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NEWS: Canadian cities grapple with water rate increases

At least two Canadian cities have been in the news recently because they are considering increases to water rates simply to maintain or build needed infrastructure.

The Toronto Star editorial board writes today that, “Early in the new year, the city’s budget committee is to consider pumping up the water rate by 9 per cent and raising existing garbage fees by 3 per cent. (Toronto mayor Rob) Ford has said that as much as he’d like to freeze both rates, there may be no alternative. In fact, a good case can be made that both the proposed rate hikes are in order.”

“The public is in no way being soaked, even though the average Torontonian’s water bill would jump by $56 next year if the increase is approved. The rate has risen by 9 per cent annually for the past several years and must continue doing so for years to come to compensate for decades of neglect. Simply put, residents long enjoyed an unsustainably cheap water ride as the rate represented only a fraction of the actual cost of the system. The result is a system in crisis, with aged pipes corroding, leaking and bursting. As Thomas Axworthy reported on the Opinion page on Tuesday, a quarter of the city’s water mains are 80 years or older, and there are 1,400 breaks in the pipes a year. The leaking water is estimated to cost the city $700 million a year. Bringing the system up to a state of good repair requires catch-up funding. Hence, the 9 per cent water rate increase. It would be irresponsible for Ford and the new city council to forego the rate hike and turn their backs on renewal of this vital infrastructure. …On water and garbage fees, (Ford) deserves credit for recognizing the trade-offs in play and acknowledging that a free ride can’t continue forever.”

And CBC reported earlier this month that, “Saint John residents will be paying an additional $72 per year for water as a part of two years of rate hikes to pay for the antiquated water and sewage system. Saint John councillors approved an 8.3 per cent increase in water rates for 2011 and an 11 per cent hike in 2012 (in December). …The city has had difficulty with boil water orders in recent years. In October, 45,000 people were forced to boil their waters after heavy rains caused the city’s water to become cloudy. Since Feb. 14, 2008, the city has been hit with seven boil orders.” When asked in a year-end interview by the Telegraph-Journal about securing the funding for the water treatment plant by 2012, Saint John mayor Ivan Court replied, “We may have it secured, but we may not have it completed by 2012. The premier of the province, his government, his MLAs are on record as saying they’re with us until we finish the project. Our federal MP (Rodney Weston) has said the same thing. We’re looking at the situation where we have the two other levels of government in a deficit position. The City of Saint John cannot run a deficit, so we rely on funding from the other two, along with our funding, to make sure that happens. Having a commitment that they are going to continuously, year in and year out, work on it, I think that’s an accomplishment. Safe, clean drinking water is the number one priority for the citizens of Saint John.”

The Telegraph-Journal has also recently reported that, “In June, council voted to file a funding application with PPP Canada Inc., the federal office responsible for P3s. The organization oversees a program that pays up 25 per cent of eligible costs for big infrastructure projects. …P3 models can involve private companies designing, building, operating, maintaining and financing public infrastructure projects. The issue has been a controversial one, with some council members, including Mayor Ivan Court, standing strongly against private control of a public utility, particularly in the 2008 election campaign.”

In terms of overall need, the Federation of Canadian Municipalities estimates that Canadian municipalities currently face a water and wastewater infrastructure deficit of $31 billion. Given the vital importance of water and wastewater services, the Council of Canadians is calling for full public consultation and a process to involve Indigenous communities and local governments in developing a strategy to address water and wastewater treatment needs throughout the country.

We also wrote in the 2010 Alternative Federal Budget that $3.7 billion should be allocated in 2010–11 to a National Public Water Fund. The chapter on water states, “Some of the general municipal infrastructure spending is to be spent on rebuilding water infrastructure. Municipal water transfers would then reach their yearly target of $3.1 billion in 2011–12 in order to pay down the infrastructure deficit in 10 years.” To read the full AFB chapter on water please go to