Using private funding and expertise to bring Canadians high quality water services — at low cost, too

November 1, 2011

Dear friends:

Canada’s water is under threat. It’s threatened by the Canadian Union of Public Employees and the Council of Canadians. Canada’s largest union has teamed up with Canada’s largest citizens’ organization to promote a wrong-headed and dangerous approach to water. They are urging municipalities to declare themselves “Blue Communities.”

Among the misguided actions that so-called Blue Communities must take is this: They must promote publicly financed and publicly operated water and wastewater services. This is not about preserving our water – this is about keeping CUPE in the pink. Municipalities cannot afford to pass up the billions now available in private funding, the superior safety record of professional water companies, or the lower rates that arise from competitively bid contracts. Urging them to do so is irresponsible. And the arguments on which this advice is based are contradictory, illogical, and simply untrue.

For example, CUPE and COC pretend that our public utilities are effective and accountable – even though they admit that the publicly run sewage systems pollute our lakes and rivers, that drinking water advisories are common, and that financially strapped municipalities are unable to upgrade existing systems and build new ones.

The Blue Community campaign blames privatization in Moncton for raising the price of drinking water. But it fails to mention that those price increases are paying for Moncton’s first drinking water filtration plant – a private plant that has cost consumers far less than the public alternative would have cost.

Here’s the full story: In the 1990s, Moncton’s public water system provided discoloured, bad tasting, and frequently substandard water. The city didn’t have the money to build a water filtration plant and couldn’t get federal or provincial grants. So in 1998 it sought private help. A private water company financed, designed, built, and now operates the city’s water filtration plant. The plant cost $10 million less than the city would have spent on the all-public plant it initially considered. Operating expenses are also lower than they would have been at the public plant. A recent academic review called Moncton’s experience a “success.” And city officials have been delighted with the results. “In the last ten years,” said the city’s director of water systems, “you couldn’t find one spot on our record.”

CUPE and COC object to water companies profiting from the provision of drinking water. “Water is essential to life,” they say. But we trust the private sector with other essentials of life, such as food and shelter. In the case of water supply and sewage treatment, the greatest expertise is often found within private firms, several of which have been in the business for more than a century, employ thousands of specialists, and invest millions in R&D. Many municipalities would be foolhardy not to tap into this experience. Moreover, private provision introduces powerful forms of accountability unknown to public utilities – binding contracts that spell out performance standards and penalize noncompliance.
Because they have no credible arguments, CUPE and COC resort to name calling (“water profiteers” is a favourite) and fear mongering. What is required is not rhetoric but hard-headed problem solving. Municipalities deserve the best solutions.

As you know, we’ve been working on these issues for more than a decade. Our most recent study, published by the CD Howe Institute earlier this year, is called A Bridge Over Troubled Waters: Alternative Financing and Delivery of Water and Wastewater Services. Please look at the study, and share it with others who care about our water services.
And please support our work. With your generous donation, we will continue to use facts to dispel the rhetoric and work to bring clean, safe water to all Canadians.


Elizabeth Brubaker
Executive Director


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