We haven't had a drought in Toronto this summer (yet). In previous years the August heat and funny weather can cause lawns to go yellow. But grass is resilient and it will recover quickly after one good rain, but home owners still use drinking water from the tap to keep it green.
Toronto.ca provides a LOT of information on lawns, including discouraging them. I say, "Nature abhors a lawn" (you heard it here first). I say, "Grass is one plant." Organic farmers discourage monoculture. A "nice" lawn needs pesticide and fertilizer. The City of Toronto will not pick up grass clippings, unless you hide them at the bottom of a yard waste bag under other weed and clippings.
Two years ago I had my back downspout disconnected. Incompetent workers created more issues with the roof (see http://diabetes-cats.blogspot.com/2009/03/this-has-been-day.html) than they helped, and I've had my eaves troughs and downspouts replaced and the rain barrel moved. My front yard is mostly xeriscaped (drought-loving summer plants).
What I should really do is take out the roses. I have two in the front. One is in a really bad place that doesn't get enough water, though it's survived, blooms only once in the late spring, and then gets eaten by bugs. I don't water or fertilize it. The other is a similar old-fashioned plant that I bought a few years ago. Now I love roses (mine are magenta). But I don't like maintenance.
6 years ago