Toronto is considering a change in the way it charges homeowners and businesses for water. The new charge is referred to as a “stormwater charge,” although many on social media are already calling it a “rain tax,” since it has to do with stormwater runoff.
The plan dates back to 2021, during the mayorship of John Tory, although an earlier proposal goes back to at least 2017. Still, its recent visibility has many pointing the finger at current Mayor Olivia Chow, and it has drawn mocking condemnation at home and abroad. Kevin Vuong, an Independent MP in Toronto’s Spadina-Fort York riding, took to social media to remark: “Seriously, they want to tax the rain.”
And in the U.S., no less a figure than Donald Trump Jr. got ahold of the news, tweeting sarcastically: “I’m sure it will end at the ‘Rain Tax.’ They definitely won’t just confiscate whatever they want in the not too distant future!!!”
Meanwhile, the city has rolled out a video presentation on the proposed new tax. Here are the takeaways from that.
How do Torontonians pay for water now?
Homeowners and businesses are currently charged based on how much water they use. The rate is $4.51 (plus a fraction of a cent) per cubic metre for the first 5,000 cubic metres (called the domestic rate) and $3.16 after that – the industrial rate.
What is the city doing to manage stormwater now?
The city has a rolling 10-year capital plan that allocates funds to maintaining and upgrading sewers and stormwater tunnels. This includes the Don River and Central Waterfront Project, a 15-year initiative to improve water quality by collecting and treating combined sewer overflows, which is the mix of stormwater and sewage that happens during wet weather events like a heavy storm or melt.
How would the stormwater charge work?
The new charge would be based on how much hard surface exists on a property. Roofs, driveways or concrete landscaping are all examples of hard surfaces, which do not absorb water.
Why does the city want to do this?
The city says it would provide dedicated funding for a dedicated service – stormwater charge for stormwater management, linking properties that create more runoff to the cost of dealing with it. That in turn would help raise awareness of stormwater management among homeowners and businesses.
What will my water bill look like under the new system?
Water bills would now include two items – the existing water usage charge (at a reduced rate), plus a fixed charge for stormwater management based on property size and the amount of hard surface on the property.
The city estimates that water rates would fall by 25 per cent, as $385 million in stormwater management funds were removed from the current tax.
In exchange, property owners would pay a stormwater charge of about $1.68 per square metre of hard surface. That would be determined by aerial photography done by the city.
Currently, standard residential properties contribute about 38 per cent of the stormwater management costs through their water bills, with 27 per cent paid for by large properties (one hectare or more), 12 per cent by industrial users, and 23 per cent by apartments and condos.
Under the new system, apartment and condos would pay only about five per cent of the stormwater charge, with the remainder shifted to residential properties (44.5 per cent), large properties (37 per cent) and industrial users (14 per cent).
Would my bill go up or down?
Most likely up. The city estimates that under the new system, the smallest properties in Toronto (2,300 square feet or less) would pay about $65 a year less than they do now. Larger properties would see an increase of between $7 and $262 per year.
Vast savings would accrue to apartment buildings and condos, however, with utility bills dropping between $3,700 and $27,600 per building. Whether building owners would pass those savings on to tenants is another question.
Industrial and commercial properties would also mostly benefit, with the smallest properties seeing a drop of between $294 and $727 per year, and only the largest properties likely to see any increase.
Is there a credit for having less hard surfaces on my property?
The city is suggesting a stormwater credit for properties that have rain gardens, permeable pavement and other so-called green infrastructure. However, only large properties of greater than 1 hectare would be eligible to apply.
Are there any other proposed changes?
The city is also suggesting the addition of a water service charge, which would help pay for fixed costs related to water services. It would be a flat rate based on the size of a property’s water meter. The city estimates this charge would add $44 a year to about 97 per cent of properties, with a few seeing a smaller increase or, in the case of large properties, a decrease.
How soon could the stormwater charge take effect?
The city says it would be 2027 at the earliest before the new tax system could be put in place. In the meantime, Toronto is reaching out to Torontonians for feedback. There are virtual meetings planned for April 8, 11 and 16, and a survey you can take here.
Is this being done elsewhere?
Toronto notes that stormwater charges have been implemented in other Ontario municipalities – Mississauga, Brampton, Newmarket, etc. – as well as Canadian cities such as Saskatoon and Halifax, and U.S. municipalities including Philadelphia and Seattle.