Mayor says YK trucked water issue has parallels with carbon tax

Yellowknife city councillors sound collectively uncertain of a proposal to increase trucked water and sewer rates by hundreds of dollars a year.

After a Tuesday meeting, city staff told council they will come back with new options. A final decision is expected during Budget 2026 discussions near the end of the year.

The city is facing a deficit stretching beyond $1 million in its water and sewer fund. Consultants InterGroup, in a report that took years, found users of trucked water and sewer were only covering 64 percent of the costs of delivering those services.

While most of Yellowknife is on piped water and sewer, some neighbourhoods can only access water delivery and sewer pumpout by truck twice a week.

Some residents of trucked water say they already pay more per litre than those on piped service and argue that further increasing their rates is unfair. But InterGroup said three consecutive nine-percent increases to those rates, leading to a $693 annual increase for the average trucked user by 2027, was the best way to balance the books.

Under the consultants’ proposal, bills for multi-residential units and commercial units on piped water would decrease by an average of a few hundred dollars a year as trucked rates go up.

On Tuesday, multiple councillors had trouble with the idea of ensuring costs are recovered by asking one set of residents to pay a significant amount more.

Mayor Ben Hendriksen, appearing at the lunchtime meeting by video, compared the situation to many northerners’ distaste for the federally imposed carbon tax.

For years, many residents – and NWT ministers – maintained that the carbon tax imposed a penalty on northern residents in off-grid, often diesel-powered communities who had no means of switching to less carbon-intensive fuels.

“To me this is in many ways a parallel discussion,” Hendriksen told the meeting, which was attended by around 15 residents.

“The reason a lot of people were riled up and angry [about the carbon tax] was because people felt they were being charged for decisions that weren’t in their control. To me, this is even more so the reality for this discussion.”

With the carbon tax, Hendriksen said, people could at least have installed a pellet stove, reduced the size of their vehicle or stopped driving entirely, even if those would have been hard choices to make.

Realistically, he said, all choices are off the table for trucked water users.

“You can’t all of a sudden run pipe to [a house] and reduce your costs. You actually have no option. So this is the policy issue I’m really stuck on,” Hendriksen told colleagues. “We’ve got more work to do.”

‘Basic human right’

The main outcome of Tuesday’s discussion is that city staff will return to council with more options.

Later this year, when council decides the city’s 2026 budget, city manager Stephen Van Dine said councillors can expect a choice between the consultants’ original proposal, a new proposal that recovers costs by increasing all residents’ rates instead of focusing on trucked services, and a thus-far vaguely defined third option that will incorporate some other suggestions council made on Tuesday.

In other words, no final decision will be made for months to come.

Hendriksen, Tom McLennan, Ryan Fequet and Steve Payne all expressed some degree of concern about introducing what staff have described as almost a 40-percent fee increase on trucked service customers in the next three years.

“I’m definitely not in support of seeing one group of people in town paying a lot more than what they’re used to paying,” said Payne.

He and other councillors drew comparisons with other services such as roads, schools and the city’s new pool, noting that large proportions of the tax base do not use all of those services but still financially contribute to them all.

Payne said he would rather have a “new rider on everybody’s bill” than go ahead with the consultants’ proposal. (Hendriksen noted the consultants – and city staff – had been tasked with a purely technical examination that did not account for “the political policy choice side.”)

“It’s very clear that we recognize potable water is a basic human right, and residents should not have different rates based on where in the city they choose to live,” said Fequet.

He called this issue “one of those instances where the collective community has to grapple with rising costs.”

“I’m unsure shifting a huge chunk of the cost onto specific users, who have already made a decision and cannot make a different one now, is the way to go,” said McLennan.

‘Who are we trying to serve?’

Cat McGurk took a different view of the idea that owners of homes on trucked services were unfairly penalized if the rate system significantly changed after they made their purchase.

“The argument of homeowners having made decisions based on previous information is something that I struggle with. Like all investments, it comes with risk,” said McGurk, who also appeared via video.

At the moment, McGurk argued, “those with less are ultimately subsidizing those with more” since many residents of multi-residential units are renting, whereas, she said, “a lot of people that are on trucked water have million-dollar homes on Grace Lake, on Latham Island.”

“Who are we trying to serve and who’s affected by this?” McGurk asked.

Hendriksen raised a separate issue, voicing concern that the more trucked service users are asked to pay, the more attractive it could become for the city to create more neighbourhoods where services are trucked.

At the moment, he argued, the city is disincentivized from allowing new developments on trucked services because the city ends up having to bear some of the cost of that. If trucked service users end up essentially covering all of the related costs, he said, that would mean “it’s safer for us to then develop trucked.”

For years, successive city administrations have maintained that developments on piped services are a more efficient and overall better option than those needing trucked support.

“There are no ‘hard guardrails’ to prevent future councils from being addicted to trucks, and they may choose to be for whatever reason,” acknowledged Van Dine when asked by Hendriksen, though he added: “We would not like to see that.”

Council appeared to broadly support other, less contested aspects of InterGroup’s report, such as simplifying user fees, splitting up water and sewer fees, and other under-the-hood changes. Those alterations look set to go ahead.