Backgrounder

April 3, 2007

CHARGING COMMERCIAL AND INDUSTRIAL USERS FOR WATER AND WHY IT MAKES SENSE FOR ONTARIO

Establishing a Water Conservation Charge

For the first time in this province, the McGuinty government is proposing to charge commercial and industrial users for the water they use to help conserve, protect and sustain Ontario’s water resources for the benefit of all Ontarians, particularly in the face of a changing climate and reduced water levels.

As demand for water grows in Ontario, there is an increasing need to manage and use water more wisely. The costs of Ontario’s water quantity management programs are significant. Many commercial and industrial users benefit from these efforts as they rely on access to clean, abundant water supplies. There is currently no charge for direct water taking in Ontario. One way to recover management costs is to require commercial and industrial users to pay their fair share. A charge would also encourage companies to take steps to conserve water.

How Does a Water Conservation Charge Work?

The proposed water conservation charge is a regulatory charge for water use, it is not a tax. The primary purpose of the charge would be to recover a portion of the costs of programs required to manage water from commercial and industrial operations that benefit from those programs. A secondary objective is to provide a financial incentive for companies to use water more efficiently.

The proposed charge would not apply to private domestic wells or water used for domestic and other non-commercial uses on municipal supplies. Charges would not apply to institutions such as schools and care facilities, and environmental uses such as wetlands projects. The charge would also not apply to hydropower and agricultural uses.

Legislative Changes to Protect Ontario’s Water

The government has proposed legislative amendments to the Ontario Water Resources Act (OWRA), through the Safeguarding and Sustaining Ontario’s Water Act, 2007.  Changes to the OWRA would allow the government to charge for commercial and industrial water use and to make regulations detailing the specifics of a water conservation charge.  

Other changes would also provide the authority to require water takings that are currently exempt (those established before 1961) to obtain a permit to take water. This would ensure that the charge is applied equitably to companies across Ontario. These water takers would be brought into the permit program using a phased approach, beginning with those who would be required to pay the charge.

Proposed water conservation charge framework

The government has released a proposed detailed water conservation charge framework for public comment.  Key elements of the framework are:

Commercial and industrial water users (except hydropower and agriculture) would be charged, including those on municipal water systems.  The charge would be phased in, starting with highly consumptive users. Other industrial and commercial users would be charged later. A charge of $3.71 per cubic decametre (or one million litres) would be applied to highly consumptive industrial and commercial users.

The charge framework is based on different rates being developed for sectors depending on how the water is being consumed. For example, companies that incorporate water directly into their products consume a greater portion of the water they use than a company that uses water strictly for industrial cooling purposes.

The water charge rates would be fair across sectors and equitable within sectors, and are expected to have limited financial impacts on affected companies.

The proposal is posted until June 4 on the Environmental Bill of Rights Registry at www.ontario.ca/environmentalregistry.

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For further information visit the Ministry of the Environment’s web site at www.ene.gov.on.ca or contact: Public Information Centre Ministry of the Environment 135 St. Clair Avenue West Toronto, ON M4V 1P5 Tel: (416) 325-4000 or 1-800-565-4923

 

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