Future buildings in Metro Vancouver to see hikes in utility connection fees

Tower construction crane in downtown Vancouver. (Shutterstock)

The one-time fee paid by new building developments to help cover Metro Vancouver’s sewerage infrastructure costs is set to see major hikes, but the increases will vary widely, depending on the sub-regional geographical area.

Metro Vancouver Regional District is considering increasing its sewerage-specific development cost charge (DCC) for both new residential and non-residential buildings to help cover the cost of building and replacing new liquid waste infrastructure.

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The region is set to embark on significant liquid waste infrastructure projects to replace aging infrastructure, and expand capacity to meet the output demand generated by strong population growth in the decades to come.

The fee is charged to the building developer during the planning process of a development, but this cost may eventually be passed to the end users of a building, such as through higher rents and property prices.

The region is divided into four separate sewerage areas, with the Vancouver sewerage area — spanning the city of Vancouver, UBC and the University Endowment Lands, parts of Burnaby, and Sea Island/YVR — set to see the highest increase with DCC rates nearly doubling.

Existing sewerage DCC rates since 2017:

Existing sewerage DCC rates since 2017. (Metro Vancouver Regional District)

Future sewerage DCC rates:

Future sewerage DCC rates. (Metro Vancouver Regional District)

There would be an 84% to 85% hike in the DCC for the Vancouver sewerage area, with new single-family homes going up from $1,811 to $3,335, new townhomes from $1,618 to $2,983, and condominiums/apartments from $1,072 to $1,988. Non-residential DCCs — such as for new office, retail, institutional, and industrial spaces — would see their rate grow from $0.93 per sq ft to $1.63 per square foot, translating into a 75% increase.

This rate of growth in the Vancouver sewerage area is drastically higher than increases for the other three sewerage areas — Lulu Island West (Richmond), Fraser (Delta, Tsawwassen, most of Burnaby, New Westminster, Port Moody, Port Coquitlam, Coquitlam, Surrey, White Rock, Pitt Meadows, Maple Ridge, Langley City, and Langley Township), and North Shore (West Vancouver, North Vancouver City, and North Vancouver District).

However, the overall DCC rates are highest for the large Fraser sewerage area, partially due to factors such as the region’s strongest population growth, and lower economies of scale from lower population densities that result in reduced efficiencies for infrastructure.

Map showing Metro Vancouver’s four separate sewerage areas (Yellow: North Shore; Orange: Vancouver; Red: Lulu Island West; Green: Fraser). (Metro Vancouver Regional District)

Moreover, according to the regional district, each of these sewerage areas has different needs based on existing infrastructure and projected population and economic (commercial/industrial) growth. As a result, the increases for DCCs in each sewerage area reflect the unique needs.

A substantial portion of the increase for the Vancouver sewerage area is driven by the construction costs of the region’s plans to build a new and expanded replacement of the Iona Island Wastewater Treatment Plant, located near YVR, which is expected to cost up to $10.4 billion inclusive of contingencies. It is set to be one of the most expensive infrastructure projects in BC history.

Separately, households in the Vancouver sewerage area are expected to see an average additional $400 to $500 annual tax increase to fund the new plant.

Artistic rendering of the new Iona Island Wastewater Treatment Plant and area ecological improvements. (Metro Vancouver Regional District)

The sewerage DCC was first established in 1997, and updated for the first time in 2017, which resulted in the existing rates.

In addition to hiking the region’s sewerage DCC, the regional district is planning to introduce a brand new one-time water supply DCC to help cover the cost of new and improved water infrastructure, such as reservoirs and dams, water treatment facilities, water mains, and pump stations. To date, water infrastructure costs have been mainly covered by user fees, but this is increasingly insufficient to cover future projects propelled by growing demand and aging infrastructure.

For instance, over the medium term, the regional district has plans to introduce water supply systems to Coquitlam Lake, which is currently solely used by BC Hydro as a power-generating source at Coquitlam Dam. The $2.3-billion project would entail the construction of a water intake tunnel and a water treatment plant.

Over the longer term, the regional district is contemplating building new dams and raising the height of existing dams in the North Shore mountains — in the Capilano and Seymour watersheds — to significantly increase the size of water supply reservoirs.

Coquitlam Lake Water Supply Project (Metro Vancouver Regional District)

metro vancouver new water supply dams reservoirs

Lower Seymour Reservoir dam option. (Metro Vancouver Regional District)

Upper Capilano Reservoir dam option. (Metro Vancouver Regional District)

Unlike the sewerage DCC, the new water supply DCC for future new developments is planned as a flat, single-rate fee for all areas of the entire region.

The regional district is currently carrying out consultation on the planned sewerage DCC increases and the introduction of the water supply DCC. In order for the regional water supply DCC to be implemented, it requires the provincial government to amend legislation that governs the regional district.

Municipal governments in the region also charge their own DCCs (known as development cost levies or DCLs in the City of Vancouver) based on set rates to help cover infrastructure and utility costs.

Three years ago, the provincial government passed legislation that allowed TransLink to establish a new DCC on both new residential and non-residential developments to help fund its transportation infrastructure projects.

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