Lawrence Solomon
National Post
August 1, 2000

After decades of neglect, many of Canada’s municipal waterworks are in shambles. Some municipalities lose as much as one-third of their water through pipe leaks, and the old cast iron pipes that dominate many communities are rusting from the inside out.

To restore and upgrade our water and sewage systems, says the Canadian Water and Wastewater Association, will cost almost $90-billion. Although water officials, scientists, engineers and others have been warning us for more than a decade about the urgency of getting the job under way, politicians have been stalling to avoid answering a fundamental question: Who should pay the tab for small towns, which traditionally have relied on deep provincial subsidies?

Waterworks in cities tend to be financially self- sustaining. Although cities do obtain occasional infrastructure grants from provinces and the federal government, these often represent a drop in the bucket. Typically, city residents pay all, or almost all, the costs of building and operating their water and sewage facilities.

Rural residents outside small towns, who rely on private wells, are also self-reliant in meeting their water needs. And like their big-city counterparts, they would balk at being taxed to provide water for those who want the benefit of small-town life without paying the costs that go along with it. As explained by Doug Galt, a rural Ontario MPP, during 1997 hearings into the province’s plans to download the ownership of waterworks to municipalities: “I look to rural Ontario, where two million to three million people have private wells and septic systems costing anywhere, in combination, probably from $8,000 to $20,000. They have to operate it and maintain it, and then we have other people who are on the [town systems]. I’m sitting here wondering who should pay … Should it be rural Ontario paying for the towns?”

Provincial governments’ long-standing practice of subsidizing the waterworks in small communities — typically one-industry towns — was often, in reality, a disguised subsidy to the industry. Even today, the British Columbia government gives resource towns “priority” in obtaining waterworks subsidies.

The subsidies don’t foster viable water systems. Towns often skimp on maintenance, expecting that the province will pick up most of the tab for new construction down the road. In British Columbia, where provincial taxpayers pay up to 50% of the cost of building small-town waterworks, residents often balk at paying the balance. In a September referendum, for example, residents of Merritt, B.C., refused by almost two to one to buy land for a new sewage treatment plant, largely because taxes would increase. In Ontario, where the provincial government has a history of paying up to 90% of the capital costs for waterworks, the subsidies often created poorly thought-out water systems while breeding irresponsibility and a lackadaisical attitude.

The town of Walkerton, for example, suffered from far more than a failure of its chlorination system to guard against E. coli. Because water mains weren’t expertly monitored and flushed out, some mains became heavily encrusted over time. Three-and-a-half kilometres of encrusted water main now must be ripped out to ensure that E. coli isn’t hiding within the rust. Another 5.5 kilometres — some of it with a diameter no larger than a garden-sized hose — should be replaced for safety reasons: In the event of a fire, firefighters would have too little water flow to protect human life and property. Other Ontario towns face similar problems, say consulting engineers who service small communities.

Bad practices thrive where the local water operation must depend on politics and subsidies. “If I’m a politician, do I spend on building a community centre or on the underground pipes that no one can see?” asks Sam Morra, executive director of the Ontario Sewer and Watermains Construction Association, who deplores the politicization of our water systems.

Because many small towns don’t charge their customers separately for water, and don’t set aside any funds for a rainy day, an unworkable system has emerged. Town councils, with no budget for needed repairs and upgrades, start lobbying for subsidies when it’s too late, after problems arise.

The federal government’s National Round Table on the Environment and the Economy agrees that Canada needs a rational, user-pay system to meet basic infrastructure requirements efficiently. “By ignoring this need for the last 15 to 20 years, governments have exacerbated the situation, since repair bills rise exponentially over time,” it reports. Both the economy and the environment have suffered as a result: Because individual Canadians have among the lowest water rates in the western world, we are among the world’s largest consumers of water.

To be true to the round table’s user-pay principles, provinces should stop subsidizing waterworks. Over the past few years, some governments — British Columbia and especially Ontario — have begun to do so, raising understandable howls from many town councils. Now, following the Walkerton tragedy, the towns are renewing their demands, on the grounds that their residents, unlike most everyone else, can’t afford to pay for clean water.

The local politicians have it backward. It’s the subsidy- ridden system of old that town residents can’t afford. Reliable, clean water won’t flow for long out of an unaccountable, politically ridden system.