Toronto mulls imposing tax on homeowners and businesses for rainwater wastage

Residents and offices in Toronto are likely to be burdened with extra tax as the city is now planning to implement new charges for water usage called 'stormwater charge'. However, this charge is already dubbed as rain tax as it focusses on stormwater runoff.

Stormwater charge

During Mayor John Tory's tenure in 2021, the idea originated. However, earlier proposals date back to at least 2017. In a new video, Toronto has outlined the details of the proposed new tax.

Under the new system, the charges will be determined based on the amount of hard surface area on a property. The surface area would include roofs, driveways, or concrete landscaping, which do not absorb water. By this, the buildings that generate more runoff water will have to churn out more money.

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The City claims that this charge will create awareness among property owners regarding the impact of stormwater runoff and will push them to allocate specific funding for stormwater management services.

Current water tax system

Currently, Toronto residents pay for water usage based on consumptions. As per The Economic Times, homeowners and businesses are charged $4.51 per cubic metre for the first 5,000 cubic metres (known as the domestic rate) and $3.16 thereafter (the industrial rate).

For the stormwater management, the city at present allocates funds over a 10-year capital plan to maintain and upgrade sewers and stormwater tunnels.

The new water bill

The new water bill will now have two components including the existing water usage charge and a fixed charge for stormwater management. However the water usage charge will be reduced with the city estimating a 25% reduction in water rates. This is because a $385 million in stormwater management funds would be separated from the current tax.

The surface area will be determined by aerial photography conducted by the city.