Lydia A. Miljan
National Post
August 10, 2000

To have the cleanest tap water possible, the Mike Harris government has announced stricter regulations governing the testing of the Ontario water supply. This despite the fact that the testing of the water supply was the only component of the Walkerton water system that functioned properly in one of the worst outbreaks of E. coli poisoning in Canadian history. Not only did the private lab detect the E. coli bacteria in the water sample, the lab also immediately notified the municipality.

By all accounts, the two biggest contributing factors to the crises were that the Ontario government failed to enforce its own regulations, and that government employees in charge of the water supply made errors in judgment. Little can be done to completely eliminate human error. However, some actions can reduce errors and provide incentives for individuals and organizations to be more vigilant about communicating those errors to the public in a timely manner. This is where privatization comes in. Rather than see increased regulation as the solution to the problem in Walkerton, Ont., MLAs should recognize privatization as a solution to maintaining a healthy water system in the province.

Improperly treated water makes its way into rivers, lakes and wells, where it can pollute the water supply. Walkerton is not alone in having a problem with its water supply. The Sierra Legal Defence Fund (SLDF) found in 1999 that only one in 21 cities it examined had an “effective, environmentally sound technology in its effluent treatment.” Four of the 21 cities dump a combined total of “365 million litres of untreated sewage directly into the nation’s rivers, lakes and seas every day. Eleven other cities dump an average of 437 million litres of untreated sewage a day through by-passes and combined sewer overflows.”

Since that report, Moncton, N.B., which was not surveyed by the SLDF, has privatized its water system. That city not only treats the water coming into the system, but also the water leaving it. Moncton has invested $23-million in the system and has standards 10 times higher than the national regulations.

The problem does not lie with lax legislation or weak regulation. Most environmentalists acknowledge we have stringent laws governing the disposal of sewage treatment. The problem, as Elizabeth Brubaker of Environment Probe says, is the government does not enforce its laws, nor does it fine or charge polluters. Ms. Brubaker and the Legal Defence Fund agree the government is in a conflict of interest. Provincial governments must contribute to the costs of constructing sewage treatment works. Therefore, any fines they impose on faulty treatment plants will ultimately require them to put more cash into the system to fix the problems. Ms. Brubaker argues that one way for Canadians to resolve this conflict of interest is to take a page from the British example and privatize sewage treatment. This would allow the government to become the regulator and the private sector to provide the necessary money and improvements in water treatment across of the country. She notes that while the number of prosecutions in Britain has increased since privatization, pollution has declined.

If the government regulating the private industry weren’t sufficient cause for someone to have more confidence in a private versus a public water system, one should examine the record of corporations when dealing with accidents and human error. The private sector, with its eye on maintaining customer loyalty, responds more effectively to public safety than do governments. Had the water workers in Walkerton been responsible in notifying the public many citizens of Walkerton might have avoided the contamination.

Despite the record of companies, who are inspired by the profit motive to make their products safer and more effective for the consumer, there is another compelling reason to prefer privatized public utilities over public ones: Mistakes happen. But when mistakes happen to a private company, the company, not the taxpayer, pays for the mistake.

Consider Walkerton’s citizens. They will pay for their water system’s faults three times. First, their tax dollars have already been spent to pay for the inadequate water supply system. Second, it was they who suffered illness and the loss of life from the poor system. Finally, when they sue the local and provincial governments for damages, any settlement they may get will come out of their tax dollars. Had a private company been responsible, the damages would come out of the shareholders’ pockets.

The government of Ontario must shoulder the blame in Walkerton: first, for not enforcing its own regulations, and second, for not providing full privatization of the water system. Full privatization of Ontario’s water supply would help ensure these errors are reduced in the future, and if they do occur, will ensure proper compensation for the victims of the human error. More regulations will only increase costs without fixing the root problems of the water supply.

Lydia A. Miljan is director of the Alberta Initiative at The Fraser Institute.