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Hefty New Water Charge for Bottled Water Facilities Starts August 1; Meanwhile No Progress is Made Toward Full-Cost Recovery from Other Commercial and Industrial Water Users in Ontario

Effective August 1, 2017, bottled water facilities will be subject to a significantly higher fee for the water they pump from Ontario’s groundwater sources – going from $3.71 to $503.71 per million litres. While Canadian Environmental Law Association is encouraged by the government’s commitment to full-cost recovery in this instance, we remain deeply disappointed by the lack of progress toward expanding the water charges program.

Water charges in Ontario have been in effect since 2009. They are set up to recover some of the costs that the provincial government incurs for the “conservation, protection and management of Ontario’s waters”. Currently, $3.71 per million litres is applied to all “phase one industrial or commercial water users”. This includes water bottlers, beverage manufacturers, fruit and vegetable canning and pickling facilities, ready-mix concrete manufacturers, some mineral produce manufacturers, and various chemical manufacturers.

Canadian Environmental Law Association and others have repeatedly criticized the Ontario government for not fully implementing the water charges program. To date, there has been no move to raise the fee for phase one users or to phase in additional water users.

In 2009, the Ontario government consulted on phase two. The decision notice did not mention the water charges program at all.

The Environmental Commissioner of Ontario (ECO) has repeatedly encouraged the provincial government to make “full-cost water pricing a priority” -- in the ECO’s 2007/2008 Annual Report (Part 3.3), 2011/2012 Annual Report (Part 4.2), and 2014/2015 Annual Report (Part 3.3).

In 2012, the Drummond Commission on the Reform of Ontario’s Public Services recommended that “[t]he Water Charges initiative should be expanded beyond high users to medium- and low-consumption industries and put on a full user-pay basis”. The province’s 2012 budget indicated that they were moving in this direction; committing to “review the current charge framework to assess the adequacy of the charge rate and ensure that the program recovers costs as fully as possible.”

In the 2014 Annual Report, Ontario’s Auditor General recommended the provincial government charge an appropriate fee to industrial and commercial water users. The government’s own assessment of the water charges program in 2012 found that only $200,000 was being recovered from the phase one water charges. The costs directly related to industrial and commercial water users was $9.5million. This amounts to just 2% cost recovery. In the 2016 update, Ontario’s Auditor General found that there had been little to no progress toward improving cost recovery in the water charges program.

It has been a decade since the Ontario government created the water charges program. It is long past due that the Ontario government fully implement this program to ensure full-cost recovery for our water management programs rather than relying on the public purse.