WC134 JanFeb 2024 - Magazine - Page 25
UTILITY MANAGEMENT
Balancing the Scales
What strategies can utilities use to advance
water equity and affordability?
BY KATINA TAM
N RECENT YEARS, communities
across Canada have experienced shifts in
the economic and fiscal landscape. High
inflation, supply chain interruptions, and
increased interest rates have resulted in
higher costs to deliver water services. At the
same time, household incomes are strained.
Municipalities are also experiencing more
severe impacts caused by climate change,
which disproportionately impacts marginalized communities. How can water utilities
strike the right balance between recovering
the full costs associated with providing
essential water services and supporting residents equitably?
While full cost recovery principles help
municipalities balance budgets to ensure
a sustainable revenue stream and advance long-term intergenerational equity,
short-term customer equity needs to be
included in the decision-making processes.
Although water remains underpriced, it is
still expensive for low-income, senior, and
disabled Canadians. Recognizing the financial burden for some
community members, the necessity for water utilities to explore a
spectrum of considerations and strategies becomes imperative in
order to enhance water equity and affordability.
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Applying a customer lens approach to servicing
In Canada, there is no formal definition of affordability related
to water rates and household income. For this reason, the definition varies by municipality. The Organization for Economic
Co-operation and Development’s (OECD) affordability benchmark, which is referred to by some Canadian municipalities,
recommends that water and wastewater services for low-income
households should not exceed five per cent of their after-tax income. Other municipalities look at the average municipal burden
as a percentage of income as an indicator of affordability.
To be more informed on how much utility bills cost customers in relation to their household income, utilities must apply a
customer perspective to servicing. Christopher Roth, industry
manager at Esri Canada, points to the power of data to advance
WAT E R C A N A D A . N E T
Several municipalities, like the City
of Vancouver, are working to increase
efficiencies within their systems and
minimize rate increases.
Katina Tam
Katina Tam is a senior program advisor
at Canadian Water Network.
WATER C AN ADA • JANUARY/ FEBRUARY 2024
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