Toronto seeks to make commercial and industrial sectors pay for stormwater runoff

After last week’s severe storm and flooding, Toronto’s controversial stormwater charge, dubbed “the rain tax” by critics, has resurfaced at city council with a motion by Mayor Olivia Chow.

Aiming to address increasing flood risks exacerbated by climate change, the motion — called Reducing Runoff and Mitigating Flooding — asks city staff to explore ways to mitigate storm effects. It also proposes consultations on a commercial parking levy to manage stormwater runoff from large-scale paved surfaces.

Speaking to reporters at the city press gallery on Thursday, Chow said her motion would impose a stormwater charge on businesses and incentives to encourage the adoption of permeable surfaces that allow water to seep into the ground, rather than running off into city sewage systems. If approved, consultations on flood mitigation strategies could begin as early as August.

“Whatever you want to call it, we do have a lot of rain,” Chow said. “We need to deal with floods.”

Last week, Toronto and the surrounding area experienced severe storms and flooding, with experts attributing the crisis to a combination of climate change, outdated infrastructure and policy gaps. They stress the urgent need for innovative flood management and climate resilience strategies to prevent future disasters in Toronto and other cities.

“We do know that climate change will make flooding more frequent and fire and heat,” Chow said. “We have to act to mitigate the impact of stormwater. And that means better stormwater infrastructure.”

Chow addressed the role of large commercial entities and major parking lots in stormwater management, noting they contribute significantly — at least 40 per cent — to the city's stormwater runoff. She emphasized the need for these businesses to take action, suggesting those who create permeable surfaces could benefit from lower charges.

Conversely, Chow pointed out that businesses failing to address their runoff issues and allowing their parking lots to become “stormwater lakes” should be held accountable.

Earlier this year, Toronto cancelled online public consultations and meetings on a plan to charge homeowners and businesses for paved surfaces on their properties. The proposal sparked public backlash and drew negative international media attention, earning it the moniker “the rain tax.”

The city will assess the impact of businesses’ spaces and determine appropriate responsibilities based on factors such as square footage. “We need to look at what kind of impact their spaces are having,” she said. “You can't just be irresponsible and let the rainwater runoff end up causing flooding.”

Chow is confident that commercial businesses, as “responsible corporate citizens,” would want to do the right thing and said the city would collaborate with them to find suitable incentives for these changes.

The motion directs city staff to report to city council by the end of 2024 on current and past private property stormwater programs, their uptake and new or discontinued programs, including those needing further review. Staff are tasked with gathering public input on effective programs and incentives for homeowners to reduce runoff and recommending ways to enhance green infrastructure in urban areas.

Sarah Buchanan, campaigns director at the Toronto Environmental Alliance, expressed support for the motion in her letter to city council, noting that last week's flooding, worsened by climate change, underscores the need for permeable green surfaces to prevent overburdening the sewer system.

“Flooding is a public safety issue that impacts all Toronto residents, but poses extreme risks for some residents who are most impacted by extreme weather,” Buchanan said. “For example, we must consider the specific impacts on seniors living alone, people with disabilities, people living in basement apartments, and people who are unhoused or precariously housed.”

Buchanan’s letter, endorsed by 18 other organizations, said while large commercial and industrial properties significantly contribute to the city's stormwater runoff due to their extensive hard surfaces, there is also a need for incentives for other property types, from large parking lots to small residential homes.

Buchanan urged the city to support homeowners who want to unpave, install rain barrels, plant trees, or create gardens.

“As the city continues to see increased severe impacts of climate change, Toronto will experience more flooding events,” she said. “By acting now to both reduce greenhouse gas emissions and manage stormwater, the city can help to reduce the impact of flooding and help protect all Toronto residents.”

In last year’s city budget, a 10-year plan (2023 to 2032) allocated $4.3 billion for stormwater management, including the $2.11-billion Basement Flooding Protection Program. Last year alone, the city invested $225.3 million in the program.