Waterloo Region passes interim plan to unlock frozen development

The water capacity issue came to a head at a regional council meeting. CTV’s Krista Simpson has the latest.

Waterloo Regional council has approved an interim plan aimed to restart local construction this fall after a marathon meeting Wednesday exposed divisions between regional staff, local politicians and the development industry.

The decision comes amid mounting backlash over an effective building freeze in the region, which was triggered by severe water capacity constraints that were first flagged late last year.

At the special council meeting, regional staff presented an interim risk management framework that would allow some frozen development projects to move forward around September 2026. The timeline hinges on upcoming testing at a pilot side stream project which is expected to free up water capacity in the Mannheim Water Treatment Centre.

Under the approved plan, affected municipalities could create their own bylaws to allocate the newly available water capacity to specific projects.

Representatives from the development industry said they cannot afford to wait.

“Imagine if your entire industry was shut down for six months. That is what has effectively happened to our community right now,” said Melissa Durrell, executive officer of Build Urban.

According to a survey by the Waterloo Region Home Builders’ Association, the current freeze has stalled more than 5,000 approved homes, idled 1,500 tradespeople and frozen over $500 million in private investment.

“These are not projections,” said Larry Masseo, a policy advisor for the association. “These are real, approved, shovel-ready projects that have been stopped.”

Some council members echoed those frustrations and said more needs to be done.

“We’re not hearing the urgency,” said Berry Vrbanovic, Kitchener’s mayor and regional councillor. “The economic impact, the reputational damage, that is falling upon us at the Region of Waterloo because of this issue ... I’m hearing desperate cries for us to be doing more and to be doing it quicker.”

Coun. Michael Harris recommended several amendments, including a developer-backed proposal to lower the region’s water system resiliency buffer to 10 per cent, down from its long-term target of 20 per cent maintained for shutdowns and emergencies.

Regional water staff strongly pushed back against the amendment.

“We as staff are very concerned about the track that you’re currently taking,” said Kenneth Brothers, the region’s interim commissioner of water and wastewater services. “If you give us a fixed amount of resiliency, we do not have an interim risk management framework. It will not work.”

Michele Grenier, executive director of the Ontario Water Works Association, urged councillors to consider the liability of ignoring recommendations.

“I would urge them to consider how you would want to guarantee that hospitals and schools and daycares will have access to safe drinking water if such a catastrophe were to occur here again, without sufficient resilience in the system,” Grenier said.

Ultimately, councillors voted to pass the staff-recommended framework but added a clause to have a provincial land facilitator review the proposals, including the 10 per cent resiliency target. Wilmot Mayor Natasha Salonen noted the clause allows council to adjust its approach as new information emerges.

Local developers say the compromise leaves the industry in limbo.

“I think inevitably we have to protect both things, and there has to be further negotiation to figure out what that middle ground is, because we clearly did not achieve that today in the council chamber,” said Joseph Puopolo, co-CEO of Urban Initiatives.

In a separate move to address the shortage, council approved an interim plan to draw an additional 15 litres of water per second from Wilmot. However, following a request from Salonen, the approval includes added protections for local residents whose private wells might be impacted by the increased draw.