Canada-Wide Strategy for Managing Municipal Wastewater Effluent

1. Canada-Wide Strategy for Managing Municipal Wastewater Effluent ECONOMIC & FUNDING TASK GROUP Manitoba Consultation Greenwood Inn December 6, 2007

2. Background • Meeting National Performance Standards and Environmental Discharge Objectives will require a significant investment to upgrade wastewater infrastructure. • Funding issues associated with implementing the CCME strategy is key to the strategy’s success. • Economic and Funding Task Group was established to consider cost issues and funding options.

3. Key Funding Elements • Funding to improve treatment of municipal wastewater is managed in an equitable and sustainable manner • Wastewater upgrading needs to be made a high priority • An increase in infrastructure spending will be required • While municipalities should be encouraged to be self-sufficient, senior levels of government will be required to help fund the strategy • Endorse recommendation that all municipalities shift to full cost accounting as per PSAB

4. Key Funding Elements • Economic challenges faced by small systems will be a major issue during the implementation phase • Recommend that senior levels of government provide seed funding for Environmental Risk Assessments – approximately $66-68 million – in first 5 years of implementation • Once ERA for all facilities complete, the total costs of the Strategy can be determined • Ongoing costs of implementation should also be evaluated

5. Funding Principles • Emphasize economic, environmental, and social sustainability • Economic sustainability option includes proper infrastructure asset management, full cost accounting, full cost recovery of O&M costs • Environmental options support stewardship of resource, conservation, watershed management and water source protection. • Social sustainability options support protection of human health and well being.

6. Funding Principles • Be flexible and take into consideration local and provincial factors including fiscal & human resource capacity of municipality. • Promote opportunities for municipalities to self fund including innovative financing arrangements and private sector investment. • Consider Environmental Risk Assessments in determining upgrading options.

7. Historic Costs • Difficult to determine actual historic spending on wastewater • Municipal spending is greatest - yet capacity to report varies greatly between jurisdictions • $14 billion on water/wastewater since 2000 • Unknown breakdown between water/wastewater • Unclear if municipalities have accurately reported all funding sources • Current spending is insufficient • Likely that requirements of strategy will require increased spending

8. Manitoba Wastewater Facilities

9. Wastewater Infrastructure Funding Commitments • Manitoba Commitments - 2000 – 2007 • Federal Commitment $195,900,000 • Provincial Commitment $ 47,900,000 Total $243,800,000 Municipal Commitment??

10. Jurisdictional Costs • Capital Costs • Costs to meet the National Performance Standards and Environmental Discharge Objectives • Costs to accommodate increase in biosolids • Costs to eliminate CSOs • Non-capital Costs • Environmental Risk Assessments and initial characterization • Annual and environmental monitoring

11. Jurisdictional Costs • Uncertainties with identified costs • Site-specific costs uncertain at this time • Costs that will arise as the strategy is implemented • Costs for CSOs will be high – uncertain as to how high • Costs not included • Costs for systems NOT discharging to surface water • Costs to achieve the Environmental Discharge Objectives (EDO)s • Operation and maintenance costs • Administrative costs

12. Costs of the Strategy • 20 years • $9.9-12.1 billion • Both capital and non-capital costs • Environmental benefits achieved earlier • Year over year costs will be greater (esp. for medium sized facilities) • Bigger burden for less resourced jurisdictions • 30 years • $10.3 – 13.1 billion • Both capital and non-capital costs • Strategy more easily accommodated • More flexibility to manage both CSOs, NPS, and site-specific needs • Inflation could result in a more expensive strategy

13. Implementation Timelines • CCME will recommend a 30 year implementation timeline • Funding for Environmental Risk Assessments in first 5 years of implementation to assess initial effluent characterization and site specific Environmental Discharge Objectives (EDOs) • All high and medium risk facilities will be addressed within 20 years • Allows municipalities with CSOs to address both CSOs and National Performance Standards within 30 years

14. Funding Considerations • All jurisdictions have specific considerations • Funding for municipalities should consider • Size of community • Flexibility to set wastewater rates • Sustainable asset management • Municipal financial position • Community growth prospects • Environmental Risk Ranking and Timelines

15. Funding Sources and Mechanisms • Information on a number of funding sources and mechanisms are included • Innovative transportation revenues/incentives • Government Service Partnerships • Strategic Budget Allocations • Full Cost Recovery • Debt Financing • Public private partnerships • Grants and/or contributions

16. Timelines for Completion • Public review and comment period ending January 31, 2008 • Completion of the Strategy and submission to CCME senior committees for approval Spring 2008

17. Contact Information • Please provide comments by January 31, 2007 to • Jennifer ViganoCCME Secretariat360 – 123 Main StreetWinnipeg MBR3C 1A3(fax) 204.948.2125jvigano@ccme.ca