Halifax AG determining scope and timeline for a Halifax Water audit

Halifax’s auditor general is considering the scope and timeline of an audit on Halifax Water.

Nova Scotia’s and Halifax’s auditors general are considering calls by Mayor Andy Fillmore to audit Halifax Water – and it sounds like at least a municipal review will go ahead.

“The mayor’s request is fairly extensive,” says HRM Auditor General Andrew Atherton. “There’s a lot of issues, a lot of concerns there that he has. And we have to try to figure out what of those we can do and when we would be able to get to it.”

Asked directly if his office will conduct a review, Atherton says, “It’s not so much of whether we will.”

“We had already had some conversations about what we might look at,” he says. “The main issue that I have to figure out is the capacity we have. It’s a small team here. And they’re all working on audits right now.”

Given the uncertainty around scope, Atherton couldn’t say how long this audit could take – but did say it wouldn’t be complete by April 1, the date of the second rate increase in the coming year.

Nova Scotia’s auditor general, Kim Adair, confirms her office has also received the mayor’s request.

“We will now consult and assess our ability to examine Halifax Water under the authority of the Auditor General Act,” Adair says in an emailed statement.

Halifax Water submitted an application that, if approved, would increase water and wastewater service rates for residential customers by 15.8 per cent on Jan. 1, 2026 and 17.1 per cent of April 1, 2026.

On Tuesday, the Nova Scotia Regulatory and Appeals Board approved increases – but asked the utility to come back within one week with lower proposals after factoring in some disallowances and orders by the board to cut back on financial demands.

‘We’re ultimately going to have to pay for it at the end of the day’

Sandra Pike, a real estate agent, says while the Nova Scotia Regulatory and Appeals Board told Halifax Water to go back to the drawing board and make some changes, “We’re ultimately going to have to pay for it at the end of the day.”

The biggest change in the short-term is the board’s deferral – to “later years” – of $24.5-million that Halifax Water wanted included in the April increase for “deficit elimination.” That will result in a 10 per cent decrease alone, along with other demands or changes.

“If you look at it like a homeowner, if they left their deferred maintenance, of course there’s going to be sticker shock,” she says. “Why didn’t Halifax Water look at that on a continual basis?”

From the board’s decision, it notes Halifax Water cited, “Inflation, cost increases and increases to interest rates on new debt issues,” along with “ongoing challenges associated with growth, aging infrastructure, and regulatory requirements have created an environment that requires increases to rates to ensure the long-term viability of the utility.”

Brewery, commercial customers brace for impact

The increase will be even more significant for commercial customers.

While one brewery previously said it would consider leaving the city if the rate hike was approved, another expects thousands of dollars to be added to its yearly costs.

Brian Titus, Garrison Brewing Company’s co-founder and president, says the “exorbitant increase” proposal over the span of three months “should never, in my eyes, have left Halifax Water … unless the idea was to sort of go big and hope for something smaller.”

He says water went from being a cost that never really had to be considered “to the point right now where it rivals our power bill, our natural gas.”

There’s “only so many efficiencies you can find,” he says.

“My costs keep going up, but can you imagine if I just said, well, I’ll just make my beer one-third more expensive next year and everybody will be okay. No, everybody will not be okay,” he says. “That would not be acceptable, and so there has to be a better way.”

Mixed reviews from homeowners

Residential Halifax Water customers shared mixed views on the proposed hikes with CTV News on Wednesday.

“I’m generally not against that if it’s going to help stabilize the water supply system,” says Allan Gillis.

The utility’s initial ask bothered Rod MacInnis, though.

“How much of that goes back to mismanagement?” he asks. “Let’s identify that problem first.”

But with allegations of financial irregularities under a third-party investigation at Halifax Water, MacInnis says the rate increase should be put on hold.

“Now that there’s allegations on the table that are being investigated, nothing should happen until that’s resolved,” he says. “I don’t think that until they show what’s going on internally, they should be charging anybody anything extra.”

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