Social Planning Council of Winnipeg

The Hon. Greg Selinger
Premier
204 Legislative Building
450 Broadway
Winnipeg, MB R3C 0V8

April 30, 2010

Dear Premier Selinger,

On July 22, 2009, Winnipeg’s City Council ratified the motion to create a Municipal Corporate Utility (MCU), an arm’s-length organization, for the purpose of owning and operating the City’s water and waste-water assets. According to its business plan, the MCU would function under the governance of an appointed Board, setting policy and overseeing the day-to-day operations. This MCU would then seek out the expertise of an international private-sector partner, for designing, financing, building, and operation of its waste-water services. As you know, the City is now in the process of asking the Province to alter its Charter, to permit the creation of the MCU.

Three international firms have been shortlisted as possible private-partners: CH2M Hill Canada Ltd.; Black & Veatch Corp.; and Veolia Water Canada Inc. Notable experts on the topic, such as Maude Barlow from the Council of Canadians, have raised serious allegations concerning these companies’ reputations for environmental and human rights abuses.

Wading into the debate is the Frontier Centre for Public Policy (FCPP) which has just released a seven-page report, in an attempt to highlight the benefits of Winnipeg’s plan to create the MCU. The author, Will Randall, makes several assertions about the merit of the City’s business plan, which in our opinion are misleading and even false.

Randall claims that, “Under the proposal, the [City] Council would represent the residents of Winnipeg; there would be no out-of-town shareholders”. This is contrary to the City’s business plan, which states that the international private partner may control up to 49% of the partnership (pg. 37-38). The MCU may also create multiple subsidiaries as it sees fit for profit generation and other business lines, which may also be up to 49% owned by the private partner (pg. 47).

Randall also cites “increased transparency” as a positive component of the MCU Plan. Just the opposite will happen, according to our analysis – public transparency is likely to decrease. We are very concerned that City Council, and by extension the public, will have a reduced level of input into the strategic direction of the MCU. In contrast to the public records and accountability at City Hall, Board meetings for the MCU would be kept entirely secret, with a “once-a-year” public meeting by the MCU for public comment (pg. 48). This will severely limit community input.

The FCPP’s report cites examples of what it calls successful public-private-partnerships (P3’s), such as Utilities Kingston. We are aware that elsewhere in Ontario, the recent experience of the City of Hamilton with private-sector waste-water management was a disaster, leaving environmental and fiscal ruin in its wake (CBC Radio, “Hamilton’s Crown Jewel”, Christopher Grosskurth, February 5^th 2003).

The City’s proposal does give control of water rates to the Public Utilities Board (PUB), a quasi-judicial body that gathers evidence, hears testimony and makes independent, unbiased decisions. The Social Planning Council supports this recommendation.

Perhaps more alarming than what the City’s business proposal says is what it does not say. There is no consideration given to the long-term ramifications of such a proposal on population health, environmental sustainability, water quality, or the effect of increased rates on low-income groups. The fiduciary obligations of the Directors to act in the best interests of the Utility (pg. 51) would not necessarily be in the best interests of Winnipeggers.

The Social Planning Council therefore makes the following requests:

·         Detailed information about the process for provincial approval of the City’s application. What stage is it at now?

·         Postponement of the Province’s decision regarding the City’s proposal until after the 2010 municipal election. Winnipeggers were not given the full opportunity to become informed last summer about the issue. Community discussions sponsored by the City were inadequate at best. They deserve the chance to have dialogue on this issue, and the upcoming municipal election will provide that opportunity.

·         That the province undertake its own assessment of the proposal, with establishment of an expert panel representing key relevant disciplines such as community health, disaster management, engineering, socio-economics, city-planning, legal experts, and First Nations interests.

·         The proposal should also require a licence from the Clean Environment Commission, which has been an integral part of this issue since its inception.  

A safe water supply and waste water treatment are essential public services, critical to the very life of the community. We believe greater transparency, environmental protection and international expertise can be achieved even without the creation of the MCU, by placing greater responsibility and resources into the public sector. We implore you to listen to the concerns raised by thousands of Winnipeggers to reconsider the City’s proposal, and postpone your decision on the amendment to the Charter until after the 2010 civic election.

We look forward to your response on this matter.

Sincerely,

Wayne Helgason
Executive Director
Social Planning Council of Winnipeg

Sandy Gessler
Board President
Social Planning Council of Winnipeg