...because motherhood is not for the meek
OK, I know you're Canadian (as I am) and while this is not the way in our country...let me know introduce you to the way of the USA...SUE. This should have been disclosed when they listed the house on the market.
If they did not disclose this issue *and* you've found evidence and the neighbors have reported that there were water issues before you can totally sue them. At the very least they will be liable to fix the issue. Please do this soon.