Municipal Water Pricing, 1991-1999

Executive Summary

This report is the latest in a series by Environment Canada which outlines the results of a 1999 survey of water use, treatment and pricing in Canadian municipalities. Data from the 1991, 1994 and 1996 surveys are incorporated to illustrate trends in various aspects of water pricing, metering and use over the past decade.

These results reinforce the notion that Canadians are major users of water. Residential consumers use roughly twice as much per person as in other industrialized countries, with the exception of the United States. Canadian households used 327 litres per person per day in 1996, compared to 128, 130 and 149 litres per person per day in Germany, the Netherlands and the United Kingdom, respectively (OECD, 1999).

The latest survey reveals a 5% increase in consumption per person following three consecutive surveys during which per capita residential water use in Canada had declined. By 1999 Canadian use had risen to 343 litres per person per day. This translates into enough water to fill 91 000 rail tank cars every day or 7 900 million litres per day.

One of the key factors explaining high rates of consumption relates to the absence of appropriate price signals. In 1999, a full 44% of Canadian residences served by municipal water systems were not metered. Also, 55% of Canadians faced residential water use charges that discouraged water conservation. The impact of these water pricing structures is highlighted by the fact that water use was 70% higher when consumers face flat monthly rates rather than volume-based rates.

The lack of full-cost pricing and conservation-oriented pricing structures has also contributed significantly to an imbalance between the demand and supply for water infrastructure. According to the National Round Table on the Environment and Economy, unmet water and wastewater infrastructure needs in Canada were $38-49 billion in 1996, and capital costs for the following 20 years would be in the order of $70-90 billion. At the same time, only 50% of the cost of maintaining and operating water infrastructure was actually being met through cost recovery from users of the systems.

In summary, the combination of low levels of residential water metering, conservation-discouraging pricing structures and lack of real price increases in key rates has led to substantially increased residential water use levels in 1999 and will continue to erode municipalities' ability to finance needed infrastructure.

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If the format is not accessible to you, print copies can be requested from:

Sustainable Water Management
Environmental Stewardship Branch
Environment Canada
Ottawa, Ontario  K1A 0H3
Fax: 819-934-5101 or
H2O@ec.gc.ca