The Agenda with Steve Paikin (Audio) - Who Should Control Ontario's Water Infrastructure?

Episode Date: June 24, 2026

As Ontario municipalities face growing pressure to repair and expand aging water and wastewater systems, some are asking whether new governance models could help manage the costs. Could municipal services corporations offer a viable solution, or do they raise new questions about oversight and public accountability? Michele Grenier, executive director of the Ontario Water Works Association, and Barbara Robinson, president of Norton Engineering, join Jeyan to discuss. Then, new research suggests a warming Arctic is reshaping vast lakes in northern Canada, raising concerns about what these changes could mean for freshwater ecosystems. Kathleen Rühland, senior scientist at Queen's University's Paleoecological Environmental Assessment and Research Laboratory, explains what scientists are finding and why it matters.See omnystudio.com/listener for privacy information.

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Find us wherever you get your podcast, and be sure to check out the video version of the show on the TVO Today YouTube channel. Hope to see you then. Kingston is looking at changing how it handles water and wastewater, and let me tell you, not everyone's happy. The city is facing the same challenges as a lot of other places in Ontario.

Its pipes are aging, and it's worrying about how it's going to pay for repairs and future growth. So, it's looking at it. creating something called a municipal services corporation. The city says that it would provide greater financial flexibility, more borrowing capacity, and opportunities for revenue. But it's kicking up controversy. We say the process has been murky and the public has been ignored. Now that's part of a radio ad from a citizen's watchdog group that's telling residents to say no to a municipal services

corporation. So why the objections? Well, there are concerns around higher rates, less transparency, and creeping privatization. So we are going to dig into how these corporations work and whether they're the right answers for Ontario communities. Then, you're probably familiar with the Great Lakes, but what about the so-called northern Great Lakes? Well, experts say that Great Bear Lake, Great Slave Lake, and Lake Hazen are among the most understudied in the world.

But new research reveals they have a lot to tell us about the effects of climate change. This is the rundown. Many Ontario municipalities are struggling with aging infrastructure and how much it will cost to upgrade and expand. But water and sewers aren't optional expenses. Could things called municipal services corporations be the solution? From Washington, D.C., Michelle Grenier is executive director of the Ontario Water Works Association. And here in studio, Barbara Robinson is the president of Norton Engineering. Michelle, great to have you on the line. Barbara, great to have you in our studios.

To be here. Typically, we are an acronym free zone, but there is an acronym that we are going to be using a lot during our discussion. It is MSC, stands for Municipal Service Corporation. A lot of counselors across this province have been talking about, it's been part of their lexicon. Help me understand what is a MSC, and why are we talking about it so much? Yeah, great question. So an MSC is an arm's-length corporation. We have them across Ontario. They're very common in the electricity field. The gas companies have them. And we're starting to talk about developing MSCs for municipalities.

And the MSC would own and operate the water and sewer systems. And there are some advantages and disadvantages, which I guess we're going to discuss here. But anyway, it's an arm's-length organization so that the water and sewer systems, instead of being governed by councils, would be governed by an arm's-length organization. All right. Michelle, help me understand a little bit when we talk about, we're talking about water and sewage. I'm thinking of aging infrastructure. Is that why we're having these conversations right now across this province? Yeah, I'd say there's a few reason, and one of them is asset renewal.

So the MSCs, the Municipal Services Corporation, have the ability to access different financing tools and funding tools than some municipalities do directly. municipalities have debt repayment limits that are mandated and so the transfer of assets to the MSC allows them to forego some of those restrictions. Now, Barbara, we're going to go through a couple of municipalities that are kind of navigating the process right now. Does the size of the municipality matter when we're considering an MSC? Well, it's funny, the CD Howe Institute did an article on MSCs a year ago. And in their article, of course, they're financial people, which I'm not. They mentioned that they thought they would be more appropriate for smaller municipalities. But what we're hearing around the province, I think, is larger ones.

Certainly if municipality is providing water or sewage services to other municipalities, like cross-border sharing agreements, we do that already, but we just have something called a cross-border sharing agreement. Sorry, that was almost an accurate. No, that was almost an accurate. Where do we see that in terms of examples there? Kitscher-Waterloo has a bunch of them. That's where the Waterloo system, the sewers, it's easier to dump them into the Kitchener system than pump or whatever.

So there's all kinds of them around, I would think. Most regions probably have them. So I would just talking about access to additional funding, as Michelle talked about, my concern with that is we are in an infrastructure deficit situation. We are behind in looking after our infrastructure. We have been for many years. So some of the advantages are cited, well, we can borrow a lot more money to catch up with this infrastructure deficit.

Well, you know, I'm not keen on borrowing a lot more money than we're borrowing now because our children and grandchildren are going to have to pay for this. At some point, we have to stop borrowing money and fix the stuff we've got, have the political will to do what we need to do to get our systems back up to stuff. Help me understand this.

I'm under the impression that municipalities have to balance their budgets every year. Is this sort of using an MSC a way to kind of play in for the long term, but not necessarily make a hit for constituents in the moment? So that I'm not entirely sure of. Certainly municipalities carry debts and they have favorable interest rates, but perhaps Michelle knows better whether they're debt. I mean, there's a limit to how much they can borrow, just like an individual.

But the limits would increase with an MSC potentially. But that just means we're going to borrow more and more and more against our children grandchildren's future but I think where there are advantages is you can so municipalities do carry debt they also carry reserves and those reserves have to be set aside for if they're collected specifically for water wastewater infrastructure then they have to be used to deliver those infrastructure elements where the MSC may have an advantage is that they can make decisions that are that extend beyond political terms and you know, You can look at investing in the system and you can make hard decisions about rates and, you know, development charges and things like that that go beyond the scope of your term as an elected official because one of the key features of the MSC is that they are intended to be set up with independent skills-based boards.

And so ensuring transparency and ensuring accountability in terms of how those systems are funded and financed is very important because you want them to be as transparent and as an accountable as a municipal council. but they also have a little bit more freedom in how they make those investments and how they make decisions about which projects to prioritize. There's a few points I want to pick up on there, but I actually want to take a step back a little bit. Michelle, we know and Barbara, that Peel Region will be implementing an MSC. Kingston recently voted to exploring the implementation of one. Innesville has had one since 2016 and Collingwood just rejected one. So in terms of sizes of municipalities, get a good sort of idea there and regions.

Michelle, what are the main factors municipalities would be looking at before deciding yes or no? I think first off, the size one is important. If you look at the union water supply system, they recently incorporated an MSC because the municipality could not borrow enough money to fund the upgrades that they needed to make because they are experiencing such significant. and growth. So that's one aspect. That's sort of at the smaller range of the system. At the broader scale, the MSC, as Barbara mentioned, allows a municipality, or I should say a system, if we're looking at regionalization, it allows you to operate a system beyond municipal boundaries. So if you look at the Lake Huron water supply system that supplies London and seven other municipalities down from Lake Huron, that's a joint management board. It's a slightly different model, but the philosophy is the same. So you can

to amalgamate water systems without having to do a political amalgamation. And so there are economies of scale to be realized there. There is a significant reduction in red tape that can be achieved. And that's sort of at the broader scale. In the Peel situation, again, it allows the three municipalities within Peel region to work together to manage their infrastructure without having to have a regional structure. I do have a big caveat about all this, though. So water and sewer are very closely related to roads, stormwater, engineering infrastructure all kind of goes together.

And when we create an MSC, now we have another party, a third party owning water and sewer, while the municipalities are going to retain the other stuff. So whenever we have two different municipalities that have an interest in the same stuff, for example, the regional structure that we have now. There's a lot of double work getting done and things are getting missed because we have one set of priorities and priorities of council, budgets, stressors, and a second set that are different.

And I see this between regional municipalities and local municipalities a lot. And there's a lot of tripping over, either forgetting stuff or tripping over each other. So from a technical point of view, like down in the weeds, I'm concerned about another... I am curious, you know, as we talk about municipal service corporations can issue debt to fund new water infrastructure,

wastewater infrastructure. We talked about the list of things that municipalities do have to balance day to day. And I am curious, are there any pros to removing that task from the municipality and moving it to an MSC? Well, I think Michelle spoke very well to the pros. There are a number of pros to be sure.

but with my research that I've done across Ontario, I've had occasion to interview everybody in the industry inside out and backwards for years. And what I hear from regional municipalities versus local municipalities is that they don't get along with each other, they don't respect each other, so the locals are always complaining about the regions, the regions are always complaining about the locals. I was city engineer at Kitchener, so I had occasion to work with the regional Waterloo. And yeah, there's not a lot of working together going on,

not to the extent that there should be. And this is causing us problems. When we look at Innesville, I think that's a good example of one that you, as you mentioned, 10 years. Is there some lessons that we can learn from there in terms of what perhaps has gone wrong in terms of an MSC or what's gone right? Yeah. Well, I wouldn't say something's gone wrong, but I've certainly worked for in services and for Innesville directly. And the thing I mentioned about two levels of government, whatever, certainly occurred there, where there was a lot of tripping over each other, you know, different filing systems, different mapping. You can imagine all the complexities that go along with engineering and different priorities.

So I see that everywhere, but I certainly saw that in this film. Michelle? I think to Barbara's point, the relationships between the two tiers, I'd say some are better than others. And I do think it makes the case for there are advantages to having a single tier system. My personal opinion is that we should go up rather than down, but that's obviously not for me to decide. But I think it's important to understand that there are a lot of MSCs that already exist, particularly in the electricity distribution side. And they've worked very well for decades. Now, they do have separate regulations in terms of rate setting and, again, you know, their own corporate structures.

But there are a lot of wins to be seen in that experience as well. Michelle, help me understand the structure of an MSC in terms of accountability and transparency to taxpayers and voters. how does that structure look? Is there representation from council on these boards? It's not entirely clear how that's going to be set up in the Peel Region case, let's say, specifically. But in the other entities, there is normally some representation from elected officials, but the rest of the board members are industry experts, finance experts, legal experts, risk management officials. and so there's a much broader approach to managing the organization.

And the corporation itself is set up where the municipality is the sole shareholder. So that's how they report back. So the company would appear on the municipality's balance sheet. So it's an asset, just like a treatment plan would be. But then the assets are held within that company. Barbara? Although I checked some legal sources. Obviously, I'm not a lawyer,

but it appears that there are mechanisms by which private corporations could invest in these MSCs. We keep saying totally owned by the municipality, but again, according to legal sources, I research, there is a possibility to have part of it privately owned. Are there concerns that's? I'm going to jump in. I'm going to say they can have external investors, but they need to be public entities as investors. So there's a difference between the municipal services corporation and a public utility corporation. And again, I know it's a nuance, but there is one where you could have

private investors, but the MSC is set up to be publicly owned. So whether those investments would be pension funds and other sort of public financing tools is still to be resolved as we move forward in this new world of municipal servicing. Michelle, would there not be concerned if we are getting investment from private entities that perhaps that they are not beholden to taxpayers and voters, but instead to shareholders. Well, again, we already have this. A lot of our transit systems are funded through public-private partnerships. We have a new wastewater chutein plant being built in Mapleton, you know, by virtue of public investment, or sorry, private investment. That is a risk, but I think we are,

there is only one taxpayer at the end of the day. And if we don't find other means, of funding these systems to Barbara's point, they're going to continue to deteriorate and the time to make those improvements in the systems is now. Barbara, you had mentioned Kitchener Waterloo, that's home base for you. Has been in the headlines quite a lot when we talk about water. Help me a little bit.

What's the concern and issues right now when we talk about the sort of water and the infrastructure in place right now when it comes to sort of building and growing the city? Yeah, so there has been a development freeze in Kitchener, Waterloo. In November of last year, the region of Waterloo took a well offline to do some service to it, and when they did, they discovered water levels were lower than expected. This is sort of surprising because all wells have water level. The water level should be

available. It just means somebody wasn't tracking it or looking forward or whatever. So it turns out that the capacity, the water capacity was 97% spoken for. So suddenly they became concerned, well, obviously about the ability to manage additional growth. Now, I will say when I spoke about that two-tier situation, this is exactly what happened in Kitchener Waterloo, because water and sewer are directly connected. So sewers leak, and when they leak, rainwater and groundwater get into them.

And so all over Kitchener Waterloo, we have water supply wells, 120 of them, and they're all located right in the city, right beside sewers, which are leaking. So I'm saying to the region, And look, these sewers are leaking. If we fix up the sewers and get rid of the leakage, the groundwater will stay in the ground. We'll have more water for drinking water.

Where does the money come from to address a need like that if it is in an MSC? Well, it's costing hundreds of millions of dollars, and it's going to come from the taxpayer or the rate payer or whatever. Yeah, so people are going to pay and pay and pay. It's really distressing. Michelle? Well, I've been involved in the Waterloo situation as well. well. And with respect, I'd say it's a little bit more complex than the way Barbara has portrayed it. But the region does have a very distributed system. It is not comparable to other municipalities like

Brantford or Toronto. But I agree it is going to require an investment from the rate payers and likely the province will have to help with some funding in terms of getting them caught up so that they can unlock that development capacity. But they do have a very solid plan to move that risk management framework forward. This is the plan that we are going to see more and more of as we start talking about this throughout the province. So we look forward to following this story. I want to thank you so much, Michelle, Barbara, for your time.

Thank you so much for having it. My pleasure. New research reveals how a warming Arctic is affecting vast lakes in Canada's north and has scientists raising the alarm. Kathleen Ruland is a senior scientist. at the paleo-ecological environmental assessment and research laboratory at Queen's University. And she joins me on the line. Great to have you, Kathleen. How are you doing? Great. Thanks for having me. Help me understand, why did you choose these northern lakes for research?

We're talking about Great Slave Lake, Great Bear Lake, and Hazen Lake on Ellesmere Island as the focus of your study. Well, these are three of the largest and deepest lakes on Earth, particularly Great Slave and Great Bear Lake, They're the largest lakes by area and volume that are entirely within Canada. And yet we know very little about these lakes. So the Lake David Chindler back in 2001 wrote in a paper that the lack of knowledge on these lakes is a national disgrace. So I think most of your viewing audience would probably be more familiar with Laurentian Great Lakes. But Canada really has three or two of the largest lakes in the world that are north of the mountains. 60. So for example, Great Sleave Lake and Great Bear Lake would fit the size of the country of Belgium

in them, so it's huge, and they're very deep. So Great Slave Lake, for example, could fit the CN Tower with room to spare, and the Great Bear Lake could fit the Eiffel Tower with room to spare. So our past research, that's led by Dr. John Small, he heads our lab here at Pearl, our past research on small and medium-sized lakes have found really big biologous. responses to climate warming in the Arctic. But these large huge lakes are extensively ice covered for most of the year, and we really find them to be quite resilient or protected from the full impacts of climate warming. So one of the things that we set out to do because now the Arctic is heating up three to four times more faster than the global average.

So we wanted to see whether these huge, big sleeping monsters are not waking up, are they going to residing up? going to respond similarly or have they responded to this new climate regime? And that's what we're hoping to find out, and that's what we found out. Well, we're talking about these giant, vast bodies of water, but we're really going onto a microscope and looking at these small microorganisms. In layman terms, help us understand diatoms. There are different kinds of algae. But generally, and we'll get into the specifics a little later,

but generally, why are they important to the ecosystems? Well, they are the bottom of the food chain or food webs in, and they are the main alcohol or the main primary producers in oceans and in our lake systems. So they photo synthesize. So they're like, you know, the algae of the water bodies are like grass and terrestrial systems. So they feed the rest of the food chain and they provide energy to the smaller organisms all the way up to the fish species.

So they're very essential to keep that ecosystem fueled. So their cell walls are made out of glass, and they're quite beautiful. But in terms of how we use them for our purposes, for our research, so we want to go back in time. We are paleo-lumologists. So we want to look at lake systems and past lake systems, and we want to use that to establish what the environment was like before anthropogenic. you know, impacts. So these diatoms, because they're made out of cell, their cell walls are made of a glass, they preserve really well in sediments. So, for example, you know, once they die,

they sink to the bottom of the lake and they become part of them, they get incorporated in the mud. So day after day, year after year for hundreds to thousands of years, they accumulate at the bottom of these lakes and they become part of the fossil record. So it's like we could use, use that as a kind of a time machine for these lake ecosystems. So we can go to that lake and take a core or take a tube of that lake sediment, and we have a means to date them. So we know that at the bottom of the core, it's maybe 1815, and at the top of the core, it's 2000.

And then we would spend a lot of time looking at the diatom. So my colleague Neil McLeodoo, he looked at the Lake Hazen cores, and we would spend time looking at these diatoms. And, you know, there's thousands of species. so a whole assemblage of species might prefer, you know, open water, light conditions, and a whole different assemblage would prefer lighter, darker conditions and maybe more ice cover and that kind of thing. Well, let's talk about, well, we actually have some images of that.

So I want to pull that up. Oh, sure. The first photo shows the type of long diatom usually found in these northern Great Lakes. The measurement at the bottom of the photo is in micrometers or millions of a meter. Now, the second photo shows the kind of. pancake diatom that is appearing more frequently in those lakes as a result of climate change. Besides the shape, which is quite obvious here, what are the main differences? As you were just alluding to a little bit in terms of how they sort of deal with sunlight,

but the shapes themselves are quite important as well when we talk about the ecosystems being at the bottom of the web. Exactly. So that larger diatom that you first showed us, it's shaped like a tin can, and they're very heavy. And in terms of, you know, relative to other diatoms, they're a very heavy diatom. And in the water column, they would require turbulent conditions or the movement of the water to keep them afloat in the photoc zone because they're photosynthetic organisms. So they need the sunlight to photosynthesize. Whereas the smaller pancake size diatom, they're very prolific and they are more buoyant. So as conditions change with warming, for example, the warm.

water column would heat up, so it's not as the mixing patterns would get diminished. The water column would heat up and the cold water would sink and we have lighter, a warmer water on top that forms these layers. And we call that thermal stratification. So that is bad news for these large diatoms because they would quickly sink out of the competitive arena. Whereas these small little pancake shapes like the teloita, this is their prime environment. And so they tend to flourish under these conditions. And so that's the kind of thing that we would look at. That's a physical change in the environment.

But diatoms are also very sensitive to different chemical cues as well. I am curious, in terms of the size themselves, what does that mean for zooplankton who are eating on diatoms and then as we move up the food chain for fish? That's an excellent question. Yeah, so those large pancate, those large, you know, tubular diatoms, They're very calorie-rich, lipid-rich diatoms, and they're a very important or nutritious food source for these smaller kind of little organisms that feed on diatoms, whereas the pancake-shaped diatoms, these small cyclotalaeataxa are more nutrient-poor.

And so, you know, there's a big shift in the food source. So in the past, those large diatoms for what dominated, for example, in Great Slave Lake for hundreds of years. So the environment was very stable for hundreds of years. And that was the dominant taxon throughout that lake. And then at around 2000, at the turn of the 21st century, we suddenly get a shift towards these very small, prolific pancake-shaped diatoms that are a poorer nutrient source for the next chain in the food link. And so we have an example of that.

So we can make a comparison, for example, to Lake Michigan. So our colleagues in Minnesota have looked at very similar changes. So they took a core much like we did. And they found very similar changes with these large diatoms shifting to these small taxa. And that had really big repercussions all the way up the food web where that next link in the chain actually didn't fare well. It was completely collapsed. And that had real big repercussions for the fish species up to the food chain. Whether that will happen in these lakes is really hard to tell.

because it's a different system. We don't have invasive species like zebra mussels as we do in the Lrenching Great Lakes. And, you know, the impact, human impacts are minimal. But I think, you know, it may play out a little differently along these lakes, but certainly this is an early warning sign that things are going to change. Well, let's talk a little bit about that. You know, as we mentioned, these are lakes that, for the most part, are quite isolated, very far from where I am here in southern Ontario.

What does this all mean? Right. So if you're living in Toronto, you might think, well, why would I care about these lakes? So if you're living in the north, of course, these are very important lakes for, they're one of the most unpolluted systems of great lakes in the world. But they're important for things like transportation and food security as well as cultural identity, that kind of thing. But if you're living in the South, you think, well, why would I care about this? So I think maybe the best way to explain that is why my colleagues and I were so surprised to see these changes. And, you know, we're talking about Great Slave Lake that's in the south. It's around 61 degrees north all the way to Lake Hazen, which is about 81.4 degrees north.

So many different degrees of latitude. They also have different degrees of remoteness. Great Slave Lake is home to 60% of the Northwest Territories. Lake Hazen has no community, permanent community there. Great Slave Lake has, you know, 35 fish species, Great Bear Lake has maybe 15, and Lake Hazen has only one fish species. So the foodway dynamics are a little bit different. But what we found surprising was the pace and the magnitude and actually the almost synchronous nature of the changes across all of these lakes. And that really highlights the widespread and powerful shift that climate, this new climate regime has on these lakes, that it kind of just, you know,

overrides those differences among the lakes. So, you know, I think we've pushed climate warming to a point now where no lakes are protected. So, for example, Great Bear Lake has always been known as the most unpolluted great lake in the world. And that's certainly true when it comes to things like contaminants and so on. But when we start looking at the microscopic organisms and how things are changing, It's now no longer untouched by climate warming. So I think the take-home message for anyone in the world, whether you're living in Toronto or up north,

that no ecosystem is immune to anthropogenic change and especially not accelerated warming, and that's what we're showing, I think, with our results. An important message. Kathleen, thank you so much for your time. I really appreciate it. Thank you for having me. I'm Jan. Thanks for watching The Rundown. We'd love to know what.

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