Iqaluit residential water rates set to triple by July 2021 as subsidy is rolled back

Iqaluit homeowners are going to be paying three times as much for water by July 2021.

Last night, city councillors passed a third reading of an amendment to the Consolidated Fees and Charges bylaw, which will claw back the 1.3 cents per litre water subsidy customers have long been receiving. The rollback retroactively starts on Jan.1, which already decreased the subsidy to one cent per litre.

The subsidy will continually be reduced by 0.2 cents, twice a year, until it's eliminated on July 31, 2021.

According to water usage data provided by the City of Iqaluit, the average single family home on trucked service paid about $51 per month in 2017. By the time the subsidy is rolled back, those bills will rise to $146 per month.

Likewise for the average single detached home on piped services, whose bills will go from between $70 and $84 per month, to between $200 and $240, according to the city's data on water usage.

• Iqaluit water rate hike to come with higher rebates for residents

The removal of the water subsidy comes as the city is trying to balance its water and sewer fund, which is in a deficit. Legally, the fund has to be balanced, according to Nunavut's Cities, Towns and Villages Act.

The city receives $1.2 million from the Government of Nunavut every year to be spent on infrastructure, but the city has used the money as a subsidy to help offset the cost of water for residential customers.

Between 2013 and 2015, the city paid out around $1.4 million in subsidies — running a deficit of less than $200,000 annually. But in 2016 and 2017, following a boom in development where more homes began receiving the subsidy, the deficit ballooned to more than $2 million per year.

Also contributing to the deficit was city council's decision to increase the subsidy, and water rates in 2016. In an effort to minimize the impact on homeowners, council increased the subsidy to residents by more than the hike to the water rate.

'The city can't afford not to do this'

Initially, the city staff presented two options to the finance committee back in November: to decrease the subsidy to 0.4 cents per litre or to 0.8 cents per litre. Both options were presented with two-year time frames.

But the committee — which is made up of all members of city council — decided to eliminate the subsidy altogether over three years.

"I've been on council for, this is my 10th year, and in that entire time there's always been a process working to eliminating the subsidy to residential water," deputy mayor Romeyn Stevenson told CBC News.

"Your question is why did we go all the way? It's because we're so close, and we need to. The committee realized there's no point in going part way when it's time to really eliminate it."

We're creating structures in our community that really impede people from going to the places they want to go- Anne Crawford, homeowner

Stevenson said not only will it satisfy the city's legal requirements to balance the water and sewer fund, but it will also free up the government's $1.2 million to actually be used to improve the city's aging infrastructure.

"We're going to be able to use that money the way it was supposed to be used, on the water infrastructure instead of passing it off, and having it end up costing us millions of dollars," Stevenson said.

"I think that the city can't afford not to do this."

While homeowner Anne Crawford has been able to mitigate her household water bills with an array of low-water appliances, she fears increases to services like water, garbage and property taxes, will eventually make it too costly for low-income family to afford home ownership.

"What you want to do is have a society where people can move from, let's say being on social assistance, to working, to renting, to owning a condominium, to owning a house. And that there isn't a cliff there that you can't get over," she said.

"And if home ownership is this cliff that you can't get over, if you're paying a mortgage-worth of money for your water, we're creating structures in our community that really impede people from going to the places they want to go, and from everybody equally participating."

Crawford added she's understanding of the city's situation in needing to balance its budget, and instead pointed the finger at the territorial government for not adequately funding Nunavut's municipalities to deal with the high costs of water and sewage.

The territorial government has a water and sewage funding program — $8 million to help Nunavut's municipalities offset the cost of delivering those services. While it's unclear how much money is given to each community, Minister Lorne Kusugak told MLAs in May the program is under review.

Stevenson said he believes there's long-term viability in owning a home in Iqaluit, and said he thinks most homeowners are happy with both the cost of their municipal expenses and the value in their homes.

Asked if, as a homeowner, he's comfortable paying three times more on his water bills in 2021, Stevenson replied: "I am absolutely comfortable paying for the water that I use and making sure that the system that we have for water in this city is sustainable. And if it takes paying more on my bill, then yes absolutely."