2004 | $10,000 |
West St Paul | 2012 | $6,100 |
Headingley | 2007 | $4,500 |
Ritchot | 2013 | $3,380 |
Canadian Municipalities
City | Year | Single family |
---|---|---|
Brampton | 2015 | $81,000 |
Mississauga | 2016 | 80,000 |
Markham | 2016 | 70,000 |
Toronto | 2016 | 39,000 |
Hamilton | 2015 | 38,000 |
Ottawa | 2015 | 31,000 (outside gb) |
Ottawa | 2015 | 22,500 (inside gb) |
Surrey | 2014 | 29,000 |
Abbotsford | 2013 | 25,600 |
Richmond | 2010 | 25,000 |
Saskatoon | 2012 | 22,900 |
Calgary | 2011 | 14,000 |
Regina | 2014 | 13,200 |
Edmonton | 2013 | 12,200 |
Note, gb: Ottawa Green Belt
Reasoning
Winnipeg has been growing since 2004 and is expected to grow further over the next 20 years. This growth while moderate, is placing pressure on public infrastructure and the need for City Council to invest in additional capacity to accommodate growth.
At the same time, the condition of existing infrastructure is deteriorating. This is a combination of Winnipeg’s weather patterns and levels of investment in maintenance and renewal over the past 20 years.
Both of these factors create an infrastructure deficit that the City has to address. Our only option currently is to fund both deficits with just property tax.
By introducing a GDC we are able to move the cost of providing growth infrastructure out of a general property tax funding source and into a more specific growth funding tool. This will hopefully achieve two outcomes:
- A specifically dedicated funding stream that can only be used to build growth-related infrastructure
- The ability to use property tax for the renewal and maintenance of infrastructure
Thus the two infrastructure pressures are no longer competing with each other for scarce tax dollars. It should be made clear that GDC is not an appropriate funding source for any of our existing infrastructure pressures. This must remain a cost for property tax to fund.
The City share of providing growth infrastructure must be funded from somewhere, and without GDC, the only source available to the City is property tax.
Further Information
Best Practice Guidelines for GDC Type Tools:
- Government of BC: Development Cost Charges
- Halifax Regional Municipality: Infrastructure Charges - Best Practice Guide
Research Papers:
- IMFG: Papers on Municipal Finance and Governance
- CMHC: Uses of Development Cost Charges
- CMHC: Using Development Levies
- CMHC: Levies, Fees, Charges and Taxes on New Housing: 2002
- CMHC: The Effect Of Development Charges on Urban Form - An Econometric Analysis