The Town of Ajax has announced it will be introducing a flat stormwater fee of $48 per residential unit on the final tax bill being issued in May 2023.
It said non-residential properties (such as commercial, institutional, industrial etc.) will be charged $0.25 per m2 impervious area, per year. The stormwater fee will be indexed annually using the Municipal Price Index (MPI), like the town’s other user fees.
The stormwater fee is expected to generate $2.7 million in revenue in year one to support the town’s stormwater management program.
This is in addition to Ajax property tax, which has increased by 3 per cent this year as well as a new Infrastructure Levy of 2 per cent.
Ajax said it is implementing this” “critical and responsible fee to ensure we protect our valuable stormwater system (which consists of storm sewers, catch basins, bridges and culverts, watercourses and facilities), and the health and safety of the community.”
This management is expressly important to the town as it protects the quality of waterways like rivers and lakes from becoming polluted, prevents flooding that can cause property damage or harm to residents, and decreases unwanted erosion that affects the shoreline, trail networks and open spaces.
As of 2021, 16 municipalities in Ontario had implemented a fee. Municipalities include: Waterloo ($163.68), Richmond Hill ($73.92), Vaughan ($53.52), Guelph ($76.80), etc. The numbers are for residential units and the Guelph fee is based on the Equivalent Residential Unit (ERU) billing method.
Ajax said stormwater infrastructure is considered a core asset as per Ontario Regulation 588/17: Asset Management Planning for Municipal Infrastructure(External link). All Ontario municipalities are required to have a final asset management plan by July 1, 2025, which must include information about the levels of service that the municipality proposes to provide, the activities required to meet those levels of service, and a strategy to fund activities related to stormwater management infrastructure.
Costs
A feasibility study (External link) conducted in 2021 showed the town spends significantly less on stormwater management (maintenance and rehabilitation) compared to other Ontario municipalities. The town’s annual expenditures average around $1.6 million, a fraction of the required true costs of $10 million.
Approximately 50 per cent of this spending has been through leveraging federal and provincial grant programs, which fluctuate annually and cannot be relied on, and through town reserves, which require stable funding. The other 50 per cent is through property taxes. The average house currently contributes $18 per year to stormwater through taxes. If there were no reserves/grants, the contribution would need to increase to $38 per house to maintain the current program with no change in the level of service. A property tax increase of 10 per cent would be required to bring the town’s stormwater program to a fully funded level ($10 million). Property taxes are based on a property’s assessed value, which does not typically correlate with its runoff contribution, so the fairness and equity of this revenue source is low.