August 20-27, 2007

Consumptive charges to be levied on large industrial, commercial water users

Industrial and commercial water users will begin paying water consumption charges in January 2009, under new Ontario regulations now in effect. O Reg 450/07 under the Ontario Water Resources Act (OWRA) specifies the charge rate, sectors to which the charge applies and when payments are to be made. It also requires information on the amounts of water used by highly consumptive commercial and industrial users to be submitted to the Ministry of Environment.

The charge of $3.71 per million litres of water applies to commercial and industrial water users who withdraw more than 50,000 litres per day from groundwater and surface water sources or a municipal system. The charge is volume-based so that commercial and industrial users will be charged for the actual volume of water withdrawn in a 12-month period.

The charge will be phased in starting with highly consumptive uses where water is incorporated into a product. These uses include beverage manufacturing, fruit or vegetable canning or pickling, readymix concrete manufacturing, and aggregate processing. The charge will go into effect on January 1, 2009. In the following year, based on the information obtained by the ministry from the users or communal water works operators, a charge will be levied on every highly consumptive commercial and industrial user of water specified in the regulation. Among these are non-metallic mineral product manufacturing; pesticide, fertilizer and other agricultural chemical production; and inorganic chemical manufacturing where water is incorporated into a product.

Other commercial and industrial water takers that are moderate or low consumptive water users, including power (except hydropower facilities), would be phased in later.

The charge will not apply to agricultural operations, institutions such as schools and care facilities, environmental uses such as wetlands projects, private wells or to the water municipalities supply for residential use. By the end of 2008, the Ministry of Environment director must prepare a list of facilities to which the regulation applies.

The regulation is intended to recover part of the costs incurred by the government in adminstering the OWRA and related legislation, as well as a portion of the provincial costs of water management activities such as preparing water budgets, monitoring, and controlling takings and impacts. These costs are significant, and many commercial and industrial users benefit from such programs, which help provide them access to clean, abundant water supplies. The government says the regulation will ensure that these users pay their fair share of the management costs, and will encourage companies to conserve water.

A related regulation, O Reg 451/07, amends O Reg 387/04 and requires pre-1961 industrial and commercial water takers to which the charge applies, who were exempt from requiring a permit to take water (PTTW), to obtain such a permit. These pre-1961 water takers must submit an application for a permit by June 30, 2008. This change is intended to ensure that the charge is applied equitably to businesses in Ontario,

Changes to the administrative fee for water taking permits

Effective September 1, 2007, pre-1961 water takers applying for a PTTW for the first time will not be required to pay the PTTW administrative fee. Upon renewal, however, these users will have to pay the fee.

The PTTW administrative fee exemption also covers applicants for wetland and wildlife conservation seeking permits for projects whose primary purpose is protecting, enhancing, restoring or establishing wildlife habitat or wetlands. A permit will still be required and the province will continue to evaluate proposals through the PTTW program to ensure that the water takings have minimal impacts on the environment.

The PTTW administrative fee was introduced in April 2005. The fee is currently paid by all permit applicants, with the exception of applications by a farmer for an agricultural purpose. The fee is a cost-recovery fee. It recovers ministry costs to process, review and issue PTTW applications.

The decision notice for the final regulation and an information notice about the changes to the administrative fee are posted on the Environmental Bill of Rights registry at www.ontario.ca/environmentalregistry (registry reference numbers 010-0162 and 010-1032).

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