Report on the Regulatory Review of Ontario Regulation 450/07 (Charges for Commercial and Industrial Water Users)

Our government has been taking action and remains committed to strengthening protections for our lakes, rivers, waterways and sources of drinking water by improving the province’s water taking program.

The ministry has completed a five-year review of water charges for industrial and commercial water users.

Our findings from the review are summarized below.

Purpose of the review

The charges for industrial and commercial water users regulation (O. Reg. 450/07) requires the ministry to review the charge every five years to determine if the charge is set at an appropriate amount given:

• the costs which the government incurs for the water quantity management programs and how much those costs have varied in the past five years
• the share of the costs that may be attributed to the classes of industrial or commercial facilities that are subject to the charge

Findings of the review

1. Program costs

   In 2021-22, the Ontario government spent an estimated $23 million on activities and programs to promote the conservation, protection and management of water resources in Ontario and their efficient and sustainable use. These programs are distributed across:

   • the Ministry of the Environment, Conservation and Parks
   • the Ministry of Natural Resources and Forestry
   • the Ministry of Mines

   The programs involve activities such as:

   • managing water takings (including under low water conditions)
   • water monitoring and research
    

   Overall, program costs have increased by approximately 30 per cent (or $5.5 million) from $17.5 million when the charge was last reviewed in 2017. This change is mainly due to the addition of costs incurred by the Ministry of Natural Resources and Forestry for the repair and maintenance of Crown-owned dams to the total 2021-22 program costs that are recoverable through the charge.

   It is estimated that approximately $920,000 of the total 2021/22 program costs (4% of total costs) is attributable to facilities that are currently subject to the charge for industrial and commercial water users.

   The remaining program costs are attributable to other industrial and commercial water users, and other non-commercial users who are not subject to the charge.

2. Charges collected

   Since 2017, the charge has generated approximately $195,000 per year. In the 2017 review, the average annual revenue reported was approximately $200,000 per year.

   The ministry will consider the findings of the review as part of any future changes to the industrial and commercial water charge under O. Reg. 450/07.

   The next review of the industrial and commercial water charge is required to be posted on the Environmental Registry by December 31, 2027.

Background on the water charge

The charges for industrial and commercial water users regulation (Ontario Regulation 450/07) requires certain industrial and commercial water users to pay $3.71 per million litres of water used. 

The charge was put in place on January 1, 2009, to help recover some of what the province spends in the administration of the Ontario Water Resources Act and any other act for the purposes of promoting the conservation, protection and management of water in Ontario and its efficient and sustainable use. This includes activities and programs to manage water takings and water quantity in the province.

The charge applies to industrial and commercial water users in the following classes of facilities that also meet the criteria described further below:

1. bottled water manufacturers
2. beverage manufacturers, where water is incorporated into a product
3. fruit and vegetable canning or pickling facilities, where water is incorporated into a product
4. ready-mix concrete manufacturers
5. non-metallic mineral product manufacturers, where water is incorporated into a product
6. pesticide, fertilizer and other agricultural chemical manufacturers, where water is incorporated into a product
7. inorganic chemical manufacturers, where water is incorporated into a product

Facilities that fall into those classes are subject to the charge if they use more than 50,000 litres of water a day from ground and surface water sources, or from a water works. The charge is applied annually, based on all water used by a facility within the previous calendar year.