Halifax Water rate hike will drive up rents, landlords say

Two rate hikes proposed by Halifax Water will drive up rents in the municipality's already strained housing market, according to an association that represents landlords.

The Rental Housing Providers of Nova Scotia has filed for intervener status in the water utility's application to the Nova Scotia Regulatory and Appeals Board, submitting a short letter on Monday in which the industry group said it's "deeply concerned" about the proposed rate changes.

Kevin Russell, executive director of Rental Housing Providers of Nova Scotia, said he's gathering evidence to make his case to the board.

"It's just another cost that the industry will have to bear, which ultimately will end up in rents," Russell said in an interview.

Halifax Water applied to the board earlier this month for rate increases that would come into effect over two years.

The utility is asking for a 16.2 per cent increase in the average residential bill in the 2025 fiscal year, which began April 1, and an additional 17.6 per cent increase in the 2026 fiscal year.

Russell said he doesn't have exact numbers on how many rental units include water in the rent and how many units require tenants to pay their water bills directly. However, he said the majority of purpose-built rental buildings have water included, while many units in family homes do not.

Russell said he doesn't know what it will look like yet, but he intends to propose to the board an alternative to what Halifax Water has proposed.

The board has scheduled a public hearing for the matter in September, where submissions from all participants can be reviewed and discussed before the board makes a decision.

Private landlords aren't the only ones worried about Halifax Water's proposal.

'Every dollar counts'

Trish McCourt said this "significant" jump in water costs will be hard to absorb for non-profit housing operators. 

"Every dollar counts when it comes to non-profit housing developments," said McCourt, executive director of the Nova Scotia Non-Profit Housing Association, in an interview.

"There's not a lot of places to go to find that additional revenue for those kinds of increases, especially when you're looking at something happening fairly soon," she added.

McCourt said her organization has not applied to intervene in the regulatory review of Halifax Water's case, but she didn't rule it out.

Like Russell, McCourt couldn't say exactly how many non-profit housing providers incur water costs themselves. But she said those who do are likely looking at their budgets, trying to sort out how they might accommodate bigger bills.

"Something like water really affects non-profits in a very similar way to private organizations, but non-profits usually have less of a cushion."

In cases where the non-profit does not pay for water, McCourt said the concern is for the tenants.

"Of course, non-profit housing providers have a lot more tenants that are at the more affordable end of the spectrum, needing more support when it comes to being housed and remaining housed. So adding an unexpected amount to their budget like that is pretty significant for the tenants as well."

'Rates must increase'

In its submission to the board, Halifax Water said it's contending with an "urgent need to replace aging infrastructure," and a slew of external pressures including inflation, increased borrowing costs and increased labour and material costs. The utility said these factors are driving up the deficit and the need for higher rates.

Halifax Water's budgeted deficit for the 2024 fiscal year was more than $18 million. In its application to the board, the utility said without the proposed rate increases, the deficit would rise to $37.1 million this fiscal year and $55.8 million in the next fiscal year.

Two major infrastructure projects on the docket are a new $70-million operations centre and a nearly $70-million set of upgrades at the Windsor Street exchange in Halifax.

In a statement to CBC News, a spokesperson added that rates are the utility's only funding source, and for the last two rate applications Halifax Water used reserves and operating surpluses to keep rates low — an approach that it no longer considers to be an option.

"As a result, rates must increase to address these financial challenges and maintain reliable water services," said Jeff Myrick.

Myrick said Halifax Water respects the concerns of landlords and welcomes their participation in the regulatory review process.