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Municipal Law Bulletin: Stormwater Fees in Ontario January 2017

January 2017 - Environmental Commissioner Recommends Levying Stormwater Fees

In November of last year, the Environmental Commissioner of Ontario (ECO) released a report titled “Urban Stormwater Fees: How to Pay for What We Need”, which focused on stormwater management in Ontario municipalities, and the significant stormwater infrastructure deficit in Ontario, estimated to be $6.8 billion. The report’s main recommendation was for all Ontario municipalities to begin levying stormwater fees, as opposed to funding stormwater management out of municipal property taxes, currently the most popular method used in the province. Stormwater fees, the report argued, would provide a “dedicated, stable, fair and equitable funding source” as well as provide an incentive for better property management. Further, eight Ontario municipalities already levy stormwater fees: Aurora, Kitchener, London, Markham, Mississauga, Richmond Hill, St. Thomas, and Waterloo.

Below is a summary of some of the additional information, findings and recommendations in the report, a full copy of which can be found here.

Stormwater Runoff, Generally

  • Stormwater runoff refers to the rain and melted snow that runs off roofs, driveways, roads, sidewalks, parking lots and other hard surfaces;
  • Managing stormwater runoff, particularly in urban areas, is becoming increasingly challenging due to the combined effects of climate change, population growth, land use decisions and a significant infrastructure deficit in Ontario;
  • The negative consequences of stormwater runoff range from flooding, to erosion and sedimentation, and water pollution, all of which can be magnified in urban areas, which produce a lot more runoff than natural and rural areas because there are more hard, impervious surfaces and less vegetation. 

Challenges in Stormwater Management in Ontario

  • Municipalities are primarily responsible for managing and overseeing stormwater facilities and stormwater programs;
  • ECO sent a survey to all 444 of Ontario’s municipalities to determine whether municipalities collect the full cost of their water systems; out of the 77 municipalities that responded, only 35% stated that they currently recover the full costs of managing stormwater;
  • The report found that many municipalities are not aware of what costs to recover, and many municipalities do not have asset management plans in place to achieve full cost recovery;
  • The report went on to find that the variety of different funding sources used by municipalities for stormwater management (property taxes, development charges, and infrastructure grants) each have systematic drawbacks which have contributed to the large funding gap for stormwater infrastructure.

Report Recommendations

The report concluded with four specific recommendations:

  1. The province should require municipalities to recover the full costs of stormwater management;
  2. The Ministry of Infrastructure should require municipalities to prepare asset management plans for their stormwater infrastructure;
  3. The Ministry of Municipal Affairs should work with the Ministry of the Environment and Climate Change (MOECC) to support municipalities in implementing stormwater fees; and
  4. The MOECC should follow through on its outstanding policy initiatives related to stormwater.  

  • The main benefits of imposing specific stormwater fees are: (1) a stable, dedicated funding source; (2) economic incentive for property owners to reduce runoff from their property; and (3) implementation of the “polluter pays” principle, requiring those who create the most runoff to pay for their proportional share; 
  • Options for calculating such fees include: a flat or tiered flat fee, which does not vary based on use or size of the land; an equivalent residential unit and single-family unit calculated through a statistical sampling of measured impervious areas to determine the average impervious area; or a fee based on the total amount of impervious area on a property;
  • Based on the eight Ontario municipalities that currently charge stormwater fees, the average fee for a single detached residential property may range from $3.95 to $14.92 per month.