Water Privatisation in Canada
Introduction
The global population in Canada continues to increase, leading to high demand for water. Canada is an untapped market for profits. Freshwater should be treated as a resource that is provided by the government at relatively free or low prices. It will lead to a reduction of health hazards from industrial pollution and factory farm inputs. The Canada top cities contribute to half of the country’s output but only collect 6% of the tax dollars; hence they are open to private sector claims that lead to manipulation (Bates, 2017). In terms of water consumption, Canada is the second-largest in the world. Despite that, water is a vital resource; its prices have been kept relatively low while its waste is high. It encourages proper wastewater management because water prices are low with direct and indirect subsidies. Water prices can be reduced by water privatization, which involves the transition from country owned and operated water system to a system where water is treated as a tradable commodity, which is subject to private property rights. Canada has adopted this mechanism to protect its water resources.
Water privatization exposes water to market forces, which will encourage proper management and efficient prices (Bates, 2017). Water privatization contributes to new costs for water that will reach an equilibrium between demand and supply. The water conservation will become more crucial and will be used less wastage due to market-induced prices.
In Canada, inadequate funding since the 1990s has forced municipalities and cities to turn to the private sector (Bates, 2017). Privatizing water involves transferring from management and control of water supply networks to the management of Private Corporation. It also occurs through a public-private partnership to protect the waste of water resources. In Canada, many community people require expensive infrastructure for sanitation networks, water distillation systems, and pipe installation. The main goal for water privatization is to maximize profit in municipalities and cities by creating a proper, efficient, well-run system because it is a cost-effective model. The municipal government of Canada estimated water and wastewater infrastructure to have a deficit of 33 billion dollars (Bates, 2017). The purpose of this paper is to analyze the water privatisation in Canada municipalities and cities.
How municipal and cities fared when they privatised their water system in Canada
The civil and cities manage positively and negatively when they privatise their water systems. The significance of water privatisation in Canada is it reduces wastewater and maximizes water profits from private water corporations acting to manage water systems. The privatisation of water supply networks in Canada is accompanied by economic principles of the water system, which focuses on profit-making and profit maximization (Zafra-Gómez, López-Hernández, Plata-Díaz& Garrido-Rodríguez, 2106). First Nations in Canada municipalities and cities require an upgraded water system in areas such as water and sanitation, which influences water privatisation to reap more profits. Many municipal and city water systems adopt an economical approach to water pricing to reduce the notion by people that they can only pay what they afford. Don't use plagiarised sources.Get your custom essay just from $11/page
In Canada, water privatization has led to water conservation, and 50% of municipalities have a government-run water supply system (Zafra-Gómez et al., 2106). Water privatisation led to the availability of clean and safe water in towns and cities in Canada. The communities enjoy proper and efficient sanitation. The municipalities enjoy the benefits through increased revenue from the tax. The private corporation dealing with water conservation has imposed trade agreements with the federal government to promote proper water trade. According to a report from Canada municipalities, to protect our water resources and services, the country must protect the resources from all unregulated trade agreements (Zafra-Gómez et al., 2106). This is because the communities require long-term infrastructure that addresses municipal infrastructure deficit, and add funds aimed at supporting water and wastewater facilities in metropolitan and cities to meet federal standards.
The municipality government provides the majority of water and waste management services. Most towns and cities have been offering safe drinking water and high-quality sanitation. Municipality requires funding to expand the water infrastructure systems to provide sufficient water services to the people (Zafra-Gómez et al., 2106). It is the responsibility of the municipal government to privatise the water system and ensure proper rights are followed when providing the water services.
The pressure from water privatisation increases every year despite the recorded failure in Canada. The municipalities have rejected much water privatisation contracts in fear of increased poor management of water utilities. In 2003 the city of Hamilton closed the Public-private partnership water privatisation due to increased environmental problems and mismanagement by several private water sectors (Zafra-Gómez et al., 2106). The sewage spills flooded in Hamilton Harbor city and homes, which led to additional costs in cleaning the city.
In 2010, also the city of Brussels closed a water privatisation contract with Aquiris (Zafra-Gómez et al., 2106). The private water corporation dumped wastewater into the river for nine days while in conflict with the public authority. The residents in the city suffered from unclean water from the river, which is the source of clean water. Municipal streams should be protected from dumping wastewater to provide clean water to the residents in the cities and towns. Private firms should take the lead in promoting proper maintenance of water resources, such as a river.
In 2015, the Jakarta private water system imposed a high water fee to the residents, and an inadequate supply of clean and drinkable water and water system operated for 16 years (Staddon, 2106). This water privatisation also impaired the municipal government to monitor the quality of water services to the residents. The water system was returned to public control after the court ruling, which ensured the residents receive proper water utilities and services at affordable prices from the municipal government.
Water Privatisation leads to proper to adequate sanitation facilities and safe drinking water, which is a human right in Canada. It is the responsibility of municipalities to ensure the residents are acquiring water services. Water shut-off policies are standard in Canada (Zafra-Gómez et al., 2106). Residents who are unable to pay water bills are cut off with little resources and later face extra charges from water shut-off and reactivation. The residents in the municipals live in great fear of water shut-off, especially those living at a moderate living condition who cannot afford high prices from private sector water companies. Privatisation of water contracts is difficult to reverse back to public control. Once the municipalities and cities have signed a water system contract to a private company, if the company fails to meet the requirement, it could be challenging to reverse the contracts (Zafra-Gómez et al., 2106).
Privatisation of the water system increase competition between the public and private water companies (Zafra-Gómez et al., 2106). Municipalities that privatise their water system increase competition because firms will have to compete with others for the right to manage water resources, which has led to poor water infrastructure and water delivery services in cities and municipalities in Canada. Private firms can become inefficient and wasteful when they practice unhealthy competition, which means the water and sanitation services offered to them are of poor quality.
Water privatisation undermines water quality. Many private firms’ main plan is to make a profit rather than serving the residents in the cities and towns. The environmental standards have hence compromised that lead to untested water offered to the residents (Bates, 2017). For example, in Walkerton city, six people died as a result of oil contamination in drinking water. The private firm contracted to offer water testing, but it failed to alert the government about the pollution, which leads to the death of residents. The private company that was contracted to test the water was later closed by the municipal government.
Case studies
In Canada, the public-private partnerships model of water and wastewater management has been advocated by the municipal government of Canada cities and the Canadian council to protect water systems (Staddon, 2106). The model argues that private sector involvement in water management will help to increase efficiency, reduce costs, and improve customer accountability. Many cities have suffered negative impacts on public-private partnerships. In 1993, Moncton city suffered from constant water advisory boil, which was caused by discoloration and poor quality water with lousy taste (Kitchen, 2017). The cities open up for bidding with three firms in fear of the increased cost of maintenance. During this period, the residents paid high water fees. Today, the residents in this city pay high water rates charges compared to the prices before the public-private partnerships. According to the municipality report, the water rates increased by 60% between the years 1998 to 2000 (Kitchen, 2017).
In 2008, the municipality of Canada recorded competition between the private firms and municipal government (Kitchen, 2017). The private firms focus on pursuing a new market for the First Nation communities while the municipal government seeks to address the growing water crises in the cities. The municipal government funding of water infrastructure has been inappropriate and inadequate to address the water crises in the cities. The federal government advocates for water privatisation to take control of the water services in the First Nations communities through the public-private partnership (Staddon, 2106). It has contributed to the privatisation of water systems to provide quality water services to the first nation communities, which will increase the profit margins in the municipality council.
In 2002 in the city of Halifax, the Suez private corporation was supposed to build sewage treatment companies to operate in the town (Kitchen, 2017). The three sewage companies ensured proper sewage management in the city. In 2003, the corporation failed to meet the contract agreement, which led the Halifax municipal council to withdraw the contract. The corporation was unable to meet the environmental water standard, which would have lend to high costs to taxpayers. The municipality government completed the project.
In 2014, the Hamilton city, through a public-private partnership, signed a contract with Philip’s environmental group and utility to operate the water and wastewater treatment plants (Staddon, 2106). The contract targeted to create more profit for the city and cutting costs like labor. The wastewater treatment had operation failure that left many homes and businesses covered with raw sewage, chemicals, and heavy metals. The company was blamed for the poor operating machine in the wastewater treatment plant. It unplanned the high costs of cleaning the city and compensating those who were affected (Staddon, 2106). Privatisation of water system should undergo rules to ensure they focus on the lives of people and not the profits made from the business.
The private water system has begun to stall in Canada. Municipal and cities government has started to own back their water and wastewater management roles of the people living in the cities and towns (Staddon, 2106). Many communities in the cities believe that municipal water utilities offer better services and operation when they are owned publicly by the municipality government
In conclusion, privatisations of water are sharing of water services done by the municipal government by private sectors. Freshwater should be treated as a resource that is provided by the government at relatively free or low prices to the residents in municipalities and towns. Canada has an untapped country with potential water benefits. The Canada top cities contribute to half of the country’s output but only collect 6% of the tax dollars; hence they are open to private sector claims that lead to manipulation. Private firms target the Canadian water management sector to make profits that lead to economic growth in the country. Canada’s municipal and cities have privatised water sectors to make profits because private firms charge water at high rates at residents.
Water privatisation has positively and negatively impacted the municipalities and cities. The towns and cities fared negatively and positively after water privatisation. The significance of water privatization in towns and municipalities in Canada is access to proper sanitation and clean water; transition by water privatisation exposes water to market forces, which will encourage proper management and efficient prices. In Canada, water privatisation has led to water conservation in cities and municipalities.
Through water privatisation, the municipalities and cities faced high water prices rates from the private sector firms compared to water services provided by the municipal council. The towns have rejected much water privatisation contracts in fear of increased poor management of water utilities. Water privatisation undermines water quality and services. The aim of many water services private firms aims to make profits rather than caring for the needs of the residents in the cities.
The case studies associates with water privatisation in Canada are the Hamilton city, where through a public-private partnership, it signed a contract with Philip’s environmental group and utility to operate the water and wastewater treatment plants. The wastewater plant failed and led to raw sewage spills in the city. Secondly, the Moncton city suffered from constant water advisory boil, which was caused by discoloration and poor quality water with bad taste. The cities open up for bidding with three firms in fear of the increased cost of maintenance. The residents suffered increased water price rates. Water privatisation in Canada has been focusing on making profits instead of providing efficient water services to the residents. The federal government should address the proper water privatisation mechanism in municipalities and cities.
References
Bates, R. (2017). Water, investment, and sustainability. In International Natural Resources Law, Investment and Sustainability (pp. 242-262). Routledge. https://www.taylorfrancis.com/books/e/9781315726076/chapters/10.4324/9781315726076-14
Zafra-Gómez, J. L., López-Hernández, A. M., Plata-Díaz, A. M., & Garrido-Rodríguez, J. C. (2016). Financial and political factors motivating the privatisation of municipal water services. Local Government Studies, 42(2), 287-308. https://www.tandfonline.com/doi/abs/10.1080/03003930.2015.1096268
Staddon, C. (2016). Managing Europe’s water resources: twenty-first-century challenges. Routledge.
Kitchen, H. (2017). Paying for Water in Ontario’s Cities: Past, Present, and Future. Institute on Municipal Finance and Governance https://tspace.library.utoronto.ca/handle/1807/80200