Halifax’s political sewage problem
by Fred McMahon


National Post

Public partnership will do little to clean up the mess

Bill Maden figures he takes his dip in Halifax Harbour at the only safe time of year — the dead of winter. For a quarter-century, Mr. Maden, a personal investment advisor, has organized the Polar Bear Club’s New Year’s Day swim.

“The temperature of ocean water in January is below freezing. That leaves most of the germs pretty harmless. But you want to keep your mouth closed,” Mr. Maden says of his experience swimming with tampons, condoms and worse unmentionables. Four-fifths of Halifax’s industrial and municipal sewage is pumped directly into the harbour. The other fifth is barely treated.

Here’s a pretty picture: Haligonians walking around in hip waders with sewage up to their thighs. That’s what they’d be forced to do if a year’s worth of untreated sewage were spread over urban Halifax rather than pumped into the harbour.

You might think this would create a sense of urgency. And you would be right. City politicians have dithered urgently since 1924, when scientists first warned about harbour pollution. The latest dither is over the city’s plan to build its sewage treatment system through a public-private-partnership (P-3).

So council commissioned a study on partnerships, just as it has commissioned innumerable studies of harbour pollution. All these tax-funded studies come to the same remarkable set of conclusions: Untreated sewage causes pollution; Halifax Harbour suffers lots of pollution; something should be done.

A solution once seemed at hand. Just in time for federal and provincial elections in 1988, a federal-provincial agreement was signed for a new megaproject — a $200-million jumbo plant to treat all of the city’s sewage.

Within a few years, the price had doubled. Funding had not. An environmental review poked innumerable holes in the plan. By 1995, it fell off life-support when the original cost-sharing agreement expired without so much as a shovel of dirt being moved.

Halifax Regional Municipality is too cash-strapped to take on the sewage problem. An amalgamation, which bloated the city to one-third the size of Nova Scotia, saw millions of dollars of projected savings transformed into tens of millions in losses.

Thus, council proposed a P-3 arrangement to transfer financing from the city to the private sector. Three groups plan to bid on the plan to build up to five privately owned treatment plants over a 10-year period. Ownership would be transferred gradually to the municipal government through a payment schedule.

Nothing concrete has been signed, and opposition is growing. The Halifax Regional Water Commission — which has a less-than-sterling record since gaining control of the sewage system in 1945 — wants in as project manager. That would frighten off private companies, which couldn’t control how their money was spent.

The commission is unfazed. “We have a lot of good things to bring to the table,” says general manager Carl Yates. “We have the experience and great public accountability.”

The Canadian Union of Public Employees has also jumped into the fray with its standard fear-mongering about the private sector touching anything that was ever within government’s domain.

P-3 opponents may even have a point of sorts. In Nova Scotia – and elsewhere in Canada, for that matter – P-3 arrangements are often best described as “public patronage partnerships.” The public picks up the bill; friends of government get the patronage.

Consider Nova Scotia’s ambitious effort to build 30 or so P-3 schools. Firms well connected with the Liberal government have been landing these contracts hand over fist, often with the government’s leasing costs left as a detail to be worked out later. That’s like buying a car from a dealership that says it’ll tell you the cost when you start payments.

These firms have a disturbing tendency to locate schools in their new development projects, away from existing communities — undoubtedly improving future property values, but alarming parents.

Yet patronage is not CUPE’s core fear. Instead, it’s the loss of “good-paying union jobs.” But that’s the essence of the argument for privatization. The idea is to provide public services as efficiently as possible, without political featherbedding. A waste treatment plant should be a waste treatment plant, not a make-work project.

Elizabeth Brubaker, head of Toronto-based Environment Probe, made this point in an interview with a local newspaper. Private operators, she said, “don’t want the operation padded with unneeded workers. For example, there are 500 extra people working in Toronto’s water and sewage systems. As a consumer, I don’t think I should pay those extra costs.”

Ms. Brubaker notes the positive record of water improvement and efficiency in the United Kingdom, where private companies have taken over often-decrepit state-run operations.

This points to another key advantage of privatization. It separates the regulator from the operator. When government is both, it tends to be a most accommodating regulator, allowing facilities and water quality to deteriorate.

This separation is desperately needed in Nova Scotia, which has suffered great disasters when politics and regulation have mingled. The Westray mine was a political project. Regulators ignored gross safety violations, and 26 miners were killed in a predictable underground explosion.

The publicly owned coal mines and steel mills in Sydney produce intolerable levels of pollution that would lead to the closure of any private company. A government-managed attempt to clean up the tar ponds collapsed in patronage and union demands for rotating work among union members, in order to give as many workers as possible enough “stamps” to collect employment insurance.

Just look at Halifax Harbour to see what happens when government as regulator does nothing to force government as operator to clean up its act. The current P-3 plan is deeply flawed. Government will eventually take ownership of the system, re-creating today’s conflict of interest. But we might at least get a few clean-harbour years when Bill Maden and his polar bears might dare to take a summer swim.