09/02/2016 07:23 EDT | Updated 09/03/2017 01:12 EDT

Consultant's proposed fee on new Winnipeg developments angers developers

WINNIPEG — A consultant's report says the City of Winnipeg should implement a development fee to offset the cost of services in new neighbourhoods.

The report recommends charging more than $18,000 for a new 1,800-square-foot home and suggests fees also be charged for new office, retail and industrial buildings.

The money would help pay for services such as transit, fire and paramedic, parks, waste collection and water, and suggests the revenue could help reduce the need for big property tax increases.

Mayor Brian Bowman says he supports the recommendation and has been advised the city has the authority to legally bring in the fees, even though the previous Katz administration was not allowed to do so by the province

City administrators will review the findings of the $250,000 Hemson Consulting study and bring forward recommendations for city council.

Developers say the fees amount to a tax and the industry would consider legal action if the city opts for them.

"The report confirms that growth is not paying for growth,” said Bowman after Thursday's release of the report.

"It's about how do we keep property taxes low and how do we really start chipping away at the massive infrastructure deficit that we've inherited."

The report suggests fees be charged at the rate of about $10 per square foot of residential space, approximately $22 dollars for offices, just under $15 for commercial space and around $6 per foot for industrial buildings.

It said if Winnipeg continues to rely on property taxes to pay for new roads, sewers, emergency services and recreational facilities, then infrastructure will deteriorate even further, services will shrink and tax bills will keep rising.

Bowman said he’s willing to discuss the fees with stakeholders. Among them is Mike Moore with the Manitoba Home Builders’ Association.

"If we just arbitrarily tax new housing, there’s a number of possible ramifications. One is that the growth and development moves outside the city,” he said.

Eric Vogan with Winnipeg-based builder Qualico says the suburbs are covering the cost of new roads and sewers, and if the city moves ahead with a fee, the industry would consider legal action.

"If the mayor is playing out of bounds, we'll have to bring him back into the playing field."

City councillors who have long argued large developments are not covering service costs welcomed the report’s conclusions.

"$18,000 for an average property, sounds reasonable to me,” said Councillor Mynarski Ward.

But new homeowner Patrick Labossiere said the fee being discussed would have driven up the cost of his house and forced him to change his plans.

"If there was an extra fee like that added to my mortgage we wouldn't have been able to afford it and so we'd have to look elsewhere." (CJOB, CTV Winnipeg)