Water, water everywhere, but who will pay the bill?
This is the question that people who supply us with our water are asking themselves with increasing urgency and anxiety. Like many a spouse taken for granted by their partner, the generally extremely high quality of water we enjoy is taken by most Canadians as nothing more than their due.
Yet for years, as a general rule, Canadians have not been paying the true cost of the water that we consume. As a result, water authorities across the country are increasingly wrestling with the problem of how to convince people to pay more for something that they regard as a right and that they are vaguely offended at having to pay for at all.
The scale of the problem is huge. But we all need to reflect for a moment on why this situation has arisen, or else we risk paying more for water, while leaving the underlying problems unsolved.
Ontario, no doubt spurred on by the Walkerton tainted-water tragedy, has thought a lot about its water problems. In that province, the Water Strategy Expert Panel reported just a few months ago about what needed to be done to ensure that Ontarians would continue to have access to safe and abundant water. Their conclusion? Over the next 15 years, Ontarians need to make $34-billion in capital investments alone. In some cases, they’re using pipes as much as a century old. So we’ve been coasting along on the investments of our ancestors, unwilling to spend the money to renew them. How much are water authorities planning to spend? $16-billion. That $18-billion gap has its counterpart in virtually every part of the country, and it’s scaring the devil out of people charged with making sure that there are no more Walkertons.
But surely the question to ask is how this situation arose? How come people have been paying something for their water all these years, but not enough to keep the pipes and plant in good condition? Because we’ve allowed too much politics to get mixed into water decision-making. The result is exactly the same kind of deficit that we had to clean up in the Canada Pension Plan and the budgets of the federal and provincial governments.
Unlike private sector companies, that must get their customers to pay the full cost of the goods and services they consume, or else the companies go out of business, government finances allow politicians to cheat. They can promise benefits to people today (when they need the votes), and push the cost off into the future (when some other politicians will have to clean up the mess).
Politicians’ willingness to dump untreated sewage back into harbours and rivers in many communities is simply another kind of deficit. We run down our natural capital, we degrade the environment, because no politician has the guts to stand up and say what needed to be said, which was that those who created the sewage should pay to clean it up. We prefer decades of finger pointing and inaction. Politics is one of the worst pollutants there is.
The problem is that when politicians confer benefits today, but leave the bill for later, the bill still falls due eventually. Then taxpayers are left holding the bag not only for the services they need today and in the future, but also for paying the costs of past decline. That’s where we are with water.
So it is undeniable that the cost of water must rise because we’ve been getting a free ride (or at least a free drink and a shower). But before we hand over the cash, we should demand better. A better system would be one where the politicians are kept well away from setting the price of water. We need strong provincial legislation that requires not only top standards in terms of water quality and the competence of those responsible for it, but that also demands that users pay the true cost of gathering, treating, distributing, and returning their water clean to nature.
One of the benefits of making people pay the true cost, by the way, is that the evidence is clear they’ll use less of it. Subsidizing water consumption is not just economically destructive and environmentally harmful, but it’s inequitable. Almost 90 percent of all water is consumed by agriculture and industry, often in ways that are wasteful because they have no reason to treat water as the precious resource it is.
Finally, like Moncton, we should find ways to introduce more competition and transparency into the provision of water services, so that poorly-performing municipal water monopolies don’t just take the money to subsidize high salaries, poor work practices and inefficiency. We should pay the real costs of our water, but not the costs of smug complacent monopolists.
Brian Lee Crowley is president of the Atlantic Institute for Market Studies. He can be reached via e-mail at email@example.com.