Ontario water privatization risks exposed

“It is especially concerning to see water, life itself, being set up to be taken out of public hands and placed under a for-profit corporate model. Nobody asked for this.”

That warning, from CUPE Local 241 Vice President Matt Manassis, cuts to the core of the debate around Ontario’s Bill 60. At stake is public trust in the systems that deliver something as fundamental as clean water.

Manassis points to Hamilton as a cautionary tale. In the 1990s, the city privatized its water and wastewater systems. The results were stark: the workforce was cut in half, costs increased, and 15 million litres of raw sewage spilled into Hamilton Harbour. Homes and businesses flooded, and residents bore the financial burden. Years later, after sustained public pressure, Hamilton returned the system to public control, saving millions and restoring accountability.

This is not an isolated example. CUPE Ontario President Fred Hahn argues that similar patterns emerge whenever profit enters essential services. “We’ve seen it in health care, in hydro distribution, in transportation, when private profit is mixed in, the focus shifts to generating revenue,” he said.

The risks are not abstract. In Walkerton, Ontario, failures linked to deregulation contributed to a deadly E. coli outbreak. Seven people died, and thousands became ill. The consequences of weakened oversight in water systems can be immediate and severe.

So, what does Bill 60 propose?

According to a legal review commissioned by CUPE Ontario, the legislation (specifically Schedule 16) does not guarantee that water and wastewater corporations will remain publicly owned. Instead, it grants the Minister of Municipal Affairs and Housing discretion over ownership structures. Despite government references to “municipal service corporations,” that term does not appear in the legislation itself, raising concerns about how public these entities would truly be.

Labour and employment lawyer Simon Archer underscores the ambiguity, “The word public’ in the name does not have any real legal effect. The legislation does not guarantee that water and wastewater corporations will be held by a municipality or other public entity.”

This lack of clarity matters. Language shapes perception, and critics argue that the bill’s framing may obscure its practical implications.

Academic experts echo these concerns. Meera Karunananthan, Assistant Professor of Geography and Environmental Studies at Carleton University, stresses that public control over water systems is essential to safeguarding basic rights. She suggests the bill aligns with broader austerity measures, where cost-cutting and privatization risk undermining equity and public interest.

David McDonald, a professor at Queen’s University, adds that global evidence does not favour privatization. “Privatization generally does not work; it is generally more expensive, less accountable, and reduces transparency,” he said. Many cities, he notes, have reversed privatization efforts, bringing services back under public control after negative outcomes.

International data reinforces this trend. The World Bank has reported that 37% of private investments in water and sanitation projects become distressed, cancelled, renegotiated, or otherwise troubled. These renegotiations often favour private contractors, leaving governments and users to absorb higher costs.

Case studies from the United States further illustrate potential risks. In Pittsburgh, a financially distressed city contracted a private firm to manage water services. Cost-cutting measures included staff reductions and changes to water treatment processes. Lead levels rose above safety thresholds, and rates increased. Residents filed tens of thousands of billing complaints, and legal action followed.

In Flint, Michigan, a switch in water sources combined with inadequate treatment led to a public health crisis. Lead contamination affected thousands of residents, and an outbreak of Legionnaires’ disease followed. Investigations and lawsuits resulted in significant settlements, though responsibility remained contested.

These cases highlight a consistent pattern: when cost reduction becomes the priority, system integrity can suffer.

Critics of Bill 60 also raise equity concerns. In both the U.S. and Canada, privatization efforts have disproportionately affected racialized and economically vulnerable communities. In Ontario, Peel Region (identified as a potential pilot area for reforms) has a significantly higher proportion of racialized residents than the provincial average. Observers question whether these communities may face greater risks under new ownership models.

Historical parallels in Ontario add another layer. Hamilton’s earlier privatization involved multiple corporate stakeholders, including international firms and pension fund investments. One such entity, Thames Water, later became financially troubled, with major investors writing off significant losses. These examples underscore the volatility that can accompany privatized infrastructure.

Ontario NDP leader Marit Stiles frames the issue as one of governance and accountability. She argues that Bill 60 shifts decision-making away from communities and toward corporate structures driven by profit. “We know that we can’t rely on the Ford government to put people first, especially when there’s profit involved,” she said.

Supporters of public water systems emphasize that accountability is clearer when services remain publicly owned. Elected officials can be held responsible, transparency requirements are stronger, and decisions are more directly tied to community needs rather than shareholder returns.

At its core, the debate is about priorities. Water is not a typical commodity; it is essential to life, public health, and economic stability. Decisions about its management carry long-term consequences. As Hahn puts it: “We need to band together to force the Ford Conservatives to reverse course here. No one should profit from our drinking water.”

The question for Ontarians is whether privatization is efficient, and if it aligns with the values of equity, accountability, and public safety. History (both local and global) offers clear warnings. Whether those lessons are heeded remains to be seen.