Our Community s Commitment to Public Water and Wastewater Infrastructure

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Edward Sutton
5 years ago
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1 Our Community s Commitment to Public Water and Wastewater Infrastructure DELEGATE REQUEST On Monday April 5, 2011 Mission Council joined a long and growing list of communities that have rejected proposals to privatize their water services. We applaud Council for listening to the will of Mission residents who said very clearly that they didn t want our water to be operated for a profit and want to keep it in public hands. As our community seeks out a made-in-mission solution to our future water needs, we ask Council to reaffirm that commitment by agreeing to put forward and/or support a resolution to the Union of BC Municipalities (originally submitted by Burnaby Council in June) urging the body to call upon the Federal Government on behalf of municipalities to fulfill its responsibility to invest in the renewal and replacement of public water and wastewater infrastructure. BACKGROUND When deciding whether or not to pursue the Stave Lake P3 water project, many Mission and Abbotsford councillors expressed dismay that the federal government was restricting access to federal funding for such vital infrastructure projects to those that involved privatizing our public services in this case, the finance and operation of our water services for 25 years. Federal funding for public infrastructure projects and services continues to be restricted despite Canada s widely acknowledged infrastructure deficit and budgetary challenges communities face in meeting growing infrastructure needs. In a report produced for the Federation of Canadian Municipalities (FCM) in 2007, this municipal infrastructure deficit is outlined in detail and is estimated at $123 billion with over $30 billion required for country-wide updates to drinking water and wastewater infrastructure alone. As recently as last month, Ottawa acknowledged that federal funding for necessary water and sewage upgrades fall short (see article) but have not committed to making funding for public projects available. Instead, the federal government continues to promote the privatization of public services by compelling municipalities to apply for federal funding through PPP Canada a fund created in 2009 that only considers making financial contributions to projects where a private partner will

2 be financing and/or delivering the public service. All public projects are ineligible for this funding. The Canadian way has always been to keep water and wastewater services in public hands and for the vast majority of Canadian municipalities, this remains the case. In fact, there are only three municipalities in Canada that have introduced the kind of full-bore design, build, finance and operate (DBFO) P3 water project as was proposed to this council and is up for consideration in Abbotsford with the Stave Lake project. Of those three municipalities, one has already re-municipalized the service after a disastrous 10-year experience that ended with the municipality having to sue the private operator. And our experience in Canada is not unique. All across Europe and the United States municipalities are rejecting P3 water and wastewater project proposals and re-municipalizing existing projects after tragic experiences with private operation of these services including reduced quality, increased costs, insufficient transparency and critical loss of control. A 2010 Annual Privatization Report produced by a pro-p3 research institute in the United States laments the slow progress of water and waste water privatization in their country. They write: New business was hard to come by...as only 14 new municipal water and wastewater contracts worth over $56.5 million in lifetime value were signed in 2009, while ten privately operated plants reverted to municipal control. In June of this year City Council in Rialto, California rejected a bid by American Water to privatize their water and wastewater services for 30 years. It did not matter that the CEO of American Water appeared before Council himself to make the case. Neither did it matter that the bid included a $30 million upfront payment as well as approximately $70 million in wastewater capital investments and defeasing of the city s existing facility debt. It did not matter because the citizens of Rialto California were watching their neighbours. They heard about American Water s attempt to lay off 10% of its workforce (currently blocked by commission review after a legal challenge by the water workers union) in West Virginia because the company said a 4.4% rate hike recently approved by state regulators wasn t large enough. It s only prudent that we should continue to listen to our neighbours, like those in Hamilton and now London, Ontario. Just a day before the failed bid in Rialto, in was reported in Ontario s London Free Press that American Water plead guilty to violating Ontario s Safe Drinking Water Act in charges related to the company s maintenance and operation of equipment where they have a 10-year contract treating water for 500,000 London, Ontario-area residents. London s chief engineer, John Braam, warns people that a contracted-out firm can be fully competent,

3 but your responsiveness to issues is significantly higher when you have control. City officials have recommended that the treatment plant and pipeline operations be returned in-house. This trend towards remuniciplization of privatized water and wastewater services is currently being threatened in Canada by a trade deal being negotiated by our federal government and the European Union, called CETA (Comprehensive Economic and Trade Agreement). This agreement proposes to open up municipal services, including water and wastewater services, to the threat of challenge by European corporations. Since it grants these corporations the right to sue for any decisions made by governments that may negatively affect their profits, actual or potential, it makes it virtually impossible (prohibitively costly) for municipal governments to contract-in or remunicipalize once a service has been privatized. Labour lawyers and trade experts have commented that the only way for municipalities to protect their autonomy and the quality of their public services is to maintain public operation and ownership. It is for such reasons that the Union of BC Municipalities (UBCM) passed a resolution in 2010 seeking a permanent exemption from the EU-deal for municipalities. To date, this exemption has not been granted and the eighth round of negotiations has just been concluded. A report produced by the Council of Canadians and CUPE titled Public Water for Sale: How Canada will Privatize our Public Water Systems outlines the impact of CETA on municipalities but also describes how the private water industry is attempting to leverage this infrastructure deficit as an avenue for increasing its role in water delivery and treatment. Sadly, the federal PPP Canada Fund exploits the same pressures that private industry is exploiting in pushing P3s. In a May 4 th press release announcing the fund s third round of grant considerations (the same round that the City of Abbotsford has applied for with the revised Stave Lake P3 water project) PPP Canada Chairman Greg Melchin states: In today s economy, the combined challenge of infrastructure deficits and fiscal deficits are driving governments to innovate and get best value for taxpayers. However, when it comes to water and wastewater projects, the vast majority of people and local governments see the best value for taxpayers in keeping these vital services in public hands. In order to continue to do this effectively in the future, municipalities need to continue to demand that adequate infrastructure funding flow from the federal government to municipalities charged with the responsibility of delivering these services. Thank you for your consideration of this request that the District of Mission take a public stand for public water and wastewater service delivery by urging the federal government to fulfill its

4 responsibility to invest in the renewal and replacement of public water and wastewater infrastructure. Submitted by Mission residents: Diane Kalen-Sukra Privatization Coordinator, CUPE Janet Chalmers Spokesperson, Water Watch Mission Abbotsford PROPOSED RESOLUTION (As drafted and submitted by Burnaby City Council, crafted as per UBCM resolution submission guidelines) WHEREAS public health depends on equitable access to clean water supplies, AND WHEREAS public ownership and operation of drinking water and wastewater treatment systems has improved access and quality, and public operation has been shown to be costeffective, efficient, transparent, accountable and responsive to changing technology, priorities and community needs: THEREFORE BE IT RESOLVED that the Union of BC Municipalities call upon the Federal Government, through the Federation of Canadian Municipalities and/or other avenues, to fulfill its responsibility to invest in the renewal and replacement of aging local government infrastructure, including that related to drinking water and wastewater, in a manner that ensures continued public ownership.

5 SUPPORTING MATERIAL REPORT Danger Ahead: The Coming Collapse of Canada s Infrastructure (FCM): ARTICLE Ottawa Acknowledges Funds for Water, Sewage Fix Fall Short: wage+fall+short/ /story.html VIDEO trailer Water Make Money: REPORT Annual Privatization Report 2010: Water & Wastewater: REPORT Public Water for Sale: how Canada will Privatize our Public Water systems: COPE 491