December 15, 2002
Elizabeth Brubaker has some encouraging news for people who dream of once again being able to safely swim in Halifax Harbour or the Northwest Arm.
And she shares it in her recently released book Liquid Assets: Privatizing and Regulating Canada’s Water Utilities.
Part of a series from the University of Toronto’s Centre for Public Management, the well-researched book probably won’t appeal to a lot of people simply searching for an entertaining slouch on the couch.
But boiling down her thesis will be at least mildly interesting to anyone who has paid attention to some of the debate out of Halifax City Hall surrounding the city’s planned sewage-treatment project.
Essentially, Brubaker believes that hiring private companies – as Halifax Regional Municipality has done – to build and operate public water utilities offers potentially more success than having the government go at it alone.
“The public sector has had responsibility for this for decades – really forever – and hasn’t been doing a good job,” she said in a recent interview.
So she studied the privatization of water utilities in England, France and the United States – and was impressed with what she found.
“Privatization has not worked everywhere,” she said. “But generally it has accomplished a tremendous amount.”
The fact that she tends to favour having the private-sector involved is especially interesting given her position as executive director of Environment Probe, a Toronto-based environmental think-tank.
When Halifax council was evaluating what route to take, local environmentalists protested loudly against having private companies profit from operating a public utility.
“A lot of environmentalists who have opposed privatization do so on ideological grounds,” Brubaker said. “Part of it is habit. We are simply used to looking to government for solutions to our problems.”
But Halifax still pumps out enough of the stuff on a daily basis to fill about 25 Olympic-sized swimming pools.
She said that Haligonians have reason to be happy with their city hiring a consortium that includes United Water to clean up the harbour.
“United Water has had an enormous amount of success around the world,” she said, pointing to Indianapolis as an example.
That city saved about 40 per cent of the costs associated with sewage-treatment by getting a private-sector firm involved.
And privatizing sewage treatment in England and Wales in 1989 resulted in a huge drop in pollution, she said. For the first time in decades many beaches were safe for swimming again.
She also examines why Hamilton’s experience with privatizing its utility was a disaster. The Ontario city was intent on having a local firm with no experience do the job, instead of going to experts in the field, she said.
Governments just can’t be expected to efficiently own, operate, finance and regulate such utilities because it results in a conflict of interest, she said. For example, if they introduce strict environmental standards, they’re the ones that have to foot the bill to put them into place, she said.
But an intense competition between private companies for the multimillion-dollar contracts ensures that taxpayers get the best bang for their buck, she said.
“The efficiency that private companies have achieved, especially in North America, is very impressive,” she said. “I’m not saying that privatization is a panacea by any means. I’m simply saying that in some places it’s worked very well.”