When it comes to starting any new venture, there are costs associated with them that many might accidentally overlook – such as water and other utilities for your business. Whether it’s a small startup or a large commercial or industrial company, water efficiency and how your costs are used are very important. Water costs vary based on several factors and of course, location. This article will give a better insight into what to expect once you’ve decided to start a business in Ontario and will serve as an oversight view for your first steps.
Water Costs and location differences
Large commercial businesses and industrial sized businesses as well have to think about where to spend their money on water (and other facilities) including where wastewater goes and how it gets treated, specific licenses, and other costs such as water recycling. Not just the costs of getting water into the businesses, but what happens during and after the fact – and how much that might cost and what needs to be spent on it.
Water costs for manufacturing depend, as noted earlier, on location and water sources, such as how much distance pipes need to transport water for your businesses. It varies by municipality, but overall, it comes down to municipal water and provincial costs for water. Cities such as Toronto typically offer manufacturers and industrial business rates that help curb the costs that otherwise would be astronomical if they were set under residential water rates, as an example. Large industries that use over a certain amount must pay provincial water-taking charges of $3.75 (or whatever the rate may be based on different factors) per million liters to the Ministry of Environment, Conservation and Parks for water conservation and protections.
- Varies by location: Larger cities such as Toronto will typically have lower rates and have offers in place for large scale manufacturers to save on water costs.
- Contacting your local municipality is a good way to ensure that you’re understanding the exact costs and fees that will come with your business. Since rates are set at municipal levels, it’s good to find out what those may be to estimate your costs.
- Check provincial water taking and saving requirements as well, if your facility takes a certain amount of water, you will need to comply to all provincial reporting requirements and pay any fees and charges that may occur if you end up going over or in general are estimated to use more water.
- Calculating the total costs can be daunting, but once you manage to understand your municipal and provincial fees, along with wastewater treatments, and other specific licenses you may need, and water recycling – you can then get a much better assessment of how much you’ll be spending overall.
As an example, by law, Phase 1 industrial or commercial water users that take more than 50,000 litres on any single day where water is incorporated into a product include:
- Water-bottling facilities
- Beverage manufacturing facilities
- Fruit and vegetable canning or pickling facilities
- Ready-mix concrete manufacturing facilities
- Other non-metallic mineral product manufacturing facilities
- Pesticide, fertiliizer, and other agricultural chemical manufacturing facilities
- Other inorganic chemical manufacturing facilities
Water charges
The $3.71 per million litres charge for Phase 1 industrial or commercial water users will apply to the total volume of water taken each year (annual volume of water withdrawn x $3.71 per million litres) Water-bottling facilities with permits to take groundwater will be charged $3.71 per million litres plus an additional $500 per million litres for a total of $503.71 per million litres of groundwater taken.
Ontario will invoice and collect the charge directly from Phase 1 users (included permitted water bottling facilities) If you are a Phase 1 industrial or commercial user and you pay a water charge, you must submit a one-time report to the ministry. The deadline for this to submit a report is within 30 days of operation.
Depending on what kind of business you are starting, such as a large commercial factory or an institutional setting like a school – all of the licenses, wastewater treatment services, and more need to be taken into account for upfront costs. Water recycling as well is available, depending on where in the province you are wanting to start your business. There are typically higher and lower costs if you are in a large municipality, such as Toronto or Hamilton, and have higher or lower costs if you are located out of any major cities or are in a small city outside of the GTA.
In the City of Toronto for example, water fees can (and often do) include everything from Annual Season Meter Activation Fees that includes replacement, removal of the water meter, one turn on, one turn off, etc. Fire hydrant flow tests, fire hydrant permits, and more. The costs of these for 2025 are as follows:
The below fees are effective January 1, 2025.
| Description | Fee $ |
| Annual Seasonal Meter Activation Fee: includes replacement, removal of the water meter; one turn-on, one turn-off | $272.42 |
| Conduct fire hydrant flow test | $354.14 |
| Disconnection Fee for any residential water service less than or equal to 25 mm | $1,676.86 |
| Fire hydrant permit | $212.45 |
| Installing 19 mm new residential water service and meter | $5,671.75 |
| Installing 25 mm new residential water service and meter | $6,571.85 |
| Processing annual water supply backflow prevention device testing reports | $66.02 |
| Reuse of residential water service 19 mm to 25 mm | $353.86 |
| Single Service call Turn-off/Turn-on within 30 minutes | $106.15 |
| Unregistered water each day order not complied | $70.76 |
| Water meter accuracy test; meter less than or equal to 50 mm – No Chamber – applied if the meter does not over-register | $212.45 |
| Water Turn-off/Turn-on Fee | $106.15 |
| Water Turn-off Fee for demolition; (disconnection of old water service not included) | $106.15 |
Fees are reviewed annually as part of the budget process and are subject to change.
The Wastewater Fees are also as follows, as of 2025 in Toronto:
The below fees are effective January 1, 2025.
| Service | Fee $ |
| Disconnect residential sanitary sewer service connection in the road allowance | $1,750.84 |
| Inspection fee for the reuse of residential City sewer connection up to 150 mm in diameter | $709.21 |
| Install a new residential sanitary sewer service connection in the road allowance | $14,186.78 |
| Install a new residential storm sewer service connection in the road allowance | $14,186.78 |
| Technical Review by Toronto Water staff – Application to Toronto Water for an exemption to permit the construction of a driveway sloped downwards towards a residential building | $2,125.66 |
| Technical Review by Toronto Water staff – Application to Toronto Water for new connection or change or alteration to the existing storm connection, sanitary or water supply connection | $424.85 minimum fee; additional $104.80/hr for each hour after 4 hrs to a maximum of $2,125.66 (plus HST) |
| Technical Review by Toronto Water staff – Application to Toronto Water for the request to encroach within a City permanent or temporary easement (related to City water and sewer infrastructure) | $424.85 minimum fee; additional $104.80/hr for each hour after 4 hrs to a maximum of $2,125.66 (plus HST) |
| Technical Review by Toronto Water staff – Application to Toronto Water for the request to release from title a City easement (related to City water and sewer infrastructure) | $424.85 minimum fee; additional $104.80/hr for each hour after 4 hrs to a maximum of $2,125.66 (plus HST) |
Fees are reviewed annually as part of the budget process and are subject to change.
Both of those charts are for Toronto, but if your business is outside of the Greater Toronto Area, these fees and costs will be different and can change. Some may not even exist in your area, depending on how the water flows are set up.
In Ottawa, extensive resources are needed to provide water, stormwater, and wastewater services and the charges you need to pay for account for:
- Water production, distribution, collection and treatment – 27%
- Engineering, planning, and client servicing – 17%
- Infrastructure renewal – 56%
Licenses and other permits, depending on what your manufacturing business is, varies from location and municipality, and since Ontario has many areas – it is recommended and encouraged to reach out to your local municipality by phone or email to get more information for manufacturing water costs, as they vary and depending on what type of manufacturing you are doing – the available fees and numbers can change.
Reviewing commercial utility options and costs
Looking to reduce your water costs? Check our Water Hub, which covers a wide range of water efficiency tips for both homes and businesses. EnergyRates.ca can also help you review and reduce your utility costs beyond water usage. Our experienced team of energy consultants can support you in comparing plans for your commercial, large commercial or industrial operations.
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