Commission on the Reform of Ontario's Public Services

For example, the Long-Term Infrastructure Plan (LTIP) commits to requiring universities,
municipalities, social service agencies and other transfer payment partners receiving
significant provincial capital funding to publish a detailed asset management plan. While this is
laudable, revitalizing Ontario’s public infrastructure will require more robust measures to keep
these assets in a state of good repair.
Recommendation 12-1: Place more emphasis on achieving greater value from existing
assets in asset management plan reporting requirements than is currently proposed in the
Long-Term Infrastructure Plan for certain organizations (e.g., universities, municipalities, etc.).
There are also cases where the fees charged for services provided via publicly owned
infrastructure do not fully cover costs. Where discrepancies exist, the gap falls to taxpayers.
A prime example is in municipal water and wastewater services, where average capital
investment chronically lags what is actually needed by $1.5 billion per year. 3 In these two
sectors, where the equivalent of about half of the $72 billion in municipally owned assets used
to deliver these services needs renewal over the period from 2005 to 2019, a funding gap of
that magnitude poses serious fiscal risks. 4 While a degree of “catching up” has occurred,
stable investment over the long term is more efficient and results in greater intergenerational
fairness; 5 Alternative Financing and Procurement (AFP) could be a useful tool in this regard.
Moreover, full-cost pricing in water and wastewater services has the added benefit of
encouraging conservation — an area in which Canada desperately lags the world’s best. 6 The
electricity sector already operates on a cost recovery model; so too should water and
wastewater services.
Recommendation 12-2: Implement full cost pricing for water and wastewater services.
Finally, specific sectors will need to fully consider their approach to infrastructure investments.
As outlined in Chapter 7, Post-Secondary Education, universities and colleges should find
ways to optimize the use of existing space before new capital projects are approved.
Chapter 5, Health, notes that any marginal operating costs resulting from current infrastructure
expansions and costs from future projects must fit within the health sector’s fiscal constraint
proposed in this report. And Chapter 6, Elementary and Secondary Education, and
Chapter 14, Justice Sector, also have infrastructure-related recommendations.
3 Financial Information Return, 2002–2006, Ontario Ministry of Municipal Affairs and Housing and Ontario Ministry of Infrastructure.
4 Water Strategy Expert Panel, “Watertight: The Case for Change in Ontario’s Water and Wastewater Sector,” 2005,
downloaded from http://www.moi.gov.on.ca/pdf/en/Watertight-panel_report_EN.pdf.
5 V. Gill, “Tapped Out: Efficiency Options for Closing the Municipal Infrastructure Gap,” 2011, Conference Board of Canada.
6 Ibid.
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