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

Issue 10 - Evidence - June 12, 2008

OTTAWA, Thursday, June 12, 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 8:33 a.m. to give consideration to the bill.

Senator Tommy Banks (Chair) in the chair.


The Chair: This meeting of the Standing Senate Committee on Energy, the Environment and Natural Resources will continue its consideration of Bill S-206, which proposes that drinking water should be placed under the Food and Drugs Act.

We have here this morning representatives of the Federation of Canadian Municipalities: Michael Buda, Acting Deputy Director, Policy; and Talusier LaSalle, Policy Analyst.

First, I will introduce the members of the committee present. On my left is Senator Lorna Milne who represents Ontario. On my far right is Senator Bert Brown who represents Alberta; next to him is Senator Ethel Cochrane, who represents Newfoundland and Labrador; and next to me is the deputy chair of this committee, Senator Pierre Claude Nolin from Quebec.

Mr. Buda, I presume you will lead off. You have the floor.

Michael Buda, Acting Deputy Director, Policy, Federation of Canadian Municipalities: I thank the committee for inviting us to appear to answer questions on this important issue.

As you may know, FCM has over 1,600 municipal members from coast to coast to coast that represent almost 90 per cent of the population. Our mission is to help Parliament and the Government of Canada better understand and respond to the needs, interests and capacities of municipalities in Canada.

Our appearance is made here today in that light: To share the municipal perspective and priorities with respect to this issue and work with this committee to come up with the best response and policy possible.

The Chair: Pardon me for interrupting, Mr. Buda. I forgot something that is important.

Honourable senators, Mr. Buda has brought notes of his remarks, but they are in English only. I ask your permission to have them distributed to members notwithstanding that they are not in both languages.


Senator Nolin: For this time, I will accept it; next time, please use your francophone services because we would appreciate receiving the French translation of your brief.

Mr. Buda: Absolutely. Sorry.


Mr. Buda: I want to introduce my colleague, Talusier LaSalle, who is with me at the table today. I want to pass along the regrets of our CEO, Brock Carlton, and our newly elected president, the Mayor of Sherbrooke Jean Perrault, who normally would have preferred to be present today, but both are unavailable.

The provision of clean and safe water is the top priority of every government tasked with this possibility and is one of the basic human rights that all Canadians take for granted and expect from their governments. Mayors and councillors stand alongside this committee in their shared interests to deliver this basic and essential service. FCM and our members appreciate the interest of the committee in this critical issue.

However, the message we bring to this committee today as clearly and concisely as possible is that more regulations cannot solve a problem that comes down to overstrained fiscal resources and capacity.

Just as there is not a senator in this Parliament who is not in full support of ensuring that Canadians have clean, safe drinking water, there is not a municipal leader in this country working in good faith for the public who does not share that interest.

The Chair: Pardon for me interrupting you again, Mr. Buda, but for the purposes of transcription and translation, can you speak a little more slowly?

Mr. Buda: Yes.

Senator Nolin: We will have, finally, the French version of what you are saying.

The Chair: We would like it to be as accurate as possible. We are now joined by Senator Marilyn Trenholme Counsell on your immediate right, who represents the Province of New Brunswick, and by Senator Grant Mitchell who represents Alberta.

I am sorry for the interruptions. Please proceed.

Mr. Buda: The reality is that these well-intentioned and hard-working mayors and councillors, reeves and alderman are hobbled by an estimated infrastructure deficit of $123 billion in everything from crumbling overpasses, overcapacity transit and failing or inadequate water systems, as you well know.

Much of the services that municipalities provide are essential and critical to public health and safety. As well, municipalities provide the foundation of our country's vaunted high quality of life, safe transportation infrastructure, policing and community safety, public health, solid-waste collection and disposal, waste water, and obviously, clean, safe drinking water.

The numbers tell the story: 92 cents of each tax dollar paid by Canadians and collected in Canada go to the federal and provincial governments. That leaves 8 cents of every tax dollar collected in Canada available to municipal governments. We believe the real fiscal imbalance in this country lies in those numbers.

Municipalities are now expected to do more because of offloading from other orders of government, and because of increased global competition for human capital and rapid growth. They are expected to accomplish this goal with the same limited revenue tools they have had since the 19th century. To fix the municipal fiscal imbalance, we need a more equitable sharing of fiscal resources among all orders of government. We do not ask for cash handouts or band-aids: We ask for a long-term partnership and a plan that will achieve results.

That point leads now to Bill S-206, which is a great example. Municipalities believe it does not matter how good guidelines and standards are if municipalities do not have the fiscal or human resource capacity to meet the guidelines.

Small communities face significant challenges with regard to inadequate treatment and distribution systems, lack of trained operators, reduced capability for monitoring, reduced access for testing, and little capacity for source water protection.

The recently announced Building Canada Fund and the now permanent Gas Tax Fund are welcome and important federal contributions to meeting the infrastructure deficit challenge and partially addressing the municipal fiscal imbalance. However, when measured against the need, in particular, of the $123 billion municipal infrastructure deficit, the scope of the problem and what is required to address that problem becomes more evident and stark.

Providing equal access to safe drinking water for all Canadians will be best achieved not through more regulation but by working together to invest in the infrastructure and capacity that municipalities need to deliver the services that all our citizens and residents expect and require.

Those are my comments. I know the committee has been exploring a number of areas and we will answer any questions we can.

The Chair: Mr. LaSalle, do you want to add to anything Mr. Buda has said?

Talusier LaSalle, Policy Analyst, Federation of Canadian Municipalities: Not at this point, thank you.

The Chair: We are now joined, to your immediate right, by Senator Jerry Grafstein, representing Ontario, who is the author of the bill that we are now considering.

You made the point that to fix the municipal fiscal imbalance, as you call it, more than 8 cents of every tax dollar generated must go to the cities.

I had the honour of being the vice-chair of the Prime Minister's Caucus Task Force on Urban Issues in Canada, and that was one of the points we made. Some of those suggestions have been implemented, as you pointed out; the gas tax and other things.

Since you referred to the tax shortfall, I want to ask you a question that derives from that subject. To be clear, I have always said, in the city in which I live, I do not pay enough taxes for the privileges and benefits that I receive from living there. I know I do not. Furthermore, I know that I do not pay enough for the water that I drink, the heat or the electricity because the external costs of those things are not in the price that I pay. One way that we will deal with climate change, for example, is by making those costs internalized.

With respect to taxes, let me make an argument. I am interested in your answer. When other orders of government have found that they are in the glue and need more money to do the job that they are charged to do, they have made extremely difficult decisions politically from time to time and have gone to the people and said, We do not have enough money to do the job that we are required to do so we will cut some services and raise your taxes.

This decision takes great political courage, but other orders of government have done it. Provinces have done it with the result that some of them are now debt-free; the country has done it with the result that there is no longer an annual operating deficit. These decisions were tough, political decisions. Is it possible that municipal governments and their members should take tough political decisions and go to their constituents and say, we do not have enough money to do the job?

You say that one of the problems with water is that there is an income shortfall to the municipality. Fix it. Please argue back.

Mr. Buda: I think you will find that the mayors and councillors are intimately aware of that argument because they are the only order of government in this country that raises taxes every single year. Every single year, property tax mill rates must rise because the economy continues to grow, demands on municipal infrastructure and services continue to grow, as does the population. Yet the property tax, as a tax tool, does not grow with the economy because it is linked to property assessments. Although the assessments are going up, if we want to raise revenue we must raise tax.

The Chair: You must raise the mill rate.

Mr. Buda: I apologize if some senators are aware of this situation. If the average assessment in our municipality goes up 10 per cent and we plan a 0 per cent tax increase, the mill rate decreases by 10 per cent. That is what happens every year. If we want to increase our revenues we must increase taxes. That happens in every city every year. I point out the provincial and federal governments, at least since the mid-1990s but probably even before that, have reduced tax rates every year because sales and income taxes increase with the economic growth this country has experienced for some time now.

The total aggregate federal and provincial tax revenues have been increasing year over year even though tax rates, which are the things that citizens most notice, have been going down. Those tough political choices are being taken, but I cannot disagree with you that tough political decisions are what need to be taken.

Having said that, again, in terms of municipal operations, public opinion shows that the citizens believe that municipal governments are running the leanest and most efficient order of government. That opinion is shown in poll after poll. There is not a lot of fat to cut, and municipalities must cut that fat every year, again, because they are faced with a choice of raising taxes 5 per cent in the same year where income and sales taxes are going down or cutting services. Every year they make those tough political decisions.

On the question of demand pricing, I cannot disagree that this is clearly a way forward. I point out, however, that the issue is complex in that we need to shift taxes from property, income and sales to paying for services like that because there are distributional equity issues, and there is tremendous public opposition to it. You are correct; the solution is that kind of political courage. I cannot dispute that point, senator.

The Chair: The infrastructure shortfall is sort of the same as the annual operating deficit shortfall that other governments have dealt with.

You are correct. One reason that taxes at other orders of government have gone down is because they have removed those deficits and their interest payments are way down. That is among the many reasons.

Mr. Buda: We argue that the other reason other orders of government have been able to eliminate their operating deficits is they have off-loaded to the municipal level some of the services they previously provided. Municipalities have picked up those responsibilities, and municipalities cannot run operating deficits. One way municipalities balance their books is to reduce investment in capital. If we are thinking about either keeping the lights on or fixing the foundation, we can put off the foundation repairs for a few years because we must keep the lights on.

What other orders of government experience as annual deficits each year show up as accumulated infrastructure deficit, which we do not really see. It is not in the balance book. It is in our streets, in the pot holes, crumbling overpasses and failing water systems.

The Chair: The downloading part is exactly right.

Senator Milne: Having grown up in a household where it was municipal politics all the way, I know some of the problems; my dad was Mayor of Toronto. The problems are enormous.

Senator Grafstein: A good mayor he was.

Senator Milne: Thank you, Senator Grafstein. My concerns are with small municipalities without the population to be able to afford a large water purification system.

How many of your municipalities with boil-water advisories have been repeats? Do you know?

Mr. Buda: I am not aware of the figure. I know you have heard this statistic before, but certainly well over 95 per cent, probably over 99 per cent of these boil-water advisories, are in extremely small communities of 500 or less, 100 or less, 50 or less. They are small incorporated entities, which raises some interesting governance issues because of the inherent lack of capacity they experience, which is clearly within provincial jurisdiction.

How many of them are repeat offenders? I do not have that statistic, but I safely venture a guess that it is a significant proportion of them because it is those municipalities that lack the people they need to build and maintain these systems, as well as the capital. The capital costs on new water systems can be high. If they cannot amortize that cost across a reasonably sized population, the increased assessments can be significant. In the smaller municipalities that are spread over a wide geographic area, it is simple for people to move outside the geographic boundary of the municipality to avoid paying the tax. Obviously, they no longer benefit from the service, but people in smaller municipalities often prefer fewer rather than more government services. That issue is another important one to consider here as well, especially in these small municipalities.

Senator Milne: In Ontario, Mike Harris downloaded the cost of even the provincial highways onto the municipalities through which they ran. That downloading meant that someone living north of Brampton, where I live, driving through Brampton on the way into work in Toronto, beating down the roads, the City of Brampton was faced with the cost of repairing and maintaining those roads.

I assume from what you say that the FCM is against this bill. Are you against the principle of the bill? Are you against it purely on a monetary basis?

Mr. Buda: As I said at the beginning of my remarks, FCM and the municipalities support any interest that Parliament and the Senate, in particular, can draw attention to this issue because the municipalities are at the front lines. I do not think you will find many councillors or mayors who are proud to say that their municipality is currently under a boil-water advisory. These situations are not ones that municipal leaders want to be in; no more so than any public official.

I would not say that the mayors, councillors and FCM are against the bill. We are interested in trying to find a solution that will solve the root of the problem. We believe that the problem is not one of insufficient regulation or enforcement. The fact that there are 1700 boil-water advisories indicates that the regulations and enforcements exist. If we did not have regulation and enforcement, there would be zero boil-water advisories; people would simply be drinking unsafe water unaware of the problem. The question is, why are there still 1700 boil-water advisories? Why is that number not going down?

Senator Grafstein: There is only one moment in time.

Mr. Buda: That is true. I do not have the data that shows the trends over time, but my understanding is that the numbers have been rising.

I suggest that one reason numbers are rising is because the regulations and enforcement are becoming better. That is a large number of boil-water advisories. Clearly, it is not only a transitory moment that, unfortunately on Wednesday, there were a lot of boil-water advisories. Likely, this problem is a persistent one, as you indicated, senator.

We believe that because there are 1700 boil-water advisories, the regulations and enforcement are working. What is not working is the solution to those boil-water advisories. That is where we come back to the need for investment in these systems.

The Building Canada Fund and the permanent Gas Tax Transfer are important steps. To put those steps into perspective, however, once the Building Canada Fund reaches $2 billion, and the Building Canada Fund will deliver on average about $500 million to $1 billion a year, that amount will represent about 25 per cent of the average capital investments that municipalities make each year. This amount is a fairly significant increase. These transfers are only recent.

We are already seeing that this fund is having an effect. Unfortunately, Infrastructure Canada does not have a full accounting of where their grants are going, but their preliminary analysis shows that a large percentage of these investments are going to water and wastewater systems because municipalities know that is where their needs are. I think over the next few years we will see an improvement in the situation. Again, the improvement is not because there are more regulations or enforcement but because there is more money available to fix the problems highlighted by the regulations and enforcement that exist in Canada.

The Chair: On the point that you made about the effectiveness of the system that rings the alarm bell, there is no question of that. It seems to be happening. However, the alarm bell is ringing and the fire department is not coming.

So that we understand the FCM's view, pick that small, incorporated hamlet of 50 persons. We can all picture that lovely little rural area with a stream running through it. There may be cows too close to the stream. Who pays for the system that provides those 50 people in that hamlet with clean drinking water?

Mr. Buda: That question is complex, and I will not dodge it. I am not trying to be trite, but clearly the fiscal sustainability of extremely small governance units like that hamlet is challenging because they do not have economies of scale in tax collection, for instance, or access to the type of reserves or debt capacity that even municipalities of 500 might have. These governance challenges are obviously within provincial jurisdiction. Therefore, I suggest that in some cases, those municipalities may never be able to build the systems they need to provide clean and safe drinking water solely on the backs of those residents who live there because they do not have economies of scale necessary to build those systems. Therefore, it is incumbent upon the provincial governments who are responsible for municipal governance. This responsibility is not within our mandate, but if those governance units are too small to be fiscally sustainable, it is more likely a provincial responsibility.

Having said that, provinces spend vast sums of money to support those smaller communities because rural sustainability is important for the whole country. Those hamlets often provide workers to critical resource extraction industries, agriculture and so on. They are important for the country. When we speak about municipalities or small municipal units, the provinces manage them and take responsibility for them. That is why you will see the provincial regulations and enforcement capacities not only target them but are adapted to supporting the work of those small hamlets.


Senator Nolin: All your members are, for constitutional reasons, provincial creatures. I was reading your policy on water management: ``Clean, safe and reliable water.'' I am wondering about the analysis that you have done of the different provincial policies. Did it assist you in developing your own policy? If you have done an analysis of these policies, what have you learned from studying the various provincial policies?

Just to give you some more food for thought, last week, the Quebec Government tabled a bill entitled An Act affirming that water resources are collectively owned and reinforcing their protection. The Quebec Government and the National Assembly of Quebec are acutely aware of their jurisdiction in the area of environmental protection and jealously protect their authority in this regard, and I would like to know whether you have some knowledge of this bill, what lessons you have learned from it and whether you could share with us some of your ideas on this subject.


Mr. Buda: I am not familiar precisely with that bill but, generally, first, FCM, in all that we do in terms of our interaction with the federal government, constantly emphasizes the importance of respecting the provincial jurisdiction over municipalities. We seek a partnership between the federal government and provincial governments, and then through provincial government with the municipalities to support the needs of municipalities as appropriate to what is within the federal interest.

Frankly, our policies around safe drinking water, are they specifically informed by provincial legislation? Probably not, but they are informed by the fact that municipalities are within provincial jurisdiction, and drinking water is clearly within provincial jurisdiction. Therefore, the type of work that we do with the Government of Canada is designed to provide additional resources for provinces so that they can deliver whichever services they prefer with their own municipalities around safe drinking water.

This is why I started with the municipal fiscal imbalance. We believe that a number of federal responsibilities have been offloaded, both to provinces and, from my perspective, to municipalities, which have placed an increased fiscal burden on them that make it more difficult for them to deliver some of the core public services. The first municipalities in this world were incorporated to provide fire protection, and water and waste water and solid waste disposal. These services are core municipal responsibilities.

With regard to your question, our focus around what provinces are doing is to try to work with the federal government to ensure that they support provincial initiatives rather than duplicate or replace them.

Senator Cochrane: Along the same line, can you explain how the municipal, provincial and federal authorities currently work together to assure drinking water quality?

Mr. Buda: I am definitely not an expert on this subject. The only knowledge I have gained from this issue specifically is from federal officials. I am not saying that is a bad thing, but I am not an expert on this matter. Obviously, a federal official probably from Health Canada is better placed to describe the system.

My understanding is that national drinking water guidelines offer guidance and a benchmark against which provincial legislation and regulations are fashioned, and those provincial regulations and enforcement mechanisms, which are based on and referenced to those national guidelines, are used to enforce provincial guidelines at a municipal level.

It starts from some sense of national guidance that leads to one national level, which is important. All Canadians clearly need safe drinking water. It is not that the citizens of New Brunswick expect slightly safer drinking water than citizens of Saskatchewan. There is one national level. However, in terms of how those national guidelines are expressed, and especially how they are enforced, there needs to be some differences because the governance systems in each province are different. Saskatchewan and Quebec, for example, have a large number of small municipal governments, so their regulations and enforcement mechanisms need to be adapted to that slightly different enforcement mechanism, whereas in British Columbia, they have a slightly different governance mechanism. They have regional districts which, especially in less populated areas, are often responsible for ensuring the safe delivery of drinking water, which is a totally different governance system and therefore requires a slightly different approach to regulations and enforcement.

My understanding is that those provincial regulations and enforcement mechanisms are drawn from and guided by those national guidelines so that there is good consistency across the country.

Senator Cochrane: What about the governance in Newfoundland and Labrador? We heard from people yesterday that they are satisfied with how their system works.

Mr. Buda: I am not familiar with this system. This goes back to my point that FCM works with the federal government and we respect provincial jurisdiction, which means that we do not work with provincial governments. That is the responsibility of the municipal associations of each province and territory. I am not familiar exactly with what is happening in Newfoundland and Labrador.

Senator Cochrane: I thought I would ask because you mentioned other provinces.

Mr. Buda: Having said that, Newfoundland and Labrador is another interesting example where the municipal governance system is complex. There are a large number of municipalities, as I am sure you well know, in Newfoundland and Labrador. The geographic isolation of some of them is acute and unique in Canada. The geology is much different in Newfoundland and Labrador, as you well know, from the rest of Canada; therefore the drinking water infrastructure will look different. If they sit on a small island made of rock, they will collect surface water more than subsurface water. Therefore the regulations and enforcements need to zero in on, and provide, more detail on how to provide safe drinking water from surface water sources. That situation is in contrast to Ontario and other provinces where most drinking water — especially in smaller communities — is collected from subsurface aquifers. That situation requires different types of source water protection, collection and distribution systems.

Senator Cochrane: You talked a bit about capacity. You indicated it does not matter how good the guidelines are if they do not have the capacity. Can you provide an assessment of the capacity of municipalities across the country? For example, do we have enough trained operators, and how many do we need? Where are the capacity gaps?

Mr. Buda: Again, I do not have specific details. An organization like the Canadian Water and Wastewater Association, which represents water and waste water systems — and obviously employees that work within them — would have the specific numbers.

My understanding is that most provinces and territories have training systems in place, and certification systems in place. However, there is a shortage as there is with a wide range of more technical jobs. In most places in this country, we face a labour shortage because of some of what is happening in Alberta and Saskatchewan with the oil, gas and mineral exploration industries.

Just like McDonald's is having difficulty hiring people in Edmonton, my understanding is that a large number of municipalities face the same sorts of challenges.

This example is different, but after the tragedy in Laval, with the collapse of the overpass, bridge engineers became even more important. Even before that collapse, they were always important. We know that there are not enough trained bridge engineers in this country to provide the technical expertise and input to designing new bridges, which means there is a backlog in bridge construction.

Likely, the same sorts of challenges exist. That is why I know that Health Canada works with provinces to provide resources, tool kits, training modules and certification frameworks to help provinces and municipalities ensure there are enough trained operators, in particular.

Of course, using Building Canada Fund money, they can build a first-rate water treatment plant, but if they do not have the staff to run it properly, then the same tragedies that occurred in the past can occur again.

I think the work of Health Canada, working with provincial departments, is a great example of the role the Government of Canada can play in marshalling resources, in sharing best practices across jurisdictions, and providing those real concrete tools that provinces and municipalities can then draw on to do what they need to, which is to recruit those trained operators.

It is not even a matter of building the systems. Municipalities need guidance on which systems are most appropriate for them. They have cannot necessarily rely on the industry to provide that guidance because the industry has its own particular interests. Which system is best for my type of community, environment and all the rest?

Health Canada provides great resources there.

Senator Cochrane: Has Health Canada provided these resources for a long time?

Mr. Buda: My understanding is they have always been involved but in the last three or four years, they have started to focus in a significant way. I do not have a lot of knowledge of the history there. I know that their work right now is exemplary. We are working with them to help them connect with our members to ensure that the resources they deliver are rolled out to our members.

Senator Milne: Following through on this business of advisory and sharing best practices, is that work taking place now? Is that role the responsibility of Health Canada or the FCM?

Mr. Buda: FCM is an advocacy organization. We are here to aggregate the interests of the wide range of municipalities that are members of the organization to work then with the federal government, so the federal government's programs and policies are designed in a way that support municipalities. We are not designed to provide capacity building with our members, so the responsibility belongs to Health Canada.

Senator Milne: You are a one-way conduit?

Mr. Buda: Yes, we ensure that organizations like Health Canada designing their own programs and policies in a way that will make sense for our members and ensure that they connect with the right associations that provide the capacity building, like the Canadian Water and Wastewater Association.

Senator Mitchell: I have a specific area that I would like to question. Climate change is a fact. Most people now agree. It is having direct impacts on this country. Some of those impacts will be directly on municipal water. Storms directly affect water. We are seeing floods like we have never seen before. Droughts are occurring in places we have not seen them before and they are becoming more intense. They affect municipal water. Many cities and municipalities in my province, Alberta, depend upon flows from glaciers, which are receding.

Those are at least three ways in which potentially there will be huge pressure — in fact, now in some cases — on municipal water supplies. Have the FCM and its members begun to assess what those changes might bring, the costs and how they will adjust to those things?

Mr. Buda: Absolutely: One of our proposals to the Government of Canada is, through transport, infrastructure and communities and their suite of infrastructure funding programs, to develop an approach to support climate-change adaptation initiatives. Source-water protection and drinking water systems are a key part of that approach, but so are flood mitigation and prevention, and all the rest.

Do we have a sense of the cost: no, because FCM has limited resources. You are looking at about 20 per cent of our human capacity to conduct that kind of policy analysis. What we do is work with the federal government to help them understand the need for that kind of study and work, and provinces obviously, as well.

This challenge is clearly one for our generation and the next generation, and we need to begin understanding the scope of the problem before we can understand how to address it.

That challenge is certainly one of our key policy platforms that we are advancing with the federal government now.

Senator Mitchell: You said you are working with the federal government to assist them in understanding. Are you making any progress?

Mr. Buda: Yes, clearly the federal government is aware of these challenges. Are we making progress? I think you need to ask federal officials that.

Senator Trenholme Counsell: It was interesting to hear the presentation from the federation. I have learned a lot, but I also think I understand. I come from New Brunswick and for two of the communities there, the number one issue for two decades has been their water. It has not been any lack of goodwill or lack of understanding of what needs to be done; it is a lack of money. I speak about Sackville, New Brunswick, and Dorchester, New Brunswick.

Dorchester was able to do it because there is a federal institution there that was able to augment greatly their capacity to pay for what was needed. Sackville struggles and still has not reached the goal because of funding.

In terms of Bill S-206, there is a concern that it would result in greater pressure on municipalities and, ultimately, unmanageable penalties. Is it the principle or is it the impact on municipal governance?

Mr. Buda: I do not think that municipal governments fear new regulations and enforcement because they are already experiencing that. Those regulations and enforcement mechanisms already apply to municipalities. I am not sure they are concerned. We are concerned that they will not necessarily attack the root cause of the problem. Will more regulations and enforcement hurt: probably not. Will they help: I am sure they will, just like existing regulations and enforcements provide the type of feedback and accountability mechanisms that impel councils — where there are the funds to make the changes that they know they need to make — to make changes.

Is it the most effective or the highest priority? We would suggest that because there already are rigorous regulations and enforcement mechanisms at the provincial and territorial level that what we face, just like Sackville and Dorchester faced, is a shortage of capital required to make the changes, to respond to that boil-water advisory and say never again will there be a boil-water advisory in this community because we have the money. Hundreds of announcements were made across the country through the Building Canada Fund that municipalities are building a new water system, and it is because of the Building Canada Fund and the partnership the federal government has made with the provincial governments to provide that kind of shared capital investment.

Senator Trenholme Counsell: Along that line, is it possible that this bill could be the catalyst and the stick that would say, these measures must be taken because water is so exceedingly important and essential to life; and safe, clean drinking water is essential to health and life?

Do we need something more and would this bill provide it to make clean drinking water a national necessity as well as a local necessity? It would give it an urgency it does not always seem to have. Yes, it is important; it is the number one capital project year after year. I was elected to the New Brunswick government 21 years ago, and in my communities this issue was number one. I saw the recent municipal elections, and locally it was still number one. The problem was not fixed.

Mr. Buda: Will additional regulations and enforcement actions taken against municipalities impel change? I think at the margin they probably will, but will they affect those 1,700 communities that currently have boil-water advisories: obviously not. They already know that their water is substandard. Each province and territory has different penalties attached to those enforcement mechanisms, but the reality is, it is up to voters to hold those municipal council members accountable. Communities under boil-water advisories clearly know in a public way that their water is unsafe to consume, and, in many cases municipal councils put forward the plan: Here is what it will take to provide safe drinking water. The assessment increases will be significant, and we are not talking about 5 per cent increase in their tax rate, and it will not be a $200 increase in their property tax rate. It could be much more than that and for a long period of time.

I cannot say what is happening in Dorchester, Sackville or other communities, but access to capital has been significant. In terms of the sense of urgency, we were surprised when we heard that the number one project category for the Municipal Rural Infrastructure Fund, which is the latest data that Infrastructure Canada has available, was water and wastewater systems. We were surprised to hear that not because we did not think it should not have been but because it shows how much urgency municipalities place on this issue. For the first time perhaps in a generation they are seeing significant new investments from the federal government in municipal infrastructure, and they are putting the investments into the thing that is the most important. The list of outstanding capital projects on most municipal capital plans is as long as your arm. With new capital invested in those categories, they will invest it in the thing that is the absolute highest priority. They are putting it into water because the urgency is already there.

To return to your question, will this bill impel that change; will it put us over the top and take us to where we need to be? If there was already an absence of regulation and enforcement, I would say definitely it would, but if there are already 1,700 boil-water advisories in Canada whenever that study by the Canadian Medical Association Journal was released, I am not sure how many more boil-water advisories we need to make the necessary changes in the absence of the money that people need to make them.

Senator Nolin: I have a question exactly on that subject, Mr. Buda. Let us have an interesting discussion now. From your own website, and we have it in front of us, you state:

Municipal governments and other managers of drinking water systems are responsible for providing clean, safe and reliable drinking water.

This bill is aimed at exactly that point: responsible to provide. Do you think it is enough to tell Canadians: If you do not like the way we carry out our responsibility to provide clean, safe and reliable drinking water, do not elect us the next time?

Mr. Buda: I am not sure how else democracy works. Clean, safe drinking water is an absolute basic human right but so are safe bridges and a wide range of public services that municipalities provide. They are also critical to public health and safety. Politics is the art of allocating scarce resources among, and to, unlimited needs, so municipal councillors and mayors juggle a range of priorities which are all important. Just like the Parliament of Canada, municipal governments must make political decisions across shades of grey.

Is the bridge that is in danger of collapsing more important than making the improvements to the drinking water system? I cannot say because I am not a politician; I have not been elected by the people. Technical analysis can be provided by staff like me that the risk profile of these two projects would suggest that perhaps this situation is better or worse. Ultimately, it comes down to a political decision, and how are politicians held accountable: by their electorate. That is where I come back to with this bill and this committee's interest in this issue.

FCM's position is that municipalities do not have access to the capital required to fulfil all their responsibilities, in part because the federal government has off-loaded some of its own responsibilities to provinces or directly to municipalities. That off-loading has placed an increased fiscal burden on municipalities. They have access to limited revenue tools, unlike provinces and the federal government. This situation puts pressure at a real level around council tables. We have more responsibilities and the revenues are flat. What are we supposed to do? I think mayors and councillors are interested in providing safe drinking water. It is a question of how they do it.

Obviously, there are some mayors and councillors, just as there are some members of Parliament, who do not always act in the public interest. That situation occurs everywhere, but my contention is that most mayors and councillors feel as impassioned as you do but face a limited pool of revenues to fulfil all the wants and desires of their community.

Senator Brown: You started out saying that you do not need more regulation; you need more money for infrastructure. First, I think 1,700 boil-water advisories is a small number when we look at 58,000 communities with water treatment systems. I cannot even imagine how many wells there are in this country. There must be hundreds of thousands of wells. If we look at 1,700 boil-water advisories out of 32 million people drinking our water, I do not think we are doing a bad job.

Every city that is 100 years old or more will need money to replace water lines that will wear out, and to enlarge systems. To do anything other than expand systems and make them work better is a waste of money.

We heard from people from Newfoundland and Labrador here yesterday who said that they sample their water virtually every day. It would probably cost hundreds of millions of dollars to impose federal regulations that require testing every bit of water every day when it is already being tested by municipalities. I do not see how it could cost any less than that.

I strongly believe that the water system we have now should be improved. If regulations are lax in any way, they should be strengthened, but I do not see how we can ask the federal government to take on a responsibility which, first, changes by the hour.

Since I have been away from Calgary, we have had more rain and I understand that the Sheep River at Okotoks is flooding again, as happened three or four years ago. The Sheep River is usually about as wide as this table, and now it is overflowing its banks and flooding communities that should not have been built on the flood plain to begin with, but we must deal with it.

Do you still strongly believe that it is not more regulation but more money that is needed to continue the good system we already have?

Mr. Buda: Yes, I do. Having said that, I cannot say whether the regulatory and enforcement system is as good as it can be in each province and territory, because I am not fully aware of what is happening everywhere. I suggest that the most efficient approach for the federal government is to work in partnership to ensure a level playing field. There are two ways of doing that. The first is enacting federal regulations and using federal enforcement mechanisms to ensure a level and consistent playing field. The second is to work in partnership with provincial and territorial governments to provide them the tools, resources and guidelines so that they fulfill their duties at the basic level that all Canadians deserve.

I believe the second approach is probably the most efficient because of the incredible diversity, both of provincial and territory governments and of the municipalities within them. I mentioned some of the differences. Newfoundland and Labrador looks so much different from Saskatchewan that federal regulations and federal enforcement mechanisms around safe drinking water must be national and must be either the highest common denominator or lowest common denominator, which means that it becomes more one-size-fits all. Those mechanisms will not serve certain types of provinces or municipalities as well as others. They may be perfectly suited to targeting municipalities in Northern Ontario, but because of the differences in municipalities in Nunavut, they will not be able to account for what is there.

I do not suggest that only money will solve these problems. Clearly, the provinces and territories have a role in continuing to improve their regulation and enforcement mechanisms. The role the federal government can best play is to work with the provinces and territories to ensure that the investment levels are sufficient to support what is required and, second, to ensure that provinces and territories have the tools they need and the guidelines to follow so that their own regulation and enforcement mechanisms are tailored to their own communities.

Senator Brown: The gas tax has recently started to flow to the large cities in Canada. Surely with the price of everything going up, the gas tax must be going up and the amount of money going to the municipalities must be increasing.

Mr. Buda: The Gas Tax Fund is a notional transfer. It is not based in any way on the excise taxes on gasoline that are collected by the federal government. The money comes from consolidated general revenues, and the allocation that is provided to provinces that then disburse those funds to municipalities is set in the budget. It began at $400 million and will reach the maximum of $2 billion next year. The current proposal is that the fund be permanent and the level of transfer be set at $2 billion.

It is not related to gas tax revenue. You are right that the numbers for revenues from the excise taxes on gasoline that the federal government collects are going up, but the transfer will remain flat.

The Chair: I am not sure that they are going up. I think the federal gas tax is 10 cents, period. Although the price of gasoline is going up, it is not a percentage; it is 10 cents.

Mr. Buda: Yes.

The Chair: It is not rising.

Senator Brown asked whether you agree that what is needed is more money as opposed to more regulation. Is it the FCM's position that the federal government should provide more money to municipalities for the purpose of ensuring clean drinking water?

Mr. Buda: I will make a slight amendment to that position. Our position is that the federal government should provide, or design funding programs that provide, money to provinces. The provinces then are responsible for working with their municipalities, and each province has a different approach. Quebec, in particular, has a different approach.

Yes, that is what we suggest. The gas tax and the Building Canada Fund are two perfect examples. A wide range of projects is eligible for funding under those programs, and water systems is one of those eligible project categories.

It is already happening, in part. If this committee is interested in ensuring that every Canadian receives safe drinking water, and it is, we need to ensure that the level of investments that provinces, municipalities and the federal government make is sufficient.

I am not sure that I can say that the portions of the Gas Tax Fund and the Building Canada Fund that are going to water and wastewater systems are sufficient. With 1,700 boil water advisories, I probably would suggest not. However, as I said, because a large percentage of these funds are now being directed, in five years we may be able to say that those funds are working. I believe that we will see that they are. Unfortunately, it is too early to tell. The money has been flowing in a significant way only for three or four years.

The Chair: One problem is that the federal government, in its various programs of transferring money to other orders of government, used to have strings attached to them, and they were in specific envelopes: You must spend this money on health, this money on education, and this money on welfare. The provinces do not like that. They do not like to have earmarked money sent to them, so at the moment, generally speaking, federal transfers to provinces and federal programs say, for example, that water systems are among the things that they can do with this money, but they can also build sidewalks or buy lawnmowers. They are not mandated to spend the money on water systems.

We can live, however inconveniently, without sidewalks and with holes in the roads, but we cannot live without water. However, this decision is not one in which the federal government currently has a hand, because it does not put money in envelopes and say that certain money must be used for specific purposes. The federal government used to do that, but no longer does.

What is the FCM's position with respect to earmarking funds that are transferred to other orders of government?

Mr. Buda: I have two responses. First, because our first principle is that we respect provincial jurisdiction over municipalities, we share the provinces' caution and concern around earmarking funds. However, we ultimately represent municipalities.

If municipalities believe that water systems are absolutely key and that is where investments are required, we ensure that, at the least, water systems are an eligible project category of any federal program, even if perhaps provinces are not that interested. We are successful in ensuring those project categories. The Gas Tax Fund contains five project categories, and water systems is one of those categories. The Building Canada Fund is supposed to respond to five national categories, and water systems is one of those, along, with provincial highways, community energy systems and public transit. That is at one level.

The second and more important part of my response is that part of our work around the $123 billion infrastructure deficit is that we are calling for all three orders of government to sit down in partnership and devise a plan to eliminate that deficit. The deficit is a millstone around the necks all three orders of government, but particularly municipal governments. When we have a deficit this massive, it is difficult to move ahead. We cannot think about investing in the types of services that will make Canada more competitive in an increasingly competitive world globally. We cannot make investments in new areas such as climate change adaptation. If we are trying to fix yesterday's problem, we cannot even begin to address tomorrow's problem. We are calling for all three orders of government to sit down together.

The first step in developing a plan to eliminate this infrastructure deficit is to understand the scope and size of the problem. To its credit, the federal government has listened to that first part and is working with the National Round Table on Sustainable Infrastructure to conduct a study of the performance and scope. Essentially, it is conducting a study on how large is the deficit, what does it look like, what are the key elements of it — obviously water systems being a key element, and how large is each one of those components. Once we have that kind of plan, then how does the problem look different in New Brunswick versus Newfoundland and Labrador versus Alberta? Once we have a definition of the problem, we can actually devise a plan, including a funding plan, which can respond to those different types of needs. Then we know that, for example, we need $40 billion, or whatever the number is, to address the deficit in drinking water systems in this country.

Who will pay for it? Clearly, it is not only the federal government's responsibility — in fact, far from it. Once there is an understanding of the precise nature, scope and size of the problem, then we can devise the funding programs that will be needed to address that problem. That is where we talk about the partnership element. The federal government will need to play a role in terms of the funding, but we are asking the federal government to provide leadership to bring the three orders of government together to treat the infrastructure deficit seriously. Just as we came up with a plan to eliminate the fiscal deficit in the federal government, we need to set a plan and some targets to eliminate this fiscal deficit. We will do that by making the tough political decisions. It happened with the fiscal deficit, and the same thing needs to happen with the infrastructure deficit, but the size and scope of the problem, and frankly responsibility for the problem, is shared by all three orders of government.

Senator Grafstein: Thank you for your presentation. I appreciate you coming here, and I appreciate the association's interest, finally, on drinking water. It was not your priority a few years ago, and let me tell you why it is still not your priority today.

The facts that you give us are top-of-the-line facts, which is $123 billion of deficit to cover everything. By the way, that amount is not the total number, according to the report. The $123 billion covers the requirements for existing plant, not for expansion or modernization. For instance, in Toronto, it covers only the plant that is there today and has nothing to do with expansion, which is growing at the rate of 10 per cent a year. Your estimates on the gross number go from $123 billion to another $120 billion, which is $243 billion. To this day, your association cannot tell us, of that $123 billion or $240 billion, how much is necessary for the infrastructure costs — not the operating costs — for clean drinking water for the municipalities of Canada, can you? What is that number?

Mr. Buda: Yes we can.

Senator Grafstein: Good: Give us the number.

Mr. Buda: It is in the report. I believe the number is $40 billion, and it is for water and wastewater because the systems need to be combined.

Senator Grafstein: How much is for clean drinking water?

Mr. Buda: We do not have those numbers, and that infrastructure deficit report, as we clearly said in the report itself, is an estimate. I do not believe it is an accurate estimate because we do not have the resources to do the work that is required. When I say ``the work that is required,'' defining this work is what the National Round Table on Sustainable Infrastructure is working on. What is required is to send engineers across this country to do a municipality- by-municipality, community-by-community survey of existing infrastructure and compare that against the needs. Then come up with what is required. This exercise is not a simple one, and not something that the 12 people in FCM's policy department can undertake.

We conducted a survey of a small number of municipalities and a quick and high level survey to shine a spotlight on the urgency of the problem.

Senator Grafstein: I appreciate that. Urgency is the purpose of this bill.

Going back to Senator Nolin's excellent question, the top of the priority list of the municipalities, Senator Nolin, is clean drinking water. That need is at the top of the list. Yet, at this juncture, notwithstanding seven years of this bill being before Parliament, we still do not know the cost of improving the existing infrastructure for clean drinking water is in this country. Our witnesses tell us that they would like some help. They want money to go to the municipalities for the municipalities to find out how much it will cost them to build or modernize their own plant. That approach is not right. That is irresponsible government. Responsible government is being responsible for their level of government.

The whole point of this bill is that there has been irresponsibility at the municipality level and the provincial level, and now the federal government is asked to come up with money, and still we do not know how much money we are talking about, for the public health of every Canadian. Can you find out, as best you can, before we conclude our testimony? The round table will take five years. Meanwhile, people are becoming sick, and there are boiled water advisories that are not reported, which we will talk about. At the end of the day, tell us how much we are talking about, not of the $240 billion but of the $123 billion.

I was in Edmonton last week and I spoke to the people there. They know how much. They tell me that of the $123 billion, they need $40 billion in the next five years. The federal government is coming on quickly because the federal government is promising $3 billion a year for the next seven years. There is quite a deficit there.

Let us have the numbers and facts. The purpose of regulation, my friend, is to change public behaviour. Frankly, the municipalities have not behaved properly. Let me give you the example of my own city, the city of Toronto. The city of Toronto has infrastructure that is over 100 years old. We have good drinking water. In the last two or three years, unreported, a number of the water systems in the various parts of the city have gone down. The reason for that is, as you say, the municipality officials hide this situation because no one presses them for water. People press them for a pothole. Therefore, municipal officials gut the capital funding of the water system, and they have not renovated it over the years. In the city of Toronto, we have a water system that is over 100 years old in many parts of the city — and this evidence is from the municipalities — and one third of the water does not even get through the system. In Toronto, we are paying for 100 per cent of the water, where one third of it goes into the ground.

The Chair: Senator Grafstein, I appreciate that speech, but come to a question, please.

Senator Grafstein: The question is money. Give us the best number that you can give us on how much the municipalities need themselves currently to renovate their existing systems only for the water system, because clean water is the purpose of this bill.

The Chair: When you are able to find that information, Mr. Buda, please send it to our clerk. We would be happy to provide it to the members of the committee.

Senator Grafstein: Second, can you tell us the quantum of money spent in the municipalities on public health as a result of bad drinking water? Do you have that number? There is no reference here to the cost of public health for the lack of clean drinking water. Can you give us that number?

Mr. Buda: I am writing these questions down.

I can tell you right now that we will not be able to come up with a drinking water infrastructure deficit. You are right that the transit systems have a much better handle on the size of the deficit, although some of those numbers are estimates as well. There is one big difference between transit and drinking water systems: There are about 100 transit systems in this country; there are 58,000 drinking water systems in this country.

Senator Grafstein: That is true.

Mr. Buda: The scale of the issue makes the system much more complex.

I will go back to capacity. If the municipality does not have the trained personnel to make a determination of the type of new system they require, they will not be able to tell you how much it will cost.

Senator Grafstein: Not so.

Mr. Buda: Okay.

Senator Grafstein: I want to take Senator Brown's point. He has made an articulate critique of my bill and I respect that. It is an excellent critique. He says: If you take a look at clean drinking water across the country and measure the boil-water advisories, it is peanuts. It does not cost a lot. From a health risk standpoint, it does not cost much. That analysis is fair. Obviously, I must try to persuade the honourable senator that his analysis is correct or incorrect. That still remains to be seen.

Having said that, if you take his analysis, he has said that if 95 per cent or 100 per cent of the water is good, let us not talk about the 570,000 municipalities;let us talk about only the major municipalities. Let us talk about 90 per cent of the marketplace and tell me how much it will cost for 90 per cent of the marketplace. We can then extrapolate those numbers to the smaller communities. We can do mathematical models; that is what computers are all about. Can you help us with that?

The Chair: For 80 per cent of the population?

Senator Grafstein: About 80 per cent of the population lives in urban communities, and we should be able to have that number. We do not need a federal government to investigate the budget of the water system in Toronto. There is a budget there. They have a capital budget; every municipality does. Can the association help us arrive at this number, and then can you help us bring forward the public health officers of these major municipalities so they can tell us what the health situation is so that we have some facts on that? Frankly, it is difficult to build an important measure without facts.

Mr. Buda: I could not agree more.

On the question of modeling, that is what our infrastructure deficit report did. The engineer who did it for us, who has lots of experience in public infrastructure, cautioned us. He said most of the data we collected is from municipalities in the top 100. The problem looks so different in the 3,700 municipalities, especially in the smaller or bottom 1,700, that extrapolating will lead to significant errors.

The other point is that it appears — and this is Health Canada's own data — that the majority of the significant problems around drinking water safety are not with the larger municipalities; they are with the smaller municipalities.

Senator Grafstein: Pause right there. How do we know if we do not have the public health officers to tell us what the consequences are? We have had one public health officer. Only one piece of information given to us indicates that there are two types of health problems; ones that are reported, and they have logarithms or models to calculate those that are unreported. We have to access the unreported information as well as the reported information. The medical officers of health will tell you that this problem is serious, difficult and complex, which I think the committee can at least challenge.

We are here to gather the facts. It would be helpful if somehow you could help us on that front as well. Public health officers are under your umbrella.

Mr. Buda: I was getting to that point. With the exception of the Province of Ontario, public health is a provincial responsibility. Only in Ontario is public health the responsibility of municipalities. Ontario will have a much different perspective and modeling than other provinces. I absolutely agree from a public policy point of view. When you divorce responsibility for the consequences of decisions around infrastructure investments from the outcomes, as occurs with public health when one order of government is responsible for public health and another order of government is responsible for the upstream end, we will have an accountability problem. That problem exists across a wide number of critical issues. There are lots of examples with any federal system where one order of government is responsible for one piece and another order of government is responsible for another.

Senator Grafstein: We are trying to cut through the levels of government and reach the proposition of Senator Milne's father, which is burnt in my head, and that is, respect for the taxpayers' dollars. The same taxpayer pays for all these levels. I am not here to cause any more cost to the taxpayer. I am trying to rationalize the costs that exist in the system based on public health. The purpose of this bill is to rationalize these costs, not to increase them.

How can we access that public health number? I know it is complex.

The Chair: If we want to hear from more public health officers from across the country, we can invite them. You may want to make that proposal, but I am not sure we can ask Mr. Buda to do that.

Senator Grafstein: I understand the association is responsible for this area, and the witness mentioned that public health is one area of his responsibility, to coagulate numbers. Let us have the number from as many sources as possible. First, they come forward here and raise some questions about the bill. Fair enough. By the same token, they have an obligation to give us some facts upon which they base their conclusions. We are not here to have general arguments. I can make the general arguments; Senator Brown can make them better than I can.

Can you help us that way? Wherever you are, can you coagulate information about public health on the safety of drinking water in the larger communities or wherever you can obtain it for us?

Mr. Buda: As I said, we are not equipped to deal with provincial governments. I apologize for that.

Senator Grafstein: Whatever you can do would be appreciated.

Mr. Buda: We can look at it. Surely the data is out there because this issue is such a significant public health issue. However, outside of the province of Ontario, municipalities are not responsible for public health. I absolutely take your point that it is only one taxpayer.

Senator Grafstein: You will agree with me that laissez-faire attitudes in terms of public health do not really work?

Mr. Buda: Absolutely not.

Senator Grafstein: We need ``powerful regulation'' to change public servants' attitudes toward things. We heard a powerful case from Newfoundland and Labrador saying, do not bring the criminal law here because we have volunteers and will not find anyone to volunteer. That is their case.

I need to deal with that issue as well, and I hope I will. For public officials, the whole idea is to hold them accountable. That cannot hurt, can it? If we want to achieve your objective to use the criminal power to change attitudes of public officials, as Senator Nolin has suggested, that is what the criminal power is all about.

Mr. Buda: Absolutely: I am not arguing against the need for, and importance of, regulations and enforcement. There is not a municipal councillor out there who will say they should not be held accountable for these things, full stop. There is full support for that concept.

Senator Mitchell: I was interested in the discussion a couple of questioners ago about the gasoline tax at 10 cents a litre. As an aside, that rate works out to about $43 a tonne if it were determined that it ranked as a carbon tax. While this might be a bit of a leap, it is interesting that this tax is fully endorsed by this Conservative government. I am making a point — a carbon tax, no less.

I am interested in an FCM fund of about $500 million for a green fund. Mr. Buda, can you give us an idea of how much money is left in that fund, and whether the federal Conservative government is interested in refunding it? Can it be used in any way, shape or form for the kinds of water questions that you have been asked about today?

Mr. Buda: The Green Municipal Fund was created in 2004 with an initial contribution of $125 million from the Government of Canada. Through successive budgets, it has reached a total endowment of $550 million. The fund is a perpetual endowment of the federal government and it is set up as a revolving loan fund that provides funding for innovative environmental sustainability projects undertaken by municipalities or their direct partners.

The fund is designed to support the innovative environmental sustainability aspect of a project. For example, if a municipality is to replace its municipal hall, that will not qualify for a green fund loan. However, if they make it a Leadership in Energy and Environmental Design, LEEDS, platinum building using innovative techniques that will increase the cost of that hall by 10 per cent or 15 per cent, they can obtain a loan from the Green Municipal Fund for that aspect of it.

The purpose is to provide a low-cost loan to that innovative environmental sustainability portion of the project and to collect the knowledge and best practices of how that municipality — perhaps a leader in that field — can share that information with the entire municipal sector across the country.

Drinking-water projects are most definitely an eligible project category. I apologize because I do not have the information on the types of projects that have been funded, but we can obtain it. It is in a publicly accessible database on the Green Municipal Fund website. We can send that to the clerk afterward.

The fund would be used to fund innovative approaches to delivering, for example, clean drinking water. For the questions this committee is raising, this is important.

Some of those innovations will include, especially, the demand-side pricing. How do we ensure that municipalities and citizens pay for the full cost of the water that they are drinking? That cost will reduce consumption, which means it is more cost- effective to ensure that the drinking water system delivers what it needs. The Green Municipal Fund is an innovative way of doing that.

Again, it only funds the country leaders. We then use that information, knowledge and best practice to share with others across the country.

Senator Mitchell: Offhand, do you know whether all major municipalities — however you might define those — in Canada actually meter water? I believe Calgary does not.

Mr. Buda: I do not have the figures in front of me. The reality is that not nearly enough of them do. There is not nearly enough metering. Water metering based on volume is a critical piece of this question.

Senator Mitchell: The question of water conservation addresses many things: Obviously, in the long rung, it addresses not having enough water, which is under threat in some places due to climate change. Also, because of the processes involved in heating water, water contributes to the enlarged carbon footprint.

Is there a focus in all of this through the FCM, the municipalities and through the green fund on water conservation?

Mr. Buda: Absolutely: That is what I was getting at. When we see the project list, I think we will find that they are funding projects and sharing capacity and resources related to water conservation. It is easy to say, ``Let us conserve water.'' How do we do that? Water pricing is a key way. There are lots of things such as public education tools that they need help with: I pay for my water now; how do I reduce its use?

For instance, we need to educate people around the biggest water users in your household. If they want to wash their car, it is more efficient to go to a car wash because they recycle the water. Also, the water is not drained directly into the water system like it is in front of their house, which does not go to the wastewater plant. It goes directly into the water source, which the people downstream will have to pay to clean up and then pipe into their drinking water.

Senator Mitchell: Then they use fuel to drive to the car wash.

Mr. Buda: Exactly: It is a complex system. Modeling has been done on that subject. It is about pricing the service effectively and also ensuring citizens have the information they need to make the best decisions. People need to wash their cars, although perhaps not as frequently as some do.

If I want to wash my car and save water because I am paying for it, how do I do it best? We must do all the modeling, which includes fuel consumption.

The Chair: The price point that you made is the key. This committee has issued a report that says all the education, cajoling and doing-the-right-thing arguments in the world are nice but do not come into effect until we reach the price point, as we now see with gasoline and the way people are buying cars.

Is there pressure from the FCM upon its members, or from other sources, to meter water? It is patently absurd. I understand the old systems do not have metering. There is no metering in Newfoundland and Labrador, for example, and only parts of the city of Calgary have metering.

Senator Mitchell: Yes, the newer areas have it.

The Chair: Those of us with grey hair grew up learning that we have endless supplies of clean water. We know that in many parts of the country that is not true. The idea of the guy in this house paying the same monthly rate for his water — if he pays anything — when he is in Arizona for six months, or gone or living alone in a house, next to a guy who has a swimming pool and washes his car every Saturday and has a family of five is patently absurd. We use that same treated water to wash cars, flush toilets, put out fires, et cetera.

Is there active pressure from the FCM on its members to meter water?

Mr. Buda: Through the Green Municipal Fund, we do a lot of capacity-building around that. You must remember that we are a member association. Municipalities are members voluntarily. We do not lobby our members. We lobby on behalf of our members.

That does not mean that in our work with the federal government and through the Green Municipal Fund that we are not conscious of that need. Having said that, the federal government is also conscious of that need. For instance, I think you will see that many projects funded by the Green Municipal Fund projects involve the installation of more innovative water meters that can be read by radio-frequency tags, remotely, and so on.

Senator Grafstein: Wireless?

Mr. Buda: Yes; the installation of water meters is expensive. Meters need to be considered part of our drinking water safety system.

We do not lobby our members but we seek the tools to ensure that, in response to everyone lobbying members around this need — of which there are legion groups — they will have access to the resources that they need. I do not mean only the financial resources, but the technical expertise, best practices and all the rest. Clearly, that aspect needs to be part of it.

To return to your question, the federal government does not like tying too many strings to their funding.

The Chair: No, the federal government would like to do that: The recipients do not.

Mr. Buda: Yes, but in this case there are lots of precedents where the federal government says, in return for funding the improvement to your water system you will also install the water meters because we will not help you build a water system that is 20 per cent bigger than you need if you are not metering your water. If you meter your water, water use goes down 20 per cent and the plant will cost 20 per cent less, which can be used in the next community.

We cannot argue against that logic. It is absolutely the best public policy available.

The Chair: Right: There is this big pool that is leaking like crazy, and people are not plugging the leak. They are saying, please help us fill it up faster. It is a tough call.

Senator Brown: I want to come to the defence of Calgary. Calgary passed 100 per cent water metering a number of years ago. Metering went through a phase-in period before it reached that goal, but I am sure it was at least two years ago that 100 per cent water metering was required. They even paid for the water meters so that they could bring people onto that system.

I am reluctant to make an absolute statement, but I think everyone who deals with water across this country would like to have safe drinking water for themselves and for everyone they service. I want to make a comparison on infrastructure.

I have been involved in it a bit with municipalities because that is with whom I deal, and municipalities must have priorities. You gave an example of a priority. You asked rhetorically, which is more important: a bridge falls and someone dies or safe water?

It is absolutely obvious that in this country, the answer is safe water for the simple reason that many more people are killed by vehicular accidents. For example, traffic departments will tell us that although we want a traffic light at an intersection, we will not have one because not enough people have died yet at that intersection. There are tens of thousands of intersections in a large province with 3 million or 4 million people and that is how the traffic department prioritizes. They do not know any other way to do it. Currently, they are building an overpass on a number one highway where many people have been killed. It should have been built 10 years to 15 years ago. All that aside, when I look at the infrastructure across this country, with the rare exception of Walkerton, I do not see a problem with the way in which municipalities service and regulate water. I know that there will be problems because any 100-year-old system, like the one in the city of Toronto, might blow up a dozen times a year. When that happens, people must react quickly with a boil-water advisory and do things properly to ensure that the water is tested and the lines are flushed. I do not see a huge number of problems arising with people in health or, unless you can give us some figures, sometime in the future unless we find down the road that hundreds of people are becoming sick with contaminated water. People running the systems are doing a good job. If they are not doing a good job, I do not know that criminalizing them will make them do a better job. We need to give them sufficient funds to build, rebuild, fix and repair the systems for them to do a good job. Criminalizing them and throwing them in jail will not necessarily make them do a better job.

Mr. Buda: That question is an interesting sociological one, I suppose, but accountability is key in any political system. Those who work in the public sector need to be held accountable for how they spend taxpayer dollars and provide critical services. In terms of how they are held accountable, I cannot answer specifically. Having said that, obviously two of the fellows that were responsible in part for what happened in Walkerton went to jail. Clearly, there is a need in some circumstances to take criminal action, and I do not think that anyone could suggest otherwise.

Where is the line drawn between criminally and not criminally responsible? I agree that accountability is critical, and criminal accountability needs to be considered in certain circumstances.

Senator Brown: That is my point. Accountability is already in place. They cannot run water systems in this country and be deliberately negligent because if they try that, the regulations will come down on them.

Mr. Buda: Absolutely.

The Chair: I have several confirmation questions, Mr. Buda. You said that drinking water is clearly within provincial jurisdiction. Can you explain to the committee how that is so?

Mr. Buda: I should have clarified that the delivery of drinking water is within provincial jurisdiction because municipalities tend to be the body that is set up to deliver drinking water. I am not a constitutional expert so I cannot tell you which sections of the Constitution delineate that responsibility. However, because municipal governments are the delivery agent for water, they are at the front lines of responsibility.

In terms of regulating drinking water, I am not a constitutional expert so you will have to talk to someone in Intergovernmental Affairs, IGA.

The Chair: Established and agreed-to standards exist between the Government of Canada and the provinces and territories. Can you tell us about the enforcement of those standards?

Mr. Buda: My understanding is that each province and territory has different enforcement mechanisms. There are 13 jurisdictions, and we do not pretend to be experts on what happens in each of those jurisdictions. You would have to call upon provincial and territorial representatives to obtain those details.

The Chair: We know about Walkerton and the consequences of some people going to jail. I recall the old saying that the prospect of being executed in the morning focuses one's attention clearly. If you wanted to focus the attention of responsible politicians upon the question of whether they should buy lawnmowers or fix the water system, would the prospect of consequences of failing to do so affect those decisions?

Mr. Buda: Absolutely: That is the principle of accountable, responsible government, although I point out that accountability is a two-way street. If those being held accountable for decisions are not given the tools to allow them to carry out their responsibilities as expected, then that accountability needs to go up; it cannot simply come down.

The Chair: One final question: I will retreat to my redoubt, the place to which I always go in this argument. Water is the only thing that we ingest that is not susceptible to regulation under the Food and Drugs Act. Bubble gum, bottled water, packaged ice, beef, vegetables, soda pop, et cetera, all fall under the FDA. People cannot live without water but they can live without those other items. What rationale could be argued for not making water susceptible to regulation under the Food and Drugs Act? The purpose of the act is to ensure that one cannot purvey a consumable commodity that people buy, either in a bottle or from their taps? Municipalities most often are the purveyors of a commodity that is being consumed. The only thing that we consume that is not susceptible to the Food and Drugs Act and the supporting regulations is water. Have you thought about that aspect?

Mr. Buda: Certainly: You are right in talking about the similarities of all the other things we ingest. However, water is different in that it is a public good. Commercial enterprises are not responsible, at least at this stage in Canada, for delivering it for a profit.

The Chair: They are responsible to a limited degree.

Mr. Buda: Yes, to a limited degree. It is a public good in that it is a public resource. That is a big difference. In many places in this country we can obtain water by bending down and putting a glass in a stream or drilling a well on private property. Those are smaller examples. The one big difference is that all the other substances you mentioned that are regulated under the Food and Drugs Act are delivered by the private sector. In many cases, those commercial enterprises cross provincial boundaries and, therefore, would not be regulated easily by provincial governments. For example, corn flakes made at a factory in Toronto can be shipped to grocery stores across the country, so federal regulations are required; whereas water is delivered wholly and within each provincial and territorial boundary.

It translates to a question of efficiency. It seems more efficient if there are commercial enterprises that selling their products, their commodities, goods or whatever, for ingestion across provincial boundaries.

There clearly is a role for the federal government there. Otherwise, we would have a patchwork of regulations applying to private industry that might be resident only in one province. Regarding water, if it is delivered not only wholly within, and separately within, each province and territory — then, furthermore, by individual democratically- elected and responsible orders of government within those provincial and territory boundaries — my concern is: Would it not be more efficient for provinces to be responsible for the regulation and enforcement as long as they follow a national guideline?

As I said before, we could easily have federal regulations and enforcement. I question whether it would be as efficient as regulating and enforcing it at a provincial level. Again, provinces are democratically elected, responsible and accountable. However, because 13 different governments are designing the regulations and enforcements that are designed specifically for their unique characteristics, they will not have the one-size-fits-all approach that can sometimes hobble federal systems.

The Chair: You agree there should be a one-size-fits-all for corn flakes?

Mr. Buda: Yes, because Kellogg's has their factory in wherever it is and they sell corn flakes across the country. It is more efficient.

The Chair: There should be a national standard for corn flakes. Is that what you are saying?

Mr. Buda: Absolutely, just as I believe there should be national guidelines for drinking water. However, in terms of how to implement that system, I believe that it is more efficient.

The Chair: You have focused exactly on the difference. At the moment, there is a clear consequence for putting out soda pop that would make someone sick. Everyone knows what it is, and that information focuses the attention of the people who make soda pop. We do not have boil-soda pop advisories because the people who make soda pop and sell it understand clearly what will happen if they put out soda pop that makes people sick. What we have is a patchwork of water regulation across the country.

Do you think that public institutions ought to be held to a lower degree of responsibility than private institutions?

Mr. Buda: I think there are two different parts to the response. I am not sure that provinces should be held to a lower standard in this case. They need to be held, perhaps, to different standards due to the context in which they operate. The environments, the geographies and geologies are different; having one set of rules and regulations will miss the boat.

When we have one national set of regulations to cover such a diverse set of geographies and government systems, we could end up creating a situation where there are gaps in the regulation or enforcement because the federal government is not able to think about every single, unique aspect of drinking water systems in the country.

I did not realize that, in Newfoundland and Labrador, surface water provides most of the drinking water. It is seasonal surface water, at best. I did not realize we were not able to craft the regulations in a way to hold people accountable in that particular context.

I think the other key difference returns to Senator Grafstein's comment. We can live without soda pop. People make money from it. We cannot live without water for more than five days.

I do not suggest that anyone should be held to a lower standard. It is how that standard that, in this case are national guidelines, is applied. I believe it is more efficient for those guidelines to be enforced by provinces because they have that intimate knowledge of their local areas. Should Canadians in Saskatchewan expect a poorer water quality than someone next door: absolutely not. Obviously, that point returns to the issue of provincial competence.

The Chair: You would not want meat to be held to guidelines, would you?

Mr. Buda: No: I do not suggest that water safety is held to guidelines, either. It is not. Right now, provinces and territories enforce regulations for water safety. I know that the regulations and enforcement look different in each province. However, there are regulations around water quality in each province.

The Chair: Some provinces have regulations while others have standards.

Senator Grafstein: I am sure we will continue this debate. However, I want to go back to the argument you made about the smaller systems.

Has the federation prepared any analysis of the cost of smaller water systems? You heard Senator Milne talk about these smaller communities. However, have you had access to any information with respect to smaller, efficient systems? It seems to be another stumbling block in terms of establishing a national regulation. Have you looked into that area?

Mr. Buda: We certainly have. It is an interesting segue back to the example of the Green Municipal Fund. Those approaches are the kinds they are looking for. The Green Municipal Fund is searching actively for municipalities and water service providers that they can fund to answer that question: How do we provide more efficient water in smaller communities? My sense is that it is an ongoing challenge.

Senator Grafstein: The Canadian government, Department of National Defence, transports water systems to Afghanistan and to Iraq. It is not a big problem. It is a small problem. We do it. I suggest that the federation talk to the Department of National Defence and ask them how they handle their engineering and cost allocation for smaller things. They do it all time.

The Chair: I am not sure you want to go there for efficiency.

Senator Grafstein: Mr. Chair, I am serious about this. We are giving these massive numbers to say, ``We cannot do this because it will cost more.'' However, the people who say it will cost more do not know what the costs are. That position is irresponsible. I am not directing this remark at you, Mr. Buda. I am directing it to my frustration about this situation.

They build the Rocky Mountains of costs to arrive at the other side of clean drinking water. When we examine the Rocky Mountains, they are not Rocky Mountains. They are little valleys and pathways. At the end of the day we need facts before policy. We have few facts from the people who oppose this bill. We have a lot of rhetoric, we have compassion and laissez-fair but we do not have facts.

The American government, the U.S. Marine Corps — in which I am an honorary Commandant — ships water systems to every place in the world. Some of the component parts are made in Canada. We have terrific technology in Canada for water and there is technology in the Middle East.

This is not new stuff. However, it is new to the municipalities who argue that they need more money from the federal government without taking the responsibility of telling us how much and how efficiently they can deliver a public health system, which Senator Nolin says is their first priority.

Let us be real here. We are talking about virtual reality. Please, give us some help when you talk about costs. It is not hard to do. Phone the Department of National Defence or the U.S. Marine Corps. Tell the Commandant of the U.S. Marine Corps I told you to call him.

The Chair: Senator Grafstein is exactly right. There are water systems that are about the size of two or three of these tables put together that do not cost all that much money. They put out significant quantities of water, inputting much worse quality water than most of the water we have run into, in even the smallest municipality in Canada. That technology is worth a note in your next newsletter to municipalities.

Mr. Buda: Absolutely.

Senator Brown: I have one comment on water systems in municipalities. In the last two years, they have been testing new sewage systems they claim can be used on as small a scale as 6 to 12 houses. The product from them is drinkable. They have not talked me into drinking any but that is what they claim.

The Chair: Parts of Los Angeles, speaking anecdotally, are now used to the idea of toilet-to-tap. That is what is happening. We must understand that there is no such thing as pure water. There is no such thing as new water. All the water that we drink has been through a whole lot before we drink it.

Do the witnesses want to add anything before we close?

Mr. LaSalle: No, thank you.

The Chair: You have been good witnesses and your answers have been useful to us. We are grateful for your patience, as Senator Grafstein always says, and for taking the time to be here this morning. It has been most interesting.

The committee adjourned.