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In 2008, Toronto’s Auditor General’s Report on Protecting Water Quality and Preventing Pollution recommended that Toronto should charge industries the full cost of sampling, testing and treating their high strength sewage. In November 2012, Toronto Council considered, and rejected, the idea, settling for a small partial increase, presumably worried about driving more industry out of the City. Now the issue is back at Council.

Under Toronto’s Municipal Code, s. 681-6, the City can enter into Industrial Waste Surcharge Agreements in which it accepts some kinds of high strength sewage from industry in exchange for payment for additional costs of operation, repair, and maintenance of the sewage works.

In 2012, Toronto Water reported that the City had industrial waste surcharge agreements with 154 companies and recovered approximately $8.5 million in fees, in comparison to actual costs to the City of $12.1 million. Water staff reported that some major municipalities such as York Region, City of Hamilton, City of Ottawa and Durham Region already charge full cost pricing for sewage discharge agreements.

Instead, Toronto Council decided to increase the fees by only $0.7 million (from $8.5 million to $9.2 million) in 2013, thus achieving approximately 76% of full cost recovery.

Now that the 2015 municipal budget is at Council, the issue of full cost recovery for sewer discharges has been raised again. The Toronto Environmental Alliance launched a petition calling on City Councillors to recover the full cost of treating industrial discharges to municipal sewers from industry. TEA’s briefing note argues for the end of this hidden subsidy:

The Auditor General and Toronto Water’s General Manager both agree that it is imperative to operate on a cost recovery basis… The Industrial Waste Surcharge Program is the only service provided by Toronto Water’s Business Operations Management unit that does not achieve full cost recovery…

While TEA supports existing City of Toronto financial subsidies for industrial water users that implement water conservation and pollution prevention initiatives, we do not support undercharging industrial customers’ wastewater treatment costs at the expense of other ratepayers. Polluters should pay their fair share of treatment costs to protect Lake Ontario from water pollution.

In February 2015, TEA recommended that Council adopt the following motion:

That City Council direct that, effective April 1, 2015, City Council approve that the industrial waste surcharge program formula for the calculation of surcharge fees be applied to all treatable parameters that exceed the sewers by-law limits, instead of only the one parameter that exceeds the sewer by-law limits by the greatest amount, allowing full cost recovery for the wastewater services provided by the City, such surcharge to be phased in over a six year period to mitigate impacts to existing companies.

We understand that City Council will decide the issue this week.

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