Municipal Submission to ERO:…

Municipal Submission to ERO: Proposed Legislative Changes for Non-Municipal Communal Water and Wastewater Systems

1. Introduction
This submission provides municipal comments on the proposed amendments to the Municipal Act, 2001 and Safe Drinking Water Act, 2002 to enable and require municipal consent for non-municipal communal water and wastewater systems. The municipality supports housing and infrastructure development but has significant concerns regarding long-term risk, environmental protection, and consistency with provincial policy.

2. Lack of Technical Clarity in Proposed Framework
A fundamental concern with the proposed legislative amendments is that the technical criteria and requirements that would govern municipal consent are not yet defined and will be established through future regulations. As a result, municipalities are being asked to support a legislative framework without clarity on the standards that communal systems must meet.
This lack of detail creates uncertainty regarding key elements such as system design standards, financial assurance requirements, lifecycle funding expectations, governance structures, environmental performance criteria, and long-term accountability mechanisms. Without this information, it is not possible to fully evaluate the risks or determine whether the proposed framework will adequately protect municipal, environmental, and public interests.
The municipality recommends that draft regulations or detailed technical guidance be released for review concurrently with, or prior to, finalizing the legislative amendments to ensure that stakeholders can meaningfully assess the full implications of the proposal.
Other technical issues:
• Require water meters
• Distribution piping on public lands and responsibility for repair
• Confusion on whether the municipality can pass water use related bylaws

3. Consistency with Provincial Servicing Hierarchy
Ontario’s established servicing hierarchy prioritizes full municipal water and wastewater services. Non-municipal communal systems are traditionally considered a lower ranked option used only where municipal servicing is not feasible. The proposed amendments risk elevating these systems beyond their intended role, potentially undermining long-term infrastructure planning.

4. Lifecycle Risk and Municipal Liability
Non-municipal communal systems present significant lifecycle risks. In cases of system failure, municipalities may be required to assume ownership and operation, resulting in substantial unplanned financial and operational burdens.

5. Source Protection Implications
If municipalities assume failing systems, obligations under the Clean Water Act, 2006 may be triggered, including technical studies, source protection plan amendments, and ongoing monitoring. These requirements should be completed by proponents prior to municipal consent.

6. Wastewater Regulatory Fragmentation
Wastewater systems are regulated under the Ontario Water Resources Act, creating a fragmented approval framework. Municipal consent may be required before full environmental impacts are assessed, reducing municipal control over environmental outcomes.

7. Financial Sustainability and Hidden Costs
While communal systems may appear cost-effective upfront, they often result in higher long-term costs, including system replacement, integration into municipal networks, and environmental remediation.

8. Infrastructure Fragmentation and Planning Impacts
The proliferation of communal systems may result in fragmented infrastructure, inefficient investment, and challenges in implementing coordinated master servicing plans.

9. Governance and Accountability Risks
Non-municipal systems may lack long-term governance stability. Ownership and operational responsibility may change over time, increasing the risk of system failure and municipal intervention.

10. Equity and Consumer Protection
Residents served by communal systems may face higher costs and reduced service reliability compared to municipally serviced residents, creating inequities.

11. Cumulative Environmental Effects
Multiple communal systems within a watershed may result in cumulative environmental impacts not fully captured through project-level approvals.

12. Recommended Policy Framework
The municipality recommends that regulations include:
- Mandatory lifecycle cost and risk analysis
- Pre-consent source protection assessments
- Integration with OWRA approvals
- Financial securities covering full lifecycle costs
- Mandatory connection where municipal servicing is feasible
- Long-term governance requirements
- Cumulative impact assessment requirements
- Release of draft technical regulations prior to final legislative implementation

13. Conclusion
The municipality supports the Province’s housing objectives but emphasizes the need for a balanced approach that protects environmental resources, ensures financial sustainability, and maintains alignment with established servicing principles. Greater clarity on technical requirements is essential before municipalities can fully support the proposed framework.

To protect themselves, municipalities should push for:
1. Regulated Utility Model (Not Ad Hoc)
• Clear governance structure
• Long-term operator requirements
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2. Financial Controls
• Mandatory:
o Reserve funds
o Lifecycle funding plans
• Possibly:
o Third-party audits
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3. Billing Oversight
• Transparent rate-setting framework
• Protection for residents
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4. Step-In / Failure Protocol
• Pre-defined:
o Who takes over
o How costs are recovered
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5. Security Instruments
• Letters of credit / bonds
• Cover:
o O&M
o Emergency response
o System replacement