UVic Releases Water Pricing Report

A new University of Victoria report is stimulating a national dialogue on water pricing as part of a sustainable approach to management.

Worth Every Penny: Conservation-Oriented Water Pricing in Canada, a report published by the University of Victoria’s POLIS Water Sustainability Project, is a primer on how to reform water pricing. The report is aimed at water managers and municipal leaders across Canada and makes the economic case for water conservation and sustainable water service infrastructure in Canada as a way to increase water security for communities.

“Water infrastructure in many Canadian towns and cities is deteriorating, and water bills are not enough to even cover the costs of operation,” says Oliver M. Brandes, co-author and leader of the POLISWater Sustainability Project at UVic. “Communities are relying on federal and provincial government subsidies to operate their water systems. Yet, conservation-oriented water pricing has the potential to stabilize revenue, address deteriorating water infrastructure and to contribute towards comprehensive water conservation programs.”

The report (click here to read it) provides practical economic and technical information about how to implement conservation-oriented water pricing—starting with setting water rates sufficiently high to encourage conservation. Lead examples from communities on Vancouver Island and cities such as Halifax and Guelph are used to demonstrate successes: they are communities that have reduced water demand and improved the environmental performance of water utilities, without negative impacts on low-income families.

“Canada has one of the lowest prices for water use and the highest consumption levels in the world,” says Brock University’s Dr. Steven Renzetti, report co-author and one of Canada’s leading water economists. “With little financial incentive to conserve, we over-consume, and our overconsumption is threatening water supplies and the sustainability of ourwater service infrastructure. One key step is the implementation of metering across the board.”

According to the most recent data (2006), over one-third of Canadian homes still do not have a water meter, and the implementation of metering varies considerably from province to province (e.g., 32.6 per cent of residential customers are metered in British Columbia, 6.5 per cent in Quebec, and less than 1 per cent in Newfoundland).

“Conservation-oriented pricing makes sound sense from both economic and environmental points of view,” says Kirk Stinchcombe, report co-author and principal of Econnics, a Victoria-based consulting firm that specializes in water use efficiency. He notes that the current approach topricing encourages overuse and is also typically not generating enough revenue to fully fund infrastructure maintenance and replacement. “Wasting water and not being able to fund the operation of water systems are in nobody’s best interest,” says Stinchcombe.

Look for more on water pricing in Water Canada’s forthcoming September/October issue.