Guidelines For Municipal Water Pricing

This study outlines the theory of marginal cost pricing of water, translates this theory into a practical approach to rate making in Canadian municipalities, and provides examples of applying this methodology. It concerns only municipalities with centralized water supply systems.

Presents an analysis of municipal water rates charged to residential and commercial water users in Canada. The purposes of the paper are to examine the types of water rate schedules in use, to compile both the unit prices and the total prices of water paid by consumers across Canada, and to evaluate current practices against some commonly accepted criteria for the operation of municipal water systems.

One of four discussion papers in support of a policy report, this paper addresses the question of how the demand for water can be better managed to ensure the conservation and protection of Canada's water. The paper deals with the questions of pricing water at a level which reflects its true worth; expanding the mandates of water agencies to include managing demand; and encouraging more efficient use of water. The paper reviews water-efficient appliances, fixtures, industrial equipment, and agricultural practices; the tools available to governments for managing water demand, including pricing policies, education and information programs, licensing agreements, and minimum standards; and a preliminary water demand management strategy.