What is the Water Supply Capacity Allocation Policy

The Water Supply Capacity Allocation Policy or Allocation Policy for short, is a fair, simple, and fully transparent way for the Region of Waterloo to provide water capacity to Area Municipalities to support future growth, as water becomes available.

You can find out more about the policy by reading the May 6, 2026 staff report here.

Why is a Water Allocation Policy necessary?

As part of the Bill 23 change in roles of responsibilities in planning authority, it was identified by the Region and Area Municipalities to transparently and efficiently provide direction on water capacity for future development in Waterloo Region. As new water supply capacity is identified through the Interim Risk Management Framework, there is a need to have a transparent framework to guide the allocation of this capacity to the Area Municipalities.  Area Municipalities will then allocate water within their “bucket” to site specific developments. 

In what intervals will water be allocated?

Initially, the allocation will occur quarterly as new capacity is identified through the Interim Risk Management Framework (coming forward to Regional Council on June 3^rd, 2026) and will shift to less frequent intervals as water supply capacity is more abundant.

The policy will be reviewed regularly to ensure it is performing as intended.

More information on when water allocation could begin will be provided as part of the Interim Risk Management Framework Report at the June 3^rd Special Council meeting. 

Which development applications are currently subject to advisory comments by the Region? 

Advisory comments indicating a water capacity concern are being issued for Official Plan and Zoning by-law amendment applications and Plans of Subdivisions and consents for severances that have not been approved that fall with the Mannheim Service Area. Regional staff are not supportive of the approval of those applications at this time.   

With respect to site plan applications and limited minor variance applications, the Region is advising the area municipality of the capacity constraint. However, we are not advising that the Region does not support approval of the applications. There are some limited exceptions where the Region is providing comments as it has in the past, including applications for condominiums and consents for legal, technical or financing purposes where no impact on the water supply is anticipated.  

The Region is not entering into any new servicing agreements, which are a standard condition of draft plan approval that is required to be satisfied prior to registration. Further, staff of the Region will be considering whether to sign Form 1s where there may be additional demand on the Mannheim Service Area water system on a case-by-case basis.  

Regional staff anticipate that there will be a further evolution on the approach as more is known about the timing of infrastructure, new water supply and the development of risk-based interim approach.

At the February 10, 2026 Sustainability, Infrastructure, and Development Committee staff reported on the types of developments and applications subject to Regional advisory comments.

How is the Region treating development applications that are already in process?

For example, are applications with Official Plan or Zoning approvals but awaiting site plan approval or building permits impacted differently? 

In part, this is addressed above. We are providing the area municipality with updated advisory comments where they are bringing forward in process applications for decisions. We have also provided area municipal staff with technical briefings so that they have up-to-date information to support their decision making as an approval authority with their individual responsibilities under the Planning Act and any other applicable legislation. 

For projects that have received site plan approval and are otherwise ready to proceed to building permit, can those permits still be issued? 

Pursuant to the Building Code Act, 1992 and the Building Code, the issuance and revocation of building permits are matters that are within the sole jurisdiction of the Chief Building Official. The Region has no legislated role in this process and therefore it is not within the jurisdiction of the Region to direct that building permits not be issued or issued building permits be revoked on the basis that there is a question about the sufficiency of water capacity during construction. 

Has the Region considered interim planning tools to allow developments to continue advancing while longer-term infrastructure solutions are identified? 

When Bill 23 came into effect on January 1, 2025, the Region became an upper-tier municipality without planning authority. This means that the Region’s role is solely as a commenting agency. With that said, we’re working closely with our area municipal partners, and have seen a municipality apply a holding provision relating to the sufficiency of water capacity for recent applications which were approved.  

What’s key is ensuring that the Region of Waterloo, as the operator of the water system, can ensure the water capacity is available before a new development connects.  

Why is the Region providing advisory comments on development applications during this period, and when is this expected to change?  

Our goal as a commenting agency is to provide area municipal partners with the best available information and data for them to be able to make decisions. Evolution on the development review approach is expected as timing of infrastructure and new water supply progresses, and a risk-based interim approach is developed. 

The current approach to Regional advisory comments on developments and applications within the Mannheim Service Area was shared with the Sustainability, Infrastructure and Development Committee on February 10, 2026.

What solutions or measures are being considered to address these water capacity constraints in the short- and medium-term?  

The Region’s technical team is dedicated to addressing this issue and are currently working with Area Municipal partners, industry expects and the Ministry of Environment, Conservation and Parks to move this work forward.  

A timeline for a preliminary list of the short, medium, and long-term solutions was brought forward to Council on January 28, 2026.

A report on the risk-based interim approach is planned for March 2026.  

How is the development industry involved in the process of developing solutions? 

The development industry is a key partner in this work. Industry leaders from across the sector including industrial, commercial and institutional (ICI) developers, affordable housing developers, and members from Build Urban, Waterloo Region Homebuilders Association, Waterloo Economic Development Corporation, Grand Valley Construction Association, Cornerstone Association of Realtors and Conestoga Heavy Construction Association are part of the Development Stakeholder Group, which is meeting bi-weekly to share information and provide input as data, communications and solutions progress.  

Which technical experts are helping the Region to develop solutions?

Due to the urgent nature of the Mannheim Service Area water capacity issue, firms with considerable local knowledge of our water supply system, knowledge of water supply and treatment design, and knowledge of project delivery were approached to participate on an industry panel to help develop solutions. The panel includes the following firms:

• Associated Engineering
• CIMA+
• Colliers Project Leaders
• Dillon Consulting Limited
• R.V. Anderson Associates Limited
• Sahely Water Engineering Ltd.
• SLR Consulting
• Stantec
• Tree Frog Environmental