Taxes and fees aren’t the only ways to tackle Winnipeg’s revenue problem: A taxpayers’ bill of rights

Last week Winnipeg City Council endorsed a proposal to ask the provincial government to allow the imposition of new fees on residential and commercial development. It was the latest turn in a decades-long struggle by the city to overcome an infrastructure deficit of at least $7 billion. The proposal, followed by a quick refusal from Broadway, unleashed a flurry of news and commentary, accompanied by more than 200 letters from readers. (See links at the end of this post.)

From the start, the fees were referred to as “taxes”, and for the most part, comments, by both writers and readers, focussed on taxation. Absent from the discussion was a recognition of the fact that the infrastructure crisis wasn’t caused by insufficient revenues, and will not be resolved by the imposition of additional fees or taxes. A major, but completely overlooked, cause of the crisis is the city’s failure to draw up a coherent growth plan and stick to it.

Although the city publishes a lot of profusely illustrated planning documents, the growth and development of the city are in fact driven by development proposals. Developers cherry-pick the areas that are the easiest, the most convenient, or the most profitable to develop and bypass others, secure in the knowledge that the city will extend roads and other municipal services as required by the new developments, regardless of the expenses incurred ultimately by Winnipeg taxpayers. That includes, not only roads, sewerage and water lines, but also transit service and more.

These expensive services have to be extended across lands that generate the low levels of taxation typical of farmland or unoccupied tracts, rather than the much higher taxes that come from urban development. Once occupied, new developments beyond the empty tracts require conveniently located community centres and library branches, and the same response times for fire fighters, police, and paramedics that more densely populated areas of the city enjoy. Street cleaning, snow removal, grass cutting, insect control, and everything else the municipality does have to serve empty parcels of land as well as full ones.

There are many examples of land that earns minimal revenues, served and/or bypassed, by the full range of municipal services, but before I cite one, here’s the context: In 2006 Winnipeg City Council was debating how it should respond to developer demands to make a vast new tract of land available for development. The tract, Waverley West, contained enough land for decades of future development, but developers, drawing on an analysis helpfully produced by the Department of Property, Planning and Development, argued that it must be opened immediately because, without it, the supply of lots available for development would last only 8 to 10 years. City Council acceded to the developers’ demands.

Seven years later Waverley West is partly developed and developing rapidly – though the bulk of it remains undeveloped – but substantial areas nearer the centre of the city, and by-passed or serviced by older infrastructure and services, remain undeveloped. A particularly clear example – a comparison of Waverley West (10.9 km. from the city centre) with Transcona West (7.6 km. from the centre) – provides visual images that come close to capturing the magnitude of the problem. Following are Google Maps of Waverley West and Transcona West, followed by a photograph of the Transcona West tract, showing a sample of the amount of land available, but unoccupied, there.

Waverley WestWaverley West

TrnscnaWTranscona West

TransconaWestPhotoWhat Transcona West looks like

The story of Waverley West and Transcona West offers only a sample of the the reckless way we have squandered our resources optimizing developers’ profits at public expense, but it provides a visual image to help us picture what’s happening when we let developers’ preferences, rather than the public interest, dictate the sequence and phasing of new development: Imagine crews building roads, sewer lines and water lines; buses driving past empty fields, and other crews traversing the vast emptiness of Transcona West for street cleaning, snow removal, grass cutting, insect control, and more. We’re all paying for almost all of that, because Transcona West generates minimal revenue.

(Don’t get mad at the developers. Their job is to make money. It’s the government’s job to regulate.)

Of course, if the city starts to insist that development practises respect the public interest, developers will look for opportunities in rapidly urbanizing municipalities beyond Winnipeg’s boundaries. The only serious way to address this issue, therefore, is for the provincial government to impose guidelines on all municipalities. I propose that the provincial government formulate them, and name them “A taxpayers’ bill of rights for the effective, economical expansion of municipal services”.

For a more detailed discussion, click on the link. (If you want to skip academic debates and cut to the chase, start with “Winnipeg’s politics of urban growth” on p. 6.)

News and commentary regarding the request for development fees:
Province snubs Katz
Living in a glass house
Editorial: Tax unjustified
Growing infrastructure deficit

5 responses to “Taxes and fees aren’t the only ways to tackle Winnipeg’s revenue problem: A taxpayers’ bill of rights

  1. A good deal of the Transcona West land has been developed in the past 3-4 years (Kildonan Green, Harbour View Phase 2 etc). Most of the remaining land will be developed starting next year (lots are already being sold).

  2. As I recall, the plan for Waverley West initially was for it become a geothermal subdivision. Obviously this did not happen because developers were greedy. Someone even mentioned that Sam Katz was paid to scrap the geothermal idea in order to sell the lots as quickly as possible. Why didn’t the city take control? I live in Whyte Ridge and we don’t have a noise barrier. This is needed more than ever due to the ever increasing traffic in this part of the city. It is long overdue but the city won’t do anything about it. They just don’t realize what impact their poor planning has on surrounding areas.

  3. Pingback: Riel Parks and Rivers Commons (RPARC), an advocacy group, posted “A taxpayers’ bill of rights” on its web site.

  4. Richard van Abbe

    Good piece, Chris.

    I do think you were a little over-gentle with our friends the developers, though.

    Yes, it’s their job to make money, but they’ve historically used that money to corrupt local officials and governments so they can continue to do what you deplore without those irritating official plans and zoning regulations to rein them in.

    I fear the smart land-use planning you advocate will never be the rule until society succeeds in erecting an economic firewall separating politicians from developers’ sweet, sweet cash.

    Anyway, it was a good read. Got me thinking, didn’t it?

  5. Richard,

    Thanks for your thoughtful comment. There’s a lot of truth in what you say, but there’s also something else that’s not so obvious. Over the years, much to my surprise, I’ve found that development and real estate people usually understand the arguments I’m making a lot better than most. Also, again and again they’ve told me that they don’t care what the regulations are, as long as the rules are clear, they allow for a reasonable profit from development, and they’re enforced impartially. Of course there are corrupt developers, but it’s bad regulation that invites them in. Consider that capitalist Europe does a much better job of urban planning than we do.

    And here’s one other important point, one that concedes much to your argument as well as mine. In the European cases I’m familiar with, the national government has a much bigger say in urban development than here. Not coincidentally, developers, who are big wheels at the local level, are small potatoes in national capitals, where it’s finance and industry that calls the shots.

    For further discussion on this issue, and documentation, click here.

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