What Is Toronto’s Rain Tax and Is It Still Happening?

Toronto’s “rain tax” is not happening. City Council indefinitely suspended the proposed stormwater charge in 2025, and nothing resembling it is appearing on water bills or property tax bills.¹ The charge that generated years of debate would have billed property owners based on how much hard surface (rooftops, driveways, parking lots) their property contains, rather than how much water they use indoors. That model is now shelved, though several related programs — flooding subsidies, a rain barrel pilot, and low-income utility relief — are active and worth knowing about.

What the “Rain Tax” Would Have Been

The nickname refers to a stormwater charge Toronto Water first put forward in 2017. The idea: fund drainage and stormwater infrastructure through a separate fee tied to a property’s impervious surface area, instead of folding those costs into water consumption rates. Under the current system, a homeowner who uses little water pays little toward drainage, even if the property sheds enormous runoff during a storm. A large parking lot can contribute massive volumes to city sewers while its owner pays almost nothing toward pipe maintenance.

Staff arrived at a base rate of $1.31 per square metre of hard surface, calculated by dividing the $275 million stormwater program cost by roughly 21,025 hectares of hard surface across the city.² Properties were split into four categories: residential, apartment and condominium buildings, industrial/commercial/institutional, and large properties of one hectare or more.

What It Would Have Cost

Rather than measuring each home individually, the city proposed slotting houses into seven tiers by lot size. The smallest lots (under 2,400 square feet) would have paid $125 per year. The largest residential tier, covering lots between 10,200 and 107,600 square feet, would have paid $475 per year.²

Apartment and condo buildings had their own tier structure running up to $4,950 annually. Industrial, commercial, and institutional properties topped out at $5,700 in their tier system. Properties of one hectare or more would have been billed individually at the $1.31-per-square-metre rate, applied to their actual measured hard surface.²

Why Council Suspended It

The charge never appeared on a single bill. After years of consultation, Council directed staff to indefinitely suspend further consideration of the stormwater charge and a related water service charge.¹ The language is deliberate. “Indefinitely suspend” is stronger than a temporary pause.

Council pointed to feedback from stakeholder engagement on a related commercial parking levy, concerns raised during earlier consultations, and actions already underway to reduce runoff through other means.³ The city’s consultation page now opens with a notice confirming the suspension.

Could It Come Back

A suspension is not a cancellation. The infrastructure pressures behind the original proposal have not gone away: aging sewers, more frequent extreme rainfall, and a funding model that lets properties with vast paved surfaces pay very little toward drainage. The commercial parking levy was being studied alongside the stormwater charge as part of a suite of related climate action tools, and staff were directed to look at ways to reduce runoff from non-residential properties with large impervious surfaces.⁴ Some form of impervious-surface billing could resurface in a future budget cycle, but there is no timeline and no active proposal.

How You Pay for Stormwater Right Now

With no dedicated fee in place, Toronto Water funds all of its operations — drinking water, wastewater treatment, and stormwater management — through a single set of consumption-based rates and user fees.⁵ Your bill reflects how much water flows through your meter, not how much rain runs off your property.

For an average household using about 230 cubic metres of water per year, the 2026 interim rate increase of 3.75 percent works out to roughly an additional $40 annually. That single bill covers safe drinking water, pipe upgrades, and stormwater infrastructure.

Programs That Do Affect You Today

Basement Flooding Protection Subsidy

As of May 1, 2026, the city offers up to $6,650 per property in flood prevention subsidies. The program covers backwater valves (up to $1,600 per device, maximum two), sump pumps (up to $2,250), foundation drain pipe severance and capping (up to $400), and a one-time home plumbing assessment (up to $500). Another $300 is available for backup power on a sump pump. All subsidies cover up to 80 percent of the invoiced cost.⁶

To qualify, you need to be the registered owner of a single-family home, duplex, triplex, or fourplex. Your downspouts must be disconnected from the city sewer system (or you must hold an exemption), and your contractor must have a valid City of Toronto business licence. Applications must be submitted within two years of installation, and you cannot have outstanding taxes or debts owed to the city.⁶

Rain Barrel Pilot

In September 2025, Council directed staff to launch a pilot subsidizing rain barrels and downspout diverters for Toronto residents.⁷ The program was proposed with a $225,000 budget and a target launch in the second quarter of 2026.⁸

A separate three-year green infrastructure incentive program was also proposed for features like rain gardens, permeable pavement, and soakaway pits. Direct incentive funding for that program was slated to begin in 2027, with no money allocated for property owner rebates in 2026.⁸

Utility Relief for Low-Income Homeowners

Toronto’s Property Tax, Water and Solid Waste Relief program can reduce utility costs for qualifying owners. For 2026 eligibility, you must have owned and occupied your home as a principal residence for at least one year before October 31, 2026, with combined household income no higher than $62,000. You also need to be 65 or older, between 60 and 64 and receiving the Guaranteed Income Supplement or Spouse’s Allowance, over 50 and receiving a pension, or in receipt of disability benefits.⁹

The water rebate requires metered water service and consumption below 400 cubic metres per year. Applications for 2026 are due by November 2, 2026, and you must submit an unaltered copy of your Canada Revenue Agency Notice of Assessment. Your property tax and water accounts must be paid up, with no outstanding balances from prior years, and you have to reapply every year.⁹

How Nearby Cities Compare

Toronto is the outlier in the region. Mississauga charges property owners based on hard surface area, using a billing unit of 267 square metres (the average hard surface on a single detached home) as the baseline. Residential properties are assigned to one of five tiers by rooftop area, while commercial, industrial, and multi-residential properties pay based on their measured hard surface divided by the billing unit.¹⁰ Mississauga also offers credits for non-residential and multi-residential owners who reduce their impact on the municipal system through on-site management.¹¹

Brampton, Kitchener, and Markham have also adopted stormwater user fees. In Brampton, low-income seniors and persons with disabilities who already receive general tax assistance automatically qualify for a subsidy against the stormwater charge, with no separate application required.¹² If you own property in one of these municipalities, a stormwater charge is already part of your bill. If you own property in Toronto, it isn’t.

1
City of Toronto. EX20.12 – Reducing Stormwater Runoff and Mitigating Basement Flooding
2
City of Toronto. Proposed Stormwater Charge – Report for Action
3
City of Toronto. Stormwater Charge and Water Service Charge Consultation
4
City of Toronto. Update on the Implementation of a Commercial Parking Levy
5
City of Toronto. Water Rates and Fees
6
City of Toronto. Basement Flooding Protection Subsidy Program
7
City of Toronto. Rain Barrel Savings Program
8
City of Toronto. Proposed Incentive Pilot Programs to Collect and Manage Stormwater on Private Property in Support of Climate Resilience
9
City of Toronto. Property Tax, Water and Solid Waste Relief
10
City of Mississauga. Stormwater Charge
11
City of Mississauga. Stormwater Charge Credit for Non-Residential and Multi-Residential Properties
12
City of Brampton. Stormwater Charge