Calgary city council endorsed a plan to hike water rates by nearly 75 per cent over the next four years to help shore up an aging water and wastewater system.

Councillors voted 9-6 in favour of the proposed rate structure during the Oct. 27 Regular Meeting of Council, and if approved during November budget deliberations, will add an extra $800 million in revenue to tackle $6.5 billion in planned capital upgrades.

With the rate increases, the typical Calgary homeowner will pay as much as $90 more per month by the end of the four years.

Ward 10 Coun. Andre Chabot, who moved the proposed rates to the council floor, said that while he’s advocated in the past for taxpayer relief on taxes and utility rates, he had to consider the situation with the water and wastewater system.

“If you can’t turn on your tap and get water, then there’s no point in even living in a house then, or being able to flush your toilet,” he said.

“There’s been too much deferred maintenance that’s been pushed out, saying, ‘Well, let’s run it to failure. Let’s just run it to failure.’ But what we’ve realized recently is some of these high-impact or high-consequence failures that impacts a large percentage of the population.”

Concerns with the state of Calgary’s water infrastructure were brought to light with the two Bearspaw South feeder main ruptures and the subsequent reviews showing more than two decades of poor oversight and management of Calgary’s water system.

In a recent report, however, risk to Calgary’s water system remains high for the next decade as systems are fixed and redundancies are built.

More options are needed: Coun. Jamieson

The Calgary Chamber of Commerce sent an open letter to Mayor Jeromy Farkas and city council members and said the increase in water rates on top of the proposed property tax increases would be “an unreasonable financial burden on Calgary’s business community.”

“Under the proposed rate structure, a typical small restaurant could see its water bill increase by approximately 86 per cent by 2030, while some industrial users could face increases approaching 95 per cent. This would mean an industrial business currently paying $41,000 per month would be paying nearly $80,000 per month by 2030 – an annualized increase of nearly half a million dollars,” wrote Chamber CEO Deborah Yedlin.

“These increases would significantly undermine Calgary’s competitiveness relative to other major Canadian cities, threatening our ability to attract and retain businesses, investment and jobs.”

Yedlin said the City of Calgary can’t address the infrastructure gap by making the city less competitive for businesses. She said the solution can’t simply be passing on the cost of the water infrastructure investments to businesses and residents through “unprecedented rate increases”.

“For the above reasons, the Calgary Chamber of Commerce strongly suggests the currently proposed rates by rejected, and that administration be directed to explore alternative funding models and a more gradual approach to cost recovery,” Yedlin wrote.

Ward 12 Coun. Mike Jamieson recognized that this was core, critical infrastructure. He said, however, that a 74 per cent rate increase in four years was “too much, too fast.”

“It lands on families already facing a massive property tax increase in November. I’d like to see more options, to be honest with you, that are more affordable,” he said.

“Many Calgarians just can’t afford this much this fast, increasing rates and a possible… massive tax increase. It adds up. It just keeps adding up. And, you know, affordability, it really matters.”

Mayor Farkas said that council has to raise the rates today given the past failure to properly invest in the water infrastructure.

“We are on the verge of failure if we do not right-size our investment in these essential infrastructure projects, but that said, I know that it is going to be disappointing for residents and businesses for us not to be able to continue that 10-year freeze on water bills,” he said.  

“But unfortunately, after chronic underfunding, chronic under-accountability on the system, us as a council, we are taking charge. We are committing to Calgarians that we are addressing this, and we are not going to tolerate failure of the fundamental responsibility of a municipality, which is safe and clean drinking water.”

Some councillors and the mayor suggested the rates could be adjusted should the provincial or federal government come forward with money for the water system.

The final decision will be made during November budget discussions.