Water, sewer rate hike recommended to help pay for $1.8B Winnipeg treatment plant upgrades

The City of Winnipeg's public service is recommending sewer and water rates rise by three per cent in each of the next two years and 2.8 per cent in the two years following. Part of the increase is slated to help pay for $1.8 billion in sewage treatment plant upgrades.

Public service report calls for increases of 3% per year for next 2 years, 2.8% for 2 years after that

The recommended rate increases are driven by the need to upgrade the city's North End treatment facility. (Jacques Marcoux/CBC)

The City of Winnipeg's public service is recommending a combined 11.6 per cent increase to water and sewer rates over the next four years.

A report to the city's water and waste committee says the main driver behind the recommended increase is providing funding for improvements to the city's North End sewage treatment facility and other sewage infrastructure projects.

The city faces approximately $1.8 billion in costs to upgrade the treatment plant.

Under the proposal, rates would go up three per cent in each of the next two years, followed by increases of 2.8 per cent in the following two years.

Water and Waste committee chair Cindy Gilroy says the rate hikes are "reasonable" given Winnipeg has some of the lowest water and sewer charges compared to other cities. (Travis Golby CBC)

The hike would mean the average residential water bill would go up $33 in 2020.

Councillor Cindy Gilroy, who chairs the water and waste committee, is comfortable with the proposed rate increase.

"Last year we didn't increase our water rates; considering some of the major projects we have moving forward, I think these are reasonable rates. We are still one of the lowest among all of the major cities in Canada," Gilroy told CBC News.

The report, published Friday and set to be discussed at the water and waste committee's meeting next week, cautions that water and sewer rates could rise even higher if the other levels of government do not provide part of the funding for the upgrades to the treatment plant.

In December, the province of Manitoba turned down a request from the city to extend a deadline to remove phosphorus from wastewater that ends up in Lake Winnipeg.

The city takes 11 per cent of the total revenue from sewer and water rates as a dividend. The public service projects that will add $34.5 million to the city's general revenue in 2020.

Councillor Kevin Klein, who sits on the water and waste committee, doesn't like how the the city takes a dividend out of the water and sewer rates and doesn't direct the cash for upgrades to its sewage infrastructure.

The councillor for Charleswood-Tuxedo-Westwood says rate increases are really taxes disguised as fees.

"This whole game of 'we don't want to have anymore tax increases,' is just really, we'd rather have fee increases than tax increases. And I'm not a fan of that right now," Klein said. 

Gilroy defended the dividend saying other cities and the provincial government take dividends from utility fees and it " would be very difficult" to take that money out of the city's operating revenues.

The report says water consumption in the city is trending downward, as it is across North America, as users embrace water conservation. That trend is expected to continue, the report says.

According to the city's public service, Winnipeg's water and sewer utility rates are the second-lowest in cities surveyed.