The shocking increase in the estimated cost of the Collingwood water treatment plant expansion has rippled into New Tecumseth, where council turned down the province's offer of strong mayor powers and rejected a pledge to build 6,400 new homes by 2031.
The Town of New Tecumseth decided during a council meeting on Sept. 25 the municipality will not be signing on to the province’s housing pledge, citing infrastructure concerns – namely the overwhelming new cost estimates for Collingwood’s water treatment plant expansion – as the main reason why the targets cannot possibly be met.
If the town had signed, New Tecumseth Mayor Richard Norcross would have been granted strong mayor powers.
However, the new estimates for the cost of the Collingwood Water Treatment plant expansion of $270 million, of which New Tecumseth would be responsible for about $150 million, is too much for the municipality to bear to make any promises about growth. In 2022 when the towns were working out a new agreement and sending out requests for proposals, the estimate for the new plant was about $121 million, with New Tecumseth's portion at about $70 million.
The completion date has also been pushed back from 2026 to 2028.
Collingwood supplies treated drinking water to New Tecumseth via a pipeline connecting the two municipalities. Collingwood and New Tecumseth have had an agreement in place since 2008 specifying that Collingwood provides 6,000 cubic metres per day of treated drinking water to New Tecumseth. An expanded water treatment plant would allow that number to increase under a new deal struck between the two municipalities in 2022.
“We were extremely surprised by the increase in price for the Collingwood water treatment plant and the new numbers that came in,” Norcross told CollingwoodToday this week.
“We, financially as a municipality, cannot commit to spending that type of money on our own without financial help from upper levels of government,” he said.
With the uptick in estimated costs, Norcross says New Tecumseth would have to contribute about $150 million to the plant expansion over several years, which is beyond anything the municipality can afford.
For context, New Tecumseth’s annual budget for all the services it provides and all capital projects currently clocks in at about $55 million annually.
“We certainly recognize we have a housing crisis. We want to do our part, but without the money in place to help pay for the infrastructure – specifically the water treatment plant – we don’t see how we can reach those targets,” said Norcross.
Even if New Tecumseth’s council had signed the pledge, there would still be no way to meet the aggressive target since new timelines for the water plant completion now take the project into 2028.
“Without partnerships, you can’t expect municipalities to make these financial commitments when they don’t have the resources to do it,” he added.
Some provincial funding through the Building Faster Fund was introduced on Aug. 21 to provide funding up to $400 million per year to municipalities that have committed in writing to achieve their overall 2031 housing target.
However, New Tecumseth is not eligible for the funding, as water allocation would need to be realized in 2023 in order to meet the first year’s target.
During the Sept. 25 meeting, New Tecumseth Deputy Mayor Stephanie MacLellan pointed to how much of the Building Faster Fund the municipality would be eligible to receive.
“Maybe we get $1.7 (million) in the third year. You put that up against the $150 million water bill and they might as well throw loonies at us,” she said. “It's a drop in the bucket. It's not going to facilitate the infrastructure solution that we need.”
During a Collingwood council meeting on Sept. 25, chief administrative officer Sonya Skinner noted talks are continuing between municipal officials in Collingwood and New Tecumseth and provincial and federal decision makers to discuss financial support for the project.
“We have pleaded our case and advised them of what’s happening. Those discussions are ongoing,” said Norcross this week. “I really want to applaud the mayor and the Town of Collingwood. They have worked hand-in-hand with us together, and it’s been a great working relationship.”
New Tecumseth council voted 6-4 in favour of turning down the housing pledge request at their Sept. 25 meeting.
At Monday's Collingwood council meeting, Skinner said a report to include the final projected costs and recommended next steps will be forthcoming to council in November. She said the bids are valid until Nov. 11.
“Upon award, construction could start in November,” she said.
On Sept. 27, a special meeting of Collingwood council was held for Mayor Yvonne Hamlin to talk with the development community on the water treatment plant expansion.
Following the meeting, Hamlin said she arranged the meeting to give details to the development community and see if there was an appetite to collaborate on solutions through striking a task force.
“I wanted to hear from them. They wanted to help sort this out,” Hamlin said. “We did a very robust design and tendering process for the plant.”
“How we’re going to move forward on funding it is a complicated issue,” she said.
When asked about New Tecumseth not signing on to the province’s housing pledge, Hamlin said this is an issue that will impact many Ontario municipalities.
“It’s not just an issue for New Tecumseth. Every municipality has been told they should be doing all they can to encourage the building of housing,” said Hamlin. “Infrastructure is a prerequisite.”
“We need a lot of infrastructure right now to make housing happen, and it’s expensive.”