Back to the Drawing Board for Toronto’s Stormwater Levy

Some policy ideas die the death of a thousand small cuts; others get torpedoed and seem to sink before your eyes. Such was the fate of the so-called “Stormwater Charge & Water Service Charge” consultation, launched in March to ask Toronto property owners for feedback on a plan to impose area-based levies meant to recoup the cost of managing run-off. 

A conservative pundit labeled this idea “a rain tax,” and that clever construction somehow found its way to Don Jr. (Trump, that is). His emoji-adorned tweet on the matter generated enough social media turbulence that Mayor Olivia Chow quickly iced the idea so the City bureaucrats can come up with something more, well, resilient. 

All big cities with plenty of pavement struggle with the cost of managing stormwater run-off, which is getting worse because of climate change. Heavy storms wash all sorts of crud into sewers, adjacent water bodies, and basements, and run-off is worst in heavily paved areas. Clean-up costs are enormous, and the levy was meant to help pay for mitigation measures. 

The stormwater charge was meant to apply to all categories of property, from residential lots to large paved commercial or industrial sites which dump huge quantities of run-off into the sewer systems. Homeowners already pay a surcharge on their water bills for stormwater infrastructure, and the new levy sought to distribute the costs more evenly by including the owners of large tracts of paved land that don’t use a lot of water. (The consultation was also soliciting feedback on a proposed commercial parking levy.) 

As Chow explained in an interview with The Toronto Star, the proposed levy’s shortcoming, which she only learned after the controversy exploded, was that it treated all residential lots alike. For some reason, the levy didn’t distinguish between homes with vast concrete driveways (impermeable) and those with naturalized gardens and no pavement (absorbent). Commercial and industrial properties would be taxed according to area.

Toronto is by no means the only municipality grappling with how to pay for stormwater costs in the era of climate change. Many other GTA and southern Ontario municipalities impose this kind of charge. Mississauga instituted a stormwater fee in 2016, and Kitchener, Ont., not exactly known as a hot-bed of radical politics, has levied a stormwater fee on all categories of private property, with rates increasing roughly by the size of the property. The revenues go to water infrastructure investments.

Further afield, in countries like Australia, Brazil, Ecuador, France, Germany, Poland, South Africa, and the United States, governments have implemented these types of policies. In fact, more than 40 U.S. states have a stormwater utility. 

In the past decade, Toronto city council debated and then narrowly defeated several earlier versions of a stormwater levy. Commercial and industrial landlords whose properties included extensive surface parking once threatened to challenge the legality of the bylaw. “It’s been through the ringer a few times,” says Sarah Buchanan, campaigns director for the Toronto Environmental Alliance and a former City Hall staffer. “I’m confused why all these other municipalities around us have [a stormwater levy] but it’s been so controversial in Toronto.”

While Buchanan says one important goal of the levy was to make the system fairer, the fact that city officials have repeatedly tried to get it approved underscores the steady increase in the cost of managing stormwater in a city with numerous ravine systems, old combined sewers, heavy downpours, and the threat of contaminated lake water off Toronto’s beaches. 

In fact, a generation ago, the City adopted the so-called Wet Weather Management Master Plan, which added surcharges to municipal water bills and used the proceeds to do things like build massive stormwater holding tanks designed to protect beaches and bathing areas from becoming inundated with dirty run-off after a major rainfall. Or construct new drains in low-lying areas and valleys to protect homeowners from basement flooding. Or fortify creek banks and ravine slopes swept away during the aforementioned deluges. 

As of 2023, the city has spent about $1.8 billion on hundreds of projects linked to its wet weather master plan, and is proceeding with plans to spend another $3.5 billion through 2032. Yet even those substantial investments aren’t sufficient to deal with the impact of stormwater run-off in a dense and heavily paved urban region. 

Chow’s decision to pause the stormwater levy consultation, a spokesperson says, “will allow city staff to undertake further work to align the proposed charges with the broader climate resilience strategy, the commercial parking levy being considered, and the City’s long-term financial plan.” With a progressive and climate-focused mayor now driving the process, it seems possible that when this idea re-surfaces, it will be approved, with the funds going to help build Toronto’s resilience against extreme weather.