Tuesday 15 April 1997

Water and Sewage Services Improvement Act, 1997, Bill 107, Mr Sterling /

Loi de 1997 sur l'amélioration des services d'eau et d'égout, projet de loi 107, M. Sterling

Dr Neil Freeman

Ms Dorothea Cook

Save Ontario Water

Ms Sarah Miller

Association of Supervisory Public Health Inspectors of Ontario

Mr Oryst Zyhar

Mr Wes Terry

Ontario Municipal Water Association

Mr Dick Beck

Canadian Environmental Law Association

Mr Richard Lindgren

Great Lakes United

Mr John Jackson

Mr John Sewell

Mr Henry Malec

Toronto Environmental Alliance

Ms Janet May

Safe Sewage Committee

Ms Karey Shinn

Canadian Union of Public Employees Ontario

Mr Sid Ryan

Ms Alison Davidson

Toronto Board of Education Parents' Environmental Action Group

Ms Elise Houghton

Mr Tony Formo

Ms Eleanor Dudar

Georgian Bay Association

Mr John Birnbaum

Mrs Annaliese Grieve

Mr Jozsef Izsak

Ontario Sewer and Watermain Construction Association

Mr Sam Morra

Low Income Families Together

Ms Josephine Grey

Ms Paula Vopni

National Survival Institute

Mrs Fiona Nelson

Geo-Logic Inc

Mr Nyle McIlveen

Earth Save

Ms Miriam Hawkins


Chair / Présidente: Mrs Brenda Elliott (Guelph PC)

Vice-Chair / Vice-Présidente: Mrs Barbara Fisher (Bruce PC)

Mr DominicAgostino (Hamilton East / -Est L)

Mr John R. Baird (Nepean PC)

Mr DavidChristopherson (Hamilton Centre / -Centre ND)

Mr TedChudleigh (Halton North / -Nord PC)

Ms MarilynChurley (Riverdale ND)

Mr Sean G. Conway (Renfrew N / -Nord L)

Mrs BrendaElliott (Guelph PC)

Mrs BarbaraFisher (Bruce PC)

Mr DougGalt (Northumberland PC)

Mr PatHoy (Essex-Kent L)

Mr BartMaves (Niagara Falls PC)

Mr John R. O'Toole (Durham East / -Est PC)

Mr Jerry J. Ouellette (Oshawa PC)

Mr Joseph N. Tascona (Simcoe Centre PC)

Substitutions present /Membres remplaçants présents:

Mr FloydLaughren (Nickel Belt ND)

Also taking part /Autres participants et participantes:

Hon Norman W. Sterling (Carleton PC)

Clerk Pro Tem /

Greffière par intérim: Ms Donna Bryce

Staff / Personnel: Mr Lewis Yeager, research officer, Legislative Research Service

The committee met at 0904 in room 228.


Consideration of Bill 107, An Act to enact the Municipal Water and Sewage Transfer Act, 1997 and to amend other acts with respect to water and sewage / Projet de loi 107, Loi visant à édicter la Loi de 1997 sur le transfert des installations d'eau et d'égout aux municipalités et modifiant d'autres lois en ce qui a trait à l'eau et aux eaux d'égout.


The Chair (Mrs Brenda Elliott): Good morning, everyone. I call to order the second day of hearings into Bill 107, An Act to enact the Municipal Water and Sewage Transfer Act. Our first presenter this morning is Mr Neil Freeman, professor at the University of Toronto. Good morning and welcome. Your presentation time this morning is 15 minutes, and that includes your presentation and questions from the caucuses.

Dr Neil Freeman: Thanks very much. My name is Neil Freeman. I have a PhD in political science from the University of Toronto, where I'm presently an adjunct professor of political science. I'm also a public policy consultant on municipal and provincial utility issues, and the University of Toronto Press published my book on Ontario's electric industry last year.

My submission is a detailed analysis of the current statutory status of the municipal and provincial water industry and indeed a historical analysis of the evolution of the municipal and provincial water industry, as the table of contents illustrates.

I'd like to make three points today; hopefully it won't take very much time. I think we all understand that the purpose of the bill is to get the province out of what is thought to be strictly a municipal issue, and that is providing water and waste water services in municipalities. But the Ontario Clean Water Agency, which in fact originated as the Ontario Water Resources Commission in 1956, has always had a dual-purpose role, more than just to be a service provider in the municipalities; the Ontario Clean Water Agency, as the successor agency to its predecessor, has always had a residual provider role.

Indeed, this is why the Ontario Water Resources Commission was created, because there were many municipalities in the province that were lagging behind other municipalities in terms of the provision of water and waste water services. There was a need for the province, whether for public health reasons or for economic development reasons, to give these municipalities that were lagging behind some assistance.

The Ontario Clean Water Agency, as the successor to the Ontario Water Resources Commission and the Ministry of Environment, which the Ontario Water Resources Commission was folded into in 1972 and then taken back out of in 1993 to create OCWA, has had this dual-function role, both residual provider and alternative service delivery provider for municipalities. I would argue to you that it is because OCWA has had this dual function that it has been able to assemble a critical mass of expertise to be able to provide services in the weaker municipalities. If it wasn't providing the services in the stronger municipalities on this alternative delivery service model, it might not be able to provide the services in the weaker municipalities.

Should OCWA be put out of business, there is a danger that the province would end up having to establish more costly programs to subsidize development in weaker municipalities or pay for different types of mechanisms to ensure, for public health reasons or economic development reasons, that municipalities are kept up to current and acceptable standards.

My second point is that Bill 107 should not be seen in isolation. While it seems to be neutral in terms of its effect on municipalities in that it doesn't tell municipalities what to do with the facilities when they are transferred from OCWA, in fact there is a completely new municipal context in which these assets will be received. For this reason, I would argue that Bill 107 has to be seen within the context of the Bill 26 and Bill 86 amendments to the Municipal Act, known as the Savings and Restructuring Act and the Better Local Government Act, both of 1996; and indeed it should be seen in the context of the proposed new structure for the Municipal Act, and that is for municipalities to be given natural person powers. This is the environment in which the decisions about the future of OCWA assets will be made at the municipal level.

The significance of Bill 26 and Bill 86 is that they changed the nature of how a municipality goes about establishing and disestablishing water and waste water utilities. Indeed, since 1887 it had been the case in the municipal water industry in Ontario that for a utility to be established or disestablished it needed the assent of the electors. The reason for this was that water as a business is a monopoly business, and it was thought that water customers, when they're locked into a monopoly situation, should have a say. The result of this has been that public water utilities have very much customer-owned utilities, but as a result of Bill 26 and Bill 86, municipalities no longer need to receive the assent of their electors to change the status of a public water utility and indeed they no longer need the assent of the electors to privatize and franchise a water utility.


This new context will be even more significant when these new natural person's powers are granted to the municipalities as expected, because what it means by giving municipalities natural person's powers is that the municipality will be free to operate like a private business and either use its natural person's corporate powers to contract with private operators or fall back on its traditional bylaw powers to establish a public utility. I bring this up because decisions that will be made over the assets received from OCWA will be made in this context, and thus water customers and local residents will have little way of being consulted.

Municipalities like the ones that OCWA was put in business to support, the ones where OCWA was a residual provider, will likely be the ones that are in a weak financial or administrative position and will not be capable, necessarily, of taking over the transferred OCWA assets. My contention is that the result of this is that the province is in effect making the decision on how these assets should and will be privatized, because the municipality won't have the capacity to look after the utilities themselves.

My third point is that OCWA has been an efficient and effective provider, especially since was moved out of the Ministry of Environment in 1993, and indeed it is an alternative service delivery provider for municipalities, precisely what the province wishes the municipalities to do: explore all their options.

My further contention is that OCWA could be run solely as a business, and ironically, it already has the natural person's corporate powers that the province wants to give to the municipalities. Further on this view that OCWA could be run as a business and should be run as a business, I would suggest that the weakness of OCWA is that it hasn't been allowed to run like a business. It's structured in statute law to have a board of directors of up to 12 persons, but to date, to my knowledge, it only has four deputy ministers appointed to the board. OCWA, to my way of thinking, could be much improved if it were left to be run like a business, if private sector directors and other directors were appointed to give it a mix of leadership so that it wasn't solely under the control of the government through the appointment of deputy ministers. I'll leave it at that. Thank you very much.

Mr Floyd Laughren (Nickel Belt): A question on OCWA: We heard some private sector folks yesterday who compete with OCWA -- the only word I can use -- "whining about the role of OCWA as being unfair competition. We know that OCWA operated at an operating profit in 1996; forget the spread on its portfolio.

Mr Dominic Agostino (Hamilton East): I think he's agreeing with you this time.

Mr Laughren: We had to educate the parliamentary assistant yesterday, but we won't get into that.

They did make an operating profit last year, I believe, of $2.9 million. It seems to me that's operating like a business and competing without subsidy, so I'm not sure I understand your concern about their having a board of directors who are public sector folks. Maybe they would have made more money -- I don't know -- and if they'd made more money, maybe the municipalities would have paid more for the services they receive. I'd be interested in knowing why you feel that it's been restricted because of that.

Dr Freeman: Personally, I don't have a big beef with how OCWA's being operated. My point is that if people believe it's somehow tainted by being public sector and somehow this means it doesn't operate like a business, why doesn't the government then appoint directors from other than just civil servants?

Further to your point about utilities and your prefatory remark, I've been to utility conferences in the United States where these issues have come up about unfair subsidy for the private and public. In fact, Canada and Ontario in particular appear to be going in a direction that is completely opposite to the experience of large municipalities in the United States, where under pressure from the private sector to tender the water or waste water services, the existing utilities go into a tender arrangement with the private sector and can deliver the services cheaper than the private sector, even under open competition. The private sector then has complained that it's facing unfair competition, which makes us have to ask the question, is the purpose of public utilities to provide a profitable business for the private sector or to deliver the goods at the cheapest possible cost for the consumers?

I think it would be wrong in Ontario if we fell into the trap of believing that the public sector shouldn't be in the business of providing utilities, because this is not even the direction that's happening in major municipalities in the United States. They're treating the public sector and private sector as competitors, and if the public sector can do it cheaper, the public sector legitimately should be in business to support the cheapest possible services for consumers.

Mr John O'Toole (Durham East): Thank you very much, Professor Freeman. I'm just very interested in your views. Do you think the public and private sector, OCWA and some other private sector group, should be in competition for the very reasons you mentioned: efficiency, price, service to the customer?

Dr Freeman: I think that's true, that competition won't hurt OCWA, and if OCWA can't win the business then maybe it should lose the contracts. OCWA should not have a monopoly in any municipality, but should be a competitive service provider.

Mr O'Toole: The former Treasurer of Ontario has tried to convince you that OCWA made a profit on the operating side, which I guess is arguably true. What's your view on the full mandate of both the cost of capital, the full cost of assets and asset acquisition and business planning and all those principles that a private sector company would have to take on to fully evolve and develop at cost to some profit centre, where OCWA is just sort of handed a bunch of assets and told, "Here's some operating revenue. See if you can make it work," and a monopoly position? Do you think it is really fair to state that OCWA made a profit?

Dr Freeman: In my view, whether OCWA was handed a monopoly position, it no longer has a monopoly position and certainly won't in the future, because municipalities would like to put these contracts out for tender and certainly OCWA will lose business. But if OCWA in fact has certain subsidies from its inheritance of the Ministry of Environment function, that's the nature of doing business. If a private sector business had bought OCWA, it would have those advantages as well.

The point is, in a competitive environment should OCWA have advantages of the public sector? I would agree with you that no, it should be out there and if there's any subsidy from the province, it should be removed, but that OCWA none the less could and should be in competition, because the ultimate objective is to provide good service to municipalities.

Mr O'Toole: I just want to make sure I hear what you're saying, or at least understand what you're saying, in terms of the government's role is basically to provide the high standards of quality for water and discharge of water. Do you see any other role for the government besides the standards and the monitoring aspect?

Dr Freeman: What the Ministry of Environment does is where the public policy function should be. OCWA should not be in the public policy function. It should be run like a business.


Mr Pat Hoy (Essex-Kent): Good morning. I want to touch on the subject material here where you talk about the grants not being the sole or deciding factor in making a decision to privatize. I think with municipal restructuring not yet completed in Ontario, it will be difficult for some municipalities today to say whether Bill 107 is good or not, because the restructuring has not occurred in the province as of yet.

If they choose to privatize, and recognizing that there would probably be shareholder expectations of a privatized water delivery system, what does this mean for the consumer at the end, when privatization takes place, do you think?

Dr Freeman: My thinking is that in the end public utilities, when transferred to the private sector, can only result in higher costs, because of taxes and dividends and other higher costs in the private sector. The only exception would be if the municipal utility is functioning poorly, and then it's incumbent upon the municipal leaders to get their utility into shape when looking at alternatives, rather than looking at the existing utility as a poorly functioning entity and the private sector as the only alternative.

Mr Hoy: In your experience, do you know of a percentage of municipalities that are running their water systems poorly?

Dr Freeman: No, I don't. I only presented that as a case, and this is the experience in the United States, that the threat of privatization has actually beaten into shape many poorly performing public utilities.

The Chair: Thank you very much for coming before the committee this morning. On behalf of the members, we appreciate you taking the time to come and give us your best advice.


The Chair: I'd next like to call on Dorothea Cook, please. Good morning. Welcome, Ms Cook. We're very glad to see you here this morning. Your presentation time is 15 minutes. That includes your presentation and questions from caucus.

Ms Dorothea Cook: Thank you, Madam Chairperson and members of the committee, for allotting me the time to make this representation.

The reason I'm here, simply as a citizen, is that I'm deeply concerned over this proposed legislation that has the potential to do profound damage, both to the physical and to the economic and environmental health of this superb province of Ontario.

There are far too many issues to be dealt with in 15 minutes, so I shall explain to you my three principal concerns. These centre around the process itself, around the provisions for sale to private corporations of water and sewage treatment plants by the municipalities in the context of other legislation and around the absence of regulation of a literally vital resource. The possibility of this legislation being enacted causes me great anxiety.

Concerning the process, the election campaign of this government gave no indication that changes were either needed or planned for water or sewage services; neither is a rationale provided in the bill itself. What crisis has arisen in the meantime to require this extraordinary action? Whatever the shortcomings of present arrangements, the public was not given the opportunity to consider the question before the election.

Since the introduction of the bill, there has been such insufficient notice of these hearings that they have had to be cancelled in Ottawa and Thunder Bay. This is scarcely surprising when there was inadequate notice given of them, effectively shutting out large numbers of the public, unless one happened to have been watching at the right time the parliamentary television channel during the introduction of amendments to Bill 103. At that time, some announcements appeared on the screen.

For those individuals who were otherwise alerted to the possibility of appearing before this committee, there was very little opportunity to prepare comments. For instance, I was given notice only last Thursday afternoon that I could make a representation this morning. This seems highly autocratic to me.

Such treatment of citizens is all the more remarkable since it has to be understood in the light of a public opinion poll taken in 1996 for the Ontario Municipal Water Association. That poll showed over 76% of Ontarians saying that water should remain in public control. Nevertheless, the provisions of this bill and of Bill 26 lead unmistakably to just the opposite result.

Meanwhile, during a period when not only the governance of Metropolitan Toronto but also education throughout the province and numerous other fundamental pieces of legislation are vying for public scrutiny, it is not in true democratic tradition to cram into the legislative calendar yet another item, in this case a bill of vital significance, when proper consideration of it by the public is practically impossible.

Then, if the legislation is passed, it becomes immediately effective. Thus municipalities, whether or not possessing the necessary expertise, staff or resources, in the midst of restructuring and of financial constraints, are required to undertake a further burden. It seems to me that this process ignores the public's concerns, and by timing Bill 107 to coincide with other massive changes, it is strongly conducive to an unacceptable imposition of a reduced level of essential service to the population.

With regard to stress placed on municipalities, three factors are notable here: First, up to 40% reductions in provincial transfer payments have already been instituted. Second, the cost of administering the act, with its attendant potential liabilities, falls on that level of government with least access to taxation and a statutory inability to assume debt. Third, the government has announced its intention to download certain costs on to municipalities. Although the details change from time to time, some of the costs of welfare, public housing, public transport and long-term care for the aged are on the agenda for shifting to the municipalities.

In these circumstances, it is difficult to accept at face value the assertion by the minister that the government is committed to public ownership of our immensely valuable water resources and their associated public properties. Why has Bill 26 expressly removed the requirement in the Public Utilities Act that municipalities hold a public referendum on the sale of public utilities? That initial laying of the groundwork has prepared the way for quick and easy sales by municipalities and, thus, an escape from intolerable financial burdens. Moreover, the price has been established at an unrealistically low level.

Bill 107 allows for privatization of any and all municipal water and sewage facilities simply with responsibility to repay those provincial capital grants received since 1978 but without interest on the capital -- see section 56.2(2) -- and federal grants are not included in repayments either. Bill 107, in my estimation, then has everything to do with making it easy for corporations to buy and sell, for their own unregulated profit, an essential resource that the government morally does not have the right to sell.


Two other issues allied to this fundamental question of stewardship of water resources are the needs for regulation of quality for consumption and for protection of the environment. Bill 107 addresses neither of these issues.

As population pressures continue to mount, exotic diseases are introduced, pollution increases and destruction of habitat with uncontrolled urbanization marches on, now is the time to ensure the safety of the water supply. For instance, recent newspaper reports of contamination of water supplies by cryptosporidium indicate the difficulty and expense of public health measures in an era of long-distance transmission of infection. Accordingly, public health, which is the first bulwark in the prevention of disease, has always focused on pure water supply and safe sanitation.

However, in Bill 107 regulatory provisions are devolved to the weakest and least experienced level. This arrangement caters conveniently to private interests. It also adds to the potential for balkanized chaos and disruption with multiple jurisdictions. In addition, given that the Ministry of Environment has suffered large budget cuts, it is likely to be a vain hope that it will pursue vigorously corporations, municipalities or individuals not in compliance with regulations. Moreover, there is no provincial legislation establishing standards for safe drinking water. A highly significant omission from Bill 107 is its lack of provision for an independent regulatory body with authority to achieve compliance.

The foregoing omissions are especially disquieting when the establishment of private monopolies becomes a real threat, for it is plainly impossible for competition to be part of the provision of water and sewage services. That is an additional reason for the unacceptability of privatization of water and sewage services. The recklessness of making it easily possible for municipalities to sell out the birthright of succeeding generations to unregulated monopolies is one of the shocking aspects of Bill 107.

Another aspect of Bill 107's lack of protection for the public is the inclusion of section 11 in schedule A of the Municipal Water and Sewage Transfer Act. This is a broad and unnecessary immunity clause that hinders redress when its availability is most needed. Section ll, in my opinion, has no place in the legislation.

Looking forward then to long-term implications of Bill 107, the wrongness of downloading responsibility for water and sewage treatment to municipalities is clearly part of a larger picture. It is the province alone that can respond to land use planning; to road systems, with their impact on runoff; and to the geologic realities of transmunicipal watersheds, catchment areas and aquifers. What we really need are effective and imaginative conservation measures and prudent management of a public resource. But above all, because government concerns the lives of people and not profit-and-loss statements or efficiency, privatization has no place in the provision of water and sewage services, in my opinion. Bill 107 should either be withdrawn or privatization expressly prohibited.

I must say, although when I wrote this last night I felt there was no place for a monopoly, of course Professor Freeman's comments gave a completely different aspect in my eyes. I do feel, though, that my point about the process at the beginning is something so many people I know feel intuitively is extremely dangerous, that public input simply hasn't been available.

The Chair: Thank you very much for coming this morning. Unfortunately, there is no time remaining for questions, but we do appreciate the time you've taken to share your views with us. Thank you very much.


The Chair: Is Sarah Miller here yet this morning?

Ms Sarah Miller: Yes, I am.

The Chair: Would you please come forward. Do you have a presentation to distribute?

Ms Miller: I have two things to distribute, my presentation and another package.

The Chair: Good morning. Welcome. As you know, you have 15 minutes for your presentation. We're very glad to hear from you.

Ms Miller: My name is Sarah Miller. I work as the coordinator of the Canadian Environmental Law Association, but today I'm going to be speaking on behalf of a group called Save Ontario Water. Save Ontario Water is a coalition that was formed this fall of citizens concerned about health protection, environmental groups and labour groups. It was formed when the Ontario government stated its intent to refer water and waste water services to their committee on privatization.

Our membership brings together a diverse group of people with considerable experience, a long history and understanding of the challenges facing our water and waste water services. Many of our environmental members have worked for decades to improve water quality, wise watershed management and water conservation as an alternative to building new, costly infrastructure. They've worked to protect adequate water resources for future generations in many efforts that were carried out by this province that looked like they might lead to some real water conservation initiatives but have since been shelved.

Other members in areas in Ontario now facing water shortages have worked hard to live within the natural water budgets in their areas by conserving and protecting groundwater. The unions which are members of our coalition and represent the people working in Ontario's water and waste water plants have contributed greatly to the health, safety and security of our water supplies. The other private sector unions which are members have contributed greatly by all the work they're doing to foster transition to cleaner production and manufacturing.

Public polls continue to reinforce the public's desire to have water services remain publicly controlled and to be subject to strong environmental protection. We feel with Bill 107 the Ontario government is moving these services further and further away from public scrutiny to the private sector. We feel that this devolution could even well lead to the complete exclusion of the public from future water policy decisions and severely diminish accountability to the public on the allocation of water, the setting of rates for water and sewage services, and the wise management and conservation of those services.

It's really hard to believe that this government is not working towards full-scale privatization when it took away the century-old public right to approve sales of public utilities by referendum in its Savings and Restructuring Act last year.


Ontario we feel is much more vulnerable to harm from privatization than other jurisdictions where privatization has occurred, because it does not have a strong water protection regime. Although Ontario has jurisdiction over one fifth of the world's freshwater resources, the province has no water conservation policy. It has no enforceable safe drinking water act; it merely has guidelines. This leaves the public with very few tools to protect themselves from harm.

We feel also, as others speakers have said, that Bill 107 can't be evaluated in isolation from other actions of this government. Cuts to the Ministry of Environment and Energy monitoring and enforcement staff mean there are fewer people to detect water and waste water pollution. Closure of government labs which offered free water testing has meant that municipalities have been thrown back on their own resources to finance and carry out this analysis. The cancellation of the municipal assistance program, which was administered by the Ontario Clean Water Agency, does away with all funds in the province for infrastructure renewal and improvement and is driving municipalities into the hands of the private sector.

It's for these reasons today that we're asking you to hold a full public inquiry into the state of this province's water protection and waste water management programs and laws, so that alternatives not contained in Bill 107 can have full public consideration, and we are asking that this bill be withdrawn.

Right now in Ontario there are some 30 private water companies already seeking business, and some of them have already been given contracts. In the Financial Times global water report put out for large international water companies, they anticipated Bill 107 and told their readers that transfer of about a quarter of the province's water and sewage treatment plants to local authorities would give them business opportunities. They also stated that the formal transfer of ownership will take place when provincial loans used to build the plants are repaid. We feel that the provision in Bill 107 to include these loans really isn't going to be a major impediment to discourage privatization; it's actually indeed just firmly placing the pricetag, a pricetag that many of these large multinationals can certainly afford.

Today, we've given you a package of documentation on the experience of privatization in the United Kingdom. We hope it will help you anticipate and prevent some of the same disastrous results in Ontario. In the UK, privatization has meant increased water waste, increased water pollution violations, decreased affordability, discrimination against the poor, increased health risks from water-borne and sanitation-related diseases, aggravation of water shortages and droughts and job loss for water and waste water workers. For the private water companies it has meant huge increases in executive salaries and shareholder dividends, capital to carry out mergers and global diversification plans. We're also getting indications in Ontario already that some of these things might be in store for us.

The question you have to answer for the public of Ontario is, will water privatization mean better protection of public health and safety?

All of the OCWA plants, as we heard from Professor Freeman, are the smaller plants in the province. Part of the original rationale for putting them into a crown corporation was to better manage those plants, to ensure there was good worker training and that those plants would be transformed into non-polluting operations, despite the fact that they didn't generate large amounts of capital to pay for those programs.

However, in the plants where private contracts have already been let in Ontario, one of the first things that happens is staff reductions. Provincial training programs for water and sewage treatment workers, which were provided formerly by OCWA, are likely to vanish with the transfer of these plants to municipalities.

In Ontario, the municipal sewage sector is still the single greatest polluter of our waterways from direct discharges, and several of those plants still only have primary treatment. As other speakers have mentioned, in the last several years we've had several troubling outbreaks of cryptosporidium. Another Great Lakes city actually experienced hundreds of deaths from a similar outbreak. The question you'll need to answer for the public is, will privatization guarantee adequate funds for plant upgrades, improvements to safeguard pollution and public health? That certainly wasn't the experience in England.

We are told that public-private partnerships will still protect the public interest, but we think there is an inherent conflict in these partnerships. One partner is accountable to the public while the other is accountable to their shareholders, to provide them with profits. In the end, all profits will be generated from one source, and that is from the consumer.

A recent experience in privatization in Ontario sheds light on what partnerships could bring. Philip Environmental, a Canadian entrepreneur in Hamilton, was awarded the contract to manage the Hamilton-Wentworth sewage treatment plant in partnership with the municipality. Shortly after, a 40-million-gallon sewage spill occurred, backing up into basements, causing property damage and contaminating the harbour. The municipality maintained all the liability for the spill, for compensating homeowners for damage and cleanup, and it will need to sue its partner in order to recover the funds. Ultimately, it's going to be the taxpayer who will bear the cost of the litigation, bear the cost of the cleanup and the long-term costs of the harm to the environment.

Who will have oversight over protecting the public interest in the myriad decisions that are going to be made around these boardroom tables with these new partners? Who is going to guarantee the potential annual contract revenues, estimated by the global water report of the Financial Times at over $125 million from the OCWA plants alone? If these plants are transferred to multinational businesses outside of Ontario, who's going to control the flow of the money? Is it all going to go out of province rather than going back into improving the infrastructure?

Public and private partnerships are already reshaping Ontario. In late 1996 York region decided to award a contract for the future water supply, likely to amount to hundreds of millions of dollars due to future growth and development, to a consortium of Consumers' Gas and one of the British water companies, Northwest Water. While there were few public open houses held as part of an environmental assessment, calls for a full environmental assessment of this large undertaking have as yet received no response from the Minister of Environment.

There is considerable public concern that the need for the project hasn't been demonstrated. The preferred alternative selected by the partner involves taking most of the region off groundwater and building a series of very costly pipelines and new treatment plants, running pipelines from Lake Simcoe and Lake Ontario. Consumers in the region will have no choice but to have their water supplied by this one monopoly, and all the capital-intensive costs of the scheme they selected, much more expensive than the groundwater provision currently in existence there, will be passed on to them.

Who is going to regulate the price of water passed down to consumers by water monopolies in Ontario to ensure equitable and affordable rates? How will water conservation even be a viable option for the private sector, who will get higher profits from higher water use? Are we propelling Ontario further down an unsustainable path?

There is a lot of rhetoric now about the advantages of public-private partnerships, and much of it is very ideological, supporting competitiveness for the sake of competitiveness, visions of Canadian entrepreneurs entering global markets and offering the public choice. Maggie Thatcher painted the same picture for British consumers in 1989. They could participate in the new world order by becoming shareholders in the new companies.

In Ontario, there definitely is a new climate of competitiveness, and that competitiveness is leading us to the unfortunate question of: Will it be the large French or British companies or the Americans, or will it be the multinational gas and pipeline companies, or will it be the home-grown companies that will land contracts for Ontario's water resources?

If you do not come to terms with how these companies will be regulated, you will be failing the citizens of Ontario. Until all the questions we have asked are answered, we're urging you today not to proceed with Bill 107.

The Chair: Thank you very much, Ms Miller, for coming before us from Save Ontario Water. Unfortunately, there is no time remaining for questions, but we thank you for taking the time to come this morning.



The Chair: I ask Harvey Bones, Wes Terry and Oryst Zyhar to come forward. Welcome, gentlemen. You have 15 minutes for your presentation, and that includes questions from caucus.

Mr Oryst Zyhar: Good morning. My name is Oryst Zyhar, director of the health protection division for York region, and I wish to thank you for the opportunity of appearing before this committee as a representative of the Association of Supervisory Public Health Inspectors of Ontario. Also in attendance is Mr Harvey Bones, president of ASPHIO; and Mr Wes Terry, who is the environmental administrator, and he is representing the part VIII delivery organizations in northern Ontario.

ASPHIO has a long-standing history of assisting the Ministry of Environment and Energy in the delivery of part VIII, and as a result of our concerns for and our expertise in not only public health programs but also other programs which can affect the health of our communities, our association felt it was imperative to make this presentation to this standing committee. The goals of the part VIII program are to ensure that the rural, unserviced areas of the province are provided with an economic, environmentally friendly and healthful method of sewage treatment and disposal that does not have an adverse effect upon the quality of the subsurface environment or to public health.

Bill 107 is intending to transfer a major portion of the responsibility for private sewage disposal systems from the current delivery agencies of the Ministry of Environment and Energy and the upper-tier governing authorities by downloading to lower-tier municipalities. This causes our association great concern, as the current delivery agencies, which are mainly health departments, have over the years endeavoured to gain expertise, knowledge and professional standing in the review, inspection and approval of private sewage disposal systems.

Environmental protection and public health programs will inevitably suffer if building and private sewage system approvals are centralized at the area municipal level. There will be a greater potential for conflicts of interest or abuses of protection principles. In Ontario, health units have the existing expertise, experience and established procedures to deliver this service effectively and efficiently and have administered the part VIII program on behalf of the Ministry of Environment and Energy in most areas of Ontario since at least 1974.

It is ASPHIO's position that a healthy environment is paramount in the maintenance of optimum human health and that safe disposal of raw domestic sewage wastes, from a pathogenic disease prevention viewpoint, has a direct link to the protection of human health. Many health units have developed or contributed to the development of broader groundwater protection strategies, as it makes sense to have the impacts of all significant sources of groundwater contamination, including private sewage disposal systems, considered by the same people.

As of September 31, 1997, these skills, accumulated through education and experience, will be replaced by inspectors with significantly fewer qualifications and limited or no experience. Accountability will be lacking or non-existent as the accumulated experience of over 23 years will be lost.

ASPHIO maintains that effective supervision of the design and installation of sewage disposal systems is fundamental for the protection of public health and the environment. At present, most municipal officials responsible to perform activities under the authority of the building code do not have training in hydrogeology, soils, public health, chemistry or biology, and how these disciplines relate to sewage composition and sewage treatment.

Currently, health unit activities include:

The inspection of proposed lots and assessing their suitability for onsite sewage systems.

Reviewing proposals for new sewage systems, including alterations to existing buildings or structures which may affect the operation of existing sewage systems.

Attending hearings before the Ontario Municipal Board and the Environmental Appeal Board and court cases relating to sewage systems under part VIII.

Responding to complaints related to sewage systems.

Investigation of malfunctioning sewage systems and advice regarding probable cause of the malfunction and the potential corrective action required.

Inspection of and issuing certificates of approval for hauled sewage disposal sites.

Providing advice and recommendations to the approvals branch regarding issuance, suspension or revocation of licences under section 80 of the Environmental Protection Act.

Responding to legal letters respecting sewage systems and property transfers.

A close liaison exists between the environmental health section of each health department and the upper-tier planning department regarding development applications which have potential health and environmental implications. Lot assessment for an onsite sewage disposal system is a complicated combination of various components, such as topography, geology, hydrogeology and regulatory requirements. Building inspection departments and their supporting ministry do not have the background or resources to assess the public health implications of certificates of approval applications, and furthermore, the building code assumes that construction is always possible and sets out the requirements for building.

Unlike building inspections, a lot inspection for the purposes of sewage system assessment goes beyond the site-specific parameters of the lot in question, as consideration of off-site impacts to ground and surface water supplies must be weighed. This planning component is significant, as it may impose restrictions on the size and location of the structure on the building lot. The implementation of this component is required prior to the application of the building code requirements.

ASPHIO also identifies that the process for dealing with complaints has a significant cost attributed to the administration of the part VIII program, as it often requires several inspections to abate the health hazard. This complaint activity has no source of revenue until a certificate of approval is applied for. It is questionable how Bill 107 will allow the regulatory agencies to recoup the costs of this service. Complaint investigations often lead to an increase in enforcement activities due to illegal system repair or installation.

It is ASPHIO's position that Bill 107 requires amendment, as the timing of the October 1, 1997, transfer date does not coincide with the calendar year or fiscal year used by the health departments or the Ministry of Environment and Energy. Current providers will need to terminate their existing programs prior to the end of the construction season unless other arrangements are made. This short time line is also inadequate to develop and provide certification training for the new non-health department staff in epidemiology, hydrogeology, soil composition, communicable disease control and general public health principles.

The intent of Bill 107, to provide one-stop shopping for the consumer by having local building officials trained and certified to provide a sewage system inspection service at the same time as a building inspection is being carried out, is flawed, as most sewage system installers work independent of the home builder and require an inspection prior to moving their excavation equipment off the site. In all likelihood, these inspection requirements will not coincide with a building inspection and therefore will require a special trip to the site by the inspector. This defeats the purpose of fewer inspections and less cost.

Currently, many municipalities and regions are involved in amalgamation and governance discussions, and it is ASPHIO's recommendation that Bill 107 be amended to ensure that the responsibility for review, inspection and approval of private sewage disposal systems remains an upper-tier municipal responsibility. This would ensure consistent delivery in all municipalities and not just those that can afford it.

ASPHIO further recommends that Bill 107 be amended to ensure that part VIII of the Environmental Protection Act and regulation 358/90 remain a responsibility of the Ministry of Environment and Energy. However, should the Legislature intend to transfer the program to another ministry, ASPHIO would support the incorporation into the Health Protection and Promotion Act and have it identified as a mandatory core program.


In the event that the responsibility for part VIII is transferred to the Ministry of Municipal Affairs and Housing, ASPHIO's recommendation would be that part VIII and regulation 358/90 be transferred in its entirety and maintained as a separate, standalone section in the legislation, provided that the upper-tier municipality is identified as the delivery agency of this provincially significant program.

ASPHIO has provided you with 30 copies of our presentation and supporting documentation, and we would again offer our commitment to meet with ministry staff to further discuss any amendments or the implementation of any proposed changes to this program.

At this time, I would like to introduce Mr Wes Terry, who will address this committee. Afterwards, our delegation would be pleased to take any questions. Thank you for considering our position.

Mr Wes Terry: Madam Chair, members of the committee, I represent the northern Ontario delivery agents, and what I intend to do today is simply give you a cut-down version of a presentation that I had hoped we would have delivered in Thunder Bay, had the committee had the opportunity to keep to its agenda.

First is the timing of the intended transfer. We feel that October 1 poses some very significant difficulties. There isn't a training program in place at present. It's currently in the process of being developed. To contemplate training inspectors and installers between now and the beginning of October is pushing it a little bit.

The second concern we've got is the ability of smaller municipalities in rural Ontario to take on the responsibilities of carrying out this program. There are many municipalities out there right now that either have no building inspection provisions or provide a very reduced building inspection provision. Asking them to take on the responsibility of delivering the part VIII program I don't think is doable. I don't think they're going to end up being capable of carrying it out.

Northern Ontario also presents a very unique situation in that we represent, geographically, about two to three times the total area of the province physically, and in excess of 90% of that land mass is made up of area that has no municipal jurisdiction. This legislation requires that the Ministry of Municipal Affairs and Housing carry out that particular program. I put it to the committee that to date in unorganized territory there are no building inspections being carried out; never have been. This creates some very unique difficulties for that particular ministry to get a program up and running where they haven't been operating a program consistent with what other municipalities in the province have been carrying out.

Those are the three things I'd like to put to this committee for its concern. As Oryst just said, we'd be more than happy to answer questions.

Mr Doug Galt (Northumberland): Thank you for your presentation and expressing to us your areas of concern. First, I'd like to put your mind at rest with the October 1 date. We too have been concerned with that date. With the minister's presentation yesterday, I can confirm that it will not be prior to January 1, 1998, and we are looking at alternative dates down the road. We can overcome that concern that you have with October 1.

Certainly with smaller municipalities I don't think there's any question they're going to turn to the health units to continue the inspection and work with the health units into the future. Part of the reason for bringing this in is that we're looking at the training and certification as a ministry and ensuring that all people are trained to a certain level. I noticed that you're pointing out the abilities of the health unit. We appreciate that and recognize the kind of service that's been there before. We just want to make sure there's some uniformity.

If there's any time left, I'd be interested in your comments further as they relate to single-tier and upper-tier handling of this in the future. You were emphasizing a couple of times the upper tier. Could you expand a little bit on that?

Mr Terry: We don't have upper-tier government in the north, but I think if you look at how the program is being delivered currently, it's being delivered for the most part by health units. In six out of the seven northern area health units do the program and in one other it's delivered by a conservation authority. They're all delivered at an upper-tier level.

The health unit I work for represents all of the district of Algoma. Sudbury has the same situation. We've got staff who are conveniently placed across those districts who are currently capable of carrying out this program should we be the agents either for the province or for a grouping of municipalities. I've got some concerns about how you develop contracts with 24 municipalities in Algoma and another 26 or 27 over in Sudbury.

Mr Hoy: You've heard the parliamentary assistant say that January 1 may be the new date as opposed to October. Do you feel that's enough time, an added three months?

Mr Zyhar: We've just been circulated something from a consultant hired to set up a training course and a certification course. That just occurred last week, and it is a very rough sketch of what they intend to do. Even that circulation was lacking in quite a few areas of what we the health agencies already perform. The consultants themselves are not aware of the implications of the program and the amount of work required in the program.

In saying that, trying to get back to these consultants to assist them in setting something like that up is going to be a time-consuming process, and in most areas right now this is when the busy season starts, this is when construction begins, this is when lot assessment takes quite a bit of our time, recreational beach sampling etc, so our assistance to them will be forthcoming but it may not be as quickly as they need.

January 1 is an extension. We would like to see it go a little bit further. That's why our offer stands. We will meet with any ministry staff you like. We will sit down with them at the table as an association and come up with some kind of guidelines or timetable for implementation of the change in the legislation.

Mr Laughren: What does it cost now for an inspection of a septic field bed?

Mr Zyhar: It would depend on the intricacy of the system.

Mr Laughren: For an ordinary homeowner.

Mr Zyhar: I work in York region. I am the director in York region and in charge of the part VIII program. We operate a program where the minimum we inspect is five times; the maximum is 10. That's 10 separate site visits to a lot. The installation of the sewage system: The cost to the homeowner can vary anywhere from $3,000 to $15,000 for the installation itself. Our permit fees begin at $100 and can range depending, after a certain point, on the square footage of the building.

Mr Laughren: I live rurally and I had a complete new septic field bed put in -- not the tank, the field bed -- and I don't remember a fee at all.

Mr Zyhar: There would have been a fee for the certificate of approval. The contractor may have taken it out on your behalf.

Mr Terry: Those fees range between $100 and about $450, but the province currently subsidizes the program up to about 75%. It's not doable at $100 to $200 or $300 any more.

Mr Laughren: I didn't have that many inspections.

Mr Terry: I think the standard across the north is to do two inspections.

The Chair: We'll cut it off at this point. Gentlemen, on behalf of the members of the committee, I thank you for taking the time to come this morning to present your views.



The Chair: Could I please call Mr Black and Mr Beck from the Ontario Municipal Water Association. Good morning. Welcome. Very nice to see you.

Mr Dick Beck: My name is Dick Beck. I'm a member of the board of directors and a past president of the Ontario Municipal Water Association. I'm joined here by Don Black, executive director of our association.

We're happy to be here. We're glad you invited us to comment on Bill 107. We speak for more than 200 public water authorities across the province which supply water to more than eight million Ontario customers.

All of these authorities are involved in the supply, treatment and distribution of water in the province, and we therefore take a great deal of interest in policy matters related to the provision of drinking water. Our members have access to a lot of expertise and skills for direction and leadership, mainly on policy issues; that's what we're concerned with here today.

One of the main points of our mandate is the public utility concept as a system that sets up and provides and ensures safe, reliable drinking water at an at-cost basis and on a fee-for-service basis. This way, our waterworks are or can be financed entirely by dedicated revenues, and these are revenues from ratepayers, not from taxpayers at either the local or the provincial level. The separate public utilities, in particular, are directly accountable to the public. A lot of those, as you know, are directly elected and we don't think there's any better connection to the public than that.

We emphasize full financial transparency, no cross-subsidization of services when it comes to services like water, and for that matter electricity and even sewage, and the levy of user fees.

This approach for the water system has much broader relevance, and it's applicable as a model for other utilities such as electricity and sewage. Some utilities already have those things attached to them and there could be more.

We think public utilities serve the best interests of the customer in terms of cost and water quality and reliability. Quite often in discussions about privatization, arguments about whether that's good or bad or efficient, the customer, the end user, the ratepayer is forgotten. When you apply the test of what does it do for the ultimate ratepayer, sometimes these other ideas fail.

I'll try to give some more specific comments on Bill 107, but I would have to say that there's so much going on now, there are changes to the Municipal Act and other acts which are going on, it's difficult to separate the ideas in all cases because they can impact one on the other. Forgive me if I'm not dealing directly with Bill 107. If not, I hope you can use your influence, if you believe in some of these things, on the other bills.

The combined effect of all these changes in the Municipal Act, for example, and the Municipal Elections Act are having an impact and will have an impact on how Ontarians have a say or don't have a say in the supply and distribution of drinking water.

We are concerned about how fast things are changing. We're concerned about all the restructuring studies and the impacts these are having on water utilities in the province. Things are moving quite quickly.

A lot of our concern stems from the fact that the municipalities are going to see additional costs downloaded from the province. They're going to be searching even more for ways of raising revenue. Some municipalities have already used or diverted revenues from water systems to other uses. We think this is completely wrong for such a basic commodity as water. There are others who, while they haven't done it yet, quite openly acknowledge that it's one of the things on their mind. We think this would be bad in the long term for the province's reputation and the customer's ultimate interest in good, clear water.

We think the government does have a role to provide a focal point for all of this. We know it has a role for standards and the enforcement of quality. We are aware that the minister has stated he intends to maintain quality levels and standards and to enforce them. I think the term is "tough" standards. We're not asking for tough standards or tougher standards. There are good mechanisms in the province now for establishing standards and coordinating with the federal government and the other provinces. What we want to see is that municipalities have the financial ability and the political will to deal with maintaining these standards.

The question is, how do you achieve these things? We agree with the objectives, and we don't want to be micromanaged by the province. Most of the utilities and certainly the public utilities have operated very well managing their water systems, but there is certainly a need for some coordination of general policy. There doesn't seem to be an overall framework of policy for drinking water in the province. How do you handle it in big communities? How do you handle it in small communities? But certainly water is considered to be a very essential service, and I'll mention a little bit more about that in a second.

We'd be glad to work with the government to develop more details. We and other organizations that we cooperate with have an interest in developing a broader plan for the long-term approach towards drinking water sources and treatment in the province. But we are concerned a little bit with Bill 107 as it's presently laid out. Even though they propose to put the assets of OCWA back into the municipalities, we're concerned that there are not strong enough provisions to prevent privatization of those plants. I could spend a long time talking about why, but time doesn't permit and we can get into that separately.

The legislation does not ensure that privatization will not result. It does say that yes, the money that was loaned to the municipalities would have to be repaid if a utility is sold, but it doesn't say, for example, that the money or whatever other proceeds come would have to go back to the ratepayers who paid for it in the first place. You can bet your bottom dollar if somebody buys something, they're going to expect to recover that in rates from the ratepayers in the future. In effect, that means that the ratepayers end up paying for it twice. It's a very dangerous and almost irreversible avenue to go down. I'm well aware of what has gone on in the UK, and I can refer you to an excellent textbook that has assessed the results of that.

I'm going to have to skip a lot here, but one of the things we've done recently was to commission a poll by Pollara. I think you have some information on that, so I'm not going to go into a lot of detail. In sum, over 80% of Ontarians think drinking water isn't a commodity, it should be provided at cost to its customers, and people feel that the money they pay in water rates should be used solely for improving the water system and not other municipal services. They believe the public should be consulted when the government is making key changes in how systems are run; for example, if a water system should be run as a public utility or a department of council and so on.

Why is drinking water not considered a commodity like other things? Drinking water and electricity -- and you could probably add sewage services -- are considered extremely essential services. Why is this? They are essential to life. They are typically inelastic in price and demand. In other words, they're so essential that it almost doesn't matter what the price is, people are going to use it. If it's in a private enterprise charging more because they're more interested in their shareholders, people are going to have to pay it anyhow. They are monopolistic by nature, so it's just a question of whether it's a private or a public one.


Should money just go to services? Certainly. Toronto had a problem a couple of years ago. When they diverted, they reduced their water maintenance fund from $15 million down to $5 million, and they regretted it after they did that. They used it for other purposes.

We have a five-point plan -- we don't have copies for everybody, but we'd be glad to provide extra copies later, if you wish -- financial transparency; public accountability; natural efficiencies through integration of utilities, and this is more important now with all the restructuring going on. Let's not destroy the efficiencies of combining electricity and water and often sewer. Let's have full cost-benefit studies before any privatization, and that includes the transferred OCWA plants, and meaningful public input.

It's a pity to see the public systems that have been developed over 100 years going down the drain by a simple motion of council in many cases. That's what some of this legislation does.

I'm going to stop now so that we can have some questions and try to give you some comments on it.

The Chair: Thank you very much. Just for the information of the members here, the presentation will be distributed to everyone so that you will have that.

Unfortunately, we only have about two minutes left for questioning, so we'll begin with the Liberal caucus, and I ask you to keep your questions or comments very brief.

Mr Agostino: The concerns you've outlined today were consistent with what we heard yesterday in London, particularly around the issue of privatization. What's so ironic is that most government members around this table, the parliamentary assistant -- and the minister himself yesterday confirmed that he believes the privatization of water services is not a good thing and that it would not be wise for municipalities to do that. He's leaving it to the good faith of municipalities that they won't do such a thing.

Do you believe this bill should have a provision in place that would prohibit municipalities from selling off, not the operation, not the operating part of the thing, but the assets of the water and sewer infrastructure, and turning control of that over to the private sector? Should there be an amendment to this to prohibit that, in your view?

Mr Beck: Yes. It's a very good point. Ownership and control is the basic point, very key. It would be very nice if there could be something in place in the legislation that would prevent that. We don't have quite as much faith in all these different municipalities doing the right thing. That's it in a nutshell.

Ms Marilyn Churley (Riverdale): Thank you for your presentation. It's good to hear from such experienced people who have been in the business, so to speak, for a long time.

Building on the previous question, what I'd like to ask you is this: Given the kind of downloading that has already happened and more to come in the future to municipalities, do you have a concern that even if municipalities would like to not privatize, because of the huge costs of infrastructure and all the other costs associated with this delivery, they'll be forced to do it if they have that opportunity, even if it's not their choice?

Mr Beck: How shall I put it? People who hope to accomplish something for the customer through that mechanism are kidding themselves. You don't get something for nothing. Municipalities have the capability, even if they haven't been used to doing it, of raising their own financing, of shopping around for some good help on expertise, combining, if necessary, with utilities. You'll pay just the same through the private company. They're going to be repaid for the capital they raise. In fact, it has been shown generally that the capital costs private companies more than it does public utilities. Somebody is kidding themself if they think they're going to solve their financial problems that way. They might. It might be less worry for council, but the customer will end up paying more.

Mr O'Toole: Thank you very much for a very informed presentation. Dwelling a little bit on what has been discussed, with the province's decision to get out of MAP, the municipal assistance programs, do you think it's important that the municipalities look at the full cost accounting operation of utilities?

What I'm trying to say is, in the past there was a suspicion that the province would come out with a bucket of money and help out municipalities with the assistance programs, so there weren't really full cost-recovery accounting principles. Like you say, they transferred some of their revenues around. Is this a good move, a responsible move to ensure a sustainable supply of clean, healthy water?

Mr Beck: Absolutely.

Mr O'Toole: It's an important initiative, really.

Mr Beck: It certainly is. The easiest way to ensure that this happens is to have a separate public utility. You must raise all the revenue you need from your ratepayers. You must spend it on your system; it doesn't go to shareholders; it doesn't get bled off for roads or potholes or anything else.

Mr O'Toole: How can you ensure that the monopoly becomes self-fulfilling?

The Chair: Excuse me, I'm sorry, Mr O'Toole. As they said yesterday, our time has evaporated. Gentlemen, I thank you very much for taking the time to come this morning.


The Chair: I'd next like to call forward, please, Mr Rick Lindgren from the Canadian Environmental Law Association. Good morning and welcome.

Mr Richard Lindgren: Good morning, committee members. My name is Richard Lindgren. I'm a staff lawyer with the Canadian Environmental Law Association, or CELA. Most committee members will know that CELA was established in 1970 for the purposes of using and improving laws to protect the environment. We're very grateful for the opportunity to speak to Bill 107 this morning because, in our opinion, Bill 107 has a number of profound and adverse environmental implications.

It's our position that Bill 107 is fundamentally flawed. It's legislation that cannot and should not be supported either in principle or in practice, and for that reason we're recommending that Bill 107 be withdrawn.

Our concerns about Bill 107 are outlined in the report I filed with the clerk this morning. It's entitled Ontario's Water Resources: The Need for Public Interest Regulation. This was jointly prepared by the Canadian Environmental Law Association and Great Lakes United, and I trust members have copies of this report. You'll be pleased to know that I do not intend to review this report in its entirety.


Mr Lindgren: I can sense the disappointment about that, but I'll leave it with committee members to read this at their leisure, because I can guarantee you it makes for excellent leisure reading.

What I'd like to do in my remaining time is just simply draw the committee members' attention to the key concerns we have about Bill 107. Those concerns are outlined on page 1 of the report. I'm going to simply speak to these concerns and hopefully leave some time for questions at the end.

Looking at the report, and starting with item 1, the first concern we have is that no environmental rationale has been offered for Bill 107 and the legislation does not appear to be motivated by ecological concerns. It appears to us that this bill is driven by ideology, not ecology, and it seems to be ideology that's out of step with currently held public opinion, which seems to suggest that Ontarians do not want to relinquish public control of sewer and water services. I note that the previous speakers provided to the committee some recent polling material which suggests that the public overwhelmingly supports the retention of public control of sewer and water services.

The second concern is this: Bill 107 fails to expressly prohibit the privatization of municipal water and sewage facilities, infrastructure or services, despite the Ontario government's professed commitment to public ownership of such undertakings.

I didn't have the pleasure of hearing the minister yesterday express his concern about privatization, but I can tell you that thanks to the intervention of Ms Churley some time ago, I did have the opportunity to meet with the minister a few weeks ago to discuss this matter and again the minister maintained that Bill 107 has nothing to do with privatization. I guess I was a little bit relieved to hear that, but I also have to say I don't believe it and I'll explain why.


Bill 107, as drafted, contains no express prohibition against privatization. If this government is committed to public ownership of sewer and water services, if this government truly believes this bill has nothing to do with privatization, this government should have no reservation whatsoever about putting forward and supporting an amendment to Bill 107 which expressly prohibits the transfer of the title or ownership of sewer and water facilities or infrastructure. If the government is prepared to do that, much of my concern has been alleviated.

Item 3: Bill 107 makes no provision for an independent regulator of the water and sewer services industry in Ontario. We've heard previous speakers talk about the potential for monopolies to be created in the absence of firm regulation or a policy framework for sewer and water services in Ontario. We note in our submission that even in Great Britain, which has been subject to the privatization regime, they have an independent regulator. They put one in place. They perceived of, they recognized the need for an independent regulator. The problem is it's a regulator that doesn't have sufficient teeth. We say in Ontario if we're going to go down the privatization route, the quid pro quo is independent, effective regulation of that sector.

Turning to page 2 of the report: Bill 107 fails to enact or entrench the essential elements of the long-overdue safe drinking water act in Ontario. When the minister introduced Bill 107, he issued a press release that says this: "The quality of our water is not negotiable. When we turn on our taps, we expect clear, drinkable and safe water." That's a quote from Mr Sterling. That's a very laudable objective. The problem is there's nothing in Bill 107 that actually secures that objective. There are no enforceable drinking water standards that are contemplated or contained within Bill 107.

I've heard some previous speakers make reference to clear, tough, enforceable standards that exist in Ontario. I'm here to tell you there are no standards that exist in relation to drinking water in Ontario. We have guidelines, we have objectives, we have certain policy pronouncements, but we do not have enforceable standards that deal with the water that comes out of you tap. We have waste water standards. We have air pollution standards. We do not have standards that regulate what is in this glass of water. That's a very significant omission. That is why for the last 20 years CELA and other groups have been advocating for a safe drinking water act to provide the legislative tools that are necessary to ensure that the water that comes out of the tap is reliable, it's safe, it's healthy. Bill 107 contains no such safeguards.

Moving on to item 5: Bill 107 fails to restore statutory provisions that previously required electoral assent to the creation or dissolution of public utilities, or the granting of municipal franchises. This is an item that Professor Freeman spoke to earlier this morning and I simply adopt his remarks and commend them to the committee.

Item 6: Bill 107 fails to require full cost accounting analyses of privatization proposals and fails to provide procedural safeguards to ensure that municipal decisions respecting privatization are made in an open and public process. Without those kinds of safeguards, the public may be completely shut out of critically important decisions affecting the future supply of water in this province.

Item 7: Bill 107 fails to place any restrictions on proposals to sell, transfer or otherwise dispose of municipally owned lands used for waterworks or sewage works.

We're all aware that the bill says in effect that if a facility is going to be sold then provincial grants have to be repaid. That's not a safeguard against privatization; that's merely a pricetag.

We also note there's nothing in Bill 107 that ensures that where privatization is going to occur municipalities receive full market value for the lands being disposed of. This was a significant oversight in Great Britain where significant pieces of publicly owned property were sold at less than market value and then were flipped over by the private interests who acquired it for a profit. That loophole has not been addressed in Bill 107 and needs to be.

Item 8: Bill 107 includes an excessively broad and unnecessary crown immunity clause that attempts to bar Ontario residents from bringing certain civil actions against public officials. I'll be quite candid. I'm a lawyer who sues government and I have a professional dislike for immunity clauses that bar residents from suing the government where they have been adversely impacted by an act or an omission by government officials. My position is simply this: If this new regime is going to work as well as is proposed or is contemplated, there should be no need for special statutory protection of public officials. If government officials ultimately undertake something that does cause harm to somebody or somebody's interests, the government should be held accountable for that in a court of law like any other defendant.

Finally, Bill 107 inappropriately offloads regulatory responsibility for part VIII sewage systems from the Ontario government to local municipalities. That's whether or not the municipalities are individually ready, willing or able to actually accept that delegation.

I note some of the previous speakers raised some significant technical and practical concerns about this aspect of Bill 107 and I would certainly say this to the committee: The septics issue is one that tends to get a little bit overshadowed by the rhetoric concerning the pros and cons of privatization, but there are lots of environmental concerns about the establishment, location and operation of septics across northern and southern Ontario. Let's not lose sight of that. Let's not forget about the need for firm and effective regulation and inspection of septics. Let's not all get distracted by the pros and cons of privatization. Septics is an important issue and can't be disregarded.

Those are the principal concerns we have about Bill 107. You'll note at the conclusion of my report, at pages 21 to 22, we set out 10 specific recommendations about Bill 107, and most of these recommendations propose certain amendments or deletions or clarifications that are necessary. Again, I'm not going to review these. I'll simply leave them with the committee to read at their leisure.

I will conclude by offering three general recommendations to this committee about Bill 107:

(1) Bill 107 should be withdrawn. There are just too many unanswered questions that need to be resolved and thoroughly considered before this legislation goes forward.

(2) I want to support the submission made earlier this morning that a public inquiry should be held to identify, to evaluate and to determine the most effective and efficient ways to maintain and enhance our management of Ontario's water resources.

(3) If Bill 107 proceeds, and that's if it proceeds, then two amendments are absolutely necessary, in our view. The first is there must be an expressed prohibition against transferring the title or ownership of waterworks or sewage works to private corporations. Mr Agostino spoke to this issue this morning. I fully support that amendment and would certainly recommend that one be considered and passed. The second amendment that's necessary is that Bill 107 itself needs to contain provisions which establish an independent public regulator of the sewer and water services industry in this province. What we have in mind is a streamlined or hybrid version of the original Ontario Water Resources Commission, and that new agency needs to be given adequate duties, adequate powers to safeguard Ontario's water resources.

On that point I'll conclude, Madam Chair, by indicating that in our view Bill 107 should not be fast-tracked. We need to think long and hard about what we're going to do to protect water resources in this province before we rush headlong into the brave new world of water privatization. Those are my remarks, Madam Chair.

The Chair: Thank you very much. Unfortunately, time is just at the end, so there will be no time, I'm sorry, for questions today.

Mr Lindgren: I'm dreadfully disappointed and I regret that.

The Chair: But we do thank you for coming forward this morning.

I'd like to now call Terry Kelly from the Unemployed Workers' Council. Mr Kelly? No? Is Mr Sewell here? I should announce to the members of the committee that at 10:45 Mr Morra is cancelled and will be coming to see us this afternoon at 3, and Mr John Sewell is instead booked for 10:45.



The Chair: Is Mr Jackson here by any chance? We're so happy when some of our presenters come early. Would you please come forward. We're very happy to see you this morning. Thanks again for your promptness. You may begin when you're ready.

Mr John Jackson: I'm John Jackson. I'm president of Great Lakes United, which is a coalition of about 200 citizens, environmental groups, conservation groups and labour groups from around the Great Lakes, from both the Canadian and US sides of the border. You already have the submission that we put together jointly with the Canadian Environmental Law Association. Mr Lindgren just described that to you and the main features of it, so I will not repeat that, just confirm that we endorse and helped write it and are heartily in support of the comments that were just made.

What I am going to stress, however, is the importance of the water quantity issue, why this bill is so critical and its implications are something that you must take very seriously. I've given to your clerk a summary of a 200-page report that we have put together with the Canadian Environmental Law Association on water quantity issues in the Great Lakes. This report is the product of two years of research, of pulling together the scientific information that we could find around the basin and in other jurisdictions to help us understand the implications of water quantity issues.

So many of us have focused on water quality issues over the past decade or so and have forgotten the importance of the supply of water for human beings and for all the other creatures that we share this basin with and why it's so important. The critical message from this report, The Fate of the Great Lakes, is that we cannot take our water supply for granted. That is something on which we have sat back in the past and said, "It will always be there." We have all this luxury of water but we can't assume it will always be that way.

The warning signs that the scientists are bringing to us very strongly and clearly are first of all that our consumption of water is growing and therefore we must be concerned about that; second, that the demand for diversions of water from the Great Lakes basin to other parts of the North American continent will increase. Ontario has always taken a very strong and clear position, saying that we must not divert water from the Great Lakes basin to other parts of the continent, but the pressures for that are increasing. As the thirst in the southwestern United States, as the thirst in Mexico expands, the proposals for major diversions will also increase.

The other factors that make this issue more complicated and more pressing for us is that the free trade agreements mean that once we open the tap to allow diversions into the States or into Mexico, we cannot close the tap, even if we ourselves are in crisis in terms of supply of water. Free trade has real implications for the diversion issue.

Finally, the climate change issue: All the scientists are now becoming quite unanimous in their predictions of the direction of climate change if we don't take very serious action now to stop that movement.

If you combine all these factors, what you come up with are some very dramatic figures about the loss of waters to the Great Lakes within our lifetimes. Jim McLaren, a well-known engineer who has worked in the field for decades, has put together the estimates from the various scientists in terms of what it means 40 years from now. That's within our lifetime. He says that within 40 years water levels going out of the Great Lakes into the St Lawrence River will have dropped by one quarter if the current trends continue and if the current pressures continue. That's a loss of a quarter of our water resource, and that is why it is absolutely critical that we now work very hard to develop a clear strategy for how we're going to take care of and protect the waters of the Great Lakes and the waters of Ontario.

The message from this is that we must develop a water quantity strategy. That must be done before we do activities like Bill 107, which has real implications. Bill 107 affects the control of the use and the treatment of waters of the Great Lakes. It decentralizes the water supply and treatment system. It potentially privatizes water supply and treatment systems, as you've heard from so many people. It does nothing to encourage, let alone require, those who develop and operate water systems to consider basin-wide issues, and it lessens the provincial role. The result is that it would make it more difficult to protect ourselves from the situations that scientists are telling us will occur within 40 years unless we act now. It encourages piecemeal decision-making, which is absolutely contrary to what we need in terms of developing a water conservation strategy for the Great Lakes basin.

This bill has implications that none of us can fully predict with any certainty. It should be withdrawn until a clear water quantity strategy is developed that investigates issues such as: What are the best ways to achieve water conservation? What are the best ways to prevent the negative consequences of excess growth? What are the best ways to avoid diversion of water to the rest of the continent? What are the ways to deal with the implications of climate change? Who should have control over our water supply and our water sources?

This must be done first, because once our system is out of provincial control, which Bill 107 would encourage and further, it would become ever more difficult to develop a water conservation strategy for the Great Lakes basin. I urge you to put Bill 107 aside while we develop a water quantity strategy for Ontario.

You have copies of our brief and you've been given a summary of our report. If you want more details -- it's a 200-page report -- there's an address on the back cover of the summary you were given. Please don't hesitate to contact us. We'd be delighted to get it to you. Thank you. I'd like to leave some time for questions.

Ms Churley: Thank you for presenting. On some levels, what you and your group have been doing over the years reminds me of Rachel Carson and Silent Spring, in the very beginning warning us about chemicals and the negative impact on our health and environment. Unfortunately, we tend to talk more about water quality as opposed to water quantity. I recommend that everybody read this 200-page report because it's scientific work; it is very frightening stuff if we don't act. I appreciate your bringing this other element.

I know you're asking for this bill to be withdrawn. My party is asking for that as well, but this government does not have a record of withdrawing unpopular bills. They tend to forge right ahead, with minimum amendments. Unless something changes, that will happen here. In your view, what is the most important amendment they absolutely must make, if they do not listen to the people once again and withdraw this bill?


Mr Jackson: First of all, I'm not willing to give up hope that they will withdraw the bill.

Ms Churley: Good for you.

Mr Jackson: I keep my confidence and my hope for that. The critical thing about Bill 107 is to make sure we don't lose control of the decision-making around our water supplies. That's why it is critical that there be provisions that will not allow the privatization of the water system. If the bill goes ahead, I would also want to see a very clear commitment in the legislation that the province is committed to developing within a certain time frame a water conservation strategy for the province, to have that clearly there with a strong time frame and say that other issues are set aside until that strategy has been put together. That could be put into the legislation.

Mr Galt: Thanks for your thoughtful presentation -- very interesting. Just a little clarification as it relates to Bill 107: It's about clarifying who does and who owns. In this case we want the municipalities to own; we certainly do not want private companies to own. We've put in the disincentive of having to pay back the grants. Some people feel that's not quite enough, but it certainly is a disincentive.

The province will continue to monitor and ensure that there are standards, ensure that there are certificates of approval for all plants to ensure that the Ontario drinking water objectives are being met, and all these plants certainly do operate under certificates of approval. The remaining quarter going to municipalities is getting it closer to the people, and the people really are the shareholders.

You talked about a water quantity strategy. There's been some talk about safe drinking water acts. I wasn't in the Legislature at the time, but I understand that the previous government talked a lot about a safe drinking water act. I'm wondering what happened, why that didn't fly and go through and be in place on June 8 when we won the previous election.

Mr Jackson: I honestly don't know why it didn't get on to the legislative agenda and become a bill that was passed. I'm not the one to ask that question, but please ask someone else.

On the issue you've raised, I'm hearing very clearly from you, and we've consistently heard very clearly from the minister that privatization, is not the intention of this bill, so it should be very easy for the government to put in something that guarantees that. What we're hearing from all sides is that this clearly does open the door and encourage privatizations, creates a structure that supports and encourages it. I'm hearing consistently that you don't support that. That's great, so please amend the bill to make sure it isn't there, that the door isn't open.

Mr Galt: You should realize that that opportunity was always there and it hasn't happened until now.

Mr Jackson: Yes, but the moves are out there already, starting to happen around privatization of the water operation and the water systems.

Mr Bart Maves (Niagara Falls): This bill transfers the remaining 25% of water systems that aren't owned by municipalities to municipalities. Since 75% of existing water systems are owned by municipalities, run by PUCs but owned by the municipalities, did you lobby quite a bit to get OCWA to take over those other 75% in the past?

Mr Jackson: What we have been doing, for example, in the region of York, which is in the process of privatizing its system and is developing that privatization, is lobbying that government to not proceed to privatize the system.

Our concern is that the remaining 25% that OCWA has is smaller municipalities. Those are the ones that will be under the greatest pressure, for economic reasons, to turn it into the hands of private companies. The other reason they'll be under such pressure to put it into the hands of private companies is to do the monitoring, the operation and the development of the plants. They will feel obliged to find an outside source to do it, because they don't have that expertise on staff now to do all that monitoring, which is very expensive to do, as they're finding the budget cuts they have to make. They'll look for another way.

Mr Maves: So the answer's no, there wasn't a lot of lobbying to move the other 75% back?

Mr Jackson: No, there wasn't, because we were confident OCWA would proceed to do a serious job with the smaller municipalities. We were lobbying and watching the big municipalities around that issue.

Mr Agostino: I've kept hearing, yesterday and today, from the government members that Bill 107 is not about privatization, that it does nothing in that regard. As I said yesterday, if you look at it in isolation, if you simply looked at Bill 107 and were totally oblivious to the world around us and everything that has happened in this place in the last year and a half, it seems like a harmless piece of legislation, that we're just transferring the last 25% to what 75% are already doing, and municipalities generally do a pretty good job of running water systems across Ontario.

But you can't look at Bill 107 outside the context of Bill 26, the first step in this process, which said that municipalities no longer have to hold referenda about privatizing. You can't look at it outside the context of this government's obsession with privatization -- everything that moves, breathes or raises dust is going to be privatized -- and you can't look at it outside of the context of the downloading and the dumping that's occurred.

When you put that whole picture together, clearly this is the final piece of that puzzle in this whole thing. This now makes it very easy and very compelling for municipalities to sell these services and to privatize these services. If municipalities privatize the operation of water and sewer services if there are certain contexts in place -- if there is protection of successor rights, contracts being honoured -- that could work. But I believe this opens the door completely to this occurring, and it's got to be looked at within context.

I'd go back to what you said earlier. If this government believes privatization is as bad as everybody tells us it is, for the life of me I cannot understand why they're so averse and why they object so strongly to changing this piece of legislation to prohibit municipalities from doing that.

I want to ask you as a consumer, as a representative of your organization, where do you believe the ability and the power to set water and sewer rates should stay, with the municipal councils or with the shareholders of large, international corporations?

Mr Jackson: It certainly isn't with the shareholders of corporations that are putting a profit factor into it, not simply the provision of a service for its people.

Mr Agostino: If this one thing was amended, would you feel comfortable with the 25% transfer to municipalities, if they amended the legislation to prohibit municipalities from privatizing the services?

Mr Jackson: I think the critical question here is whether those municipalities want the facilities. If they don't, transferring it to them is not going to work if they're not wanting to do them.

The critical thing, though, is to put together a broader strategy to recognize that Bill 107 has implications in terms of broader strategy. Until we know we're putting together that broader strategy, I don't want to see any changes made.

The Chair: Mr Jackson, thank you very much for coming this morning, for being early, and for bringing us your best advice.



The Chair: Is Mr Kelly here? No? Okay, Mr Sewell, could you come forward, please.

Mr John Sewell: Thank you, Madam Chair, and I'm sorry I was two minutes late. These things happen.

The Chair: We like to be prompt.

Mr Sewell: Thank you very much for rescheduling my time from this afternoon. I must say it's a real pleasure to be able to speak to Bill 107, which has an unusual thing in it, and it's something I've never seen in a bill, which is making the major legislation an appendix of the bill. I thought that was an absolutely brilliant act. I have no idea why it's done, except maybe to make sure that two bills didn't have to be introduced. I've never seen it before, that a bill is actually an appendix to another bill, and that's what section 1 says. You people are probably doing something historic here, for a reason. Who knows what the reasons are?

I have four very modest amendments that I would like to suggest to Bill 107. I want to start with section 17, which is the title of the act. I thought the title should be changed to better reflect the purpose of the act, which seems to me to be to throw to the wind questions of quality in water and sewage treatment. I think a more honest title to reflect the intent of what's proposed would be, "An Act to permit bad drinking water and poorly treated sewage in Ontario." I think that's what the act is generally intended to do.

I know there are some people who disagree with that, who think the act is to privatize water and sewage, and I've just heard the discussion about that. I believe that's one of the intentions and so I think there's an alternative title. The act could be called "A devious Act to privatize water and sewage facilities in Ontario." I say "devious" because it's not being done up front. That's the first amendment: I think you should be honest about your title.

The second amendment I'd like to make is in regard to a testing mechanism. People have talked about quality of water, quality of sewage, and I think it's important, in trying to ensure the transfers take place and quality is ensured, that there is a testing mechanism put right into the act. Just in thinking about it, I think the best people to do the testing are those who think that the transfer is a good idea and that it will protect water and sewage quality.

I would like to propose a new section which states, "To test the quality of the product of those facilities transferred pursuant to this act, all Conservative MPPs who supported this legislation in its passage are required to do two things: (a) publicly consume two glasses of water produced by these facilities once every six months for the next ten years; and (b) swim in the effluent of the sewage treatment plants once every July and August for the next ten years."

If you're really convinced that what you're doing is protecting quality, you won't have any problem with those two things. I might say that the swimming produces a terrific photo op, where Premier Harris can be seen with his head just above the waves, just like Mao Tse-tung swimming in the Yangtze River. I think that's something you'd be proud of in the years to come.

I think there should be a testing mechanism and that, to me, is the best one. Make them publicly drink what's coming out of these things that are being transferred. Unfortunately, if they get sick there's going to be problem, given that there aren't too many hospitals left to deal with those kinds of things, but they'll have to deal with that themselves.

The third amendment I'd like to suggest is to section 11, on page 15. Section 11 is the one about, "No proceeding may be commenced against" everyone. I want to say how surprised I was at how limited section 11 is, saying, "No proceeding may be commenced against OCWA, its predecessors, a minister of the crown, a director..." and on and on.

Now, I understand the government's fear of lawsuits and I note that virtually every piece of legislation this government introduces says that nothing done under the act is subject to the courts -- 103, 104, 105, 107, on and on. I understand your fear of the citizenry provoking court cases against you. I'm sure each of you on the government side finds it distressing to be subject to law and due process, which of course is why these sections keep reappearing.

What I think you should do is create a catch-all section, and here's some wording which I think might catch your mood: "Nothing we do is subject to the courts." It's short, succinct and it catches directly what you're doing. I think this itty-bitty approach of just introducing every law saying, "We aren't subject to law," is a dumb way of doing it and should be much more open. You might have some problems in wording like that with your constituents, because it's so blunt, but I think that's the honest way of proceeding.

The last amendment I would suggest has to do with the question of what happens to these plants. You and I know, no matter what you say, that the small municipalities to which transfer will be made will be entirely unable to operate these facilities. They haven't the money and they haven't the expertise. I believe the act is based on that premise and no other. The act is based on the premise of hoping that the plants will then be sold off; or if not sold off, then private companies will be given long-term management contracts for them. That protection about paying back debts I think is no protection whatsoever.

If that is the case, I think you should try and ensure that they're sold to the right people, that they don't just fall into any hands, and so you should put provisions in this bill to ensure their proper sale. I suspect the following amendment will express your hidden purpose fairly well: "No facility may be sold by a municipality, or a contract for its management made, except to a company which has made substantial contributions to the Conservative Party of Ontario, or is friendly with individual Conservative MPPs and their families."

I think that's pretty straightforward and expresses fairly well the intentions that are involved: Make sure it doesn't get into the wrong hands. I know it sounds crass and blunt, some might even say it's unkind, but if you aren't passing this legislation in order to sell off these facilities, what other purpose does it have?

Conclusion: These suggestions are made in the firm hope that Bill 107 will die in committee. It's a bad bill and even my suggested amendments can't fix it. Kill the bill before its impact kills citizens of Ontario.

Mr Galt: Thank you for your presentation. You've questioned several times the purpose of the bill. Let me stress that the main purpose is for clarification of ownership; 75% of the ownership is presently by municipalities. There are some 230 plants in the ownership of OCWA and we want to see those under the ownership of the municipalities to bring it closer to the people in the community.

Mr Sewell: I don't believe you for a moment.

Mr Galt: If you read the bill, that's what it's all about.

Mr Sewell: I don't believe you for a moment. That's a dishonest reply, in my mind.

Mr O'Toole: He listened to you.

Mr Sewell: I don't like people saying things that aren't true.

Mr Galt: You mention an awful lot about the quality of water. I'd like to point out to you some water that's been produced by a water plant that's owned by a municipality, and I notice Marilyn Churley has been drinking it and it's quite consumable. This is what we're promoting in the future.

Yes, it's quite safe; I didn't even die.

I'd like to stress to you that all of these plants do operate under a certificate of approval and must meet the Ontario drinking water objectives, and that's the way it's going to be in the future, whether it's municipally owned or whatever. Certainly those certificates of approval will be in place and there will be the requirements and ongoing monitoring, as there has been in the past, that they will meet those objectives.

Mr Sewell: How many municipalities are eager to take these over right now?

Mr Galt: Prior to getting involved in this, 60 of the 230 volunteered on their own, asked to have them. That's before we even got involved with this bill. They were asking for them ahead of time; not a bad percentage.

Mr Sewell: About a quarter.

Mr Galt: A little over a quarter.

Mr Agostino: I want to thank Mr Sewell for the presentation. As usual, it's always difficult when you don't really tell us how you feel and hold back a bit. You've done that quite well again. Thank you. I think you've put a thing on it that many of us have concern about.

I want to go back to the issue of privatization, because I think you've hit a couple points there. First of all, I think the part about the debt, or repaying the loan or the grant they were given over the years, is simply a feel-good smokescreen. Most of the companies involved are going to make so much money if they get their hands on the water taps, that will simply be a token cost of doing business, a drop in the bucket if they can incorporate it in the rate they charge consumers once it's privatized.

I guess what's disturbing about this bill and what's disturbing about what the government is saying is that really it's privatization, but unlike the other things they want to privatize, where they're throwing it in your face and telling you, "We're going to do it," this is done through the back door, because they realize politically it is not favourable with the public and the public simply will not accept that privatization of water is the right thing to do.

They're going to turn it around, they're going to blame the municipalities for being irresponsible and for not doing the right thing: "Those bad municipal councillors now have turned around and sold off your water and sewer services." Do you see that as part of the danger in this, that it simply is a political passing of the buck and making the municipalities look bad?


Mr Sewell: Oh, yes. I have no question that all of these 100 pieces of legislation are there to destroy institutions of local democracy that give people a good way of life in their communities. That's what this is. If this was not what this is, we would have seen a really interesting white paper that would have described what terrific things are going to happen to municipalities, and we didn't. This is part of the blitzkrieg of this government, trying to destroy all of the institutions of local democracy, and water and sewage is high on their list. I think it's disgusting. I hope you withdraw it.

Mr Laughren: Thank you, Mr Sewell, for coming before the committee. There's something terribly disingenuous going on here. You, as someone who was involved in municipal politics and probably kept your hand in it for a long time as well, would understand this. In my own community, if the downloading goes through the way it's been announced, property taxes in the regional municipality of Sudbury will double. That's using all the numbers and netting out the education being removed and so forth. Can you imagine, if you were a mayor of a municipality and that was happening, would you be able to resist the sale of an asset like your sewer and water facilities?

Mr Sewell: No. That's exactly the kind of thing that happens. You're put in an impossible financial position and then you have to do something to try and raise revenue. The other thing you will do is drastically cut services at the same time. Those two things will happen under the proposals. There's no question about it.

Mr Laughren: I don't use the word "disingenuous" lightly, because it's a mean word, but I can tell you when I hear the government members say that they don't like the idea of privatization -- the minister said it in London yesterday when he came before the committee, that he personally didn't like the idea of privatization -- that's what I find disingenuous, because what's happening is going to force it and they know it.

Mr Sewell: The other thing that bothers me is that I don't think any of the people on the government side were elected to do this. If you went back and talked to your constituents, none of them would support you on this. They're totally opposed to this agenda. It hurts them badly. What happens is you can't make eye contact with government members any more. They're terrified of people who are criticizing them, and also of their constituents.

It's very worrisome. This is not where Ontario was ever meant to go. It seems to me the government members are now captive of this evil force in the Premier's office. It's very frightening and you should not be going along with it. Your constituents don't support you and you know that. You know they don't support you.

The Chair: Thank you very much, Mr Sewell, for coming forward this morning.


The Chair: I now call Mr Malec to come forward. Good morning, sir, and welcome.

Mr Henry Malec: I'm a part-time resident of Port Carling, which is in the district municipality of Muskoka. Port Carling is presently in the process of selecting and designing a water treatment plant, and I, as a private citizen, have had the opportunity to watch this process and participate in it. I would like to tell you my observations of what has happened now, in other words, pre-Bill 107, and what might happen after Bill 107. I'm specifically focused on section 2 of your bill, which relates to capital grants and the funding of a water treatment plant.

As you know, when a municipality decides to build major infrastructure, like a water treatment plant, they hire consulting engineers to do an environmental assessment. These engineers select potential sites -- in this case, there were four potential sites -- and do a study on them, a cost analysis, quality of water, that kind of thing. They ultimately produce what's called an environmental study report, which is this for little old Port Carling, 500 people; pretty hefty stuff.

They selected alternative C. In the costing of it they have: water intake $560,000; low-lift facilities $300,000; water treatment facilities, that is, the actual treatment plant itself, $3.3 million. Utilities, engineering $1.107 million; subtotal, GST, interest, and total of $7.3 million.

Nowhere in this whole report does it say how this is going to be paid for. I know, having sniffed it out, that three quarters of it will be a grant from the province, 75% of it will be a grant from the province, so for every $4 million spent, the municipality's only spending $1 million. That is a good deal: "Wow, I can spend $1 million and get a $4-million facility." That's terrific. I like those kinds of deals. Seventy-five percent off, it's called. There's that.

Also not said in here is that the engineering fees -- it just says, "engineering fees." They are 20% of the hard costs. If you add up all the hard costs and take 20%, those are the engineering fees. In other words, the engineering fees are sort of like a commission, if you want to think of it that way, on the cost. The higher the cost, the more money the consulting engineer makes.

I'm an engineer myself and I don't want to bad-mouth engineers, but human nature -- if you're going to make money on a cost, you'd rather get the higher one chosen than the lower one. That's just normal human nature.

Both those kinds of pressures conspire to increase the cost, not decrease it.

Let's say this all happened after Bill 107. The municipalities are going to pay for their own water treatment plant -- no subsidies. Now the taxpayers are going to be looking at this with a very jaundiced eye and saying: "Why are you spending this money? Why are you doing this?" The pressure is going to be: "Now if it costs $4 million, we're paying the $4 million. Bring down the price, since we're paying for it."

Second, in my particular area up in Muskoka there's a very strong cottager association which also scrutinizes all costs. To date, they have been scrutinizing school costs because they're very disturbed at the money spent on schools they can't use. Their sights have been trained on school costs. That no longer will happen, because you're moving that on to provincial funding. Their guns will now be aimed at these kinds of things. This will be on the tax roll. A lot the Muskoka Lakes cottagers don't use piped water, so they'll be saying: "Do you really have to do this? Is this really necessary?" That's another pressure to bring the costs down.

Coincidentally with all this, when they selected alternative C, they did not select the existing site. The logical thing would be to go to where they're getting the water right now. Port Carling does have a water treatment plant, but a very primitive one. It definitely needs a new water treatment plant. But they didn't say, "Let's expand that site or put in modern treatment facilities." They just ignored it. If Bill 107 was in, maybe they would have chosen the existing site because it definitely is the cheaper alternative. They haven't even evaluated it in this study.

In conclusion -- again, I'm speaking very specifically -- Port Carling and many other municipalities definitely need new water treatment facilities. In Port Carling, for example, typical of many northern water supplies, it's called a pump-and-squirt system: You pump out the water, squirt some chlorine in it and send it on its way. When I told my wife that's the way Port Carling's water is treated she stopped drinking it, and I don't blame her. They just take out the big lumps. It's just sort of a screen there. It's really disgusting, even though Port Carling is in the middle of a pristine area.

As you probably read in the Globe and Mail yesterday, cryptosporidia parasites are now appearing in water supplies. They are cysts that resist chlorination. You need a proper filtration process. Port Carling needs one.

I hope you all recognize that we need a transitional stage from pre-Bill 107 to post-Bill 107. This project is being caught in the middle, so I hope the regulations are sympathetic to the funding of this particular project and other municipalities like this that are caught in the process.

In summation, contrary to my friend Mr Sewell, I fully support Bill 107. I think it will be terrific. I think the bottom line will be that we'll have a lean, mean costing of our water treatment facilities, and I think that will be to the betterment of the taxpayers in general. Thank you.


Mr Hoy: Thank you very much for your presentation. I would have to say it's somewhat different from what we've heard over the last day and a half; none the less, I appreciate your comments.

I notice that at the bottom of the sheet we were handed, you say a funding program for smaller municipalities should be explored. I know of one agricultural group that is quite concerned about a number of issues, but one of them is the future use and quality of water. Naturally, those concerns would translate, from their point of view, I suppose, to rural, small municipalities.

In Bill 107, I think we're seeing that privatization that might take place in an urban area may tender availability -- profitability, from the shareholders' point of view -- of supplying water to very small, rural areas. I happen to know of communities, perhaps best described as hamlets rather than towns or villages, that think perhaps someday they would like to have water like their urban friends have.

Those are my comments as it pertains to the smaller municipalities, particularly the rural ones, in line with your saying that funding may have to be allowed for them to achieve what their urban friends may have already.

Mr Malec: I agree. By the way, if you travel through France you can see that every little hamlet, and there are 10 times more little hamlets than there are in Ontario, has its own fully functioning municipal system. They all have the water storage towers. Every little village is dominated by a hilltop with a little water storage tower. I don't want to get into privatization because I don't have views on that, but it works quite well in France. It doesn't seem to work that great in England, or the view is that it doesn't work that great, but in France it does.

Mr Laughren: I was shocked and appalled at your comments about the motivations of engineers. They must have a code of ethics they follow. You commented that it was human nature that they would be in favour of the higher price because they get a percentage of the total cost of the project and it's human nature to want to get that.

I couldn't help but think that if water systems are privatized in the province, would the same philosophy apply to the private sector operators, who would surely want to maximize their return on investment by selling more water to the ratepayers? Wouldn't they want to sell as much water as possible in order to pay back the investment they made in this facility and give a return to their shareholders? That's what they're there for. I'm wondering if the same kind of motivation and drive would be behind the private sector operators as would be behind what drives the engineers who work on these municipal projects.

Mr Malec: First of all, let me say that I love engineers. I love myself. I love my colleagues.

Mr Laughren: Too late now. You've done the damage now.

Mr Malec: I'm just saying that it's human nature, if you're in a business, to want to make -- that's the only thing. Let me just say that personally, I don't care what water costs, you know what I mean? I flush the toilet unnecessarily all the time. If I knew every flush cost me a buck or whatever, I wouldn't flush as much.

Mr Laughren: What if you were selling it?

Mr Malec: You're right. Someone in the business of selling water wants to sell more water. But at the other end of the spectrum, I think the consumer being aware of the cost would inherently tend to be more conservation-oriented. At least I would, because from my own personal experience, if I don't pay for it I don't care, but if it cost me a lot of money, I think I'd watch it.

Mr Galt: Thank you, Mr Malec, for a very interesting presentation, certainly different from what we've been hearing this morning, but we did hear some that started to approach it yesterday.

As to your comments about capital grants, the feeling of this government and the feeling I've had for a long time is that when we get up to 85% or 90% grants for a system, the responsibility on the local basis starts to slide away when they're paying such a small percentage and getting such a large plant.

That certainly came from the Who Does What commission, David Crombie, indicating that where plants have been built, the local municipal councillors were so successful in getting such a large plant that they couldn't then afford to run it and had to come back to get more money in grants to be able to operate the plant. That was the kind of thing that was going on and that we wanted to turn around.

You're absolutely right that chlorine and a lot of other things do not kill cryptosporidium; about the only way to get it out of drinking water is to filter it. I expect that if we went back a few years ago, it wasn't being diagnosed; we didn't recognize it and it was probably just referred to as one of the flu bugs we picked up. It isn't that long ago that we started to recognize it as a problem of the intestinal tract.

You comment at the bottom about the hard-hit municipalities: Those that now get 85% or 90% grants, the hamlets looking for water systems, we're certainly going to have to look at in a different way than Toronto or London or Kingston, just no question.

Your comments are very refreshing. As to the professional engineers getting 20% -- I notice an engineer back there holding up his finger with the iron ring on it.

Mr Malec: I noticed. I saw it right away.

Mr Galt: We have the highest respect, but I have to wonder sometimes when I see -- I think of schools as one example. Do we need that amount of money put into engineering and architects for buildings that are repeated over and over and over again? Yes, there are some unique situations, but the whole building doesn't have to be unique, with a special design. I think your comments there were right on the money.

The Chair: I thank you very much on behalf of the members of the committee for taking the time to come this morning and give your views.



The Chair: I now call Janet May, from the Toronto Environmental Alliance. Welcome.

Ms Janet May: I didn't make copies of my presentation, and that is because I feel that since the government is forcing us to react to this bill, the government should be paying the cost of photocopying and not expecting non-profit groups to cover this cost.

The Chair: We'll be very happy to copy anything you'd like. That's done quite often.

Ms May: I was told by the clerk's office that I had to bring my own copies.

On behalf of the Toronto Environmental Alliance, I would like to recommend to this committee that Bill 107 be withdrawn.

First of all, I'm very concerned about how quickly and recklessly this government is changing Ontario. I have in the past often felt frustrated by how slowly governments address obvious inequalities in society, but we live in a democracy and democracies often are tedious.

In order for democracies to work, the people who will be affected by legislation must be consulted. I must say, we were only given two days' notification to submit our names before this committee and I don't think that is adequate notification. There are a lot of people out there who don't even know these hearings are taking place, and I really do think democracy should be giving people more time.

Democracies as well are not and should not be run as transnational corporations: by a board of directors that is accountable only to its shareholders, and where only a few reap all the rewards and everyone else is ignored. I think that is what this government is doing with 107, 103, 104 and all of the other bills that have been put forward.

Democracies are a form of government that seek to respond to the preferences of their citizens. This government seems to have skipped Canadian Politics 101. Last year this government passed Bill 26, which removed the requirement that the public must be consulted prior to the sale of municipal water and waste water facilities to private special interests.

Then the mega-week announcements profoundly changed the responsibilities of municipal governments without providing local councils with the money to fund these changes. Along with the radical and foolish upheaval of municipal government, the province has decimated the municipal assistance program, which gave municipalities grants for water and sewage projects. Now Bill 107 is about to be passed.

Although by itself Bill 107 appears merely to return control of water and waste water facilities to local governments, when viewed with previous legislation, it is actually a green light for cash-strapped municipalities to sell off water and sewage treatment plants to the highest bidder.

Although this government claims that 107 is unrelated to privatization of water or sewage facilities, it is very difficult to believe these claims for the following reasons:

(1) Bill 107 does not expressly prohibit the sale of publicly owned water and sewage services to the private sector.

(2) Bill 107 encourages public ownership of water and sewage through the requirement that any municipalities that have received a provincial capital grant for water and sewage facilities since 1978 must repay this grant prior to selling out to the private sector. Has the government considered that this repayment will merely be added on to the selling price of water and waste water facilities and then passed on to consumers? And these consumers are, of course, you and I.

(3) Minister Sterling stated on October 17, 1996, to the Legislature of Ontario that the Ontario Clean Water Agency can better compete in the open market, which they are facing at the present time, if they are under a private structure than if they are under a public structure. Notwithstanding that, the whole goal is to get cleaner, less expensive water to the people of Ontario, and that can be done in a competitive atmosphere better than in a monopolistic atmosphere, which is presently the kind of situation we have in Ontario.

England and Wales are examples of a disastrous experiment with privatization. Privatization in these countries has led to a number of problems, including: water prices doubled between 1989 and 1993; more low-income families had water service cut off because they could not afford the increase in water prices; the number of times people had their water cut off increased from 480 to 21,282; water shortages; and finally, an increase in regulatory violations on the part of the water industry.

Given that this government has also introduced an environmental deregulation agenda, we can be sure that violations of water will occur in this province as well. When the Ontario Clean Water Agency was established in 1993, one of its mandates was water conservation. Selling off OCWA is likely to result in an end to water conservation programs, unless one counts cutting off people as a water conservation measure.

As we know, the main goal with the private sector is to increase profits by selling more of its products and services. What will happen to water conservation projects such as delivering free, low-flow toilets to residences and rain barrel programs when the private sector controls our water?

I believe that a rate structure which rewards those who use the most water with lower prices of water will be implemented once privatization comes along.

Bill 107 paves the way to put water in the hands of special-interest corporations, yet water is not a commodity we can either choose to consume or not. As far as I know, this government has not yet changed the dietary requirement of drinking eight glasses of water a day for optimum health. If, however, following privatization, we are dissatisfied with the quality of our water, the lack of service or its cost, we will not have the option of changing to another company, nor will we have the option of turfing water corporation executives on to the street for failing to protect this necessity of life because they are not accountable to the public.

In a poll conducted last year, 76% of Ontarians stated that they support public control of water. A few weeks ago, Kathleen Cooper of the Canadian Environmental Law Association spoke to Citizens for Local Democracy at their Monday night meeting. That, of course, is another special-interest group of taxpaying voters. She spoke about 107. The outrage of the audience towards your plans to privatize our water and sewage treatment plants was matched only by their outrage towards Bill 103. The public is appalled by your plans to sell off our water. To Ontarians, water is a right, not a privilege.

Bill 107 must be withdrawn. I am afraid that with its passage, all who live on the Great Lakes will soon be echoing the infamous words of the ancient mariner: "Water, water, everywhere. Nor any drop to drink." Thank you.

Ms Churley: Thank you very much for your presentation. I want to actually put something on the record briefly here.

Earlier, Mr Galt, the parliamentary assistant to the Minister of Environment, asked Mr John Jackson a question, specifically: "Why did the previous government," meaning the NDP government, "not bring in strong water quality and conservation regulations?" I think it was a good question, which perhaps should have been placed more to one of us. However, there's something very important that should have been done and we're hoping now that this government will.

But I want to point out that this government in fact has already gone in the opposite direction. They have cancelled MAP, the municipal assistance program, to help municipalities with their upgrading and expansions. And under OCWA there was a mandatory conservation policy: In order for a municipality to get money from OCWA to upgrade or expand, they had to work with OCWA to come up with a conservation plan or they couldn't get the money. In fact, in Barrie we have a perfect example: They wanted to expand because of Molson, and because they were forced to work with OCWA, millions of dollars and capacity were saved. This government has gotten rid of both these programs, plus the rural runoff program.

I just want to make that clear. Political cheap shots can be made, and are often made, around this table. I'm responding to that one by saying, yes, I wish we had acted even more, but this government has cancelled what was already there.

Ms May: Right, including RAP.

Ms Churley: Including RAP, the remedial action program for the Great Lakes. I don't have time to go into all the cancellations and deregulation around water, but there are several.

My question is, if this bill is not withdrawn, which is what we all want, I believe -- those who are opposed -- what is the most important amendment you can see which absolutely has to be passed?

Ms May: That privatization be expressly prohibited.

Mr O'Toole: Thank you for your presentation. I just wanted to make a parallel analogy, if I could. I'm trying to understand this. One aspect of your point of view is the price of water and the need to conserve water, even though it's, "Water, water, everywhere." The analogy I want to make is that Ontario Hydro is a public utility of a sort. Would you agree with that? This isn't a trick question. Is it publicly traded?

Ms May: Yes, although I think some of the salaries are more in line with the private sector, but yes.

Mr O'Toole: That's a good one. I never thought of that. How does OCWA phase out on that? But anyway, that's another one. They're on the list to read. There's about a page of them.

The point I'm trying to make is, it's a public utility. Do you think that Ontarians, or Canadians for that matter, are wise users of the commodity, of power?

Ms May: No, I would say not. There was an article --

Mr O'Toole: Well, does that make the argument that only a public generator, a not-for-profit, can have a conspicuous conservation policy? I wonder if the real contrary argument could be made: that only in a competitive market are true conservations of scarce resources applied.

Ms May: No, because --

Mr O'Toole: You don't believe that argument? I would challenge you.

Ms May: -- there's no accountability.

Ms Churley: Wait for her to answer.

Mr O'Toole: I would ask you to think about that, because I believe without competition there's no conservation.

Ms May: I would disagree.

Mr O'Toole: You don't agree with that?

Ms May: No. Water is a right. We all have the right to water. Privatization will --

Mr O'Toole: Why do not public utilities use full cost accounting principles today?

Mr Laughren: You don't want to ask a question, you're just giving a speech.

The Chair: Mr O'Toole, please continue.

Ms May: Anyway, my answer is no. I don't think a competitive environment is the way in which we should be --


Mr O'Toole: Do you think that full cost accounting principles should be used in our municipal utilities, that is, the cost of capital, the cost of labour, all the various costs, materials, operating, capital, all that stuff, should be part of the bill?

Ms May: Part of Bill 107?

Mr O'Toole: No, part of the bill you receive as a consumer.

Ms May: Oh, my water bill? No, not necessarily, because we need water to survive.

Mr O'Toole: Yes. So it's free, kind of.

Ms May: Exactly.

Mr O'Toole: I don't agree with you.

Mr Hoy: Thank you very much for your presentation. I also noted that you talked about conservation in your presentation. I can recall in a city that I live near, but do not live in, perhaps in August, utility commissioners would put over the radio or other means, in the press, a request that people not water their lawns in August, particularly if it's been extremely hot.

The response, as I understand it, has always been very good. They see this as their utility, their water source. If privatization were to come in and you have a responsibility to shareholders to show profits at the end of each fiscal period, would you be motivated to tell people to turn their sprinklers off, either in-ground or through a hose and moved around the yard? If you're motivated by profits, would you put out that notice through the press that you should not do that?

Ms May: No, I don't think so. I don't think it's likely, because of course shareholders would demand that more of the product be consumed so that their profits would go up. It's like rain barrels too. I don't think it's likely that we'll see the companies that are bidding for water handing out free rain barrels to people so they'll use the rain that they've collected to water their lawns. No. There'll be an end to water conservation.

Mr Hoy: Thank you for your presentation.

The Chair: Thank you very much for coming before us this morning, Ms May. We appreciate your advice.


The Chair: Our final presenter this morning is Karey Shinn from the Safe Sewage Committee. Good morning and welcome.

Ms Karey Shinn: Good morning. The Safe Sewage Committee is a non-government organization. We were originally formed to bring public input into the main sewage treatment plant environmental assessment at Ashbridges Bay. We have toured many sewage treatment facilities in North America, attended water environment federation conferences and have membership in Japan, Britain and the United States. We know quite a bit about this and, I'm afraid, probably in some cases too much.

I would like to address three different areas of concern:

(1) The wording of this bill would lead a reasonable person to believe that a private company could buy a municipal water and sewage system for as little as the debt to OCWA and then be in the business of selling water.

(2) The need for a graduated water rate structuring, so that delivery of essential water requirements to any person in Ontario would not be threatened, nor hamper water conservation programs.

(3) The need for regulations, conditions, operation contract criteria and licensing that ensures that (a) the land that water and sewage utilities sit on remain in public ownership, subject to local land use bylaws, and this consists of mostly large waterfront and near-shore lake lots, and (b) all services are carried out under license or contracts meeting specified regulatory body requirements to ensure that quality water delivery and not foreign ownership or profits are the result of the bill.

(1) Does the bill go beyond the intent to transfer "service," the wording of the bill? Has the government investigated how the wording and language of this bill implies that what is being transferred is not just treatment works and delivery but the water itself?

Bill 107 is labelled the Municipal Water and Sewage Transfer Act. This clearly refers to the product in the system, and not the service or the pipes and infrastructure. If in fact the service is what is being transferred, a reasonable person would expect the act to be titled the Municipal Water Delivery and Sewage Treatment Services Act. Do you agree that the wording does not describe a service?

On page 14, subsection 9(2), the proposed act refers to collecting payment for services and includes in the options among "sewage service rates" etc the term "water rates." A reasonable person would think they were purchasing water.

The supply of water today is an essential service that is provided by a public utility. In Toronto, we receive a water and sewage bill. This amount is either a flat rate or metered amount calculated in cubic metres or litres. A reasonable person cannot tell that we are receiving water at no cost. In fact, we pay for the service at cost. This confusion has no consequence when everything is publicly owned and operated.

If, however, Bill 107 intends to transfer physical plants to municipalities but wants to introduce the concept of privatization of services, then payments cannot be made for water. If payments are made for water and sewage and service is not specified, what Bill 107 will have done is changed the nature of an essential service from an at-cost public utility to a commodity. Under this commodity outline, I think it would then fall under NAFTA and we would have our water shipped out. It only took 10 years to get rid of the Aral Sea in the Soviet Union. It was 24,000 square miles, which is roughly the size of Lake Superior. I think it's very, very clear we have to look at the wording of the bill.

Has the government investigated the implications of Bill 107 that would, in effect, turn into a commodity the water draining into and forming the Great Lakes, given that the water in the Great Lakes belongs to the federal jurisdiction under a number of charters and international agreements? Have you looked into this? Yes or no?

The commodity issue does not arise under the publicly owned system we have today, nor the USA situation where private companies are usually given a five-year contract provision to operate. Outright private ownership does not exist in the USA. Their setup is for contract operations/management.

In short, the wording of the bill would lead a reasonable person to believe that a private company could buy a municipal water and sewage system for as little as the debt to OCWA, and then be in the business of selling water. Will the government ensure that Bill 107 does not cause this to happen by default? If the intent is to retain public ownership and not turn water into a commodity, this must be both implicit and explicit in the wording of the bill.

The wording of the bill must be changed to more clearly describe the delivery of service, and not the water; in the case of the Great Lakes, a federally governed international resource carried by the service. This would not have been an issue in Britain, which is an island, nor Australia, which is a separate continent. Neither of these countries have a situation where the majority of their population receives water from a jointly controlled international and interior freshwater lake system.

(2) Water delivery and sewage service rates need to address the kinds of problems created by private systems that have led to people suffering from no water, as was the case here as well in Toronto at the turn of the century before we had a public utility.

We recommend that a rate structure that never threatens the minimum amount of water that a person or persons require at any given billing address is always established, so water used beyond a fixed or essential amount at a flat rate would be subject to increases that were greater and related to the amount of water used. This staged approach would prohibit shutting people off from essential water needs, while at the same time encouraging water conservation.

One of the problems we face in the city of Toronto, probably one of the largest flat rate remaining systems we have, is that it does not take into account the number of people who live in a house or how much water they put on their lawn. It is not mandatory to get a water meter, and this makes water conservation very difficult to implement. With no measurement of exact usage, there is also no way to measure what has been conserved and what capacity we could avoid in costly upgrades to treatment plants and ensure that charges are equitable. In order to improve the present situation, mandatory metering is essential to any service provider, and a fair, equitable and effective payment rate system used to ensure no one will be cut off from essential services.


(3) I do not want to leave you with the impression that we in Metropolitan Toronto are impressed with the current quality of our sewage treatment plant effluent and therefore the continued degradation of the source of our drinking water, Lake Ontario. The Ashbridges Bay sewage plant in Toronto's eastern Beaches has achieved the status of a Great Lakes hot spot by meeting government regulations. Expansion continues to be a priority over effluent quality, and this is not acceptable. Although health studies continue to demonstrate the incidence of respiratory disease, heart disease and, in newer reports, childhood cancer, this plant continues to incinerate sludges, up to 40,000 dry tonnes a year, the equivalent of about 22,000 Canadian automobiles in carbon dioxide alone.

If the government could mandate an end to this huge source of air pollution and high carbon- and nitrogen-based emissions in Ontario, it could be the case we begin to meet our carbon dioxide reduction objectives as well as cause our sludges to meet beneficial use criteria: for use on mine tailings, golf courses -- they use it in Disneyland in the US -- and other useful nutrient programs. This would also free up equally huge amounts of natural gas generated in sewage operations for energy, rather than being wasted to incineration, the equivalent of attempting to burn mud.

Because the current system and regulatory framework are not producing functional improvement to near-shore environments at treatment plant sites, it is very important that regulations, licensing and operation contracts come under the scrutiny of a regulatory body that will enforce improving standards and undertake monitoring and enforcement.

If a private interest were to become a manager-operator of a drinking water or sewage treatment plant, what would be spelled out in the licence or operations contract that ensures that money goes back into the service and is not redirected out of the system or hurt the Ontario economy by sending profits out of the country or just simply out of the tax base?

We tried to look for models, things that we could sort of see where maybe this is working somewhere. The model our commitee has favoured is the setup used by the Northwest Biosolids Association. This association began as a co-op with 120 municipalities and waste water industries working in conjunction with the University of Washington State and the department of forestry at the University of British Columbia. They are capable of putting together projects and improvements for both municipal and private companies. They hold an annual conference in the fall to exchange ideas and run a library and Web site to document project successes, failures and new developments in the industry as a whole.

I think if municipalities are going to be acquiring sewage plants, there must be some sort of an annual event or something that offers everybody operating these plants the chance to see new technologies, to be involved with engineers who are out in the field and not just from the local areas in Canada, because in many cases we've found that Canada has locked out even its own homegrown technologies here in Ontario. I there reference Trojan for ultraviolet disinfection and Zenon for their fibremembrane processes. I don't know why. These people are producing drinking water out of sewage. I think we want this.

For a small to mid-sized municipality, it's difficult to afford expertise to understand the alternatives that are available for their needs. Transferring ownership to a municipality is no guarantee of improving anything. The important factor is knowing how to get treatment facilities to operate so that effluent is not going to generate pollution hot spots and sludges will be clean enough to recycle nutrients. It is important that municipalities have high expectations and understand how to get their systems to perform well, be capable of monitoring and enforcing sewer use bylaws designed to protect the entire service area, including the host community for the sewage treatment plant processes. A municipality must be able to recognize good management, and the operations contracts or licensed operators must be held to performance standards and system improvements.

The introduction of many new technologies would also promote new sector jobs and provide large jumps in the advancement of water quality and source control protocol to ensure sludges continue to meet stringent land application guidelines.

When the Safe Sewage Committee was founded six years ago, Metro had no water conservation program, nor did the city of Toronto. Metro Hall and the domed stadium were both built without water conservation standards for new toilets and fixtures. With the city of Waterloo pioneering water conservation and the Rocky Mountain Institute setting an early standard, we are learning that in many cases expansions of drinking water and sewage treatment plants can be avoided. There are Ontario companies capable of producing near drinking water from sewage and disinfection without toxic chemicals. We need this.

The time is right to improve water and sewage treatment. The challenge is to create a situation that can make this part of the process, and have a regulatory body in place that ensures this will happen.

The Chair: Thank you very much. We have just over a minute remaining for each caucus and we'll begin with Mr Maves from the goverment caucus.

Mr Maves: There are some new and interesting things in your presentation and I appreciate that.

On page 4, one of your paragraphs: "For a small to mid-sized municipality it is difficult to afford expertise to understand the alternatives that are available for their needs." It seems to be a misconception. The bill does not end any operations agreements that these small municipalities have with OCWA. OCWA runs and operates a lot of these plants and that doesn't necessarily change through this bill.

Ms Shinn: It would only change if they were offered a better deal by somebody else. If somebody was willing to pay off --

Mr Maves: Right.

Ms Shinn: I'm just saying they may not know what their options are.

Mr Maves: The other thing, on page 2 you talked about: "Outright private ownership does not exist in the USA. Their setup is for contract operations/management." Then you said, later on: "A municipality must be able to recognize good management and the operations contracts or licensed operators must be held to performance standards and system improvements." How do they do that in the United States in those places where they have contract operations/management?

Ms Shinn: The Environmental Protection Agency in the US sets the standards for water and sewage treatment plants throughout the country. They have regulation 503 in place for their sludges and they have different types of Clean Water Act agreements and whatever for the effluent discharges. It's very different from here but I was very interested to read that. This is in some of the latest literature that's coming out. As members of WEF we read these things.

The longest contract they have is for five years and if they're not going to cut it with water quality in that they're going to have them out there. The problem they've had with the five-year contracts in terms of these new operators is that over a five-year period if they have to put in centrifuges and digesters and everything else, it costs a lot of money and the amortization period is a problem. However, I think Wheelabrator is the largest private operator. They're almost getting out of equipment into operation -- not ownership, operation. They are looking at a maximum of 15-year contracts. Again, it's not ownership; it is operation/management.

The problem I have with this bill is it is not clear that that is what the issue at hand may be. I think we have to separate this idea that the water is part of this ownership, because it is not. If that is ever going to be discussed, it would have to be done through joint federal agreement, so I think that's not clear. But in the States it is not the water, it is not the ownership of those utilities; it is simply the management and operation.

Mr Hoy: Thank you very much for your presentation. Your concern about water falling under the description of a commodity and its relationship to NAFTA is probably worth investigating. I think most Ontarians believe that the Americans would like to tap into our water sources. I know some years ago it was a great item of discussion. California is one of the states. It has an abundance of many things -- people, climate, land -- but they're not overly blessed with water. There was talk that even they were interested in water from our area. I take note of your warning here.

Ms Shinn: If you have a private company that has water as a commodity in Canada and they have customers in the American Midwest, it would take less than 10 years to drain Lake Superior, and I don't doubt for a minute that because we get all these floods of rain, if you put that kind of volume of water up in the air, which is what they've done by draining the Aral Sea, 24,000 square miles -- no one imagined it would go -- it is recycling in the environment. It's a very dangerous precedent to set, and I think the wording of this bill has really created a big grey area. So I take your point. I think it's very serious to look at the wording of this bill.

Ms Churley: Thank you, Ms Shinn. Your knowledge and expertise continue to astound me. Thank you for coming forward with this today.

By the way, I forgot to mention earlier, for the record, that the Harris government also cancelled the green communities programs which helped communities learn how to conserve water and energy.

Closer to home, in the east end, Ashbridges Bay, what's happening with that right now? I'm not clear what you're saying within your presentation. How do you see the connection between this bill and what is going on and your long, long struggle against the expansion of Ashbridges Bay plus the burning of the sludge? How is there a connection there?

Ms Shinn: To a great extent the Metro facility is overbuilt, but it's producing underquality product. We really need to have a better regulatory body in place that actually looks at receiving water quality and monitors on a regular basis. If you can achieve a Great Lakes hot spot by meeting the regulations, it's not very good.

I think we were all upset that the MISA program had been terminated at the time that the waste water treatment plants were actually going to be looked at as sources of contaminants, because that, for the first time, would have provided a way to work back through the system to identify certain particular pollutants.

Our water and sewage plants have been built over history by civil engineers. In the 1970s water pollution changed to chemistry. The number of chemicals in the system are just astronomical, yet we still have civil engineers shifting, pouring concrete and dumping it further out in the lake, so we've got to look at the chemistry of water now and I think this has to be done through introducing new technologies.

We could run our own metropolitan systems a whole lot better if in fact there was a better process for certificates of approval. Instead of just getting a rubber stamp on putting in a new one of those old things, people would have to look at new technologies.

So there's a whole bunch of ways of looking at what we've got now and improving it without becoming a big cost and something you'd want to sell off because somebody else might know what to do. You might not want their technologies. If you sign a long contract, it might be an extinct technology before it's even paid for.

The Chair: Ms Shinn, thank you very much for taking the time to come to the committee this morning. I think we all enjoyed your presentation.

Colleagues, that's the last presenter for this morning. We adjourn and we'll reconvene at 1:30 this afternoon.

The committee recessed from 1201 to 1336.


The Chair: The resources development committee will come to order for this afternoon's proceedings. Our first presenter is Mr Ryan from the Canadian Union of Public Employees. Welcome.

Mr Sid Ryan: Joining me today are Alison Davidson, a researcher from our national union in Ottawa, and Peter Leiss, the chairperson of our environmental committee. I'm Sid Ryan, president of CUPE Ontario.

I'm happy to have the opportunity to address the committee on such an important bill. It has not to date received nearly the attention that has been given to Bills 103 and 104; however, the detrimental impact of Bill 107 is no less severe.

Like these other proposed pieces of legislation, Bill 107 demonstrates the government's continued willingness to abrogate from its responsibilities. Ensuring good quality public services that are accountable and accessible to the public in all areas of the province should be the primary concern of this government. Bill 107 continues the pattern of withdrawing provincial support for water and waste water treatment that began with the cancellation announcement of the municipal unconditional grants program, which helped to defray the costs of water and sewage treatment facilities.

What is at stake is the quality and cost of water services, the health of our citizens and the quality of our environment throughout Ontario. Water is an essential element in Canada's intricate web of life and not a commodity for corporate greed.

CUPE represents thousands of employees in the water industry throughout Ontario. Our members work as technical and clerical workers in dozens of water and sewage treatment plants throughout Ontario. As workers, we fear the loss of our jobs as a result of privatization. As ratepayers, we fear the increased costs of water and the decreased quality resulting from privatization.

The proposed act will transfer all ownership and financial responsibility of water and sewage facilities in Ontario from the provincial to the municipal level of government. At present 25%, or 230, predominantly small and medium-sized facilities are serviced by the Ontario Clean Water Agency. Once this transfer happens, municipalities will have full responsibility for the construction, operation and maintenance of all water treatment and sewage treatment plants in Ontario.

In the context of other downloading by the province, Bill 107 encourages the privatization of OCWA-serviced water and sewage treatment systems and municipally owned and operated facilities. There will be great pressure on the municipality to either privatize water and sewage treatment services or to raise water and sewage rates.

As a result of Bill 26, the omnibus bill, which eliminated the requirement for a plebiscite before the government could sell a utility, water has become a Canadian commodity to be bought or sold. In this government's desire to appease business, the interests of the communities become secondary to that of corporate profit.

Privatizing water becomes particularly acute in the era of NAFTA. If water is diverted and sold to the US, a precedent will be established which ensures the continued export of water and perhaps an escalation in that trade. This event is far more likely if water delivery and treatment facilities near the US-Canada border are privatized. Bill 107 encourages this privatization and hence the threatened drainage of this natural essential resource so as to make a profit.

As we speak, there are large water and waste water corporations and consortia actively looking to design, build and operate water and waste water facilities in Canada. Many of these huge multinationals see our largest natural renewable resource as their fountain of profit. The largest are the French-based corporations Lyonnaise des Eaux and Générale des Eaux. These are followed by the British companies, the largest of which is United Utilities, the subsidiary of which is Northwest Water. Northwest Water and Consumers Gas just received the contract to build and operate the newly proposed water treatment and delivery system in York region.

There will be no competition if the water industry is privatized, because it will be dominated by huge, powerful monopolies. A recent French audit criticized the insufficient competition in the French water industry because of the dominance by two huge companies which has resulted in the price of water rising by almost 50% in less than four years.

In the UK and other parts of Europe where profit-making corporations took control of water services the disastrous results included: increases in water prices well beyond the rate of inflation; termination of water services to thousands of low-income families; outbreaks of dysentery and hepatitis A caused by poor sanitation and unavailability of water; failure to reinvest profit into the aging infrastructure, resulting in water shortages; selling off of reservoir lands for development purposes; laying off thousands of workers and lowering wages while dividends to investors and executive salaries increased dramatically; and political corruption, illustrated by the conviction of executives of both Lyonnaise and Générale des Eaux.

An April 1996 poll conducted for the Ontario Municipal Water Association by Insight Canada Research found that Ontario residents strongly oppose water privatization. Specifically, the poll found that 76% of Ontarians favour water utilities being controlled by municipal officials compared with only 19% who favour private sector control.

Both Thunder Bay and Ottawa-Carleton have rejected aggressive sales attempts by water operations and management companies such as Philip Environmental. The management and operation of the Hamilton-Wentworth water and sewage treatment facility by Philip Environmental illustrates the fiscal disadvantages of private sector involvement in water services. On two occasions since 1995, when the region devised ways to cut the cost of the service to the ratepayers, Philip immediately claimed the savings for itself. Potential losses to the region from the ensuing disputes will more than offset any potential savings from having Philip manage the utility.

In January 1996 in Hamilton-Wentworth, an accident in the plant resulted in the worst disaster in the region's history. It occurred when 180 million litres of raw sewage were released into the harbour and surrounding areas. More than 70 houses and businesses were flooded. The region was entirely responsible for damages and Philip was let off the hook.

If this bill passes, the province will no longer be responsible for enforcement of sections 76 to 79 of the Environmental Protection Act as they relate to water and sewage systems. The result is a fox-in-the-henhouse scenario, where municipalities will monitor and enforce their own programs and services. Bill 107 makes no provision for an independent public regulator to safeguard against profiteering. In the UK, when water services were privatized, a public sector agency was established.

If municipal water and sewage treatment facilities become privatized, we demand that the government institute provisions so that the job security of CUPE workers be protected. We also demand that the health and safety of CUPE workers are protected in the event of corporate intrusion.

We endorse all the recommendations put forth by the Canadian Environmental Law Association in its submission, in particular that the Ontario government should immediately withdraw Bill 107 unless it is substantially amended.

If Bill 107 proceeds, it must be amended to include an express prohibition against the privatization of water and sewage facilities, and if this does not happen, any proposal to privatize must be subjected to full cost accounting as to the consequences of privatization; restrictions on proposals to sell, transfer or otherwise dispose of municipally owned lands used for water or sewage works; provisions establishing an effective, efficient and independent regulator of water and sewage undertakings in Ontario; and the restoration of the previous statutory requirement for electoral assent to proposals to dissolve or create utilities.

Mr Hoy: Thank you very much for your presentation. You are speaking today in regard to Bill 107 about the quality of water, ratepayer costs in the future and impacts on jobs. The government would suggest that privatization is not the main aim of this bill. With the downloading, which, I'm sure you're aware of to municipalities that is going on currently, such as social programs and other programs, and the lack of a requirement for a referendum within the local municipality to divest itself of water or sewage treatment plants, do you see Bill 107 as not opening the door to privatization?

Ms Alison Davidson: If the purpose of the bill was to prohibit privatization, there are no provisions in the bill which prohibit privatization. This is one of the demands put forth by CELA and endorsed by us as well, that yes, privatization is the reason why this bill is coming forward.

Mr Hoy: Earlier in the day a presenter mentioned Northwest Water. With the rotation we have here on questions, I didn't have the opportunity to ask, but do you have any information as to their performance in Britain?

Mr Ryan: I was in Great Britain a little over 18 months ago, around the Christmas period, and I witnessed first hand massive water shortages in Great Britain. The CEO of Northwest appeared on television with a glass of water, like this, lecturing to the citizens of Great Britain that in his opinion they were wasting water and they should be able to bathe with a glass of water. He said he was doing it on a monthly basis; this is how much water he used. He and his wife used a glass of water to bathe on a monthly basis.

We saw water trucks rolling down the streets where they had water shortages, the water mains had burst, where the private sector had not invested the amount of dollars they said they would into upgrading the water systems in Great Britain.

The newspapers were absolutely chock-a-block full of stories about CEOs ripping off the public, making massive profits. We had people, of course low-income families, being cut off the water because they were unable to afford the increases in water rates.

This is the type of system I think we're heading towards if the Tories get away with privatizing the water treatment systems and sewage treatment systems in this country.

Ms Churley: Thank you very much, Mr Ryan, for your presentation. It reflected what we've heard over the course of the morning and yesterday in general. I'm particularly worried, however, about the section on NAFTA. We've been hearing more and more about water quantity along with quality. For the first time people are starting to become aware that we've got a water quantity problem here too, which is very worrisome. Can you elaborate on the implications of this? You just mentioned it very briefly.

Ms Davidson: I'll start; maybe Sid wants to add. If water is diverted to the United States, it will be very hard for us to get it back. As Ontarians and Canadians we have to look at ourselves as stewards for some of the last remaining natural fresh water. Water is contained under the tariff schedule in NAFTA. It's possible it will be diverted, and we cannot get it back in that case. We can imagine a scenario where the United States is getting our water, at our expense, when we're experiencing a drought. Who knows what the future holds? It would be difficult for us to keep that water here if it's privatized by these large multinationals.

Ms Churley: What you're saying is, as long as we don't privatize it, then it doesn't come under NAFTA? I don't know a lot about this, but you're saying that in itself could make the difference: If it's in public hands, it's harder for them to do or impossible for the Americans to get it.


Ms Davidson: That's my understanding. It would be less likely for a publicly held utility to go to the United States than a privately held company, especially when that private company already has holdings in the United States, like many of these multinationals do. They will be looking for more profit and it will mean diverting our resources to the United States.

Mr Galt: Thank you for the presentation, a most interesting one. I'd just like to make reference to a few of the points you were speaking on. One relates to York region. In fact, the municipality is in control, is looking after, will be there. It's a build, operate, transfer to the municipality. It is not privatization like you're referring to in Great Britain.

In reference to the Hamilton one, certainly pumps did fail on occasion there. I'm pleased to report the Ministry of Environment inspectors were on the job monitoring and things were properly looked after.

As we talk about exporting water and all that kind of thing, what's really going on here is that we're talking about the transfer of property and waterworks to municipalities. We're not talking about the water, we're not talking about other things; we're talking about that being moved to the municipality.

There was a reference made to a plebiscite in Bill 26. That related to PUCs, and most waterworks are separate from PUCs. Granted, there are some that are connected, but have a look at the privatization that's occurred so far. There's been no limit to stop municipalities from privatizing in the past. It has not been happening, and with this bill we're rolling in the requirement that they have to pay back the subsidy or grant to the provincial government, which is a very definite disincentive to privatization.

I was interested in your comments as you talked about it being transferred, and realizing that OPSEU is the union that works with OCWA, and CUPE with the municipalities generally, as I understand it, I almost got the feeling that you were concerned about having these works transferred to the municipalities. I would think you would be quite supportive of that with your union involved in those various municipalities.

Mr Ryan: You had a lot of statements there and not too many questions, but let me just go back to your first statement around the York region. You said that BOT -- build, operate and transfer -- is not privatization. I would put it to you, sir, that BOT is the worst form, the most odious form of privatization, because what you get is the worst of all scenarios, where you have the taxpayers pay for the building and pay for the operation but the private sector takes the profit out of the water utility, and then at a time when it's in a state of disrepair 20 years down the road, guess what the private sector wants to do? Transfer it back into the hands of the public sector, back into the municipality.

We end up getting caught twice. First off, the private sector takes the profit out of the building for the first 20 years, and then when it's badly in need of repair, you transfer it back into the public sector so the taxpayers once again have to pick up the cost of repairs. It's the most odious form of privatization.

I know a lot about the environmental damage that happened down in Hamilton. Just because the environmental department was sitting around watching what happened in the harbour in Hamilton-Wentworth does not take away from the environmental damage that occurred and from the 70,000 tons of sludge that was pumped out into the harbour as the result of the inefficient operation by the private sector of that plant. I fail to see the point you're trying to make. Just because it will happen to be monitored doesn't absolve the private sector utility of the responsibility for repair.

By the way, they didn't pick up one single penny of the repairs. It was paid for and the cleanup was paid for by the taxpayers of Hamilton-Wentworth, once again an example of where the private sector is abdicating its responsibilities, taking the profit out of the system but refusing to clean up the mess they leave behind.

The Chair: Our time has expired. Mr Ryan, thank you very much for taking the time to come before us today and present your views.


The Chair: Our next presenters this afternoon are Elise Houghton and Lyn Adamson from the Parents' Environmental Action Group. Welcome.

Ms Elise Houghton: Good afternoon, Madam Chair and members of the committee. I'm Elise Houghton and this is Lyn Adamson. We are parents representing the Toronto Board of Education Parents' Environmental Action Group. Our group has been active at the Toronto board since 1992 and our mandate is to make environmental awareness, protection and action an integral part of public education. We like to think that some day all the kids in school will understand how their water systems work, but I think we're still a long way from that.

We'd like to thank the committee for this opportunity to speak about the proposed legislation outlined in Bill 107, a bill variously entitled the Municipal Water and Sewage Transfer Act and, perhaps as an afterthought, the Water and Sewage Services Improvement Act, which second title is included at the head of every page. A careful reading of this bill by a layperson unversed in legal subtleties does not reveal in what way it is intended to improve our water or sewage services. This was my impression on reading this bill very slowly. On the contrary, speaking as parents concerned about both children and the environment, we are of the opinion that should this bill be passed into law, it seems very unlikely that water and sewage services in Ontario would improve as a result.

Water is one of our most precious resources in Ontario and clean, safe drinking water is one of the most vital elements of a healthy and prosperous society. It is a resource we expect to see governments safeguard and conserve in the interests of the public good, taking all appropriate measures to promote conservation and environmental protection. As residents of the Great Lakes basin, which is now home to more than 30 million people, we are concerned that the provincial government of Ontario has not chosen to take measures to improve the quality of our drinking water.

Before proposing the present legislation, this government has:

First of all, amended and repealed environmental laws, regulations and policies which affect virtually every aspect of environmental protection in this province, as well as natural resource management.

The government has cut budgets and staff in both the Ministry of Natural Resources and the Ministry of Environment and Energy, resulting in a dramatic reduction in the capacity to monitor and enforce the laws which remain, including those which affect water quality.

The government has proposed to cancel funding for local advisory bodies developing cleanup plans for pollution hotspots in Lake Ontario, from where we get our drinking water.

Now the provincial government proposes transferring the ownership of water and sewage treatment plants to municipalities, along with many other services which we've seen and heard a lot about in the last two months, which we believe will put a very severe burden on our property tax base. We understand that this government has virtually eliminated the municipal assistance program, which provided capital grants for municipal water and sewage projects.

It would therefore appear to us as citizens that municipalities will have three choices if this legislation passes. The first is to significantly increase property taxes to provide sufficient funding for the many services which are about to be downloaded on us, including the maintenance and staffing of our waterworks. A second choice might be to have to make a choice between hard, or infrastructure-based, services and the soft social services which we already see decreasing, which we imagine would be to the probable detriment of Ontario's needy. The third choice would be the selling off of water and sewage infrastructure to private interests to maintain enough funding to fund all the other services municipalities are about to be faced with.

It's worth mentioning here that in 1996 an Insight Canada poll, which you've probably already heard about, indicated that 76% of Ontarians favour public ownership of waterworks. It struck me that this was a familiar figure, since 76% of Metro voters also seemed to oppose a megacity. But we also noticed that large majorities of public opinion don't seem to have too much influence on this government, which forces us to practise public speaking. We would like to remind the members of this committee that members of the public do understand these issues, although we may not be as expert as many of you, and we believe the public opinion you continue to hear is very clear.

There are a few points we would like to pick out with reference to Bill 107. The first one is that we believe that water is a public good and should remain under public ownership. We have noted with grave concern the results of the sale of water and sewage works by the Conservative government in England. Previous speakers have given you more details than we have on this subject, but I will repeat them anyway.


We heard that water rates in England in some areas went up as much as 400%. We have heard that families who could not afford these increased water rates were disconnected from water, and apparently at the beginning of this change there were over 21,000 families which were disconnected, which is horrifying. We learned that people who cut back on their water use to very major scrimping led to a lack of basic hygiene resulting in outbreaks of dysentery and hepatitis A.

We heard that water reservoir lands, which were preserved to protect the water quality, were sold off to developers. We have learned that reinvestment of water revenues into infrastructure maintenance decreased, resulting in increased leakage and deteriorating facilities. We heard that water pollution offences increased.

We've also heard that, following the pattern of multinational corporations, there were extensive staff layoffs and salary cuts and that the profits from the now high-priced water revenues went to paying very high executive salaries and shareholder dividends at the public expense.

I understand that Bill 107 says it is not intended to privatize our water system, but when you look at everything else that's going on these days, it would appear that is very likely to be the only choice.

To avoid this scenario in Ontario, we believe Bill 107 should specifically include a prohibition against the privatization of water and sewage delivery in Ontario.

Next, it would appear that this government is transferring ownership of water and sewage treatment facilities to financially burdened municipalities at a time when new concerns are arising with respect to public water supplies. Two were mentioned in the paper yesterday if you read the Globe.

The first one was that, in 1996, 3,000 people on south Vancouver Island were infected with toxoplasmosis parasite. This is a parasite which can cause birth defects. These people were contaminated from the municipal water supply.

The second item is that, in 1993, 400,000 people in Milwaukee were infected and at least 100 people died when the city's water supply was infected with cryptosporidia parasites. If you read this, you'll know that this was only noticed by someone who became aware of the depletion of products for intestinal conditions, not the government.

In 1996, the city of Collingwood, Ontario, experienced a major outbreak of cryptosporidia as well. We now know that these, like many other interesting and new bacteria that are arising as a result of our not terribly environmental control of disease, are things that possibly threaten us. I don't know enough about the filters in existing Ontario infrastructure -- apparently these kinds of things can be repaired with filters -- but this will become a money problem.

It is essential that our water systems be regularly monitored by competent staff and that the kinds of filtration be installed which can safeguard populations against new strains of infection. Bill 107 does not provide for an independent regulator of water or sewage works; nor does it propose to set and enforce provincial drinking water standards.

We believe it is essential, particularly in the case where Ontario municipalities may be obliged to sell waterworks to private interests, that the government maintain an independent regulator of water and sewage standards for all providers and that they draft and enforce a clear set of standards to ensure that Ontario's drinking water remains safe and clean. It would seem appropriate to define by law the responsibilities that accompany ownership of public or private water treatment services.

Another concern in relation to allowing privatization of our water services is the possibility of free trade implications becoming relevant, along with foreign ownership of our water infrastructure. I understand that under NAFTA a foreign corporation, once given the right to divert or export Ontario's water to US markets, could claim under this agreement the requirement to continue doing so even if water shortages were to occur in Canada.

With signs of global climate change upon us, it is possible that the southern US and Mexico may experience water shortages. It may be possible that we also could experience water shortages. It is therefore essential that the government retain control over policy setting with regard to export of our water supply, should foreign interests be given control over our infrastructure.

With respect to environmental concerns, water conservation is another policy which should be entrenched within legislation regarding the future of our water supply. Water conservation makes sense both environmentally and economically and programs which promote decreased water consumption would benefit municipalities whose water and sewage infrastructures are already working to capacity.

As parents, we are concerned about the failure of this legislation to specifically address the need for water quality standards, for the provincial government's leaving water quality monitoring to uncertain authorities now and in the future, as our children become citizens under this kind of regime. As residents, we're concerned about the likelihood of the privatization of our water supply, increased costs which would benefit only the few and greatly increase hardship for the poor. As people concerned about the national environment, we're concerned that this legislation does not address the need to conserve water, does not provide for guaranteed water monitoring and does not include full cost accounting, which means all the results of all of the changes that would be made to both humans and the environment, in any plans to privatize our water and sewage infrastructure.

We therefore believe this bill should be withdrawn or carefully amended to ensure the public good is ensured by all of the above considerations.

Mr Laughren: Thank you for your presentation. You indicated that you were looking for improvements in the way this act would improve the water quality in the province. We haven't been able to find anything either. In keeping with that, I wondered if you knew, and my colleague's been reminding deputations of this, that this government is also planning to get rid of the requirement for zero discharge of chlorine from the pulp and paper sector into our waters of this province too. We're very worried that this is part of a bigger agenda to allow the private sector to have its way with our environment in ways they haven't been able to for a while. Do you see any other examples of this?

Ms Houghton: Any particular examples of water quality not being protected?

Mr Laughren: Yes.

Ms Houghton: Yes, I was aware of the reversal of the zero discharge rule. I haven't brought any information with me so I can't cite very many specific --


Ms Houghton: I have a list which I could give you, if you like, of cuts that have been made to various parts of Ontario legislation by this government to reverse irritants to industry and to encourage industry to be self-monitoring, self-regulating; as far as I know, there are no examples of success with this happening. Obviously all of these industries are discharging into our drinking supply, those around the Great Lakes.

Mr Galt: Thank you for the presentation. Just a few comments in connection with keeping it public: Certainly we agree with that. We want to keep it public, closest to the people, and that's in municipal government. The bill is about clarifying the roles and the role as it has been. MOEE will be the regulator. Certificates of approval are there for each and every plant and will continue that way.

We've looked at the British system. We too agree that is not the route to go. They had a disastrous infrastructure system when they privatized in 1986, along with an $8.5-billion debt just for their water system, and that's certainly not the case of where we're at today. We're simply wanting to clarify the roles and ensure that the 230 plants, or 25%, that are not owned by municipalities will join the 75% that already are.

You made reference to toxoplasmosis and that was of interest to me, a parasite -- not a bacteria -- that I don't associate with water. It's carried more by rodents and spread by rodents. It does cause abortion in several species of animals and there was a very emotional article in one of the women's journals about 15 years ago about what it could do to your child in very rare circumstances. Shortly thereafter there was a massive wipeout of cats; they were euthenized all across Ontario because of the rather emotional article.

The parasites that we're more concerned about in water are giardia, or beaver fever, and cryptosporidium. Cryptosporidium has risen its ugly head in recent years more because of ability to diagnose it and isolate and identify the cyst. It's probably always been around and probably in the past we referred to it as a flu and didn't know what we had. Now we're able to diagnose it and it's quite different. Anyway, thank you very much for your comments.

Mr Hoy: Thank you very much for your presentation. Whether the circumstances some time ago, as mentioned by the parliamentary assistant, were emotional, none the less it caused a lot of concern among people, I'm quite sure, and I'm sure if standards or the lack of standards created a situation where water was believed to be unsafe, it would be emotional, yes, but also heartfelt and would probably bring about a lot of strife throughout the people of Ontario.

You cited that you were concerned about the lack of standards. I think you talked about the reduction of staff at MOEE offices. It's my understanding that Parry Sound, Gravenhurst and Pembroke don't have any MOEE offices; commonly known as cottage country. Your concerns I would assume are for your children and yourselves as a parents' group. They're well taken by me and I appreciate your comments today.

The Chair: Thank you very much on behalf of the committee members. We appreciate your taking the time to come today. Thank you.

Our next presenter is Lin Grist. No? Eleanor Dudar. Is John Birnbaum here or Annaliese Grieve?



The Chair: Mr Formo? Always we have a saviour today. We'll move down then to the 2:45 spot, Mr Formo, and we'll come back to those others shortly. Welcome. We're glad not only that you're here, but that you're here early. Please begin.

Mr Tony Formo: Bill 107, the water and sewage alleged improvement act: a deputation to the government of Ontario standing committee on resources development. You're sitting, not standing. Filibusters could be extended by attempts to rename governmental entities with such obscenely inappropriate titles as calling what you seem to be doing "resources development."

Improvement for whom? That question applies to legislative misnomers the political machinery has applied to what it wants to do water and sewage, municipal governments, public education, public libraries, public health care, public policing, public television and many other public costs that can be expected to skyrocket as public resources are privatized at bargain prices to friends of the political machinery.

It's not yours to give away. Turning water and sewage over to multinational corporations investing megabucks in a tax-subsidized purchase of political influence would be likely to drive up the cost of living for local citizens to the benefit of interests opposed to both democracy and free enterprise.

Allowing corporate greedheads to operate water and sewage services at the same time as being able to profit from the pharmaceutical industry or privatized health care involves some very serious conflicts of interest. If interests who control public water can profit from ill health, what are you going to do? Keep an eye on them at party fund-raisers?

My name is Tony Formo. I came to Toronto from the United States in 1968 to protest the war in Vietnam and military conscription. A few years later, John Sewell and community groups made an issue of political hacks pimping for developers running city hall, but a decade or so later community groups got tired out and I've had a vague impression that developers, and whatever other interests might be associated with political machinery, have been running things ever since -- with more difficulty recently.

Another aspect of my political education in my adopted country is that after doing graduate work at U of T, I worked as a research officer at Queen's Park. I came to understand that how the government of Ontario worked was that when good suggestions got to the political machinery, they'd get zapped, regardless of potential cost savings, social equity or other public benefits. The Big Blue political machinery wasn't just the politicians. The deputy ministers and other upper bureaucrats were political appointees and there to rewrite reports and recommendations and otherwise evade public accountability.

Rather than being an institution that existed to benefit the public by minimizing living costs for everybody, the government of Ontario, as I experienced it, was into using the powers of government to selectively reward buddies of the political machinery with contracts for advertising and consultants, pouring concrete and a slew of other scams.

This is my first spoken deputation to the government of Ontario, although I submitted a written deputation on Bill 103. From what I remember of standards of effective communications in the government of Ontario, literature reviews used to have some respect so I'll give that a try.

A literature review of the sorts of scams involved in corrupt governments operated by political machinery to public detriment might start with The Spoils of Power: The Politics of Patronage by Jeffrey Simpson, which is a historical survey of federal and provincial governments in the great white north since colonial imperialists did their takeover from native persons. It's a rather tedious read with similar story lines repeated over and over again with lots of unfamiliar names. The basic story line is that governments around here have been invariably corrupt, and they periodically change figureheads and political parties in ways that the rascals get thrown out of office and into well-paid jobs in the private sector or elsewhere in the political machinery and another batch of flak-catchers sponsored by the same interests take office and continue the same policies.

Other suggested readings include A Portrait of Canada by June Callwood; the Corporate Welfare Bums by David Lewis; On the Take by Stevie Cameron; Friends in High Places by Claire Hoy; Shooting the Hippo and Behind Closed Doors by Linda McQuaig; Above the Law by Paul Palango; An Unauthorized History of the RCMP by Lorne and Caroline Brown; Parcel of Rogues by Maude Barlow; Out of the Blue: The Fall of the Tory Dynasty in Ontario by Rosemary Speirs; the History of Quebec: A Patriote's Handbook by Léandre Bergeron; A People's History of Prince Edward Island by Errol Sharpe; Drapeau by Brian McKenna and Susan Purcell; Up Against City Hall by John Sewell; and such Pierre Berton books as The National Dream, The Last Spike, The Promised Land and The Great Depression. Peter C. Newman also wrote some excellent books that have helped me learn about politics and business in Canada.

That's just a starter set of readings about dysfunctional government in Canada that doesn't include such classics as The Vertical Mosaic by John Porter, because I haven't read it all, or stories tracing political dysfunctionality to its sponsors and beneficiaries in the private sector, such as Red Lights on the Prairies by James Gray; The Developers by James Lorimer; Uneasy Lies the Head: The Truth about Canada's Crown Corporations by Walter Stewart; Electric Empire by Paul McKay; or Oil and Gas by James Laxer and Over a Barrel: A Guide to the Canadian Energy Crisis by Jan Marmorek. Corporate Crime in the Pharmaceutical Industry by John Braithwaite also seems germane to Bill 107.

It seems my whole damned library of books about governments in my adopted country, and I have many more, have had the same theme of public services being run by political hacks who are out to screw the public on behalf of somebody else. From the beginning, governments were set up to serve foreign investors at the expense of local citizens with political machinery set up to facilitate corruption while maintaining a facade of public accountability.

I also have literature reviews that I could add about the people who were living here before the colonial invaders imposed their new economic reality and of the economic effects of that. For millennia before the colonial military conquest of this continent, water and air and land were considered resources for everyone's benefit rather than a profit source for infinitely greedy interests maximizing short-term private profit at long-term public costs, then calling it "resources development." An annotated literature review of how brain-dead the Common Sensers' economic policies are could easily use up 15 minutes all by itself.

Years ago, I dropped out of academia to read, think and write about alternative futures and how they might happen. One of the ways I tried to pay my bills while doing so was driving taxis. Having a professional background as a program evaluation researcher, I made a practice of thinking of ways that traffic congestion problems could be reduced. Once upon a time I had a taxi trip with a fellow who worked as a civil servant in either transportation or environmental policy at Queen's Park. When I accosted him with suggestions for how megabucks could be saved in wasted fuel and time, he pointed out to me that civil servants weren't as dumb as they were publicized as being and most of the ideas I was suggesting had already been suggested by people like himself, but killed by political hacks more interested in making money for interests like petrochemical corporations than in saving money for the citizens of Ontario.


I never gave a public deputation until April 28, 1992, when I spoke to the Toronto Transit Commission about the electric trolley issue as the beginning of the case study in political dysfunctionality. What happened with Toronto's electric trolleys is a model of bad government in action that's been repeated in all sort of other situations, including the Orwellianly titled Water and Sewage Improvement Act.

Some bean counter at the Toronto Transit Commission said that people would be better off getting rid of an electric trolley system that had been operating in a cost-effective way for decades with all-night service through residential neighbourhoods, while making minimal noise and leaving its pollution at electric power stations rather than in city air, where it would be most likely to create health problems. Local citizens were used to oil companies behaving like that, but not a public institution like the TTC.

At the time I initiated the electric trolley case study in political dysfunctionality, the allegedly objective, non-partisan head of the bureaucracy was a political appointee who was even less accountable to the public than a politician who doesn't care about getting re-elected. I'd not encountered this individual before and have had no particular personal animosity towards him other than his being an unmistakable example of this sort of interchangeable, unaccountable political hack who screws the public on behalf of interests with hidden agendas. Having seen this political machinery in action in 1992 and 1993, this helped me understand the Common Sensers and their revolution.

In a prelude to the megacity issue and alleged improvements to water and sewage, what started out as a matter of cost-efficiency in the choice of transit vehicles became a matter of democracy and integrity of government. In the face of considerable public outcry, the political machinery would stonewall petitions, demonstrations and deputations to rely on secret reports from experts hired by the political machinery. When caught in awkward situations, there was no apparent shame in telling outright lies. Many citizens were concerned that their public transit system was being run by political machinery that wanted public transit to screw up expensively so that people would drive cars and buy gasoline and insurance and use parking lots and car pounds, and had other hidden agendas.

While the Common Sensers and their tag team partners have been quick to try to save money for governments in other ways, they don't seem to have considered reducing the costs of political hacks not particularly accountable to the public, making public decisions to screw most of the public on behalf of whoever or whatever might be behind flak-catchers of the sort I've observed in the electric trolley case study and the megacity issue and on into its continuation into contaminants of drinking water that the Common Sensers want to make corporate and profitable.

Canadians historically have been willing to shrug off bad weather and bad governments as long as some illusion can be maintained that the crooks who happen to be in power at the time aren't ripping off the public too outrageously. The present government of Ontario has overstepped the lines of "too outrageously," having exposed itself as being case study examples of political hacks pimping for interests with hidden agendas. The Common Sensers at Queen's Park have been responsible for a massive public education campaign in which thousands of otherwise apathetic citizens have had a chance to witness the political machinery in action, getting increasingly agitated with its disdain for public concerns and discovering that public institutions we thought we could trust not to screw us too outrageously seem to have been taken over by interests that apparently want to do just that.

Bad governments have been a tradition in the great white north. This government has gone beyond bad to outright evil. The government of Ontario has no more mandate to sell off public water than to impose a megacity on Toronto against the wishes of its citizens. It would not have been elected if it told the voters what it was going to do. The political machinery has no mandate to keep election promises it didn't make. It's time for another election rather than a continuing fascist coup.

The Chair: Your time has expired. We thank you for taking the time to come before us today with your presentation.


The Chair: I now call Eleanor Dudar. Welcome.

Ms Eleanor Dudar: Good afternoon. I want to start with some very basic questions. First, why am I here? Second, what is the purpose of this committee hearing?

I'm here to talk about only a few of the issues raised by Bill 107. When I began to write this, I realized there was indeed a lot more than I could possibly touch on in 15 minutes. Much, perhaps all of what I say, will have been said by others. My presentation to you may not in itself cause you to stop and rethink, but I hope that if my remarks are part of a pattern you hear, you will take these ideas seriously.

The experience of the committee hearings on Bill 103 was profoundly dismaying. So very few of the many excellent suggestions offered were heeded and the changes that were made were small and superficial. That brings me to my second question: What is the purpose of this committee hearing?

I intend to take it seriously, to assume that you are putting aside your ideological beliefs and listening with as open a mind as you can to gather different perspectives on the issues and then make changes that respond to people's reasonable concerns. I will not do you the disservice of thinking that this is merely a sham exercise in consultation. Therefore, I challenge you to take yourselves seriously as people who have a responsibility to ensure the health and wellbeing of Ontario's people and the environment.

While Bill 107 can be characterized as merely a piece of legislation that allows transfer of local water and sewage works to municipalities, it is in fact about much more. My remarks will focus mainly on the issue of privatization that this brings to the fore and on how what isn't in the bill tells us a lot about the bill's real intent.

My apologies to the opposition members of this committee. I must address myself to the government members, as the power to change or indeed withdraw the bill rests with them.

What is Bill 107 about? Ostensibly, it is part of this government's passion for being the tidy housekeeper of Ontario, disentangling provincial and municipal roles in the delivery of water and sewage services, giving the minister the power to transfer ownership of water and sewage works from the Ontario Clean Water Agency to municipalities and, we are repeatedly told, encouraging public ownership of water and sewage infrastructure.

This last assertion needs to be examined closely, since safe water is a basic necessity and keeping water and sewage plants in the hands of publicly elected officials is strongly favoured by 76% of Ontarians. Undoubtedly, that finding by an Insight Canada Research poll had an influence on the way the objectives of this bill were framed. Had the poll discovered instead that Ontarians favoured privatization of water and sewage services, the writers of this bill could have said more openly what your government's more likely agenda is in proposing this legislation.

Looking carefully at what is missing is one way to discern the bill's real intent.

(1) Municipalities have to repay money given or loaned by the province if they sell their water and sewage systems to private interests. This proviso is said to represent a major disincentive to privatization. Curiously, municipalities are not required to repay the interest on this money or loans made by the federal government, so there's a kind of doublespeak here, isn't there? Some public money has to be repaid, but a lot of it does not.

There's a pretence, then, of penalizing municipalities that seek or are forced to sell their water and sewage treatment plants to the private sector, but the money that doesn't have to be repaid -- the interest on the debt to the province -- would in most cases likely be far greater than the principal owed, just as the interest payments you make over time on a house mortgage are far greater than the principal.

The fact that in the case of disputes about moneys owed the minister has the sole power to arbitrate is a worrisome sign of this government's continued concentration of real power in the hands of a few in order to forestall an adequate and fair process of public consultation.


If you really want to protect the public's investment, amend the bill so that all public moneys plus interest must be repaid in the event of privatization. Unless you make that change, the bill represents another instance of a government's scheme to subsidize the private sector with public money, just not as much public money.

The bill is not about encouraging public ownership at all. This bill, like others your government has introduced, calls for comment on the way you do business. Saying the opposite of what really is going on is a recurring habit of this government.

Thus we had Mr Leach solemnly and endlessly intoning that he saw no real public expression of rejection of Bill 103. In his mind and that of the Premier the referendums didn't count, because they weren't scientific enough or they didn't put the question clearly or not enough people voted, even though more people in Metro Toronto voted against the megacity than voted for Conservative candidates in the last election.

If ministers of your government can make assertions like that, there are few bounds to what doublespeak we are going to be subjected to. In Bill 107, it is the pretence of serving the public interest when quite clearly it is the private interest that will be advantaged.

You seem to have believed too well the adage that if you tell a lie often enough, people will believe you. Hence your spin doctors titled your grossly unjust Municipal Tax Reform Act, Bill 106, fair and graced this water and sewage transfer act with the noun "improvement" when there is nothing anywhere in the bill that smacks of it, not even the appearance of the word itself.

Yours has become a government bent on dangerous extremes blinkered by an ideological vision, corrupted by a flagrant disregard for speaking honestly and resorting to all sorts of measures to place the legislation and its impact above reasonable challenge through public hearings or through the courts. In this, ladies and gentlemen, you tread a dangerous path.

Unlike previous Conservative, Liberal and NDP governments, you have taken a confrontational rather than a consensual approach to governing. The get-tough, Thatcherite strategy -- and it does have to be named as that and seen more and more clearly as that -- you are pursuing, pandering to a small powerful élite, counting on the stunned indifference of enough regular folks alienated from the political process and saying the hell with the rest, has worked for a time, but Ontario isn't Britain and we are capable of learning from history.

Ontarians are accustomed to being listened to and having their input make a difference. Your arrogant dismissal of the many wise and thoughtful suggestions for amendments to Bill 103, for instance, some of them presented by people who knew a lot about city governance, shocked a great many more people than I suspect you bargained for.

One way you can mitigate the real damage done to your government by that fiasco is for government members of this committee to differentiate themselves from the government majority that heard deputations on Bill 103.

It can be achieved quite simply: Show yourselves capable of reason. Pay attention to what people here have to say, experts and regular folks alike, and show us that you hear us by the changes you subsequently make to this bill. Otherwise, the downward slide in the polls that you have recently begun to experience will only accelerate.

The minister himself has declared his belief in the principle of public control of water and sewage services, pointing out that water service is different from roads because the supplier has a monopoly. That being the case, I call on the government members of this committee to pass an amendment that explicitly declares that privatizing water and sewage services is not allowed.

Sometimes even a government such as yours, dedicated to reducing government influence, has to act in the public interest. Safe, clean water is a necessity of life, a basic right, not a commodity that should be delivered to our taps at a price that will fatten the pockets of private investors.

(2) Another piece missing is the bill's intention with regard to the fate of the Ontario Clean Water Agency. Since the public so overwhelmingly favours keeping water resources and their treatment in public hands, it makes sense that our clean water agency be maintained and even strengthened.

The reasons for the agency's creation have not disappeared. In fact, it is clear that the need to have a public body that monitors environmental and public health risks is greater now than it was in 1993. We need an independent public regulator, yet it appears that serious consideration is being given to privatizing this body as well, even though you can point to places in the bill where OCWA will apparently continue to perform many of the functions it does now. More doublespeak.

Yesterday's timely front-page story in the Globe and Mail alludes to some of the inadequacies in our local water treatment that have led to some home-grown epidemics. While one could argue that this buttresses the case for privatization, in fact there is no evidence suggesting that a company driven by a for-profit motive is going to be interested in the costliness of effective monitoring and regulation that is required.

As it is, in Ontario today, thanks to your government's savage downsizing of staff in the Ministry of Environment and Energy, there are not enough inspectors on the job to maintain an adequate inspection regime of our water and sewage treatment plants.

The cryptosporidium outbreak that killed 100 people in Milwaukee and made another 400,000 ill also happened here in Ontario, thankfully on a much smaller scale, just last year in Collingwood. As you know, the Environmental Commissioner has reported that currently at least 40 surface water treatment plants in the province are potentially vulnerable to cryptosporidium.

It is the business of the state, not the market, to ensure that we have a safe water supply. We need the clean water agency's role as an independent regulator to be confirmed within the context of the bill. How can you call this bill an improvement without it? Show us that you are sincere about safeguarding our water supply by making the role of public inspection clear. Further, make it doable by ensuring adequate funding.

I pay taxes so that we can continue to live in a safe and civil society. Don't offer me a tax cut, one of the many hidden consequences of which may be the possibility of widespread waterborne disease. Think about why we have a government in the first place and assume full responsibility for protecting the public interest.

(3) There are a number of other things that are missing either in the bill or in backgrounders to the bill. One of the really important omissions is an accounting of the money involved here. If the changes being made possible are going to be of tremendous benefit to the public, I suggest that we would see those favourable figures bandied about. Their noticeable absence strongly suggests that the monetary benefits to be realized will accrue only to the private sector.

(4) Because I'm going to run out of time, I must turn to the biggest missing piece of all: the bill's demonstrated inability to think beyond the most conventional of categories. The bill is mechanical and technical in nature and, while this is one characteristic of government bills, they need not be limited in this way. The bill has no big-picture thinking embedded other than perhaps the prospect of big profits for the large corporations who will be able to afford to repay the principal owed on government grants and loans, unless of course the minister decides to lower the amount which this bill gives him the power to do.

I began by listing the major objectives as named in your government's background compendium. Let me get specific about just how out of step with the times this bill is in that list of objectives. Unbelievably, in 1997, there is no mention in that list of environmental protection or resource conservation -- none whatsoever. There is no ecological thinking embedded in the bill at all. The framers of the legislation are working completely in terms of money and power. Do you really believe that those are sufficient criteria to be considered in drafting legislation about a resource which is the very basis of all life?

Without ecological thinking, that quality of mind that seeks out connections and develops a competence and understanding of how things are interrelated, the bill is simply inadequate. At this point in Ontario's history, ecological thinking should be woven into every piece of legislation you produce. At it's most philosophical, ecological thinking about Ontario's water and sewage would relate it to the health of all the other interdependent natural systems whose health, our human health, depends on.

Ecological thinking would also relate our water and sewage treatment systems to human impacts and how we can lessen them. For example, wiser land use planning that explicitly protects groundwaters and headwaters. Are you up to the challenge?


The Chair: Excuse me. I must interrupt. Are you just finishing? The time is up.

Ms Dudar: Yes. You could signal this future-looking orientation by simply framing a statement at the beginning of your bill, one that you could point to with pride 20 years down the road when problems of scarce water become serious. Some of you have children, perhaps even grandchildren, but whether or not you do, as legislators of this province you all have a responsibility to future generations.

But this is only one little bill, you could say. I'm here to say that it has vast implications, as does anything to do with our natural resources and the health of the planet. If you really want to be leaders that future generations will look up to, you need to safeguard these precious resources. You need to make the focus of your legislation not disentanglement, but sustainability.

I want to end by including a quote from environmental educator David Orr. Here's one of the things he has to say about sustainability:

"The crisis of sustainability, the fit between humanity and its habitat, is manifest in varying ways and degrees everywhere on Earth. It is not only a permanent feature on the public agenda; for all practical purposes, it is the agenda. No other crisis of politics, economics and public policy will remain unaffected by the crises of resources, population, climate change, species extinction, acid rain, deforestation, ozone depletion and soil loss. Sustainability is about the terms and conditions of human survival, and yet we still educate at all levels as if no crisis existed. Our laws, likewise, are written as if no crisis existed."

Take back Bill 107.

The Chair: Thank you. Sorry. We must wrap up. I'm sorry. Your time has expired.

Ms Dudar: Spend some time thinking about how you can make this a really impressive piece of legislation, one that will become a benchmark for other laws.

The Chair: Thank you very much.

Ms Dudar: Show some civic pride.

The Chair: Thank you very much. I'm sorry, your time is expired. We do appreciate you taking the time to come today.

Ms Dudar: Thank you very much.


The Chair: I would just like to remind the members who are here and the people who are here in the gallery that the legislative committee is an arm of the Legislature and we must operate under the same rules that we operate within the Legislative Assembly, which means that people are allowed to come into the gallery and participate in the hearings, but you must not display banners or clap or any of that sort of thing. I ask for your indulgence in that regard, please. Thank you.

Mr Laughren: Madam Chair, do we have a copy of that presentation? It's certainly one of the better ones we've received.

The Chair: I don't believe we do, no.

Mr Laughren: I'd really like a copy.

The Chair: If you'd care to leave it with us, the clerk will make sure we get copies. Thanks.


The Chair: Is Mr Birnbaum here now, please? Welcome.

Mr John Birnbaum: Thank you, Madam Chair. I'm John Birnbaum. I'm executive director of the Georgian Bay Association. I'm joined today by Annaliese Grieve, who is a member of our GBA environment committee. I'm going to read part of the presentation, and then Mrs Grieve will conclude.

Good afternoon. The Georgian Bay Association is pleased to contribute to your review of Bill 107. As a regional residents' association representing 5,000 families on the eastern and northern shores of Georgian Bay and adjacent lakes, we've been exposed to two specific foci of the legislation that allow us to comment first hand and to share specific suggestions for your consideration.

First, the good news: The Georgian Bay Association applauds the provisions of the bill that allow municipal assumption of authority for private septic system inspection and approval. It's been obvious for years that the MOEE, under several administrations, has been unable or unwilling to effectively assume this responsibility.

As resources and manpower have been removed, the responsibility for maintaining water quality and public health in cottage communities has been abandoned to a minuscule ministry program which seemed lately to depend on voluntary cottage association self-inspection programs.

We have encouraged progressive townships like the township of The Archipelago in Parry Sound district to pursue a pilot program with MOEE to assume this responsibility. Its success over the last few years demonstrates that the program can be administered on a cost-recovery basis, with either the planning or building departments trained and responsible for the program.

It's our hope and expectation that local municipalities will, over time, have the capacity to reinspect every septic tank on a regular basis, that is, every five to 10 years, compared to no reinspection now. We also expect that septic system plans can be filed with local authorities to enable new owners to then review the maintenance records and age of their new systems, which is unavailable to them now.

For our largely water-based communities, our water is everything: it's our view, it's our recreation, it's often our drinking water source, it's our highway. As more cottages are built and more cruising boats arrive to share this finite resource, we all must share responsibility for water quality. This bill will move us closer to being able to do our share.

Mrs Annaliese Grieve: The GBA's recent involvement with the York region long-term water supply study has raised several issues concerning how water diversion projects are planned and approved and the involvement of private interests in the provision of sewage and water services.

We opposed the region's proposal to direct water from Georgian Bay to meet its long-term demand. Water diversion and major water pipeline projects are unique and large in scale and their environmental effects are very difficult to predict. We recognized that, if successful, York was likely to be just the first of many more diversion projects. This bill must provide a framework to provide for public oversight of these projects. This is not presently reflected in the bill.

Bill 107 should be amended to include the appointment of an independent board or body to oversee the development and operation of sewage and waterworks, particularly those being operated by private sector interests. This board should follow the model of the Ontario Energy Board and have powers related to setting approval standards.

Furthermore, Bill 107 should be amended to state that any movement of water or sewage that represents a transfer of water from one watershed to another should be the subject of the full requirements of the Environmental Assessment Act, not the class EA process as was attempted with York region.

We appreciate this opportunity to share these recommendations with the committee and would be pleased to respond to questions if time permits.

The Chair: You've been very generous in allowing time for questions. We have 10 minutes. That's a little over three minutes for each caucus.

Mr Maves: Thank you for coming and making your presentation today. I don't have a lot. I'm just curious about your opening paragraph or maybe your third paragraph where you've talked about your problems with the MOEE over several administrations. Therefore for several years you've had a problem getting the attention of the MOEE. I wonder if you could expand a little bit on that.

Mr Birnbaum: Well, we're trying to be as non-partisan as we can in these difficult times.

Mr Maves: Oh no, I'm not worried about the administrations, but the problems with the MOEE.

Mr Birnbaum: Quite frankly, initially, many years ago, the MOEE had a number of individuals in cottage country and attempted to inspect a substantial number of systems on a regular basis. It also provided for inspection of sites for new facilities. Over time, they first devolved the responsibility for new approvals to firms that were hired for that purpose. Those firms inevitably hired summer students who arrived at the site knowing less about septic systems, often, than the cottagers they were there to advise. The cottage reinspection program or the cottage inspection program devolved over years, so I think in this last year it inspected perhaps 1,000 cottages in all of Ontario. That's a minuscule amount with all of the systems existing. The authority that has vested with MOEE for all of those services has essentially been ignored, and the excuse is that they don't have the personnel, they don't have the budget. It's simply been a void.


Mr Maves: You seem pleased that the municipalities will have more control over this. Have you had experience where they've been more attentive and more responsive to these issues?

Mr Birnbaum: Yes. As I alluded to, the township of The Archipelago in Parry Sound district initiated a pilot project with MOEE several years ago where MOEE delegated and trained municipal personnel to carry out that function. Quite frankly, one of the changes put in place was to charge a sustainable fee for that service. Instead of the $35 the government was charging, a fee of $100 to $300 was charged for either reinspections or for inspections of new sites. Over time, we believe that on a cost-recovery basis, ie, the cottager who gets reinspected pays $100, the cottage owner who wishes a new system pays $300 for his site approvals and evaluation of the proper site, and that goes into the pot, that will pay for reinspections of the existing systems.

So we think this could be done on a cost-recovery basis. Frankly, it's imperative that it be done. Otherwise, we have difficulty appearing before Dr Galt asking for consideration of grey water legislation, to require it to be held by votes, when in fact we can't come to the table with clean hands and say that all of our systems have been reinspected and are confirmed to be operating correctly.

Mr Hoy: Thank you very much for being here today. The county I live in is 92% farm land, so there are a lot of septic tanks in the area. We had the health inspectors of Ontario here today talking about the need for extensive study, the fact that perhaps most building inspectors wouldn't be able to do inspections of sewage septic tanks at the current time, they would have to be educated to that, and they thought it was a rather extensive education procedure indeed. As well, conservation authorities in my area have the authority to allow for or disallow septic tank systems.

I just want to make the comment that -- I'm going by memory, but I think it was August 4, 1995, and for some reason that date, of all the dates I have in my mind, sticks with me, but I asked the ministry to finally decide on one type of septic system or another, and to date I still don't have that answer. It appears to me that perhaps it's going to be left up to the municipality in question, and then even to that, they don't know whether it will be the upper tier or the lower tier, the unicity, the unicounty or whatever might evolve in the restructuring of Ontario. That's some of my experience, and I just wanted to comment on this voluntary self-inspection program that you have in your area.

Mr Birnbaum: I've perhaps been misunderstood. The present system that is now in place is what we are terming a voluntary self-inspection. They're asking us to inspect our own systems and report if we see difficulties.

A couple of things you've said: one, the approval of the system that can be installed, or the municipality's jurisdiction over approving the type of system. I think that's going to be a great strength. These systems obviously will have to be approved as acceptable to MOEE, and frankly, there's been a dearth of them. There haven't been many new systems approved. There's a general reluctance to get too involved, other than in research, in any of the new systems.

We live in Georgian Bay. We live on rocks. There's very little ground cover. We're very anxious to explore some of the new single-bypass filters that Waterloo developed and the ministry is testing. We're very anxious for our local municipality to be able to have authority to be creative about those sorts of things, always being effective, needless to say. I don't think that should be a problem.

With regard to training, I think that can be done. I assume it would be done through the private sector, again, since government doesn't even have the personnel to train the people who are going to be inspectors. If they were trained properly, I think they could do a good job. I think either the planning department or the building department has the capacity, when they're out at the site in any case doing other things, to approve those things in a cost-effective way. I think this can be made to work.

Mr Laughren: I appreciated your presentation. I'm just a country boy from the north, but I've always thought the whole principle of the septic system should be one of the wonders of the world. I've actually grown quite attached to mine, and I've always worried about inspections of them and so forth, because they're never inspected.

Mr Birnbaum: That's right.

Mr Laughren: I mean never, and I do worry about that. If I could engage in some mea culpa, I had problems with mine that I didn't know about until it was too late, and then I had to tear the whole thing up and so forth.

I'm not saying this will happen, but with the shift of many responsibilities from the province down to the municipalities, with the tradeoff from education taxes, I'm worried about municipalities being able to do this. I don't worry about them doing it, them having that responsibility; that doesn't tear me apart. It's whether or not, given all the extra costs they're going to have -- and we know that's the case, it's not hypothetical or rhetorical; they're going to have extra costs -- they will make this a priority, because there are a lot more septic systems in this province than most people realize; especially if they live in downtown Toronto, they never have to think about septic systems.

So I'm worried, and I wondered if you share any of that concern. Maybe your municipality is different, I don't know, but, boy my municipality is going to be scratching for every penny they find they can save. I'm worried whether they'll have the ability, the incentive or the will to actually go out and do the inspections properly.

Mr Birnbaum: I can speak for cottage country communities. The township I'm in, the township of Georgian Bay, has 88% seasonal population; the township of The Archipelago has 98% seasonal population. Your community, I would guess, has under 50% seasonal, and there's a high farming component. In our areas, there is overwhelming pressure from cottage associations to know the score on their septic systems. I am now being charged, with our member associations, in working with the municipalities to be sure they're in place. Even in October -- this bill talks about transferring authority in October -- I suspect you'd probably be wiser to think about some time in the new year.

Mr Laughren: That has been changed, by the way.

Mr Birnbaum: Oh, has it?

Mr Laughren: Yes.

Mr Birnbaum: To January?

Mr Laughren: The minister announced not earlier than January 1, 1998.

Mr Birnbaum: Thank you. I think that's probably reasonable. I doubt there will be any opportunity for our councils not to have a fully effective program in place, and there will be enough business for them that the system can be cost recovery.

With regard to your community and others where there is probably more distance in between septic systems to be inspected and perhaps not the same momentum to get started, that may be a difficulty, and there may well be a need for the province to continue to be vigilant in this area and to perhaps ask for performance reports from the municipalities on a regular basis so that they can be judged on their performance.

The Chair: Thank you very much. We appreciate your taking the time to come down today and present your perspective to us.



The Chair: We'd now like to welcome Mr Izsak. The 3 o'clock appointment indicated they're running a bit late, so we're moving to the 3:15 presenter. Welcome.

Mr Jozsef Izsak: Thank you. Just to eliminate any suspense, I'm against Bill 107. Notwithstanding what its name is, it really appears to be a bill intended to open the way to privatizing water and sewage services. I don't think it's necessary for me to go over a lot of ground that's been covered before and I suspect will be covered amply with regard to the specific shortcomings of it and the technical things.

I find myself having a great deal of difficulty understanding the motivations of a government in bringing in bills of this nature, because it's well known that when you put the responsibility for this type of service down to the local level, the municipality simply can't pay for it, and so it seems designed to ensure that these things end up being privatized. That suggests that somehow the idea of privatization is a very good thing and it's regarded as a type of progress if more and more public services end up in the hands of individuals or corporations that are going to be able to mark them up.

I've always found it puzzling that people could seriously suggest that when you add corporate profits to the cost of something, it's going to result in a decreased cost. It's perfectly clear that if a municipality simply can't afford to pay for it, if they privatize it then obviously the salaries and the cost of providing the service will no longer fall to the municipality. But a corporation is not going to buy and maintain a utility because they think that's a fun thing to do. It's not like hang-gliding, where you make an investment for your own pleasure. The people who use the water and the sewage system are going to be paying the costs of purchasing the utility irrespective of how expensive it is for the private company to acquire. They're also going to be paying the interest on whatever loans the corporation has to take out to make the purchase, and they're going to be paying for a profit on top of that. So the prices are going to go up here for water just like they've gone up everywhere else this has been tried.

This brings up the idea that clearly water is just like VCRs or expensive cars and people exercise their democratic right to avail themselves of these luxuries. Maybe someone will chose not to drink water or bathe because they'll put their money into a VCR, or if someone chooses not to be able to afford water or a VCR, it's because he has made a choice to withhold his labours because he couldn't get the price for his labour that he wanted. So this is all very democratic. I'm not going to patronize anyone by explaining the shortcomings of this type of reasoning.

I'm pretty concerned about having to share the city or the province with some of those people who had their water cut off, for a number of reasons. If you look back to the Middle Ages, which I'm not really anxious to revisit personally, and it appears to be in the cards, the custom arose of men walking on the outside because people were throwing excrement from their chamber pots out their windows and it tended not to land too close to the buildings, so the men were gallant enough to risk having the stuff fall on them. I'm really not interested in having my gallantry tested in that way. It doesn't seem rational to me to want to put people in the position of not being able to flush their own toilets. This is not a good thing.

Further to the legitimacy of private profits, a lot of people believe that it makes a lot of sense for the rich to be in control of everything because they've demonstrated by virtue of their success that they're just smarter people, they're better people; it's natural selection taking its course. The assumption implicit in that which I think is faulty is that the wisest, most intelligent, capable people will have no other goals but to become as wealthy as possible. This suggests that Van Gogh is a worthless idiot. This suggests that there aren't any Christians in the government, because Christ was obviously an idiot because he was poor and thought this was a perfectly reasonable thing.

On my way here about an hour ago I bumped into Professor Ants Elken, who was one of my professors at the University of Toronto School of Architecture. He's in every sense a great architect and, to me, in every way a great man. He has a little house; he's not wealthy. He lives on his pension; I guess he's about 82. Presumably someone with few assets, like Professor Elken, is obvious someone who should pay increased taxes and user fees for everything, because the really important people are the ones who are going to be able to afford to buy the utilities. They're already billionaires, they're going to become multibillionaires some day, and the rest of us are the rabble who really deserve to die out.

The interesting thing about this is that it appears that by adopting the notion that the biggest and the strongest are inherently the best, we seem to be adopting the social structure of the gorillas, because gorillas are ruled by the biggest and strongest gorilla, not the oldest and wisest gorilla. I don't think this is progress, really. I think we had it right 100 years ago when we started having public resources in the area of water.

I'm also reminded of a lot of concerns that people have had over the years. A lot of fiction writers have written about worlds wherein people created artificial entities to make their lives easier and better, and then they were taken over by these creations and they had to serve them. They only survived at the pleasure of these artificial beings.

It seems that we've brought that about, but they're not robots, they're corporations. We've created these artificial entities, these legal constructions that are corporations. They are now the richest things in the world. The biggest corporations are richer and more powerful and bigger than a great many nations are, and a corporation's only priority is to increase its profit, to maximize its profit.

So human beings, who are inherently decent people and care about their friends and their families, have to serve these mindless, soulless things, and the only way to please the corporation is to improve its bottom line and so they end up doing things that people like me fear in this particular instance that are going to increase the incidence of diseases, that are going to drive people over the brink and cause them to become violent. All these things are going to happen because we're being ruled by creatures that aren't human, that don't have any feelings, that don't have any morals. I don't think this is a direction we should continue to move in.

The final thing I want to attack is -- I shouldn't have said "attack," that's such a hostile expression; let's say "examine" -- the justification for everything that we do is to conserve money, because money's always in short supply. Money is a rare, precious, non-renewable resource. Somehow, because of our own personal relationship with money, which for most of us is always one of an insufficiency, we've come to believe that money, even though it appears to be made of paper and ink, is actually a non-renewable resource. We don't seem to concern ourselves with where money comes from, because we assume that someone, somewhere, is taking care of creating money and all we can do is just struggle to conserve what little we have.

We have the idiotic situation that we've abandoned using gold as money, because it was perpetually in short supply; people couldn't do all the work that they were capable of to serve markets that existed for their goods and services, because there wasn't enough money for everyone to buy everything that could be produced. Now we have an artificial scarcity of paper money so that Canadians can't work, even though they have skills and training and tools and modern factories and a market for the goods and services, because of a shortage of money. Here we are, intelligent, educated people and we're discussing whether we should downsize this and privatize that and cause all sorts of misery in order to supposedly save Canadian dollars? This is just so crazy.

Imagine if the post office had people lining up to send mail, and half of them had to be turned away because there was a shortage of stamps. People would say: "What is this nonsense? You've got letter carriers. You've got post offices. Just take the bloody mail. Sell me a stamp." The response would be: "There really aren't enough stamps for everybody. If we print any more, they'll lose their value. We'll have inflation. What we have to do is make better use of the stamps we have, and we've already borrowed so many stamps, we're terribly in debt."

This is so idiotic. We've got the same situation with paper money. We've got a finance minister who pretends he doesn't know where paper money comes from. We've privatized money creation, so governments can't get money; all they can do is borrow it and pay interest on it to private banks who create it out of thin air. It's so crazy.

And if I can remember the last thing I wanted to say I'll be really delighted, because it has slipped my mind now. No, I think it's gone. Does anybody have any questions? I have no idea how much time I have.


The Chair: We have just two minutes remaining for questions.

Mr Hoy: Thank you very much for your presentation. In your opening remarks, you were concerned about the privatization of water and perhaps the sewage aspect of this bill as well, and how it could be made cheaper by privatizing when you have shareholder interests and maybe salaries of CEOs etc, maybe three or four vice-presidents -- who knows? Those concerns I think you've heard here as well today, and I appreciate your comments. Shareholder demands can be strenuous. They can be onerous on those heads of companies. Layoffs can occur even in their sector. I appreciate your comments as to whether privatization will actually make this system under Bill 107 any better than it is now. Thank you.

Mr Izsak: How can it possibly make it better? When you look into economics, as I have for five years, it just gets crazier and crazier and there are more and more layers to the onion, and with the kind of rampant greed that we've now legitimized throughout our society, what you get is a situation where CEOs are no longer working for the benefit of the company, because if they can hurt the company by improving its immediate bottom line, and therefore putting up the share value, they get an enormous bonus. So they get millions of dollars in a single year's salary, the company is going to be weakened in the long run, and of course more and more people get laid off. It's a lose-lose situation for everybody except the CEO certainly, and the shareholders supposedly, because they reap a paper profit but stocks are one of these things that generally -- we've been seeing increasing share values, but if anybody actually wanted to realize those profits, the value would suddenly plummet. We've created an enormous, very unstable house of cards here in the financial sector.

Mr Laughren: I won't get into the money supply debate with you. Maybe some other time, over many beers or something.

You started out by questioning the motivation of privatization, or as a young gentleman referred to it at noon, piratization of our water supply, and I want to give him credit for that. It's not my line. If I could help you on that motivation, and you're not supposed to attribute motives to honourable members, but if I were allowed to --

The Chair: But you're not.

Mr Laughren: I'm not allowed to -- you might want to consider whether it's because of all the downloading that's going on to the municipalities -- that's very serious and it's substantiated all across the province -- if that's occurring, the government is doing the municipalities a favour by allowing them to privatize their water supply to ease the pain a little bit at the local level. That's really what's behind it all; it's to allow the municipalities to privatize because of the downloading that's going on. The minister is saying publicly that he's not really for privatization, but at the same time he and his colleagues are making it happen. I don't think you need to go much further than that to look for motivation.

Mr Izsak: It appears that this government believes in privatization.

Mr Laughren: Yes, they do.

Mr Izsak: I think it's a mistake. We elect people to be representatives, not to be dictators. I don't know who tossed off the comment some time ago that anybody elected here can be a dictator for four years, but in the past that wasn't a danger simply because no one would risk demonstrating that kind of disregard and contempt for the electorate because they knew they'd be tossed out of office. Certainly some unpleasant speculation arises when you see a government that seems to be completely unconcerned about the prospect of being re-elected, and you find yourself wondering, just why are they so confident, why are they so indifferent about offending the electorate?

I think one possible reason is that we have a one-party system masquerading as a multiparty system -- with apologies to the NDP. They seem to be opposed to much of this. But certainly we've seen in Ottawa that no change took place.

The Chair: I'm sorry to interrupt, but our time has expired.

Mr Izsak: That's okay. I'm finished.

The Chair: We thank you for taking the time to come this afternoon though.


The Chair: Our next presenter is Mr Sam Morra, representing the Ontario Sewer and Watermain Construction Association. Welcome.

Mr Sam Morra: Good afternoon, everybody, and thank you for the opportunity to present today. My name is Sam Morra. I am a civil engineer and the executive director of the Ontario Sewer and Watermain Construction Association. I am here to talk to you about amendments to the legislation to include transitional measures needed to ensure municipalities can afford and maintain the systems they are about to inherit.

Our proposed transition assistance program is founded on five key principles. They are: (1) mandatory reserve accounts for water and sewage infrastructure, (2) a move towards actual cost accounting, (3) mandatory five-year capital plans, (4) regionalized infrastructure systems, and (5) a province-wide infrastructure review.

The Ontario Sewer and Watermain Construction Association has represented the sewer and watermain industry for over 25 years, and draws its support from over 700 member companies engaged in the industry. Our industry supplies, builds and rehabilitates the infrastructure which delivers clean water to people's homes and to industrial users, as well as taking away dirty water for treatment.

We applaud this government's efforts to achieve efficiencies and to create a climate in Ontario that promotes environmental and economical development. Let me say that the Ontario Sewer and Watermain Construction Association supports any attempt to clarify municipal and provincial roles in the delivery of water and sewage services.

The difficulty we see, however, is that although the direction is right, the legislation is silent on giving municipalities the right tools in order to ensure that the substantial taxpayers' investment in our water and service infrastructure will be protected.

Quite frankly, we see a need for a transition assistance program to complement the transfer of assets to municipalities so municipalities can actually support the systems they are inheriting. It makes little sense to get keys to the car, for example, if you don't have enough money to pay for gas, insurance and, more importantly, the maintenance and upkeep.

I'd like to take the remaining time to outline briefly the features and benefits of our proposed transition assistance program. We strongly urge you to consider what we have to say and respectfully request that you include these measures as part of the Water and Sewage Services Improvement Act.

Firstly, mandatory reserve accounts for water and sewer infrastructure: Historically, municipalities have financed the construction and rehabilitation of water and sewage infrastructure through a combination of property taxes, loans and provincial subsidies. Provincial subsidies have accounted for up to 85% of the capital costs in smaller communities. As a result, municipalities in these smaller communities have become addicted to the provincial subsidies.

A first step to breaking the addiction is to establish reserve accounts. Reserve accounts are accounts established by the municipality whereby money is set aside to pay for future capital projects necessary to keep the water and sewer systems healthy and efficient.

Reserve accounts act like RSPs to foster the concept of saving money now to be able to cope with the unfunded infrastructure capital liability that is steadily accruing. In the absence of a reserve account, there is no means for the system to become financially self-sufficient. When a major upgrade or replacement is required, and it will be required sometime in the future, an enormous and unnecessary burden will be placed on taxpayers.

Our experience indicates that some municipalities may have a reserve account, but these reserve accounts are used more like a chequing account to pay for a range of services. The result is that in tougher economic times, as we have experienced in the last five years, reserve accounts are depleted. This is like cashing in your RSP 20 years before your retirement and defeats the purpose of the reserve accounts. It is not enough to simply have a reserve account; it must also be solely dedicated for its intended purpose. Our solution is to require that municipalities set up dedicated reserve accounts for their water and sewage systems. It's simple and it works.

Our second key principle is actual cost accounting. As I mentioned previously, the municipal reliance on subsidies has created a disincentive for municipalities to establish an accounting system that ensures that the costs charged to users actually bear a direct relationship to the costs of providing the service and eventually replacing the system. The result is that municipalities will not be positioned to address their future sewer and watermain infrastructure capital liability. This also translates into a perception that water and sewage services are cheap, which in turn translates into wasting these resources.


In order to address the future infrastructure liability and encourage wise use of water, consumers need to become aware of the actual costs of delivering the service. The first step towards this end is to have municipalities separate the water and sewer bill from the property tax bill and use actual cost accounting to set appropriate rates. This will provide the necessary revenue stream to offset the infrastructure liability, and can also alter consumer attitudes in the same way that the blue box program helped to instill a sense of responsibility for waste. The result will be a move towards achieving greater efficiencies.

Key principle 3 is mandatory five-year capital plans. In addition to the dedicated reserve accounts and a movement towards actual cost accounting is the need for municipalities to establish and follow a five-year rolling capital plan.

Unfortunately, the three-year municipal election cycle has a dramatic influence on capital infrastructure programs, because elected officials consistently have demonstrated a propensity to defer longer-term capital rehabilitation programs during their relatively short terms, and especially in an election year.

A case in point is the city of Niagara Falls, which has in place a five-year capital plan. Unfortunately, the city council has decided to reduce its sewer capital infrastructure program from $2 million annually to $500,000, a 75% cutback, in order to maintain a zero tax increase budget for 1997. With deferral of the program, there is little hope of meeting the five-year capital program which the city of Niagara Falls adopted as part of its efforts to clean up a historic basement flooding and direct sewage discharge problem due to combined sewer overflows. No one needs to be reminded that Niagara Falls is one of the largest tourist attractions in the province and is home to one of the great natural features of the world. The sad part of council's decision is that the city is forgoing a much-needed infrastructure program at the expense of future users.

Another case in point is the regional municipality of Ottawa-Carleton, where the chairman has said that he will propose a decrease in the water rate of two cents per cubic metre to offset a projected 1997 tax increase of $14 for Ottawa residents. He had promised not to increase Ottawa taxes during the life of the current council. The water rate cut would save the average residence about $12 per year. The chairman overruled a staff proposal to put an estimated $3.6 million from water-sewer revenues into reserves.

These are the types of shortsighted measures currently being adopted. By developing and sticking to a five-year plan, municipalities and their taxpayers know which direction they are headed in and how to get there.

Our fourth key principle is regionalized infrastructure systems. OSWCA supports the government's determination to achieve efficiencies at all levels of government. We applaud the introduction of legislation to allow municipalities to share infrastructure.

One of the ways to build on the initiatives already started and achieve greater efficiencies in the delivery of water and sewage services is to, where possible, regionalize infrastructure systems. This means combining what have been traditionally standalone plants and distribution-collection systems under a broader jurisdiction to take advantage of economies of scale.

Decisions about the need for capital works should be based on 20- to 30-year health and environmental considerations and on geographic watershed areas, as opposed to three-year municipal election cycles and strict municipal boundaries. This could be accomplished through joint service boards established to manage water and sewer infrastructure programs and ensure financial self-sufficiency of the systems.

Our last key principle is a province-wide infrastructure review. Part of the difficulty of deciding where money should be spent is the lack of a comprehensive set of data describing the state of infrastructure in Ontario. OSWCA supports a review of the state of water and sewage infrastructure on a province-wide basis to ensure that public money is spent where it is needed most. Information obtained from the review could be used to direct the money to where there is a defined need and would avoid frivolous applications for funds by municipalities that are in a position to finance infrastructure improvements themselves. Combined with the other measures described previously, conducting a provincial-wide review would be another step in getting Ontario's valuable water and sewage infrastructure in order.

OSWCA is prepared to work with the provincial government to develop an infrastructure review concurrent with the transition assistance program. OSWCA has concrete ideas that would ensure the review does not merely turn into a paper exercise.

In closing, these five elements describe what should be done and why. The beauty of this approach is that once it's in place, clean water is assured perpetually.

Clean water is a precious resource, and does not begin or end at the tap. It happens because of the substantial investment in the out-of-sight supply, distribution and treatment systems this province has made over the last 50 years.

OSWCA believes that by providing a transition program geared to sustaining Ontario's $50-billion investment in water and sewer infrastructure, the provincial government will ensure the economic vitality and health of Ontario into the next century.

For those of you interested, there are additional copies I'll leave behind, including a two-page clean water infrastructure backgrounder.

I would be pleased to answer any questions at this time.

Mr Laughren: Thank you for your presentation. You speak well on behalf of the people you represent. I really had to pinch myself, though, when I saw your comment that the first step to breaking the addiction is to establish reserve accounts and to make it mandatory, that presumably you could build it into the legislation. In my own municipality where I live, the regional municipality of Sudbury, the downloading that's going on -- they've documented it -- is going to double property taxes in the region unless something's changed. If you were to say to Sudbury, "Not only have you got this struggle with keeping property taxes from doubling, you're now going to have to set up a reserve account," I know what they'd tell you, and it wouldn't take many words to do it.

Mr Morra: The reality of the situation is that sooner or later the regional municipality of Sudbury is going to be facing an infrastructure crisis. Whether they own up to it today or 25 years down the road is up to them.

Mr Laughren: I know when they'll own up to it. It won't be the day the downloading occurs. They won't be able to, or other municipalities either.

Mr Morra: That's why we're suggesting a transition program. If you look at the two-pager that's attached, it's a six-year transition program that doesn't cut out the MAP funding right away. It gradually weans them off.

Mr Laughren: That's gone already.

Mr Morra: That's not our understanding. Our understanding is that there is the possibility of a sort of "son of MAP" program that may come to pass. That's what we're recommending, and we're recommending that it should be over a five-year period to allow municipalities who are feeling the effects of the other downloading to develop their water rates and reserve accounts to offset these particular offloads.

Mr Laughren: Well, good luck.

Mr Maves: Thank you very much, Sam, for your presentation. Most of the figures that many of the municipalities are saying they're going to be short by don't include the extra billion dollars we kick in on an annual basis. For instance, we're giving them $6.4 billion worth of new costs to take over and $5.4 billion of revenues from education taxes. To make that up, we also have an annual fund of $1 billion. We also have, as you've alluded to, an $800-million program over four years for transition for the very thing you're talking about, so when people take over things like the sewer systems and water systems, they have access to $800 million worth of capital. You are accurate on that. There's also $750 million-plus that will go into an account in case welfare rates rise to an uncontrollable level.


Mr Morra: That is the key, to provide some transitional assistance, because you've got municipalities that have been used to 85% funding that all of a sudden may be faced with zero. Unfortunately, because of the process in the past, they perhaps haven't been astute enough to develop their own dedicated reserve accounts and the proper levels of water rates to be charged to their users, so in fairness to them, this jolt needs to be buffered over at least a few years.

Mr Maves: It's over four years.

Mr Hoy: Thank you very much for your presentation. Your plan sounds very good indeed. However, it actually fuels the debate that the municipalities, rather than try to find these funds, raise taxes, have dedicated amounts of money put away in reserves -- their possible inability to do that with the other downloading occurring is precisely the argument for why they would sell it and privatize it. They may not have the ability to accumulate funds for transitional purposes or dedicate funds specifically to water and sewage management.

This morning a group said that water rates may increase in some municipalities in order to pay for services other than the delivery of and maintaining the quality of water. If a municipal politician had a choice between putting in a toll road -- which they're talking about next door to my riding -- and raising the water rates, they may choose to raise the water rates rather than have this toll set up at the end of the road. It's just a possibility.

Your plan is very wise and thoughtful for the future. As you say, the infrastructure, if it isn't crumbling already in some areas, will some day. But it's the ability of the municipalities to do this, and I think that's what's fuelling some of the debate here from many presenters that they will simply sell this off.

Mr Morra: You've got to remember that the municipalities we're talking about are smaller rural municipalities. The private sector is not particularly attracted to these types of scenarios where you've got a low customer base and very little way to recoup your investment. From the private sector's point of view, they would like to see the most concentration of people in the smallest area so they can derive revenues. They are not going to be attracted to these areas. That's my belief.

Mr Hoy: What if they had them all?

Mr Morra: Perhaps, but smaller areas usually don't attract the privatization people.

Mr Hoy: So the small area really is between a rock and a hard place.

Mr Morra: You're right.

The Chair: Mr Morra, thank you very much for your advice. We appreciate your taking the time to come today.


The Chair: Would Josephine Grey, representing Low Income Families Together, please come forward. Welcome. You have 15 minutes for your presentation time. That includes your presentation and time for questions from caucuses.

Ms Josephine Grey: Thank you. Ladies and gentlemen, I came here today to present the concerns of Low Income Families Together regarding Bill 107. We are an 11-year-old resource and education centre which provides community education and economic development services to low-income families and communities.

Our greatest concern is that Bill 107 will pave the way to the privatization of water and sewage treatment. Water is a fundamental requirement of life and as such is a basic right in every United Nations country. Ever since it became clear that the health of the population is fundamentally dependent on the cleanliness of water, it has been the responsibility of the state to ensure its cleanliness and sustainability. The fulfilment of this responsibility has been the most significant factor in improving human health in the past century. How the concept of selling this right and the foundation of the ecology and the economy to the highest bidder can be justified, I cannot say.

I remember as a child I was swinging in the park with my friend and we laughed at the idea that some day they could make you pay for water or die for lack of it. We had just seen the beginning of bottled water and growing public awareness of the dangers of water pollution, and this sparked some childish extrapolation. At the time, it seemed too dastardly for words and we thought government would never allow it; that's why we laughed. I believed then that at least the fundamentals like sanitation, health and education were eternally protected by government in the interests of all the people. As a mother of four children, I am certainly not laughing now.

I would like to present the following information to add to the possibility your government would choose a more informed and sustainable direction to ensure the health and wellbeing of the water, the people and the environment.

At this point, I have to note that I'm going to select certain sections of my presentation and not read the whole thing for the sake of time.

In other countries where water has been privatized, water prices have increased sharply and water supply has been cut off to thousands of households. Even that well-known radical organization the British Medical Association has called for a ban on water disconnections in England.

In Canada, too many low-income housing units already have very high utilities costs. There's electric heating and hot water, the cheapest to install, but the most expensive in terms of consumption costs.

The burden on low-income families or people facing even temporary displacement from the labour force leads to utilities being disconnected far too often. It may be hard for members of this committee to relate to the crisis which results from the lack of access to water or even an interruption of service can create, the kind of havoc it can create in a family with children -- you'll have to excuse me; this is an upsetting issue for me. They are suddenly unable to wash clothes, food, dishes or maintain basic hygiene. The current situation already poses a threat to public health and must not be exacerbated by higher fees for basic needs.

Bill 107 fails to require full cost accounting analysis of privatization proposals. These are essential to ensure that the full range of short- and long-term consequences of privatization for the community and the environment are quantified and publicly discussed before final decisions are made.

The lack of research into consequences is yet another blow to democracy which requires fully informed representatives and voters. As always, the poor stand to lose the most when democracy fails, and in this case will be in greater danger of losing their very lives.

In other countries where water has been privatized, there have been severe shortages and households unable to pay increased costs have been disconnected. As a direct result of these factors, there have also been dramatic increases in the incidences of dysentery, hepatitis and other gastrointestinal diseases. There have even been outbreaks of disease due to reduced water quality on the United States side of the Great Lakes basin, just in case you think it can't happen here.

In Britain, water had to be trucked in by a massive fleet of trucks in Yorkshire region. Rationing and penalties for misuse had to be introduced and pollution problems further reduced access. It is interesting to note that at the same time as the system was collapsing, the CEOs of the same water utility corporation which caused the problems were reaping salaries at least three times higher than the former public system managers. Poor people in that region had to fill buckets from waste-polluted rivers and sneak jugs of water out of public washrooms. This frightening example of the consequences of privatization is one more reason why access must be a right.

If privatization is not going to be expressly prohibited, Bill 107 must ensure there is an independent regulator of water and sewage services in Ontario. Even Britain tried to retain this responsibility, though it has so far proved toothless as an enforcement mechanism.

In the United States, there has been pressure by the private sector to undermine clean water act standards to expedite higher dividends and less responsibility for industry. We do not even have a Clean Water Act. So the process of degrading water quality would be even easier here.

In countries where campaigns to sacrifice standards for the sake of profit have been successful, people have to rely on bottled water to maintain health. This is not a viable option for poor families.

One argument frequently used for privatization is that municipalities are too poor and inefficient to maintain the systems properly and that the private sector will do a better job. Yet proof is largely to the contrary. In Britain, maintenance has been very poor, resulting in approximately 29% of water supply being lost in leakage. People who live in municipalities which lack the capacity should have the same rights as other Ontario residents. That is why the province used to share responsibility, assist in infrastructure improvement and provide quality control services to ensure quality of access.


Left to sink or swim on their own, poor communities will be unable to pay enough to maintain plants properly as well as covering increased overhead costs. Some 25% of Ontario's water and sewage infrastructure is half a century old or more and will not last much longer. Under Bill 107, any hope that new state-of-the-art plants will be built in poor communities would be a wishful fantasy.

If the province truly could not contribute to the costs of upgrading local systems, municipalities can borrow money from international funds and banks usually at a lower rate of interest than multinational corporations can. Furthermore, they do not have to factor dividends to shareholders and the higher cost of private sector management into the terms of their borrowing.

Once you dump the protection and control of our most precious resource, you cannot change your mind. The North American free trade agreement imposes dire penalties for having second thoughts or trying to correct your course of action if selling public assets to the private sector somehow backfires.

Even if we could surmount obstacles to reclaiming sovereignty over our water, the expertise and infrastructure dismantled by privatization would have to be rebuilt from the ground up, once again punishing the taxpayer. NAFTA also hands the right to access our water over to the United States just as they have hit the wall of shortages due to waste and pollution. They maintain this right whether or not we experience shortages in Canada.

Once our water services and infrastructure are privatized, what's to stop the multinationals from making deals with their subsidiaries and each other? The substantial foreign interests waiting in the wings have no stake in our water quality other than profit. But then again, if one has a choice between no water or bad and costly water, what do you do? You pay.

Why should they invest in quality control if there's no penalty for inadequate or unsafe delivery? Why would they encourage conservation for future generations when reducing use would reduce their profit? Who then protects Ontario residents' basic right to an inherent natural resource? Who will hold the wealthy controllers of the global economy accountable for our local interests? As we increase their profit, our wealth will drain out of our economy and our land along with our water.

Also strange is how the burden of interest payments is crushing our economy in the average household, but somehow companies that purchase the water treatment plants and sewage treatment plants we have paid for will only be asked to pay face value. How can you allow the taxpayers' investment in regulating, treating and conserving our water to be not only betrayed but sold out at a loss? Before Bill 107, any surplus revenues were reinvested in water services, ensuring that taxpayers' money continues to serve the purpose we expect. Now increased surpluses will end up in someone's pocket, while shortage creates thirst and disease for poor people. As it has been elsewhere, so it will be here.

It is clear whose interests are being served here and whose have been swept aside by the forces of greed. It is more than an oversight to put forward a bill so profoundly opposed to the public interest in the name of reducing government. Dismantling government's role of safeguarding life's most fundamental and fragile resource is hardly the average person's idea of better government; neither have I found this item in the common sense agenda. So you can't say we voted for it.

The lack of any public accountability to health or environmental standards and legislation in Bill 107 is an omission which openly threatens the future sustainability of Ontario's population and ecology for the sake of a quick buck.

Any gains to be made by this and virtually all other forms of privatization accrue to the wealthy by sucking the rest of society into ever-increasing hardship. Taxpayers paying higher user fees as consumers end up essentially paying twice for service infrastructure and the province uses the one-shot revenue to help finance tax cuts as corporations make more profits.

It is a pattern too likely to be repeated again and again until our society is completely at the mercy of monopoly control, which is even worse than the random impacts of the free market. The monopolistic forces which are poised to consume privatized utilities, crown corporations and public services are heretical to the principles of traditional capitalism.

In France, three companies control 80% of water business and the French auditor general has expressed concern about lack of competition in the water business. How then does your government rationalize its plans with capitalist rhetoric while further advancing the conditions for global corporate hegemony in which a free market and fair competition are virtually impossible?

The rights to water cannot be sold for a short-term and illusory gain on the deficit tax cut balance sheet. The loss to the public would be immediately unrecoverable. No proof exists that privatizing water improves services or reduces costs, but all evidence suggests it is complete disaster for poor people.

To add insult to injury, the multinational utilities industry has a track record of corruption and incompetence. Almost every jurisdiction which has taken a closer look at full cost accounting and the history of the top-bidding companies has rejected the temptation to give up responsibility for water.

How is it common sense to hand over stewardship of one fifth of the world's fresh water supplies to unscrupulous profiteers who have reduced access and quality of water in other jurisdictions?

I'm a widow with four children. I cannot afford another financial burden, although I work hard for my minimal salary. Many of the people I work for and with could pay more for water. Many have already been pulled under by loss of wages or income. Nobody's children can thrive without secured access to clean water. Most of the population cannot consistently afford bottled drinking water, which may soon be the only way to guarantee the safety of water.

With OCWA in place and infrastructure improvements and upgrades in process, we can continue to sustain an improved water supply for ourselves and future generations. People who are enabled by public education to ensure responsibility for water quality and, if necessary, can be constrained by law from poisoning those who live downstream -- especially the captains of industry -- can be assured that their extra attention and effort will continue to be rewarded by continued access and health.

Municipalities can facilitate and maintain local services, but can rarely afford to retrofit or upgrade water and sewage treatment plants, nor can they be guaranteed to prioritize the interests of those living downstream.

Your government's apparent willingness to deny access to a life-giving resource, thus risking death simply to increase profit, implies a terrifying denial of the basic principles of governance --

The Chair: Excuse me. Are you just wrapping up?

Ms Grey: Yes, I am -- a breach of democratic process and an absence of moral context and the exercise of leadership. Excuse my boldness, but Bill 107 is a direct threat to my family.

Will artificial scarcity of an abundant resource be created by depriving the most vulnerable so the majority will tremble with fear and pay up quietly? The sustainability of clean water is a responsibility that all must share and therefore must be protected by remaining publicly accountable. We must have an enforceable clean water act if we wish to have access to fresh water in the future.

In the interest of all life in Ontario, I pray that your basic duty to all your constituents will compel this committee to insist that accountability for the right of everyone to access clean water now and in the future remain the responsibility of the provincial government and the people of Ontario.

The Chair: Thank you very much for coming today. We appreciate hearing your point of view.

Ms Grey: Why am I surprised you don't have any questions?


The Chair: We'll now ask Paula Vopni to come forward, please. Each presenter has 15 minutes. You may choose to use your time as a complete presentation or with questions from the caucus.

Ms Paula Vopni: I hope that it will only take about 10 minutes and then I would like to ask questions actually, or have questions answered that I'm going to pose.

First of all, I'd like to thank the committee for giving me this opportunity to express my views about Bill 107. I will proceed by explaining my understanding of various aspects of Bill 107 and of other acts and developments that directly relate to Bill 107 and by expressing my reactions, opinions and questions about such acts and developments as I proceed. I've chosen this approach because of the complex nature of the bill and its implications and because information about the bill and related developments, as well as public debate about them, seems to be quite limited.

First, I understand that Bill 107 will transfer ownership of sewage and water works from the Ontario Clean Water Agency to municipalities. As I understand it, OCWA is a crown corporation that operates the Ministry of Environment and Energy's water and sewage facilities and provides financial and technical assistance to municipalities. I further understand that OCWA operates and financially supports these facilities in the interest of human health, to promote water conservation, to ensure public accountability and to support provincial policies regarding land use and development. It is my understanding that OCWA was intended to contribute to economic renewal, to ensure environmental accountability, to promote water conservation, to encourage sustainable development, to create jobs, to improve water service and efficiency, to foster new financing and investing arrangement and to pursue opportunities for more effective partnerships.


Also, I would like to note that the Ontario government's municipal assistance program, which provided capital grants for municipal water and sewage projects, was virtually eliminated from the budget of the Ministry of Environment and Energy in early 1996. Since municipal governments are losing provincial grants and are at the same time undergoing massive restructuring, it seems likely that municipal governments will have trouble financing their water services.

In a related development, following the introduction of Bill 107, a provincial task force identified OCWA as a candidate under review for privatization.

Finally, I would also like to make reference to Bill 26, the Savings and Restructuring Act, enacted in early 1996, which makes it easier for municipalities to dissolve water or public utilities without electoral assent.

In light of these seemingly discrete but related developments, it seems to me that if Bill 107 is enacted, OCWA will become an agency which simply pursues contracts to operate water and sewage facilities owned by municipalities and its public interest role will disappear. In fact, I feel it is possible, even likely, that OCWA will be privatized. Since OCWA owns 25% of the province's 937 water and sewage facilities, this means that these facilities are potentially threatened by privatization under Bill 107.

The stated objectives of Bill 107's OCWA reforms are disentanglement of municipal and provincial roles regarding the delivery of sewer and water services and encouragement of public ownership of water and sewage infrastructure.

This is confusing, because as far as I am aware, water and sewage services are currently publicly owned. Does public ownership in the context of the government's stated objectives mean private ownership? This is a question I would like to put to the committee or the current government. Are we, by debating Bill 107, discussing and considering the sale of our water facilities? I was stunned and appalled when I fully realized the nature of the various bills and developments which have been going on with relation to water services. I've seen very little in the press about this and I am wondering why an issue as vital as water services seems to have escaped the notice of the mainstream press.

In light of these developments and acts and in the absence of public debate and information, I can only conclude that Bill 107 is intended to substantially reduce the province's traditional role with respect to water and sewage services and to promote the privatization of all water and sewage services in Ontario. If the government of Ontario wishes to privatize municipal water service, I believe it should have the courage to do so through an open and transparent process rather than in a surreptitious and arcane manner that will force municipal governments to privatize these services and suffer public outrage. Any attempt to sell off water service facilities should be openly debated and subject to the most rigorous scrutiny and review and, most important, to public assent.

Privatization of water services in other parts of the world has led to rising water rates and deteriorating water infrastructure, because the mandate of private companies is to make profit, not to provide quality water. Private companies have no mandate or interest to conserve water. On the contrary, they would have an interest in using and selling as much water as possible. In addition, private companies would have no mandate to protect health, so they would have little interest in ensuring the quality and safety of water. Thus, privatization of water services is contrary to the public interest in Ontario and to the environmental protection of the Great Lakes.

Furthermore, the stated objectives of Bill 107 do not include any objectives relating to environmental protection, resource conservation or improvement of water quality in terms of ecological criteria. Nor do the stated objectives of the sewage system amendments make any reference to environmental protection, resource conservation, improvement in water quality or water treatment based on an ecological approach. However, the bill is called the Water and Sewage Services Improvement Act. I fail to see how this act will improve water services, and I come before you not only to express my misgivings but to ask for an explanation of how this bill will improve water services for the people of Ontario.

I fear that rather than improving service, rather than ensuring that citizens of Ontario will have access to clean water, rather than ensuring a more ecologically sound system for waste water treatment and for drinking water treatment, this bill is intended to offload responsibility for these services to save money in order to reduce the deficit and thus enable the government to cut taxes.

Privatization opens the door to the wholesale export of water from Lake Ontario to the US under the terms of the North America free trade agreement. Once water is sold in bulk, it will be classified as a commodity and subject to the terms of NAFTA which apply to commodities. I understand that this means we would have to treat US customers on the same terms as we treat domestic customers, that we could not restrict sale of water even in times of national shortages.

Privatization of water services is particularly troubling for the city of Toronto. It seems to me that privatization of water services in Toronto could very well lead to foreign ownership of water facilities which we have paid for out of tax revenues. But beyond this, once a private company owns water facilities in Toronto, it seems to me that they will be able to sell water from Lake Ontario to private buyers, including US interests who would like to purchase water from the Great Lakes for sale to customers in the US Midwest.

I'm familiar with a scheme called the great canal or the grand canal which has been devised to divert water from the Great Lakes to the US Midwest. The private and/or government parties interested in such a scheme would surely welcome the opportunity to purchase access to water from Lake Ontario.

Because of the fundamental human need for clean water, it is independent from market forces. People need clean water in spite of market forces and will be required to pay any amount for water and will need to have clean water at any price or risk becoming ill. These needs are not subject to the market. How will citizens of Ontario pressure private companies to provide clean, safe water? Who will the competition be? How will rates be set? Where will profits go? These questions deserve debate in an open forum.

Privatizing water services is anathema to the public interest and to environmental protection and resource conservation. Privatization of water resources in the name of cost-cutting is not justified. Losing public control of water resources would be the greatest folly any government could consider. Only a free market ideologue would advocate the privatization of water resources. Water resources should not be subject to market forces.

I must diverge here to posit that there is no such thing as a free market or market forces operating in Ontario, because the government continues to subsidize primary resource extraction and processing industries in Ontario and to subsidize roadbuilding. These subsidies at the front end of the economic system distort the market and make any claims about a free market and the operation of market forces absolutely preposterous. How can we as taxpayers be required to subsidize the private sector so heavily and then not subsidize and pay for our own water services?

In conclusion, I assert that water services should remain under public ownership, meaning public administration, government, tax-funded. The government of Ontario must ensure, through law, that transferring ownership to municipalities will not result in their privatization, meaning being sold off to private enterprises. Any such attempts must be open to public review and subject to public assent. We must maintain the public right to clean drinking water, the right to have clear standards restricting contaminant levels in drinking water, and we must protect our technical and financial capacity for testing, monitoring and reporting about the state of our drinking water supplies. We must not lose public control of our water resources.


Before I finish, I want to make it quite clear that I'm not part of any special interest group, unless the entire population of Ontario can be regarded as a special interest group. In fact, I would argue that the people of Ontario do indeed have a special interest in water quality and that the members of this committee and their children and the members of the Ontario government and their children also have a special interest in water quality. I argue that we all have a special interest in water quality.

I expect, in good faith, that I will receive answers to the questions I have posed today and that my views will be taken into account by the government when discussion of Bill 107 proceeds in the Legislature.


The Chair: I remind the audience that this is an extension of the Legislature and the gallery must not participate in the proceedings other than by listening.

There is a little less than two minutes remaining. We'll begin with the NDP caucus for brief questions and replies.

Ms Churley: We're willing to give up our time for the government to answer a question.

The Chair: Agreed? Okay. You can direct questions to the parliamentary assistant, Dr Galt.

Ms Vopni: First of all, I want to know, are the things I mentioned at the beginning, all these related or unrelated acts and developments by government, intended to privatize water services and facilities in Ontario?

Mr Galt: You're referring to other bills or you want to discuss this bill?

Ms Vopni: This bill, but I believe there are other bills and developments which directly relate to this bill. You can't really look at this bill in isolation without looking at those.

Mr Galt: Looking very specifically at this bill, the whole purpose of this bill is to clarify who should own the plants. Right now, 75% of the waterworks, plants for treatment for both water and waste water, are owned by municipalities and 25% are owned by OCWA. We're proposing in this bill that 100% of the plants should be municipally owned and that's what the transfer is about. From there on, the municipalities will then have the flexibility to look at who operates them, whether it be themselves or OCWA or a private company that would actually do the operations of those plants.

But it's our intent that the ownership stay in the municipality; in other words, publicly owned. Municipally, it's closer to the public, closer to the people who are using it. We believe the local municipal councils are the ones that are closer to you and in more of a democratic process, that's the place for the ownership.

Ms Vopni: That being the case, then, since municipalities are undergoing a lot of cutbacks in grants and restructuring, what is to prevent them from selling off those utilities if they can't afford to maintain them?

Mr Galt: They'll have to return the grants or subsidies that the provincial government has given to them. In some cases, up to 85% of the building of the plants has been paid for by the provincial government. That's quite a disincentive for them to be selling them off to private interests. Also, there's $5.4 billion annually that they can now collect from residential property which was previously going into education, which the province will now be taking over.

Ms Vopni: So there's nothing in law to prevent them from selling them?

Mr Galt: There never has been in the past.

The Chair: I have to interrupt at this point. I'm sorry, but that is all the time we have for questions. Thank you very much for coming today to make a presentation.


The Vice-Chair (Mrs Barbara Fisher): I call Fiona Nelson, representing the National Survival Institute. Good afternoon.

Mrs Fiona Nelson: Thank you very much, Madam Chair, ladies and gentlemen. I've put myself down to speak as the president of the National Survival Institute, which is a national NGO particularly interested in the environment. I have been president of that for several years. In addition to that, I'm also a member of the Toronto Board of Education and the Toronto board of health. I mention that simply because of the obvious connections between water and sewage treatment and the general health and wellbeing of the population. In a sense, I suppose I would be particularly speaking to Dr Galt, as a former veterinarian and therefore a person concerned about public health. My son is a farmer in his constituency and so I'm particularly anxious for him to hear this message.

I think it's useful to keep in mind not only this particular bill but the context in which it's being presented, which is an amazingly tumultuous time of a great flurry of bills in all directions, especially radically changing the role of municipalities and the things that they're going to administer and the things they're going to pay for. It concerns me that this particular bill probably addresses itself mostly to the municipalities with the poorest revenue bases, which is of particular worry to me because, as you've heard from several other deputants, of the potential that arises for the privatization of the water and sewage treatment in those municipalities and the rather extraordinarily bad history that private water and sewage has had in other parts of the world.

I think it's important to keep in mind a quotation from Mahatma Gandhi who said, "Think of the poorest, weakest man you have ever seen and ask yourself if what you are about to do is going to be of any use to him." Inasmuch as we're probably talking about the poorest municipalities in this province, perhaps the ones with the fewest financial resources, but maybe they're sitting on most of the water resources, I think it's a particularly important thing to consider exactly who it is we're talking about. I also think it's important to remember that in the omnibus bill the need to have a referendum around the privatization of these resources, as I understand, was removed and therefore it could be done very quickly and arbitrarily by a particular council which found itself in difficulty.

I'd like for a moment to direct you to the matter of health, which is of great concern to me. A few years ago I sat on a panel with the Honourable Jean Charest at the International Joint Commission talking about the health of the Great Lakes. That is of course a matter of great concern to us. It's a huge chunk of the world's fresh water, much of it in not a terribly drinkable state. Ontario contains an enormous fraction of the world's fresh water sprinkled all over the landscape and it's very easy to take it for granted. This worries me because once we've despoiled the fresh water, either the surface water or particularly the aquifers, we're in really serious trouble as far as health is concerned, not only of the people but of the animals and the crops in this province. It seems to me that this can be done so easily. We know that there can be unfortunate and unexpected spills of various awful chemicals from mine sites and the manure vats on a pig farm and various other things that maybe nobody has anticipated and they are simply catastrophes. But to deliberately put ourselves in the way of what could be an environmental catastrophe of great dimensions strikes me as an extremely dangerous and foolhardy thing to do.

Just about the earliest thing that public health authorities did in this province was to look at water and sewage, because they were well aware of the fact that an enormous amount of infectious disease was spread by water that was supposed to be drinkable water but was contaminated by sewage, and we know that the link between the two is pretty inexorable. It strikes me as an extremely backward step to be dismantling a very strong publicly funded and supervised and regulated body and putting into the hands of the municipalities least able to cope with it the responsibility for looking after clean water and the disposal of sewage in an appropriate manner.

It strikes me that water also has to be considered, like air and soil, as a public good and it should not ever become a private good. There is just too much connected to it that has to do with the welfare of the entire population that makes it an extremely dangerous move. It would seem to me that we must think of it always as something that should stay in the public hands, be controlled publicly, be regulated very strictly publicly and be available with no profit motive in mind. It is unfortunate that profit often causes real distortions of people's sense of duty and responsibility.


As a sidebar to this, the current dispute over the bovine somatotropin, the hormone to produce more milk in cows, is producing a tremendous furore simply because people have an innate and almost instinctive need to feel that the milk that is available to them must be clean, must be uncontaminated and must be free of any kind of foreign substances. Water I think is held in the same regard as milk by most people. It is something that people have to depend upon as clean and healthy and available and not something that they cannot afford.

The Toronto board of health a few years ago did a very interesting study on the water produced by the city in its water treatment plant as opposed to the bottled waters that were available. It was a very comprehensive study and it showed that the publicly produced water from the Toronto waterworks was as good or better than most of the bottled waters, some of which were bacterially contaminated. I think that's a useful thing to keep in mind, that the people of Toronto were able to depend on the publicly produced water as a safe way to get their drinking water and water for other purposes.

I don't think you can dismiss people's innate concern about this. It is a good that people have to be able to depend upon and that they should not have to be held up to ransom for. For that reason, I would really like to remind you that not only should we think about what we're doing on a rational basis, but we should worry about the rational people who by their intellect put the tools of destruction into the hands of the irrational. I'm inclined to think that people who are motivated primarily by profit are going to have what would amount to an irrational sense of their responsibility when it comes to something like water.

Finally, I'd like to plead with you to reconsider what is happening here and its potentially catastrophic impact and withdraw this bill. If you wish to reintroduce it, reintroduce it at a time when the public at large has the energy and the ability to pay attention to it. At the moment, with the enormous number of tremendously comprehensive bills that are being put through the House, I think that there are far too few people aware of what the potential of this bill is. Even if the new city of Toronto that you're creating hangs on to its public waterworks and continues to produce clean, safe water for the people of Toronto, the water in the rest of the province could -- in the little municipalities that are going to be in financial straits because of the various downloads that are occurring could manage by giving over this extremely important public good to the private sector -- imperil very large numbers of people in this province, not just for a short period of time but maybe in perpetuity. We all know that once you contaminate a major aquifer, it takes hundreds, even longer numbers of years for it to clean itself again. I hope that you will keep in mind the particular health interests we have to consider in this bill, the people to whom you are going to be giving this responsibility and their ability to cope with it and the welfare of the entire province.

I'm speaking to you certainly as an environmentalist, certainly as a teacher, certainly as someone concerned about public health but most particularly I'm appealing to you as a grandmother. This is the sort of thing that is going to have very long fingers and I do not wish to hand over to my grandchildren a province that is so badly contaminated that their health is going to be at risk. I plead with you to reconsider this matter and to withdraw this bill to a time when the people of this province can give it due consideration.

I've left about five minutes. I hope there's time for some questions.

The Vice-Chair: You've actually left about three minutes. Having said that, our questions start this time with Ms Churley from the third party. That's the way it was indicated to me.

Ms Churley: I'll be quick. Earlier today, Mr Galt, the parliamentary assistant, quite rightly in fact pointed out to a deputant that the previous NDP government had not brought in any new clean water regulations. I wish we had. Of course, we're now trying to convince this government to do so. But for the record I've been reminding people of all of the things that this government has done to harm water quality: repealing laws, deregulating.

There's one I forgot to mention earlier, Madam Chair, and you might be interested in this, and that is the proposal for the expansion of protection for agricultural activities from the requirements under the EPA, the OWRA, the Planning Act, the public health act, and this is all through the Farm Practices Protection Act. So talk about runoff and problems there. The MOEE groundwater and hydrology staff have been cut by 53%. I forgot to mention those earlier, so I just wanted it on the record that those are other areas yet again. I shall be mentioning more as we go along about the deregulation and cuts that are actually hurting our water quality as we speak.

Mrs Nelson: I was aware of those, partly as an environmentalist, and as I say, partly as the mother of a farmer. I am extremely concerned about all those things, which was why I was aiming my shots partly at Dr Galt.

Mr Galt: Thank you for your presentation and making reference to my riding. I did want to bring to your attention, as you made reference to a referendum as it relates to PUCs, that's right, that was in Bill 26. But PUCs actually operate very few waterworks in the province; some water treatment plants, but very few waste water treatment plants, so that the opportunity for municipalities -- it's 75% that presently own them -- to privatize has been there I suppose almost since the beginning of time. With this bill, we are putting in there the disincentive for privatization by requiring that the grants or subsidies would have to be returned to the province. It's certainly our wish, our desire, that the municipalities, the level of government closest to the people, will maintain and operate the plants. It's good for that community and they know what's best for them. What this bill is about is moving the 25%, or 230, of those plants to the respective municipalities that they operate in, the municipalities that are presently paying for them anyway. We believe that they should have the ownership, the same as the other 75%.

Mrs Nelson: I think it's the fable about the camel's nose that comes to mind. You may remember the Arab who on a cold night put up his tent and the camel was outside and begged to just put his nose inside and a little later, could he put his head inside and then his neck --

Mr Galt: I thought that was an elephant.

Mrs Nelson: The story I heard was a camel. But eventually the whole camel got into the tent and the Arab was pushed out. You're quite right, it's just the PUCs. That to me is the camel's nose. I would be a lot easier about this if there was an express forbidding of this particular aspect of our environment being privatized in that bill, but I may be pushing my luck with that one, I don't know.

Mr Hoy: Thank you very much for being here. I knew of your concern for the environment from sitting in an audience many years ago in Chatham where you were speaking on environmental concerns, and your concern is no less so for water and water quality.

We don't have much time. Actually, I did want to read this to another presenter two or three persons ago, the Low Income Families Together. I carry this in my wallet. You gave a quote --

Mrs Nelson: From Gandhi.

Mr Hoy: -- in midstream of your presentation, so I'll give you one which is not dissimilar but by someone else: "The test of our progress is not whether we add more to the abundance of those who have much. It is whether we provide enough for those who have too little." I wish I could say it was a Canadian who coined the phrase but it was Franklin Roosevelt in 1937.

Mrs Nelson: Let's hope that we can meet that objective, which is what I think we all would benefit from.

The Vice-Chair: Thank you very much, Mrs Nelson, for attending. We've appreciated your comments this afternoon.


The Vice-Chair: I wonder if Ms Casselman is here.


The Vice-Chair: I would ask then if Nyle McIlveen is here. Good afternoon.

Mr Nyle McIlveen: Good afternoon. Thank you very much for the opportunity to address the committee. I apologize off the bat for any lack of preparation. I found out about this on Friday, by mistake or whatever, and I didn't have a lot of time to get stuff together. But I have a few major concerns.

I'm a professional engineer. I represent a small consulting firm, Geo-Logic Inc. We carry out the part VIII program in North Bay, Parry Sound and Gravenhurst. We actually run the nuts and bolts of this program, so this presentation is more, I would hope, from a nuts-and-bolts perspective.

Basically, we handle the day-to-day operations of installing tile beds. My own doing of this is, I handle most of the large tile bed design approvals, I deal with complaints and complaint investigations and tile bed failures. I feel I've got a pretty good understanding of how it works and I'd like to bring some of that to this committee.

I feel the program has been stagnant for 25 years. I don't think anything has been done to it, so when people are talking about presenting and improving the program, I honestly don't feel there's a possibility to fix it from within. I may not be popular with some of the presenters, but I think at this stage this may be the best option. However, I have some concerns with the way Bill 107 was generated.

Number one, the date, October 1, has already been dealt with. That was quite a grave concern from our point of view. I'd like to just indicate the reasons I think it is a really poor date. I would stress that I think it should be January 1, and I think you should stick to that date and not deviate from it, because at the stage in October the inspectors, installers, everyone who is in the business is going great guns. They are trying to get their job done. They don't have time to start up a program. This is not going to be an easy task, what you're asking. However, if they have time to do it in January, February, March, when the snow is on the ground and there are not complaints coming in, there is a possibility that this can be done. So I would suggest that you don't let it go any further than January 1. October 1 was a poor date. That was my first.

The second point I have is that the program appears to have been divided up into a two-tier system, county and municipality, and then there's a third tier put in there with the government. I really, truly believe it should be a one-tier system. I was asked how this could be done. I'm not quite sure at this stage. However, one group should be responsible for it: large tile beds, small tile beds, complaint investigation. It's the only way you can efficiently run the program. If you've got two or three people involved, there's always someone else who can do something. You can go to someone else and say, "This is a problem." You should keep it at one tier. Whether it's county government, district government, that should be selected, but I think if you get it out and it's two tiers or three tiers, you're going to have problems.

The approach that's been taken by a lot of engineers and the level of knowledge in this province with regard to septic systems is often embarrassing, and a lot of this has come about, in my opinion, because the government has taken control and allowed engineers off the hook. I'm a professional engineer and I review professional engineers' work now, and a lot of it is disgraceful. What we have to do is put it back into their hands, but make them responsible. When they have something that isn't a proper submission, we send it back. I don't even look at it. I think that's one thing, that somehow the government is going to have to increase the level of experience of installers, engineers, anyone involved in the program.

My third point is a small one. I didn't understand why a large tile bed was selected at 4,500 litres. I think I have the answer: I think it was selected as 4,500 litres because it has always been 4,500 litres. I think that kind of attitude of just saying, "Well, that's the way it was," is wrong. I can't give you a number right now. My incentive would be somewhere around 10,000. I think it should be upped, because when you're dealing with a system between 4,500 and 10,000, it's a small corner store. It's someone who doesn't have the money to put in a huge system; however, they need a system. So I think some care should go into selecting that number. I don't think we should just accept 4,500 and say, "Okay, that's the way it was before."

Another point was that the ministry was going to set tough rules for installation and inspection and expect the municipality to just go by them. I think there should be a lot more input from the municipality. We've been on the contract for the new manual that's coming out for training and certification. I think the municipality should be made more responsible for that. I think somehow there should be a separate body set out that is responsible for all this work. It's not the government. The government has the experience and the expertise, which they've always had, at approvals. That's their role. The role of municipalities is to carry out the function, and then you have a body in between that is responsible for policing and certification of installers. I am frankly sick and tired of installers who get 70 or 80 tickets for doing something wrong and their licence isn't pulled. You've got to put some teeth in the policing of this regulation somehow when it comes down to it. If you have a separate body, someone who's at arm's length from both groups, that's another body where the public can go.

This bill is going to evolve. This is not going to be a one-time thing. This is a big change. I would say this is changing 40 years of the way things have been done, so it's going to evolve. So you have to have that separate body where people can go.

I guess that comes into the last part of it. I think the municipalities should be involved more in the training aspect. If we have this separate body, it can be given a grant or some kind of monetary payment to carry out the training they wish on how to do it. They will be given the guides and the utensils to do it and where to do it, but I think it should be taken out of the government's hands as much as possible.

In closing, I think you made the right choice in the part VIII program, because I don't think it could be fixed, but I think you have to build in a lot of flexibility. The one thing that disturbed me was that all these meetings are in Toronto for part VIII. I'm from Peterborough and I deal in North Bay, and I'm tired of people in Toronto saying how septic systems should be put in and installed, because they don't see them, and they're making the regulations. I think those three or four points should be added to the bill and some consideration should go into it. Are there any questions?

The Vice-Chair: Thank you very much. I would like to welcome the minister to our proceedings today. We did have the occasion to have you at our series yesterday as well, so welcome to our proceedings. As a matter of fact, we start with the government this time.

Hon Norman W. Sterling (Minister of Environment and Energy): I happen to be a civil engineer as well, and a long, long time ago was involved in a number of engineering skills etc. May I say about the installers that the whole purpose of Bill 107 is to introduce a degree of professionalism in terms of the installers and the inspection, to try to get some kind of even keel across the province in terms of inspections and in terms of installers.

I am not unmindful of your suggestion with regard to having some kind of intermediary body taking care of getting rid of the bad installers. The problem is, the installers are not organized at the present time in any kind of association. This is brand-new for them. Therefore, I think your suggestion may have more relevance a year or two down the road. What is going to naturally happen, because they are not licensed at the present time or certified, is they will become more active as a group and therefore will be in a more mature position to perhaps come up with another association spinning out of that, or not an association, but if you want to say an accreditation body involved in the certification and all the rest of it.

Secondly, we have retained an engineering firm to come up with a certification program, both in terms of the inspection and in terms of the installers. Therefore, we are addressing this head-on. I have given personal instructions to my staff to ensure that municipalities, and small municipalities in particular, where these kinds of systems are put in are consulted. We're trying to locate as many of the installers as we can. Unfortunately, because they don't have a central focus, it's difficult to have them give input, because they're not organized in any fashion, but we hope to be able to get as much back as we can during this period of time.

I think it's a tremendous step forward. As you say, this program has really been very disorganized over the last 40 years, and this is the first attempt by a government to put any kind of organization behind it to make it more professional. I think, notwithstanding inspectors, the improvement in the systems will be dramatic because of the training and because of the fact that if you're a bad installer, your right to do those installations will no longer be there.


Mr McIlveen: One thing I would say to that is, don't shortchange the installers. They're a group that's been trying to --

Hon Mr Sterling: Oh, I'm not shortchanging them.

Mr McIlveen: -- get together for quite a while.

Hon Mr Sterling: And I'm giving them the tools to do it.

Mr McIlveen: Yes, and you must do that. As a group, they're more than willing. It's better for them if they're a licensed group. They're licensed now, but the licence carries no weight. That's the major problem. But I wouldn't shortchange them. I think they'll pick up quickly if you give them the tools and if you give them another body where they can go and learn.

I always get the excuse from a lot of people, "Well, some of them can't read and write." That may be one or two people, but we can't change the system for that. If we have to have a way to deal with those one or two people -- they still have to fill out forms, so I wouldn't shortchange them at all.

Hon Mr Sterling: I wasn't shortchanging them at all. I was just saying that I'm giving them an opportunity here which they've heretofore not had.

Ms Churley: I very much appreciate your coming down from Peterborough to give us some of your technical expertise. It was interesting to hear one engineer talk to another about some of those technicalities. I'm interested to hear that the minister is saying that he understands the problem around training. I have to tell you that I am extremely nervous about the municipalities' willingness or ability to accept these responsibilities. Groundwater and surface water contamination by septic systems is well documented, and you would know that as well. In my view, it requires further regulations. It's one of the issues I was concerned about when we were in government, and still am, because I don't think people understand the magnitude of how serious it can be. So I think it's nice that you're here to talk about some of these real nuts-and-bolts issues.

Madam Chair, oh dear, I forgot and I must say again, there are a couple of other areas here where I've discovered that this government and the Ministry of Environment are actually doing things, repealing laws that are actually at this moment hurting the water supply and the environment, and I just want to read them into the record. One of them which I'm very concerned about of course is the restriction of the conservation authority mandates to flood control through Bill 26, and the withdrawal of provincial funding for conservation authorities. That, as we all know, is really going to hurt our water supply.

One that I'm very, very concerned about, and I expect the public will be if they know that this is happening, is that there are plans to repeal the marinas regulation -- that's regulation 351 -- and replace it with a voluntary code of practice. Right now, 351 requires marinas to have pump-out facilities to dispose of the sewage from their pleasure boats. I also remember this being an issue when we were in government, the grey water area issue; really serious problems with contamination on that.

I just wanted to say that it's important, as we discuss all of these issues, that we must look at the full magnitude and fit the context of this bill into all of the deregulation that is happening throughout the entire ministry around environmental protection, including the protection of our vital water supplies.

Mr McIlveen: One thing I'd like to say to try to alleviate some of your concerns in regard to municipalities is, I heartily believe municipalities can do it. I privately do it now, so it's taking business away from me. I don't think it is. I think it will all work out in the wash. However, health units and a lot of these municipalities have done this for years. They do a better job. They're getting better at it all the time. In our area it's going to be a big change. Our area is going to be one of the hardest-hit because these municipalities haven't done it since 1974 or 1975, and those are the areas.

The other area is, I honestly don't believe the system is going to change that much, other than for the better if we can get the certification, and that's crucial to this whole bill. If they can do it, that will improve the system greatly. But I really believe municipalities can handle it from that end. It's not a huge argument. I'm going to try to assist them in our area so there's a nice, smooth transition to the municipalities.

The Chair: Thank you very much for coming today.


The Chair: I do not see Ms Casselman yet, so I would ask if Miriam Hawkins is here. Good afternoon and welcome to our proceedings.

Ms Miriam Hawkins: Thank you very much. I'm here to represent Earth Save, which has a mandate to protect public interest in terms of our agricultural practices and farm lands and so on, but I think the extension to water quality as a whole is a fair one.

One of the biggest concerns I have with this bill is that it does not specifically refer to the transfer of services only. It actually refers to water itself as a finite commodity, and I think that's one of the most glaring problems with the bill. This has been brought up by a previous speaker. Under NAFTA, of course, we lose control of our water as a commodity.

I think the wording of this bill should be looked at because it doesn't talk about the transfer of services; it talks about the transfer of water, which is ownership. If we don't recognize that we have one fifth of the world's fresh water supply and that we will give up ownership of it without public input, without a public referendum -- this is unacceptable. We're losing all control.

I think we would all agree that one of the most fundamental rights we have as citizens is to water, fresh water, and that if we give up ownership of the water, we no longer have anything as citizens. If we don't own the water, what do we own? If we can't get a fresh drink of water, what can we get? If we can't say that this lake belongs to the province and the public, what's the point of being born in the province? Our fresh water is one of our richest resources and we would give up ownership of it completely. This bill does not protect us from this.

Another thing I'd like to mention, and perhaps this is the second most serious concern I have about the process of this bill's introduction and debate, is that this is not a televised hearing. There are no televised hearings. How is the public going to see the other side of the issue? The government has made the bill public, but none of these issues are discussed publicly because there's no television coverage of them.

Certainly this committee is not planning to do a lot of travelling, and the number of hearing dates is so limited that really the opportunity for the public to take part in a discussion or consultation about this is nil. I would say this is not an open process at all. If the government wanted to let people know what these various organizations have to say and what the two sides of the issues are, then this should have been held in another committee room where television would be possible. I question the lack of television coverage.

Certainly the curtailment of public involvement is on various levels. Of course this bill and Bill 26 certainly mitigate against any kind of public involvement, public-initiated referenda. We're basically hamstrung as citizens. I say this is a basic human right, the safety of our drinking water, the availability and ownership of our drinking water. It's one of the only things that we have as citizens where we can say, "Yes, this is ours and will remain ours."

As far as the stated purpose is concerned, it's easy to see we have come across a lot of problems financially in the province, and these stem back to reductions in transfer payments from the federal government and transfer cuts to municipalities for these water and sewage treatments and their services. If ownership is going to go to private sector for profit, why would the province not maintain the ability to take the profit itself? If there's going to be profit made from it and if there's private sector interest, therefore profit interest, why would the government of Ontario not want to maintain the ability to profit from the water and sewage treatment if in fact there's a long-term advantage from a profit standpoint?


If we're having trouble paying the bills, if we're cutting back hundreds of millions of dollars to these services, why don't we maintain the possibility of making a profit as a province so we can pay for them in the long run?

The other thing I might bring up is that the subsidy to these private sector interests would certainly not include, and it certainly doesn't include, the price the public has paid over the years to the federal government in terms of taxes. Money that was paid to the federal government by taxpayers is not being included as a requirement for the payment of any private sector interest.

May I ask why the public should pay for years and years, why ratepayers would pay for years and years to pay back the federal government and to pay for these services, why we would just give all that up to the first private sector bidder that some cash-strapped, desperate municipality is going to bring on as a private sector joint venture or co-ownership or operational management contracts and these kinds of things?

If there's money to be made, let it stay in the public purse. If the public has already paid for it in any regard, whether it's federal or otherwise, this should be repaid if any private sector interest -- and I don't agree that the private sector has an ownership role here at all, because of the NAFTA concern.

I think many people have brought up the question of what incentive there is in the bill for private sector companies to maintain water quality standards. Certainly there's no accountability. The public can at least complain to the government and certainly we can change the government. We can't change a private sector company. We can't vote them out. We're not shareholders. Not everybody can be a shareholder.

Everybody is a shareholder in Ontario, in the government of Ontario. We're all voters, except the children, whom nobody seems to think about in any of this. What kinds of decisions are we making for our children who cannot become shareholders and who don't vote? Are we protecting their interests in the long run or will they be paying higher and higher prices with no regulatory scheme in place and no accountability? I say it's completely irresponsible.

These may be the most important points. So many points have been brought up, and quite frankly I don't see any of the environmental sector's points that I don't agree with. Perhaps I can stop here and have some response to some of these issues I've brought up and we can discuss that.

Ms Churley: Thank you for your presentation. You have stated what many others have today, although there are some different perspectives in certain areas. First of all a very simple question: Is your preference that this bill be withdrawn and that there be more public consultation and discussion before anything is done and changes made here?

Ms Hawkins: Absolutely. I think this is a fundamental human right, the right to our water resources and to clean water. I think the public is very interested in this. I don't think the public has been given any opportunity to take part in the discussion. Two days of hearings in Toronto represent a complete abrogation of the government's responsibility in this issue.

Ms Churley: Right. Okay. It's unlikely -- it's possible, anything's possible, but it's unlikely that the government will withdraw the bill. What do you thing would be the most important amendment to make this bill at all agreeable to you?

Ms Hawkins: I would say the most important amendment would be to make sure that any reference to the transfer of water and sewage services include the word "services" so that we're clear we're not handing over the water. It doesn't say in every instance "services."

Ms Churley: In other words, when Mr Galt and others say, "We want to discourage privatization and we're doing that by saying that -- " well, the discouragement is that they've got to pay back any grants, which of course is just the cost of doing business. It's a ridiculous, bogus argument but they say that. If they really mean what they're saying, then why don't they just write into the bill that municipalities cannot privatize water? That would solve that problem, if they put their money where their mouth is.

Ms Hawkins: It's clear that it's not the intention and I think there's quite a little bit of obfuscation on this issue. I don't think the government's intention is to protect public safety. I don't think the government's intention is to create a regulatory framework or any kind of public involvement. It's very clear that if the government were interested in any of these issues, these would be stated in the bill. I think this facilitates privatization all the way and that's what it's about: the transfer of water, not water treatments and water services. I think that is what it's all about.

Mr Galt: Thank you for the presentation. Just a few comments to try and clarify some of your concerns. The first is you make reference to the transfer, and in section 56.1, section 56.2, under subsections 56.2(2), (3), (4) and (5), all very specifically refer to the transfer of waterworks or sewage works. They do not refer to ownership of water or the transfer of water in any way, shape or form, and that's true throughout the bill.

The concern you expressed about the coverage and the public knowing about this: That was an all-party agreement. We agreed we would go for five days of hearings out of Toronto. It was London, Ottawa and Thunder Bay, and we did not receive enough submissions, concerns from delegations in Ottawa and Thunder Bay to warrant the cost of sending this committee. We've invited them to send their submissions to us in writing, and we look forward to obtaining those. There was all-party agreement. It wasn't just a government decision to do it in that form and in that style.

You referred to the private sector concerns and the direction with that particular area and moving in that direction. I assure you this is about ownership and who should have the ownership, and we believe that the municipalities should have the ownership. To discourage municipalities from privatizing or going in that direction we're asking, not only asking -- it's in the bill -- requiring them to return the grants or any subsidies they've received from the provincial government.

Ms Hawkins: It's a fraction of the cost of these facilities.

Mr Galt: Well, in some cases that fraction is 85% and that's a pretty high fraction, in my estimation.

Ms Hawkins: And with hundreds of millions of dollars in reductions --

Mr Galt: The other area of concern you expressed is about children. Let me assure you this government is very concerned about children, the kind of debt that's been laid on this province over the last decade or so, just really putting our children under an extreme, heavy debt burden in the future. I'd suggest to you this is probably the most compassionate government this province has seen in many, many years.

Ms Hawkins: If I could just respond to your comments about the financing of these facilities: Why wouldn't the province be in a very strong position to create new methods of financing for these facilities? I think municipalities are less able to raise the finances necessary. The provincial government can issue bonds. There are other forms of capital financing that could be explored by the province and certainly none of these -- I mean, we have some problems in terms of our fiscal situation here in Ontario, but we certainly should come up with more creative solutions. To suggest that municipalities are being discouraged from privatization when their transfers are being cut by hundreds of millions of dollars, I don't understand how that can possibly be, and if it's the intention of the government, let it be stated.

The Vice-Chair: I thank you for your presentation this afternoon. That ends our proceedings.

I acknowledge a point of privilege.

Ms Churley: Madam Chair, I request a point of privilege, and it's not entering into debate: I think it's important to clarify how decisions are made around travelling and where and when committees meet. Subcommittees: Each party has a representation and it is true that there is general agreement, although the government has priority.

The Vice-Chair: Excuse me, Ms Churley, I just have to say that you asked for a point of privilege, and it's not a point of privilege that you're raising.

Ms Churley: Okay. My point of privilege is this: Our party wanted to go to other locations, but because of the emphasis on Bill 103 and the lack of publication and public understanding of this bill, there was a lack of response from the public. But it's this government's fault for not letting people know what has been going on with this bill. It is not this party's fault that we've only been in three locations, and I want to make it perfectly clear for the record --

The Vice-Chair: Excuse, Ms Churley, you said that you wanted to make a point of clarification. The clarification has been made.

Ms Churley: -- that I will not take that ridiculous rap from the parliamentary assistant to the Minister of Environment.

Mr John R. Baird (Nepean): On a point of order, Madam Chair: I'd also mention that the government has a minority representation. The opposition outnumbers the government two to one on the subcommittee.

The Vice-Chair: That's not a point of order.

Ms Churley: Are you trying to say our party has tried to limit public hearings on this bill? That is absolutely ridiculous.

The Vice-Chair: Ms Churley, excuse me. You're out of order. Having had our presentations for today, I would like to draw these hearings to a close, to recommence tomorrow morning at 10 o'clock. Thank you very much.

The committee adjourned at 1651.