By Tony DiPede
With alarming frequency, we read of horror stories which focus on the declining quality of our water supplies. These issues relate not only to the quality of the groundwaters, but also to the infrastructure required to treat and distribute water. Over the past 15 years we have witnessed a striking decline in the health of our water and sewage infrastructure. Governments at all levels and of all political stripes have allowed this decline to occur.
Changes to the financial relationship between Ontario and the municipalities resulted in the transfer of responsibility for water and sewerage financing to the municipalities. In theory, a corresponding transfer in financial flexibility should have accompanied this, due to the Province assuming the full cost of education from municipalities. However, few municipalities have used this flexibility to invest in underground infrastructure, which is much less visible to voters.
The Ontario government has recognized the pressure on water and sewage systems across the Province and has provided municipalities with access to over $200 million via the three-year Provincial Water Protection Fund, but that is less than $6 per person per year. It's simply not enough to make a difference.
It does not appear that the federal government is any more prepared to foot the bill for water and sewage infrastructure renewal than any other level of government. It is allocating a mere $400 million per year for infrastructure (water/sewerage, roads and affordable housing) over five years -- for the entire nation! That's less than $4 per person per year, two-thirds as much as the provincial government.
We understand that there is fierce competition for scarce public funds, and that tax dollars are not limitless. At the same time, however, we watch helplessly as municipalities continue to defer expenditures or significantly reduce capital budgets for maintaining and replacing water and sewage infrastructure. So where is the money to fix our growing infrastructure problem going to come from?
Over the long term, municipalities must be more responsible. This is not a novel idea. Successive provincial governments have tried to get municipalities to better manage their affairs. Recent legislative steps, such as amalgamation and service realignment, can do much to improve economies of scale, but municipalities have taken to saving money not spending money, or directing it towards other projects. Less money spent on water and sewerage directly affects our waterways with more flooded basements, and more water that is simply lost due to pipeline leakage. Change must happen now. Decisions can be deferred no longer.
It is time to take a proactive approach and set municipalities on a course of action that is fuelled less by talk and more by action. How? With simple provincial legislation designed to protect our water quality, we can put water and sewage infrastructure financing on a stable, responsible footing today and into the future.
Dedicated Reserve Accounts
The first step is to establish mandatory reserve accounts so that municipalities have the means to deal with ongoing maintenance, repair and eventual replacement. That's why we have RRSPs, so that governments can reduce the burden of an aging population in future years. This is common sense.
Separate Water and Sewage Billing
The second step is to ensure that all municipalities have a sense of how much it actually costs to provide water treatment and sewage collection and treatment services. One easy way is to have separate billing tied to usage for each and every user. Each user should pay for what they use.
Full-cost Accounting
The third step is actually the easiest. Municipalities should be forced to adopt full-cost accounting practices that ensure that depreciation and eventual replacement are factored into budgets. Right now, municipalities generally treat assets as if they will last forever. This makes no sense. Municipalities need to treat their infrastructure assets, as assets that wear out over time and eventually need to be replaced.
By forcing municipalities to establish mandatory reserve accounts dedicated to water and sewage infrastructure, by implementing separate billings for users, and adopting business practices, the Province can ensure that municipalities have the tools to achieve financial sustainability of our infrastructure. No longer will politicians at any level be free to ransom water quality for other more politically attractive projects.
Municipalities cannot be expected to implement these changes overnight. Transition assistance and a phased approach will be needed to ensure that change is brought about in an orderly and timely fashion.
The Ontario government has an opportunity to take a leadership role and leadership is what everyone in the Province is looking for. It's time to clean up our water and protect our environment.
Tony DiPede is past-president of the Ontario Sewer and Watermain Construction Association.
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