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Overview

Part II of the Walkerton Inquiry Report completes the work of the Inquiry that began almost two years ago. In this report Justice Dennis O’Connor recommends 93 changes relating to the provision of drinking water and drinking water services in Ontario.

The Report recommends that a multi-barrier approach be applied to protecting drinking water. Such an approach would have five major components. They are:

  1. The protection of the source water through a watershed-based plan that would be binding on provincial and municipal government.
  2. The continual updating of Ontario’s standards and technology using the most recent knowledge and experience.
  3. That all municipal water providers be required to adopt a quality management approach that would require municipalities to have an accredited operating agency and to have an approved operational plan. This would include the mandatory training for all water system operators, including grandparented operators who would be required to pass certification exams within two years.
  4. That the Province adopt a government-wide drinking water policy and a Safe Drinking Water Act. That the Province also establish two specialized branches within the Ministry of the Environment (MOE), one responsible for watershed planning and the other for overseeing water systems.
  5. That the Province adopt a government-wide drinking water policy and a Safe Drinking Water Act. That the Province also establish two specialized branches within the Ministry of the Environment (MOE), one responsible for watershed planning and the other for overseeing water systems.

The ramifications of these recommendations are clear. Water systems will be reviewing their operational and management structures (Recommendation 44). They will be licensed according to an accreditation process whereby they will undergo regular evaluation and be expected to continuously upgrade and improve using a “quality management” approach. Such an will strive to adopt:

  • Best practices;
  • Real time process control;
  • Robust multiple barrier approach to public health;
  • Preventive rather than strictly reactive strategies to public health; and
  • Effective leadership.

Water systems would also be required to undergo an independent audit by a certified accrediting body (by experienced people within the water industry). The report suggests that a process for accreditation be put in place by December 31st, 2003 and that the MOE set a date in 2006 when all municipalities be required to have an accredited operating agency. Municipal water systems also need to prepare an operational plan to be reviewed and approved by the MOE.

All of these changes will cost money and the report makes clear that municipalities, which are responsible for providing drinking water services, will have to pay the cost. Let us examine some of the recommendations that will directly affect CUPE members and that are of special concern to CUPE from a policy perspective. These are the public-private question, the funding of water services and training and certification of water system operators.

 

The Public-Private Question

In his report Justice O’Connor takes neither a pro-privatization nor an anti-privatization position. However, he does state that he sees no reason to recommend the privatization of water services based on safety concerns. This is a decision he suggests should be left up to individual municipalities.

The report makes a distinction between the private sector owning water systems and their performing certain functions within water system. He notes that municipalities have not been considering selling off their water systems. Justice O’Connor did not embrace CUPE’s recommendation that the report urge the provincial government to remove from Bill 107 the right of municipalities to sell their water systems.

The report also notes that municipalities have had the option of contracting out water services, but have generally decided not to do so. However, Justice O’Connor urges the Province “to adopt a position of neutrality with respect to decision of a municipality to engage, or not engage, private operating agencies to deliver water services.” Furthermore, he suggests that:

The Provincial Government should ensure that this neutrality is reflected in provincial legislation and regulations including Bill 46, An Act Respecting the Accountability of Public Sector Organizations, introduced into the Legislature in May 2001, as well as in the provision of Superbuild Funding for water systems.

While not a formal recommendation, if heeded, this suggestion should put an end to Superbuild’s open encouragement of Public Private Partnerships and should affect how and whether Bill 46 addresses (or exempts) water services. Further investigation of these two issues is needed.

The only formal recommendation made on the public-private question is that “Municipal contracts with external operating agencies should be made public.” The term “external operating agency” is used because municipalities in Ontario may choose to contract with one of three kinds of water service providers; a private sector company, another municipality, or the Ontario Clean Water Agency (OCWA).

Justice O’Connor also issues a note of caution to municipalities that are considering entering into an agreement with a private sector water services provider. It is one that relates specifically to the operating agreement between the municipality and the private sector corporation. He urges that municipalities be fully apprised of the legal implications in terms of future liability, financial responsibilities, information disclosure, dispute resolution and enforcement, including the investments provisions of the NAFTA and other trade agreements.

Furthermore, he states that safety should be the primary principle governing the decision to contract water services and that the operating agreement should reflect this concern. “The municipality should include performance-based safety bonuses and penalties in the contract, and should have sufficient remedies if there is a default on safety issues.” In its submission to the Inquiry, CUPE argued that a contract could not cover the various contingencies and that as in the case of Hamilton-Wentworth, the municipality paid the price for operational problems related to the private sector’s performance.

The contract between the municipality and a contracted water services provider, according to Justice O’Connor, should be made public as soon as it is signed and it should be transparent. Also municipalities should solicit the views of residents before entering into such an agreement and the agreement should require the operating agency “to report regularly and publicly on the achievement of water quality standards, on system performance, on financial results, and the like”. This conforms to some extent with one of the recommendations made by CUPE.

CUPE has always criticized the secretive and undemocratic nature of these contracts as one means of exposing the many problems with water privatization. A more transparent process does not make water privatization acceptable, but if this recommendation is implemented, including the suggestions on public progress reports, it will become much more difficult for private water companies to take advantage of municipalities. Also, an active and informed public is needed to ensure that these changes are effective.

OCWA, which has been under threat of privatization for some time, is seen by the Inquiry as serving an important function for smaller municipalities. Justice O’Connor therefore recommends:

The role of the Ontario Clean Water Agency in offering operational services should be maintained. The provincial government should clarify the Ontario Clean Water Agency’s status and mandate. In particular, OCWA should be:

  • an arm’s length agency with an independent, qualified board responsible for choosing the chief executive; and
  • available to provide standby emergency capabilities.”

Whether OCWA continues as a viable competitor in water services contracting remains to be seen. A lot will depend on the support it receives from the provincial government. If the recommendation is implemented, OCWA will continue to exist as an agency that at least offers expertise and emergency water services to municipalities. Its outright privatization is much less likely as a result of the recommendations in the report.

The Costing and Pricing of Water Services

As mentioned above, the report recommends that water system owners (municipalities) be required to have, and to periodically renew, an MOE licence for their water system. The report also specifies that three conditions should be met before a licence is issued or renewed; that the water system have an accredited operating agency in accordance with a provincially recognized quality management standard, that it have an operational plan and that it have a financial plan based on full-cost recovery and asset management (Recommendation 47).

The last of these conditions may surprise some, but the inquiry gave considerable attention to the adequate funding of water systems. The all-too-frequent occurrence of municipalities not having sufficient revenue for water infrastructure, or of municipalities using water revenues to pay for other activities while their water systems deteriorated, became one of the major focuses of the Inquiry.

Implementing a full cost recovery financial plan necessitates identifying all water services provided and the infrastructure required to provide the service. Furthermore, the report recommended that this be done in accordance with a provincial Standard as specified in Bill 155, the proposed Sustainable Water and Sewage Systems Act. Costs would include operating costs, financing costs, renewal and replacement costs and treating or distributing costs. They would also include accreditation and operational planning, staff training, meter reading and any contracted services. It is suggested that the provincial government define exactly what costs are to be included in a full-cost recovery program.

The report makes it clear that water services should be paid for from local revenue. Recommendation 48 states: “As a general principle, municipalities should plan to raise adequate resources for their water systems from local revenue sources. Barring exceptional circumstances.” Two exceptions to this rule are when implementing an operational and full-cost recovery system would overwhelm a municipality’s ability to pay and where the residents would be unable to afford the costs if applied to their water services bills.

While the report states that household water prices will need to rise to pay for the costs of water services, it also states that this can be done while keeping the cost affordable for the vast majority of municipalities and their residents. However, Justice O’Connor states that rising water rates should not become a significant burden on low-income families and individuals and that, “The provincial and municipal governments should ensure that this does not occur by whatever means they consider appropriate.”

The report does not think that grants to municipalities from higher levels of government are a good idea. Reliance on such grants are seen as rewarding municipalities for effectively planning and investing in their water systems while it penalizes those who have done so. Such grants are also unpredictable and reliance on them can lead to delays in decision making about necessary capital expenditures. Therefore provincial grants or subsidies should only be made available in exceptional circumstances, according to the report. Specifically the report suggests that subsidies be made available only to the degree necessary to bring water service costs within an affordable range and only after a municipality has reviewed various restructuring options or has provided a reasonable timeline by which costs could be brought within an affordable range.

These recommendations are in keeping with the overall direction of Bill 155 and together they will result in greater financial planning and higher water rates to users of municipal water services.

Training and Certification of Water Operators

In Part I of the Walkerton Inquiry Report, Justice O’Connor made five recommendations (recommendations 20 through 24) that directly affect CUPE members who work within Ontario’s water systems. These relate to the training and testing of water system operators and are as follows:

  • Recommendation 20. The government should require all water system operators, including those who now hold certificates voluntarily obtained through the grandparenting process, to become certified through examination within two years, and to be periodically recertified.
  • Recommendation 21. The materials for water operator course examinations and continuing education courses should emphasize, in addition to technical requirements necessary for performing the functions of each class of operator, the gravity of the public health risks associated with a failure to treat and/or monitor drinking water properly, the need to seek appropriate assistance when such risks are identified, and the rationale for and importance of regulatory measures designed to prevent or identify those public health risks.
  • Recommendation 22. The government should amend Ontario regulation 435/93 to define training clearly, for the purposes of the 40 hours of annual mandatory training with an emphasis on the subject matter described in Recommendation 21.
  • Recommendation 23. The government should proceed with the proposed requirement that operators undertake 36 hours of MOE-approved training every three years as a condition of certification or renewal. Such courses should include training in emerging issues in water treatment and pathogen risks, emergency and contingency planning, the gravity of the public health risks associated with a failure to treat and/or monitor drinking water properly, the need to seek appropriate assistance when such risks are identified, and the rationale for and importance of regulatory measures designed to prevent or identify those public health risks.
  • Recommendation 24. The MOE should inspect municipal water systems regularly for compliance with Ontario Regulation 435/93, enforce the regulation strictly and follow up when non-compliance is found in order to ensure that operators meet certification and training standards.

In Part II of the Report, Justice O’Connor elaborates on the need for such changes and also recommends the following with regard to operator training and certification:

  • Recommendation 59: The Ministry of the Environment should continue to require the mandatory certification of persons who perform operational work in water treatment and distribution facilities. Education, examination, and experience are essential components of ensuring competence.
  • Recommendation 60: The Ministry of the Environment should require water system operators who currently hold certificates obtained through the grandparenting process to become certified through examination within two years, and it should require operators to be recertified periodically.
  • Recommendation 61: The Ministry of the Environment should require all applicants for an operator’s licence at the entry level to complete a training course that has a specific curriculum to ensure a basic minimum knowledge of principles in relevant subject areas.
  • Recommendation 62: The Ministry of the Environment should develop a comprehensive training curriculum for operators and should consolidate the current annual training requirement in Ontario Regulation 435/93 and the proposed requirement of ministry approved training into a single integrated program approved by the Ministry of the Environment.
  • Recommendation 63: The Ministry of the Environment should take measures to ensure that training courses are tailored to meet the needs of the operators of these water systems.
  • Recommendation 64: The Ministry of the Environment should meet with stakeholders to evaluate existing training courses and to determine the long-term training requirements of the waterworks industry. The ministry should play an active role in ensuring the availability of an array of courses on the subjects required to train operators.

Part II of the Report essentially reinforces and elaborates on the recommendations in Part I pertaining to operator training and certification. It recommends that the use of grandparented operators be phased out within two years and that these operators be tested through an examination.

When the recommendations are implemented, operators will undergo continuous training and the need for periodic certification. A new training curriculum will be developed so that operator training and certification will focus more on systems operations, water treatment and quality issues, public health concerns and the possible impact of pathogens on public health than they have in the past. Also the MOE will more closely monitor operator training to ensure that operators receive the necessary training.

According to the Inquiry Report, approximately 5,000 licences were granted under the 1987 and 1993 grandparenting programs and that a significant number of operators remain who have not been required to pass an examination. Justice O’Connor suggests that, “Efforts should be made to ensure that the examination process accommodates any study or exam-writing difficulties that long-standing employees may have.” However, the report also states that, “Operators who received licenses under the voluntary grandparenting program should be required to meet the same standards as other certified operators.”

It is clear, that training and certification changes recommended in the Report will impact all water operators, but especially those who were grandparented. CUPE will participate in the process to require more training and testing of our members so as to ensure that operators are treated fairly and given every opportunity to participate in training and prepare for examinations.


July 2002