Editorial: Out of the box infrastructure idea

Municipalities in Ontario are facing a chicken-and-the-egg problem in handling infrastructure and the growing housing crisis. It has been well documented that the province needs more housing for the ever-growing population. Just as well documented is the struggle municipalities have – especially smaller or rural municipalities like South Dundas – in being able to maintain existing infrastructure and expand that infrastructure for new housing.

The general rule of thumb for new infrastructure is that growth pays for growth. This is done through agreements with developers, connection charges, and development charges. South Dundas has begun the process of implementing development charges, one that will take years of meetings to implement. Some argue that development charges limit the municipality’s “competitive advantage” compared to neighbouring municipalities that already have development charges in place. It is a challenging argument since South Dundas’ building boom is relatively quiet compared to our neighbours.

Paying for municipal growth often takes the form of debt. Water and wastewater treatment plants, water towers, pumping stations and all the underground infrastructure can be financed by municipalities, and paid for by the users who benefit. But that debt counts towards the overall borrowing capacity of places like South Dundas, which limits the use of debt financing for other projects that could help grow the community.

A recently released report by the Task Force for Housing and Climate looked at ways of getting more homes built faster, better, and with an eye on being climate friendly. One out of the box policy idea in the report could solve both parts of municipal infrastructure problems with a change in how these utilities work – by making water/wastewater infrastructure utilities instead of municipal enterprises.

By creating a public utility company – similar to that of a hydro-electric distribution company – the service is separated from government and able to operate at arms-length. This is not a foreign concept even in South Dundas, which is the largest shareholder municipality of electricity operator Rideau-St. Lawrence Distribution. RSL maintains and operates the existing infrastructure, and expands to places where service is required. A water/wastewater utility, if publicly owned, could finance capital through the debt markets like any other business. Using RSL as an example, many municipalities could combine resources for operations and repairs through common ownership. The end user should see no difference other than the label on their water bill.

By relieving municipalities of the responsibility to plan, operate, repair, and grow their water/wastewater infrastructure systems, it enables that same government to focus on its priorities, and gives them the debt breathing room to make improvements needed elsewhere.

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