Halifax Water As a municipally-owned utility, operating on a cost-of-delivery basis. It does not have profit built into its rates. The funds collected are the funds required for operations, capital investment and debt financing to provide quality service for our customers.
On May 2, the Halifax Water Board of Commissioners approved for Halifax Water to proceed with a General Rate Application (GRA) to the Nova Scotia Regulatory and Appeals Board (NSRAB).
Halifax Water submitted a GRA to the NSRAB on Monday, May 5. To view to full application, please visit HERE.
An update will be provided once the application has been submitted.
To view the full news release please visit HERE.
As part of our commitment to ensuring value to customers and the population we serve, Halifax Water prudently operates and maintains large and complex systems for drinking water, wastewater, and stormwater to ensure they meet all public health, safety, and environmental requirements.
Over the past several years, the utility has used accumulated reserves and surpluses to keep rates lower. As a result, rates have not been adjusted to reflect the actual cost of providing the services.
The ability to use accumulated surpluses is no longer an option. For 2024/25, Halifax Water deficits are projected to be $18.7 million and $34.1 million for 2025/26.
It is not financially prudent for a utility to operate at a deficit. As a result, Halifax Water is now at a critical point, where its financial position compels us to seek approval for rate increases
Background
This is the first increase in water, wastewater and stormwater rates since 2023. However, the costs of replacing aging infrastructure, more stringent regulatory compliance and population growth have continued to increase. As a result, our ability to recoup these costs has not kept pace.
In its 2020 rate application, Halifax Water intentionally suppressed rate increases and instead tapped into its reserves and accumulated surpluses totaling $12.2 million to offset the shortfall and continue to meet its revenue requirements.
Halifax Water undertook this cost-control measure on behalf of its customers to reduce the impact of rate increases on the rate base during the pandemic.
In its 2022 rate application, as the world continued to emerge and recover from COVID-19, Halifax Water again asked for modest rate increases that did not fully cover water and stormwater deficits, which amounted to $8.4 million.
These cost-control measures were undertaken based on Halifax Water’s ability to use reserves and accumulated surpluses to reduce the impact on our customers.
These rate-making decisions were appropriate at that time. However, those deferred costs have increased Halifax Water’s current financial deficit. It should be noted that the NSRAB Policy Handbook requires “All water utilities should schedule water rate adjustment applications to avoid creating an operating deficit”.
Customer Impact
A rate increase and strategic investments are necessary to ensure the safe and dependable delivery of water services. Halifax Water understands that these challenges come at a time when many households are already feeling the pinch of rising costs, but without these investments, the utility risks long-term financial instability, jeopardizing the quality of services provided to the community.
Although rates have remained low for several years, adjusting them to catch up with rising costs and deficits is crucial. Halifax Water must apply for a rate increase to support operational sustainability, mitigate further deficits, and ensure it can deliver high-quality water services that customers expect.
As a result, Halifax Water must apply for a rate increase to support operational sustainability, mitigate further deficits, and ensure it can deliver high-quality water services that customers expect.
Proposed Rates
As part of the application, pending approval by the Nova Scotia Regulatory and Appeals Board (NSRAB), Halifax Water is requesting the following:
Requested Annual Rate Increase in dollars and percentages:
Estimated Impact on Average Annual Bill:
Estimated Impact on Average Annual Bill on a Daily Basis:
Affordability
This request was not made lightly; Halifax Water appreciates that this will impact customers that are already feeling the pinch; however, the utility is at a critical point that requires the utility to submit a rate application to avoid further operating deficits
Halifax Water is committed to meeting the demands of customers by understanding how it can better serve them. That is why the utility is focused on providing customers with the tools and information they need to manage their accounts more effectively and efficiently.
The utility has invested in new tools to help customers manage their bills, including Customer Connect. Customers can monitor their consumption, receive customized water-saving tips, and be proactively notified about potential leaks or high consumption. There is no cost to enroll for this service.
Halifax Water is continuously focused on providing value to customers and recognizes There is a cost to assuring quality, but for some, there is a financial concern. This is why Halifax Water conducts an affordability study on a regular basis to look at rates and benchmarks against other cities across Canada. Halifax Water continues to have some of the lowest rates in the country.
We appreciate that increased costs for services is unwelcome, but for those that struggle with affordability, we have designed programs to help them. These include:
Our H2O Program:
- The H2O (Help to Others) Fund is available to Halifax Water residential customers who are having a hard time making their bill payments. Approved applicants will receive assistance once in a 24-month period to a maximum of $275.00.
- Additionally, Halifax Water has lowered the interest rate charged to customers on their outstanding accounts from 19% to 14%.
FAQ
Halifax Water operated with a deficit of $18M in 2024/25 and has budgeted a deficit of $34M for 2025/26. These deficits stem from increased inflation, rising interest rates, depleted reserve funds, and aging infrastructure. A rate increase is necessary to tackle these financial challenges and ensure the reliable delivery of essential water services to our community.
We understand that a rate increase comes at a time when many households are already feeling the pinch of rising costs, according to the NSRAB Water Utility Accounting and Reporting Handbook, it is not financially prudent for a utility to operate at a deficit, and water utilities (e.g. Halifax Water) must schedule rate adjustment applications to avoid further operating deficits.
Rates have remained low for several years, and with no profit built into its rate structure, Halifax Water must file an application to avoid further operating deficits. We are applying for a rate adjustment over the next two years to support operational sustainability, mitigate further deficits, and ensure we continue delivering high-quality water services that our customers expect.
We believe we are taking a rational approach to the proposed rate adjustment and are doing what we can to reduce operating costs and ensure our customers are getting the best value.
We are hopeful the NSRAB will approve the adjustments. However, any delay will defer these rate increases to a later date.
For example, during and coming out of the global COVID-19 pandemic, Halifax Water intentionally suppressed rate increases by tapping into its reserves and accumulated surpluses.
While these decisions were appropriate at the time, the deferred costs have increased Halifax Water’s current financial deficit. This has been further compounded by significant cost increases related to inflation, interest rates on new debt issues, and depreciation costs.
We understand that a rate increase comes at a time when many households are already feeling the pinch of rising costs. However, when these factors are coupled with the ongoing challenges associated with municipal growth, aging infrastructure, and regulatory requirements, rates must be proportionate to the mounting cost pressures facing the utility.
Pending approval, residential customer (5/8” meter size) rates for water and wastewater services would increase as follows:
- 15.8% on January 1, 2026 (approximately $0.41 increase per day or about $138.01/year on the average residential bill)
- 17.6% on April 1, 2026 (approximately $0.428 increase per day or about $173.56 per year on the average residential bill)
Halifax Water is facing significant operating deficits, projected at $18.7 million for 2024/25 and $34.1 million for 2025/26. These deficits stem from increased inflation, rising interest rates on new debt, depleted reserve funds from keeping rates low, and aging infrastructure. These factors, as well as the ongoing challenges associated with growth and regulatory requirements, are the main drivers for this application. A rate increase is necessary to tackle these financial challenges and ensure the reliable delivery of essential water services to our community.
We understand that a rate increase comes at a time when many households are already feeling the pinch of rising costs, and we are mindful of the impact rates have on customers' affordability and the region's overall economic well-being. However, the utility is at that critical financial point that requires a rate application to address the operating deficit. We are committed to engaging all customers openly and transparently throughout the application process.
In 2023 and 2024, Halifax Water experienced significant leadership changes at the executive team level. These changes, along with other institutional capacity issues, coincided with increasing financial pressures on the organization. As a result, this led to delays in the ability to file a General Rate Application (GRA) in 2024.
While some capital spending has been delayed, the associated costs are not applied to rates until the projects come online. We continue to add staff in key areas of the organization to assist with delivering the capital budget.
As the need for and the amount of capital spending increases, rates must reflect the cost of services in the face of growth, aging infrastructure, and increasingly stringent environmental regulations.
Halifax Water is a municipally owned utility operating on a cost recovery basis and regulated by the NSRAB. Meeting the demands of a growing customer base requires the utility to grow along with it. We continue to invest in technology to reduce our costs, have programs in place to manage energy costs, and manage our assets to find the right balance between maintenance costs and asset replacement.
Halifax Water continues to have some of the most affordable service rates in Canada, and these are regularly benchmarked against other cities across Canada. This includes the current rate application.
Halifax Water remains focused on providing value service through safe, high-quality drinking water. However, we understand that any increase in costs can cause financial concern for some customers.
We continue to offer the H2O (Help to Others) Program for those who struggle with affordability. This fund is available to residential customers who are having trouble making their bill payments.
- Approved applicants will receive assistance once in a 24-month period up to a maximum of $275.00.
- Additionally, we have lowered the interest rate charged on outstanding accounts from 19% down to 14% and waived some of the fees we charge on overdue accounts.
Stormwater continues to be underfunded, and rate increases are required for the right-of-way charge, the impervious surface charge for ICI customers, and the tiered charges for residential customers.
ICI Customers with stormwater management systems on their properties may be eligible for a stormwater credit for more information visit here.
The rate application process is open to interveners, and the NSRAB will actively seek public comments. We look forward to and welcome customer input.