Water Pricing in Canada

Abstract

Water pricing has historically not played an important role in most facets of water policy in Canada. Specifically, policies relating to the allocation of water across major water-using sectors, water quality and even the provision of potable water and sewerage services have not relied heavily on prices or other economic instruments (Conference Board of Canada. How Canada performs: Water withdrawals. http://www.conferenceboard.ca/hcp/details/environment/water-consumption.aspx. Accessed 3 Apr 2014, 2014). For example, in many provinces, self-supplied water users face minor administrative fees to access raw water supplies. At the municipal level, inadequate pricing has meant consumers have not faced the full cost of water supply and sewage treatment and has left water agencies with aging infrastructure. The first half of this chapter discusses this feature of past and current Canadian water policies at the provincial and municipal levels and critically assesses its implications for the efficiency and sustainability of Canadian water use. The second half of the chapter presents evidence of recent changes to Canadian water pricing policies, assesses their implications and discusses opportunities and challenges for future pricing reforms. Interestingly, there are a number of initiatives underway that signal provincial and local governments’ greater reliance on prices and, more generally, market forces. In a number of provinces, fees for water withdrawals permits are rising. At the municipal level, some water agencies are developing charges associated with the cost of stormwater management. These trends have not been without controversy, however, and raise questions about a shifting in attitudes towards the potential ‘commodification’ of water as well as the distributional consequences of these policy reorientations (Bakker K. Ann Rev Environ Resour 39:469–494, 2014).