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WATER INFRASTRUCTURE FUNDING LOOKS PROMISING
Posted on 17 May 2016 by cohu44
FluksAqua Community, FluksAqua insights, Innovation, Utility management, Wastewater Management, Water and wastewater community,
In its first budget, Canada’s Liberal-led federal government delivered on its early promises to invest in “local water and wastewater facilities; clean energy; climate resilient infrastructure, including flood mitigation systems; and infrastructure to protect against changing weather” made during and after the election campaign last fall.
The federal minister of finance, Bill Morneau, announced that the federal government was investing $5 billion over five years into water, wastewater and green infrastructure projects across Canada.
The 2016 federal budget documents released March 22 show that Canada’s federal government will invest:
- “$2.24 billion over five years in First Nations communities for improvements to reserve water and wastewater infrastructure, and waste management.
- $2 billion specifically allocated for a clean water and wastewater fund for cities and provinces to improve their water infrastructure and wastewater treatment.
- $197.1 million to increase ocean and freshwater science, monitoring and research activities for the Experimental Lakes Area.
- $3.1 million to improve nearshore water and ecosystem health by reducing phosphorus and algae in Lake Erie.
- Up to $19.5 million to support the International Joint Commission and manage transboundary water issues.”
Reaction was swift. Kealy Dedman, the president of the Canadian Public Works Association, said in a news release: “The Government’s significant investments in transit, water and wastewater management, and green infrastructure, as well as a cost-sharing funding model for municipalities, are welcome news for local governments.”
WATER INFRASTRUCTURE FUNDING LOOK PROMISING
A key question to consider in the water industry is the overall rate of funding support for water systems, given the tremendous demands that repairs, upgrades and new projects require in North America alone.
Canada is not alone in its investment in water infrastructure. In the wake of the environmental and health disasters affecting the residents of Flint, Michigan, the United States government is facing increasing pressure to invest funds in repairs and upgrades to its water systems. In response, the US 2017 federal budget plans to add another $158 million to the Environmental Protection Agency’s State Revolving Fund (SRF)—the primary source of federal funding for water infrastructure improvements at the state level. Still, while increased support is always useful, some utilities reported that the process is so complicated, it acts as a deterrent to seeking support.
NOT JUST NORTH AMERICA
Australia has created a $500 million (AUS) National Water Infrastructure Development Fund to support planning and implementing infrastructure improvements for 2017-2018. The goal is to “help secure the nation’s water supplies and deliver regional economic development benefits for Australia, while also protecting our environment.”
Some European countries are also building water system support into their budgets. The United Kingdom plans to invest £100 billion by 2020-21 on infrastructure, and £700 million on flood defence.
STRONG ANALYTICAL DATA IS CRITICAL
Global investment in water systems has been studied extensively, with reports from the World Bank and Deloitte and Touche, among others, demonstrating how poorly water infrastructure is funded in comparison to other industries such as electricity, transportation, energy and telecommunications.
In 2007, the Organization for Economic Cooperation and Development (OECD), a world-renowned think tank based in Paris, carried out a broad analysis of infrastructure funding to assess needs from the present to 2030.
The researchers concluded that “public budgets fed by taxes will not suffice to bridge the infrastructure gap. What is required is greater recourse to private sector finance, together with greater diversification of public sector revenue sources.”
ARE PRIVATE-PUBLIC WATER ALLIANCES DESIRABLE?
In March, the US held a water summit to leverage $4 billion in private sector funding commitments for water system improvements. John Holdren, US President Barack Obama’s assistant on science and technology, said, “Water is a critical area of focus, in its quality and quantity. Shifting populations and climate change are exacerbating water challenges. We face a whole array of challenges in the water domain.”
With the increasing attention to water as a critical resource, it remains to be seen how this focus will translate to the necessary funds required to keep water systems delivering quality water to consumers worldwide.
At FluksAqua, we are interested in learning how you see government funding affecting your priorities for water and wastewater management. Our online community is here to engage and support information sharing for the primary benefit of the urban water facilities user community. Our members represent organizations and communities that contribute key indicators to measure and compare the performance of networks globally.