ACCESS TO SAFE DRINKING WATER TO PROTECT BUSINESS STABILITY AND ECONOMIC COMPETITIVENESS (2026)

Issue

Reliable access to safe drinking water is foundational economic infrastructure. Business operations, investment attraction, workforce retention, and regional competitiveness all depend on stable and predictable water systems. In many parts of British Columbia, particularly in small, rural, and remote communities, water infrastructure instability is creating direct economic risk. Businesses face rising operating costs, service disruptions, and reduced consumer spending, while communities struggle to attract and retain investment.

Background

Water infrastructure across British Columbia is facing increasing strain due to aging systems, deferred maintenance, regulatory requirements, population growth, and climate-related pressures. While water system delivery is often locally administered, provincial regulations, standards, and funding frameworks significantly influence the cost and sustainability of these systems, with the economic consequences of infrastructure failure extending far beyond local governments. In many cases, limited local tax bases and governance structures make it difficult to finance major upgrades without significant external support, raising important questions about the appropriate role of the provincial governments.

These challenges are most acute in small, rural, and regionally governed systems, where limited tax bases and dispersed populations make it difficult to absorb capital costs while maintaining economic competitiveness.

In the South Okanagan, residents connected to the Sage Mesa Water System near Penticton are facing a potential $33 million replacement cost without government assistance, equating to an approximately $136,000 levy per property owner[1]. Public reporting indicates infrastructure concerns were identified years ago, yet residents are now being asked to authorize borrowing that could result in significant monthly financial burdens[2]. Some homeowners have described the potential outcome as “economic eviction.”[3]

Such financial shocks have broader economic consequences:

• Reduced household disposable income directly impacts local retail, hospitality, and service sectors.
• Elevated utility costs increase operating expenses for small businesses.
• Property value instability discourages commercial investment.
• Housing affordability challenges impair workforce attraction and retention.

Water insecurity and operational risk

The Town of Osoyoos provides a second example of systemic vulnerability. The community relies on six groundwater wells feeding municipal reservoirs. During peak summer demand, even with all six wells operating at full capacity, reservoir levels have fallen to approximately 40 percent, leaving no contingency capacity in the event of mechanical failure. Municipal officials have warned that if reservoir levels fall below 35 percent, sediment disturbance could trigger a community-wide boil water advisory lasting weeks.[4]

In the City of Prince Rupert, aging water infrastructure, including century-old pipes, has resulted in repeated boil water advisories[5], emergency conditions, and a multi-year infrastructure program exceeding $100 million [6]. As a critical trade gateway supporting billions in economic activity, these challenges highlight the broader provincial and national economic risks associated with water system instability.

Prolonged boil water advisories significantly disrupt:

• Restaurants, wineries, and food processors.
• Hotels and tourism operators, particularly during peak season.
• Health care facilities and long-term care operations.
• Construction activity requiring potable water access.

In addition, inadequate water capacity and low- or no-flow hydrants present serious risks for fire suppression, particularly during wildfire season. This creates heightened exposure for businesses through property damage, insurance costs, and potential interruption of operations.

Provincial regulatory requirements, including water quality and infrastructure standards, are essential for public safety but can create significant financial pressures for smaller systems when not paired with predictable, long-term funding.

Provincial economic implications

These examples reflect broader provincial challenges. According to the B.C. Water & Waste Association, approximately $7.7 billion in water and wastewater infrastructure across British Columbia is currently in very poor condition and requires immediate attention.[7] When infrastructure reaches crisis level, capital costs are frequently downloaded onto small ratepayer bases ill-equipped to absorb them.

Unstable water systems create measurable economic impacts:

• Suppressed consumer spending.
• Increased cost of doing business.
• Delayed housing and commercial development.
• Reduced investor confidence.
• Heightened reputational risk for tourism-dependent regions.

Current funding programs are competitive and episodic, rather than predictable and system based. Businesses require certainty in infrastructure planning to make long-term investment decisions, a principle recognized by the Organisation for Economic Co-operation and Development (OECD)[8], which identifies reliable and well-governed infrastructure as fundamental to maintaining investor confidence and economic competitiveness. Without reform, water infrastructure instability will increasingly act as a structural barrier to regional economic growth.

The Chamber Recommends: 

That the Provincial Government:

1. Establish a permanent, dedicated clean water infrastructure fund, coordinated with federal programs, prioritizing small, rural, regional, and private systems where capital replacement would otherwise create economic instability.
2. Develop a provincially led, economic-impact-based cost-sharing framework that clearly defines the roles of provincial, federal, regional, and local governments, while accounting for tax base capacity, median income levels, and impacts on business competitiveness.
3. Implement provincially coordinated early-warning monitoring and oversight mechanisms for vulnerable water systems to prevent crisis-driven capital downloads and ensure timely intervention.
4. Create an emergency stabilization mechanism to prevent sudden infrastructure costs from undermining local housing affordability, business stability, and local economies.
5. Develop and implement clear provincial standards and guidance for water system resilience, including minimum requirements for emergency capacity, fire flow, and long-term asset management planning.