WINTRUP: Winnipeg delays new housing, plans new taxes instead

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Loss of taxation revenues and housing opportunities continues for Winnipeggers into 2025. Local officials delaying, blocking and denying new housing developments for people, such as the Parker Lands, cause the taxpayers of Winnipeg, Manitoba and Canada to all lose.

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Enid Slack, Director of the Institute on Municipal Finance & Government, Munk School of Global Affairs and Public Policy at the University of Toronto, has said property tax remains “a really good tax for local governments”. Property taxes provide a stable and predictable revenue source for local governments. Also, the property tax system closely relates to local governments’ curbside services — police, fire, street cleaning, etc. — provided to properties, making it a visible tax to the taxpayer.

Property taxes are the principal revenue source for the City of Winnipeg: Winnipeg’s 2024 Budget revenues estimate $745.9 million from property taxes followed by $236.1M from provincial funding and $122M in federal funding. Frontage levies provide $80M and the business tax about $60M.

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Growing the property tax base via land-use planning discretionary approvals can noticeably increase revenues for a municipal government. One example is 2525 Pembina Hwy., located at the southwest corner of Bison Drive and Pembina Highway, previously occupied by an outdated Dairy Queen. The lands were purchased for building new student housing. A discretionary planning approval was required. City staff’s mindset from the start was opposition to the idea.

A planning effort was undertaken by the proponents to provide new student housing by overcoming technical issues the City continually found with the concept. The City’s key concern was the amount of parking being proposed: students would not walk because “it’s too far to the University.”

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The ARC high-rise now stands on the site filled with 600-plus students and several empty parking stalls: U of M students all have bus passes included in their tuition providing access to transit. Students walk or ride the bus that stops next to their residential building. The increase in annual net property tax revenues by this one infill housing project, went from $21,833.74 to $641,084.17.

That project spurred the redevelopment of the abutting vacant, former car dealership with student housing. The ALIGN — which has 70% parking stall vacancy — now stands to also provide 600-plus students with housing and grow the property tax revenues for the City. Both housing projects alleviated the pressure placed upon the nearby low-density residential Fort Richmond neighbourhood to convert houses to student housing. As each of these projects has demonstrated in reality, the initial objections of City officials were unfounded.

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Parker Lands is the prime example of property tax revenue losses, on multiple levels, for Winnipeggers. The Parker Lands, after discretionary planning approvals are in place, will generate $3.7M per year in property taxes – this alone funds for a year the entire City Planning’s operating expenses, which was around $2.2M in the 2024 budget.

The Parker Lands still does not have the final development agreement from the City that would trigger the its property tax revenue and allow house construction. The Parker Lands’ proponents provided the City a development agreement 10 months ago and indicated a willingness to negotiate this contract to get construction going in 2024. The Gillingham administration instead chose to burn up another construction and taxation year in bureaucratic processes before a development agreement could be negotiated. It’s another year in delays for a project that has been delayed since 2015.

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The City is out around $35M in property tax revenues dating back to 2015 when the Court of King’s Bench determined the Parker Lands should have been put forward to Council for approval. $435M in net contribution to GDP remains unrealised. $973M in economic activity is absent as the Parker Lands sits vacant within walking distance of an underused rapid transit station built with taxpayers’ monies to service the new residents on the Parker Lands. This rapid transit system cost all levels of government nearly half a billion dollars to construct and a vacant Parker Lands means Winnipeg Transit ridership revenues from new residents remains unfulfilled.

Instead of providing enough annual property tax revenues to pay all City Planning operating expenses, the Parker Lands — for the foreseeable future — will only provide enough property taxes to pay a senior person in the Planning Department. The vacant Parker Lands could house 4,795 people, while the Gillingham administration advances 4-plexes in all Winnipeg neighbourhoods, on your streets of Abbotsfield, Bonner, Brahms, Greyfriars, Handsart, Lodge, Lemay, Pinewood, Princemere, Waterton, Waterloo, Yale, Vialoux, etc. to accommodate new housing.

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Mayor Gillingham’s strategy, instead of delivering the Parker Lands with utmost haste to provide housing and grow the property tax base, is to squeeze new taxes from productive citizens because of the tight economic circumstances the local government has willingly created for itself.

And it is not just Parker Lands as many other small and large housing projects have been delayed and denied this year, causing the same economic and financial losses for Winnipeggers.

Gillingham now wants to make up for this loss of property tax revenue with new taxes on your gasoline purchases, new taxes on your online food orders, new taxes on your vehicle registration, and new taxes on whatever else you do in Winnipeg. The City also wants taxpayers across Canada, including towns and cities advancing new housing, to open their wallets to pay Winnipeg’s bills for delaying, blocking and denying new property tax revenues from new housing.

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This is not sustainable. Other governments also have spending needs to address serious issues in health care, education, national security, employment insurance, housing, etc. These pressures mean other governments are less likely in the future to financially support Winnipeg’s luxurious indulgence in subduing property tax revenues to nourish the popularity of locally elected officials.

Planners have long shared online a Venn diagram of overlapping circles that simply explains what City officials need to start grasping to grapple with Winnipeg’s mounting issues. To have stable government services and low property taxes, growth in housing needs to occur to expand the property tax base. Winnipeg has a willing development community wanting to invest their money, create new housing and pay higher property taxes.

The Gillingham administration has chosen to forgo these new sources of property tax revenues from new housing to go back to all the citizens of Winnipeg and get everyone paying more on a variety of newly minted taxes. It doesn’t have to be this way but until mindsets at City Hall change, it appears this is the direction Winnipeg is headed.

— John Wintrup is a lifelong Winnipegger, urbanist, globetrotting city explorer, Harvard student, and professional planner with a M.Sc. Planning degree and holder of multiple planning accreditations in both Canada and the United States.

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