Rethinking rates to enhance sustainable use of agricultural water and equitable cost sharing

CRD Agricultural Economic and Financial Water Rate Analysis

For many years, the Capital Regional District (CRD) has provided qualified farmers with a subsidized agricultural water rate that is significantly lower than municipal retail or distribution rates. This program aims to reduce expenses for crop irrigation and livestock rearing. The funding for this rate comes from the annual operating budget, and it had remained unchanged for a decade despite rising water costs. As a result, the difference between the rates has been steadily increasing. CRD reached out to us for help in addressing the issue.

Our team set out to undertake a review of the current agricultural water rate, rate model and application, and implication of these elements, then present rate and rate model options for consideration. Our comprehensive analysis included the research, reporting, and rates required to cover expenses of new investments to sustain growing demand while being equitable to all water parties. We then developed a potential rate that supported farming operations, which contribute to the regional objective of supporting local food production, while addressing the service budget implications and the additional cost burden to non-agricultural customers.

The resulting five-year plan recommended enhancing and adjusting the rate subsidized program. The new rate is vital in assisting farmers, safeguarding food security, stewarding the land, preserving open space, and providing stability for the CRD’s budget.