GVCA President’s Message March

What’s Happening with Water in Waterloo Region

The Region of Waterloo has confirmed a water capacity limit impacting parts of the region, especially the Mannheim Service Area (which includes parts of Kitchener, Waterloo and Cambridge).

This constraint stems from a combination of factors:

• A revised method of calculating available water capacity.
• Heavy reliance on groundwater supplies (about 80 % of regional supply), which makes the system more sensitive to drought/limits.
• Aging infrastructure at the Mannheim Water Treatment Plant that limits throughput unless upgrades are made.
• Staff changes and some level of ineptness

As a result:

• New servicing agreements (which allow future developments to connect to water and wastewater systems) have been paused or delayed.
• Buildings with already approved permits and servicing agreements can still proceed, but new development commitments are limited until capacity is expanded.

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The Impact on Development

Development Approvals are slowing or on hold because developers generally need servicing agreements before starting major projects (like residential subdivisions, condo towers, office parks, industrial buildings), a constraint on water capacity means:

• Some new projects won’t get servicing letters immediately.
• Developers are deferring or re-scoping projects while solutions are established.
• Temporary capacity measures (like side-stream treatment in containers) are being tested to help move approvals forward in the short term.

Municipal reporting and industry commentators have highlighted that water limitations are a material constraint on growth in a region that has been among Ontario’s fastest growing.

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Impact on Jobs and the Construction Sector

Construction jobs and economic activity are at risk.

Industry sources and regional discussions recently highlighted that this water capacity issue puts a significant number of construction-related jobs at risk.

According to reports from industry outlets:

• More than ~24,000 construction jobs could be jeopardized if development slows or projects are cancelled due to ongoing servicing limits.
  • This figure comes from presentations to municipal committees and industry stakeholders outlining the broader economic impact of delays, particularly in housing and commercial infrastructure.

What this means in practice:

• Contractors, tradespeople, and suppliers depend on a steady pipeline of new developments (residential, commercial, institutional).
• If servicing letters are delayed for months (or longer), builders may postpone hiring, scale back teams, or bid work outside the region.
• Supply chains (manufacturers of building materials, equipment rentals, engineering services) also feel the ripple effects of reduced project starts.

Broader Economic and Social Impacts

• Organizations that support urban growth (architects, planners, landscape, utilities) will see reduced revenue streams.
• Local employment that depends on construction (restaurants near job sites, equipment suppliers) will see reduced activity.

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What’s Being Done

Local governments, industry and utilities are responding:

Short- and Medium-Term Solutions

• Engineering and infrastructure upgrades at the Mannheim plant (including temporary side stream treatment systems to boost capacity quickly).
• A working group has been established with representatives from all impacted industries. The group meets weekly as an accountability source.
• Regional Council discussions include budgeting for larger upgrades and long-term investments to expand overall water/wastewater handling.

Balancing Growth and Infrastructure

The goal is to allow as much development as possible while water capacity is expanded — but there is a trade-off:

• Developers may have to wait weeks/months for servicing letters.
• Regional staff need to balance safe, sustainable water service with economic growth.