According to the newly released Drummond report, the government of Ontario should immediately take a number of steps to ensure that infrastructure services are efficiently delivered to the public. Water and wastewater infrastructure assets were explicitly referenced in his report along with several recommendations. A full cost recovery model for water usage, similar to how the electricity sector operates, is the primary recommendation for the water and wastewater sectors.
Drummond highlighted the fact that “average capital investment chronically lags what is actually needed by $1.5 billion per year. In these two sectors, where the equivalent of about half of the $72 billion in municipally owned assets used to deliver these services needs renewal over the period from 2005 to 2019, a funding gap of that magnitude poses serious fiscal risks.” He further highlighted Alternative Financing and Procurement tools as an option for renewing infrastructure at a sustainable and fiscally reasonable manner.
In addition to recommending a full cost recovery model for the maintenance and development of water infrastructure, Drummond also made a number of water related recommendations on the use and monitoring of water resources. Specifically, the cost of water management to the ministries of Natural Resources and the Environment was mentioned, with the recommendation to develop a payment system where the burden of cost falls on the “beneficiary’s shoulders” and not on the public’s.
Three tiers of usage are discussed in the report including high, medium and low volume users. High volume users include industries such as cement and beverage manufacturers along with canning/pickling facilities. Medium volume users consist of industries such as mining, construction, wood production and recreational facilities. Low volume users include electricity generators such as hydroelectric and nuclear facilities. According to Drummond the Ontario government spends approximately $15 million a year through various ministries to manage water quantity and encourage efficient use but recovers only a fraction of that through the issuance of permits.