Committee Documents: Standing Committee on Resources Development - 1997-Apr-16 - Bill 107, Water and Sewage Services Improvement Act, 1997

Bill 107, Water and Sewage Services Improvement Act, 1997
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WATER AND SEWAGE SERVICES IMPROVEMENT ACT, 1997 / LOI DE 1997 SUR L'AMÉLIORATION DES SERVICES D'EAU ET D'ÉGOUT

JOHN SANDLOS

TORONTO BOARD OF HEALTH

CANADIAN ENVIRONMENT INDUSTRY ASSOCIATION, ONTARIO CHAPTER

KAREN BUCK

GREENPEACE

ONTARIO POLLUTION CONTROL EQUIPMENT ASSOCIATION

CONSULTING ENGINEERS OF ONTARIO

WATER ENVIRONMENT ASSOCIATION OF ONTARIO

CANADIAN INSTITUTE FOR ENVIRONMENTAL LAW AND POLICY

CANADIAN UNION OF PUBLIC EMPLOYEES, LOCAL 79

NATIVE CANADIAN CENTRE OF TORONTO

PROFESSIONAL SERVICES GROUP, CANADA

HUMBER HERITAGE COMMITTEE

COMMITTEE ON MONETARY AND ECONOMIC REFORM

JUNE RILETT

CONFEDERATION OF RESIDENT AND RATEPAYER ASSOCIATIONS

REGIONAL MUNICIPALITY OF OTTAWA-CARLETON

PHILIP UTILITIES MANAGEMENT CORP

SAVE THE OAK RIDGES MORAINE

CANADIAN AUTO WORKERS -- CANADA

ONTARIO NEW HOME WARRANTY PROGRAM

CONTENTS

Wednesday 16 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

Mr John Sandlos

Toronto Board of Health

Mr Peter Tabuns

Canadian Environment Industry Association, Ontario Chapter

Mr Mori Mortazavi

Ms Karen Buck

Greenpeace

Ms Morag Simpson

Ontario Pollution Control Equipment Association

Mr Brian Gage

Consulting Engineers of Ontario

Ms Erin Mahoney

Mr Don Ingram

Water Environment Association of Ontario

Mr Bill De Angelis

Canadian Institute for Environmental Law and Policy

Ms Anne Mitchell

Dr Mark Winfield

Canadian Union of Public Employees, Local 79

Mr Jim Chisholm

Native Canadian Centre of Toronto

Ms Ann Landrey

Ms Pauline Shirt

Ms Tara Chadwick

Professional Services Group, Canada

Mr Mark Sanderson

Humber Heritage Committee

Ms Madeleine McDowell

Committee on Monetary and Economic Reform

Ms Sydney White

Ms June Rilett

Confederation of Resident and Ratepayer Associations

Mr David Vallance

Regional Municipality of Ottawa-Carleton

Ms Alexia Taschereau-Moncion

Mr Jim Miller

Philip Utilities Management Corp

Dr Stuart Smith

Save the Oak Ridges Moraine

Ms Anna Tilman

Canadian Auto Workers -- Canada

Mr Nick De Carlo

Ontario New Home Warranty Program

Ms Carole Bennett

STANDING COMMITTEE ON RESOURCES DEVELOPMENT

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 North / -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 / -Centre PC)

Substitutions present /Membres remplaçants présents:

Mr TobyBarrett (Norfolk PC)

Mrs JuliaMunro (Durham-York PC)

Clerk Pro Tem /

Greffière par intérim: Ms Donna Bryce

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

The committee met at 1007 in room 228.

WATER AND SEWAGE SERVICES IMPROVEMENT ACT, 1997 / LOI DE 1997 SUR L'AMÉLIORATION DES SERVICES D'EAU ET D'ÉGOUT

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 (Ms Brenda Elliott): Good morning, everyone. I'd like to welcome everyone to our third day of hearings on Bill 107, An Act to enact the Municipal Water and Sewage Transfer Act.

JOHN SANDLOS

The Chair: Our first presenter this morning is Mr John Sandlos. Welcome. Your presentation time is 15 minutes. That includes your own presentation and time for questioning from the caucus.

Mr John Sandlos: Good morning. My name is John Sandlos. I'm a masters student in environmental studies at York University as well as a teaching assistant for the faculty's course in urban sustainability. I'm pleased to have a chance to address the committee today but must begin by expressing some reservations about the public hearings process surrounding this bill and other recent mega-week proposals.

I have attended many hours of hearings on Bills 103 and 104 and have witnessed many MPPs talking throughout the proceedings, mimicking the presenters and expressing a general contempt for any view that opposes the government's perspective. In one case, an MPP returned from a break during the Bill 104 hearings and asked her colleague, "Is this another teacher?" Is it any surprise, then, that none of the advice and recommendations put forward during the Bill 103 hearings have been heeded by the government? Still, I will try to offer constructive advice to this commission but perhaps should come clean and tell everyone that though I am not a teacher, I am just another one of those environmentalists.

I want to begin by telling you about a city, a fictional city but a city that has frightening implications for contemporary society none the less. It is a city that Bertolt Brecht imagined in his 1927 opera The Rise and Fall of the City of Mahagonny, a play that depicts the efforts of a group of disaffected urban dwellers to create a new city in the sun. This city is meant to satisfy all the private desires and wealth of its citizens. The motto of the citizens is, in an eerie foreshadow of contemporary sloganeering, Just Do It. They support the idea of less government in their lives, and they are also, in their words, "for freedom of the rich, for valour against the defenceless, for greatness of squalor, for the immortality of underhandedness" and "for the continuation of the golden age." This golden age is Brecht's extreme parody of a society that bases its notion of the public good solely on the accumulation of private wealth.

I wonder what kind of water and sewage system they would have had in the city of Mahagonny? Brecht never says, but considering the fact that a man is executed near the end of the play for not paying his bar tab, it is perhaps safe to assume that water was a fairly scarce commodity in the city. Regardless, in the absence of any collective, non-privatized vision of the public good, Mahagonny descends into violence and anarchy near the end of the play. The citizens' dream of a wholly privatized golden age crumbles with the rest of the city.

Call me paranoid, but I'm starting to feel like things are beginning to crumble in my own city and in the province as a whole, which brings me to Bill 107. To put things in context, Bill 107 seems to be part of a larger exercise to offload so many public services from the province to the lowest levels of government that they will wither on the vine of ineffectiveness, and the government will never have to accept direct responsibility for the consequences in front of the electorate. In addition, it is a cynical attempt, in my opinion, to impose neo-conservative ideologies of reduced public services and expenditure cutbacks on municipal governments which may not share this perceptive on public policy formation. In the particular case of Bill 107, it is undoubtedly an attempt to offload expensive water and sewage systems on to municipalities, which can ill afford them, and thus force their privatization.

The government members of this committee yesterday denied this assertion and stated that the government is committed to public ownership of water and sewage facilities. But what is an already sceptical public supposed to think when committee members later argue the merits of privatization with various deputants at the same hearings; when previous government legislation has removed the rights of local citizens to a referendum concerning water privatization; when there are no guarantees against privatization in the bill; and when the Premier of the province himself appears on television, just last evening, to say that all options, including privatization, will be considered following the implementation of Bill 107?

I think the case against privatization has been stated clearly from case studies outlined by other deputants, so I'm not going to go into that expressly. I am disturbed that the government of Ontario is trying to impose this weak option on an ill-informed citizenry that has been given little time to prepare responses or consider the consequences. I must say I was up pretty late last night doing this because I only had three days to get it ready. What is more, the government deliberately seeks to confuse the citizenry by publicly stating conflicting views on the purposes of Bill 107. I believe these actions represent irresponsible and morally questionable behaviour.

However, it is behaviour that is not without precedent. For example, in Great Britain, Neil McFarlane, Margaret Thatcher's parliamentary undersecretary of state for the Department of the Environment, stated in the House of Commons session of December 20, 1984: "We have absolutely no intention of privatizing the water industry. The government have no plans to urge that on the water authorities. There has been some press speculation about it in the past but there is no intention to do so." Yet at the same time, according to the authors of the book I got this quote from, William Maloney and Jeremy Richardson, "the Conservative government had been encouraging the support for privatization from the management of all of its public corporations, through a process which Steel and Heald have pointed out made" -- and this is a subquote -- "`life unnecessarily unpleasant for the nationalized industries [and] thus became a convenient spur in a change in attitudes towards denationalization.'"

Substitute the word "municipality" for "nationalized corporation" here, and I think we have a fairly accurate representation of what is occurring in Ontario at this very moment. History, it seems, does repeat itself.

In an even more bizarre analogy, we find the Baroness Nicol outlining what is today a major weakness of Bill 107 in Britain's House of Lords on April 22, 1985. She condemned the Department of the Environment for "this very limited consultation. Even in flying a kite, you need to fly it over a wide area. The views which should have been sought out should have included those of the local authorities, the Ministry of Agriculture, Fisheries and Food, conservation bodies and consumer organizations." Not all of those apply in Ontario, but you get the analogy. "Without their views any decision or further action on the lines of this document would be made on insufficient evidence."

Herein lies, I believe, the central failure of Bill 107, the failure to consult local people and local authorities on their needs and priorities for improving water quality and sewage treatment in their areas and communities. It is a shameful abdication of responsibility by the province rather than a provision for meaningful local control over water and sewage systems. There are many problems with water and sewage services in the province, including leakage and overflow of sewage ducts and mere primary treatment of water in many facilities. How this bill addresses these problems is not apparent to me or many of my fellow citizens. Thus, the bill should be amended so that it no longer exists. However, barring the above, I also recommend the following:

(1) The rights of local citizens to a broad consultation process and a referendum regarding water and sewage privatization should be restored and preserved.

(2) No downloading of water and sewage services presently controlled by the province should occur without the consent of the local municipality in question, and no privatization of water and sewage facilities should be allowed to occur due to the financial instability of any offloading arrangement. The province must make up for any funding gaps in any offloading of water and sewage management responsibilities to local municipalities.

(3) Section 11 of the bill, which prohibits citizens from questioning elected officials and civil servants in the courts, or presumably because the words say "any proceedings," I assume that means they can't question the Ontario Municipal Board, should be struck out as undemocratic and highly irregular. I am disturbed at the high numbers of similar sections that appear in other recent and notorious government legislation.

(4) A section should be added that guarantees the provision of clean water as a basic right in Ontario, regardless of the ability to pay. Just to illustrate that, in the event of metering, there should be some provision to address equity issues related to low-income families and individuals. There is a good argument to be made that metering, not necessarily by a private company, does lead to conservation. However, I think it's really important to address equity issues in that eventuality. This provision could be part of this bill and perhaps be added to the Environmental Bill of Rights.

(5) I also endorse all the other amendments and deletions proposed in the joint Canadian Environmental Law Association and Great Lakes United written briefs, particularly the provision for a strong regulator in the event of privatization and an inclusion of a safe drinking water act within the bill.

(6) I propose a public inquiry into the problems facing water distribution and sewage disposal in Ontario. This inquiry should address what real actions can be taken to improve water and sewage service delivery in the province. A focus of the inquiry -- this is something that isn't addressed in the bill and that I haven't heard a lot of talk about -- could be on the real cost savings to be found in living machine technology and wetland filtering of waste water products, which is something a lot of communities are adopting in other jurisdictions.

Above all else, this bill should address the larger issue surrounding water provision and sewage disposal in the province, and that issue is the public good.

The Chair: Thank you very much. We have three minutes remaining in your presentation time, and we'll begin with the official opposition.

Mr Dominic Agostino (Hamilton East): Three minutes total?

The Chair: Total.

Mr Agostino: Just to follow up on your last point, when you said obviously services must be delivered for the public good, that has to be the first priority in government, and I think you addressed part of it earlier. Do you believe that giving private corporations the ability not only to own the infrastructure of sewer and water services but, more importantly, the ability to set the rates they will charge for those services is in the interests of the public good, and does it serve the citizens or the shareholders of those corporations?

Mr Sandlos: No, I don't. I think the example from Britain makes the case that it's not in the public interest because of the high rates there. I'd also like to say that environmentally, when we're dealing with a public commons resource such as water, we can also see many cases where a public commons such as forestry or fisheries has actually been destroyed by further privatization of that public commons. I think a close study of the Newfoundland fishery would show that is the case. When shareholders and the bottom line are the question, the main concern of that corporation, then I don't think the public good is in mind. You just have to look at the management of our food system and how much food in a grocery store barely resembles actual food. I think there is a good analogy there.

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The Chair: I would just ask you to keep your answers brief, because we're almost out of time.

Mr Sandlos: Sure.

Mr Floyd Laughren (Nickel Belt): I appreciate your presence here. I wanted to ask you to do something to test whether or not the government members are being disingenuous when they say they support public ownership of sewer and water systems. In about 10 days -- it's scheduled for April 30 -- we'll be doing clause-by-clause, which is an open process here. If the government members themselves move an amendment to prevent privatization once the waters systems are turned over to the municipalities, then they are being sincere when they say they want it to stay in public hands. If they either don't move an amendment themselves or vote against opposition amendments, which surely will be put, to prevent the privatization of sewer and water, then you will know whether or not the government members are being disingenuous or sincere.

That's what I'd ask you to do if you could find the time -- it's in the afternoon; after question period is when this committee meets -- attend the meeting and see whether or not there is support for public ownership of sewer and water. That's a request I have of you.

Mr Sandlos: Okay.

Mr Doug Galt (Northumberland): Thank you for your presentation. I have just a couple of comments. Bill 107 is about ownership: 230 plants are owned by OCWA rather than by the municipalities; the other 75% are owned by the local municipalities. This bill was triggered because 60 communities asked for ownership. They were paying a mortgage on something when they did not have their name on the deed. I don't think you'd be very happy if you were paying for a mortgage on your home and the province owned your home.

The second triggering factor was the David Crombie commission and their report. They recommended we do exactly what we are doing. Going back to paying this mortgage on your home and the deed was in the name of the province of Ontario, I think you'd be pretty concerned, and that's how the municipalities, at least 60 of them, were feeling prior to this bill being brought forward.

Your last comment, as it related to sewage and looking at biological filtration, one of the reasons that's hung up is because of the red tape and the present regulations. They are being reviewed, and yes, we do want to move forward with that kind of advanced technology, and that's what reg reform is all about.

Mr Sandlos: I agree that if a community wants to take over their own sewage and has the financial means to do that, there should not be any kind of patronizing relationship between the province and municipalities. Local control can often lead to interesting alternatives, like living machine technology, but I suspect that this is about forcing those services, as with the other downloading proposals, on to municipalities, and I think that is wrong. The way it's being done is wrong, and David Crombie has come out and said that that's wrong, referring to the broad offloading proposals. That's what I really spoke out against.

Mr Galt: He was very clear on this, and it's in writing that this is how he wanted it. We're doing exactly what he suggested.

The Chair: I'm sorry, I have to cut it off. Our time has expired at this point. Thank you very much, Mr Sandlos, for taking the time to come before us this morning.

TORONTO BOARD OF HEALTH

The Chair: I'd like to now call Mr Tabuns, please. Good morning. Welcome. If you would please introduce your colleague for the record. You'll have 15 minutes for your presentation time, including questions from the caucus.

Mr Peter Tabuns: My colleague is Kim Perrotta, from the department of public health, environmental protection office. My name is Peter Tabuns. I chair the board of health for the city of Toronto. I'm here to represent the views of the board on Bill 107.

We don't need a crystal ball to know what would happen when the floodgates to privatization are opened. Seven years ago, Conservative wisdom in England established privatized water authorities. In the first year alone, company profits increased by 90%. Two years later, they had increased by 137%. However, on the consumer side, things weren't quite as rosy. Water bills for customers of privatized companies rose from C$96 in 1988 to C$460 in 1995.

In addition, there was the imposition of water restrictions, delayed repairs and increased consumer disconnections. During the summer of 1995, many consumers had severe water restrictions imposed on them. For example, Yorkshire Water actually instituted rotating cutoffs on all water use for residential customers, an action that affected 600,000 people. The same company invested only C$22 million in repairing leaks in 1994, when in the same year its profits exceeded C$284 million. The number of domestic consumers who had their water supply disconnected increased by 177% by 1992, a direct result of the dramatic rise in the cost of water.

During the 1995 crisis, one private company, North West Water, actually sold four of its reservoirs to private land developers, which led to major shortfalls in available water supply and severe water restrictions for its water customers.

Bill 107 radically changes the way the province's water and sewage treatment systems are to be operated, transferring ownership of 25% of the water and waste water facilities in Ontario from the Ontario Clean Water Agency to local municipalities, whether they want them or not.

The provincial government is providing the conditions under which privatization of water and waste water works in the province will take place. A number of local municipalities clearly do not have the necessary resources to maintain their facilities. That's one of the reasons I believe OCWA was set up in the first place: A lot of municipalities weren't able to provide clean, safe, secure water supplies.

In combination with sections of Bill 26 which allow municipalities to bypass provisions of the Public Utilities Act, Bill 107 appears to provide the terms for privatization, terms which appear to provide generous incentives. For instance, companies that buy public water and waste water facilities will have access to all properties connected with those facilities -- some of which I'm sure are of great value for their real estate potential but have nothing to do with the generation of safe, secure water -- and will not be required to pay interest on provincial grants.

A 1996 poll done by Insight Canada Research for the Ontario Municipal Water Association showed that Ontario residents are strongly opposed to privatization. Some 76% of Ontarians favour water utilities being controlled by municipal officials, versus 19% who favour utilities being controlled by private business. If the government is truly committed to keeping these utilities public, Bill 107 should explicitly prohibit privatization.

The public health department and the board of health are concerned about the potential impact of this bill and the privatizations that will follow. In August 1996, the British Medical Association publicly called for action against the disconnection of water supplies because of the public health risks associated with disconnections. I quote from their report: "The British Medical Association believes that the disconnection of water supplies should be made illegal because of the vital role of water in health and disease prevention."

Our public health department notes that the provision of a clean, safe water supply has been one of the cornerstones of public health since the mid-19th century. It's well known that disease can be spread when sewage is not properly treated and monitored; that people who do not have access to clean running water are at greater risk of communicable disease; that inadequately treated drinking water can transmit communicable disease to large numbers of people; and that groundwater, and thus well water, can be contaminated by improper construction and location of septic tanks.

Despite these public health realities, the provincial government is proposing, with Bill 107, the transfer of responsibility for these 230 water and waste water facilities to municipal governments, which may not have the resources or expertise necessary to provide high-quality water in a reliable way at an affordable price to their residents.

The board of health recommends:

(1) That Bill 107 should be withdrawn.

(2) The provincial government should remove the Ontario Clean Water Agency from the list of agencies to be considered for privatization.

(3) The provincial government should establish a full public inquiry into the management of the province's water resources, which would include an examination of the following:

(a) The role of the provincial government in the planning, delivery and monitoring of the water and sewage services in the province;

(b) The models of ownership for water and waste water works in the province; and

(c) The ownership, management and conservation of the province's water resources as a whole.

(4) If Bill 107 proceeds, it must be amended to explicitly prohibit the privatization of water and sewage facilities in the province.

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The Chair: We have eight minutes remaining, so that's just under three minutes per caucus.

Ms Marilyn Churley (Riverdale): Thank you, Mr Tabuns, for presenting to us this morning. Because you're a member of Toronto city council, I think I can make the link between 103 and 107 here, because of the connections with downloading to municipalities, and this is one of those downloading bills. Let me say first that Toronto city council has been, in some areas, far ahead of the province in terms of environmental protection and finding innovative solutions.

My worry here is, if Bill 103 goes through and amalgamation happens, what do you think will happen to those kinds of innovative solutions around, say, Ashbridges Bay and dealing directly with some of the local problems? I understand, of course, that the city of Toronto, unlike some of the smaller municipalities that have really serious financial problems, will be affected differently. If this bill goes through as it is and Bill 103 goes through, what do you think is going to happen to our systems here in Toronto?

Mr Tabuns: In terms of water and waste water systems, there will be pressure to sell those off to the private sector. The expectation of our senior staff who have looked at the future financial picture is that the megacity of Toronto will face substantial financial challenges, if not financial crisis. I would say that in that atmosphere, in the context of municipalities being able to sell off infrastructure, there will be great pressure to sell this off. Given the British experience, I don't think that bodes very well for the health of the people who live in the Metro Toronto area.

Ms Churley: Do I have another minute?

The Chair: You have about half a minute; very quickly, please.

Ms Churley: Yesterday as I listed the areas where this government is actually weakening and deregulating water quality laws and regulations, I forgot to mention this one: that of course they plan to weaken the MISA requirements under the Red Tape Review Commission, so the reporting requirements will be weakened. I just wanted to add that because I forgot to mention that yesterday.

The Chair: To the government caucus, Mr Ouellette, Ms Fisher and then Dr Galt.

Mr Jerry J. Ouellette (Oshawa): I have a couple of quick points. You talked about the percentage increase in profits in the British example. Do you have any relations or analysis of how it compares to usage?

Mr Tabuns: In terms of increased water sales leading to increased profits?

Mr Ouellette: Yes.

Mr Tabuns: I don't have those figures with me, sir. My understanding was that it was a profitability that arose from increasing the cost of the product and reducing the investment in the infrastructure.

Mr Ouellette: You also talked about the fact that there were a number of shutoffs.

Mr Tabuns: A dramatic increase in the number of shutoffs.

Mr Ouellette: Locally, though, we've had a number, I know, in our community. We're constantly asked to conserve. Odd and even house numbers are used on a regular basis through the summers. How do you find that different?

Mr Tabuns: From what happened in Britain, where there were rotating cutoffs? I find it extraordinary that a company would sell off its reservoirs to a real estate developer in a situation where they were facing substantial water shortages already. I think any municipal government that did that would find itself turfed out of office.

Mr Ouellette: But locally we already have rotating conservation programs.

Mr Tabuns: We may have conservation programs, but I'm not aware of cities in Ontario where the water is cut off on a regular basis in the summer.

Mr Ouellette: Do you have analysis as to why there were so many disconnections? What was the reason or the main reasons why there were so many disconnections in Britain?

Mr Tabuns: As the price rose dramatically, low-income households could no longer afford to pay for water, so they stopped paying.

Mr Ouellette: We already discussed that we didn't have a relationship of the usage of water as it relates to profit. Do you have facts to say that it's strictly because of the cost of water that relates to the shutoffs or is it because of the inability to pay or back bills or what?

Mr Tabuns: Well, when people found that their water bills were going up four and five times over what they'd been before, and they simply did not have the cash, they stopped paying, and they would try to rely on their neighbours.

Mr Ouellette: For those people where it went up four and five times, what were their usage rates? Were there any increases or change there?

Mr Tabuns: From the British press reports, people in fact dramatically cut back on their water use. They still couldn't afford to keep the water flowing through their taps. In fact, people were going on systems where they'd flush their toilets once a day, which, as you can imagine, was not entirely desirable.

Mr Galt: I have three quick questions. As you were talking, "Who's to pay?" was coming quickly to my mind. Secondly, Toronto has owned its water works literally forever; it has never been privatized. We're now bringing in penalties with the transfer of ownerships, the penalties being they have to pay back grants, so why now would a city like Toronto privatize their water, which is where you're from? Third, Toronto, I hear from you, is making recommendations to rural Ontario. Rural Ontario loves to hate Toronto. I don't know why you'd want, from Toronto, to lay solutions on to rural Ontario, where 60 of those communities are recommending that they'd like to have the ownership of their water works.

Mr Tabuns: You've asked me a number of questions. I'll start at the top. As to whether or not the city of Toronto would sell off its water and waste water system, we're very concerned about the implications of megacity and the downloading. Our best analysis shows that we will be in deep financial trouble if you proceed with what you're doing. In those situations, people are going to try and find a way out. I think selling off parts of the store may be the solution a lot of people embrace. I think the potential is there for the city of Toronto, or the reconstituted city of Toronto, to try to solve its financial crisis by that sale.

In terms of telling rural Ontario what to do and what not to do: My understanding of this bill is that you're simply turning over ownership to all municipalities, whether they request it or not. If a municipality requests ownership of its water system, can deliver that water at standards that are found acceptable and is not going to be privatizing, then I see no reason not to turn it over to them. But this isn't an exercise in local option; this is, as far as I can tell, a download. You're turning over these agencies to these municipalities whether they can run them or not. My understanding was that OCWA was set up in the first place because many municipalities couldn't meet provincial standards for water quality.

Mr Galt: They're already running them. It's simply a transfer of ownership.

The Chair: I have to move to Mr Agostino now.

Mr Agostino: I appreciated your presentation, Mr Tabuns. I find it fascinating, because we've been through two days of hearings and we're on the third day, and all I keep hearing is government members saying: "Well, it's not really about privatization. This bill is about simply transferring that 25." It continues to be the smokescreen and it continues to be the political spin the whiz kids in the Premier's office have offered up to members to pitch at these hearings days after day.

Very clearly, and I've said this before and I'm going to continue saying it, this bill is not in isolation to other actions of this government. This bill ties in very clearly with the agenda of Bill 26, which was to take away some power that citizens had with regard to this issue and voting in referendums with regard to privatization of these services. It cannot be seen in isolation of the mega-dumping that's occurred.

Municipalities do not choose to sell water and sewer services to the private sector. Municipalities may be forced into it because of the tradeoff of huge tax increases that you have dumped on taxpayers or having to sell one of their assets to offset those tax increases. That is the reality. I'm amazed, because not one member of this committee, of this government, will say that privatization of water and sewers is a good thing; they will all tell you how bad it is and how evil it is and how it would not work. However, not one of them yet has had the courage to come forward and say, "We will bring forward an amendment to stop that from happening."

I read, interestingly enough, and you'll appreciate this coming from Toronto and knowing what they have done to you in regard to the supercity, that the minister said: "Prohibiting such privatization in the bill will be an inappropriate intrusion by the province. The municipalities are the rightful owners. Where do I get off saying, `You can't do that with your particular system'?"

I find it ironic that they're saying they don't have the right to tell municipalities whether or not to sell their water and sewer systems. They seem to have no problem having the right to tell the area municipalities in Metro Toronto, "You're going to be part of this whether you want it or not." They intrude in many other parts of municipal jurisdiction, but in this area the minister says, "Well, I don't believe in it, but I can't tell them whether to do it or not."

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Would you feel comfortable with an amendment that would prohibit municipalities and would you as a city councillor see it as an insult or an intrusion if the province came in and said, "The city of Toronto, the city of London, the city of Hamilton," and so on, "you cannot sell your water and sewer services to the private sector"? Do you see that as an intrusion or do you see that as the role of provincial government?

Mr Tabuns: I think it's the role of provincial government. If in fact Bill 107 goes ahead, I think it should be amended to prohibit privatization. You'll have other problems that arise from this, and I think they'll come out in poor water quality in cities that don't have the money to invest, as they should, in a good water system.

Mr Agostino: So you don't see it as an intrusion upon your right as a councillor?

Mr Tabuns: No, I don't.

The Chair: Thank you very much. I'm sorry to interrupt, but our time has expired. Thank you for taking the time to come before us this morning with your perspective. We appreciate it.

CANADIAN ENVIRONMENT INDUSTRY ASSOCIATION, ONTARIO CHAPTER

The Chair: I'd like now to call Mr Mori Mortazavi, please, to come forward, from the Canadian Environment Industry Association. Welcome.

Mr Mori Mortazavi: Good morning, ladies and gentlemen. Thank you for giving me the opportunity to exercise my right to give you some comments that I believe would be constructive in the process of downloading the water and sewage works to municipalities and also for establishing an effective and responsive private-public partnership for better protection of human health and the environment in Ontario.

My name is Mori Mortazavi. I am a consulting professional engineer with more than 30 years of experience in the geo-environmental business, interpretation and implementation of environmental protection legislation, regulations, policies and guidelines, green industries as well as public infrastructures.

My presentation will consist of three major parts: background, issues and recommendations.

The water and sewage infrastructures existing in Ontario are among the most fundamental public services that have been established and have evolved over more than three decades under the auspices of the Ontario Water Resources Commission, Ministry of the Environment, Ministry of Environment and Energy and, more recently, the Ontario Clean Water Agency.

The water and sewage works are designed, constructed, operated and monitored for yielding sufficient water quantity at a constant and dependable rate and sustainable quality for most of the consumer demands across the province; and for appropriate collection, transmission, treatment and disposal of sewage without inflicting adverse effects on the environment. The conservation and sustainability of resources have been among the essential factors considered in the design and operation of water and sewage works. It is very important to note that from hydrogeological, contaminant migration and adverse effect viewpoints, the principles controlling the design, construction and maintenance and monitoring of these infrastructures should be uniformly and globally implemented across the entire province in compliance with the established goals, policies, objectives and implementation procedures.

Under Bill 107 it is understood that:

The Minister of Environment and Energy would have the power to transfer the ownership of these works that are currently owned by OCWA to municipalities.

Most of the responsibility for regulating these works would be transferred to municipalities; and if municipal organization does not exist, the Minister of Municipal Affairs and Housing will take the responsibility. Furthermore, a municipality may apply to the Ontario Municipal Board to resolve any dispute that may arise among the municipalities with respect to these works. You can see the diffusion of responsibilities in the new regime.

Municipalities will be facing up to 40% in cuts in transfer payments from the Ministry of Municipal Affairs and Housing. With such huge reductions, it is not clear how they will be capable of picking up the slack created by other huge cuts from the Ministry of Environment and Energy and the Ministry of Natural Resources and conservation authorities. However, Bill 107 provides stipulations for privatization or partnership with the private sector for construction and operation of the water and sewage works by which the municipalities can further delegate their financial and service provision obligations to various private sector entrepreneurs.

Issues: Considering the extreme significance of the water and sewage works on the public's health and safety, conservation and sustainability of water resources and protection of the environment, the author strongly believes that the following issues should be resolved prior to finalization of Bill 107:

(1) Considering the existing limited resources of municipalities, the proposed downloading of provincial obligations, if ever successful, is to be extremely slow, and OCWA should continue assuming responsibilities and operate for a considerable future period of time.

(2) Due to the absence of water supply and sewage disposal standards -- please note that we do not have standards in Ontario. There are guidelines, objectives and policies; there are no standards in Ontario. If private sector entrepreneurs show up to take over the water and sewage works in either total ownership or in partnership with municipalities, who would monitor and assume the liability for providing clean water and proper sewage disposal? We totally agree with the Honourable Norman Sterling that the quality of our water is not negotiable. We also agree with the Honourable Norman Sterling that Ontario's high policies, objectives and guidelines should be globally and uniformly implemented. This is from his address to the Legislature on January 15, 1997.

How would the adverse cross-boundary effects on resource conservation and the environment be effectively and consistently corrected across the province? How would a level playing field or consistency be maintained among municipalities with respect to public health and safety measures?

With the responsibility and liability diffused among ministries, municipalities, private sector entrepreneurs, the Ontario Municipal Board and other ministries, it is not clear how the service quality and protection of human health and the environment would be equitably maintained across the province; whereas environmental quality and public health at large, not for this generation but for future generations, cannot recognize political boundaries and should not be politicized.

It is not clear if a feasibility study on Bill 107 implementation has been undertaken and the study findings justify the subject downloading from the standpoints of economics, sustainability and long-term investment values in the protection of public health and the environment.

Recommendations:

The Ministry of Environment and Energy should continue its essential function of setting up the policies, objectives, guidelines and regulations and hopefully in the future the standards controlling the design, construction, operation and maintenance of water and sewage works in compliance with the provisions of water resource and environmental protection acts, unless the acts are going to be changed and the ministry's legislated obligations are also going to be delegated.

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With the fast and frequently changing environmental criteria and regulations -- they change continually -- as more information and data are compiled on the effects of contaminants on human health and the environment, the Ministry of Environment and Energy should remain the overall policymaking and regulatory agency across the province.

In the absence of environmental standards and fast and frequently changing environmental regulations, the professional engineers, such as myself, would be hardly able to accept the entire liability associated with the design criteria unless comprehensive risk assessment and risk management studies are undertaken for every single case under consideration and overconservative contingency measures are employed, which will be very time-consuming and costly. This is another reason for enforcing the abovenoted recommendations 1 and 2.

The downloading of the Ministry of Environment and Energy's mandate of water and sewage works to municipalities should be substantiated by a comprehensive feasibility study of long-term economic and sustainability gains and adverse impacts on the public welfare. The study should also clearly identify the goals, targets and procedures upon which the municipality should be prepared and equipped so as to be capable for undertaking this mega-task.

To maintain the overall MOEE policymaking and regulatory role for equitable quality control procedures and a unified implementation procedure by the municipalities across the province, a public-private partnership model seems more beneficial than total privatization of these works.

The Chair: Thank you very much. We have four minutes remaining, so just over a minute of questioning per caucus.

Mrs Barbara Fisher (Bruce): Thank you for your presentation this morning. It seems rather obvious, to me anyway, that you've studied the intent of what we're really trying to do with this whole system. I would like to address the issues of your recommendations, and that can be done very quickly; it's not with questions, it's actually with comments.

We don't disagree with 1 and 2 at all. It appears you're very much on track and have an understanding of what we're trying to do in terms of the public and municipal partnering.

Regarding number 3, we will have presentations this afternoon from representatives from other groups of the engineering community, and we look forward to those types of negotiations. I think that's a key word in this whole thing, "negotiation," where we work together to address the issues of who is responsible for what. There seems to be a different twist all the time in terms of the verbiage and how somebody addresses that. We see it as a working partnership, and I'm glad you understand it that way as well. We recognize fully that negotiation has to take place to make that happen.

I would like to clarify a point for the record, if nothing else. There's no intent here to reduce the level of responsibility of anybody who undertakes the operating practices of any facility that is turned over to a municipality, and rightfully so, because they're paying for it anyway. The idea here is that where OCWA is in contract today, they'll have the opportunity to bid again on that same provision of service. If not, somebody must be fully licensed and qualified to provide that service otherwise. So there's no intent whatsoever to put at risk the quality of service that's being provided. I think your presentation identifies that, understands that, and we look forward to working together on a negotiation basis to make that happen for the municipalities.

Mr Mortazavi: Thank you very much for agreeing with most of my presentation. But remember, I'm a professional engineer, I'm a practising engineer, in the trenches, actually confronting all the problems in reality. My concern is that with the cuts in the Ministry of Environment and Energy, the Ministry of Natural Resources and conservation authorities, I do not realize how this can be continued even in the old system, let alone that the ministry is going to make the policies and regulate the private sector or partnership with the municipalities; that's one.

Second, when you enter into a partnership with the private sector, any municipalities or the ministry, we have to consider the entity as a business entity, and we should look at all those terms we use from legal points of view in making sure we make the right decision when we do that, because, as I said, some of the policies and regulations cannot be presented in a court of law and you can hardly find a licensed, competent engineer to even take the responsibility of the government, of the Ministry of the Environment, for enforcing those guidelines.

Therefore, the work that the ministry has done for more than two decades is really valuable and it does not have to dissipate, depending on the public sector to replace or take the responsibility. That's my entire issue. I'm not against the public-private partnership, but it has to be done properly, and with this haste I'm afraid we will create more waste.

Mr Agostino: I appreciate the recommendation. I'm pleased to hear that government members agree with some of what you have said here. I guess the concern I would have, though, is that you can talk the talk but you have to be able to walk the walk through this. When you look at the history and talk about enforcement of regulations, standards, policies, objectives, one must wonder who's going to do this, and with what budget.

The overall budget of the ministry has been cut by about 39% in the past two years, about one third of the staff has been let go, so it would be an interesting question to see who's actually going to do this work. It sounds great on paper. There's a reality between what's in regulation and on paper, and if you don't have the staff or the ability within your budget to enforce those guidelines and those regulations -- this is sort of a step in that direction.

You talk about a public-private partnership. As you know, there's nothing in legislation that would prohibit a municipality from making it a totally private ownership issue. I guess I'd like to know, in your view as a professional, do you believe it would be in the best interests of consumers if a private company had total control and ownership of the facilities and total control and power to set the rates it would charge the consumers?

Mr Mortazavi: I totally agree with you that first of all the issue has to be studied in detail. The significance and sensitivity of these resources and these works, in Ontario particularly, are far greater to be politicized and to put them as an urgent matter to change. It has taken more than three decades to come to this point, where we have a system that is working quite well, relatively speaking, with respect to other provinces and other countries in the world.

Secondly, I agree with you that being a practising engineer working with the municipalities, I know the exact problems. We should not download the entire system. We should go with at least a pilot project. Even with the public-private partnership, we should pick up one of these projects and go through that.

Thirdly, why don't we learn from the experience we have with other ministries? We have public-private partnerships in the Ministry of Transportation with respect to highway construction and other things. Let's learn from the experience we have gained in a very short while from that perspective.

We have had comments on the same grounds when they were going to privatize the maintenance of the highways, the construction of the highways. We, as consulting engineers and practising engineers, were adamant to say to the Ministry of Transportation: "You cannot delegate your responsibility that the Legislature has imposed upon you. You have to be responsive to the public."

The Chair: Could I ask you to keep your answers just a little briefer?

Mr Agostino: He spoke very well.

The Chair: I know that. I'm not denying that.

Mr Laughren: Mr Mortazavi, I very much appreciate your presentation. It was very thoughtful and balanced. You didn't just simply take one side of the issue and hammer away at it, and I appreciate that very much.

I'm confused about one part. By the way, the questions you ask are the right ones, in my view, even though you haven't provided the answers to them. I think that's up to this committee, to work out the answers to those very pertinent questions in here. That's a very nice way to put it to the committee.

I'm confused about the second of your questions, though, and maybe you could help me. "How would the adverse cross-boundary effects on resource conservation and the environment be effectively corrected?" Quite frankly, I don't understand that question. Can you help me?

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Mr Mortazavi: Take, for example, the Oak Ridges moraine. It may fall into several municipalities. When we want to ask the municipalities to take the responsibility of design, operation, construction and monitoring of sewage systems on that sensitive water resource, which is the headwater of the greater Toronto area watershed, if they go with different monitoring, different quality control, different criteria for the design --

Mr Laughren: Because they're different municipalities.

Mr Mortazavi: Yes -- then we are inflicting on one global watershed and water resource different guidelines or different criteria. From a hydrogeological point of view the water resources cover a lot of political boundaries. How do we ensure that's a level playing field or consistent in the criteria of implementing the procedures and that making these work effectively will not affect that environment adversely?

Mr Laughren: That is helpful. I'm going to keep your questions, keep track of them, because I really think they are the right ones to ask.

The Chair: Mr Mortazavi, thank you very much for taking the time to come to the committee this morning. We appreciate it.

I'd like to ask the committee's permission. Our next presenter, Karen Tilley, is unavailable to attend and has asked that Karen Buck be allowed to present in her absence. Is there agreement? Agreed.

Mr John O'Toole (Durham East): Is this a replacement?

The Chair: Yes.

KAREN BUCK

The Chair: Welcome, Ms Buck. You may begin. You have 15 minutes for your presentation.

Ms Karen Buck: Thank you very much for your time to hear my submission.

As a member of the public -- and I also sit on the board of Citizens for a Safe Environment in Riverdale in the east end of Toronto -- when I read Bill 107, I was really shocked that it didn't contain any more than it did. The public resource of water was being protected and also the services were being transferred, I understood, but it was very difficult to tell if it was just a wholesale sellout to private companies, which has been the rumour.

As a member of the public, I was dismayed that the bill seemed to lack a concern for our greatest resource, our drinking water, and it felt to me that maybe the bill merely hands over all the water treatment plants and waste water or sewage treatment plants to the municipalities without adequate provincial funding. I think plants that have been run with provincial money before -- it can't just be taken away and the municipalities left to raise their taxes, unless there's a provision that the taxes will be reduced at the provincial level.

I was also surprised that there was no mention of an overseeing regulatory body with enforcement powers, because I think that really goes hand in hand. I've also heard -- these have been rumours and myths and I'm not quite sure how it will actually come to be -- that there's a lot of downsizing in the Ministry of Environment and that people may not be able to follow up and enforce regulations. That's a concern for me.

I thought the bill lacked the fact that there was no public voice required for the sale of transferred utilities and lands from municipalities to private concerns. Maybe there wasn't an adequate payback structure of public moneys invested in water and sewage works if they were sold, and I certainly didn't see an outline of enforceable regulations that both municipalities and private concerns in receipt of public works and public lands would have to adhere to.

I did read the CELA presentation, and to a certain extent it coloured some of my comments, because it did reinforce some of the things that I believe in. Like they are, I too am recommending that Bill 107 be substantially amended. I have attached pages 13 to 18 of the CELA presentation because I do agree with their recommendations 1 through 8 and also their comments on the amendments to the Capital Investment Plan Act of 1993.

I don't agree with them when it comes to section 3 of the bill. Attachment B, which is the last page of my submission, is something that I have already submitted to the Environmental Bill of Rights registry.

I'll talk about section 3 of Bill 107. I do not agree that in unorganized territories, the general responsibility to regulate the construction and the use of sewage systems under part VIII of the EPA should actually go to the Ministry of Municipal Affairs. It really should remain with the Ministry of Environment and Energy.

Within Bill 107 there should be adequate legislation to ensure that the MOEE has in place regulations that will ensure that systems under this section of the regulation will be permitted with adequate soil conditions, sufficient separation distances and proper design, construction and maintenance so that such systems, once installed, cannot adversely affect groundwater and surface waters, or result in other nuisance impacts to nearby land owners.

I think Bill 107 should allow the Ministry of Environment to enter into contractual arrangements with municipalities to assign inspection and permit-issuing functions to those municipalities, but it is imperative that Bill 107 also state that before issuing this responsibility to municipalities, the municipalities in question are actually in compliance with having appropriate expertise to handle that inspection and permit-issuing responsibilities.

I've attended FOCA conferences -- that's the Federation of Ontario Cottagers' Associations. About four years ago we heard a presentation from the Ministry of Environment and they were saying that it was impossible even then, before cutbacks, for them to get around and do the inspection of septic systems.

I'm also on the steering committee of our Clear Lake association up in Humphrey township, and of ultimate concern are septic systems around that lake. Certainly, this is one of the issues that our members continue to wonder what is happening with the inspection on, and they would really like to see it handled by somebody.

I think the municipalities are closest. They could do it when there are sales in the area, or they could do it -- I think sales in the area was one of the consensus things that came up in our association, that it would be something ongoing, but it wouldn't be overwhelming, that 100% of the septic systems were inspected in any one year. Certainly, they're looking for septic systems to be inspected and permitted properly.

Municipalities are in a situation that they could do that, but again, downloading everything to the municipalities certainly means it affects the tax structure within municipalities and the provincial government. I think you have to figure out what is going to be paid at the municipality and what is going to be paid at the province, so that in fact there are not hardships for people paying taxes.

I do believe that the municipalities must be responsible to a regulating body -- and I've already talked about a regulating body. It could be the same body. But I am, and I think a lot of people are, really looking at the provincial government to be a leader as far as setting regulations and having enforcement actually happen. Over the past years, enforcement really hasn't been very effective, so here's an opportunity, even with less staff, to figure out a system where enforcement really does happen.

Bill 107 must reassure the public that municipalities given this responsibility are also responsible or liable for regulatory negligence. We've encountered it with our council in Humphrey township, where it is very debatable, with the staff and how they've organized their municipality, that inspections can happen, unless they are required to happen and they are liable for that.

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In conclusion, I'd like to say that water is a collective and indispensable public resource. Long-range planning and policy development of the Ontario government should not be subject to forces that place profits made from water or sewage above the public's right to the use of water, nor should the Ontario government jeopardize our water resource in any way, in any bill or legislation, such that water would be seen as an export commodity regulated by the North American free trade agreement, which could require a continued supply of our water as a commodity to the United States even if water shortages were to occur within Canada.

The Chair: We have four minutes remaining, so each caucus has one minute only for questions and answers.

Mr Agostino: Thank you for the presentation. It's clear throughout the presentation that you and many other organizations who have spoken before you believe that water should not be privatized, and that government simply has a role and a responsibility to ensure that there is access to clean, safe drinking water and services across Ontario.

This government may or may not proceed with any amendments to prohibit that possibility of privatization. That being the case, if they went ahead and allowed the opening for privatization, do you believe there should be an amendment in this legislation that would force municipalities to hold a binding referendum on the issue of privatization, so that if they were going to go ahead and do it, if the bill allowed it, there would be a provision in there that a referendum would have to be held, that the municipality would have to abide by those results if the public in that municipality said in that referendum, "No, we do not want the service privatized," and the municipality could not proceed? Would that type of provision give you some comfort level?

Ms Buck: There are projects that I'm working with in Toronto with the main sewage treatment plant, and I think it is possible for the services to be privatized, but I wouldn't like to see the water privatized and I wouldn't like to see the lands and the actual utilities sold without public consent. I wouldn't like to see that at all, really. But if a municipality would like to actually go ahead and privatize the services, I think there are a lot of successful examples, and we have one at the main sewage treatment plant now with the biosolids program where it's a private-public partnership that I think could be successful.

Mr Agostino: But clearly, setting the rates would still fall under municipal jurisdiction when it comes to water and sewer services; it wouldn't be a private company that would have the power to set those rates, but it would be a municipal council that would have that power.

Ms Buck: Right.

Ms Churley: Madam Chair, did you know that the Harris government has reduced the original staff from the water and drinking section of the ministry from 113 to 48, which is 42%? I'm not sure if everybody here was aware of that, and I wanted to add it to the list of the measures that this government has taken to actually deregulate in terms of protecting our water.

Thank you for your presentation. I've known you for a very long time and value very much your expertise and interest in this area.

I wanted to know this: If the government were to put a provision in the legislation that says very clearly that the water cannot be privatized, would you feel more comfortable with the legislation? Second, would you recommend to the government that it repeal the section of Bill 26 that says that municipalities can sell off their water supply without public consultation? Would that give you more comfort?

Ms Buck: It would give me more comfort. I don't want to see water being treated as a commodity. Also, I think the actual utilities should remain within the public sector. Again, I'll repeat that if you're putting it in legislation, keep the water, keep the utilities as public, but you can privatize the services.

Mr O'Toole: Thank you, Ms Buck. I respect the fact that you agree with municipalities taking on responsibility for wells and septic. I have a private well and septic and I consider it private, I consider it in my best interests to make sure it's functioning properly. I think driving responsibility down to the lowest level sometimes is the most sustainable method, without oversimplifying things.

With that kind of backdrop, I just have a simple question that I've been trying to follow through with most presenters. The current method for capital funding is when the province comes in and gives a big bundle of money out to build a water or sewer plant. The municipalities end up being the operator, if you will, mostly. I'm from Durham region. I'd ask the question, do you think the system should be operated on a full cost-recovery basis? If you want to have something sustainable and the province under its map grants is not going to be there -- because there just isn't any money; we're borrowing it from Japan or somebody who will give it to us -- should it design sustainable systems close to the users of those systems?

Ms Buck: I agree. I'm not positive, but people may be willing to pay more on their water rates so that there are sustainable systems.

Mr O'Toole: But that helps conservation, would you not agree? If I could show some relationship between the cost -- here's the problem: It's actually blurred now. We're paying for the plants out of a provincial tax pocket and we're paying for the consumption out of our municipal tax pocket, really. It's a user system -- it should be; not all are.

But if you put those together and made it very clear that the one way of having efficient operating plants -- do you think this is a good plan, with that kind of reasoned justification?

Ms Buck: In Toronto, we have always paid for our plants and our infrastructure, except for the subsidies of, I think, 30% and sometimes 50%.

Mr O'Toole: Yes, 50%.

Ms Buck: But I do know that OCWA was running Mississauga's plant, so in fact my provincial taxes were going to pay for OCWA running Mississauga's plant. There are inequities across the province, that if you are going to start dismantling how funding is structured, you probably have the opportunity to make it more equitable all the way through. But I would say that if you are going to increase expenses at the municipal level, there should be some kind of way of triggering a saving in taxes at the provincial level and this may be sorting out what the services are at the provincial level.

Mr O'Toole: It's 30%. That's what we're looking for in savings on the provincial side, the tax break.

Ms Buck: I do not agree with the downloading, and I'll put in a written presentation on Bill 106. I don't agree. I think property should have only the services.

The Chair: I'm sorry. I'm going to interrupt at this point because we are at time and we're moving into another area. I know that the committee members want to thank you for taking the time to come this morning. We were glad you were able to fill in.

GREENPEACE

The Chair: I'd like to welcome Morag Simpson, representing Greenpeace.

Ms Morag Simpson: Good morning. There are seven recommendations that we're making for Bill 107.

Bill 107 should be withdrawn, but if it does proceed:

That water and water and sewerage facilities be explicitly excluded from privatization;

That the provincial government incorporate into any proposed legislation an explicit commitment to investment in high-quality research, development and monitoring, and that all records be available for public inspection;

That any proposed legislation incorporate the creation of an independent regulator -- it's crucial in this case;

That any proposed legislation incorporate an insistence on exploring and investing in alternative water treatment methodologies through local and regional pilot projects;

That any proposed legislation incorporate a commitment to reinvest in acceptable quality infrastructure and maintenance; and

That the export abroad of drinking water for profit by privately owned companies should be prohibited.

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The safety and security of delivery of clean water to households and businesses is one of the things that separates developed countries from less-developed countries. The maintenance of a solid infrastructure, access to clean, safe water -- these are the markers of a strong, healthy, stable economy. Outbreaks of things like dysentery, hepatitis A, cholera and other waterborne diseases are things that we and the greater public associate with the Third World. Yet in the UK, where privatization been tried and tested, outbreaks of dysentery have risen by 600%, hepatitis A by 200%, and contamination of drinking water by accidental spills, dumping, groundwater runoff and the like is a regular occurrence.

Also in the UK, where droughts were a regular summer feature of my youth, summer droughts are now endemic, but rather than leading to adequate conservation strategies, the conglomerates and multinationals that control access to the nation's clean water supplies have sold off reservoirs for land development and have systematically disinvested in maintaining an adequate infrastructure, to the point where apparently, reportedly, approximately 29% of the nation's water is lost to leakage from an aging and badly maintained network -- all this, by the way, despite the presence of an independent, if slightly toothless, agency set up to monitor the ability of the multinationals to deliver and maintain this precious resource.

The legislation, Bill 107, that is before this committee today cannot be reviewed on its own merits and has to be assessed in light of other changes that have been made by your government to environmental, municipal and health regulations.

In the last two years since you have taken office, you have substantially revised, revoked and removed a legislative framework that had been put into place over a period of 20 years that had included legislative initiatives started by the Tory government of Bill Davis and had been built on solidly by all parties and governments that have taken office at Queen's Park ever since.

The cumulative effects of these changes and their effect on the safety of water supply are of enormous concern to the public across the province. The changes that you have proposed and enacted are so wide-reaching that it would take hours to go through all of them, but here are a few that will directly impact on the quality and safety of water in this province:

Bill 26 -- we've already had comments about that this morning.

Changes to MISA regulations will mean greater discharges of persistent organic pollutants into rivers, waterways and the Great Lakes bioregion.

Removal of funding for remedial action plans and offloading of responsibility for continuance of these programs on to the goodwill and deep pockets of the public and municipalities could halt these programs.

Changes in reporting requirements will mean poorer access for the public.

Laying off experienced enforcement officers and expert staff in the labs at the MOEE will have a serious impact not only on the quality and safety of water supplies, but also on the public's perception of agencies to deliver healthy, safe, clean water. Already in Toronto, many thousands of people do not directly drink the tap water for fear of contamination. Some reports actually show that about 75% of people in Toronto do not drink tap water, but rather use home filtration devices or bottled water.

Downloading of responsibility for delivery of essential services to the municipalities without mechanisms for financial support and without an outside and impartial regulator or regulating agency merely sets the stage for the worst kind of privatization.

Simply stating that Bill 107 does not privatize water and sewerage services and that the bill does protect the quality of Ontario's drinking water, without adequate monitoring and enforcement mechanisms and provisions built into the legislation, is just not good enough.

In 1984, the first North American outbreak of another waterborne contaminant, cryptosporidium, affected 400,000 people in Milwaukee, killing 100. Last year in Collingwood, another major outbreak of cryptosporidium had dozens of people visiting hospitals. This parasite is not killed or contained by the chlorination of drinking water supplies, but rather requires an additional investment in more sophisticated treatment and filtration technology.

A serious concern with the proposals and consequences of this proposed legislation is that technical upgrades, investments in alternative technologies and development of pilot projects that will test different methodologies will simply not happen, and we will be locked into an inadequate treatment infrastructure.

As Joseph Cummins told the Globe and Mail, reported just on Monday, "We've recently realized that Canada's water treatment facilities are nowhere near adequate."

Figures released by the World Wildlife Fund in 1995 show loading levels of contaminants from 30 of Ontario's sewage treatment plants into the Great Lakes and St Lawrence basin in excess of 293,000 kilos of heavy metals, which included zinc, cadmium, copper, lead, mercury and chromium, over 181 kilos of pesticides and 22,256 kilos of industrial chemicals, including PCBs, dioxins, furans, industrial solvents and cleaners. These identified discharges from sewage treatment plants only represent a total of approximately 75% of discharges from sewage treatment plants in 1995.

With little provincial expertise remaining, and the offloading of responsibility for regulating construction and use of septic systems on municipalities, regardless of whether there is an investment in expert staffing by the municipalities, safety and security are again an issue. Without proper inspection and enforcement, rural septic systems will continue to pose a significant threat to ground and surface water contamination.

Finally, I'd like to remind you of poll results that have been conducted on the possible privatization of Ontario's water. In January, as Peter Tabuns also reported this morning, an Insight poll showed that 76% of Ontarians favoured public ownership of this vital resource. Yesterday you heard that 86% of Ontarians believe that water is not a commodity to be sold for profit. I believe that the public faith in the ability of multinationals to deliver a safe, clean water supply is absent, and reflecting on the UK experience, this absence of public trust is warranted.

The Chair: We have five minutes remaining, so that's a minute for question and answer.

Ms Churley: I just want to thank you very much for your submission. I know you have a long background in this area and I value your expertise in this. I just wanted to add another area -- you mentioned many of them and so have I -- that I forgot to mention earlier: the deregulation of mineral exploration activities under the Public Lands Act and of course groundwater contamination due to mine exploration. Boreholes, as the members may not be aware, have been a serious problem up north for a long time; that's another area.

Mr Laughren: Is there no end to this list?

Ms Churley: No, there isn't.

I wanted to ask you a question. There were members in the House some months ago, when the minister suggested that privatization was a good thing and he couldn't wait to get on with it, who said that what happened in England could not happen here because that's not what they're proposing. If you read Hansard from England, Thatcher and the minister responsible said very similar things. I wanted to ask you your opinion on that, because they do say it couldn't happen here. Why do you say it can, given this bill and their responses?

Ms Simpson: As the bill stands at the moment, what was set up in the UK was the creation of a quango, which was supposed to look at, assess, intervene and monitor the delivery of safe, clean, healthy drinking water supplies in the UK. There is no such proposal in this legislation. Especially if you look at the legislation within the parameters of all of the other legislative changes that have been proposed in the last two years, there is no mechanism at all to monitor contamination; there is no provision for restricting pollutants from industrial sources into our waterways and riverways and thus contaminating the water. In actual fact --

The Chair: Wrap up, please. Sorry. I do caution members, when I say a minute, I mean a minute for question and answer. I'm going to have to cut off the presenters if the questions are too long and the answers are too long. I don't like to do that, so please. Mr Ouellette and Mrs Munro.

Mr Ouellette: Thanks for your presentation. A couple of quick questions. First of all, on point 6 regarding the water, does that include bottled water?

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Ms Simpson: I think when you're talking about the export of water, there are two reasons for including this point. One is the provisions of NAFTA, which would prevent you from not exporting once you've gone down that path.

The second reason is that if you are providing a framework for the export of water, you are not ensuring at all conservation strategies in Canada and particularly in Ontario.

Mr Ouellette: Okay. Also in the same manner that we're always hearing more about the percentage or number of truck tires, wheels that have fallen off, do you have any verifiable information or data regarding the percentage increase directly caused by the water changes in England, or is it just that the recording and the information that's being transmitted is -- because of the changes, we're now seeing that this has always taken place and the recording is being increased?

Ms Simpson: Are you referring to the increase in outbreaks of dysentery and hepatitis A?

Mr Ouellette: The 600% and the 200%, yes.

Ms Simpson: Those were figures that were reported by the British Medical Association last year.

This kind of legislation, if you look at the kind of commentary that has been made in the UK, particularly in the last 18 months, where there have been serious shortages shown -- last year, the editorial board of the Financial Times, for example, which is not known as a radical left-wing newspaper in the UK, reported that the privatization of water in England and Wales was nothing short of scam, theft of the public purse, legalized robbery and a mugging. This is pretty strong stuff for the Financial Times to say.

Mr Ouellette: I'm just trying to find out how they got to the 600% and 200%.

The Chair: Thank you. Mr Agostino.

Mr Agostino: Thank you for the presentation. I think you brought out a point in regard to regulations and monitoring, which is critical to all this. As we've seen in other areas, this government's philosophy in many areas of the environment has been self-monitoring, self-regulation, self-compliance. They seem to be moving more and more towards leaving it to the goodwill of the private sector and the corporations to monitor and comply. In my own community we saw how well that worked 20 or 30 years ago, where chemicals and raw sewage were being pumped directly into Hamilton Harbour as a result of self-compliance and self-regulation.

The concern I have in this area, and I want to get your view on it, is that we're moving to the same thing. If you privatize water and then you move to the step of self-monitoring, self-compliance, you see a danger to public health as a result of that.

Ms Simpson: Absolutely. There's no question that will be the result.

The Chair: Ms Simpson, we thank you for taking the time to come before us this morning. We appreciate your advice.

ONTARIO POLLUTION CONTROL EQUIPMENT ASSOCIATION

The Chair: We now ask Mr Brian Gage to come forward please, from Ontario Pollution Control Equipment Association. Welcome, Mr Gage. You have 15 minutes for your presentation, and that includes questions from the caucuses.

Mr Brian Gage: I'll try to be brief. I've prepared a two-page note which outlines some of our comments to this committee. We take pleasure in making comments and thank you for the opportunity of having the chance to provide some input.

Just on background, OPCEA is a non-profit organization comprised of member companies which supply equipment and services to the water and waste water treatment industry in Ontario. I enclose -- actually I haven't enclosed, but I can pass around this copy of our membership and the products that we supply, for your information, to provide you with a better idea of who we are and what we do.

OPCEA has been in existence since 1970 and its focus has been to service largely the municipal market for water and waste water treatment, the same market to which the subject Bill 107 applies. OPCEA is closely tied to another organization, the Water Environment Association of Ontario, the WEAO, and an annual technology transfer conference is jointly sponsored by the two organizations. The conference this year was in London. It was attended by about 700 people, some of whom you may have seen on Monday or Tuesday of this week while you were receiving deputations there.

Although OPCEA has no serious objection to the transfer of the water and waste water treatment plants and the collection and distribution systems associated with them to the municipalities which are served by those facilities, it is very concerned that those assets not be subsequently sold to the private sector. The people of Ontario have paid for those assets through provincial and municipal property taxes or through water or waste water surcharges, and to a certain extent they have mortgaged their future in order to enjoy the benefits of safe drinking water and unpolluted rivers and streams.

Bill 107 leaves the door open for the wholesale transfer of this vital infrastructure to private interests which take profits without necessarily adequately maintaining the infrastructure. Should this privatization occur, OPCEA member companies would likely suffer a decline in revenues, at least initially, which obviously is not in our interests.

Ontario has been a leader in providing water and waste water treatment for its population. This leadership was provided by the province through the Ministry of the Environment. The standards of treatment provided were higher here than in the other provinces in Canada and certainly a large number of our neighbouring states.

One result of this progressive, conservative and proactive participation, by originally the Ontario Clean Water Agency and subsequently the Ministry of Environment, was the birth and growth of companies right here in Ontario which subsequently formed or joined OPCEA. Those companies have developed expertise that is now being exported around the world. Many Ontario-based companies, such as Trojan UV Systems, are now world leaders in their areas of expertise but owe their very existence to the efforts of the Ministry of the Environment, and those company profits are taxed right here in Ontario.

The Ontario Clean Water Agency, or OCWA, the operations section of the Ministry of Environment which was spun off by your government, owns and operates plants which service a large number of rural communities. Those communities are of a size and population where qualified personnel capable of operating the treatment plants are hard to find. Furthermore, the costs of building or operating those plants are high due to the lack of economy of scale. These are plants which nobody wants to own or operate. They are plants which are vulnerable to eventual closure, but they are also the plants which support tourism and trade for the province as a whole and thereby can be justified on a provincial basis. Bill 107 ignores this fact or reality.

The equipment and services required for water and waste water treatment plants are very complex today. The expertise required to evaluate, purchase, install and operate equipment or services provided by OPCEA member companies is quite significant. The MOEE, or OCWA, has personnel with enough expertise to usually make the right decisions, but many of the small communities, when on their own, are vulnerable to making poor decisions which could ultimately threaten public health. It is in everyone's interests, including the members of OPCEA, that the right decisions are made, so if we have a concern, it is for the smaller communities serviced by OCWA.

The impact of Bill 107 on OPCEA will include the following: The number of clients we will have to service will increase, making it more difficult to service the marketplace, particularly in the remote areas; the requirement to meet Canadian content requirements in larger contracts will likely be reduced; the potential for credit problems will increase to the vendors with smaller communities or possibly the private sector.

There is an advantage in that the potential for more variation in what is actually used will increase, which could lead to more innovation. The enforcement of regulations and the promulgation of regulations will be less encumbered with the MOEE not being in the business of both the operation of plants and enforcement of regulations at the same time. Perhaps with all the plants no longer the responsibility of the MOEE, through OCWA, the M in MISA will actually be promulgated and put into effect. This long overdue and promised regulation would be a stimulus for sales for OPCEA members.

One of the more immediate concerns of OPCEA is the manner in which the provincial government would participate in an infrastructure program currently being proposed by the federal government. The generally poor state of the water and waste water treatment infrastructure in Ontario has been well documented. One survey was done by Gore and Storrie, Mr George Powell and Sherry Eaton, which some of you may be familiar with. But the point is that practically all of the funds from the infrastructure program could be used right here in Ontario to improve our infrastructure, and by infrastructure I mean the sewers and water and waste water treatment plants in addition to potholes in our roads.

Given the history of funding splits between the federal, provincial and municipal governments, we foresee some difficulty looking to the province for their share when they have passed ownership to the municipalities with this bill.

OPCEA again would like to thank you for the opportunity to address this committee.

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The Chair: Thank you very much. We have six minutes remaining. That's two minutes per caucus, and we'll begin with the government caucus.

Mrs Fisher: I'll just take one second of that time, but I do want to comment on one of the points with regard to remote areas and perhaps the difficulty in providing service there. I happen to represent rural communities of Ontario and I find the opposite happening, quite frankly. I find that where OCWA had individual contracts, agreements to service and operate facilities in place now, just within the last six months we find six communities coming together.

The cost effect of that, to give you an example, is very beneficial to the communities. Just to give you one example, a year ago, a community of about 1,300 people purchased that service from OCWA to the tune of $135,000. In working with other communities to consolidate some of that servicing requirement in rural communities, they actually reduced it to $90,000. I find that is a significant savings for a small community.

I don't mean to be controversial with you, but I can tell you that some of the benefits and the gain that can be made by municipalities working together here can be shown through that type of negotiation.

Mr Gage: My response to that would be that it may be quite valid, your personal experience. It could be anecdotal. It could be that OCWA didn't have good numbers to present for the operations of the plants because they're relatively new in the business, and it may be that you were low-balled by another service provider that is looking down the road for additional contracts once they've established them in the community.

Mrs Fisher: Actually quite the opposite. The continuing contract is with OCWA.

Mrs Munro: I just have one quick question. On the first page of your submission you suggest here your concern about assets not being sold to the private sector, and certainly this is something that we have heard from others. I'm just wondering if you see this as likely. When you raise this issue, is it based on a premise that you consider it likely?

Mr Gage: I would say the likelihood is remote in that I would hope that most municipalities -- and the past experience I've seen is in Hamilton-Wentworth and also in York region, that they've retained ownership of the infrastructure and looked for contract operations of services, and that I don't think we have a problem with.

It's when you actually sell those assets that you're constrained not only in the growth you can achieve within your community because you're beholden to a private organization that may or may not wish to concur with your growth plans. If we look back in history and see what happened 150 years ago, I think people will see the light and continue to do what we've seen being done to date.

But there could be communities that are very strapped for cash that are facing bankruptcy as a municipality that could look to privatization as a way of getting them out of an immediate problem.

Mr Agostino: Just along the same points, Brian, I think when it comes to the issue of privatization of these types of services, history is probably not a good guide because of the things that have occurred, as I've said a number of times.

The example you gave in Hamilton-Wentworth is a good one, distinguishing clearly between the operation of a facility with a company that comes in and may do it just as well and, as long as you provide contract protection for workers and those types of things, it could work and it could save us probably some money. But I think clearly a difference between that and outright owning the facility and the ability to set rates is the danger here.

Although it hasn't happened in the past, do you believe there's a real possibility here that as a result of dumping and downloading on municipalities which are having to offset those costs, the only real asset the municipalities have that the private sector may really want to buy into is this? Nobody is going to want to buy the TTC and think they're going to run it for a profit unless they charge $10 a ride or something. Do you not see that as a risk that wasn't there in the past?

Mr Gage: We definitely see that as a risk. We've identified that in our response and we're concerned about it because we've seen experiences outside the country that lead us to believe that inadequate assurances as to how the plant was maintained were made and, as a result, excessive profits were made by companies that we ended up seeing here acquiring companies.

I just wanted to speak to Bill 107, which I see as being the privatization of the infrastructure and not the operations. So really the question about operations is a separate issue that should be addressed in some other way, but it's not being addressed in 107.

Mr Laughren: Mr Gage, thank you for your presentation. Are members in OPCEA largely private sector organizations?

Mr Gage: Yes.

Mr Laughren: Well, I'm shocked and appalled that you would come before us and be against privatization of a sewer and water system. What happened to your ideology? Did you get lost along the way?

Mr Gage: Mr Laughren, I work for a company called Degremont Infilco Ltd, which is owned by Degremont in Paris, which is owned by a company called Lyonnaise des Eaux, which is a large operations company, one of the largest in the world. I'm also a citizen of Ontario and concerned about the proper contracting out of operations. The companies I work for see no problem with operations. In fact, Lyonnaise has a practice of providing operations but not owning the infrastructure. It's a model that is foreign to France but one that was initiated in Britain. So speaking individually, I don't see any problem with what we've said here, and collectively, as a group, I guess the clearest point I received from the OPCEA board of directors when we discussed this was this one point about ownership of infrastructure and the concern about the maintenance of that infrastructure by the companies should you sell them.

The Chair: Thank you for taking the time to come this morning. We appreciate hearing your advice.

CONSULTING ENGINEERS OF ONTARIO

The Chair: I'd now like to welcome, please, Mr Mahoney from the association of Consulting Engineers of Ontario. Actually, is it Erin, Ms Mahoney?

Ms Erin Mahoney: Yes, it is.

The Chair: My apologies. I wasn't reading carefully. Welcome. Please introduce yourself and your colleague, and you have 15 minutes for your presentation.

Mr Don Ingram: Madam Chairperson, committee members, I'm Don Ingram. I am president of the Consulting Engineers of Ontario, and Erin Mahoney with me is the chairman of our liaison committee that functions between CEO and the Ministry of Environment and Energy.

The association of the Consulting Engineers of Ontario is pleased to be here today to present our views on Bill 107 to the standing committee on resources development. Consulting engineers have been involved with virtually all the municipal water and sewage infrastructure in the province and we appreciate the opportunity to offer our comments on the Municipal Water and Sewage Transfer Act.

CEO is an organization devoted to the business and professional aspects of the practice of consulting engineering in Ontario. More than 275 firms are members. "Consulting engineer" is a designation used by a professional engineer in private practice who has met the requirements of the Professional Engineers Act and who has been approved to use this designation by the council of the Association of Professional Engineers of Ontario.

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A combination of education, technical knowledge, experience, judgement, integrity and a high dedication to a strict code of professional ethics and a code of consulting engineering practice are the hallmarks of our industry. The consulting engineer has an integral and vital role in advanced technological planning and design that is essential to the successful operation of projects which have a significant interface with the environment. Of relevance to Bill 107 is our expertise with respect to the sewage and water treatment infrastructure in Ontario.

The ingenuity and application of scientific knowledge to meet human needs, from the investigative process to completion of capital projects, places consulting engineers in a unique position to serve public and government bodies and to comment today on the proposed legislation.

CEO advocates contracting out by government departments and agencies with a view to providing greater opportunities in the free-enterprise system, producing world-class consulting engineering firms that export services and provide spinoff benefits to Ontario's manufacturers and suppliers.

We support the intent of Bill 107 to allow municipalities to take ownership of the water and sewage infrastructure which provides water supply and sewage treatment services to their jurisdiction. This compatibility in ownership with responsibility for service delivery and accountability at the municipal level of government will ultimately benefit the consumers of these services.

We believe this initiative will advance the province's objectives to reduce duplication and clarify the accountability for the water supply and sewage treatment systems in the province.

Ms Mahoney: By transferring the provincially owned water and sewage facilities to municipalities, this new legislation will clear the way for municipalities to determine the most appropriate service arrangements for their situation.

The fact that the bill does not preclude public or private partnership or ownership creates flexibility for the owner municipalities and the taxpayers of Ontario by providing choice and access to capabilities which may be possessed by one or the other of the public and private sectors.

Treatment and supply of water and waste water services are activities vital to the health and safety of municipal residents and businesses. Therefore, changes affecting the operations and staffing of municipal water and sewage systems must be carefully considered and well managed from the outset.

We believe that during the nine-month period prior to the date upon which the transfer order becomes effective, municipalities must have the right to complete a condition survey of the current status of system components; to also complete an evaluation of the assets, including any transferred water distribution and sewage collection systems; to complete an audit and inventory of the real estate; to conduct a financial valuation of the assets being transferred; and finally to determine any liabilities associated with these water and sewage systems. In the ownership transfer process the province must also preserve the rights of recourse for owner municipalities to those suppliers and contractors who have been involved with their water supply and sewage treatment systems.

The significant capital investment by the province in these water and sewage facilities must be protected and facility performance guaranteed through establishment and enforcement of provincial standards. The province has a paramount role to control the quality of water and sewage treatment services through comprehensive standard-setting. Such standards must be founded on a consideration of health-based risk assessment and best available technology.

We are of the opinion that CEO can provide the province with valuable input into the standard-setting process. Consulting engineers can provide the pragmatic reality check needed in such a process. Any government body setting standards in the modern era must balance considerations of economic sustainability and best theoretically achievable performance. CEO's experience and objectivity in the water and sewage treatment industry can help establish this middle ground.

To continue to provide a high level of service to system users, the owner municipality must be able to choose innovative and cost-effective technology.

CEO wishes to reinforce to the standing committee our position on Bill 57, as it is relevant to the purpose of Bill 107, namely to facilitate delivery of better services at lower costs. The province must ensure that approvals requirements for water and sewage infrastructure are not a disincentive to process changes and the use of new technology.

Independent audits of water and sewage system performance accompanied by published audit results on key performance benchmarks such as water quality should be conducted and are expected to provide benefits to system consumers. The province should promote self-management using frameworks such as ISO 14000, the environment series, as one mechanism for owner municipalities to use to maintain a high quality of service delivery and as the basis for minimizing the province's involvement.

In the early 1960s, the Ontario Water Resources Commission provided the lion's share of the funds to build our water and sewage infrastructure. This commission and later the Ministry of Environment and Energy saw the need to develop and maintain an operating arm to ensure that the value of the infrastructure would be maintained and that the facilities would be operated properly.

This strategy was critical to maintaining the quality of the infrastructure. Some areas in the province are on their third facility in 25 years, while other properly maintained and operated facilities are still satisfactorily running the original 25-year-old pumps. Maintaining a high standard of operating expertise is the key means of meeting performance standards and extending the life of the infrastructure to keep costs down.

World-class water supply and sewage treatment facilities can only be sustained if they are operated by properly trained and certified staff. The Consulting Engineers believe that operator certification is an absolute necessity and must continue to be required to provide the taxpayers of Ontario with safe, reliable and cost-effective water supply and sewage services.

The Consulting Engineers of Ontario believe that by implementing the ownership transfer as outlined in Bill 107, the province's objectives to reduce duplication and clarify the accountability for water and sewage systems will be achieved.

Our recommendations on performing condition surveys and conducting a financial valuation will provide the owner municipalities with the necessary information on the status of their water and sewage assets. We also believe that if those systems are operated by certified staff and independently audited, the quality of service delivery will be maintained at lower cost. By ensuring that regulatory approvals requirements do not impede but rather encourage the use of new, innovative process technology, as is the intent of Bill 57, monetary resources will be available for investment in those areas which can most directly benefit the environment: the capital infrastructure of the water and sewage works in the province.

In summary, the Consulting Engineers of Ontario support the direction of the changes outlined in Bill 107. We believe the consulting engineering industry will play an important role in assisting the province and owner municipalities in maintaining a high quality of service delivery from the water and sewage infrastructure in the province.

Don Ingram, president of CEO, or I would be pleased to respond to any of your questions.

The Chair: Thank you very much. We have five minutes remaining; that's just over a minute per caucus.

Mr Agostino: Thank you for your presentation. I just want to touch on a couple of points. You have one section called "Competitive Opportunities," and I want to focus on that for a second. Based on this, if I read it correctly, you believe it would be appropriate for full private ownership, operation and setting of water and sewer rates by private sector corporations.

Ms Mahoney: CEO does not advocate for privatization, although we do advocate for contracting out. Our position with respect to the bill is that it does not preclude municipalities of any choice that they may wish to pursue to provide them with the best and most cost-effective service for their jurisdiction.

Mr Agostino: Do you believe, though, that the privatization of the infrastructure -- I'm not talking about running the operation but the selling of the assets and the control of the infrastructure -- is a good thing or a bad thing for consumers in Ontario?

Ms Mahoney: We believe that the role of the public or private sector in owning the facilities -- I think we're neutral with respect to that and believe it should be up to the specific municipality to decide what best meets their needs.

Mr Agostino: So you don't have an opinion on whether it's in the best interest of the public to have public or private ownership of these facilities?

Mr Ingram: We don't take a strong position with respect to privatization. We believe the municipalities involved should look at their size and their capabilities and make a determination themselves. We don't support wholesale privatization. We don't preclude it as an option where it suits the purpose and the situation within the municipality.

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Mr Laughren: Thank you for your presentation. I notice that at the very beginning, in your overview, you say, "We support the intent of Bill 107 to allow municipalities to take ownership...." I don't think that's what this bill does. It makes them take ownership of water and sewage facilities infrastructure. I support your position. I think there's nothing wrong with the municipalities saying they want to if they want to, but this doesn't do that. I just wanted to make that point. It doesn't allow them; it requires them to.

Secondly, I wonder if you'd comment -- I don't want to put you in the middle of a political battle, because that's our problem here, but the whole issue of privatization is an important one in terms of public policy for those of us who are elected to debate this. There are a number of issues at stake. One is the example of Great Britain, which is truly a horror story. I don't know whether you've followed that or not, but it really is horrible what's happened there with privatization.

Thirdly, a year ago, 76% of people in Ontario, in a statistically significant poll, indicated they were opposed to the sale of water and sewer assets, particularly water. This year it's up to 86%. So you've got a huge preponderance of the public who don't want this to happen. They don't like to see profits attached to water. I think they see it as one of those things like health care that shouldn't be.

So I wonder if that bothers you at all when you are thinking of the public position you will be asked about and have to take as an organization, if the experience in Britain gives you pause for thought, and the strong feelings of the public at large against this privatization.

Ms Mahoney: I know there are a couple of sections in the bill which require that should a private ownership position be chosen by a municipality, the prepayment of the debt is required. I think that type of requirement and the amount of provincial and federal contribution to the infrastructure that's being transferred to municipalities will dampen the tendency for these assets to come into private ownership. So I think that feature of the bill provides for perhaps a tendency for the infrastructure to stay in municipal ownership, public ownership.

Mr Galt: Thank you for the interesting presentation. I'm interested in your comments about regulations. There's no question that we do have regulations in place that actually impede good environmental protection. That's what the environmental review is all about, and the sooner we can get that through, the better for the environment.

We've heard a lot of presentations and some concerns about free water or low-cost water or who pays. I'm starting to be a little confused and I'd like to hear your response on this. I look to rural Ontario, where two million to three million people have private wells and their septic systems costing anywhere, in combination, probably from $8,000 to $20,000. They have to operate it and maintain it, and then we have other people who are on the communal systems and everybody's using it. I'm sitting here wondering who should pay. If I shouldn't have to pay, then who should pay for me? Do you have any feelings on who should be paying for this?

Ms Mahoney: Who should be paying for the private services?

Mr Galt: Any of them. In cities or towns, they talk about free drinking water sometimes, but it costs money.

Ms Mahoney: Yes. Absolutely.

Mr Galt: So I'm sitting back wondering, who should pay? Should it be rural Ontario paying for the towns?

Ms Mahoney: We believe that full-cost user-pay systems are appropriate to recover the cost of providing water and sewage treatment services to the province's residents and businesses.

Mr Galt: Certainly this has been masked in the past by provincial grants to municipalities and then they charge sort of their day-to-day operation, not recognizing the true cost to deliver water and take the sewage away.

Mr Ingram: If I might comment, I think one of the key aspects of that is that if you are ever going to encourage conservation and efficient use of water as a resource, the user has to recognize what the full cost is of providing that resource to him.

Mr Galt: We sure do in rural Ontario.

The Chair: Thank you very much for your presentation this morning. The committee members appreciate your taking the time.

WATER ENVIRONMENT ASSOCIATION OF ONTARIO

The Chair: I'd like to now call Mr De Angelis from the Water Environment Association of Ontario. Welcome. Please begin.

Mr Bill De Angelis: Thank you very much. My name is Bill De Angelis. I am a member of the executive of the Water Environment Association of Ontario. I'd like to read into the record a letter that we sent to Minister Sterling in January regarding our position.

"Dear Minister Sterling:

"The Water Environment Association of Ontario is an organization with a mission of `A Clean Water Environment Today and Tomorrow.' We have a membership of 1,300 professionals drawn from federal, provincial and municipal governments, industry, academia, consulting engineers and equipment suppliers. We are a member of the Water Environment Federation. It is comprised of over 60 member associations situated throughout the world and has a total membership of over 42,000.

"Mr Minister, we would like to offer our support to the principle of user pay for water and sewage infrastructure. We were a member of the water industry group which supported the formation of the Ontario Clean Water Agency.

"Mr Minister, we understand that you wish to turn back to the municipalities the ownership of their water and sewage infrastructure. We believe that this step does not compromise the quality of service delivered to the residents of Ontario.

"We do have some reservations concerning the ability of the smaller communities, now serviced by OCWA, being able to afford the delivery of services on their own. They will presumably have to look to an organization such as OCWA, who would deliver to a number of communities, thereby obtaining the economies of scale. Minister Sterling, the Ontario Water Resources Commission and its successor, the MOEE operations branch and now OCWA, have delivered a high quality of service to these small communities by means of common staff or common administration. You will have to ensure that combining of services continues in the future in order to provide services to these small communities. Our association stands ready to assist your ministry in whatever way you feel is best.

"We will be sending you a letter authored by the Ontario Water Works Association and the Water Environment Association of Ontario concerning the administration of the operator certification program."

It is signed by our president, D.C. Edwardson. As a matter of fact, one of the members of our executive attended a session this morning to signify our interest in getting involved in the certification program.

Just to sum up, we have been around for a long time. We have a lot of fine members in the public and the private sector with a wide variety of skills, and it would be our pleasure to assist you in your deliberations.

The Chair: Thank you very much. You have given us lots of time for questions.

Mr Laughren: Thank you, Mr Edwardson. Have I got the name right?

Mr De Angelis: De Angelis.

Mr Laughren: I'm sorry. Actually, I was reading the letter, the person who signed the letter.

When you talk about the transfer of the facilities back to the municipalities, I don't think that bothers most of us very much, assuming that the municipalities can handle that exercise. I think you expressed that as well. I represent in my own constituency, which is a sprawling northern constituency, many communities that have virtually no tax base, I mean as close to no tax base as you could get, no industry really, just a gathering of 300 or 400 souls in a small, isolated community. I worry a great deal about those.

If OCWA is disbanded, I think that responsibility -- and I know the parliamentary assistant will help me if I'm wrong here -- will be taken over by municipal affairs. The Ministry of Municipal Affairs will look after those municipalities.

Interjection.

Mr Laughren: Oh, I thought there were.

Mr Galt: With the septics, it being municipal affairs is suggested there, yes.

Mr Laughren: Oh, just the septics. I see. Well, then, I stand corrected. Thank you for that. Because I am worried about the small communities that can't afford to handle this kind of responsibility.

Secondly, and this may sound like a political statement but I don't really mean it that way, because of the downloading, the shifting around of responsibilities between the province and the municipalities, I think it's generally conceded that the municipalities are going to have added costs. I think there's a general concession to that fact in the province. If you talk to any of the municipalities who have done their numbers, they could prove it to you.

What I am worried about are those municipalities, because of that crunch, selling off their assets such as sewer and water facilities. I wondered what your organization thought about that, given the history that's occurred elsewhere when water has been privatized, what your view is of that.

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Mr De Angelis: The British experience keeps coming to the front and it has painted the entire industry with a black eye. There is a large difference between the selling off of the assets, which is was what happened in the British experience, and what is tending to happen in North America, where we're going into contract operations.

As an organization, we don't favour public over private. We're mostly concerned about water quality and the most efficient use of dollars, and whichever way provides that service is the way it should go.

Our experience in looking at contract operation fields is, as you say, that towns that come upon a cash crunch that have difficulty financing infrastructure may look towards that option.

Mr Laughren: If in fact that has happened, who should be responsible for monitoring and inspecting and so forth of those systems then? Who should pay for that?

Mr De Angelis: Up until now, the ministry has provided that service for us. We believe it has been provided well and I don't know that there's any reason why that should discontinue. There's a role for a regulator.

The Chair: Sorry, we must move on. Mr O'Toole for the government caucus.

Mr O'Toole: We've heard over the last number of days of these hearings that the future is really moving towards GO/CO, government-owned, contractor-operated. I suspect that's kind of what you're saying here as well, reading through this. But I think the big disguise over the past while has been the way capital has been managed itself, how these plants actually got built. Maybe whether they were sustainable in a small community or not, there's always this understanding that the government would come in and just pay for the capital improvements or whatever. That's been the status quo, has it not, where we've been?

Mr De Angelis: I think that generally money has been available in the past for improvements.

Mr O'Toole: Maybe even money that we didn't have, right? Like, we borrowed it? I'd like Floyd to stay and hear this, because Floyd really was an expert at it. He used about $100 billion.

I have a more serious question. As the full debate on Bill 98, the Development Charges Act, is in process, and every time I add capacity to water-sewer, the net beneficiaries are those new lots and those new homes, who should pay for the capital: the users or somebody living in Sudbury, like Floyd, on a private septic system?

Mr De Angelis: I don't have a comment on that.

Mr O'Toole: You don't?

Mr De Angelis: No.

Mr O'Toole: No, who should pay, really? If all of a sudden you have a farmer's field and we're going to put pipes in the ground and service it with a capacity plant, who should be paying for that? Somebody living in Thunder Bay? Who pays for the capital infrastructure in a community?

Mr De Angelis: I think, going back to the question on the available funds in the local communities, a lot of communities cannot support the types of system they require. So therefore --

Mr O'Toole: Maybe they shouldn't have them.

Mr De Angelis: Well, our onus is on environmental protection. I think that --

Mr O'Toole: Fully agree. Why don't they go to private sewage systems then?

Mr De Angelis: I think that's part of the debate that's coming out now.

Mr O'Toole: Exactly. And if you have private, you have less development, you can let the development -- you have smaller levels of service in smaller communities. But it's got to be self-sustaining. That's what sustainability means. It doesn't mean that the Bank of Toronto bails out Napanee.

Mr De Angelis: As an organization, we support full-cost pricing of water and sewage.

Mr O'Toole: That's excellent. Thank you.

Mr Agostino: My colleague just opened up an interesting point, and I think that's part of what's driving all this, is how wonderful the philosophy of total user-pay sounds. The reality is that there is an imbalance and inequality in income. There's imbalance and inequality in assets in communities, in assessment growth. If we want to separate this province into hundreds and hundreds of little towns and communities and put walls and borders around each one and say, "If you can't make it on your own, that's tough," that certainly is not a vision that I share about how we should operate as a province.

I think we have a responsibility overall to communities who have difficulty looking after their own needs. That is why I think we try to operate the province in a manner that shows some care and compassion for each other.

I just think that philosophy, frankly, is the wrong way to go because you don't take into consideration ability to pay and need, and simply the survival of the fittest is the way we should operate. If you can't make it on your own, then I guess you just don't get water.

The danger that I see with this bill is that whole mentality as we move towards privatization, as we leave the door open to the private sector to come in, operate a facility, charge the fees and then at the end of the day, as is the experience in Britain, if you can't pay the water bill, tough. If you're a senior on a fixed income, if you're disabled, tough. We just shut the tap off and you make it on your own or go to a neighbour down the street and use their water.

I think it's this kind of debate that leads to the concerns we have in the opposition. I don't want to ask you all the questions, because you're doing a great job of staying out of the political debate and simply representing your view, and I think it's appropriate that you shouldn't be drawn into that.

I want to go back to Mr Laughren's point about the monitoring, inspecting, and sort of ensuring that the standards, whatever standards are in place, are met. Do you believe that should continue to be the role of government, that government should still have the responsibility to ensure that there's clean, safe water available to people across Ontario and that standards and regulations are met, or do you believe the private sector should play a role in that as well?

Mr De Angelis: It should probably be a hybrid system. I think you'll find in the US some areas are moving towards self-regulation and self-monitoring, and I think we'll see that to some degree here.

Mr Agostino: I think we've seen it already.

Mr De Angelis: I believe there's still a control function that is required.

The Chair: Thank you very much.

Colleagues, that's our last presenter of the morning. I'd just like your indulgence for one moment. Yesterday we had a presentation by a fellow by the name of Tony Formo, who indicated that, and I quote, he "worked as a research officer at Queen's Park." I think some of us may have misunderstood that he perhaps was a member of the legislative research staff here at Queen's Park. The staff wanted to indicate to me that this gentleman was not part of the staff here. I think it's important to note this because we all rely on the legislative staff for non-partisan information from time to time. I thought we should all be aware of that.

Mr Galt: So who did he work for?

The Chair: It's not clear, but it wasn't part of the legislative research staff here in the Legislature.

Mr Galt: One of the parties?

The Chair: Possibly one of the parties, yes. Possibly.

This committee stands recessed until 1:30 this afternoon.

The committee recessed from 1217 to 1336.

The Chair: Good afternoon, everyone. I call to order the afternoon hearings of the third day for 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.

Ms Churley: Madam Chair, before we begin, just very briefly, there have been a number of questions asked and perhaps you or somebody else here might be able to help, because I don't know the answer. There's a question around how committees are chosen to be televised and who makes that decision and I'm unable to tell them. I know that some people here are asking that question. It's just something that I don't know the answer to and perhaps you do.

The Chair: I don't know the answer, myself. I refer to the clerk. Can you tell us?

Clerk Pro Tem (Ms Donna Bryce): Each standing committee is assigned a room. There are 11 standing committees. This committee has been assigned this room, 228. I believe actual value was assigned room 151.

Ms Churley: The Amethyst Room.

Clerk Pro Tem: That's right.

Ms Churley: What committee is that coming under?

Clerk Pro Tem: Finance and economic affairs, I believe.

Ms Churley: But that's not their regular room. That's why I ask, because that's usually community and social services, whatever that area is.

Clerk Pro Tem: During the recess the rooms were assigned again.

Ms Churley: Who does the assigning?

Clerk Pro Tem: The Clerk's office.

Ms Churley: How are the decisions made? Of course AVA is very important and there are a lot of important bills, but there are concerns expressed about how important this is and it isn't being televised.

Clerk Pro Tem: I think there are probably a number of things. As you just said, the matter of public interest might be taken into consideration; if French translation is required. There are a whole number of issues surrounding the decisions.

Ms Churley: One final question: Yesterday, the other committee in the Amethyst Room, AVA, ended early and we were still going on. Is there any reason why, if one committee ends early, they can't then just pick up the proceedings from another committee?

Clerk Pro Tem: I think the logistics. It's just very difficult for a committee to pick up and move.

Ms Churley: We'd actually have to move into that room?

Clerk Pro Tem: Exactly.

Ms Churley: I see. Okay, thanks for your help. That clarifies it.

CANADIAN INSTITUTE FOR ENVIRONMENTAL LAW AND POLICY

The Chair: We'll begin this afternoon with our first presenters, Mark Winfield and Anne Mitchell from the Canadian Institute for Environmental Law and Policy. Good afternoon and welcome.

Ms Anne Mitchell: Thank you, Madam Chair. Good afternoon to you and to members of the committee. Thank you very much for the opportunity to meet with you today. I also have with me Dr Mark Winfield, who is our director of research at CIELAP and who has prepared the brief that you have before you. I'm the executive director of the organization.

A little bit about CIELAP: It was formed in 1970 because of the continuing need for objective analyses of environmental law and policy issues. We feel there's clearly still that need. We are independent of both government and industry. We're a national, not-for-profit, charitable research and educational institute committed to reforming law and public policy.

We're concerned about the fact that presenters before your committee on this bill have only had 15 minutes. We won't take up time being concerned about that, but I hope you somehow or other have a mechanism to digest all of the information that you've received and are able to give it the time that is needed to make good decisions.

We can't support this bill as it stands. It fails to address, in our view, the real environmental and public health problems which are presented by the province's deteriorating municipal water infrastructure. The Provincial Auditor, the Environmental Commissioner for Ontario, the Commission on Planning and Development Reform and the Ministry of Environment and Energy itself have identified serious problems with Ontario's sewer and water infrastructure and the operation of septic systems in the province.

These key problems include the lack of effective controls on industrial discharges into municipal sewer systems. It's estimated that industries release between 350,000 and one million tonnes of hazardous and liquid industrial wastes into municipal sewer systems each year. Another problem is the continuing failure of sewage treatment plants to meet provincial effluent guidelines, and this is largely due to aging facilities. In a 1991 review, 91 of the province's 415 facilities were not in compliance, and eight out of 10 of the worst were Ministry of Environment and Energy owned and operated.

Another problem is the increasingly outdated and inadequate standards for drinking water. Another one is the vulnerability of many water plants to bacterial contamination due to the lack of adequate filtration facilities and the growing problems of bacterial contamination of surface and groundwaters due to the malfunctioning septic systems.

It's our view that this bill does not address any of these problems, but rather, the bill's implementation could make them worse. It could, in fact, offload aging water and sewage plants on to municipal governments while the province withdraws financial support for their maintenance and it could open the door to the privatization of sewer and water infrastructure. As we know, this has led to serious public health problems, water shortages and the cutting off of water supplies to low-income families in England, where in fact this has happened.

Similarly, the responsibility for the regulation of septic systems is to be transferred to municipalities with no indication of how they are to finance this function.

These are some of our concerns. We are willing and prepared to entertain questions, and as I say, Dr Mark Winfield, who prepared this paper for us, will be open to answering questions.

I do want to indicate, though, although we have said that we cannot accept this bill as it stands, we are prepared to work with your government on environmental law and policy issues and we have indicated this to Mrs Elliott, Mr Galt and Mr Sterling at various times in the course of your government. Thank you.

The Chair: Thank you very much. We have 10 minutes remaining, three minutes per caucus, and we'll begin with the government caucus.

Mr Galt: Thanks for your presentation and for your input in the past, particularly with reg reform. We have worked together and I appreciate the input that your organization has given.

I'm curious. This article that you have attached refers to "Septic Systems: The Sleeping Giant." Just glancing at it, and I haven't had a chance to really work my way through it, maybe you can just highlight it a little bit for me, whichever one of you is the most familiar with this particular article and the concerns that they're expressing in here and whether or not this relates to the Ontario situation.

Dr Mark Winfield: Yes, it relates very directly. The excerpt is from this book here, Toxic Time Bombs by John Swaigen. What the excerpt does is explain some of the environmental problems in Ontario and public health problems that have been identified with septic systems. A couple of things that it highlights is that there are about a million septic systems operating in the province. The Ministry of Environment and Energy has estimated that about 30% of them are malfunctioning, and that's leading to quite serious contamination of surface and groundwater. It also notes that there are a number of situations in which septic systems are being used inappropriately in the province, particularly in cottage country, and again that's leading to contamination of surface and groundwaters. That was something the ministry confirmed in the state of the environment report that was released in January. It highlighted septic systems and the problems in cottage country.

It's there just as a backgrounder, as an impression of the kinds of problems that are there. These are things that the Commission on Planning and Development Reform highlighted in its report a couple of years ago as well.

As I say, our concern with the bill is it simply offloads the responsibility for the regulation of these systems on to municipalities. It doesn't provide any indication of how they are actually supposed to try and deal with this new responsibility or how they are to finance these functions, and in the case of the ministry, where there's no municipal organization, it offloads these functions on to the Ministry of Municipal Affairs. Again, that causes us a lot of concern, one, because the Ministry of Municipal Affairs has no experience in this kind of environmental and public health regulation, and secondly, because there appears to be no indication of any intention to transfer resources from the Ministry of Environment to municipal affairs to deal with these new regulatory responsibilities.

Mr O'Toole: Thank you for your presentation. I am familiar with a previous presentation that you've made, or I've read, but I just want to come back to the fundamental question I've asked most members. Today's methodology of financing the capital for water and waste water treatment is changing, and I think it's a case of who we're borrowing the money from. Do you think that the full-cost recovery is the best way to maintain both sustainability and conservation issues where the user is fully accountable? Of course there would be subsidies for those that have differentiation of income and various economic factors, but fundamentally, once that's been addressed, do you see any reason to have full-cost recovery in whatever, a public or private sector monopoly? Because that's what you're going to end up with either way.

Ms Mitchell: I think we've certainly argued for full-cost recovery. The question of what happens to the most vulnerable is a problem and is a question.

Mr O'Toole: It's an important issue.

Ms Mitchell: But the whole issue of progressive taxation is also an issue and somehow or other they've got to be dealt with together.

Mr O'Toole: That's sort of like Bill 106. You're talking about fair tax, progressive, like Bill 106.

Ms Mitchell: Yes, progressive and fair taxation.

Mr O'Toole: That's the new municipal assessment. There's a lot going on.

Dr Winfield: In the brief we've made clear that we support the full-cost internalization of new sewer and water infrastructures to support new urban growth because, in effect, otherwise you're subsidizing urban sprawl.

One of the concerns that we're raising with the bill, though, is that there's potentially a very dangerous combination of things here. If, on the one hand, you're going to withdraw the provincial financing for that kind of infrastructure at the same time as you're giving municipalities the power to approve septic systems, you present a very dangerous temptation to municipalities to approve new development on septic systems rather than sewer systems, and the Commission on Planning and Development Reform and others have pointed to some very serious problems.

Mr O'Toole: I just want to question that, if I may. The province should have the standards --

The Chair: Excuse me. I'm sorry to interrupt, but we should go to the Liberal caucus.

Mr Agostino: Thank you, Madam Chair. There are two points I want to touch upon. First of all, there's this ongoing concept on the government side about this obsession with full-cost recovery. I think we've got to differentiate the difference between full-cost recovery in services the government provides that are optional and that people can do without and full-cost recovery in essential services.

You can stretch this argument to suggest that we should do full-cost recovery for health care, for hospitals, so if someone goes in and they get sick, then when they walk out they should be handed a $100,000 bill. That would be the concept of full-cost recovery for an essential service. You can do the same thing with transportation and maybe charge $10 a ride on a bus if you wanted to go to full-cost recovery.

You can take that extreme to essential services, and obviously it would be a very unworkable system where you end up with the wealthy having access and the rest of Ontario being shunted aside and sort of falling off to the way and making it on their own if they can. This whole concept of full-cost recovery, although it sounds great, in my view doesn't fit this argument when you're talking about essential service such as water.

It leads into a privatization question, and it's something I guess you've talked about here. This bill leaves the door completely open, of course, to private companies walking in at the option of the municipality, buying the whole package, buying the infrastructure, the land, the services, and then charging whatever they feel like charging for those services. Again, if you're in the upper echelon and make lots of bucks, you probably won't even notice the difference. If you're an average working Ontarian who's middle to low income, you're going to notice a difference.

In your view, is there a danger with this movement? Is there a danger in the whole concept of full-cost recovery as you tie it in to the privatization of water and that potential with this bill?

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Ms Mitchell: I guess if we had a progressive and fair taxation system, that may be the best way. I think one of the factors with a full-cost recovery system, at least the argument is that there won't be so much wastage.

Dr Winfield: I think one needs to be very careful about this. Clearly, the allegedly full-cost recovery system put in place in England in terms of sewer and water privatization produced enormous social impacts in terms of impacts on low-income families. In fact, it's been clearly a public health disaster to boot.

I think that we need to differentiate. There are some very core basic public services which need to be provided by government. Sewer and water is part of that. The only place, really, where we've indicated there may be a place for some cost recovery attempts here is when you're talking about expansions of new infrastructure to support new development, but where you're talking the need to maintain existing services and that kind of thing, clearly there's a very powerful case to be made for an approach that involves the involvement of the government. In fact, you have to remember that one of the reasons the province originally got into the financing of sewer and water infrastructure in the 1950s was precisely because municipalities couldn't afford to provide these essential services on their own. That was essential to the creation of the water resources commission in the 1950s.

Ms Churley: I think it's relevant to this presentation for me to point out that, of course, groundwater contamination due to abandoned oil wells is well documented, and this government has deregulated petroleum resource activities through amendments to the Petroleum Resources Act, so in fact this government has made it easier now for petroleum to leak into our groundwater. I just wanted to point that out as we proceed.

I must say I was slightly alarmed when I saw LUST, leaking underground sewage tanks, here, but not for the reason that the acronym is LUST. When I was the Minister of Consumer and Commercial Relations, through the urging, to put it mildly, of John Swaigen, the author of this, my ministry brought in some of the toughest leaking underground storage regulations for petroleum. The reason why I was alarmed is because I don't think this government has discovered that one yet to deregulate and I was afraid that if we bring it to the surface that will be next to go.

Anyway, I wanted to ask you -- and I will carefully read your document because I really trust your expertise in this area. There are government members, including the minister and the parliamentary assistant, who say that what happened in England cannot happen here under this bill. If you read Hansard from England, Thatcher and ministers said the same thing. But we're very worried about not just the privatization of the operation but of the actual plant and water and therefore the rate setting itself. I want your opinion as to whether or not you think this bill the way it's written now could actually lead to that same kind of privatization that's happened in England.

Dr Winfield: I want to touch on your comment about underground storage tanks, because the government has in fact introduced a remarkable scheme around underground storage tanks through Bill 66.

Ms Churley: Not mine.

Dr Winfield: No, the previous government. I'm sorry, yes, the previous government did. The current government has and in fact is transferring those regulatory responsibilities to something called a technical standards and safety authority, which I can't even describe in terms of institutional taxonomy as to what it is. We're actually getting legal opinions developed on the agreement between this authority and the Ministry of Consumer and Commercial Relations to try and figure out what exactly it means and what is going on.

In terms of this bill and the issue of privatization, it's quite clear that the bill's wording makes it very clear that municipalities are free to transfer the property of the Ontario Clean Water Agency to anybody once they've received ownership of it. There are no constraints of any sort at all in terms of what they can do with the capital infrastructure or its operation once it's been transferred to them. There appears to be no constraint at all.

Ms Churley: So you would recommend strongly that if the government really means what it says, then they would take heart and immediately say they're going to amend that section of the bill to make it very clear that can't happen.

Dr Winfield: Yes. The minister and the parliamentary secretary have said on the public record that the clauses about the return of loans to the province, which may have financed infrastructure in the past, are intended as a disincentive to privatization.

Ms Churley: It's the cost of doing business.

Dr Winfield: Yes. I think our view would be, if that's the government's intent, to discourage the privatization of this infrastructure once it's transferred, then the bill should be amended simply to make that clear and to say that privatization of the infrastructure is not an option once it's been transferred. If that's the government's intent, and that's what the minister and the parliamentary secretary have indicated they're trying to discourage, then they should make it clear in the bill that's what they intend to do.

The Chair: Thank you very much for your presentation this afternoon. On behalf of the members of the committee, we thank you for taking the time to come today.

Our next presenter is Ann Landrey from the Native Canadian Centre of Toronto.

Ms Ann Landrey: Madam Chair, we're awaiting one member of the group. Mr Chisholm, who is next on your committee's list, has agreed to stand in my place, to stand down once, if that's agreeable to the committee.

The Chair: Yes, that will be fine.

CANADIAN UNION OF PUBLIC EMPLOYEES, LOCAL 79

The Chair: Welcome, Mr Chisholm, representing CUPE Local 79. You have 15 minutes for your presentation. That includes your presentation and questioning.

Mr Jim Chisholm: My name is Jim Chisholm. I'm the chair of CUPE Local 79's environment committee. CUPE Local 79 represents approximately 9,000 members who work in the city of Toronto, Metro Toronto and Riverdale Hospital.

Our big concern with Bill 107 is that we feel there is a very significant possibility and in fact likelihood that it's going to lead to the privatization of water filtration plants and sewage treatment plants.

Municipalities are going to be faced with the question, after a year, of whether to allow OCWA, the Ontario Clean Water Agency, to continue operating plants that are presently operated by OCWA, or to perhaps submit the operation of the plant to competitive bids. Given that municipalities are under an economic crunch, that there is little or no money available in the municipal assistance program, and given that many of the privatizers are probably willing to offer significant sums of money for this type of operation, even if there is a penalty outlined in the bill that they have to repay the government for expenditures that were made going back to April 1, 1978, it is our feeling that is likely.

In fact, right now, today, we see the privatizers, large companies from Europe and Canada, right here in this province. Some of them have set up operations in Toronto and they are hammering at the doors of the municipalities. We know that Metro Toronto has been visited, asking if they are interested in privatizing their water and sewage treatment plants. At this point, Metro Toronto has said, "No, we're not that interested," although it's in the background. Other municipalities like the region of York, the region of Peel, the region of Waterloo and Haldimand-Norfolk have also been approached. From what I read, they are looking seriously at that option.

Privatization at the best of times is a bad thing. Presently the water supply throughout the province is of a high quality and it's partly at a high quality because it's not produced at a profit. The end objective is not to produce a profit for the companies but to produce a high quality for the receivers of that water, both industry and residents. It is cheap, by and large, and it's reliable. It's almost unheard of to hear that the water supply has been cut off. I'm sure you must have heard in the last few days that in fact that was a reality in Britain after privatization. The reliability of the water could no longer be assured.

From our point of view, it makes absolutely no sense to allow those operations that are so key and vital to the health of the people in Ontario and to the industries of Ontario to be privatized. At the best of times, it would be a bad thing.

In Ontario, this would be occurring essentially in an unregulated environment. For example, if the privatizers took over sewage treatment plants, there is no sewage treatment plant regulation in Ontario. There simply is not one at this point.

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Who's going to control these operations? Who's going to tell the operator what quality he operates at if there's no regulation? One of the few areas the Ministry of Environment has indicated a regulation will come down is in the area of sewage treatment plants. So, in fact, we may actually see a regulation of sewage treatment plants.

I did have the opportunity and pleasure of sitting on a committee that the ministry had set up dealing with sewage treatment plants called the joint technical committee. Essentially, I was helping to draft that regulation, so I have some idea of what may be in that regulation.

It's likely to cover the most basic parameters of biochemical oxygen demand, suspended solids, phosphorous, bacteria and, if we're lucky, it may cover acute toxicity. Almost certainly, that regulation will not cover metals, it will not cover toxic organics such as DDT, endocrine- disrupting chemicals like nonylphenols and almost certainly will not cover sewage sludge. At the best of times, that's not a good situation.

In my opinion, even the municipalities should have to look at these items, monitor them and so on. But here we have a private operator who will -- again, the objective is not necessarily to produce good water in the treatment plant or in the filtration plant for the residents. The objective is to produce profits.

Just to give you a small example of what may happen, a typical chemical used in a sewage treatment plant is ferrous chloride. Ferrous chloride is used to precipitate phosphorous. Typically, that particular chemical is usually purchased as a byproduct of an industrial process, so as a result of that, it's very important to watch the quality of the ferrous chloride as some processes, of course, introduce contaminants like chromium and so on. It's very important to make sure your ferrous chloride is in fact ferrous chloride and doesn't have chromium, mercury and other contaminants.

Money, of course, is spent to do that, to analyse and so on, and the higher-quality chemical, of course, costs more. For a private operator having to select between a pure ferrous chloride and a ferrous chloride that has contaminants such as chromium and mercury etc, what one are they likely to chose if the second one is cheaper?

You may say they're going to be responsible and select the first one. I am not so confident, especially considering there is no regulation at this moment that regulates it and the regulation that will be brought in is not going to cover it. My prediction is that they would select the second grade ferrous chloride and chemicals like chromium, mercury and so on would in fact be introduced by them through that contamination of ferrous chloride into the treatment process. That's just one example. There are many other examples I could have given to illustrate that, in my opinion, private operators will not run plants of the same quality as a public operator.

The public operator, if we have some problems with it -- and I've done this myself. I've gone to committee meetings in Metro and said, "Listen, you should be looking at nonylphenols in sewage sludge. We have to be really concerned about that," and they listen. If we, as citizens, have concern that private operators are using for example ferrous chloride that's contaminated with chromium, what outlet will we have, especially considering there's no regulation dealing with it and the regulation coming down will not cover it?

Another consideration that I think is very important is to look at the impact on sewer use. Presently, to give you Metro Toronto, for example, sewer use questions are controlled by Metro Toronto, of course. They have enforcement people who go out to the industries to check to make sure the discharges are within Metro's bylaw, which is based on a provincial model sewer use bylaw.

What do you think is going to happen if the sewage treatment plant is operated by a private operator? The impetus now for the municipalities to check and regulate sewer discharge is that many of them run the sewage treatment plants like Metro Toronto, and it's in their interest to go to the industries and make sure that the industries are within their bylaws and that the municipality even has a bylaw, keeping in mind that in Ontario, again, there's no regulation for sewer use. There's no requirement in Ontario for municipalities to have a sewer use bylaw. In fact, the majority of municipalities in Ontario do not have a sewer use bylaw; it's only the larger ones that do.

If you don't have that reason for a municipality to look at sewer use because they're not worried about the sewage treatment plants any more, they're run by a private operator and all of a sudden, it's their concern, not the municipality's concern, number one, it's possible they may not even have a sewer use bylaw. Why would they? There's no real need to. If they do, why would they enforce it, or why would they enforce it to the level they are doing now? The reason primarily that sewer use bylaws are enforced now is to protect the sewage treatment plant. That reason would be removed if privatization were to happen. It would make no sense to have the privatizer operating the plant and the municipality separate and apart from that municipality enforcing the bylaw to protect that plant. There's just not a fit. In fact, it would be logical that a private operator take over enforcement too. That would be the logical extension of it, which I'm sure none of us would support, or at least I would hope.

There are other things that happen in a sewage treatment plant that are absolutely vital, in my opinion. At the best of times, if it was well regulated I'd have serious concerns about a private operator taking over these responsibilities.

But this is happening in a context in Ontario. The sewage treatment plant operations and sludges and so on are operating in an unregulated environment. There is no regulation dealing, for example, with sewage sludge. Treatment plants generate a sewage sludge, and the worst of the chemicals, the biocumulative chemicals, the persistent chemicals and the toxic chemicals -- I've studied this -- will end up in the sludge. That is an environmental fate of the worst of the chemicals: It ends up in the sludge.

What do we do with the sludge? The only guidance that is given in Ontario in terms of sludge is when it goes on agricultural land, otherwise there is no guidance, and it happens to be that book right there. It's called A Guideline for Sewage Sludge Utilization on Agricultural Land. "Guideline" is the key word; it's not a regulation.

But even in the framework of the guideline, if you look through it to see, "What does it have to say about pesticides? What does it have to say about DDT? What does it have to say about endocrine-disrupting chemicals like nonylphenols and thallates and so on?" you'll find they're not covered. Toxic organics are not covered in the guideline, which gives me concern even when it's operated publicly. We've raised, and I have raised personally, these issues with Metro in other areas.

It will be an absolute nightmare to imagine this in the circumstance of a private operator who generates a sludge. Perhaps it's incinerated now like in Hamilton, which costs a lot of money, and that operator is going to want to stop incinerating that because it costs money, and the objective again is to make money.

In fact, in Hamilton they've stopped incinerating. They haven't put it on agricultural land yet, to my knowledge, but they're putting it in landfill sites. The step after that, as soon as they reduce the metal -- the only thing stopping them as far as I know at this point is metal levels. That's one thing that is covered.

Once those metal levels come down sufficiently, then an operator like the one in Hamilton, which is a contract operation by Philip, potentially will be able to put that on agricultural land and we won't even know what DDTs are there, what PCBs are there, what endocrine-disrupting chemicals are there because there is no requirement in this guideline even for monitoring. If we did know, if they did monitor it and we found that it's full of DDTs, dioxins and so on, there's nothing in this guideline to stop them from putting it on agricultural land.

The implications are incredible when you think of it: crops growing on sludge where the quality is virtually unregulated. Do we want to entrust this to private operators? I do not think so.

The Chair: You have one minute left.

Mr Chisholm: Really? My God, I'm only halfway through, but I'll summarize very quickly.

In the interests of the public and industries Metro Toronto did a survey that indicated two thirds of industries do not want privatization; they want it publicly run. Two thirds of industries in the Metro Toronto area, when surveyed by Metro Toronto last year, said they want it in the public sector, and surveys of the public indicated time and time again that they want it in the public sector as well.

It's not in the public's interest and it is not in industry's interest to allow privatization. You must include an amendment in this bill to prevent privatization at the municipal level. At the very least you must reintroduce the plebiscite that was eliminated by Bill 26, the omnibus bill, that required a plebiscite if municipalities were considering privatizing their utilities. At the very least you must do that. Thank you.

The Chair: Mr Chisholm, thank you very much for taking the time to come this afternoon. We appreciate your advice. You can leave your brief with the clerk.

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NATIVE CANADIAN CENTRE OF TORONTO

The Chair: Ms Landrey, are you able to come forward now?

Ms Landrey: Yes. Our party has arrived.

The Chair: Welcome. Please introduce your colleagues for the record.

Ms Landrey: Madam Chair, members of the committee, my name is Ann Landrey. I am here this afternoon to introduce three Anishnawbekwe first nations women who will be addressing the committee. Their names are Pauline Shirt, Tara Chadwick and Diane Pugen. Ms Shirt is a mother and grandmother, an elder and teacher and a masters student at York University. Ms Chadwick as well is a university student. Ms Pugen is on the faculty of the Ontario College of Art and Design.

You will hear much during these depositions of competing interests: Should water and sewer utilities be public or private? How much regulation is necessary? Who will preserve our water resources for future generations? In these discussions one voice is missing, and that is the voice of the water itself. The water has a lot to say on these issues. It has always spoken and it is time for you to listen to what it has to say.

Ms Pauline Shirt: First of all I'd like to say bonjour to everybody. I am of the bird clan. My name, Nimki-Kwe, means Thunder Woman in Ojibway. I have been a resident of Toronto since 1969 and I am of the Cree nation.

First of all I'd like to give my greetings to the committee and to the presenters and also greetings and thank you and meegwetch to my helpers coming in here to help me as a grandmother. As grandmothers in our communities we have helpers. We are the teachers and our helpers carry our words.

Today I'd like to say something that's very important and very sacred to us: water. In our tradition it is the woman who is the carrier, the caretaker and the teacher for water. To us, water is very sacred. I have brought a water vessel here. It symbolizes the upkeep that we as women have in our tradition. In our culture, traditionally water cannot be owned. We say that our mother is an entity, she is alive, she has all the properties of our bodies, of everything. In her lodge, in her body she carries what we call the blood, her lifeblood, which is the water. The water purifies her, nurtures us and helps heal our bodies. In our tradition the woman, who is the caretaker, carries this teaching to all. It has been our teaching since the time we have been here.

As a recap to you I would like to read an understanding, a treaty that is called a two-row wampum belt, and I would like to read it out to you here. I will explain what it is for those of you who have never heard of it. This teaching is between the Iroquois and the earliest white settlers. This belt symbolizes the agreement and conditions under which the Iroquois welcomed the Europeans to this land:

"You say that you are our father and I am your son. We say this will not be like father and son but as brothers, as equals. The two rows on this belt will symbolize the paths of two boats on the same river. One path is for the white people, their laws, customs and their ways. The other path will be for the Iroquois and their laws, customs and way of life. We shall travel side by side but in our own boats. Neither of us will try to steer the other's vessel or make laws or interfere in the internal affairs of the other."

The Anishnawbe people of this land have followed that. What it really says is that our other equals have dishonoured that. It is the water which binds us together. I am not here to give you a guilt trip or anything like that. I am here for you to recap and go back to that understanding, to the agreement that we do not own the water. We're all in this together. We have to share everything together. That is a teaching in our way: the sharing of everything in here.

We do not own Mother Earth. We cannot own her. She is your mother too and she is my mother. She takes care of us. She takes care of your children. She takes care of your grandchildren. As a grandmother that is what is so important in my heart, that teaching of the water, how precious and how important it is for us, for the survival of the human race. We have to be together in this circle of life. We have to maintain that circle concept of learning and being together as one. We have to do that in order for us to survive as people.

I would like to tell this committee that we are prepared, as Anishnawbe people, to re-educate not only you but ourselves too to come into this together and help each other understand the true meaning of water because water is an entity. That water has a voice, that water has a spirit and we cannot own her.

I'd just like to say meegwetch for listening to me and for opening up your ears to that teaching. It's a very simple teaching but it's also very important. I say meegwetch, and we have songs that speak to the spirit of the water. My helpers will sing that song. Songs are part of our teachings. Songs are part of our way of communicating and understanding each other.

Ms Tara Chadwick: We're going to sing this water song. I'm not going to sing it into the microphone, sorry. It's a ceremonial song. I'm just learning it, so I'll sing it the best way I can. It talks about this water. It's a song that was given to us and it talks about that beautiful, shining water. It talks about the life of that water. While I sing I'm going to close my eyes because it's easier for me to focus on the spirit if I close my eyes. So I invite you to really listen. For me it's easier to really listen if my eyes are closed. Other people keep their eyes open. I just invite you to do that.

Musical extract.

Ms Shirt: I'd like to say meegwetch for listening to us and listening to our voices.

The Chair: Thank you very much.

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PROFESSIONAL SERVICES GROUP, CANADA

The Chair: We'd now like to call Mr Sanderson to come forward, please. Welcome, Mr Sanderson.

Mr Mark Sanderson: Good afternoon. Madam Chair and members of the committee, I'd like to thank you for allowing me the opportunity to speak to you today. My name is Mark Sanderson and I'm vice-president of Professional Services Group, Canada, which is the largest contract operator of municipally owned water and waste water treatment facilities in North America.

I have purposely kept my remarks short today so that I could have time to answer questions and address issues that might be of interest and concern to you.

We support this bill because we believe it will provide an opportunity for us to provide services to municipalities that are interested in receiving them, and I put the emphasis on "interested in receiving them." It will be up to the municipalities to decide if we can provide a combination of services and value that is to the benefit of their citizens.

Companies such as ours can bring considerable expertise to our clients that might otherwise not be available, or at least not in a cost-competitive fashion. There have been numerous references lately to the fact that the private sector will compromise service levels and raise water rates as a result of this bill. The track record of our industry does not support these statements. First, we do not set water rates. We're talking about privatization very loosely in the context that I'm hearing it. We're suggesting that privatization always means "private ownership," and that's not the case.

We operate municipally owned water and waste water plants. We do it cheaper and better, which results in them being able to lower their water rates. We do not have control over the rates. We are able to lower operating costs while maintaining and improving service levels, which allows them to reduce the rates. There are numerous benefits that the private sector can bring to the operation, maintenance and management of municipally owned treatment plants, and I'd like to draw attention to just a few.

(1) The competitive process. The way our industry works is that a competitive procurement process is entered into by the municipality which sets out terms and conditions, scope of services that we as private operators propose. This is very much in the control of the municipality and they determine what the levels are. We are controlled through contracts relating to effluent performance and maintenance performance, resulting in the health and safety of the citizens we are working for being protected.

We've seen municipalities that have had savings as high as 40%. Typically they're in a range of 10% to 20%. A previous speaker mentioned that industry in Metro Toronto was not in favour of private operations. Last year a competitive assessment was done that showed that $50 million per year could have been saved in the water and waste water budget if private operators were running the plants. I wondered, if you rephrased the question and said, "If private operators were to save that kind of money and that would be reflected in your water and sewer bill with no reduction in service levels, would you favour it?" if you might get a different answer.

(2) We bring considerable expertise that is a result of the experience we have, and this is a direct benefit in terms of service levels and cost to municipalities.

(3) Our track record. Much has been said about the British privatization experience. That's not the model that I think is being considered in Ontario by municipalities, or in North America. I don't know of any municipalities that are interested in selling their water or waste water assets, or selling their water, for that matter. Many of them are considering private operations of facilities they own.

This is what we do. We operate and manage water and sewage plants. Sure, we have a profit motive, but we have a much different motive from that. We're responsible people. We live in the communities we work in. We drink the water we treat and we use the sewage systems we work in. It's not in our short- or long-term interest to provide a service that is not the best it can be -- in fact, that's how we differentiate ourselves -- or that's not a good value for the citizens we're working for.

Finally, in the contract operations industry or the selection of private operators to run municipal infrastructure, there's considerable expertise and experience and a proven track record of procuring these services that address all the risks and concerns I've been hearing today. Our contracts are very onerous in terms of our performance requirements and our liabilities and the guarantees and bonding that we have to provide associated with them.

I'd like to thank you for your attention. I'll restrict my comments to what I've said and hopefully I could answer some questions.

The Chair: Thank you very much. You've given us about three minutes per caucus.

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Ms Churley: Thank you very much for your presentation.

You must understand that the British experience, as you are well aware, is a nightmare. I think you'd agree that it went very wrong.

Mr Sanderson: No, I wouldn't.

Ms Churley: You wouldn't agree with that?

Mr Sanderson: No. You have to understand that the whole purpose of what Britain did was that they were entering into the European Community. They had, as a government, not invested in infrastructure properly that would have allowed them to meet their European directorate requirements for drinking water quality and standards and waste water treatment. As a result the Water Act created an onus on the private sector to make up that £40 billion of infrastructure investment. I've seen all this.

Ms Churley: There's documented evidence even in all the more right-wing papers that --

Mr Sanderson: The Toronto Star.

Ms Churley: No, no. This is from Britain, and I have Hansards as well: "Profiteering Claims Mark British Privatization." If you read through, there's absolutely no doubt about it. I'm not saying this would be the case with you, but I'm a little shocked to hear you say that Britain was not -- we all know it was a disaster. The companies made huge pots of money and did not reinvest in the infrastructure. There were serious leakage problems, droughts, all kinds of problems and huge profits were made. Poor children were getting their water cut off. This is absolutely documented evidence.

Mr Sanderson: I'm not endorsing the British model. I did say that I do not think it applies at all to what's being contemplated in Ontario. I know of no community that's thinking of doing anything like that, and we're not interested in doing that ourselves.

Ms Churley: I'm glad to hear that, but I was little afraid when you said you didn't think it was a nightmare there.

My second question is, if you feel strongly that this is not the model anticipated here -- numerous people, experts in the field who've read the bill and studied it, have told us time and time again that the bill is not clear enough on that and that the government should amend it to make sure that kind of model doesn't happen because right now it's wide open enough where it could happen. Would you recommend to the government that they amend the bill to just absolutely rule out any kind of straight-out privatization of our water?

Mr Sanderson: No.

Ms Churley: Is my time up?

The Chair: Thirty seconds.

Ms Churley: There's no time to answer, I'm sure, but you're saying you would even support the British system of the privatization of our water.

Mr Sanderson: I didn't say that.

Ms Churley: Okay. Perhaps other people can pursue this.

Mr O'Toole: Very quickly, Mark, thank you very much for stating very categorically your position. It's my understanding too that the nature of this bill is a very different starting point dealing with the issue of privatization, and I would refer you to section 56.2, which is part of what the minister said, that it's not the same position as Britain. We're starting from a different position on the globe.

I just want to be sure: You're familiar with the GO/CO option, government-owned and contracter-operated. That's really what you're espousing, not the capital side, the operating to the standards? Building in the efficiencies that these very specialized workforces deal, give me one example, if you could, Mark, of how you would achieve those efficiencies and be able to do it more efficiently and more effectively to very high standards than the public sector monopoly.

Mr Sanderson: I'll be very frank. There's an efficiency of labour. There's no sense mincing words. A lot of municipal plants are grossly overstaffed, and I don't apologize for that. That's not my fault.

Mr O'Toole: It's a monopoly too.

Mr Sanderson: It's not my fault.

Mr O'Toole: Okay.

Mr Sanderson: In the competitive environment we then have to enter into operating the plant the most efficiently. That also brings about opportunities for us to do electrical savings by operating equipment better. We believe that our maintenance practices lower maintenance costs and improve the operability of equipment. There are many different areas in which we can save municipalities money that have no detrimental impact, in fact a positive impact, on the operations and maintenance of the plants.

Mr Bart Maves (Niagara Falls): How many communities does your company serve? You said you're Canada-wide.

Mr Sanderson: Currently we don't operate any in Ontario, but we operate over 400 plants for about 250 clients.

Mr Maves: In Canada?

Mr Sanderson: No. There hasn't been an opportunity in Canada for companies, which is one of the reasons you do not have Canadian companies or a strong contingent of Canadian companies that can do this.

Mr Maves: So in the United States?

Mr Sanderson: In the United States.

Mr Maves: We've heard a lot of fears about quality assurances. You've already said there's a substantial improvement on costs to consumers. What kinds of quality comparators do you have?

Mr Sanderson: Our contracts are very onerous in terms of the effluent performance requirements we have, in terms of maintenance standards we have. You have to remember we don't do this unilaterally. We work with the municipality, and the municipality has a contract with us that they enforce and make sure everything is being done. They don't just walk away from the facility and let a private operator hand it over and then five years later come back and say, "How's it going?"

Mr Maves: Have there been very many examples of privately run systems, to your knowledge, that have had quality problems?

Mr Sanderson: We have to provide a performance bond, and I do not know of any performance bond in our industry that's ever been called.

Mr Maves: Ever in your industry?

Mr Sanderson: No.

Mr Maves: Thank you.

Mr Sanderson: That's to my knowledge. It just doesn't happen.

Mr Agostino: Just to start, where in the United States, which communities -- just two or three examples -- do you operate?

Mr Sanderson: We operate the whole system for the island of Puerto Rico, which resulted in a $50-million annual saving for the island citizens; we do Oklahoma City, New Orleans, we do the Newark water system. We operate systems as small as an operating budget of $50,000 a year to as much as $93 million a year.

Mr Agostino: Just to follow an earlier -- at the beginning I wasn't sure what you were saying. I think we have to distinguish, and I'm not sure if that was distinguished clearly enough. What I perceive to be the difference between privatizing the operation of the services and privatizing the service by selling the assets and controlling the rates is really what we're talking about here.

The system you advocate is that you would go into a contract with a municipality and your company would run the system. You'd have no control over rates and you'd have no ownership of the facilities.

Mr Sanderson: Correct.

Mr Agostino: That system already is in place in Canadian jurisdictions. It happens in my own community of Hamilton-Wentworth, which is substantially different from selling the package. The point I want to talk to you about is along those lines. You don't have any plants in Canada. Would you, though, agree that if your company bid for that kind of facility in an Ontario plant, you would be compelled and feel an obligation to honour existing contractual obligations, labour union agreements and bargaining units as part of that, or do you feel that as a company you have the right to come in and basically ignore what is there and set up your own folks and do what you like without honouring contracts and agreements that are in place with regard to labour negotiations?

Mr Sanderson: Our preference, and what we recommend to municipalities, is that they put protecting language in the RFP documents and in the contract to show how they want to look after their employees. Typically that includes protecting the current labour force, that they all get to keep their jobs, and if there are reductions, it's through attrition, that their comparable wage and benefits are received. That's up to the municipality. There are instances where the municipality says, "Sorry, but we can't do that," and then we're in a competitive situation. We just have to do what they dictate to us. But our position is to protect the employees. This is a hard enough business as it is to sell without going in and disrupting the whole community.

Mr Agostino: But do you not see the difference between the British situation, where it was a selling of the institution and controlling of the rates by private companies, and what you're doing? I found it bizarre that you would not see the difference between the two systems.

The Chair: No, we have to stop. I can't let you go on. Sorry.

Mr Sanderson: I perfectly see the difference. I just think there's been some very one-sided journalism on the British model.

Mr Agostino: So you think it's okay --

The Chair: Mr Sanderson, I have to interrupt. Sorry, Mr Agostino. I want to thank you for taking the time to come today. We appreciate your advice on the subject.

Mr Sanderson: Thank you very much.

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HUMBER HERITAGE COMMITTEE

The Chair: I'd like to welcome Madeleine McDowell, please, from the Humber Heritage Committee.

Ms Madeleine McDowell: I'm chair of the Humber Heritage Committee. We were formed about 12 years ago. We're made up of representatives of heritage and environmental groups such as the Toronto Field Naturalists, Black Creek Group, the Etobicoke Historical Society, York LACAC, Caledon LACAC, Kleinburg, King City. We have had representation from ARCH, Action to Restore a Clean Humber.

I've asked the clerk to distribute a brochure that we produced. We printed 30,000 of those. They're for use by school children -- it was entirely prepared by volunteers -- and they're in at least 300 schools in the watershed now, and we fund-raise to pay for the printing.

The Toronto, Cobechenonk, St Jean or, as it is now known, Humber River, has existed with its rise in the glacial deposits of the Oak Ridges moraine since the last ice age. Its entire watershed is filled with year-round streams, both surface and underground. It drops more than 1,000 feet in its 28-mile length. It is rife with human history, aboriginal sites predating the pyramids, French traders and priests, United Empire Loyalists and a succession of farmers, entrepreneurs and people.

It is a very beautiful river. We are pursuing its becoming a Canadian heritage river, like Lake Kluane, based on its natural beauty and tourism, its rise in the Oak Ridges moraine, a feature designated as a world significance by the United Nations, and its human history. It is linked with magical names like Étienne Brûlé, sieur de La Salle, Louis Hennepin, John Graves Simcoe, Wahbanossay, Peter Jones, Sir William Pearce Howland, who was the first Lieutenant Governor of Ontario, the Tyrrells and Elizabeth Arden, who was a Woodbridge girl.

The valley is still rebounding from the weight of the glacier. Because of its porosity and water table, it is a great aquifer. Because of its growing development, its watershed is now, for practical simplification of stormwater runoff and pollution control, being described also as a sewershed. The Humber as a nurturing environment has survived the great earthquake of 1663, the lumbering of the 19th century, the 100 or more mills which harnessed its power in the early development of the greater Toronto area as the industrial heartland of Canada. It now faces its greatest threat, the spread of urban development into its sources: the Oak Ridges moraine, the Niagara Escarpment and the fragile remaining wetlands areas. Wells are being dropped deeper because they run dry. This is the first alarm bell. Tributaries are being piped. Sewage infrastructure as it evolves must be rigidly controlled so that stormwater runoff is clean at entry into watercourses and controlled so as not to exacerbate flooding.

Water consumption must not affect groundwater levels causing a drop of stream flow. The same steady flow which the Humber has always enjoyed must be maintained. Programs to restore water quality must be maintained and improved. The Humber watershed-sewershed typifies much of Ontario.

The need for water and air is basic to all life. The maintenance of the supply of water at a quality and quantity level, supportive of human health, is not appropriate for private responsibility. Ontario has the highest concentration of fresh water in the world. This is a blessing and a trust which can only be maintained by government. Water has a cycle which in nature regenerates and purifies it. When people are inserted into this cycle in large numbers, the regeneration and purification factors must be dealt with as insertions also.

The integrity of watersheds-sewersheds must be protected and maintained. This means groundwater levels, normal surface flow as in streams, lakes and rivers, and stormwater runoff. It also means water treatment both for drinking water and sewage. Waste water has several options, depending on locale, including small partially closed cycles with ongoing topping up of clean water.

Ontario has long recognized water pollution as both environmentally and life threatening. Water processing for drinking water and sewage is controlled and maintained by municipalities under provincial authority or directly by the province. It is paid for by public dollars and user fees, a closed circuit of moneys with no siphon, no profit and no abrogation or corruption of responsibility in the loop. The mere encouragement of public ownership of water and sewage infrastructure in Bill 107, as opposed to their support and maintenance, is dangerous to public wellbeing and environmental protection.

Brave heart is not always a strength in those who hold public office. They need bedrock at their feet and backs, the bedrock of our common agreements which we call law. Any weakness in water treatment and conservation is life-threatening to members of our population. Dysentery, poisoning or disease from going for a swim to drinking from the tap is not a scenario which we can afford to engage. Neither is environmental degradation, which is costly and frequently almost irrevocable, for remediation is not merely dollars but time in generations.

This government has made it very clear that the municipalities are creatures of the province. This being the case, the disentanglement of the province from its creatures is neither feasible nor common sense. The financial support of water infrastructure, both its development and renewal, is a function of all three levels of government in our Confederation, just as our human population is in symbiotic relationship with our environment.

According to some American investment analysts, utilities with their annual dividends are one of the better long-term investments. Ontario is not the United States. Our tax dollars are an investment hedging our future. There is an inexorable link in ownership between water resources, water table, streams, rivers and lakes, and water treatment, supply and potentially even demand such as export.

By not specifically maintaining public ownership of the treatment and infrastructure, this link is being ignored in the Water and Sewage Services Improvement Act. A broken link is a broken chain. The existing link must be kept and recognized with express provision for the retention of public ownership.

If privatization of water supply and treatment is to be permitted, as Bill 107 currently does, it must not be permitted in the absence of an ironclad public regulatory body dealing with both the prevention of environmental degradation and the maintenance of guaranteed safe drinking water and clean effluent at reasonable cost to users.

I read the brief submitted by the Canadian Environmental Law Association and the Great Lakes United and concur with all their recommendations. They are consistent with our own. I thank you for your kind attention.

Mrs Julia Munro (Durham-York): I think that from time to time all of us certainly need to be reminded in terms of a historical perspective on issues.

You alluded, perhaps, to this in the final statement you made in terms of your concurring with other submissions that have been made, but I just wanted to ask you if you were then ostensibly supporting the status quo. Do you see opportunity here for change or would you suggest that it is in our best interests to maintain the status quo?

Ms McDowell: Gee, that's very difficult. I would prefer something very similar to the status quo.

Mrs Munro: Okay.

Ms McDowell: There's always room for change. Change is growth, but the type of change is another whole matter. If the ownership of the resource and then the ownership of the processing of the resource are separated, then as I said, you've broken the chain and the ship can drift.

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Mrs Munro: Understanding that at this point it's 68% or 75% of water treatment --

The Chair: It's 75%.

Mrs Munro: -- that's 75% of course municipally, I wondered if you had any comment to make in terms of change to the status quo.

Ms McDowell: Some of the municipal treatment facilities are very old and need upgrading. Certainly a great deal needs to be done in stormwater management and processing.

Mr Agostino: Thank you. I guess it's not a question of maintaining the status quo. I think people who made presentations today have indicated time and time again that it's not a question of what this legislation has but what this legislation doesn't have or doesn't exclude, and I think that's part of the point you were making earlier.

No one is opposed to change if we believe it's going to make it a better system, a more efficient system, but there's a significant difference, I believe, between saying municipalities -- first of all I think the weakness in the argument that 25% of the gain is turned back is that often now there's not going to be any money available for infrastructure upgrading to allow municipalities and townships that are affected to be able to spend the money necessary to bring the facilities up to standard, which I think is a very serious flaw in what is happening.

It's the issue of privatization. I presume you would support or believe it would be in the best interests, based on what you've said, of the public and consumers if this government brought in an amendment to this legislation that would prohibit municipalities from selling off the assets in setting the water rate.

Ms McDowell: Absolutely.

Mr Agostino: You think that would protect consumers and the quality of the water?

Ms McDowell: That would help a lot.

Mr Agostino: Thank you.

Mr Laughren: I just wanted to alert you to what could happen, the potential here. The potential is to do exactly what you would like to see done: to move a very simple amendment that says, "If a municipality has ownership of a sewer and water system, it will not be privatized." It would not be a complicated amendment. It would take only one amendment, not 12,000, to make that happen.

The government in about 10 days, a couple of weeks, will be dealing with amendments on this bill. This is the last day of public hearings, then we move to clause-by-clause discussion as a committee. At that point the government has a choice. They can either move that amendment themselves and have the support of the opposition, because the opposition would like to support an amendment like that -- we'd be enthusiastic about it.

Mr Agostino: Absolutely.

Mr Laughren: If the government does not do that, the opposition will move an amendment. I can't speak for Mr Agostino, but I don't think there's any doubt that his party and mine would move such an amendment.

At that point we'll see whether the government members really mean what they have been implying from time to time and the minister has been implying, and we'll support such an amendment.

I urge you to keep an eye on that process and come back here in a couple of weeks. It's an open meeting. It's scheduled now for April 30 in the afternoon, after question period. That could get changed, as I said, but you could keep in touch with us and just see how it unfolds.

Thank you for your presentation.

The Chair: Thank you very much. We appreciate your taking the time to come today.

COMMITTEE ON MONETARY AND ECONOMIC REFORM

The Chair: Ms White, please. Welcome. Please introduce yourself for Hansard.

Ms Sydney White: My name is Sydney White and I'm speaking as a member of the Committee on Monetary and Economic Reform.

This government acts as if it is doing the people a favour by allowing us to come here and speak in numbers that can only be described as token. The Tories particularly need to be reminded that the word "politics" comes from the Greek word "politikos" meaning "citizen." The citizen is the meaning and the end of politics and we deserve far, far better than the crude and shabby treatment that this government has inflicted on us. Witness today: We are virtually speaking incommunicado. If the public knew what is happening here today -- and 90% don't -- they could be at the doors with pitchforks.

When Maggie Thatcher imposed her shopkeeper's mentality on England by confiscating publicly owned water and placing it on the market as a commodity, the people paid with their health. While Maggie's friends were hauling in $5 million a year as the new CEOs of water, the yearly bill for water rose to $2,000 and one third of the water was lost through leaky pipes. Some 21,000 households were disconnected because they couldn't afford the extortion. They went to public washrooms for their drinking water, bathing was minimal, toilets were seldom flushed. Dysentery rose 600%. Hepatitis rose 200%. All this happened in a period of six to eight years, by the way.

Regulations were ignored. In Devon, people were bedridden for weeks with cryptosporidium, and some died. Some 42,000 salmon were killed in the Trent River and the waste management was fined 16 cents per fish. While water was sold off to other countries, the people of England were told, "Cement over your gardens and dig out your trees to save water."

York region, north of Toronto, has already gone the private route, selling off to one of these same British utilities and Consumers' Gas. Pipelines are going to be sucking our water from Lake Simcoe and Lake Ontario. This plan can't even be sustained. We have to take care of our watershed instead of shipping it around the world. In the next century, water will be more valuable than oil. We must not allow our most precious resource to be stolen from Canadians by the same quisling government that sold us out in 1989. And recall that under NAFTA, Ontario's water, once diverted, would have to be perpetually supplied even if we do without.

The privateers say that user fees for water would conserve it, but they really want it priced to sell it. Some 76% of Canadians have stated that water should remain in public control. Unfortunately, the bankers' boys in our government have already shown their aversion to that same overwhelming number. Their lust to obtain all that we own is almost pornographic.

People, in shock and disbelief, ask daily: "How can institutions and utilities that we have paid for over half a century be confiscated and sold to privateers? The law says that before any public utility is touched, the public must agree to this in a referendum." That was true up until Bill 26.

Bill 26 removed the Public Utilities Act requirement that municipalities hold public referendums before selling any public utility. In short, a small group of greedy individuals with temporary powers have arbitrarily removed the people's right of consent or objection to the confiscation and sale of their property.

Thomas Jefferson has said, "Governments are instituted among men, deriving their just powers from the consent of the governed." It follows from this truth that by arbitrarily removing the public's right to be consulted and without our knowledge, the Harris government has compromised the principles of our Constitution and should be challenged. I say "without our knowledge" because corporate lawyers using doublespeak and altered concept definitions, as in the "Water and Sewage Services Improvement Act," have obscured the fact that they were removing democratic and property rights.

We know that no election makes any group the automatic owner of public assets. This public property has been paid for by the people and created so that the people all have equal access to life support systems, of which water is primary. These utilities have been coveted by privateers for some time. Wiser governments in our past knew that public structures have been proven more efficient, safer and cheaper than any privatized, in every case. There is overwhelming evidence to back this up.

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Businesses also prefer to locate in areas where there is a sound public structure, as it saves them thousands in benefits. So the Harris government's claim that privatization will make everything more efficient or safe -- in the words of the kitchen, it's a crock. Added to this, they have ripped to shreds every law that would protect our environment. This public-private arrangement is a scam. There is no such thing as being a little privatized; it's like being a little pregnant.

What is the other pillar of sand on which the Harris group bases its lemminglike rush into the choppy seas of the free market? That we must tighten our belts. I have noticed that their belts are all on the last notch. They say that we have been living high and now we must pay the piper, the piper being the deficit. We all know what happens to those who follow the piper. We are not going there.

The deficit is beloved of the government and created by the government for the sole excuse of doing away with every social structure that we have so arduously built, and they want to make sure that no social responsibility will ever come back to claim its meagre 3% of the national military and usury budget.

We have a manipulated shortage. Since Mulroney, our government has followed the lead of George Bush, who really ran the Reagan government. I mean Ronny could have been in the first stages of Alzheimer's then; we don't know that. The US budget office has admitted that the sole intent of piling up federal debt was to provide a reason to cut social spending. Since Reagan's heyday, our government has also piled up the debt by giving huge tax breaks to corporations and wealthy individuals and draining billions from tax revenue.

At the same time, they choked off the charter of the Bank of Canada and went on the same anti-inflation crusade as the US fed, causing mass layoffs. The Bank of Canada was prevented from holding federal debt and the quisling government invited private banks to hold the debt at compound interest. As soon as we were heavily indebted, politicians claimed that it was our social programs that caused our financial crisis. This is the most criminal lie that has ever been inflicted on a long-suffering public.

The fact is that in 1972 when our social programs were at their peak, our gross per capita domestic product was around $13,000. In 1995, it was $20,000. We are almost twice as rich now but we are told that we cannot afford the same social programs nor can we afford any of our publicly funded utilities. In the meantime, 80,000 profitable corporations pay no tax and the rest pay a fraction of the rate that working people are taxed. This phoney crisis has been engineered by a succession of corrupt governments in order to dismantle and wreck the public sector and sell off crown corporations at bargain prices to corporate predators.

The question we must all put to the government, both provincial and federal, is this: If we really have a deficit crisis and we must pay down the deficit as fast as possible, why are we giving huge tax breaks to the wealthiest families in the province and to corporations that are making enormous profits? If any one of us had a huge debt to pay, we would sensibly be hoarding every cent that we had to pay it as quickly as possible. We would not be giving our money away to some wealthy neighbour; that's not how you pay down a debt.

Both Chrétien and Harris usually answer that one with the tired delusion that wealth will trickle down and will make jobs. If that's the case, why don't we and Mexico have full employment? We certainly have enough concentrated wealth to not only produce a trickle down but a veritable Niagara Falls. What nonsense. It has been proven conclusively many times over that the sparrow following the horse is more likely to be dumped on and suffocated before he finds a grain of sustenance.

Crisis manufacturing is not a new manipulation. Kissinger brought this up first and it worked quite well for him, so now the lackeys of globalism are copying furiously by subsidizing the wealthy and the corporations and taxing the public into bankruptcy. That way much more property will come into the hands of the banks and of course the banks back the privateers. This is how they are surreptitiously robbing the public of every life-sustaining utility. Of these, water is primary.

Our right of consent has been stripped from us, and in some cases our very lives. People die unnoticed in understaffed hospitals while Rockefeller's HMOs are invited in. People are found dead in the morning snow. Thousands who have paid taxes all their lives are downsized and suddenly become welfare bums to be cast aside because they no longer have the holy job. All this supposedly to pay the deficit, which is mostly compound interest to the private banks. They are foreclosing on Ontario while the Bank of Canada is in chains. Truly we are witnessing a generation of vipers.

In Maggie Thatcher's national disaster area, the Financial Times crows that, "Following the British model, well over 100 countries have now adopted privatization as public policy." What an oxymoron and what an appropriate word. We know that in many of these countries objection was crushed by the corporate heel, thousands are jobless or working for medieval wages, protests are endemic and corporate murder, as is now being committed in the northern Chiapas, is rampant. The transfer of our water to privateers will also result in illness and death.

We are being robbed of our bread to be given a stone by the leaders of a corrupt monetary system. Charest has been on television with his plan on CD-ROM. The Liberals had their red book and the Conservatives promised that they would be revolting. In answer to that, I have a plan that would keep our money and our public institutions out of the hands of the speculating banks and the global casino:

(1) Tell Chrétien, Paul Martin and Gordon Thiessen to stop choking off the Bank of Canada and use the charter as it was meant to be used: to create employment and carry our debt. The Bank of Canada must also be responsible for at least 20% of the money creation and not the abysmal 2% to which it has been reduced. Right now, the Bank of Canada is not creating enough debt-free money to pay the interest on the debt.

The right will answer this by saying that the Bank of Canada cannot take back its previous portion of money creation because it will cause inflation. It will not cause inflation if the reserve requirement is reinstated. The very few countries that have no reserve in their central bank could be carpeted. This reserve is not a deposit to supply private banks with interest, as they are claiming, but a collateral deposit to prevent the banks from becoming speculators rather than bankers. Their judgements have already resulted in the loss of billions, and in 1991, their foolish and inexperienced decisions cost us our reserve. Nobody else gets off the hook. Why did they?

(2) Bring in a 0.5% financial transaction tax so that the corporations and banks return a minuscule portion of their profits to the communities that support them; 17 countries have instituted a financial transaction tax, and we could do away with the hated GST. Paul Martin said from the poop deck of one of his offshore ships that a financial transaction tax would be too hard to administer. Well then, let him administer a depression.

(3) We should cancel NAFTA, as provided for in the agreement, by giving the US and Mexico six months' notice. It would be wise to do this before the US pressures us to roll the Bank of Canada into the US federal reserve, which has already been talked about and suggested, and before we have to burn their radioactive waste as they are now doing in Oakridge, Tennessee. As you well know, Harris lifted the ban on incinerators and one will be coming to a town near you shortly.

(4) We must acquaint the people of Canada with the fact that Canada's wealth is in the trillions and that our government has capital assets to which they never refer when they discuss the deficit.

(5) Don't listen to the corporate fairy tale that the market will balance itself and doesn't need regulation. It has not, it cannot, and it will not. All those who say so have secret yearnings to live in Disneyland.

(6) We must drive towards representation by population so that democracy can never again be twisted into dictatorship by a few temporary power brokers.

(7) This could be the most important one, it's so insidious. Do not let the forthcoming scheme to fingerprint and card all those on social assistance be instituted. The Royal Bank, Paul Desmarais's corporation, Great West Life and Unisys, a US corporation that has been banned for unethical practices, are going to make millions by tracking the huge workfare force they have created. We must stop our civil liberties from being taken away. This march to have the little card, the identifying card and finger-scanning, is being done to assure Chrétien's Asian counterparts that he can compete with their child labour, prison labour and medieval wages. This scheme will be brought out at Metro Hall on May 12.

This unrelenting blitzkrieg of bills, these numbered and nameless atrocities, should be identified publicly as the infamous robbery bills, and any bill which removes the right of the citizen to participate in his ownership of any public utility or institution, or his participation in his own destiny, should be immediately challenged on the grounds that it removes the consent of the governed, on which democracy is founded.

The Chair: Thank you very much for your presentation.

JUNE RILETT

The Chair: I'd like to call now on June Rilett, please, to come forward. Welcome. You have 15 minutes in which to make your presentation.

Ms June Rilett: My name is June Rilett. In 1996, I was laid off from the Royal Ontario Museum after having worked there for seven years. I now create and sell T-shirts and other products to promote social justice and as a means of earning a livelihood. I am Canadian-born and have lived in Toronto some 25 years. Until the early fall of 1995, I would say I was like a lot of citizens in the province. I had a job, a job which I liked; I was actively involved with a number of personal interests. But unfortunately I left to the government in power the important role of protecting my rights as a citizen. This had sufficed in the past, and so of course I naïvely assumed it would suffice in the future.

To those who have always been engaged with political matters and social justice issues, this will probably be seen as a typical attitude of someone who has been lucky enough to live in a democratic society. I do believe, however, that I was no different then than thousands of other fellow Ontarians who still now conduct their lives in a similar fashion. I was one of the unconscious citizens, as John Ralston Saul so aptly describes in his book The Unconscious Civilization. Now that I am awake, I have spent the last year and a half becoming more informed about what is happening in our province and our country and am now totally committed to doing everything I possibly can to preserve a caring society that will support the public good for all its citizens.

My own personal wake-up call came on October 1, 1995, when the then Minister of Community and Social Services, David Tsubouchi, announced a 21.6% cut in social assistance. This was followed by a recommended shopping list for welfare recipients for which $90.21 a month would suffice, if one lived on bologna and dented cans of tuna. I found it shocking that a member of my government could be so insensitive to the people whom he had just deprived and who were financially much less fortunate than himself. What kind of government did we have at Queen's Park? It was very clear to me that I could no longer sit on the sidelines and do nothing.

Shortly before I left the museum, I registered my business, June for Justice, and immediately initiated my plan to stay alive by designing my own humorous T-shirts based on the continuing mistakes and misdeeds of this government. I know my shirts have given rise to lively discussion, leading people who have not been aware of these issues in the past to wake up, stop being complacent, and take a stand before their way of life is cut down, sold off and carted away by this government.

I am here today to register a strong voice against Bill 107, the Water and Sewage Services Improvement Act, 1997, a bill which I believe has the potential to seriously harm Ontario residents, both in terms of their health and their democratic rights and freedoms. I cannot believe that the Harris government intends to take our precious publicly owned water supply and allow it to be privatized by selling off our Ontario Clean Water Agency.

This is being considered, despite strong opposition of 76% of Ontarians who stated their voice in a 1996 Insight Canada poll that they wanted to keep water in public hands. Our government seems fixated on selling off everything that we the public own, and our water, our source of life, one of the most valuable treasures that all Ontario citizens can call our own, is now up for grabs too.

One has only to look at some of the horrors of the privatization of the water systems in England and Wales to realize how removed the Thatcher government was from its people when it caused human misery on a grand scale in the name of greed and corporate profits. Water rates shot up from 100% to 400%. Some 21,000 poor families in 1991-92 were either disconnected from receiving water, had to ration their water or even reuse their rationed water because they couldn't afford the exorbitant water bills. Dysentery rose by 600%; there were outbreaks of hepatitis A and other gastrointestinal diseases, and the most vulnerable -- the sick, the poor, the elderly, mothers and children -- were the needless sufferers. Is this Mike Harris's grand plan for Ontario?

Profiteering and failure by private companies to make sufficient reinvestments to maintain a quality system during a drought in Yorkshire in 1995 caused a national disaster; 26% of the water collected by Yorkshire Water was lost through leakage. A public relations man for the company even had the nerve to demonstrate on television how a person could wash with only a few cups of water in the sink. He claimed he had not showered, but it was soon discovered that he was sneaking out of the district to have a shower at his mother-in-law's house. The situation in Yorkshire became so serious that water was eventually ferried into western Yorkshire 24 hours a day. Every available tanker truck was used, the largest peacetime tanker operation in history. And our government would have us believe that this kind of privatization is efficient or money-saving. What a blatant lie.

In the middle of winter of one year, 600,000 people in Yorkshire were even notified that their water supplies might be cut off on a rotational basis. The Guardian reported a story from Birmingham where a number of tenants were disconnected from their water and could not flush their toilets. To cope with the situation, tenants were defecating in the stairwells and even throwing excrement out the window. The caretaker of the building described the situation in three little words: "Quite a stink." These kinds of health risks were so prevalent in England and Wales that finally the British Medical Association had to call for a ban on disconnections.

In 1995, it was estimated that 29% of the 16 billion litres of water distributed in England and Wales every day leaks out of the system. According to our Ministry of Environment, 25% of Ontario's water and sewage infrastructure is almost 50 years old and nearing the end of its lifespan. Would corporations have the social conscience and will in Ontario to put aside their corporate greed and profits to attend to the repair and maintenance of this aging infrastructure?

We just have to be reminded of the Love Canal tragedy in Niagara Falls, New York, to seriously doubt that this would be the case. The old Hooker Chemical company disposed of its toxic wastes in the canal and then sold the property to the city's board of education, which resulted in hundreds of deaths and serious illnesses among the citizens who tragically had the misfortune to live there.

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In the UK, in addition to all the public health problems, there was much environmental deregulation. There were 250 successful prosecutions of water companies, but fines were so low that they had little effect on these companies' future environmental behaviour. There is no guarantee with Bill 107 that the same environmental disaster as described above wouldn't occur in Ontario.

It is my understanding that while I talk, 20 multinational water companies are already lining up at this government's door, along with other powerful Canadian corporations, including our banks, to make vast profits on our water. Water pipelines to the US are also being discussed, even though Canadians were promised during the propaganda blitz to sell us on NAFTA that this would never happen.

I am amazed that thousands of citizens are not storming the doors of this hearing room, but most of the public have either been kept in the dark or have been just too bombarded by all the other bills being raced through this House at lightning speed. I also note that nothing, or at best very little, about the hearings of Bill 107 has appeared in the media, so it looks as if this government and big media are up to the same old tricks. We could call this tyranny by information overload.

The Harris government need only turn to the Alberta Conservative government under its darling, Ralph Klein, to look for a model of how privatization worked there. Kevin Taft, in his book Shredding The Public Interest, states it as it is:

"Twenty-five years ago Alberta was solid and Albertans were secure. There were huge oil and gas reserves; education, health and other programs that led the nation; sound government finances; and a promising and certain future.... Alberta has [now] been hollowed out, a shell of its former self. Alberta has gone from having the finest public services in Canada to having some of the poorest. More than $90 billion in nonrenewable resource revenues has flowed through Alberta government coffers since the Progressive Conservatives were first elected. Alberta has developed the most heavily subsidized private sector in Canada. Alberta society is fractured. Haves and have-nots blame one another for social problems. People who speak out are degraded as whiners." Sounds familiar, eh? "Social unity has been sacrificed to the politics of divide and conquer."

It seems to me that if we want to preserve a civil society, there are certain basic things that cannot be turned into products to be bought and sold. To do so would be contrary to the whole meaning and integrity behind what constitutes a civil society.

What is a civil society, then? A civil society would never allow libraries and schools to be sponsored by commercial corporations, because a civil society would know that this would destroy the very foundation, independence and meaning of education. A civil society would never allow citizens to die in the street while giving the most wealthy an enormous tax break. A civil society would never allow a patient to die forgotten in a hospital while thousands of nurses are discarded.

A civil society would never allow its population to become deathly ill with dysentery or hepatitis to merely fill the pockets of a privileged few. A civil society would want to provide safe, clean and accessible water to all its people. A civil society then would not want to sell the inheritance left to us by generations of Ontarians before us who toiled and sacrificed for our benefit. A civil society would never discuss an issue as important as the privatization of Ontario waters without any public media in attendance.

A civil society doesn't allow strangers to enter our homes and sell off our belongings. We call such behaviour theft and we call the buyers receivers of stolen goods. We punish accordingly. What then should we call those who try without our permission to sell off or buy the property that belongs to all of us as citizens? What punishments shall we mete out and what actions will be necessary to reclaim that which is ours?

In conclusion, if the privatization of water is permitted to take place in Ontario, it will be another assault on the poor and the less fortunate in our province, since citizens would be in no better position to negotiate water prices for themselves than they would be to negotiate Tsubouchi's dented cans of tuna.

Kevin Taft sums up brilliantly what a responsible government needs to do to preserve a civil society for all its citizens:

"Political leaders alone cannot determine the public culture of a society. But they can influence it strongly. They can appeal to the anxious, selfish, mean-spirited nature that lurks in each of us, or they can appeal to nobility, tolerance and generosity. People with differing points of view can be sincerely considered, or they can be called humiliating names. Governments can help people get a fair break and build a powerful society, or they can further enrich and empower those who are already rich and powerful, building a society of haves and have-nots. Governments can tell the truth, or they can lie."

Just as a departing postscript from my company, June for Justice, the hot number T-shirt that's selling now goes with the slogan: "Let's kick Mike and his privatizations! Save Ontario! Stop Harris!"

Interruption.

The Chair: Thank you very much. Your time has expired, but we appreciate you taking the time to come before us today.

While we're waiting for our next presenter, is Mr Sheppard here? Mr Vallance? Mr Vallance, welcome.

While you're getting settled, I'd just like to caution the people in the galleries. This committee functions under the same rules as the House of the Legislature, which requires that the galleries can be attended, but there are to be no demonstrations. These rules must apply in this committee hearing.

If you have attended the Legislature, you will know that in the past the Speaker has said if this rule is not followed, the galleries will be cleared. I would hate to have to do that in this committee hearing, so I ask for your indulgence in following the rules of the Legislature of Ontario.

CONFEDERATION OF RESIDENT AND RATEPAYER ASSOCIATIONS

The Chair: Mr Vallance, welcome. Would you kindly introduce yourself. You have 15 minutes for your presentation.

Mr David Vallance: My name's David Vallance, appearing on behalf of the Confederation of Resident and Ratepayer Associations of Toronto -- the current city of Toronto, that is. Although I'm presenting on their behalf, this hasn't been vetted by the whole organization and some of it's my personal views, and I'll try and define that.

To continue, I'm really not sure what is driving this government. Much of what you are doing may well be heading in the right direction, but you aren't bringing the public along with you. Recently, a headline in the paper said something to the effect, "Government at a Loss at Blame on Health Care." The point of the article was that you thought you were doing the right thing and health care would continue to receive the same amount of money, but the public either didn't understand or, more important, didn't believe you.

Much the same thing applies to this bill. Headlines a few months ago said, "Government at Odds with Public Opinion on the Environment." The perception is that funding for important regulatory and testing programs has been cut to the point where environmental safety has been jeopardized. It also appears to be the reality. This is at odds with the 80% of the public who polls show want more stringent legislation on environmental protection.

It seems somehow that the focus is on giving an income tax cut, and anything necessary to do this is going to be done. The idea seems to have come from the US, where Newt Gingrich -- that's the Senator --

Mr O'Toole: House of Representatives.

Mr Vallance: The House of Representatives -- won a victory and is leader of the House now since the elections in 1994. In the most recent Economist of April 5, 1997, Mr Gingrich no longer talks about tax cuts and cutting the deficit at the same time. Mr Gingrich now realizes that tax cuts are less important in the minds of most voters than good management to reduce the deficit.

There seems to be no common sense when this government does something. In Toronto, it wants to amalgamate everything into one to reduce government and create savings. This Bill 107 proposes to turn a provincially managed water system in 230 municipalities over to those 230 municipalities, along with the responsibility for inspecting and regulating septic systems. In Toronto, you want to get rid of six fire chiefs and in the rest of the province you want to create 230 managers of septic system inspections with 230 different interpretations of what is allowable, assuming any inspection is done at all.

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While writing this, I listened to a short program on the environment. Someone said the government is withdrawing from many areas. You should know by now that the withdrawal method is very unreliable. "But," you say, "how can we compete economically if we have all these environmental regulations and so many areas of the world do not have any?" Of course, we in the wealthy, developed world consume 80% of the world's resources with 20% of the population, so maybe we have an obligation. Perhaps there's another way.

During the megacity debate, I had the opportunity to have many discussions with Wendell Cox, the American consultant on amalgamations and transportation systems. One night, we were discussing the waste that was being created with the whole process of amalgamation and the ongoing cost of the bureaucracy that would be created. Mr Cox said, "I believe it is possible to do everything we want to do without any increases in taxes if we would work at making government as efficient as possible."

On virtually every issue, this government seems obsessed with cutting or withdrawing from areas of responsibility, rather than examining options to make things work better. You are imposing, or at least trying to impose, the most expensive system of government for Metro, you have chosen the most expensive and most hated system for assessment of property taxes and now you are abdicating an area where 80% of the population says it wants more control.

It would seem to me that there are many areas of water and sewage management where economies are possible by having a central system for testing and for developing new techniques for treating. I doubt that all 230 municipalities have enough work to keep a full-time inspector, much less the ability to know if the inspector is keeping up with new technology. Then there is the problem of keeping equipment etc. The cost of all this is not going to be welcome and many municipalities will fudge it.

"Privatize it," you say. For me, that is not a problem -- and this is a personal opinion -- for the treatment and distribution of water and the collection of sewage. Of course, that would require government control, like all monopolies, such as Ontario Hydro or Consumers' Gas. Ontario Hydro may be a bad example. The real concern is the same as the 80% mentioned above, and that is for the setting and monitoring of standards, for the testing and inspection for quality. Somehow I just don't believe you are going to do that aspect of it as well as we expect. Why do I say that? Take a guess. Hint: I'm from Toronto.

At the end of the hearings in Toronto on Bill 106 last week, I spoke with Isabel Bassett. I said, "Isabel, it seems as though you have to leave your brain at the door when you come into the Legislature." She replied, "There is a system, you know." On a TV program a couple of weeks ago, Hugh Segal said, "MPPs were not elected to be lapdogs of the Premier or cabinet." How does that square with Mrs Bassett's comment?

When you were elected, I was rather pleased -- I really was -- although I didn't vote for you. My wife did. The election result suited me just fine because my understanding of the Common Sense Revolution was that this Harris government was going to bring efficient and effective government to the province. What a bad mistake. The deficit reduction is in no small way the result of federal policies and, as reported in the Globe today, our proximity to the United States that have given the province a revenue boost that in no way relates to what you have done. Much of the revenue for the last year is the result of profit earned in the year before, that has nothing to do with this government. Some of the poorest and most disadvantaged people in the province have suffered severe hardship because of your hamfisted approach to change.

Your approach to education is directed primarily to elimination of politicians -- ie -- trustees, and duplication. There has been little discussion about teaching improvement. There seems to be little understanding of the business world. Why do we need five major banks and a whole lot of little ones? Why do we need over 100 insurance companies? Is it possible that this may be the most efficient way to get the job done?

This is the crudest way to deal with a real environmental issue. Slashing and burning doesn't get the job done. Careful planning and effective management is what creates an efficient operation. There is no talk of that.

I've made my living as a salesman. One thing I've learned is that everyone is a salesman. The second thing I've learned is that you can't shove a sale down somebody's throat and expect to get repeat business. The third thing I've learned is that you cannot be a success without repeat sales.

Interruption.

The Chair: I must remind you this is a committee of the Legislature as the whole.

Mr Vallance, we have six minutes left for questions, two for each caucus.

Mr Laughren: I found your presentation interesting, Mr Vallance, but I was puzzled about one thing, and I'm not trying to be deliberately stupid on this one.

Mr Vallance: It doesn't take much effort.

Mr Laughren: You said, "I just don't believe you are going to do that aspect" very well. "Why do I say that?.... I'm from Toronto." What are you getting at there? I really didn't understand that. You're talking about standards and monitoring and so forth.

Mr Vallance: I guess 75% of the people who voted in the referendum don't believe the government --

Mr Laughren: Sorry. I didn't make the connection with the referendum.

Mr Vallance: There is a connection. It's the same government that's doing it.

Mr Laughren: Yes. I don't disagree with you there.

Your point on the first page talks about provincially managed systems in 230 municipalities and creating a real hodgepodge. An engineer was here this morning who made the point, and he used -- is it called the Oak Ridges moraine? -- Oak Ridges moraine as an example, the watershed coming into Metro.

Mr Vallance: Oak Ridges moraine, yes.

Mr Laughren: He was using that as an example of how you could have all these different municipalities and if they privatized their sewer and water supply, they could each have different standards as the private sector operated different utilities all in that area and you wouldn't have any consistency of environmental policy as regards water conservation or quality. I think your point here is very well taken. It's just in the last few days that people are starting to question that aspect of it. People have been questioning other aspects of it like privatization, but they are now starting to question how that makes any sense at all. I don't know whether you've put your mind to how you'd ever resolve that, but I'd be interested in your comments.

Mr Vallance: I don't think privatization is a panacea for all government ills. I don't necessarily believe that privatizing garbage in Toronto, for example, would create a more efficient system. I'm not a privatizer per se.

I don't have a problem with privatization, though, where there is some justification for it in terms of more efficient operation and in terms of the expertise in some of the things that can be done in the private sector that wouldn't normally be done in government. However, if you do privatize something like water, then it is absolutely essential that the regulations and the pricing be controlled by the government, the same as we control the prices for hydro to a certain extent and rate increases and so on for Consumers' Gas. Those things have to go through regulatory approval. For water, that's absolutely essential because water's probably more important than electricity or almost anything else. I mean, I'm drinking the water here; I hope it's safe.

If the distribution and the collection of the sewage are privatized, I'm not firm one way or the other on that, but as far as the monitoring, the testing and the regulation, it's absolutely essential that the money be there to do that job.

Mr Galt: Thanks for your presentation. Just a couple of comments I'd like to make to try and clarify some concerns that have been expressed. There's certainly been a number of statements made that the province does not have standards for water and sewage treatment works.

It's important to understand that all water and sewage treatment plants must have a certificate of approval issued by the Minister of Environment and Energy subsequent to a review of the technology. Terms and conditions placed on these approvals require compliance with the Ontario drinking water objectives for effluent criteria in the case of sewage works. These terms and conditions are enforceable in law and have the equivalent effect of standards and the standards will be enforced across the province.

There's no suggestion in this bill or any other one that there will be patchwork pieces of different rules and different regulations. This bill is about transferring the ownership of those plants. You expressed that 80% of the population wants to have more control. That's exactly what this is all about, putting 230 of the plants in the hands of the municipal councils so that they do have control at the municipal level, and that's where the biggest control is. It's not at the provincial level or at the federal level.

It's possible -- I'm not sure -- you're suggesting that 75% of the plants should be turned over to OCWA with some of the comments that you've made. I don't think so. I think the best idea is to put them in the hands of the municipal governments where they are the closest to the people. That's what the bill's all about.

Mr Vallance: This is some of the rhetoric we've been getting on everything. Putting the control of the water system on a municipality with 1,000 people makes absolutely no sense whatsoever because there's no possible way they can afford the proper testing and inspection that's required for a system of that size. You need an outside regulatory body.

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Mr Galt: And there is.

Mr Vallance: Although I don't have a problem with the privatization, maybe turning the running of that over to another operation, I guess my concern is -- and it's not something I'm intimately acquainted with; I read the newspapers and it's not just in the last week this has come about -- I've been watching for the last six months and I hear of scientists who are let go, I hear of departments that are shut down that are, as far as I'm concerned, pretty vital to our long-term viability as a country in terms of our ecology. That has a concern for me, and I think the 80% of the population I'm talking about is referring to that, not the control that goes to a local municipality for the distribution and pickup of the sewage. I'm talking about the control over the standards, and that shouldn't be at a local level. That has to be run by a larger body and the provincial government's the obvious one to do that. That's where my concern is.

Mr Galt: That's the way it is and that's the way it'll stay.

Mr Vallance: We're sceptical. Let's put it that way.

The Chair: Our time has expired. Thank you very much for coming this afternoon. Is Mr Sheppard here?

REGIONAL MUNICIPALITY OF OTTAWA-CARLETON

The Chair: We'll move then to the representatives from the regional municipality of Ottawa-Carleton. Welcome.

Ms Alexia Taschereau-Moncion: My name is Alexia Taschereau-Moncion. I am a solicitor for the regional municipality of Ottawa-Carleton. My colleague here is Mr Jim Miller, who's director of engineering services for the regional municipality of Ottawa-Carleton.

As you know, section 3 of the bill transfers to municipalities most of the responsibility for regulating the construction and use of sewage systems under part VIII of the Environmental Protection Act. We are here today to specifically deal with that issue.

Regional council adopted a report, which we have passed along to members of committee, on March 12, 1992. Recommendation 2 of that council report suggests that the first and second readings of Bill 107 be amended, assigning responsibility of the part VIII program to the upper-tier municipalities.

At this point, I would like to transfer the responsibility to my colleague, Mr Miller.

Interjection.

Mr Jim Miller: Madam Chair, I'll try and speak a little louder so that the audience can hear.

Just to emphasize, we're here to discuss the rural issues of Bill 107, the part VIII program regarding septic tank systems. If I could take a couple of moments, this photocopy was distributed to committee members just to orient you to Ottawa-Carleton and what our particular issues are.

Ottawa-Carleton comprises 11 municipalities, population 740,000 people. Of that group, 90% are in our urban area and are serviced by our central water and sewer systems; 10% are in our rural area. In this photocopy in front of you, just to orient you, the very dark is our greenbelt, the shaded area is the area that is serviced by our central systems and the white area is our rural area. As I said, we're here to talk about the issues that affect the septic tank regulations.

RMOC is responsible for the protection of public health, the approval of all lot creation and the protection of environmental and remedial measures when septic tanks fail. Therefore, we believe the region is the appropriate level to be responsible for this program. We make this position because groundwater is a scarce and valuable resource and the regional municipality is ultimately responsible for the remedial measures in case of systems failure.

I want to advise committee here is we that have had system failures and tremendous dollars have had to be spent. Just to point out on this overhead or this map here, there's the community of Carp here, there are the communities of Carlsbad Springs, Vars and Manotick. You may have heard those names. In Vars, we've spent $8.5 million in the last three to four years putting in a water system; Carp, $17.5 million for a water and sewer system; Carlsbad Springs, $6 million; and, Manotick, $4.5 million for a water pipe extension from our central system.

In the case of Vars, Carp and Carlsbad Springs there is conclusive evidence about septic tank failures and the need to bring in these communal systems to solve the health problems. In the Manotick case, it was contaminated groundwater. It was not conclusively from septic tanks here; it was conclusively from poor practices dealing with industrial waste. However, we are aware of septic tank failures in that community. Totally, $36 million of public funds have been spent dealing with these problems, and graciously, 30% has been supplied by the province. I'm not optimistic that we will still get that level of support to deal with future problems.

We believe it's important to have a consistent approach regulating septic tanks throughout the region. We believe there's an economy of scale if the region is involved in dealing with this. We believe a uniform fee structure throughout the region will lessen the possibility of competition between local municipalities and ensure the proper standards are achieved. The regional municipality also has a mandate, and they carry this out, with respect to public education. We believe we can well serve in this area as well.

As I stated, we think there's a direct link with the part VIII program and the hydrogeology issues and that groundwater protection is a responsibility that's very important.

For those reasons, the report that has been distributed to you has been approved unanimously by regional council. I would draw you to the recommendations, specifically recommendation 2, that the Ontario Legislature amendments to the first-reading version of Bill 107 assign responsibility for the part VIII program to the upper-tier municipalities -- Ottawa-Carleton, we're speaking of.

I note that recommendation 3 is in the event that there is no amendment. Then we are going to endeavour to deal with this on a local basis, and I urge this committee to make a recommendation to deal with this and assign that responsibility to Ottawa-Carleton in our area. We'd be pleased to answer any questions.

The Chair: Thank you very much. We have nine minutes remaining for questioning.

Mr O'Toole: Thank you very much for an interesting perspective and a very well defined problematic delivery of this service. I just want to ask you a question: Do you have an in-house service specialist in the area of the septic or discharged water, or is this consulted out? Does the region of Ottawa-Carleton do this?

Mr Miller: I'm pleased you raised that issue. Presently it is administered by the Rideau Valley Conservation Authority and it would be our intention to maintain a relationship and use the expertise that is already there, but we believe it's appropriate that we have the legislative power to control the service levels and the fee structure etc for the uniformity requirements. They have the training and it would be our intention, and we speak to that in recommendation 4, our report speaks to that, to use that expertise.

Mr O'Toole: So I guess you don't have it in-house.

Mr Miller: We do have --

Mr O'Toole: You will consult it somewhere, but you want to be in charge of it, manage it.

Mr Miller: Yes, absolutely. We do have a considerable amount of expertise with respect to a surface water quality group that monitors surface water. We are recognizing these groundwater issues that are more and more pressing us and causing us to have to deal with these areas, remediate these problem areas. I would say that we are well suited for having to deal with the problems, so we want to have control to make sure that they don't get any larger.

Mr O'Toole: Let's talk about the other side of that equation. Again, I'm trying to explore this; I don't really have a preconceived answer. The operations of the plants themselves -- now we're getting down to another phase of what we're talking about here -- for example, the inspection itself: Do you have any recommendations on the efficient way of doing that with the properly trained, properly certified people, maybe even being the building inspectors as they go to a site looking at the structure? Is there any chance you could publicly look at that training and certification process for the appropriate personnel with training to -- you know, is that the way you'd approach this?

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Mr Miller: We do have the health department, we have public health inspectors. They have in the past, in history, administered this program. The training is very important. I think, as in some of the earlier presentations I heard, it can't be done in a hodgepodge fashion and you need the uniform training. Somebody made the comment about if you only have a part-time position dealing with that, I don't think you'd get the expertise that you need to deal with it. That's why we believe the economies of scale we can offer, that we would have in dealing with this in a regional fashion, are very appropriate.

Mr O'Toole: But you might be able to also contract that, not to put a bad word on contracting.

Mr Miller: Absolutely.

Mr O'Toole: Let's say that Philip Environmental or somebody else had the greatest proven track record, would you not be wise to use their --

Mr Miller: We would certainly consider that option. We're not negating that at all. In fact, I'd like to emphasize our approach is that we would use the expertise that we already know, that is, looking at it on a uniform basis, rather than to segment it. That's what concerns us very much.

Mr O'Toole: Quality water for the citizens is really your primary concern.

Mr Miller: Absolutely, yes.

Mr O'Toole: I agree with you totally.

Mr Agostino: I had a chance to read the report that was given to us earlier. There does not appear to be any relation or any reference to additional cost from your review. As a result of this proposed change, will there be any additional cost to the municipality?

Mr Miller: Our intention with this is that service would be carried out on a cost-recovery basis. So effectively additional costs would be covered in that fashion. It's not a service that would come for free. All of our water and sewer services in Ottawa-Carleton are on a total-recovery basis.

Mr Agostino: Does that include the cost of infrastructure as well?

Mr Miller: Absolutely, the cost of infrastructure. However, I emphasize that the large expenditures to deal with problems, and we know we have existing problems, have been totally funded from the provincial grant structure that has been in place to date, plus the residents or the problem areas have paid to top it up to take it to the 100%. That is a regional council policy.

Mr Agostino: Just to follow on that, under the proposed changes here, with the grants being eliminated -- that's one of the options in this -- does this leave the door open? Obviously too, if you run into a problem and you must do infrastructure changes to your system, if it goes into the millions, as an example, as some major difficulties could, would you simply pass that on to the local taxpayers as part of the cost of water and sewer services in Ottawa-Carleton?

Mr Miller: That would be a very tough decision because of the tremendous cost to solve these problems. I mentioned the $36 million and I would say that $36 million has dealt with about maybe 3,000 residents. Those are the kinds of numbers. So I don't know how that pill can be swallowed without some sort of support. What we're getting at is we think it's appropriate to solve these problems up front and not have pollution problems. That's why we want to have that control to ensure that we're doing everything possible not to have future problems like Vars and Carp and Carlsbad Springs.

Mr Agostino: But there should be, in your view, obviously a mechanism to ensure that provincial grant is available to help with some of those programs, or if you run into another situation where you have to spend $36 million for 3,000 residents, I would presume if you were going to base it on that cost per user, I don't know off the top of my head, but it sounds like it could be a hell of a lot of money for each resident. That's the scenario you could be facing once you eliminate the grants and support payments that would have been there to help municipalities make some of those changes. I think that's the danger in part of this whole package, that if you go on that basis, on that user-fee philosophy across the board like that and you include total elimination of your infrastructure money, to help upgrade or build or make changes to these facilities most citizens would be in a situation where they would not be able to afford to pick up that cost, the $36 million, as an example, that you've just outlined, if it had to come from one particular municipality or one particular area within a municipality.

Mr Miller: What we're very concerned about is the potential for significant expenditures to solve the problem. We have the mandate to deal with potable water in Ottawa-Carleton. We want to protect that interest. We want to ensure it's done right. We want to ensure there are no problems before they happen. That's what we're asking this committee to consider through this legislation.

Ms Churley: Thank you for your presentation. I was quite interested in your last comments about prevention, because I believe that's very important. We don't have time to get into the details of the implications of what that means. I don't know if you're aware, but this government has loosened the MISA regulations over the past year. You know what MISA is, of course.

Mr Miller: Yes.

Ms Churley: It has in fact gone in the opposite direction from preventing chemicals from getting into our sewer systems. On top of that, I'm concerned beyond the privatization issue, so I'm not going to get into it with you because we don't have time. I'm interested in the cost stuff. I remember when we were in government; there was never enough money for municipalities for sewer systems, because there are infrastructure needs etc.

One of your recommendations is about the conservation authorities and that you would approve of these responsibilities being delegated to them. They've had their funding almost totally chopped. I just don't know where they're going to get the money to do that. On top of that, groundwater and hydrogeology staff have been cut from 28 to 15 -- 53%. I could go on about it; I'll stop there for now. We can't play games with this stuff. This is our health, our water, and there have been so many cuts and now more downloading coming. I just don't see how municipalities are going to be able to carry on -- and I think you have some good ideas -- with all of these cuts throughout the system. Good, clean water costs money, to make sure it stays clean. I don't know what your comments are on this, but we can't pretend it doesn't cost money.

Mr Miller: If I could, just a couple of brief comments. With respect to the region's position regarding the conservation authority, they would be delivering a service on a total cost-recovery basis. Whether we contract it to them or whether we contract it to Philip Environmental or someone else, we want to ensure we get the proper level of service we think is appropriate to protect our interests and our responsibilities to clean up. I know they're doing it on a cost-recovery basis.

The other issue you mentioned, about the MISA program -- and I did comment about our surface water quality group. Regional council has taken a very specific position regarding industrial waste and we I think have gone beyond what the provincial requirements are at this time to ensure that these pollution problems don't cause us bigger headaches later. We do believe that prevention up front is the best way to deal with it, and that's why our position in front of you today.

Ms Churley: Thank you, and I'm glad to hear that because I know there are some municipalities which do a much better job than higher levels of government in terms of protecting the health and environment of their citizens. So I congratulate you on that.

The Chair: Thank you very much. We appreciate your taking the time to come and make your presentation to us today.

PHILIP UTILITIES MANAGEMENT CORP

The Chair: I'd like to now call Mr Stuart Smith to come forward, please. Welcome.

Dr Stuart Smith: Thank you, Madam Chairman. It's a pleasure to be here.

The Chair: Your presentation time of 15 minutes includes your presentation and questions from the caucuses.

Dr Smith: Yes, I'm aware of that. Things have tightened up since 15 years ago when I was last in this room in a slightly different capacity.

Mr Agostino: It has changed a lot, Stuart.

Dr Smith: So obviously it's a tight ship being run in this place, I'll tell you. I'll do my best.

Thank you very much for the privilege of addressing the committee. I am here, as you know, in my capacity as president of Philip Utilities Management Corp, which is the largest Canadian-owned private sector water and waste water management firm. We are the contracted operators, as you know, of the regional municipality of Hamilton-Wentworth's water and sewage plants, as well as water and sewage plants and works in several other smaller Ontario locales and in the United States.

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We are here to support Bill 107. We agree with its underlying premise, namely that municipalities should have the freedom to choose, the freedom to select in open competition the operators of their own municipal water and/or sewage works. If they wish to do it themselves, that's fine as well, obviously. By clarifying the issue of ownership of these works, the province has effectively put an end to the practice whereby the Ontario Clean Water Agency, which I refer to as OCWA, by virtue of its alleged ownership of facilities, was restricting municipalities from arranging competitions. They would simply say: "No, you can't have a competition. We own it, so we'll operate it, thank you very much." This has finally put an end to that.

Committee members should understand that these competitions are very valuable as a source of savings to Ontario's municipalities. In every one of two dozen or so contests that have occurred in the last couple of years, savings to the municipality have never been below 20% and often much higher than that. We can document these. This is true even where the Ontario Clean Water Agency has won the right to continue the contract. In other words, they've given their best price and then when there's a contest they themselves submit a price which has never been less than 20% better than their previous price. So competition works, and I think most of us know that, but it's been proven over and over again. The truth is the competing firms are obliged to be as innovative as they possibly can be.

This is not the British system which Bill 107 is proposing. I've never seen so many people invent an imaginary foe so that they could make a living protecting all of us against this imaginary enemy. The British system is not being suggested for Ontario. The minister is opposed to it, I am opposed to it. Nobody I know is recommending the British system in Ontario. Yet I read in the papers day after day people are defending us against this system that nobody wants. In fact, even the British don't want the British system at the moment, as far as I can make out.

In the UK, what happened is that the central government simply decreed that public monopolies would overnight be turned into private monopolies. The benefit of competition was nowhere to be found. Furthermore, the new monopolists were able to set their rates and turn off the water for non-payers. We believe there's no need for this at all in Ontario. We are perfectly happy with the municipalities continuing to own the facilities; what we want to bring is expertise and efficiency in the operation of these facilities. Bill 107 clears away roadblocks and permits such competitive activities.

Let me say a word about the issue of quality. Ontario citizens, like everybody else, are rightly concerned that we continue high-quality services and safe drinking water. I can tell you our water in Canada generally, and in Ontario in particular, is better than any of the European countries whose big companies are coming here to tell us how to do things. So the fact is we have excellent water quality in our province and we always have had.

What they need to understand is that the provincial role as the regulator of water quality should not, and will not, change with the passage of this bill. There will be no difference whatsoever. Evidence from the United States indicates clearly that standards of water quality in private sector operations are no lower and are usually somewhat higher than standards achieved in the United States public sector. Ontario's public sector already maintains very high standards. The private sector companies will have every incentive to try to do even better in order to maintain their reputation and not to lose contracts they have signed.

It is generally easier for municipal authorities to demand performance from an outside contractor than from their own managers and staff. If you go to your own manager and you say, "We're not meeting the quality," and he says, "Yes, but I asked you four times for some additional people and you didn't give them to me," it's kind of hard to get into a fight at that point. But if you have a private company, you simply say, "You didn't meet the standards; you're out." It's a whole lot easier to demand accountability when you have somebody in that role.

Now to the role of what I'm really here to talk about, which is OCWA, the Ontario Clean Water Agency. We would really prefer that OCWA not continue to collect payments from municipalities with respect to outstanding loans which the province has given to help those municipalities to provide services. I refer to section 8 of the bill. Committee members should understand that OCWA has securitized these debts with the province of Ontario and makes money by charging higher rates to the municipalities than it pays to Ontario. This spread in the interest rates is in effect a poorly-thought-out subsidy to the water and waste water sector in Ontario since it has been used to cover the deficit that OCWA has traditionally run on the operations side of their business. Not only does this tend to mask any inefficiency in OCWA's operations, it also permits OCWA potentially to move money back and forth between the financing and operations category in their dealings with individual municipalities, and generally, I can assure you, to the detriment of those of us who would like to compete on operations alone and on a level playing field.

We are pleased that subsection 8(3) allows the minister to specify the apportionment of payments to OCWA as between financing and operations, but that's not going to be easy to do, and we still feel it would be better to separate the financing by taking it entirely out of OCWA's hands.

There has been much discussion about removing this loan portfolio from OCWA and placing it where it belongs with the appropriate financial agencies of the government of Ontario. For some reason this has been delayed and the result has been what we in the private sector consider to be continued unfair competition by OCWA.

As the only Canadian-owned company in the business of exporting these management services -- we are, as you know, 70% owned by Philip Environmental of Hamilton and 30% by the Ontario teachers' pension fund -- I am happy to tell you that together with our engineering and construction partners from the United States we have recently won a contest in Seattle whereby, in preference to all the largest water companies in the world that bid on this project, our group has been given the privilege of finishing to negotiate a contract to design, build and operate for 20 years a new drinking water facility for the people of Seattle. This contract will be the largest of its kind in North America and we are hopeful that our efforts at negotiation with the city, we're quite confident, will be successful.

By getting started in Hamilton we have created an export industry that will bring revenue into this province. We do not understand why we need to have our own province, in the form of OCWA, competing with us. We have seven or eight major companies competing with us already, and I'll tell you it's tough enough. To have our own province competing with us when the people competing don't ever have to dig into their own pockets but rather into the pockets of everybody else in this room is a bit frustrating.

The minister stated this week in London, Ontario, that he does not want the province to be in conflict as "both the regulator and the owner-operator" of plants. I agree with him. Bill 107 deals with ownership, but the province is still in a conflict situation as to operations. OCWA is still competing with us to operate, and the fact is that the province is also the regulator.

Thank you very much for the opportunity of sharing these thoughts with you. I hope I haven't used too much time, because I'd like to have some time to answer questions and have discussion. I appreciate very much this opportunity, Madam Chair.

The Chair: Thank you. There's lots of time for questions, almost three minutes per caucus.

Mr Agostino: Thank you, Dr Smith, for the presentation. I am quite familiar with the Hamilton situation. I was a member of the regional council when the approval was given and I think overall that has worked well.

The point I've made consistently here in the last two days is that there's a distinct difference between a private operator coming in and running the facility on behalf of the municipality -- because the key elements are protected, that is, the standards and setting of the rates, which I think are essential to ensure there's public access and to make sure everyone out there, regardless of income level, is not going to be at the mercy of a private sector company rather than the fact of local, municipal politicians having the ability and the power to set the rates. I think that is distinctly different from the ownership issue.

In the situation in Hamilton contracts were honoured, negotiated agreements were kept, union bargaining rights were not eroded whatsoever, employees who were there stayed there. That kind of formula is different, and I have said consistently that I have no problem with that.

The concern I have, and I think you've talked about it here, is about the potential, if not today, down the line, of downloading that may occur and the extra burden on municipalities, the fact that municipalities may want to look at selling the assets and the operation, which would formulate somewhat on the British model. What we have insisted clearly in the opposition is that the government bring in an amendment or a change to this that would simply ensure that municipalities continue to be the owners of the facilities and continue to have the power to set the rates.

Would you have any objections to that being brought into the legislation here, which would ensure that municipalities keep that control as far as ownership and power to set rates?

Dr Smith: Well, Mr Agostino, we could live with whatever the government and the elected representatives of our people decide, obviously, so it's not that we would object one way or another. I think municipalities could be given some flexibility in this regard. Let me explain. If the municipality were to sell to the private sector, it could still maintain the right to set the rates; or if it didn't have that, then you'd have to have a regulatory body which would set those rates. You couldn't leave that to the private sector.

Right now if somebody doesn't pay in Hamilton-Wentworth, whether we're there or not, as you know, you can put a lien on their house, essentially, and when that house changes hands, then you collect your money at that point. Let's say the municipality were to sell; let's say Hamilton were to sell us the plant. Hamilton could still set the rates, and even if it worked otherwise and we were to set the rates, Hamilton could have an arrangement whereby we could not turn off the water. We would simply go to Hamilton and say, "This person is not paying. You pay us instead, and then you put a lien on their property and collect it after their house changes hands just as you do now." This wouldn't have to be any different.

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The British didn't do that. The British left people at the mercy of the companies, which to my way of thinking is a horrible mistake. I don't think it's necessary to do that.

Let me point out one other possibility. Some municipalities have been talking about selling the asset and leasing it back and they do this to a limited partnership. The limited partners can then get depreciation on that asset, which is essentially a federal subsidy to the province, in effect. That's not such a bad idea. It can be done and some of these smaller municipalities have found that's not a bad situation at all. But they maintain complete control over setting the rates and they never allow anybody's water to be turned off.

My way of looking at it is that there are a number of hybrids, there are a number of middle grounds, where if you just passed an amendment saying the municipality must be the owner, you might be a little too limiting. We could live with that because frankly we're not looking to buy plants. We don't really want to buy plants. We don't want to buy these utilities. We don't want a regulating authority we've got to deal with. We're not looking for that, so we could live with it. When you ask me if I would have any objection, I'd say I could live with it, but at the same time you might be limiting things which municipalities don't want you to limit. That's the only point I'd make.

Ms Churley: Thank you very much for your presentation, Dr Smith. I want to go back to the British experience, and I'm very pleased to hear that you think it was and is a disaster. But the bill in its form could actually lead to that situation, which is why we're asking for an explicit amendment, which I assume you would support.

I want to tell you that if you look at Hansard -- and there are reams of them from Britain -- some of the very same assurances were offered then by British politicians and people in the business, and look what happened. We had a deputant here today from your line of business who has no operations in Canada -- in the United States and other countries. When I asked him, "But you would agree that the British experience was a disaster?" he said: "No I wouldn't. I think there is one-sided press on that." The member for Durham East agreed that it was one-sided and I was quite shocked by his response.

It goes to show again that nice assurances are great but I want to see it in writing. My first question, Dr Smith, is: Would you support an amendment to that effect so it can't happen here? My second question is: Who paid for the $40-million gallon of the raw sewage that went into Hamilton Harbour? Was it your company or the public purse? Those are my two questions.

Dr Smith: I already answered your first question when Mr Agostino asked the question. As for the second one, what went into Hamilton Harbour was a consequence of the fact that Hamilton does not have a stormwater collecting system. Over the years when Hamilton region was running this plant there were spills over and over again into the harbour. When you have a big storm and a big thaw you have the overwhelming of the plant.

In this instance there's a further argument about whether an employee who was working for the region for seven years -- was a member of the union and we took him over and he worked in exactly the same job -- a couple of months later should have turned a pump on or off when he turned it one way or the other. There's an argument about that.

Apart from that, this is simply the overwhelming of an old plant in a city that doesn't have a stormwater system. What went into the bay, you should know, was cleaner than the water that was already in the bay. The fact is that this was an episode at five o'clock in the morning. Nobody is flushing their toilet at five o'clock in the morning. You had basically melting snow and rainwater, that's what you had, and it was going into the bay because it had overwhelmed the plant. So while people speak of raw sewage, it was not quite drinking water quality but pretty darn close. It was very dilute.

Ms Churley: Was there a cleanup?

Dr Smith: There was no cleanup required. The bay was not affected one iota. Not one penny had to be spent cleaning up the bay because there was nothing to clean; it was cleaner than what was there, so there was nothing spent, not one penny.

Ms Churley: So there were no costs incurred to the municipality?

Dr Smith: The only problem is, unfortunately there are a couple of homes that are constantly being flooded -- it's happening frequently in Hamilton, and some of these people may be constituents of Mr Agostino -- and these people had backups in their homes and they have sued the municipality, which has turned around and sued us because that's the appropriate thing to do. Our insurance companies are now settling the matter, so between us we'll get those settled. But the bay, no public funds have been spent whatsoever.

Mr Galt: Thank you, Dr Smith, for the most interesting presentation. You've kind of opened my eyes, and maybe I should have known, to the loan portfolio aspect. I'm curious and maybe you can tell me: What's the difference between what they charge municipalities in interest versus what the Ontario government charges OCWA?

Dr Smith: It averages out because this keeps changing. A lot of municipalities are paying off their loans as rapidly as they can. The last time I looked at it, Ontario was charging OCWA 7 1/4% to 7 1/2% and OCWA was charging something in the realm of 9% -- it might have been up to 9 1/4% -- to the municipalities. So if you look at OCWA's annual statements over the past several years, you'll find, Dr Galt, that they have always shown a loss on operations and a profit on financing, but the financing could have been done by anybody. If you can pay 7 1/2% and collect 9%, you could be a chimpanzee and make a profit.

Mr Galt: It's kind of interesting that this has come out, because the day before yesterday we were having quite a little debate over whether OCWA was in fact making a profit or not, and now I can understand how they could break even or make a profit. I don't think it's debatable anyway, when it comes to a crown corporation making a profit or not making a profit, when they have the assets to back them up.

The other question I wanted to ask you about: Yesterday there was a question on York region's long-term water supply strategy. You'd almost think everything had happened, that they'd sold it down the drain, when in fact there's really been no decision. They've identified that their preference would be to retain ownership, and what they're looking at is retaining some consultants at the same time, looking at design-build-transfer. Mr Sid Ryan really got quite excited about that and said that's the worst possible scenario the Ontario government could ever take. I was kind of curious about your comments, whether a design-build-transfer with ownership of the municipality would be the worst possible scenario.

Dr Smith: No, I think it would be the best possible scenario for the municipality. It might in the long run, however, reduce the number of public sector jobs, so I can understand why Mr Ryan would be concerned, and it's his job to be concerned. I respect him for that. But I think what happens when you have the private sector -- If I can give you an example, Seattle actually is a controlled experiment; accidentally it's a controlled experiment.

They went out the usual way. They got a respectable firm of engineers to do a drawing for them and they had it costed out and it came to something -- I'm just going to use a number now -- around $150 million. They then turned around and said: "That's a lot of money. Let's see what happens if we have a design-build-operate -- or transfer, whichever -- situation where we get the same crew that designs it, they build it, they operate it. They don't come to us and overdesign it, underbuild it and then leave us with the mess." The net result was that we put together a team to do that: We got a builder and an engineer and ourselves as the operator and we came in and we are told, according to the news in public works financing, that we are something like 40% below what they were coming in at, so you're talking about savings in the realm of $40 million to $50 million by our doing it that way.

I recommend that design-build-operate be the way of the future whenever you're building new facilities in Ontario. Right now you have a contest to choose a consultant, the consultant draws up specs; you have a contest to choose an engineer, the engineer draws up specs which usually overdesign the plant; then to those specs you have a contest to choose a builder who usually underbuilds the plant. Then you're stuck, as a municipality, operating it.

Mr Galt: I think what we've ended up with is the municipal councillor's main job being to lobby for money from the provincial government, when they get it they overbuild, and then they have to get more money to operate what they've overbuilt. I think it's really exciting that you're exporting this kind of expertise to the US. We hear all the time about things coming from the US into Canada. It's pretty exciting. It's too bad the newspapers wouldn't pick up on the kind of exports we're carrying out. Thank you and congratulations to your company.

Dr Smith: Thank you, sir. I think they will pick up on it. It's just that we can't announce the contract itself until we've signed it. We just won the contest, but that gives us the right to negotiate. It's going well, but until the signature is there, we can't announce it as a general announcement to the press.

The Chair: Our 15 minutes do go quickly. Thank you very much for taking the time to come this afternoon. We appreciate it.

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SAVE THE OAK RIDGES MORAINE

The Chair: I'd now like to call Anna Tilman from Save the Oak Ridges Moraine. Welcome.

Ms Anna Tilman: Thank you for the opportunity to speak here. I speak not as an expert but in two capacities: as chair of Save the Oak Ridges Moraine in the area just north of the city which has very sensitive areas that are under heavy study, and also as a resident citizen of York region. My presentation will be based on both aspects of my experience in terms of Bill 107. You might have already received copies of my submission. I'm not a politician, so I'll do my best with this.

In essence Bill 107 is transferring the water and sewage plants presently under provincial control to municipal ownership. The bill outlines new provincial guidelines and requirements for the sale of any water and sewer plants. These actions, along with Bill 26 which was passed a while ago, which removed the requirement that municipalities hold a public referendum on the sale of public utilities, strongly indicate that privatization will be the vehicle which municipalities will opt for as they attempt to grapple with the complex issue of water supply and sewage disposal, without necessary or needed support mechanisms in research, inspection and general expertise primarily due to funding cuts and loss of staff at ministry and municipal levels. Furthermore, no provision is given for independent regulation of water and sewage utilities.

For all service options there is a need to develop an integrated, holistic approach to water supply and sewage treatment to avoid adverse environmental consequences and inappropriate planning decisions. Comprehensive planning strategies must be based on the definition of environmental carrying capacity and should incorporate a holistic view of the environment and definition of development land forms.

The need to be cautious in areas of sensitivity cannot be understated. Land forms such as the Oak Ridges moraine lie within a number of municipalities and regions. The particular issues and unique properties and functions of the moraine regarding soil, groundwater, aquifers and natural heritage transcend political boundaries. What assurance is there under Bill 107 that municipalities will be consistent across the moraine and that degradation does not occur?

STORM, the organization which is a coalition to save the Oak Ridges moraine, has several concerns with respect to privatization.

(1) Accountability: Private companies will be accountable to their shareholders first. Profits could very well be their first priority, and efficiency and conservation may not enter in.

(2) Regulations and maintenance: We could see a deterioration in maintenance and service of equipment if we don't have adequate safeguards or enforcement. What guarantee do residents have to a continual clean water supply and that sewage treatment will have the appropriate safeguards to ensure no leaching, contamination of groundwater etc? Why are we risking the health and welfare of all of us for expediency and short-term gain?

(3) Affordability, allocation and access: What guarantee is there that allocation of water supply will be determined by environmental considerations rather than profits, development, engineering and expediency? What assurance is there that the cost of water and sewage services will be controlled, in essence, and affordable? What likelihood is there that such costs may rise to the point where services become unaffordable to those on low or fixed incomes?

(4) Long-term protection: Ontario's waters may not be protected in the long term from those private interests. Through NAFTA, water may be exported to areas in the US and Mexico that may be subject to water shortages. Trade agreements make water a commodity which may have to be perpetually supplied.

(5) Management and jurisdiction: The fragmentation of management and jurisdiction over our water and waste water have already indicated some problems which have decimated our water budget.

STORM also has serious reservations about York region's formation of a partnership with the consortium of North West Water, Consumers Gas and the region itself to develop a long-term water supply strategy. I would like to address the issue of the consortium, the partnership, the experience in England with respect to privatization and the public process.

I first wish to address the public input process. First of all, how informed were the residents of York region with respect to this partnership being formed and its implications? On what basis was this company, North West Water, chosen for developing a long-term strategy for water supply? I'm aware of what has gone on in terms of how many companies were invited. Three were invited. On what basis was a decision made to form a partnership in the first place? What alternatives were pursued in terms of long-term water supply other than privatization? Has research been done into the experiences and effects of privatization of public utilities in other areas in a public utility such as water? Many people in York region are very unaware of what has gone on.

I'm sure you have heard about the English experience already. It has not been very good. I will go particularly to the York region experience.

In the search for a long-term strategy for York region, the partnership came up with nine possible options to consider: pipelines generally; getting water from different sources, from Georgian Bay, Lake Ontario, groundwater etc.

Three open houses were held last November to obtain public input. Notification for these meetings was rather scanty and hard to find. Very few residents were aware of the issues and the level of complication with respect to the water supply and privatization. In total, 169 residents of York region came to this public input process. This was out of a population of 500,000-plus. You can't say people are apathetic. This does not necessarily speak to apathy and it can't be dismissed in that way.

I attended the open houses. At these open houses we were asked to fill out a questionnaire. The questionnaire was very confusing, obtuse and very subjective. In total, 59 residents or people who attended the open houses filled these out. Then to top it off, we got some glossy literature from this consortium, and this is one of the species: very glossy, very nice.

I want you to pay attention to something here. There is a map in this. It says "York region" and gives some numbers. This is not very mathematically done, by the way, and I'm a mathematician by trade and background. On further glance, this very glossy, well-described consortium has York region described on this map. I looked at what the map was and it wasn't York region. On further inspection I found it to be an area in North America, as a matter of fact in the United States. What they've done is impose the letters "York region" over a map of the Indianapolis area.

Ms Churley: It's an error.

Ms Tilman: It's an error, yes, but this is an error by a company and consortium to which we are entrusting delivery of water supply and so on. You may think this is small, but the reaction when I spoke about this to a meeting in York region -- people did not know about this and they did not know about the open house. They wondered about the kind of money that goes into this stuff and they still can't get it right, something simple like this. Gloss hides a lot; true facts are what you're after.

After this "consultation" with 169 residents, after which other input was received of course on the whole process, a selection of preferred solutions was produced by the consortium. I have it here. Half the pages are blank, by the way. They're used as dividers. A final decision, a preferred solution was to be made as to which of these nine options was to be taken. On December 19, 1996, there was supposed to be an open meeting in York region. However, York region council declared the meeting to be an in camera meeting, and I and a number of other people were unable to participate and attend. That concerns me, and I'm very concerned about this lack of public input process in the true form, not just paying lip-service to it.

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Another area that concerns me: If we're really serious about water supply in this province, why aren't we seriously looking at conservation issues? There have been reports after reports, some from consultants with a very high reputation that did study the Oak Ridges moraine with respect to water supply and sewage treatment -- Proctor and Redfern. I have their references for your information.

Various agencies, government groups, the federal government, have recommended that one could conserve about 25% to 40% of our water -- we're not sure, of course -- through retrofitting, other techniques; there are a number. There's research done on this, reclaimed water sources etc, not just residential but industrial-commercial usages. This preferred solution document, which seems very vague, by the way, very spotty in its recommendations, says we can maybe conserve 2%. I say nobody has done their homework on this.

There has been little if any research done, serious research on environmental and cumulative impact studies on pipeline options. This is a big void, including septic systems, a big problem -- over a million septic systems in this province and there's lack of consistency across the board here.

In conclusion, the haste of making an historic decision using unrealistic time frames and whose impact on the environment and health and safety has not been fully explored is a recipe for disaster. Once water and sewage are put under the control of private companies, it would be extremely costly for the people of Ontario to buy it back should privatization prove untenable. Why do we risk squandering a resource as essential and basic as water? Who owns the water, really?

I would like to call for a full environmental assessment on the project in York region rather than the class environmental assessment. I'd like to consider this Bill 107 to be re-evaluated with what I have in mind. Although I may not give specific recommendations, I think the gist of what I've had to say would indicate the direction I would like the bill to go in.

One incident -- I was late in getting here; I was coming from work -- I heard somebody mention York region and other privatization models: I was talking to a colleague about a private system that was brought in in I think Flushing, appropriately named, New York state, in the New York region. This private water company was called Jamaica Water and it was brought in to fix up the problems there. The company has gone belly up, gone broke, and the water supply is back in the hands of the public. Thank you very much for your time.

Applause.

The Chair: I have indicated three times that the gallery is not to participate by demonstrations of clapping. If it occurs again I'll have to clear the gallery, and I don't think anybody in this room wants that to happen.

We appreciate hearing from you, Ms Tilman.

CANADIAN AUTO WORKERS -- CANADA

The Chair: We'll move now to Mr De Carlo from the CAW. Welcome, Mr De Carlo.

Mr Nick De Carlo: Thank you. I hope everyone has a copy of the report. Before I begin, though, I want to comment on the issue of applause from the people who are attending. It's an issue that's been raised in other public hearings I've been at, and I want to point out once again that the behaviour of people here is much superior to the behaviour I see in the Legislature itself, therefore I don't understand what the issue would be.

Ms Churley: You have to agree with that, Madam Chair.

The Chair: I do agree.

Mr De Carlo: That being the case, I think the people here have every right, as much as the members of the Legislature, to express their opinions.

I'm here today to express on behalf of the CAW our unequivocal opposition to Bill 107, the Water and Sewage Services Improvement Act. Rather than improving water and sewage services, this act opens the door to a fundamental attack on the quality of water and sewage services in Ontario and threatens irreversibly to alter citizens' rights of access to clean and safer water.

It is a well-known and accepted fact in the 1990s that we're facing an environmental threat from the overuse and pollution of water. At the very time when leadership is required to protect water resources, the Ontario government is preparing the groundwork to reduce regulation and inspection of water, privatize water resources in Ontario and open the door to the wholesale selloff of Ontario's water.

Our members are directly affected by water pollution. Many of them are employed in workplaces which pollute the water systems. They work in factories where they feel hazardous waste is not treated as well as it should be. They work in airports where ethylene glycol, wing de-icer, is allowed to run into nearby creeks and contaminate the groundwater. They live in communities surrounding these workplaces and are concerned about their health and the health of their families. They live in places like Collingwood where our 500 members employed at the Reynolds-Lemmerz plant were very concerned about cryptosporidium, an micro-organism found in their water supply. While this micro-organism did not originate in a workplace, it is a clear example of a contaminant harmful to human health that must be controlled.

We as a union are extremely active in environmental issues, bargaining into our collective agreements environmental committees and health and safety and environmental committees so that the workforce will have a say in trying to limit environmental harm from our workplaces. But our powers are limited. We play only an advisory role to management who have the final say in whether or not protection of the environment is implemented. We believe government must play their role in formulating stringent legal requirements and strictly enforcing these requirements to ensure that any possible harm from our workplaces to our communities is eliminated or at least minimized to the greatest possible extent.

Around the world, environmentalists and strategic thinkers are advising that water scarcity could bring disaster. Water tables in the US, especially in the southwest and Mexico, are dropping. In this context, the US has plans in place for massive water diversion of Canadian waters to meet their future need for water. The free trade agreement with the US provides that once water is exported to the United States we cannot stop the flow of our water south of the border in the future, even if there are water shortages in Canada. Yet the Ontario government proposes to make water a commodity for selling, and the government of Ontario proposes to take control of water away from the citizens of the province and hand it over to multinational corporations that have no obligation to the citizens and no loyalty to the country.

Water services have been managed and controlled by government in the public interest precisely because private control leads to abuse, high prices and lack of safety in water treatment. Yet the Ontario government proposes to go backwards in time by privatizing water resources at the same time as reducing regulatory and enforcement mechanisms and downloading responsibilities on to municipalities, many of which cannot afford to apply adequate resources to carry out these functions. While promising more efficiency, the government opens the door to higher prices and greater dangers.

In taking this gigantic step back to the future, the Ontario government casts aside the opinion of the citizens of the province. An Insight Canada poll of April 1996 found that 76% of Ontarians say that water should remain in public control. By encouraging privatization, Bill 107 ensures that the public will not be able to have a say in how water is treated and provided in this province. Our government does not announce to the people of Ontario the real intent of Bill 107. Instead, it buries the true direction in the verbiage of "improvement" and "disentanglement."

Privatization is a key issue. Bill 107 permits the privatization of Ontario Clean Water Agency-owned assets and the wholesale privatization of hundreds of sewage treatment plants and water treatment plants currently owned by municipalities. The first Ontario public health and municipal waterworks legislation was passed in the 1880s, over 100 years ago. In the 1950s the province greatly expanded its role in safeguarding water resources by enacting the Ontario Water Resources Act. An independent body, the Ontario Water Resources Commission, was created and enjoyed general supervisory and regulatory authority over water quality and water use within the province. The commission had various approval powers and pollution abatement powers and also served to finance and supply water and sewage services to municipalities.

In 1993 the Ontario government created the Ontario Clean Water Agency, which assumed the operation of the Ministry of Environment and Energy's numerous water and sewage facilities and provided financial and technical assistance to municipalities. The public interest justification for the Ontario Clean Water Agency included protecting human health, promoting water conservation, ensuring public accountability and supporting provincial policies regarding land use and development.

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Ontario has 100 years of history of improving public control over water and sewage services. Though there remain improvements to be made, the current Ontario government chooses instead to reverse the direction.

What is the record of the current Ontario government with regard to water and sewage services? Bill 26, the Savings and Restructuring Act enacted in early 1996, makes it easier for municipalities to dissolve water or public utilities without electoral assent. 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, and the MOEE's 1997-98 capital budget reductions announced on April 11, 1996, slashed approximately $142 million from the municipal assistance program, which had already suffered multimillion-dollar reductions for 1995-96 and 1996-97.

After Bill 107 was introduced, a provincial task force identified the Ontario Clean Water Agency as a candidate under review for privatization. At one time water quality in the province was routinely monitored through sampling of lakes, rivers and watercourses to build a database to track contaminants. This information was used to determine if a particular lake could withstand further cottage development, whether a watercourse could handle a sewage treatment plant and for other purposes. The number of water monitoring stations dropped from nearly 700 in 1991 to just over 200 in 1996. No surface water monitoring was done north of Barrie, where the majority of watercourses are located, for the 1996-97 work year. Very little water monitoring was done elsewhere. Sampling locations have been reduced by 80% in the Great Lakes in the past five years. The number of stations sampled dropped from approximately 500 in 1990 to 100 today.

Groundwater provides drinking water for 3.5 million people, or approximately one third of the Ontario population. Groundwater supplies account for more than half of municipal water use. Ministry staff look at approximately 2,000 groundwater contamination incidents per year and often discover faulty construction and poor maintenance of wells. These kinds of problems can result in direct contamination of the water table. In Smithville, cleanup costs of PCB groundwater and soil contamination have reached approximately $25 million to date. Despite this, inspections of well installations are no longer being done in some areas of the province. Verification of water well records is among the lowest-enunciated priorities in the ministry's work plan.

Despite these developments, the current Ontario has chosen to downsize the Ministry of Environment and Energy. In 1996-97, 650 of 1,770 jobs in the MOEE -- over a third of the jobs -- have been eliminated. This ensures that inspection and monitoring will continue to deteriorate. A direction has been clearly established by the Ontario government: deregulation, reduced enforcement and privatization.

Despite Ontario government promises of "encouragement" of public ownership under Bill 107, the bill merely provides that before a municipality can transfer a water or sewage facility to the private sector, any provincial grants received for the facility since 1978 must be repaid, but without interest. This simply establishes a subsidized price for the facility and does not constitute an effective safeguard against privatization. In fact, it opens the door to it.

By transferring ownership to municipalities and eliminating capital investment subsidies for municipalities to construct and maintain these services, the Ontario government is ensuring that water and sewage services will be privatized. By allowing the privatization of Ontario's water and sewage services, when 25% of Ontario's infrastructure, including water and sewage services, are 50 years old, at bargain-basement prices, the Ontario government ensures that standards will not be maintained and prices will go up.

I also want to raise a concern over an issue that's raised in An Act to enact the Municipal and Sewage Transfer Act, 1997 and to amend etc:

"75.2(2) The Minister of Municipal Affairs and Housing may enter into an agreement with a board of health or with a person or body prescribed by the regulations providing for the performance of the Minister's responsibilities....

"75.3: A person or body that has responsibility for the enforcement of sections 76 to 79...."

I believe the question has to be asked, does this open the door to passing over responsibility for regulation and enforcement to private individuals and corporations?

Downloading also flies in the face of recommendations of various Ontario government bodies.

For example, the Commission on Planning and Development Reform in Ontario recommendations are in complete contrast to section 3 of Bill 107, which transfers from the MOEE to municipalities the general responsibility to regulate the construction and use of sewage systems under part VIII of the EPA.

In general, part VIII sewage systems include septic tanks, small private sewage works and other systems that do not discharge effluent directly into watercourses. It has been estimated that there may be over one million such systems located throughout the province. The problem is that without adequate soil conditions, sufficient separation distances or proper design, construction and maintenance, part VIII systems can adversely affect groundwater and surface water and result in other nuisance impacts to nearby landowners.

The Commission on Planning and Development Reform in Ontario found that there "is increasing evidence of contamination of both ground and surface water" from septic tank systems. The commission also referred to regional MOEE studies that showed one third of septic systems were designed below standards and one third were classifiable as a public health nuisance. Given the environmental and public health significance of septic systems, the commission correctly concluded that the MOEE should continue to have the primary responsibility for inspecting and regulating septic systems. This primary responsibility disappears with downloading and privatization.

Further, the cost of acquiring water and sewage treatment facilities realistically means that a few large companies will be able to purchase these facilities, raising the possibility of virtually unregulated private sector monopolies controlling water and sewage services in many areas of Ontario.

What is the experience in Britain with privatization of water? I know this issue has been raised with you many times; we raise it again. As others have pointed out, the effects of privatization of water in Britain have been numerous. They include such problems as substantial increases in water prices; termination of water services to low-income families; severe water shortages; restrictions on non-essential water uses; outbreaks of dysentery and hepatitis A; selloff of water reservoir lands for development purposes; excessive executive salaries and shareholder dividends; extensive layoffs and wage reductions; failure to reinvest profits into infrastructure improvements, resulting in increased leakage; numerous violations of water pollution laws; and creation of integrated private monopolies.

Is this what the Harris government means by "improvement" in water and sewer services? The answer appears to be yes.

Conclusion: Bill 107 is not about disentanglement. It is about downloading and disenfranchisement. Municipalities will be forced to shoulder burdens they cannot bear. Inevitably they will sell off the services to private companies. Lack of regulation and enforcement combined with private control of water and sewage will severely restrict, if not eliminate, citizen participation in the process. Bill 107 is about profit for corporations at the expense of the environment and the citizens of Ontario.

What Ontario citizens need and want is more protection for water and sewage services. We agree with others who recommend that Ontario legislate a Safe drinking water act. This act would:

Entrench a clear public right to clean drinking water;

Establish standards limiting the amounts of contaminants in drinking water that may adversely affect human health;

Establish standards that address contaminants that may cause odour, appearance or usability problems with drinking water;

Impose a positive statutory duty on the MOEE to set and enforce drinking water standards;

Require public and private water suppliers to periodically sample, monitor and report upon the quality of drinking water;

Promote research into alternative water treatment technologies that eliminate organic chemicals in the water treatment process;

Establish appropriate prohibitions, penalties, and investigation and enforcement provisions;

Require public and private drinking water suppliers to provide timely public notice of operational problems, failure to carry out prescribed testing, or violations of prescribed standards; and

Create a statutory cause of action permitting individuals to sue violators of the act or standards.

We need to move forward in protecting the environment and our water supply, not to go backwards. Bill 107 is going backwards.

The Chair: Thank you very much, Mr De Carlo. Unfortunately there's no time for questions, but we thank you for taking the time to come before the committee today.

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ONTARIO NEW HOME WARRANTY PROGRAM

The Chair: The presenters from the 4:45 slot have withdrawn. Is Carole Bennett here, please? Yes? I'm glad you're here. Welcome.

Ms Carole Bennett: I want to thank the committee for the opportunity to present on behalf of the Ontario New Home Warranty Program around certain aspects of Bill 107.

The Ontario New Home Warranty Program is a private, non-profit corporation which was established in 1976 by Ontario's home builders to provide an insured warranty for new homes. In 1977 the province of Ontario designated the corporation to administer the Ontario New Home Warranties Plan Act to ensure all new homes were provided with warranty protection.

The corporation is self-funding and self-insuring. All our revenues are derived from fees from the registration of builders and vendors of new homes and the enrolment of new freehold and condominium units in the plan.

The warranty program is interested and directly concerned in the proposals in Bill 107 because the definition of "home" in the Ontario New Home Warranties Plan Act requires warranty protection for private sewage disposal systems installed by a "builder," as defined.

Our past experience with these systems has not been good. In the early 1990s the warranty program took steps to evaluate the situation and address the risks it faced because of the failure of these systems in new homes. In 1991 the warranty program identified concerns for the undue liability to which the corporation's guarantee fund could be exposed because of the inability of the existing approval processes to ensure that private sewage disposal systems functioned adequately.

Information indicated that the incidence of claims paid by the warranty program for repair and replacement of these systems was rising. In addition, some significant failures in subdivisions in various parts of Ontario, principally in London, in Halton and in Peel, alerted the warranty program to increased potential liability, and in fact the risk of having to build out significant portions of sewage systems.

As a consequence, in 1992 the warranty program commissioned Paragon Engineering to study the requirements, approval processes and failures of private sewage disposal systems throughout Ontario. The study identified that although MOEE, local health units and conservation authorities were depending on the jurisdiction responsible for approving these systems, there was a lack of uniform application of the requirements across the province.

The study also investigated the causes of septic system failures across Ontario and found that many of the system defects could have been prevented. In some cases the systems were designed and installed improperly. In others, inaccurate soils information was responsible. As well, homeowners' actions were to blame for a number of problems. These conclusions matched our own experience.

The warranty program's own claims data were also revealing. From 1991 to 1993 septic system claims represented about 10% of all freehold construction-related claims, and believe me, the number of homes on septic systems isn't anywhere near 10% of the overall enrolment of homes in any given year. In 1993, for example, we paid out over $325,000 for septic system claims compared with $4 million for all construction-related claims in freehold homes.

Remedial costs are high because of the need to replace contaminated soil, the associated hauling and tipping fees, the engineering fees we have to pay out in order to come up with appropriate solutions, the replacement of the system, of course, and the restoration of the property back to its original condition. From 1991 to 1993 the average cost of claims per home increased from $8,400 to $14,200. This was borne by the warranty program, but there are many others: homeowners who have to bear those costs themselves when they aren't protected by the warranty.

The frequency ratio of all warranty claims, both construction and financial loss, is normally about 24 claims per 1,000 homes enrolled. But with homes on septic systems, the estimated frequency we found during this period was 42 claims per 1,000 homes enrolled, so almost double what we would normally expect. It was apparent that we had to take certain steps to protect the guarantee fund.

These statistics reflect our experience only. They don't include all the costs incurred by builders at that time who serviced their own problems without involving us, nor do these statistics include homeowners who had to take on corrections because they were in older homes, seasonal dwellings or whatever and therefore were not brought into the equation either.

After evaluating the data, the warranty program adopted several recommendations, including publications for builders around design and installation requirements; maintenance publications for homeowners which go to all new homeowners on these systems; training for builders; but by far certainly the most controversial but most significant initiative was proof of professional certification of the design and installation of all systems in homes enrolled with the warranty program.

The final proposal, professional certification, added between $1,000 and $2,000 to the cost of the house. But given the unpredictable nature of the claims at that time we felt it was necessary, and we implemented our builder bulletin 33 to require certification proof from all registered builders who were building these kinds of systems. Along with this, we provided province-wide training.

While the warranty program was taking these steps to correct the problems, other organizations were doing the same. MOEE contracted with some new approval authorities for better implementation of its requirements. Existing approval bodies tightened up their approval and inspection procedures, and some, like Waterloo region, had already moved to a professional certification model in the late 1980s. Others, like the Upper Thames Conservation Authority, took over responsibility for septic system approvals and inspections with much better procedures and policies than their predecessors, and they also implemented new training programs for their clients: builders, installers and so forth.

All these actions have had an impact. The warranty program's claims have dropped significantly. Claims costs in 1995, for which I have the most recent data, dropped to just under $160,000. The average cost per claim is also coming down to just over $10,000 per home. More important, the frequency ratio has dropped dramatically to 10 claims per 1,000 homes enrolled from the 42 per 1,000 I had described earlier.

As a result, in 1996 the warranty program reduced its certification requirements for builders from the whole province, which was affected, to only four regions: Halton, Ottawa-Carleton, Peel and Wellington where there are still above-average claims. With this kind of improvement, though, it was our intention and certainly our goal to eliminate the certification requirements of builders altogether within the next few years. However, Bill 107 gives us some pause.

There is much to commend, we believe, in the bill as far as the septic system conditions are concerned. We endorse MOEE's continued responsibility for establishing appropriate and stringent standards across the province. We heartily support the certification and training requirements for installers and inspectors. We also endorse the concept of one-stop shopping for builders seeking permit approvals and inspection services for the homes they are building. It's especially timely as the new home market begins to recover and meet the pent-up demand after a very, very, long recession.

However, we have reservations about the practical implications of moving approvals and inspection to the local municipality. We do not want to see a return to the performance of the early 1990s when, in that case, almost 50 jurisdictions were having very mixed success in administering the part VIII provisions of the Environmental Protection Act. The performance has improved dramatically, as I have already described.

We have concerns now, going from 50 jurisdictions or close to, up to over 800, that we will be right back into the same mess we were in in the early 1990s and that we will begin to see an increase in septic system failures again because of lack of experience, increased workloads, lack of other resources and the variable interpretations that are all very real situations.

For new home owners there may be some protection through the warranty, but others will not be so fortunate. We believe that on the whole the current approval authorities are performing satisfactorily. We will continue to monitor our claims data and address liability issues accordingly. We will continue to take the necessary steps to protect the guarantee fund while we balance the entrepreneurial needs of the building industry with consumer protection rights and the need for environmental protection. But in the model proposed in Bill 107 we believe, and it is our hope, that those currently performing an effective approvals and inspection function will continue to do so.

Mr Galt: The point you made that we heard earlier from a delegation from Ottawa-Carleton, which level of municipality should be delivering it, is one we've struggled with as well. The idea of one window for the customer, one-stop shopping, so to speak, has a lot of merit. At the same time, as you point out, there are some 800 municipalities that you would have to work with and that we would have to work with and so on, and maybe the health units if they use health units to carry out the actual inspections. We're struggling with that one. If you have any more input I'd love to hear from you. We're talking with the large systems on the upper tier, the small systems, single-house and lower tier, and then in the north MMAH looking after it there.

It's a real struggle. You're sort of damned if you do one and damned if you do the other. It's really tough to come up with what's going to be the best for all concerned. We'd look forward to anything else you have along that line.

Ms Bennett: I would be happy to provide the committee with detailed information about our claims. The Paragon study, which I described in my remarks and so on, may help.

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Mr Galt: The information you had there on claims is quite an eye opener and certainly reinforces the need to train and certify or license the installers, more than just the inspectors.

Ms Bennett: Absolutely. Our belief is that things are just getting going right now and we would like to see things continue as they are because we feel they are finally on track.

Mr Galt: Super. Thanks very much.

Mr Agostino: Thank you for your presentation. I think you've brought a perspective that we have not really talked about, with that particular impact, through our deliberations. Actually it's the first presentation from that angle in the three days we've had, so it was very enlightening for myself and I'm sure for most of the committee members.

What do you see as the fallout of the recommendations you made about the process and the control, the jurisdiction of this? What do you see as the fallout or the downside if the recommendations are not accepted and you end up with the situation that the bill stands as it now is?

Ms Bennett: If claims go up again for us, then we will take steps with builders and probably have to go back to requiring greater certification requirements. As I said, right now we're down to requiring proof of certification by a professional engineer in only four parts of the province, and we had every expectation that the improvements that are going on, particularly in Ottawa-Carleton and in Wellington, would reduce that because we do a five-year rolling claims average. If we see claims going back up, we will then have to bring back the certification requirements, so that means again added cost to the house.

Ms Churley: First of all, Madam Chair, I just want to remind people that pesticide staff have been cut from 31 to 17, or 55%, and aquatic toxicology and ecosystem staff cut from 28 to six, 21%.

Mr Agostino: That's shocking.

Ms Churley: Of course these impact on water supplies. I just want to say to you that it's nice to see you, Ms Bennett. As a former Minister of Consumer and Commercial Relations I remember this issue very well, and some of the controversies with AMO around it, and we were able to work through it.

I think your presence here today is extremely important because there are so many aspects to these kinds of new legislation that quite frankly government members and opposition often don't know about. You've brought a very important perspective today in terms of the importance of making sure that -- and I like your recommendation, "It's working the way it is." I just wanted to thank you for coming forward with that perspective because I remember how difficult that issue was to resolve.

Ms Bennett: Yes, we both have good memories of that time.

The Chair: Thank you very much, Ms Bennett. We appreciate you taking the time to bring your perspective to the committee.

Colleagues, before we adjourn today we have one matter of business, and that is to determine the time when the amendments for this bill will be presented to the Clerk's office. A suggestion has been made that on Friday, April 25, at noon would be an appropriate time. Any discussion?

Mr Galt: A week Friday.

The Chair: And with clause-by-clause on April 30.

Ms Churley: The deadline for getting them submitted would be Friday -- what was it?

The Chair: April 25 at noon.

Ms Churley: Okay. A week this Friday. I think that's fine.

Mr Galt: That gives us time to get them in and time to have a look at them.

Ms Churley: Yes.

The Chair: I see agreement on that then. So Friday, April 25 at noon, amendments must be presented.

Mr Agostino: Just one quick question. On a positive note, I've had a chance on a number of committees in the time I've been here to look at briefing material and I want to thank the ministry staff for preparing what is really an excellent briefing book. I think the information contained, the relevance and all the background -- while we may not agree with the contents of everything in here, as a member of the opposition I'm certainly quite pleased with the material that was provided and the amount of information that was given to us in our briefing books. I think it was well done.

The Chair: That's a very kind compliment. I'm sure they'll appreciate it.

Ms Churley: And they're a little bit tired too, so we doubly appreciate all the work the clerks are performing here and I'd like to thank them.

The Chair: That's very nice. With that I'd like a motion to adjourn and we could reconvene on April 21 after routine proceedings.

Interjection.

The Chair: Oh, we don't need a motion. Then we adjourn.

The committee adjourned at 1706.

Committee Documents