Proceedings of the Standing Senate Committee on
Energy, the Environment and Natural Resources

Issue 8 - Evidence - April 29, 2008

OTTAWA, Tuesday, April 29, 2008

The Standing Senate Committee on Energy, the Environment and Natural Resources, to which was referred Bill S-206, An Act to amend the Food and Drugs Act (clean drinking water), met this day at 5:36 p.m. to give consideration to the bill.

Senator Tommy Banks (Chair) in the chair.


The Chair: It is my pleasure to welcome you to the Standing Senate Committee on Energy, the Environment and Natural Resources. I am Senator Banks, from Alberta, and I am the chair of the committee. I would like to briefly introduce the members of the committee. We have Senator Bert Brown from Alberta; Senator Meighen from Ontario; Senator Adams from Nunavut; Senator Trenholme Counsell from New Brunswick; Senator Cochrane from Newfoundland and Labrador; and Senator Sibbeston from the Northwest Territories.

Today we are continuing our examination of Bill S-206, which seeks to amend the Food and Drugs Act to include water from a community water system, among other places, as a food subject to regulation under that act.

The first witness to appear before us today is Mr. Hrudey, Professor Emeritus at the University of Alberta. He recently wrote an article entitled "Investigative report: 1766 boil-water advisories now in place across Canada," which was published in the Canadian Medical Association Journal, CMAJ, on April 7 last, only a couple of weeks ago.

Thank you for coming and for making a special trip here. We are grateful for your appearance before us tonight. We would appreciate it if you would make opening remarks given your understanding of what we are seeking, and we hope you will accept questions from us after you have concluded.

Steve Hrudey, Professor Emeritus, University of Alberta, as an individual: Honourable senators, I greatly appreciate this opportunity to share with you my views concerning safe drinking water. In the time available, I clearly cannot do justice to the wide range of complex issues involved. I wish to focus on what I regard to be the single most critical aspect of consistently assuring drinking water to Canadians, that is, competent operations, broadly and holistically defined.

Canadians are remarkably lucky with regard to drinking water. While we experienced the horrors of the Walkerton tragedy in May 2000 and we narrowly missed causing more fatalities 11 months later in North Battleford, the reality is that drinking water outbreaks are rare in Canada. The large majority of Canadians, mainly living in larger urban centres, can open a tap and receive into their homes water that is treated well enough to prevent illness. Tap water's aesthetic quality is also mainly good. However, growing numbers of Canadians are buying bottled water at 1,000 or more times the cost per litre of community tap water because they dislike the tap water's taste or simply do not trust its safety.

Despite the excellent recommendations from Justice O'Connor following Walkerton and considerable investments in Ontario seeking to implement his recommendations, the recent report alluded to in the Canadian Medical Association Journal cited 679 boil-water advisories currently in Ontario among at least 1,766 in place across Canada.

I must respectfully disagree with the honourable Senator Cochrane who compared boil-water advisories to vaccination as being a "proactive and preventative measure taken to protect a vulnerable segment of the population from potential illness." Boil-water advisories are notoriously ineffective with a low compliance rate unless fear grips individuals in a community who witness their neighbours falling ill, as happened in Walkerton. If a measure requires some to become ill to assure effectiveness with others, it is not preventive.

The reality is that boil-water advisories are virtually the last emergency tool in the rather sparse public health toolbox for reacting to drinking water contamination. Boil-water advisories are not appropriate alternatives to fixing the safety problems that triggered them. Since many boil-water advisories have been in place for months or years, their widespread use shows chronic vulnerability rather than effective management of drinking water safety.

What should Canadians make of the large number of boil-water advisories in Canada? The optimistic perspective is that our drinking water regulators are more vigilant since Walkerton. That is valid to a point, but these must be the underlying questions: Why are so many boil-water advisories necessary? What is being done to fix the water safety problems?

Senator Cochrane correctly drew comparisons between Canada and Australia. They are both large, sparsely populated federations without national drinking water legislation and with jurisdiction on drinking water largely taken by individual provinces or states. Senator Cochrane also correctly described the Australian Drinking Water Guidelines as "successful and internationally recognized." Where I must again respectfully disagree with the honourable senator is her description that Australia's approach is "similar to the one that is in place in Canada now." I disagree on the basis of direct personal experience since 1999 in developing the Australian guidelines. I am wearing my Australian Water Association tie as proof.

The key flaw we set to correct in restructuring the Australian Drinking Water Guidelines was that they allowed, and perhaps even encouraged, the prevalent perspective that drinking water guidelines are only a table of water quality limits. The misguided belief that stringent water quality limits assured drinking water safety was tragically exposed in Walkerton. There, even the meagre regulatory requirements that were in place would have prevented that disaster if the operators had been trained to understand the purpose of those requirements and had taken appropriate actions when contamination arose. In Australia, we developed a framework for the management of drinking water that comprehensively outlines the requirements for competent management and operations of drinking water systems from the CEO to the plant floor. By comparison, the Guidelines for Canadian Drinking Water Quality, as their name accurately indicates, only provide water quality limits.

How did Australia come to produce superior guidance? A major advantage held in Australia is the degree of consolidation they have for their water services. Western Australia, South Australia and the Northern Territory have state-wide water corporations that either provide or oversee drinking water supply to almost every community from large urban centres to isolated outposts. The State of Victoria collapsed approximately 120 mainly municipal water organizations into 15 viable water companies. Having several large competent water companies was critical to the development and the ongoing implementation of the Australian Drinking Water Guidelines with their focus on operational quality management.

Does the Australian experience reflect any differences in the prevalence of boil-water advisories? Based on email inquiries to key regulatory contacts over the past two weeks, the current prevalence of boil-water advisories for responding Australian states, with a combined population of about one half that of Canada, is about 50 boil-water advisories in non-Aboriginal communities. That is much less than half of the more than 1,700 boil-water advisories, not including First Nations communities, in place in Canada. I provided to the clerk a more detailed summary table that presents the boil-water advisory prevalence on a per capita basis.

I maintain that the bottom line for assuring safe drinking water is the competence — the training, knowledge, public health awareness and functional capacity — of the water provider. The smaller the entity charged with providing drinking water, the more difficult it becomes to assure competence.

I will leave you with an image to illustrate my point. None of us would be comfortable as passengers travelling in a plane flown by a pilot being paid minimal wages with minimal training and technical support. Yet, in many small communities under our current drinking water management model, we place responsibility for delivering safe drinking water into community homes upon personnel who are often undertrained and are mostly underpaid for the enormous public health responsibility they must discharge.

How difficult is it to recognize where the real problems lie? We will not improve drinking water safety in Canada unless consumers are provided with effective, fair and equitable means to invest in assuring high-quality, reliable and safe water from their community water systems. These are a bargain in Canada, but their safety is not universally assured because we generally fail to invest adequately in them and to pay the true but generally reasonable cost of assuring water safety. Maintaining the status quo simply promotes the escalating growth of wasteful bottled water consumption by those who can afford it. Our focus must be on assuring operational competence. We can do better in Canada.

The Chair: Thank you, Mr. Hrudey. Off-topic, the first and most important question is whether you are related to Kelly Hrudey.

Mr. Hrudey: Yes. I am either a second or a third cousin to Kelly's dad. My kids are third or fourth cousins to Kelly.

The Chair: I presume they play hockey.

Mr. Hrudey: Mine do not play, but, you are correct, Kelly Hrudey is famous in Canada.

The Chair: As are you, Mr. Hrudey.

You talked about the most important thing being the competence of those who are in charge of delivering water to us.

Mr. Hrudey: The competence of the people and the organizations is important.

The Chair: In your view, if this bill were to come into force and there were Criminal Code penalties for failure to meet a set standard, would that fix the problem?

Mr. Hrudey: I will sidestep your question a bit but I will try to answer. I like leadership, and national leadership on drinking water is lacking in Canada. As I pointed out, we have guidelines for water quality limits that do not address the competence issue, and that reflects our jurisdictional division of responsibilities in Canada. We are lacking leadership in operational competence.

Do I believe that empowering federal inspectors will solve the competence problem? I cannot be optimistic about that. You will never have enough inspectors to deal with all of the numbers. B.C. has 3,500 water purveyors for a population of less than 5 million people. How many inspectors would you need to ensure the competence of that many water purveyors?

The Chair: One argument is that you would not need 3,500 inspectors if a penalty were in place like there is for making people sick by selling them tainted bubblegum, and not every stick of gum is inspected. Such a penalty, like Damocles' sword hanging over the heads of the companies and people who purvey water to us, just like the one that hangs over the heads of the people who purvey beef, vegetables and other commodities that we ingest, would increase the competence because of the threat of prosecution in the event they failed to measure up to the standard.

Mr. Hrudey: My concern is that that a penalty alone will not get the job done. I look at what has happened in Ontario since Walkerton. Justice O'Connor's inquiry, on which I had the pleasure of serving, lasted for two years and cost $9 million. He produced an excellent blueprint of what Ontario should do. Ontario has ticked off all of the recommendations, and we have 600-plus boil-water advisories in place in Ontario.

We held a workshop in Walkerton in May 2005 for students in the Canadian Water Network to interact directly with people in Walkerton to see what was happening. One of their exercises was to go out into surrounding communities and look at their water systems to prepare a risk assessment. They did presentations afterwards, and one of the groups brought back pictures taken in May 2005 — five years after Walkerton — of a water treatment plant within half an hour of Walkerton that showed a toilet sitting in the middle of the plant floor. That was the sanitary facility in this water treatment plant, and it was still licensed and operating five years after Walkerton. It was shut down in 2006, so the regulatory system finally caught up with it.

A regulatory system based on penalties is reactive and catches up only after the fact. We have to focus on getting the means in place to be preventive.

Senator Sibbeston: You were involved with the Australian guidelines. If you were given the task of increasing the quality of water in Canada, what would you do? What are the requirements to reduce the number of water advisories?

Mr. Hrudey: We need leadership. That is the credit due this bill to foster a discussion at a national level. That is very important. The pieces in place in Australia that are not in place in Canada are more difficult to solve. Australia is a dry continent. People in Australia know that water will limit their future, as it already does in some places. Water is at the top of the political agenda in Australia, so they are ready to deal with water issues.

Many Canadians still think water should be free. Many Canadians pay less than $25 per month for their drinking water, and if you were to ask them to pay an extra $5 per month, they would balk. We are living in a fool's paradise in our attitude toward drinking water, and that has to change.

In my presentation I pointed out that the water industry in Australia has a number of large organizations. We never could have gotten the restructuring of the Australian Drinking Water Guidelines underway without the help of all of those large organizations that bought into the idea that we need to do better. They are still working on it. Australia is not perfect. They have many problems, but they are working and are committed to working on it. Unfortunately, the most difficult problem for Canada is the need to change the attitude toward water, and I do not know how to achieve that.

Senator Sibbeston: Canada is a cold country, so the water is colder too, and I imagine in the height of winter there are fewer organisms and bacteria in the water to do harm. Certainly in Northern Canada, where I am from, generally the water is very cold. Believe it or not, one of the biggest problems in the north is getting potable water. We have lots of ice, snow and water, but it is distributed. To get water from the bush or the ice into the kitchen is a big task.

Mr. Hrudey: Unfortunately, all the cold does is preserve micro-organisms. It does not necessarily kill them. It is not really a protection. The primary source of contamination of drinking water is people themselves, or their animals, their livestock, and to some extent wildlife. That is why it is such a pervasive problem. No matter where you have people or pets or livestock, you have the source of pathogens that can make us sick.

Senator Brown: Mr. Hrudey, I would like to ask about heavy rainfall. It seems to me that the only two boil-water advisories I know of in Alberta were both caused by excessive rainfall. One was near Banff during the summer, and it overwhelmed the filtering equipment. They did not actually have a boil-water advisory in Calgary, but they did come close to it. They had to ask people to consume less water because the filtration plants just could not keep up because of sediments in the water. There was another pipeline I heard about where the low flow had combined with heavy rainfall and caused the same situation.

There are many organizations or suppliers of water in the various provinces. Your argument is that we need to teach them more about how to better supply water and to meet a higher standard continuously, and they need to be able to react immediately when something happens. I cannot get my mind around how many federal inspectors you would need to keep an eye on systems to ensure that every community in Canada has safe water 365 days a year, 24 hours a day, 7 days a week.

Are we working on regulation? Is that the way to go? Is training the best solution we can have?

Mr. Hrudey: Training is an essential part of it, and the structural nature of the water industry is critical. As you pointed out, it is worth realizing that, in Walkerton, the flawed system was in place for 22 years before the disaster struck. Inspectors had been through that plant. Inspectors alone are not the answer. What was missing was the competent operation, and the competent operation that was missing was to anticipate. They did have heavy rainfall in Walkerton, very heavy rain storms, for a week before the outbreak. Unusually heavy rainfall should put a competent operator on warning that something might happen. That is part of this competence argument I am making. If I had to choose between having a highly competent operator and a poor facility or having a Cadillac facility and a poor operator, I would take the first scenario every time, because the competent operator will know what his system can do and what it cannot do, and if need be he will call for help when things are out of control. In the other scenario, people are just whistling in the wind, and disaster can strike.

Senator Cochrane: Thank you very much for coming. On the issue of training water operators, in the past you have said that "the best protection against having inadequate people doing the job is to train operators to know when they're in over their heads, when to call for help, and to assure that help is available when they call." To your knowledge, is this approach to training practiced anywhere in Canada?

Mr. Hrudey: Very rarely, unfortunately. We did a review recently for the federal water quality training board, which is the federal agencies that are responsible for drinking water in their own areas, trying to find training materials that they could use for RCMP stations and national parks and so on. Unfortunately, as Justice O'Connor pointed out in the Walkerton inquiry, most of the training is technically oriented — how you operate pipes and pumps. It is getting somewhat better in terms of having people understand what the threats are, but I do not think we are doing an adequate job of making the operators appreciate the huge responsibility they carry. If they foul up, like the operators did in Walkerton, they can kill people. That is a huge responsibility for people to carry. They need to appreciate how they will deal with that, and when they realize they cannot deal with it adequately, there must be some place they can go to get help. In most places in Canada, there is not.

Senator Cochrane: Is that how they go about things in Australia?

Mr. Hrudey: Australia is not perfect. They have lots of problems. However, they have gone to these larger water organizations. For example, the Water Corporation of Western Australia is responsible for water in all but three communities in the entire state, and that is a third of the continent. They have a core of expertise in that organization so that even when you are talking about a supply that is 1,000 miles away from Perth, they can be on the phone or Internet or fly out to help. They have that support network that your question refers to. We do not have that for our remote communities in Canada, by and large.

Senator Meighen: You describe them as organizations in Australia. Are they public, private, or private-public organizations?

Mr. Hrudey: They are all public in the sense that they are created by governments. The Australian term is "corporatized." They are probably equivalent to our Crown organizations, but not exactly. In some cases, they have licensed with private water companies, some of the international companies, to operate facilities, but the overseeing structure that I have alluded to in all these cases are public corporations.

Senator Meighen: You alluded to large international organizations. Is there not a huge French company?

Mr. Hrudey: Yes, there are several of them.

Senator Meighen: Does that company just provide the operators for facilities? I am trying to look for accountability. It would seem to me that if a corporate entity like that did not provide good quality, you would be able to institute legal action, which might keep them on their toes successfully.

Mr. Hrudey: I did not have time to address in my presentation that what got things going in Australia in part was the Sydney water crisis in 1998, two years before they were to host the Summer Olympic Games, where they were on rolling boil-water advisories for 4 million people for up to three months. That was a case where they had contracted with an international water company to operate the plant. Sydney Water Corporation was the overseer, the public corporation. They did not have a proper, functional relationship with the Department of Health, and it was a mess. As it turned out, it was all a monitoring mistake. Four million people were on boil-water advisories for no good reason. The chair of the corporation got fired. They broke up Sydney Water Corporation. Many things happened. Fortunately, no one got sick.

Senator Cochrane: How would you like to see the competency issue dealt with here in our country?

Mr. Hrudey: It is not like we have to start from scratch. So much good work has been done around the world. There is an international movement. Many of the Australian initiatives have been picked up in the World Health Organization's drinking water guidelines, some using exactly the same language. They call it a water safety plan approach. Most rich countries around the world, like Canada, except for the U.S., are picking up on that model and working on the focus on competence. Canada can benefit from that work. We do not have to start from scratch, but we have to buy into the idea that it is important to look at restructuring.

Ontario's Water Strategy Expert Panel released its report in 2005, Watertight: The case for change in Ontario's water and wastewater sector, which recommended consolidation. The report has languished. Nothing has happened. There was, as I understand it, a backlash against the idea of any consolidation.

Senator Cochrane: Do you see any improvements since Walkerton?

Mr. Hrudey: Yes. Clearly throughout the water industry, Walkerton made people realize just how important safe drinking water is. Even though millions of people around the world die every year from drinking unsafe water, I think we had lost track in Canada of the idea that people could die from contaminated drinking water.

Have we done enough? I am afraid not. I have to tell you that I have had more uptake on the things we have written and said about Walkerton in Australia than I have in Canada. In other words, people in Australia have taken ownership of what happened in Walkerton. In Western Australia, some operators took it upon themselves to rewrite Walkerton as a case study in local terms, putting Australian names on the communities and whatever else, to help train their operators about what could happen there.

I have seen nothing like that here. I am afraid that the media coverage of Walkerton here allowed too many people to write it off as the bad deeds of two people, the operators. That is not what Justice O'Connor reported. He pointed out that it was much more widely spread than the two operators. Unfortunately, I think most Canadians have kind of written it off as just a few guys who messed up.

Senator Cochrane: We have heard various scientists tell us that tap water is just as good as bottled water. Would you like to comment on that?

Mr. Hrudey: It depends on where it comes from. I am sorry I cannot answer you any other way, but with respect to most places in Canada, that is true. There are several places in Canada where boil-water advisories are in place where I would be cautious about drinking the tap water.

In Toronto, Ottawa, Edmonton, Calgary — the large urban centres — it is absolutely true that people who buy bottled water are paying a thousand times more for that water, and they are getting no health benefit from it. They better like the taste very much.

The Chair: Senator Meighen suggested that if there were consolidation and something went wrong and the purveyance of water made people sick or, God forbid, killed them, it would be easy to assign blame, and I think you suggested pursuing a prosecution of some kind.

Senator Meighen: That would be easier.

The Chair: I will ask my first question again. Do you not think that, if you were the mayor of a town that operates a water system or the water commissioner in a big city that operates a water system, the existence of criminal prosecution if you and your employees did not do your job would focus your attention to doing the job and to ensuring that the training you suggested is necessary would be put in place forthwith?

Mr. Hrudey: Yes, perhaps if they understand what needs to be accomplished. However, the Ontario legislation already establishes that kind of accountability.

The Chair: What is the consequence of failing to meet the standard in Ontario?

Mr. Hrudey: I do not know the specifics of the penalties, but they are sufficient to have gotten the attention of people to the extent that several people do not want to run for municipal councils in Ontario because they do not want to take on that responsibility.

I do not know that that is solving the problem, either. We still have a huge number of boil-water advisories in Ontario. Maybe it is a transitional thing. Maybe five years from now we will come back and see that they have the problem wrestled to the ground, but it seems to be taking a long time.

In Part Two Report of the Walkerton Commission of Inquiry: A Strategy for Safe Drinking Water, Justice O'Connor states:

Perhaps the most significant recommendations in this report address the need for quality management through mandatory accreditation and operational planning. Sound management and operating systems help prevent, not simply react to, the contamination of drinking water. In this vein, I recommend requiring all operating agencies to become accredited in accordance with a quality management standard — a standard that will be developed by the industry and others knowledgeable in the area and mandated by the MOE.

This recommendation was one of the last that Ontario picked up, and it is still not functional. I do not understand why it took so long to get onto this. The book is still out as to whether it will happen.

Justice O'Connor made over 100 recommendations. He intentionally did not rank them in priority, but he said that perhaps the most significant recommendation in the report — he got it — is competence.

Senator Trenholme Counsell: This has been a very enlightening presentation. My first question goes back to the source of all of this, and I realize this is not the subject of the bill, but I think you are to some extent going beyond the subject of the bill and we are talking about water safety, quality and so on. I was totally alarmed when I read the Canadian Medical Association Journal article that talks about the amount of raw sewage entering the water in big cities and big communities.

I also know that in small communities people are doing many dangerous things regarding water safety, such as not taking precautions and thinking that nothing serious in the way of illness or disease will come from water.

The priority, it seems to me, would be doing something about the actual contamination of water. Of course, you always need your governmental structures to assess the water itself and then assess whether it is coming out. I would like you to comment on that.

I am also alarmed because Ontario had the largest number of boil-water advisories in March of this year. You have commented to some extent, but what specifically has been accomplished in Ontario? I am not sure I have grasped that yet.

I realize that when you look at the events per million of population, Ontario is not that bad. Yet I do not think we should talk about millions of people of population, because one person getting sick from something like this is to me as significant as larger numbers, although it does not cost the health care system as much.

Mr. Hrudey: I will deal with your first question about the overall protection of water. A key aspect of the Australian approach is the multiple barrier approach. You do not rely on just one measure to protect water safety. You have a series of measures in series that do the job. There is documentation in Canada promoting this approach as well, but it is not operationalized to the same degree.

A key element of that, which Justice O'Connor reflected in his report, is source water protection. Do not pollute the water in the first place. To the extent that you can achieve that, it is sensible. Unfortunately, with the number of us living on this planet, it is not possible to adequately assure drinking water quality in our rivers by taking measures to treat sewage. There will always be some level of contamination there, and we will still have to treat our water. However, you are right: keeping contamination out of the rivers and lakes in the first place is important.

Senator Trenholme Counsell: On that issue, is it strictly a matter of dollars and cents? Is the reason this is still allowed because it costs too much? Why is this still allowed in this century?

Mr. Hrudey: I read a report yesterday about the City of Victoria coming to the realization that it will cost them $1.6 billion to put in a sewage treatment facility finally after all these years. The District of Oak Bay was screaming that $700 per household is outrageous. I do not know if you know what real estate values are in Oak Bay, but $700 a year to have your sewage treated in Oak Bay does not strike me as outrageous. That was the reaction. For most other communities sharing in the cost, the rates were much lower. It comes down to dollars and cents for consumers who will spend a fortune on bottled water, cell phones and the Internet but will not spend a nickel on improving our water.

The Chair: I promised Mr. Hrudey he would be out of here by 6:15 to catch his flight, so we will push it just five more minutes.

Mr. Hrudey: If I may add, Ontario has done a lot. I would have appreciated seeing more effort to get their excellent water providers working as a team to focus on the competence issue rather seeing the legalistic approach they have taken. In many communities, water facility people are so scared of prosecution that they have jacked the chlorine content through the roof so that no one in the community will drink the water because it tastes like bleach. That is not what I mean by competence. You do not have to do that to make water safe. Ontario has done many good things. There are 679 boil-water advisories because they are doing more than in most other places. Do I believe that the Canadian jurisdictions that have zero advisories are doing a good job? Probably not.

Senator Milne: Mr. Hrudey, I agree with much of what you have said. I am from Ontario and I know that the approach taken by the Ontario government has cost Ontario farmers millions and millions of dollars. The water that was polluted at Walkerton came downhill from a barnyard, but that barnyard was in place before the well was located there. It goes right back to basic stupidity. The problem is not only untrained and incompetent operators but also the basic stupidity of the people who locate these wells. Anybody can tell you that water flows downhill and so does manure. Farming in Ontario is becoming more and more expensive because farmers have to put in sewage treatment facilities in many cases if the farms are agribusiness.

In the area where I live, the Brampton fair grounds take municipal water. It is the same water that I drink out of the tap in Brampton all of the time and the same water that everybody in Mississauga drinks out of the tap. They still have to test that municipal water every week, which is a waste of time and a waste of money. You see what is happening in Ontario, where they have gone overboard and they are punishing the good guys and, it seems to me, not correcting the bad situations. I have become most concerned about this, and I hope this bill will do something to help.

The last paragraph of your submission says ". . . unless consumers are provided with effective, fair and equitable means to invest in assuring high quality, reliable and safe water from their community water systems." That is where it has to be. Do you think this bill will help to force communities to actually do that?

Mr. Hrudey: The benefit of the bill is in focusing attention on the issue and in its potential for providing some leadership. The bill alone cannot create the mechanism that I describe.

The marketplace shows that bottled water consumption is growing at a phenomenal rate. My supermarket has a whole aisle for bottled water.

Senator Milne: It is ridiculous. A lot of the bottled water comes straight out of the tap from some community water system. It is not treated.

Mr. Hrudey: People are willing to pay a huge price for water when it is bottled.

Senator Milne: They will pay when it is in plastic.

Mr. Hrudey: They are not getting that mechanism in the community system, so something is missing.

Senator Milne: Common sense, perhaps?

Mr. Hrudey: Perhaps. On your comments about Ontario farms, it is important for people to understand that Justice O'Connor was clear in his findings that the farmer, who was the town veterinarian, was not to blame for what happened. He made that clear.

Senator Milne: Precisely.

Mr. Hrudey: However, there are many source-water protection issues around inadequate agricultural waste management in Ontario, as there are elsewhere in Canada. An important part of his recommendations was to make improvements in that area. Having cattle walking through streams and doing what cattle do is not good manure management.

Senator Milne: Nor is building the barn above the stream. I do not know how you can treat such basic stupidity. I become very discouraged when I look at your statistics; they are frightening. Hopefully we can do something about the stupid decisions made by municipal engineers in the past. Those have to be corrected first.

Senator McCoy: I am sorry you have to rush off, because I find you to be a breath of fresh air on this subject. Thank you for being so diplomatic about Bill S-206.

I wanted to point out that Alberta is leading because of a man who came from the drought south, Dr. Lorne Taylor. He was Minister of Environment at the time and initiated a program. Senator Trenholme Counsell, they have just added another $300 million to that ever increasing budgetary item. It is certainly a dollars and cents item.

Perhaps we could invite you to come back for further commentary and questions so that we can promote this issue in other ways. I am not getting a sense of specifics from you. If you are talking about consolidating water servers, that is presumably a provincial issue, but if you are talking about increasing the competency of operators, I can see a better opportunity for the federal jurisdiction to be skilfully deployed.

Mr. Hrudey: Yes.

Senator McCoy: I am 100 per cent with you when you say that sanctions do not encourage better performance; at best they discourage. My classic example is that you cannot legislate morality or competence. We have always had laws on the books against murder but we still have murders.

Mr. Hrudey: I apologize for harping back to Justice O'Connor so much, but I cannot overstress the wisdom of his words in those reports. He did not find that the operators had any ill intent. They did not want to kill their neighbours. They were just ill-equipped. If they had had any inkling that they could kill their neighbours by their misdeeds, it probably would not have happened.

It is an educational issue, and yes, there will always be people who will do some things wrong. If we are going to entrust our water treatment to people, they have to be equipped with the tools to take on that responsibility if we want them to protect us. I am afraid that a spectrum of penalties will not work by itself. Would you pick up the phone when you had doubts about something being right and admit that maybe you screwed up, knowing that you might face penalties? I am not sure it is the right solution.

Ultimately, there has to be a regulatory structure. That is the next phase the Australians are moving into. The State of Victoria has brought in specific legislation to implement the guidelines so that they are no longer guidelines but rather requirements for these water companies. It is a matter of sequencing. If you do not get the competence right first, putting the regulations in place first could turn it the wrong way.

Senator McCoy: I accept your point on competency, but I do not understand just what you are advocating. Are you talking about ensuring that everybody is accredited after passing a mandatory course?

Mr. Hrudey: I would be misleading you if I said that there has not been a big improvement in the training of operators in Canada since Walkerton. There has been much more focus on that, and Ontario is putting a lot of resources into training.

However, there has to be more than courses. There has to be organizational support so that operators have a place to go for help when things are going wrong. If you are running the water treatment plant out in a tiny town in Saskatchewan and are on your own, no matter how much course work you have taken, you probably cannot solve the problem. You need some kind of support network.

Senator McCoy: Would you be suggesting a centralized agency that would have people available even on-line, for example? I think doctors are actually operating on-line now, with mentors at the University of Alberta and someone in Medicine Hat performing the operation. You are looking at putting various services together in that.

Mr. Hrudey: Effectively, we recommended that when we did our review of safe drinking water for First Nations a couple of years ago. It is functional regionalization. Where communities are too far apart to connect them by pipes, then you have to connect them by communication. You need to have circuit riders. This idea was developed in Saskatchewan and has been picked up by the Indian and Northern Affairs Canada. It is being used effectively in a number of communities. Someone travels around to provide assistance to local operators. We do not do that in non-First Nations communities. I do not know why. It is a brilliant idea.

Senator McCoy: I think we have more to learn on the subject. Thank you.

Senator Meighen: To confirm, you said that the Australian experience has been that the regulatory framework they are working towards adopting is based on a state rather than a federal level.

Mr. Hrudey: That is correct. The guidelines are federal. The National Health and Medical Research Council sponsors the guidelines. The states and the water companies all participate. However, the actual regulation of drinking water is done at the state level, similar to Canada with our provincial regulation.

The Chair: Thank you, Mr. Hrudey. We are indebted to you for having made your trip here today. We may have further questions, which we will write to you, if we may. I would be grateful if you would respond to them via the clerk of the committee.

Mr. Hrudey: I would like to thank you once again for this opportunity.

The Chair: I will ask Mr. Somers to come forward. We will conclude this as quickly as possible. I remind honourable senators that at the conclusion of Mr. Somers's testimony we need to have a short in camera meeting to deal with some questions including a matter Senator Brown wants to raise.

Senator Brown: I need to leave. You can leave my item off the agenda.

The Chair: I will ask your question in your absence and we will get an answer.

Senator Brown: Okay. It is probably easier to get an answer when I am not here anyway.

The Chair: It may well be. I will give you an answer tomorrow morning.

Honourable senators, we are now joined for a discussion on the legal perspectives and the legal repercussions of Bill S-206 by Mr. Greg Somers, who is a lawyer with Ogilvy Renault.

Mr. Somers, I thank you for appearing before the committee. We are grateful for your remarks and hope you will take questions at the end.

Before you begin, Senator Meighen has the floor.

Senator Meighen: For the record, I am counsel to the firm of Ogilvy Renault out of Toronto. I do not think I have had the pleasure of meeting Mr. Somers, who is based in Ottawa. I can safely say that I know nothing about what he is an expert in. I will listen to his evidence with great interest.

The Chair: We are not voting today, in any case, Senator Meighen, so you are safe from any conflict of interest.

Greg Somers, Lawyer, Ogilvy Renault LLP: I would like to thank the committee. I am gratified by the invitation and hope I can assist in some way. As the usual lawyer disclaimer, I want to say that any views I express are personal ones and not those of my firm.

When I received the committee's invitation, I was a bit unclear about the particular trade issues that the committee wanted addressed. In Canada, the issue of trade and water is a fraught one. There is, arguably, nothing that is not affected in terms of water by the various trade agreements, investment agreements and other treaties to which Canada is party.

I provided to the committee a brief note on the sanitary agreement and provisions of the NAFTA which relate to water-quality guidelines and non-discriminatory application of those, national treatment, and other issues. I sent it late in the day. I am not sure if the committee has had a chance to receive it. As I was that dilatory, I brought ten copies with me that I am pleased to circulate.

The Chair: Would it please members to circulate Mr. Somers's document?

Senator McCoy: Mr. Chair, did you want to clarify the question? Our question was not precisely about sanitary systems in the context of Bill S-206. I believe it was Senator Spivak and I who were particularly interested in that question.

The Chair: We are interested in any of the legal implications that you would like to talk to us about. I hope that you have had a chance to read Bill S-206.

Mr. Somers: Yes, I have.

The Chair: As I understood it, this is the main question: If we were to pass this bill into law, would it have the effect of commodifying water, and if so, would that make it susceptible to actions under the North American Free Trade Agreement, NAFTA, that we might not like?

Senator McCoy: Also, would there be any other unintended consequences?

Mr. Somers: Thank you. That is helpful. As I said, your clerk has the memorandum on the other issues.

I had a suspicion, or at least a dread, that that might be the issue. That is the most difficult one on any level, including trade law. Reasonable people disagree.

A couple of things struck me when I read the bill that engaged those concerns. I will not say it was conclusive or dispositive of them. However, first of all, the bill defines water from a community water system for human consumption as a food.

The consensus of opinion heretofore is that before water is packaged, that is, while it is still on the lake with a loon swimming on it, it is not a good. It is not a tradable commodity and it does not engage all of the obligations of the trade agreement. As soon as you put it in a bottle or a tank and package it artificially somehow, it does become a merchantable or an item that can enter into commerce and, therefore, that is subject to the disciplines of all those trade agreements, whether the World Trade Organization, WTO, or NAFTA. They are similar. In any event, an obligation of one, for our purposes today, could probably be echoed in the other as well.

The Chair: If water is commodified when we put it in a bottle, is it also commodified when we put it in a pipe?

Mr. Somers: As I said, heretofore no. The general consensus was that it would have to be packaged and ready for commerce. It would need to be ready to be shipped and so forth. However, this is not the unanimous consensus. The issue of pipeline water has not yet arisen in any serious way in any trade forum. Therefore, no legal jurisprudence exists on that issue.

Another provision in the bill that engages my concern is that it expands the definition of "sell" to include having in possession for distribution without actually going through the act of distributing it. Under the Food and Drugs Act, absent your amendment, something would have to be distributed in order to enter into commerce. However, when it is just presumably sitting in whatever reservoir it is in before it is distributed, the question of commodification arises.

The bill also adds a definition of "article" to include a gas, liquid or solid that is not packaged. That one hits it square in the forehead. It says that irrespective of whether I have packaged this water in a container or even a pipeline, it is an article. That is a very short step to a good, and once you are into a good or a product, you engage the potential disciplines of NAFTA or WTO. For example, in theory if you tie an iceberg to a boat and pull it, although you have not packaged the iceberg, you are transporting it for a commercial purpose. Presumably that is why you hooked up to the iceberg. The issue of a package may not have been recognized, but it may well have been a bit of a red herring because water, especially since the bill adds gas, liquid or solid, may have been already susceptible to the analysis, which is the subject today: Is it subject to NAFTA disciplines?

The bill also adds the definition of "collection" to include any activity that causes or promotes the accumulation of a food, whether or not it is artificially contained. Again, that is the same kind of concern. The other issue is that not only is water a good in terms of the bill's treatment of it but also the distribution of water is a service. Known services might also engage NAFTA investor rights principles. Where the distribution of water is privatized and foreign investors participate in that, they may well import the obligations of the investor rights provisions of NAFTA. NAFTA investor rights provisions are not available to Canadians vis-à-vis Canada. Only foreign investors can invoke those provisions. For example, a foreign investor in a water distribution service, even absent or leaving aside the question of the ownership of that water or the rights over the water as a good, may be able to invoke NAFTA as well if there is any discriminatory treatment, expropriation treatment or less than a minimum international standard of treatment afforded to that investor. Those are the major rights afforded by NAFTA.

Senator McCoy: While you are holding that thought, what is the foreign investor's right to sue? Refresh my memory, please.

Mr. Somers: There are basically four rights under NAFTA. A foreign investor with a Canadian investment, for example a Mexican or a U.S. investor who has a Canadian investment, which can be the operation of a business, a building, and including a distribution business, can invoke NAFTA's provision against the following:

First, that he or she be treated no less favourably than an investor from any other country on earth. The Mexican or U.S. investor is entitled to what they call most-favoured-nation treatment.

Second, that investor can insist on national treatment, which means treatment no less favourable than that accorded to a Canadian investor.

Third, the foreign investor can insist on treatment as good as or better than a minimum international standard irrespective of how Canada treats other investors. There is an absolute bottom level of acceptable treatment of the investment, whether by regulation or by other government interference, and an assurance that it does not go below a certain level, which is unprescribed in advance. It is up to the international arbitration tribunal to decide whether this was offensive behaviour that so clearly violated the international rules of treatment of investors.

Fourth, the investor is entitled to not have his or her investment expropriated without due process of law and fair compensation paid by the seizing state.

Senator McCoy: Can it sue the Government of Canada to enforce those?

Mr. Somers: It can sue the Government of Canada, and if it makes out that one or more of those were involved, it can receive financial compensation only.

As to the prior question of whether the amendments to the bill commodify the subject water as a good, my bottom line answer, to save you the hours of verbiage that are almost the professional obligation of a lawyer but that I am willing to shortcut, is no. Those questions fall to be decided by a NAFTA tribunal or by a WTO panel. They will have regard to the legislation of various countries, but those are not the definitions or the operative principles that apply to persuade or compel them to make a finding as to whether a thing is a product or a good.

They apply international legal principles that are beyond Canada's international law competence to dictate. For example, you might be aware that in the U.S., groundwater is considered a good by the U.S. Supreme Court. In Europe, there is a similar finding by the European Court of Justice. Canada has to date not made any judicial determinations on that. The committee could propose a bill to say that water is not a good or product, pass the bill and use that contra to say that no NAFTA tribunal can now find water to be a good because we have legislated it out of goodness. That is equally irrelevant for an international tribunal's consideration to decide whether we have commodified water. That is the bottom line. That is essentially what it is.

The Chair: In short, a WTO panel or a NAFTA tribunal could decide today that Canadian water is a good.

Mr. Somers: Yes, it could decide that.

The Chair: If this bill became law tomorrow, would that tribunal or panel be more likely to decide on Thursday that Canadian water was a good than it would be to decide that now? Is that a fair question?

Mr. Somers: There is no such thing as an unfair question to a lawyer.

The Chair: Would the passing of this bill make it worse?

Mr. Somers: I would say, no, it would not make it more likely that WTO or NAFTA would decide that Canadian water is a good. If they were to take that into account, they would be taking an irrelevant consideration into account. It does not matter what Canada proposes in a piece of legislation.

The Chair: That is what I was getting at. If we pass a law that says water is not a good, it will not make any difference because they will decide whatever they decide regardless of what laws are in place in Canada, because we have already made everything else we do subservient to NAFTA and WTO.

Mr. Somers: In effect, that is correct.

Senator Milne: You said that water is already considered a good in Europe and in the U.S.

Mr. Somers: If I said "groundwater," that is correct.

Senator Milne: Water in the ground, not even in a pipe or a bottle. That may well be why the Council of Europe is talking about declaring water a human right. This happened recently at the Council of Europe, when I was there two weeks ago. They are talking about declaring water a human right.

Mr. Somers: I understand that debate to be going on. That engages a slippery slope. The right to vote and the right to free assembly are considered fundamental human rights.

Senator Milne: They consider water and food to be basic to life.

Mr. Somers: The concept engages a whole new set of concerns. Is it a right to life in the sense of not to be denied, or is it substantively a right to life in the sense that one can insist on it at a subsidized or even free level? Those questions are beyond a trade lawyer's concern, but they are valid.

Senator Milne: There will be increasing questions in the future.

Mr. Somers: Doubtless.

Senator McCoy: Who said that the soul of wit is brevity? You have exceeded my expectations. I am very appreciative of your answer. Thank you so much.

Senator Trenholme Counsell: I thought that perhaps you might put something together for me. Some people use the expression "connecting the dots." All evening, I have been thinking about the complexity of the governing structures involved. You truly have all three levels of government — federal, provincial, and municipal — involved in all of this. You are very able to conceptualize many things, and I wondered if you could discuss the difficulties and challenges. Do you have some clearer picture of how this really can happen in Canada and how it can be more effective?

Mr. Somers: I doubt I can be very helpful on that issue, which is more for a constitutional lawyer or constitutional scholar. I can speak to the trade issues that impinge on those questions. As to whether federal or provincial cooperation would be involved or the best vehicle to do it, as a trade lawyer, the first level that I would think has to be vigilant is the federal government. Their constitutional authority to legislate in respect of international trade and interprovincial trade would cause concerns regarding the NAFTA or the WTO to fall directly on their shoulders. That said, trade law obligations devolve to the provinces as well, but it is Canada who has to account for deficiencies or breaches of, for example, the NAFTA by the provinces, because Canada is the signatory.

Senator Trenholme Counsell: I was not thinking so much about international trade. I realize the perspective from which you come today. The whole issue is clean drinking water for Canadians, which is what this bill is about, and the federal government cannot do it alone. I thought perhaps you might put your mind to that and give us some greater depth regarding the complexity of the situation and some practical suggestions for the governing bodies in Canada vis-à-vis water.

Mr. Somers: I do come at it from a trade law perspective. You are quite right, senator. What would satisfy my concerns, and again I am not a constitutional much less a federal-provincial relations authority, would be for the federal government to establish minimum standards, and then for the provinces to do at least as well as those. That would minimize the trade law concerns of discriminatory treatment, for example, against imported water and those sorts of things. As long as the minimum standards were consistent, we would not have one province establishing higher standards or lower standards and therefore different levels of favourableness of treatment that could give our trading partners cause to complain.

Senator Trenholme Counsell: In terms of minimum standards, if you think only of the federal level, how would you rate our standards at this point in time?

Mr. Somers: I am completely ignorant of them. I apologize. I could inform myself and provide the committee with a view.

The Chair: Mr. Somers, is there anything else you want to advise us on, comment on or explain to us having to do with trade and water, other than the questions we have asked you and the things about which you have been mercifully clear and for which we all add our thanks?

Mr. Somers: Thank you, senator. The questions were so directly put they were easy to answer. Those are the issues, and since they neatly escape a trade law net, I let that sleeping dog lie. The legislation is in place.

The Chair: To clarify your answer to Senator Trenholme Counsell on the last question, you said that if federal standards were to be put in place, they would have to be consistent. You also said that they would have to be at least as good as, and that is the normal nature of federal standards that are applied to provinces. They must be at least as good as. A province could set itself higher standards than the minimum federal ones. That would still be okay, would it not? You did address this question, but I was not quite sure what you meant.

Mr. Somers: That was the point exactly. If there is a floor in consistency as far as a particular standard across the country, any imports coming into the country or any cross-border movement of this water would have to meet at least that standard, and you would not have one province upsetting the apple cart for another by having a standard that went below that.

The Chair: If I am a manufacturer making beef jerky in Province A and their requirements of me become more expensive than I want to spend, I cannot pick up and move my factory to Province B in the expectation that I will find there a standard lower than the floor that is set by the federal standard. It may be lower than in Province A, but it will not be below a certain standard.

Mr. Somers: Exactly right. If you could do that, an import movement could come in saying, "I like that lower standard, and because the province has set that precedent and done it, I am entitled to it too." You have to give them treatment no less favourable, or in this case, regulation no less stringent, and you would be stuck as a legislator in trying to control that. That is right.

The Chair: I will go one question further, if I can, with the permission of my colleagues. This does not relate directly to this question. Say I am a Canadian bottler of water that I am getting out of a spring or out of the tap someplace. I have a distribution centre, a system that bottles water and sells it. I sell it in the United States, let us say, because some do. There is also an American or Mexican bottler of water. Is that Mexican or U.S. bottler of water now entitled to come into Canada to turn on the same tap from which I get my water and bottle it and sell it in Canada?

Mr. Somers: Having extracted that water from the Canadian tap?

The Chair: Yes.

Mr. Somers: Arguably, he already can, irrespective of whether you had sent that water already, because it is recognized that bottled water is an internationally traded commodity, a good.

The Chair: It is coming out of the end of a tap, so it becomes a tradable good immediately I put it in the bottle. Does a Mexican bottler now have the capacity under NAFTA or WTO, should he or she want to, to come and stick his bottle under my tap and put water in it and sell it?

Mr. Somers: Bottled water is already traded among the three NAFTA countries. True, normally they take advantage of their own sources.

The Chair: Proximity.

Mr. Somers: Exactly, to exploit the water. There is nothing in the act of you selling tap water in a bottle in itself, packaging and sending it on and exporting it, that would cause the reciprocity obligation, in other words, that a Mexican or a U.S. bottler could come up here and use the tap. That in itself is not triggered by your act of exporting water.

The Chair: Could they do it now?

Mr. Somers: You anticipated what I was going to say. If they wanted to come into Canada and invest in a factory and tap into the local water supply in any particular city you want to name —

The Chair: Or the Rocky Mountains, which is a saleable thing.

Mr. Somers: If they can acquire a piece of a melting glacier on a side of a mountain and meet whatever other restrictions Canada can legally impose, yes.

Senator Adams: I am a little bit confused. Our water in the North is usually good. If NAFTA has an agreement on water between the United States and Mexico, does it have one with respect to Canada?

Mr. Somers: Are you asking about whether NAFTA covers water?

Senator Adams: Yes.

Mr. Somers: There have been various pronouncements from the NAFTA commission, the supervisory body of NAFTA, to say that bulk water is not covered by NAFTA. That is actually still an open question. It has not been decided, and reasonable people disagree on whether or not it actually does. The note by NAFTA authorities saying that bulk water is not included is not part of NAFTA. It is an interpretive note that sits over it and that you could argue shows the intent of the people who entered the agreement, but it is not conclusive. It is still an open question.

Senator Adams: With respect to the Oldman River, the Americans are currently diverting this river that comes from Canada, right?

Mr. Somers: NAFTA and other agreements recognize that those sorts of issues are normally dealt with under treaty by the International Joint Commission if they are transboundary waters. NAFTA will defer to settle those in that forum, because there is a treaty that speaks specifically to the diversion of transboundary water.

The Chair: Thank you, Mr. Somers. I am very grateful, as are all my colleagues, for your having appeared today. If we have any further questions, I hope you will permit us to write you, and I hope you would address your reply to our clerk.

Mr. Somers: I would be pleased to help the committee with any further questions it might have. Thank you for your attention today.

The Chair: The meeting will now go into camera.

The committee continued in camera.

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