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Canada’s housing push is running up against a basic problem: some communities’ water and sewer systems just can’t handle all the growth governments want.
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Municipalities and developers are confronting wastewater plants nearing capacity, sewers that need expansion and aging water systems that already require billions of dollars in investment. The result is that developments are being delayed, phased or stopped even though provincial and federal governments are pushing cities to approve housing faster.
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More than 11 per cent of Canada’s water and wastewater-related infrastructure was in poor or very poor condition in 2022, representing an estimated $107 billion in replacement value, according to the 2025 National Infrastructure Assessment.
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Tim Tierney, president of the Federation of Canadian Municipalities, which represents more than 2,200 municipalities, said water and wastewater infrastructure ranks at the top of the obstacles his members face.
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“Top. Top. Top,” he said. “It’s infrastructure, infrastructure, infrastructure.”
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Governments can accelerate approvals and set ambitious construction targets, but the pipes, treatment plants and other infrastructure needed to service that growth can cost billions of dollars and take years to plan and build, he said.
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That tension is playing out in Winnipeg.
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The city’s North End Sewage Treatment Plant is undergoing a multibillion-dollar upgrade, but the existing system only has about four years of additional capacity remaining. The plant has enough capacity to serve about 40,000 more people, although new industrial development could use up some of that capacity.
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The problem is timing, according to Lanny McInnes, chief executive of the Manitoba Home Builders’ Association. Parts of the plant’s upgrade are already coming online, but the work needed to expand its wastewater capacity is not expected to be completed until 2032.
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McInnes said Winnipeg is getting dangerously close to running out of room.
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“We’re flashing the signal that we’re getting very, very close to reaching that point,” he said, adding that if that happens, “we will not be able to build any new housing.”
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McInnes said development has effectively been restricted in some municipalities surrounding Winnipeg, including East St. Paul, because of limited wastewater capacity, so much so that some builders have finished one phase of development, but can’t move on to the next.
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Similar constraints are appearing in different forms elsewhere.
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Tierney pointed to infrastructure delays affecting Toronto’s Black Creek trunk sewer, which is associated with the development of about 63,000 homes. Waterloo Region in Ontario now requires developers to compete for limited wastewater capacity before their projects can move ahead.