Stormwater Funding Review

If we don’t manage stormwater properly, it can cause problems for our environment and our well-being.

• Stormwater can affect important water sources like aquifers (underground water storage), creeks, and lakes. When it rains or the snow melts, natural landscapes soak up water like a sponge. But when we clear land for development stormwater runs off more quickly, causing erosion in creeks and preventing aquifers from getting replenished.
• Stormwater run-off carries pollutants like sediment, fertilizers, hydrocarbons, pesticides and litter into our waterbodies. Nutrients from those pollutants are then carried to ponds or to Hamilton Harbour and are food for algae, leading to poor water quality and strong odours when the algae begins to rot. In the City’s combined sewer areas, stormwater mixes with sewage. When there is heavy rain or snowmelt, these combined sewers can overflow, also sending polluted water with nutrients into our natural environment. 
• Extreme weather events, like heavy storms are becoming more frequent due to climate change. These events can damage homes, disrupt roadways and communities, and can even impact our health.

There are many different pressures on the stormwater system:

• continued development
• aging infrastructure
• sediment and other pollutants in run-off
• increasing impacts of climate change.

Without proper financing and preventative maintenance, there is potential for disruptive failures, costly repairs and damage to the environment.

The City currently spends approximately $56 million annually on its stormwater program (which includes $9 million of contributions to the local Conservation Authorities funded from property taxes). Currently, the City primarily pays for stormwater management services through water and wastewater utility revenues, with the remainder coming from property taxes.

This means that properties pay primarily based on the amount of municipal water consumed, not based on how much stormwater runs off their properties. That means that the amount that a property contributes to stormwater funding is not fair or equitable.

Properties that use a lot of water (such as the food services industry and laundromats) currently pay a larger amount for stormwater services. Properties with large areas of hard surfaces such as parking lots, contribute very little funding to stormwater management despite the amount of stormwater which runs off their site and into the stormwater system. This is why the City is introducing a stormwater fee starting in April 2026.

Starting in April 2026, the City will implement a stormwater fee. At that time, properties will be charged based on the load (or use) they place on the stormwater system.

Paying for stormwater management through a stormwater fee, also referred to as a utility, is similar to how the City funds its water and wastewater programs, and it is becoming more common in Ontario and across North America. Other municipalities that have successfully implemented a stormwater fee include Kitchener, Waterloo, Ottawa, Guelph, Brampton and Mississauga.

The City investigated the viability of implementing a more equitable stormwater funding model through the Stormwater Funding Review; the timing of which is outlined below.

• December 2021 - Hamilton Council directed staff to report back to the Public Works Committee with a review of the benefits and challenges of various stormwater program funding options and provide a recommendation for the preferred financing model for the City’s stormwater programs.
• June 2022 - Council approved a report that outlined a three-phase project, the Stormwater Funding Review, and directed staff to provide Guiding Principles for consideration which will direct the evaluation of an alternative stormwater rate funding structure.
• November 30, 2022 - Guiding Principles to be used in the review of stormwater funding models were approved by Council, including:
  • How justifiable a model is,
  • It’s equity,
  • Climate resilience,
  • Environmental sustainability,
  • Affordability, financial sustainability and
  • Simple to understand and administer
• January 2023 - Council directed staff to accelerate the funding review and report back by June 2023.
• June 2023 - Council approved the new stormwater fee (findings and recommendations were presented in a Council report) and directed staff to consult the public on a financial incentive program.
• October 2023 to January 2024 - Staff engaged the public on a draft financial incentive program.
• January 16, 2024 - Communication Update(PDF, 157.08 KB) released to the Mayor and members of Council outlining preliminary recommendations based on the feedback gathered from the public engagement period, with a full report to be brought forward to council in spring 2024.
• June 5, 2024 - General Issues Committee approved the stormwater incentive program.
• June 12, 2024 - Council approved the stormwater incentive program (recommendations and public feedback were presented in a Council report).

The stormwater fee for the City of Hamilton is based on core guiding principles to ensure the most sustainable, equitable, affordable and simple funding model. This fee will have a variety of benefits:

• The fee will be a stable and dedicated funding source that allows the City to address stormwater risks and water quality issues as needed, plan for long-range and large-scale capital improvements, and leverage provincial and federal grant programs by being able to provide matching funding.
• The fee will be fair and equitable, and based on stormwater runoff rather than water consumption.
• The fee will mean that costs for municipal stormwater services are equitably distributed to all privately and publicly-owned developed properties within the municipality.
• An incentive program will be implemented alongside the fee and will encourage property owners to make improvements to reduce the amount and improve the quality of stormwater that runs off their property.

Once the 2026 budget is estimated at the end of 2024, the stormwater fee for each property will be estimated. These fees may change until they are formally approved by Council at the end of 2025.

• Single-Family Detached Homes (urban and rural) - If you live in a single-family detached home. you will be charged a fixed fee – one billing unit. In other Ontario municipalities with a Stormwater Fee, this fee typically ranges from $10-$20 per month.
• Multi-Family Properties (with less than six units): Townhouse and duplex dwelling units will pay 0.5 billing units per dwelling unit, and triplexes, fourplexes, fiveplexes, and sixplexes will pay 0.3 billing units per dwelling unit. These categories will be taken from Municipal Property Assessment Corporation (MPAC) assessments.
• Industrial, Commercial, Institutional, Agricultural, and Multi-Family Properties (with more than six units): For these property types, the fee will be based on the actual impervious area of each individual property (the impervious area is the hard surfaces on a property, like a roof and an asphalt or concrete driveway). The City will measure this using aerial photography.

When the stormwater fee is implemented, properties that are connected to the City’s sewer system will no longer be charged for stormwater services through their wastewater utility fee.

Instead, all properties (including those that are not connected to the City’s wastewater system) will see a separate stormwater fee on their utility bill. Wastewater rates will be reduced when the stormwater fee is implemented in April 2026.

The City will implement a unique ‘made in Hamilton’ incentive program for industrial, commercial, institutional, agricultural and multi-residential properties with greater than six units.

It will include a multi-stream credit program unlike other municipalities, including a Stormwater Management Infrastructure Credit (of up to 50%), a Hamilton Harbour Discharge Credit (of up to 90%) and a Green Space Credit 

The proposed three-stream stormwater credit program was approved by Council in June 2024.

We know that some people with large properties are worried about how the new stormwater fee will affect them. That’s why the City will be offering a “Green Space” credit. This credit will help to reduce the stormwater fee for properties that have a large amount of green space, like forests and fields. This credit will be applied automatically to the stormwater fee without the need for a credit application.

The City’s stormwater program includes important work in the rural areas to keep the system working well:

• City staff inspect, fix and clean assets like culverts, stormwater ponds and ditches. They also reshape ditches to better catch dirt and mud and address invasive species. 
• The City takes care of natural watercourses, like streams and wetlands, inspecting, cleaning them of debris and sediment, and fixing places where the water is eroding the land. 
• The City addresses water quality issues from pollutants that include high levels of nutrients like phosphorus. 
• The City also contributes millions of dollars each year to Conservation Authorities which address watershed management issues in rural and urban areas.

The City invests millions of dollars per year in stormwater services for rural parts of Hamilton, which provides valuable benefits to the rural community. Right now, much of this work is paid for through City water and wastewater rates. But some rural and farm owners do not pay into this funding system. We believe that a fair solution would be to have all property owners contribute through the stormwater fee. This way, everyone helps pay for managing stormwater, whether you live in downtown or rural Hamilton.

A rural property with just a house (e.g., no commercial, industrial or agricultural buildings) will be charged as a residential property and will pay the same as any other house within the City of Hamilton. A farm property with just outbuildings like barns and greenhouses will be treated as non-residential and will be charged based on how much of the land is covered by hard surfaces (like roofs and paved areas) and how much is green space 

Since many farms have both a house and outbuildings, the stormwater fee for those properties will be calculated using a hybrid approach. The house will be charged the residential fee, and the outbuildings will be charged as non-residential. 

The actual rates for the stormwater fee will be decided by City Council at the end of 2025. Like other properties in Hamilton, residential-only rural properties would be eligible for the approved subsidies, and farms would be eligible for the approved Green Space Credit. 

For property owners not currently receiving a water/wastewater utility bill, they will begin to receive a stormwater only utility bill when the stormwater fee is implemented in 2026.(like fields or gardens). A property that is undeveloped, with no hard surfaces will not be charged any fee.

Not only do ditches and culverts serve municipal roads used to access rural properties, but they also serve private roads and overland flow from rural properties.  They also convey run-off from rural driveways and rural green spaces when the ground is saturated or frozen.

The City owns and maintains 1,500 km of ditches and 3,500 culverts. The City’s stormwater program includes important work in the rural areas to keep this system working well. City staff inspect, fix and clean ditches and culverts. They even reshape ditches to better catch dirt and mud. Staff maintain more than 30km of ditches each year, regularly patrolling and documenting issues, and dealing with issues based on priority. So you may not see activity in your area unless there is a problem that needs to be addressed.

Hamilton's new stormwater fee is designed with fairness and simplicity in mind. There are over 120,000 single-family homes in Hamilton – this makes up 84% of all properties. Charging each residential property owner a different fee based on the actual measured amount of hard surfaces on their property (like driveways and rooftops) would require a lot of time and effort to calculate and monitor each individual home. The City would need to increase staffing to administer this!  After careful analysis, we found that while larger homes have more hard surfaces the potential $7 difference in monthly charges between the largest and smallest single-family homes is minimal compared to the administrative costs of individual rates. Additionally, many larger single-family homes are in rural areas without direct connections to the stormwater system, making higher charges harder to justify. Therefore, to keep things both fair and simple, all single-family residential properties will share the same rate.

Multi-family residential properties typically have a smaller footprint than single-family detached homes, so they will be charged less. The rate for townhouses and duplexes will be half of the rate for a single-family detached home, while the rate for triplexes, fourplexes, fiveplexes, and sixplexes will be approximately one-third. These categories will be determined by Municipal Property Assessment Corporation (MPAC) property assessments.

The City of Hamilton is offering a multi-stream credit program for industrial, commercial, institutional, agricultural and multi-residential properties with greater than six units, as described above.

Single-family residential and multi-residential properties with six or fewer units are not eligible for the credit program. In the place of a credit, properties will have access to programs that provide a variety of discounts, subsidies, and advisory services for implementing stormwater management measures that support the natural water balance by reducing the amount of stormwater that runs off a property, infiltrating water into the ground where possible, and preventing pollutants that could be carried by stormwater runoff.

It is the responsibility of property owners, or representatives, of industrial, agricultural, commercial, institutional or multi-residential properties of more than six units to apply for the Stormwater Management Infrastructure Credit or Hamilton Harbour Discharge Credit. Applications will be reviewed on a case-by-case basis. Submission requirements will be available online in 2025.

In addition, there will be an appeal process. If you feel that your fee or credit is incorrect, appeals can be submitted. The City will reevaluate your fee and/or credit and be in contact with you. The steps for submitting an appeal will be posted on the City’s website.

It is the property owner’s responsibility to submit proof of maintenance of the stormwater facilities every five years to be eligible to continue receiving storm credits. 

For those property owners with large green space, the Green Space credit will be applied automatically for eligible properties.

A small monthly credit based on a percentage of the residential stormwater fee is generally not enough of a financial incentive for homeowners to implement stormwater measures on their properties. Providing higher up-front grants and subsidies, as well as guides and other assistance, would be more helpful to residents who would like to participate, and more cost-effective from an administrative standpoint.