This research investigated the existence of drought contingency planning and plans, formal and informal, in Ontario municipalities, and evaluated the capacity of local government to implement effective drought contingency plans. Methods included analysis of documents, policies, and legislation pertinent to drought management and semi-structured interviews with water managers and planners in the Town of Seaforth, the County of Oxford, and the Regional Municipality of Waterloo. The major findings from this research suggest that the more populace municipalities, with greater financial and technical resources, have greater capacity to plan for drought. There is also a tendency for smaller communities to rely on informal drought planning methods. The most noticeable weakness across the case study areas was the lack of clarity concerning the roles and responsibilities of senior levels of government in water management, and drought management, specifically.