It is heresy, they say. Blasphemy! Amongst environmental circles the sheer word is nary spoken without a plateful of disdain. Its polysyllables scathe one's ears, bringing forefront to the mind visions of fat cigars, corporate suits, a desertified planet and only the green found in your pocket.
The word--dare I say it?!-is privatization.
Melodrama is certainly not unique to environmentalists. Those of us who have gone through puberty know that all too well. It is not always warranted, but a growing coalition of Winnipeggers feel the drama unfolding around the word in their city is more than appropriate.
The city of Winnipeg (pop. ~650,000) needs massive upgrades of its drinking water systems in response to a crumbling infrastructure and new health regulations from the province. The city's estimated price tag is coming in at around $1 billion. That's a lot of money, especially for one of Canada's--it is the coolest one--'have-not' provinces.
The city is in a bind. The city's Mayor, Sam Katz, says the city can't afford it on its own. The solution appears to be to get somebody else to help pay for it: the private sector. The proposal, which is scheduled to be tabled to city council in the next few weeks, would create an independent utility to manage the city's water system and update the infrastructure. The controversy lies in the public-private partnership that would create the new utility.
Aghast! There is that word again. Private.
Many local residents, along with a slew of well-known observers including Maude Barlow, are concerned that the public-private partnership will ultimately transform into a completely privatized system where a private company could raise rates and restrict supply as it sees fit. Winnipeg being the landmark pioneer that it is, the domino effect would appear and the rest of Canada could be privatized. But in all seriousness, this is something we should be concerned about.
Many years ago, the Bolivian city of Cochabamba privatized its drinking water supply to an American company called Bechtel. Overnight, the price of water skyrocketed and before anyone knew what hit them they were putting a hefty chunk--almost equal to their rent--of their already small income towards drinking water. Riots ensued, people were killed and the company was kicked out. We don't want such a thing in Canada. Unlikely in Canada, but water is a special thing.
Katz has openly stated that this would not be a pure privatization of Winnipeg's water because 100% of the assets of this company would remain city-owned. However, other councilors and members of the public are criticizing the unclear language in his proposal he plans to table to city council. He doesn't dispute this fact and claims he'll clear it up by the time the meeting rolls around in a week or so. Several people, including many councillors, don't believe him and would like the proposal delayed until September so everyone can understand it properly.
There might even be a city-wide referendum on the idea. I wouldn't be surprised if the referendum ends up costing a pretty penny, too. Perhaps they should privatize that...I kid because I love.
Personally, I don't think they're planning to privatize the city's drinking water system. That would be insane. But I do think a public-private partnership could be dangerous. In these situations, the public ends of doling out taxpayer money and the private group makes a profit. But such a situation is not very surprising. After all, Canada's municipal water systems are all getting old and are in need of repair, but it gets more expensive every minute to do it. And in the more conservative, smaller-government mindset we find ourselves in, the governments throughout Canada are a little less trigger happy than they used to be with cash.
Establishing an independent, arms-length, city-owned utility to manage the city's system would be a smart idea. Several cities have done so. Peterborough, though not as large as Winnipeg, has had one for many years that handles water, sewage and electricity. Judging by the budget size of some programs I'm familiar with of theirs, I don't think they're struggling for much cash.
Despite the worries over the proposal, several people are in full support of privatizing the system. It will improve the water quality, make the service more efficient and ultimately make everyone better off because the free market rules all, they say. Hogwash. If it were a competitive market they might have a case in an economics class, but this is water and a monopoly does not make the world a better place. Efficiency and quality are interesting points, but the government already has very high standards for water quality and the efficiency might come at a cost of very high rates. Not to say pricing water is necessarily evil, but something tells me a monopoly would take it too far.
But back to the actual proposal. What they should do is set up the utility, keep it completely city-owned, pay the private firm a management fee to keep them happy if they continue to be involved but revenue control will remain in the hands of the city where its answerable to the public and not shareholders.
Oh, and if cost is such a problem, didn't the federal government fork out a couple tens of billions of dollars for things like this?
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