Watershed decision

Lawrence Solomon
National Post
December 18, 2001

two people turning a tapCUPE, the public service labour union, recently issued a dire prediction to its members. “A waste water treatment system in the coastal city of Halifax … could well be a watershed in the Canadian struggle against privatization,” it warned in exhorting its troops nationwide to join its anti-privatization campaign.

“The stakes are high … the water multinationals smell big business. They’ve stepped up their lobby in Halifax, with an eye to setting a private precedent for other coastal cleanup projects.”

The watershed decision took place last week. A precedent was set. Halifax, in the first indication of how Canadian cities may react to the deplorable state of the waterways that receive their sewage, overwhelmingly chose privatization.

CUPE waged an intense, two-year war in Halifax but, in the end, city councillors had an easy decision to make in trusting the cleanup to a multinational consortium over municipal operators. For decades, Haligonians had seen their environment deteriorate under an apathetic, government-run sewage system that treated Halifax Harbour as its toilet. Every year, the unionized public utility abjectly dumped 40 billion litres of raw sewage – untreated feces, tampons, condoms – into public waterways, staining Halifax’s reputation coast to coast. To add insult to injury, since 1973, the city has been collecting a surcharge on water bills to pay for a cleanup. Almost 30 years later, most of that money has been frittered away, leaving citizens with dirty waterways and empty pockets.

In contrast to Halifax’s abysmal environmental record, the multinationals vying for the contract – one led by the British firm, Thames Water, the other by France’s Suez-Lyonnaise des Eaux – operate mostly in the European Community and the United States, the two jurisdictions with the world’s most stringent water quality standards. Public opinion polls in Halifax showed the public wanted the best job done for the best price, ruling out the government-run locals.

As the bidding for the sewage contract demonstrated, the public is doing well by the decision to go private. Halifax had estimated that building the sewage plants alone would cost $315-million. Suez, which narrowly outbid the British multinational for the contract, has committed to build the plants for $262-million, besting the Halifax government estimate by more than $50-million. The sewage contract requires the winning bidder to clean up the harbour enough to permit swimming, boating and fishing 67% of the time. Suez wants the water to be clean enough to allow those activities 95% of the time and believes it can do so at little extra expense.

To add to the benefits to taxpayers of the deal to build and operate the plants – at $465-million over the 30-year life of the contract, the largest municipal infrastructure project in Atlantic Canada’s history – Suez will be paying taxes: an estimated $1-million a year to the province, twice that to the federal government. Had the award gone instead to a municipally run utility, the cost of the project would have been higher, the quality of the environment would have been lower, and governments would have had less revenue to pay for health, education, policing, or other needs that involve an indispensable government role.

None of privatization’s inherent advantages impress CUPE, which sees instead a lost opportunity to obtain more dues-paying members. CUPE knows privately run utilities need fewer workers to get the job done – in some cases, half as many workers – limiting the union dues spilling into its coffers. Because taxpayers, consumers and the environment all benefit, CUPE has emerged as the only loser from its two-year long campaign to derail the privatization process.

Over those two years, CUPE stopped at nothing in its attempts to discredit privatization of water and sewer services. Among its many assertions, CUPE claimed that, as a result of water privatization “dysentery has gone up by 600% in Great Britain alone.” In fact, dysentery rates, which fluctuate wildly, fell as often as they rose in the decade following privatization. In another example, CUPE claimed private companies have logged increased water pollution violations in the U.K. In fact, following privatization, sewage plants cleaned up their act and coastal beaches became swimmable for the first time in decades. The U.K.’s Environmental Agency declared “most of the environmental damage of the past 200 years will have been repaired by 2005.”

CUPE also claimed private companies failed to invest in infrastructure. In fact, the private U.K. companies are investing almost $100-billion. As a government official put it, “You just couldn’t contemplate that kind of expenditure in the absence of privatization.”

Halifax councillors and the public took note of CUPE’s evidence and opted for the competition. Past attempts to build sewage facilities repeatedly failed for lack of money. The private sector’s proposal – slim on bureaucratic waste, fat with benefits for the public – makes the long-overdue cleanup possible.

With the Halifax privatization a done deal, the battle will now turn to the other cities with Third World sewage disposal, particularly St. John’s, Saint John and Victoria, all publicly run systems that pump raw sewage directly into their waterways.

CUPE’s one good claim deserves repeating: Halifax’s decision “could well be a watershed” in bringing Canadians the superior water and sewage systems we deserve.

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