Water & Wastewater Municipal Service Corporation

Person filling up a glass of water from a kitchen tap
The City of Kingston is exploring the creation of a Municipal Service Corporation (MSC) to manage water and wastewater services as the city grows.

Background

In the evolving landscape of water and wastewater services, the creation of an MSC is an opportunity for the City and Utilities Kingston to improve service levels, enhance operational efficiency and foster sustainable practices.

Looking to the future, the city is facing significant growth, with a projected population increase to 220,900 by 2051, requiring 29,300 new homes. This growth occurs amid a housing crisis, climate emergency, and economic uncertainty, prompting the city to proactively plan. Utilities Kingston and the City have identified essential infrastructure projects to support this growth, which exceed their current financial and human resource capacities. To address these challenges, the City is exploring the establishment of Municipal Services Corporations (MSCs) to enhance operational and financial capabilities, endorsed by the provincial government and Association of Municipalities of Ontario.

What is a Municipal Services Corporation (MSC)?

An MSC is created by a municipality to manage specific services or assets. An MSC can only provide a system or a service that the municipality would provide and is created under the provisions of Ontario Regulation 599/06 under the Municipal Act, 2001.

Get Involved

Person filling up a glass of water from a kitchen tap
The City of Kingston is exploring the creation of a Municipal Service Corporation (MSC) to manage water and wastewater services as the city grows.

Background

In the evolving landscape of water and wastewater services, the creation of an MSC is an opportunity for the City and Utilities Kingston to improve service levels, enhance operational efficiency and foster sustainable practices.

Looking to the future, the city is facing significant growth, with a projected population increase to 220,900 by 2051, requiring 29,300 new homes. This growth occurs amid a housing crisis, climate emergency, and economic uncertainty, prompting the city to proactively plan. Utilities Kingston and the City have identified essential infrastructure projects to support this growth, which exceed their current financial and human resource capacities. To address these challenges, the City is exploring the establishment of Municipal Services Corporations (MSCs) to enhance operational and financial capabilities, endorsed by the provincial government and Association of Municipalities of Ontario.

What is a Municipal Services Corporation (MSC)?

An MSC is created by a municipality to manage specific services or assets. An MSC can only provide a system or a service that the municipality would provide and is created under the provisions of Ontario Regulation 599/06 under the Municipal Act, 2001.

Get Involved

CLOSED: This discussion has concluded.

  • The premise behind this plan is that Kingston's population is projected to increase to 220,000 by 2051. The population projections of 2023 have recently been demonstrated by both Federal and Provincial governments to be significantly over estimated. Why, then, are they being used to justify this change?

    hillc asked 21 days ago

    On December 5, 2023, Council endorsed the Medium Population, Housing and Employment Growth Scenario for the City of Kingston for the 2021-2051 time period (Report Number 24- 016). The review of the City of Kingston’s Official plan is being developed based on these projections. The most recent postcensal estimate for Kingston, released by Statistics Canada, is 148,900 people in 2024, reflecting an annual growth rate of 2.5% from 2021 to 2024. This growth rate is higher than what was projected, driven largely by non-permanent residents and migration. The population growth is expected to moderate by 2026 and is expected to align back to forecast levels.

  • Will Council have decision-making power over planning within the Water Wastewater MSC?

    hillc asked 21 days ago

    In the proposed MSC, the City would directly hold the equity ownership of the MSC. The MSC would operate Water and Wastewater services and report to Mayor and Council under full municipal ownership, maintaining public accountability and transparency through annual reporting, Council oversight, and shareholder direction. Furthermore, the MSC would continue to be involved in the water and wastewater master planning process as part of the Official Plan. This approach to planning would not change with a new MSC.

  • In regards to your answer to the question about risks - the MSC model does not appear to benefit the residents and rate payers in the City of Kingston. Without referring everyone back to the KPMG report - please provide the specific benefits to the MSC model over the current model.

    cchiddle asked 28 days ago

    Compared to the current model, an MSC structure offers increased infrastructure investment flexibility, focused governance, improved responsiveness to growth and development, strengthened service efficiency and innovation, access to broader revenue and financing opportunities and transparency and a performance-driven culture. This introduction of this MSC would also allow for borrowing capacity beyond municipal limits.

  • In the MSC scenario - would any of the revenue from the water and waste water portions be moved to fund other infrastructure projects?

    cchiddle asked 28 days ago

    No. All revenue collected from water charges will remain within the water utility and all revenue collected from wastewater charges will remain within the wastewater utility. All water and wastewater revenues are utilized to finance water and wastewater services and infrastructure projects. 

  • In the KPMG report there is reference to leveraging partnerships, of which could be the development community. It seems high risk to have an MSC in partnership with developers who may push for approvals that currently are not attainable because of the current model. It appears that there could be undue influence by partnerships from the private sector.

    cchiddle asked 28 days ago

    The MSC is not involved in land use application processes which remain under the Planning Act and under Council’s authority. Any partnerships established between the MSC and the development community would be based on the actual construction of the water and wastewater services and would only be considered if land use applications were approved by Council.

  • What specific risks and benefits to the tax payers of Kingston could be associated with the proposed MSC?

    MJMcIntyre asked about 1 month ago

    The benefits defined in the business case include:  

    • The MSC will have the opportunity to pursue new revenue streams. This includes third-party servicing, shared services with neighbouring municipalities, and providing specialized utility services. 
    • The City may delegate operational rate-setting processes to the MSC within an approved framework that safeguards affordability and public interest with the official rate by-law still being adopted by Council to ensure enforceability. 
    • The MSC structure would alleviate pressure on the City’s debt levels to support future infrastructure project development. 
    • A dedicated board and leadership team allows the MSC to prioritize water and wastewater mandates without competing interests, thereby improving service delivery, accountability, and long-term planning.

  • Water and wastewater treatment are essential services with immediate, irreversible and serious health and safety implications for all Kingston residents and visitors. What are the specific risks and benefits of the proposed MSC?

    MJMcIntyre asked about 1 month ago

    The MSC would maintain an operational service contract with Utilities Kingston. This means that water and wastewater operations would still be subject to all provincial regulations to ensure health and safety of all residents. The MSC Board of Directors would be an additional layer of oversight for these utilities. City Council also retains all responsibilities under the Safe Drinking Water Act and will continue to receive annual reports as they do now.

  • What alternatives within the current Utilities Kingston and City of Kingston operational management are, or could be, available to finance the required infrastructure improvements and expansions forecast to be necessary over the next 25 years?

    MJMcIntyre asked about 1 month ago

    Utilities Kingston currently employs a funding model in which each utility service, namely water, wastewater, natural gas, electricity, and broadband networking is self-financed entirely through distinct user fees specific to each utility. Under the current forecast, operational revenues alone are insufficient to fund required capital expenditures. The City issues the debt required to support infrastructure projects. Currently, just over 40% of the City’s debt capacity is dedicated to those water and wastewater infrastructure projects managed by Utilities Kingston.

  • Please provide specific examples of the target "strategic partners".

    MJMcIntyre asked about 1 month ago

    Strategic partners could include other municipalities and the development community.

  • Please provide specific examples that illustrate the range of plausible "alternative financing approaches".

    MJMcIntyre asked about 1 month ago

    The MSC will have the opportunity to pursue new revenue streams. This includes third-party servicing, shared services with neighbouring municipalities, and providing specialized utility services. 

    MSCs can leverage their borrowing capacity by securing loans based on asset values rather than being constrained by municipal debt limits tied to total revenues. For example, while municipal borrowing is restricted such that annual debt servicing costs cannot exceed 25% of total revenues, MSCs could operate under a 50% debt-to-equity ratio, providing greater financing flexibility. 

Page last updated: 20 Jan 2026, 09:25 AM