Question

Canada has the lowest pricing for water and the highest consumption of water in comparison to many developed countries.

a) Why is Canada's water price so low? Be specific. Explain any current policies in place.

b) Why is Canada's consumption so much higher in comparison to other countries that have a slightly higher price than Canada?

b) What reforms should take place for water policy in Canada to create more efficient and sustainable use of water?

Answer 1

1. Canada has low cost pricing structure because there has been amalgamation of many water agencies and have used full cost accounting best practices to identify direct and indirect costs. Due to economies of scale and optimisation prices are relatively lower.
2. Canadians use more water than any other developing country because of its low cost structure and availability as well as concept of dual flush and its perception of not saving water.
3. Following reforms can be undertaken for sustainable usage:

• Implementation of increasing prices beyond threshold limit and providing subsidies for low consumption households
• Higher rate of interest and cashbacks on saving more water
• Implementing summer surcharges in water parks and pools and occasions
• Electronic meter system to gauge consumption usage and cutoff of water supply during non peak hours