Serving 1.4 million residents and 163,000 businesses across Brampton, Caledon, and Mississauga, the Region of Peel operates one of Canada’s largest utility systems. But size brings complexity. The Region needed to move beyond traditional budgeting to a highly integrated, 30-year strategic outlook.
The primary hurdle was internal alignment. Finance, operations, and capital planning were operating with diverse processes. To balance massive "State of Good Repair" (SOGR) requirements with customer affordability, all while managing high-priority pricing objectives such as equity, revenue predictability, and transparency for a massive and diverse customer base, the Region needed to break these down and reconcile them into a single, cohesive framework.
Building a flexible financial future
Raftelis executed a multidisciplinary approach to build a defensible, flexible financial roadmap. We attacked the problem through four key phases:
- Process gap analysis and benchmarking: We began with a "current state" audit of budgeting and capital planning. This was supplemented by an international environmental scan, comparing Peel’s financial health and rate structures with those of peer utilities across Canada and beyond to identify best-in-class opportunities.
- Custom financial modeling: We developed a proprietary long-term financial plan model. This tool functions as a "living" decision-support system, allowing the Region to simulate the long-term impact of capital project timing, inflation, and growth on utility rates and reserve balances.
- Cost-of-service and rate innovation: Using cost-causative principles, we evaluated the existing rate structure. We modeled viable alternatives, including scaled fixed charges, class-based volumetric rates, and tiered residential structures, to better align with the Region’s goals of equity and stability.
- Stakeholder-led design: Unlike many technical studies, our approach was driven by Executive Leadership workshops and stakeholder panels. We facilitated extensive outreach to ensure the new financial plan reflected the community’s priorities before being presented for Council approval.
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Resiliency for decades to come
Our work delivered tangible strategic results for the Region:
- Rate structure modernization: Successfully validated and refined rate alternatives that transition the Region toward a more stable revenue base, including the introduction of fixed service charges to recover approximately 20% of revenues.
- Process integration: Identified and bridged gaps between the Region’s $350M+ annual capital program and its operating budget, ensuring that new infrastructure costs are fully accounted for in future rate adjustments.
- Strategic consensus: Facilitated a series of workshops that narrowed down dozens of competing financial priorities into three "High-Priority Pricing Objectives," creating a unified vision across the Region’s Finance, Operations, and Public Works departments.
- Data-driven decisions: Provided 10-year and 30-year rate projections that allow the Region to plan for a $1.6 billion water and $2.2 billion wastewater SOGR capital plan without sudden "rate shocks" to the community.
The long-term financial plan model and associated fiscal policies have set the Region of Peel up for long-term resiliency. By integrating the financial model into their annual budget cycle, Peel staff can now perform real-time sensitivity analysis as economic conditions change. This ensures that the Region maintains its strong credit rating while providing the necessary funding to transition its capital delivery program from $350 million to over $700 million annually. The Region is now equipped with the tools to manage infrastructure risks proactively while providing customers with predictable, equitable, and transparent utility billing for decades to come.
