The Sustainable Water and Sewage Systems Act
In December 2002, the Ontario government passed the Sustainable Water and Sewage Systems Act, 2002 (SWSSA), as part of its response to the contaminated water tragedy in Walkerton and to the recommendations made in the Part Two of the Walkerton Inquiry Report. The SWSSA requires that municipalities that provide water and sewer services to the public implement full cost accounting and full cost recovery. The Act seeks to introduce the principle that having consumers pay the full cost of providing water and sewer services will promote water conservation and greater awareness of water and environmental protection — and thus help to ensure a healthy aquatic environment and safe drinking water for Ontario residents.
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Implications of the Act
This means that municipalities will have to assess and report on the full cost of providing water and sewer services, including expenditures related to source protection, operating and financing water and sewage systems, and renewal, replacement and improvement of these systems. Municipalities will approve their own reports on the full cost of providing services and then submit them to the Minister of the Environment for approval. Having accounted for these costs, municipalities will then prepare and approve cost recovery plans indicating how they will finance the full cost of providing those services.
The SWSSA applies only to municipalities, and even if a municipality has transferred its authority to provide water or sewer services to another entity, such as the Ontario Clean Water Agency, it will be deemed to be providing the services for the purposes of this Act.
Implementation
The legislation contains few details about implementation of the SWSSA; instead, these details will be provided in regulations to be made under the Act. The regulations will establish what sources of revenue may be included in the plan and the maximum amount by which municipalities may increase charges for water or sewer services over any period of time. However, a municipality may seek the minister’s approval to increase those charges beyond the maximum amount set out in the regulations.
Public Consultation
Public consultation on the SWSSA included notice and comment opportunities through the Environmental Registry and public legislative committee hearings held on both the SWSSA and the Safe Drinking Water Act. (See The Safe Drinking Water Act for more information.) Following these hearings, the committee made extensive amendments to the SWSSA. They include giving more control over full cost reports and cost recovery plans to the municipalities; adding the cost of source protection as a component in the full cost of providing water and sewer services; and involving municipal auditors and professional engineers in full cost reporting.
Municipal water and sewer rates
At present, water and sewer rates vary according to municipality, but are often heavily subsidized by provincial grant programs, especially in small municipalities. Since municipal water prices in Ontario are generally very low, particularly compared to many European jurisdictions, there is room to raise water rates where consumers are not currently paying for the full cost of safe water. Subsidizing the cost of water and sewage services encourages the overuse of water resources. Full cost accounting, in fact, was one of the Six Guiding Principles for Sustainable Development set out by the Ontario Round Table on Environment and Economy: “ . . . to prevent overuse and exploitation, all prices ideally should incorporate environmental, social, and resource depletion costs.” It is also important to recover the full cost of providing these services because the cost of necessary upgrades to water and sewage infrastructure in Ontario in coming years will be significant. (See The Environmental Impacts of Sewage Treatment Plant Effluents, pages 29-49.)
Impacts of the SWSSA
The SWSSA should have a positive impact on water and sewer services and water protection in Ontario. Once it is fully implemented, municipal water and sewer systems should start to become self-financing and sustainable, with adequate funds to finance necessary upgrades to water and sewage systems. However, implementation of the SWSSA is likely to require a fairly long period of time. The transition to higher water and sewage rates should be eased by the fact that the province will have the authority to cap rates and will approve requests by municipalities to exceed that cap only in special circumstances. MOE has indicated that this should protect consumers against sudden or unreasonable rate increases. However, full cost pricing may cause financial hardship for smaller municipal systems and for low-income individuals and families in the province.
ECO Comment
The SWSSA is a welcome initiative from the Ontario government in response to public concerns about the safe and sustainable provision of water. The Act puts in place a legal framework to support a comprehensive system of full cost accounting and cost recovery planning that, in the long run, should encourage greater water conservation and protection in Ontario.
The ECO commends MOE for undertaking a thorough public consultation process that took into account the comments and recommendations of various stakeholders and members of the public – and that resulted as well in amendments to the draft legislation. In particular, the ECO is pleased that the SWSSA was amended to allow MOE to require that municipalities providing water and sewer services take into account source protection costs and considerations. This emphasizes the connection between watershed management and water and sewer services, and should help some municipalities plan for and finance source protection as part of providing these services. However, small municipalities and municipalities that obtain their water from a source that has already been affected by a range of other municipal and industrial users may continue to face challenges in source protection. While the recognition of source protection costs in the SWSSA is a good first step, the implementation of watershed planning is also required. It is a positive step that the Ontario government established a Source Protection Advisory Committee on November 15, 2002, to develop a provincial framework for watershed-based source protection planning. This committee released its recommendations for public consultation on April 21, 2003, and the government stated that it planned to introduce legislation on source protection planning in fall 2003.
Given that a great deal of detail has been left to regulations under this Act, the ECO is pleased that MOE has prescribed the SWSSA under the Environmental Bill of Rights to ensure the public has an opportunity to receive notice and to comment on these regulations. To restore confidence in municipal water and sewage systems, the ECO encourages MOE to consult broadly on these regulations.
| This is an article from the 2002/03 Annual Report to the Legislature from the Environmental Commissioner of Ontario. |
Citing This Article
Environmental Commissioner of Ontario. 2003. "The Sustainable Water and Sewage Systems Act." Thinking Beyond the Near and Now, ECO Annual Report, 2002-03. Toronto, ON : Environmental Commissioner of Ontario. 105-108.
