October 19, 2004
Eastern Ontario Municipal Water Association and Eastern Ontario Waterworks Association Joint Conference
by David Caplan, Minister of Public Infrastructure Renewal
Check Against Delivery
Thank you, Roy, for that kind introduction.
It is a pleasure to be here with you today.
As you’ve probably all noticed, I was to speak on “Opportunities for Water Utilities in the 2004 Budget”.
But, today I want to speak to you about a very important topic that is also very dear to me -- the future of our province, and how you can help us ensure stronger, healthier Ontario communities.
When Premier McGuinty appointed me Minister of Public Infrastructure Renewal, he did me a very great honour. At the same time, he offered me a very great challenge. And, I’m very grateful for both.
Ontario’s infrastructure needs attention ¾ both immediate and long-term.
In recent months, I have outlined our vision for properly managing and upgrading Ontario’s infrastructure, as well as our need to find innovative new ways of looking at finance and procurement.
Today I want to talk, very specifically, about water.
There may be nothing I do in government that is more important than to help lay the groundwork for the proper long-term management and financing of Ontario’s water and wastewater infrastructure.
That’s why associations like yours are so vital to the future health and prosperity of our province. We need your expertise to help us find solutions that will work to ensure a clean, safe, stable and affordable supply of drinking water for generations to come.
To that end, I have also enlisted some other expert help.
Recently, our government established an independent panel of experts to provide us with advice on how to make the investments needed to improve our water and wastewater infrastructure, as well as to provide advice on the best way to deliver water and wastewater services.
The panel’s recommendations will help form the basis of our government’s long-term water and wastewater infrastructure investment and financing strategy. And, the panel is currently seeking the invaluable input of key stakeholders like you.
Now before I continue, I would like to thank Harry Swain, chair of the panel, for joining us here today. I know Harry will be speaking to some of you after lunch.
In a little while, I will have more to say about our distinguished experts who make up this panel, as well as their mandate. But first, I would like to provide a little background — a little context — for the problem, they are being asked to help us solve.
Ontario’s water and wastewater infrastructure is massive.
There are nearly 1200 municipal treatment plants in this province. Add to that, untold kilometres of pipe carrying water to, and wastewater from, Ontario homes and businesses.
And, as massive as this infrastructure is ¾ it is also old…and getting older.
Some of the pipe has been in the ground for more than a century, and much of it is in need of repair or replacement.
That is a very, very long time for a pipe to be delivering something as important as the water we drink ¾ a very long time for us to rely on something that must safely carry away wastewater that could do us harm. All of us want to know that we can turn on the taps anywhere in the province and have a clean, reliable supply of water.
Of course, a big part of the problem is that this pipe is under the ground. It is out of sight. And, as long as nothing goes wrong, it is all too easy to keep it out of mind.
Unfortunately for all of us, that’s exactly what previous governments have done ¾ ignored the enormous scale of the problem. They have failed to provide the necessary leadership on water and wastewater infrastructure needs. They have ignored the problem in hopes that it would stay out of the minds of Ontarians until after the next election.
Ontarians can’t afford that luxury anymore.
The current situation is not sustainable. We need to fix our water and wastewater infrastructure and we need to start laying the foundations for these upgrades now.
The tragic events that unfolded in Walkerton in 2000 reminded us all of our innate dependence on the drinking water piped into our homes each and every day. That horrible tragedy has ensured that we never take clean, safe drinking water for granted again.
Our province hasn’t been the same since…and ladies and gentlemen, I’m here to promise you that this province will never be the same again.
We are absolutely committed to implementing all of the recommendations of the Walkerton inquiry.
And, it is this commitment that has reinforced the need for a long-term water investment and financing strategy that will serve the needs of Ontarians for generations to come.
Never mind this year.
Never mind three years from now.
As Premier McGuinty likes to say, we’re playing the long game ¾ for the good, for the safety, of our children, and of their children.
It’s a long game, and it’s an expensive one.
During the next two decades, Ontario’s population is expected to grow by 40 per cent. These citizens will all need water and sewer services, in addition to schools, hospitals and roads.
Our goal is a strategic and comprehensive approach to planning, managing and financing water and wastewater infrastructure that will ensure clean, safe drinking water for all Ontarians. By creating sustainable systems, we will protect public health and allow communities to grow.
We know that multi-billion dollar capital investments are required for an extended period to bring distribution and treatment systems into a state of good repair and to allow for expansion.
The independent panel of experts we have enlisted has been tasked with the huge job of finding ways to make these investments ¾ of finding ways to make Ontario’s complex, inefficient and often antiquated water and wastewater systems sustainable all the while, making sure they are realistically affordable. And let me assure you, our government is going to make sure public ownership of water and wastewater systems is preserved.
All of which brings me to the members of our panel, whom I am sure most, if not all of you, know or know of by reputation:
Professor Fred Lazar is Associate Professor of Economics at York University and the Schulich School of Business. He has written extensively on a wide variety of economic policy issues, including water industry investment.
Jim Pine is the Chief Administrative Officer of the county of Hastings, and a member of the Implementation Committee of the Expert Source Water Protection Committee. He has over 20 years experience with both water and municipal issues.
The panel is chaired by Harry Swain — a leading Canadian expert on water and wastewater issues. And, as you probably know, he was Chair of the Walkerton Research Advisory Panel.
This expert panel has been holding consultations with stakeholders ranging from municipalities to environmental organizations…from engineering experts to economists…from consumer to business and industry groups. In fact, we are meeting with Rod Holme and other representatives from the Ontario Water Works Association and Ontario Municipal Water Association this Thursday.
The panel is seeking advice from a variety of stakeholders ¾ asking questions and listening to ideas. The members of the panel are particularly interested in learning your thoughts on innovative approaches to running, building, upgrading and financing our water and wastewater infrastructure.
And, the solutions the panel finds must be consistent with other provincial programs, including Watershed-based Source Protection Planning and other initiatives that are soundly linked to the protection of drinking water. Just a few other examples of such programs include: Places to Grow, Greenbelt Protection, Planning Act reform and the Provincial Policy Statement review.
The panel welcomes your input on any issue relating to its mandate. It is committed to a fully open consultation process and will be posting all written submissions on its website at www.waterpanel.ontario.ca. Here, you can also find more information on the panel and its scope.
Again, the panel will provide our government with advice on organizational structure, governance, the amount of investment required, and how to minimize total costs while still meeting all — and I do mean all — public health, environmental and water quality regulations.
It is anticipated that they will deliver their report later this winter. It will be made public and, as I said earlier, will help form the basis of our long-term water and wastewater infrastructure investment and financing strategy.
Please take the time to make your views and ideas known by visiting the panel’s Web site today and submitting your thoughts.
Now before taking your questions, I want to also say a few words about the notion of full-cost recovery, which Commissioner Dennis O’Connor advanced in his Walkerton Report.
Under the Sustainable Water and Sewage Systems Act, municipalities — and as you know it is municipalities who have ownership of our water and wastewater infrastructure — municipalities will be required to move towards recovering their full costs of providing water.
It is clear — and Commissioner O’Connor emphasized this — that full-cost recovery is a invaluable tool to help ensure the long-term sustainability of our systems.
That said, our government recognizes that full-cost recovery in the short term presents very real problems for smaller communities, many of which would be faced with implementing simply unmanageable cost increases.
We won’t let this happen.
We are already taking steps to help municipalities make the necessary investments right now without having to quickly raise water rates. For example:
The Canada-Ontario Municipal Rural Infrastructure Fund (COMRIF) will provide close to $900 million over five years for improvements to municipal infrastructure ¾ especially roads, bridges, water, wastewater and waste management facilities, in smaller and rural municipalities. The agreement between the federal and provincial governments is almost completed, and municipalities will be notified as soon as the fund is ready to accept applications.
And, the Ontario Strategic Infrastructure Financing Authority (OSIFA), an agency of the Ministry of Finance, helps municipalities obtain lower-cost financing for infrastructure projects. OSIFA uses money from the sale of its Infrastructure Renewal Bonds to provide debt financing for municipal infrastructure projects on more favorable terms than most municipalities could obtain for themselves. So far, OSIFA has approved loans totalling almost $1 billion for 90 municipalities in all parts of the province, and the program is now being expanded to include more types of infrastructure and more municipalities.
A big part of the expert panel’s mandate is to find ways of helping municipalities move towards full-cost recovery without saddling consumers in smaller communities with price increases they can’t afford.
Now, I’m not pretending that this isn’t a huge challenge but that’s why we brought in the experts to help light the way.
Before I conclude my remarks, I’d like to leave you with an old Scottish proverb:
“We'll never know the worth of water till the well goes dry.”
Now, our well is by no means dry, but we surely have learned hard lessons on the value of our drinking water. The water in that well must be kept clean and safe, and it must be delivered clean and safe to the taps from which we drink.
Ensuring this is going to require proper financing, vision and planning. We are relying on guidance from our expert panel in all three of these areas, and I would like to thank each one of them for taking on this enormously important task.
It is also going to require cooperation between all three levels of government, and I am confident that the atmosphere required for that cooperation now exists.
In addition, the cooperation of associations like yours is paramount. Your work in helping maintain safe, adequate and sustainable supply sources, ensuring adequate funding for water systems, and enabling free exchange of ideas and information between all parties involved with drinking water in the province, is invaluable.
Finally, it is going to require that our government is clear and straight with Ontarians — along every step of the way — about what we plan to do and how we plan to do it.
You have my assurance that we will be exactly that.
Thank you, and I’ll be happy to take some questions.
