Hamilton councillors back 10.4 per cent water rate increase

The rate increase will see the average homeowner’s water bill jump by $88.10 to $965.40 from the current $877.30.

In 2023, councillors approved a water rate increase of 6.49 per cent, or about $53.47 for the average homeowner’s water bill. In 2022, the water rate hike was 4.98 per cent.

The 2024 rate increase marks the start of projected hikes of around 10 per cent each year for the next decade. Water officials argue the increased funding will go toward upgrades to the city’s aging water and sewer infrastructure, including the Woodward Avenue treatment plant and the Dundas treatment plant, which is scheduled to be upgraded over the next few years.

Officials say the 10-year capital budget plan is to spend just over $4.1 billion for water, wastewater and stormwater infrastructure projects, including up to $250 million for the Dundas plant and just over $1 billion for further upgrades to Woodward.

But councillors and staff blamed the province — specifically Bill 23, the More Homes Built Faster Act — for a major portion of this year’s water rate increase, arguing that about eight per cent of the hike was due to programs the city is required to complete.

In response, councillors agreed in a 14-0 vote to identify the provincial contribution on homeowners’ bills. Other municipalities, such as Guelph, have also included Ontario’s contribution on bills amid rising water rate increases.

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• Dec 31, 1969
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• Dec 31, 1969
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“The bulk of the increase is because of provincial downloading,” said Mountain Coun. John-Paul Danko.

Mike Zegarac, corporate services general manager, said Bill 23 will exempt development charges for builders, potentially eliminating about $5 billion from Ontario municipal revenues.

The impact on Hamilton this year is about $24 million, with an estimate the total lost revenue from city coffers over the next three years will be about $54 million.

Bill 23 freezes, reduces and exempts fees that developers pay on certain buildings, such as affordable housing units. Municipalities use that money to pay for important infrastructure projects such as roads, sewers, parks and recreation centres.

Hamilton councillors had initially been facing a 20 per cent water rate increase, but at the request of Mayor Andrea Horwath, the city will dip into reserves for about $13 million in 2024 and an additional $22 million over the next three years to mitigate the rate increase.

“No doubt reserves are for a rainy day,” said Horwath. “It’s a rainy day.”

In addition, the city will apply to the province for $4.6 million in support under the Building Faster Fund. The problem is the program isn’t expected to be operational until early next year, Zegarac said.

The 2024 water rate budget, which councillors backed unanimously at their Nov. 27 budget meeting, includes $121 million in operating costs, which is up about 11 per cent over last year — in part because of the addition of 24 new full-time employees. Capital costs amount to $286 million.

The city will also create a new “locates” office “for greater efficiencies” rather than contracting the service to private businesses. Locates are ground markings that identify the position of utility lines based on records or electronic equipment.

Mountain Coun. Tom Jackson said he is providing his “full support” to this year’s rate budget.

“It’s never an exciting or a great pleasure to pass along a 10.4 per cent increase,” he said.

By bringing the locates office in-house, it will mean hiring 19 full-time staff, 10 new electric vehicles and locate equipment at a total initial cost of $1.81 million. The funding will be taken from the wastewater reserve fund. It is projected the new office will save the city about $3.3 million annually starting in 2025.