WC141 MarApr 2025 - Magazine - Page 10
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Turning the Taps On
Necessary water action to alleviate the
housing crisis.
BY THOMAS SANDERSON AND KYLE BERTSCH
S PART OF ITS PLAN to achieve 1.5 million
new homes by 2031, the Ontario Government
announced that it will invest heavily in housing-enabling infrastructure. Highlighted in the Ontario
Government’s investment plan is its commitment
to invest up to $1 billion in loans to provide municipalities
with financing options for water infrastructure projects
through the new Housing-Enabling Water Infrastructure
A
“Even with timely upgrades, water supply and
sewage capacity are 昀椀nite."
(HEWI) lending stream. The purpose of this lending stream
is to support the development of water capacity infrastructure
necessary for new home developments, including drinking
water, wastewater and stormwater infrastructure. While the
Ontario Government’s financial investment in water infrastructure is a step in the right direction, regulatory challenges.
Even with timely upgrades, water supply and sewage
capacity are finite. A growing municipality often cannot
assign capacity to all development proposals in a given
year. Accordingly, some adopt allocation policies that
score applications according to community priorities: e.g.
economic benefits, sustainability, efficient land use, housing
affordability, and/or local amenities. Developers may find
themselves asked for development features going beyond the
standard Planning Act requirements. Priorities differ from
one community to the next.
For decades, under the Municipal Act, municipalities have
been required to supply water or sewage treatment on request
Kyle Bertsch is an associate with the London,
Ontario office of Miller Thomson LLP. Kyle practices
real estate law, with a focus on commercial
transactions, leasing, and financing.
Thomas Sanderson is a partner of the Waterloo,
Ont. office of Miller Thomson LLP. Sanderson
practices municipal, planning and land
development law, acting for municipalities,
residents and businesses.
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WATER C AN ADA • M ARCH/APRIL 2025
to any building along a supply line, provided that this is
consistent with any official plan and that there is “sufficient”
water supply or sewage capacity. Courts have qualified these
obligations to allow for broad municipal powers over public
utilities. In 2014, the Court of Appeal rejected owners’
arguments seeking to enforce a “first come, first served”
approach, instead allowing municipalities some flexibility to
determine when supply is “sufficient”. The Court concluded
that allowing control over “reasonable” allocation allows for
orderly development.
In June 2024, Bill 185 added section 86.1 to the
Municipal Act, 2001, expressly setting out a municipal power
to adopt allocation policies. Old policies continue in force,
but new policies must involve a staff- or agent-administered
approval process and no appeal procedure. Allocation policies
will continue to vary under the new provisions,
Unfortunately, the only regulations permitted under the
updated Municipal Act are those creating exemptions for
specific instances or classes of development. The responsible
Minister may hesitate to make case-specific regulations,
anticipating scrutiny on the grounds of fairness, transparency
and local accountability, and developers may not be willing to
expend the time and effort required to seek such regulations
Exempting entire classes of development also poses
problems. As certain favoured project types increased their
share of capacity, competition would increase among other
projects, with the impact difficult to predict. The Ministry
may find it difficult to research and plan the impact of such
interventions, to the extent a local community is able.
A better method of regulating allocation policies would
be for regulations to set province-wide parameters. This
could include prescribing permitted or unlawful factors, and
allocating timelines for decisions and expiry. Such changes
would help developers to navigate allocation applications
efficiently and across multiple jurisdictions. It would also
provide a clearer legal standard for municipalities, with
enough flexibility for a tailored policy.
Overall, while the Ontario Government’s investment in
water capacity infrastructure is a positive step toward meeting
the housing goals set for 2031, the regulatory challenges
associated with water capacity allocation remain significant.
Municipalities need clear, consistent, and adaptable allocation
policies to manage the finite nature of water supply and
sewage capacity effectively. A more standardized, provincewide regulatory approach could streamline these processes,
provide clearer guidance for developers, and ensure fairness
and efficiency in allocation. Addressing these regulatory
challenges as soon as possible will be essential to ensure that
necessary water infrastructure is in place to support Ontario’s
ambitious housing development objectives.
WAT E R C A N A D A . N E T
