Bill 237, Sustainable Water and Waste Water Systems Improvement and Maintenance Act, 2010

Versions

Bill 237 2009

An Act to sustain and encourage improvement in Ontario's water and waste water services and to establish the Ontario Water Board

Note: This Act repeals the Sustainable Water and Sewage Systems Act, 2002. For the legislative history of the Act, see the Table of Consolidated Public Statutes – Detailed Legislative History at www.e-Laws.gov.on.ca.

Her Majesty, by and with the advice and consent of the Legislative Assembly of the Province of Ontario, enacts as follows:

PART I
Purposes and Interpretation

Purposes

1. The purposes of this Act are,

(a) to ensure that public ownership of water services and waste water services is maintained;

(b) to promote full-cost recovery and full-cost accounting of water services and waste water services;

(c) to encourage an increase in scale and capacity in the provision of water services and waste water services to minimize costs to the public;

(d) to improve transparency in the provision of water services and waste water services to the public through the establishment of publicly-owned corporations; and

(e) to create an independent economic regulator with the expertise and authority to administer this Act.

Interpretation

Definitions

2. In this Act,

"Board" means the Ontario Water Board; ("Commission")

"Minister" means the Minister of the Environment or such other member of the Executive Council as may be assigned the administration of this Act under the Executive Council Act; ("ministre")

"municipal auditor" means an auditor appointed by a municipality under section 296 of the Municipal Act, 2001 or section 139 of the City of Toronto Act, 2006, as the case may be; ("vérificateur municipal")

"prescribed" means prescribed by the regulations; ("prescrit")

"professional engineer" means a professional engineer as defined in the regulations; ("ingénieur")

"raw water supply" includes any ground water or surface water in the natural environment; ("source d'approvisionnement en eau brute")

"regulated entity" means a municipality or group of municipalities designated as a regulated entity by regulation; ("entité réglementée")

"regulation" means a regulation made under this Act; ("règlement")

"source protection costs" means the prescribed costs that relate to a source protection measure financed in whole or in part by a regulated entity and includes any prescribed charges or fees imposed on a regulated entity; ("coûts de protection des sources d'eau")

"source protection measure" means a prescribed measure to protect the quantity or quality of any raw water supply that a regulated entity relies upon or may rely upon in the future for the provision of water services or waste water services to the public. ("mesure de protection des sources d'eau")

Provision of water services

3. (1) The provision of water services to the public includes any source protection measure related to the provision of water services and extracting, treating and distributing water.

Provision of waste water services

(2) The provision of waste water services to the public includes any source protection measure related to the provision of waste water services and collecting, treating and discharging waste water.

Provision of services by other person or entity

(3) A regulated entity is deemed to be providing water services or waste water services to the public for the purposes of this Act even if it has, before or after being designated by regulation,

(a) transferred all or part of its authority for doing so to a municipal service board established under the Municipal Act, 2001, a city board established under the City of Toronto Act, 2006 or any other person or entity; or

(b) entered into an agreement with a person or entity described in clause (a) to do so on its behalf.

Trailer parks and campgrounds

4. For the purposes of this Act, water services or waste water services provided at a trailer park or campground do not form part of the water services or waste water services provided by a regulated entity unless designated as such by the regulated entity.

Amalgamated regulated entities

5. If two or more regulated entities amalgamate their water services or waste water services under section 20, they are deemed to be a single regulated entity for the purposes of this Act.

PART II
Administration

Ontario Water Board

Board established

6. (1) The Ontario Water Board is established as a corporation without share capital under the name Ontario Water Board in English and Commission des eaux de l'Ontario in French.

Non-application of Acts

(2) The Corporations Act and the Corporations Information Act do not apply with respect to the Board.

Crown agency

(3) The Board is an agent of Her Majesty in right of Ontario, and its powers may be exercised only as an agent of Her Majesty.

Board objectives

7. The Board, in carrying out its responsibilities under this or any other Act in relation to water services or waste water services, shall be guided by the following objectives:

1. To protect the interests of consumers with respect to prices and the adequacy, reliability and quality of water services and waste water services.

2. To promote economic efficiency and cost effectiveness in the provision of water services and waste water services and to facilitate the maintenance of a financially viable water and waste water industry.

3. To promote water conservation and demand management in a manner consistent with the policies of the Government of Ontario.

Composition

8. (1) The Board shall be composed of at least five members.

Appointment

(2) A member shall be appointed by the Lieutenant Governor in Council.

Term of initial appointment

(3) The first term of a member shall not exceed two years.

Reappointments

(4) A member may be reappointed for one or more terms of office, each of which shall not exceed five years.

Quorum

(5) A majority of the members constitutes a quorum for meetings of the Board and may exercise the powers of the Board.

Chair and vice-chairs

(6) The Lieutenant Governor in Council shall, by order, designate a member as chair and shall designate two members as vice-chairs.

Powers and Duties

Public interest

9. The Board shall exercise its powers and duties in the public interest and in accordance with the principles of honesty, integrity and social responsibility.

Powers

10. (1) The Board has the capacity and the rights, powers and privileges of a natural person for the purpose of exercising and performing its powers and duties under this or any other Act.

Same

(2) Without limiting the powers or capacities of the Board, the Board may establish guidelines governing the exercise of any of the powers and duties under this Act.

Duties

11. (1) The Board shall perform any duties assigned to it under this or any other Act.

Same

(2) Without limiting subsection (1), the duties of the Board include,

(a) reviewing and approving business plans;

(b) analyzing and ruling on quality management certification;

(d) considering requests to increase charges for the provision of water services and waste water services for any customer or class of customers beyond the prescribed maximum amount in accordance with the regulations;

(e) overseeing the submission of progress reports and ensuring that these reports are made available to the public;

(f) establishing and publishing contract templates for the provision of water services and waste water services;

(g) holding hearings, receiving submissions, making decisions and preparing reports regarding, among other things, business plans, issues of service quality, abuse of dominant position, franchise areas, and any other decision, direction or order that has been made under this Act;

(h) informing and advising the Minister with respect to matters that are of an urgent, critical or relevant nature and that are likely to require action by the Board or the Minister to ensure that the administration of this Act is carried out properly; and

(i) examining, reporting and advising on any question respecting water referred to the Board by the Minister.

Employees

12. The Board may appoint employees to carry out its functions under this Act.

Delegation of powers and duties

13. The Board may delegate in writing any of its powers and duties to any person employed by the Board, subject to any conditions set out in the delegation.

Director

14. (1) The Board shall appoint one of its employees to be the Director of the Board.

Powers and duties

(2) The Director shall perform the duties and exercise the powers conferred or imposed on him or her under this Act.

Liability

15. (1) No action or other civil proceeding shall be commenced against any of the following persons for any act done in good faith in the exercise or performance or the intended exercise or performance of a power or duty under any Act or regulation or for any neglect or default in the exercise or performance in good faith of such a power or duty:

1. A member of the Board.

2. An employee or agent of the Board.

Same

(2) A member of the Board is not liable for an act, an omission, an obligation or a liability of the Board or its employees.

Crown liability

(3) Despite subsections 5 (2) and (4) of the Proceedings Against the Crown Act, subsections (1) and (2) do not relieve the Crown of any liability to which it would otherwise be subject in respect of a tort committed by any person referred to in subsection (1) or (2).

Hearings

16. (1) The chair of the Board may direct that a hearing under subsection 40 (4) be held before a panel consisting of one or more members of the Board, as he or she may designate.

One member quorum

(2) One member of the panel constitutes a quorum for the purposes of a hearing.

Jurisdiction

(3) The panel has jurisdiction to determine all questions of fact or law that arise in matters before it.

Parties

(4) The Director of the Board, the person who required the hearing and such other persons as the panel may specify are parties to the hearing.

Notice

(5) The Board shall give notice of the hearing to the parties in the manner it considers appropriate.

Oaths

(6) Every member of the Board has power to administer oaths and affirmations for the purposes of a hearing.

Order

(7) An order of the panel constitutes an order of the Board.

Money and Reports

Fees

17. (1) The Board may charge fees to regulated entities to recover the costs incurred by the Board in carrying out its functions under this Act.

Special purpose

(2) For the purpose of the Financial Administration Act, all amounts collected under subsection (1) shall be deemed to be money paid to Ontario for the special purpose of funding the Board.

Cost of funding Board

(3) The cost of funding the Board shall be paid out of funds appropriated for such purpose by the Legislature.

Audit

18. The accounts of the Board shall be audited by the Auditor General or by another auditor whom the Lieutenant Governor in Council may appoint.

Annual report

19. (1) The Board shall submit an annual report to the Minister every year within six months after the end of the Board's fiscal year that describes the affairs of the Board during that year and includes the Board's audited financial statements.

Report to be laid before Assembly

(2) Within one month after receiving the annual report, the Minister shall lay the report before the Assembly by delivering the report to the Clerk.

Other reports

(3) The Board shall submit to the Minister all other reports on the conduct of its business, other than the annual report, that the Minister may require.

PART III
Regulated entities

Amalgamations

20. (1) Two or more regulated entities may amalgamate their water services or waste water services or both.

Minimum customers

(2) If a regulated entity provides water services or waste water services to fewer than 10,000 customers, that regulated entity shall consider whether it is possible to amalgamate those services with the services of one or more other regulated entities.

Minister's direction

(3) The Minister may direct two or more regulated entities to amalgamate their water services or waste water services if, after considering any advice provided by the Board, the Minister considers it appropriate to do so.

Requirement, amalgamations

(4) Two or more regulated entities shall amalgamate their water services or waste water services if,

(a) under subsection (2), all of the regulated entities determine that it is possible to do so; or

(b) under subsection (3), the Minister directs the regulated entities to amalgamate their water services or waste water services.

Business Plans and Full Cost of Services

Business plans

21. (1) A regulated entity that provides water services or waste water services to the public shall prepare a business plan for the provision of those services.

Same

(2) If a regulated entity provides water services and waste water services to the public, it shall prepare a separate business plan for the provision of each of those services.

Form

(3) The business plan shall be prepared in a form approved by the Board.

Requirements

(4) A regulated entity shall ensure that the business plan meets the requirements of this Act and the regulations, the Safe Drinking Water Act, 2002, any provincial growth management policy, and municipal official plans, and in preparing the business plan, shall take into account,

(a) efficiencies available through technological choice and innovation as well as economies of scale and scope;

(b) efficient provision of services, including existing or revised contracting possibilities;

(d) management of septage on a municipality or multi-municipality basis.

Contents

(5) The business plan must contain the following information:

1. A governance model, a financial model and an accountability model.

2. An inventory of and management plan for the infrastructure needed to provide the water services or waste water services, prepared and certified by a professional engineer.

3. An assessment of the full cost of providing the water services or the waste water services and the revenue obtained to provide them.

4. A description of how the regulated entity intends to pay the full cost of providing the water services or waste water services to the public.

5. Any other prescribed matter.

Full cost of water services

(6) For the purposes of paragraph 3 of subsection (5), the full cost of providing the water services includes any fees charged by the Board, source protection costs, operating costs, financing costs, renewal and replacement costs and improvement costs associated with extracting, treating or distributing water to the public and such other costs as may be prescribed.

Full cost of waste water services

(7) For the purposes of paragraph 3 of subsection (5), the full cost of providing the waste water services includes any fees charged by the Board, source protection costs, operating costs, financing costs, renewal and replacement costs and improvement costs associated with collecting, treating or discharging waste water and such other costs as may be prescribed.

Full metering

(8) A regulated entity shall specify in the business plan that full metering of customers will be used as a source of revenue, subject to any prescribed exceptions.

Submission of business plan

22. (1) A regulated entity that is a municipality shall submit the business plan required under subsection 21 (1) to its municipal council for approval.

Same

(2) A regulated entity that is a group of municipalities shall submit the business plan required under subsection 21 (1) to the municipal council of each of the municipalities for approval.

Auditor's review

(3) After a business plan has been approved by a municipal council under subsection (1), or by all municipal councils under subsection (2), the regulated entity shall submit the plan to the auditor mentioned in subsection (4).

Same

(4) For the purposes of subsection (3), the auditor shall be,

(a) if the regulated entity is a municipality, the municipal auditor;

(b) if the regulated entity is a group of municipalities and has delegated its authority to provide water services or waste water services to a municipal service board, the municipal auditor who is responsible for that board; or

Same

(5) The auditor shall review and provide the regulated entity with a written opinion on the business plan.

Business plan, submission to Board

(6) After a business plan has been reviewed by the auditor, the regulated entity shall submit the plan and the opinion provided under subsection (5) to the Board by a date specified by the Board.

Extension of deadlines

(7) The Board may extend the deadline by which a regulated entity is required to submit a business plan under subsection (6) by no more than six months.

Business plan prepared by Board

23. (1) The Board may prepare a business plan for the purposes of subsection 21 (1) on behalf of a regulated entity if the Board considers it appropriate to do so.

Same

(2) The regulated entity shall reimburse the Board for the costs incurred by the Board in connection with the preparation of the business plan under subsection (1), in the amount determined by the Board and within the period specified by the Board.

Same

(3) If the Board prepares a business plan on behalf of a regulated entity, the regulated entity is not required to prepare or submit a business plan under section 21 or 22.

Approval of plan

24. (1) Upon receipt of a business plan submitted by a regulated entity under subsection 22 (6), the Board may approve the contents of the plan or may require the regulated entity to make specified changes to the plan before approving it.

Same

(2) If the Board requires a regulated entity to make specified changes to a business plan, the regulated entity shall make the changes within the period specified by the Board and shall give the Board the revised plan.

Deemed approval

(3) The Board is deemed to have approved the contents of a business plan prepared by the Board.

Implementation of business plan

25. A regulated entity shall implement its business plan approved by the Board within the prescribed period of time.

Update to Business Plan

Updated business plan

26. (1) A regulated entity shall prepare an updated business plan,

(a) if, as a result of a change in circumstances, the regulated entity has reasonable grounds to believe that the estimate set out in the business plan of the full cost of providing water services or waste water services to the public does not reflect the full cost of providing the services;

(b) if, as a result of a change in circumstances, any other information in the business plan needs to be updated or corrected;

(d) if the Minister directs two or more regulated entities to amalgamate their water services or waste water services.

Board direction to update business plan

(2) The Board shall not direct a regulated entity to update its business plan under clause (1) (c) more than once every five years except in the circumstances that may be prescribed.

Same

(3) A regulated entity shall give its updated business plan to the Board within the prescribed period or, if the Board has directed the regulated entity to update its business plan and has specified a different period in the direction, within the period specified in the direction.

Same

(4) Sections 21 to 25 apply, with necessary modifications, with respect to the updated business plan.

Other Reporting Requirements

Progress reports

27. (1) A regulated entity that provides water services or waste water services to the public shall prepare progress reports, at such intervals as may be specified by the Board, concerning the implementation of its business plan approved by the Board.

Form

(2) A progress report shall be prepared in a form approved by the Board.

Contents

(3) A progress report shall contain the information as may be prescribed.

Submission of progress reports

28. (1) A regulated entity that is a municipality shall submit the progress report required under subsection 27 (1) to its municipal council for approval.

Same

(2) A regulated entity that is a group of municipalities shall submit the progress report required under subsection 27 (1) to the municipal council of each of the municipalities for approval.

Auditor's review

(3) After a progress report has been approved by a municipal council under subsection (1), or by all municipal councils under subsection (2), the regulated entity shall submit the report to the auditor mentioned in subsection (4).

Same

(4) For the purposes of subsection (3), the auditor shall be,

(a) if the regulated entity is a municipality, the municipal auditor;

Same

(5) The auditor shall review and provide the regulated entity with a written opinion on the progress report.

Progress report, submission to Board

(6) After a progress report has been reviewed by the auditor, the regulated entity shall submit the report and the opinion provided under subsection (5) to the Board by a date specified by the Board.

Extension of deadlines

(7) The Board may extend the deadline by which a regulated entity is required to submit a progress report under subsection (6) by no more than six months.

Other information

29. A regulated entity shall give the Board such information as the Board may request concerning the provision of water services or waste water services to the public and shall do so within the period specified by the Board.

Inspection and audit

30. Upon request, a regulated entity shall promptly make its records concerning the provision of water services or waste water services to the public available to the Board for inspection and audit.

Public reporting

31. A regulated entity shall make its business plan approved by the Board, any updated business plan approved by the Board and any progress report available to the public as soon as is reasonably possible by ensuring that the plan or report is,

(a) posted on its website;

(b) published in a local newspaper; or

Governance by Public Corporation

Establishment of corporation

32. (1) A regulated entity that provides water services or waste water services to the public shall establish and maintain a corporation under the Business Corporations Act, in accordance with the regulations, to deliver those services and to own or lease the relevant assets.

Same

(2) If a regulated entity provides water services and waste water services to the public, it shall create a single corporation for the provision of both of those services.

Sole shareholder

(3) A regulated entity that establishes a corporation under this section shall be the sole shareholder of the corporation.

Composition

(4) The majority of the directors of a corporation established under this section shall be members of the public who are not members of a municipal council, unless the Board specifies otherwise.

Shareholder's declaration

33. A regulated entity shall draft a shareholder's declaration that describes the relationship between the regulated entity and its corporation and the regulated entity's aims and expectations of the corporation, including the following:

1. The powers, selection and terms of the board members.

2. The reporting and accountability requirements.

3. The standard of care and diligence required by the board members.

4. The indemnification of the board members when acting in good faith.

5. The requirement to prepare a business plan under subsection 21 (1) and any requirements to revise or update the plan under this Act.

6. The requirement to prepare a progress report under subsection 27 (1).

7. The requirement to prepare quarterly public reports and to hold a public annual general meeting.

8. Actions requiring shareholder ratification, such as the submission of the business plan or increasing or decreasing charges for services.

9. The shareholder's residual power of direction.

10. Any other matters of operations and policy in which the shareholder is concerned.

Responsibilities of the corporation

34. In addition to the responsibilities set out in the shareholder's declaration, a corporation established under section 32 shall be responsible for,

(a) creating a strategic plan;

(b) overseeing operating practices;

(d) any other prescribed matter.

Separate accounts

35. (1) A corporation established under section 32 shall maintain separate accounts for the provision of water services and waste water services to the public from those of the regulated entity.

Charge for water services and waste water services

(2) A corporation established under section 32 shall charge a regulated entity the same amount for water services and waste water services that it charges other customers.

Other transactions

(3) Any transaction between a regulated entity and its corporation, other than the transaction referred to under subsection (2), shall be priced at fair market value and shall be publicly reported in a manner as may be prescribed.

Miscellaneous

Restriction on increase of charges to customers

36. A regulated entity shall not increase charges for the provision of water services or waste water services for any customer or class of customers beyond the prescribed maximum amount unless it submits a written request to the Board to do so and the Board approves the request.

Contract templates

37. A regulated entity and a corporation established under section 32 shall, if appropriate, use any contractual templates published by the Board for the provision of water services or waste water services to the public.

Delegation by regulated entity

38. A regulated entity may delegate in writing any of its powers and duties to a corporation established under section 32, or to any person or persons employed by the corporation, subject to any conditions set out in the delegation.

Municipal auditor

39. For the purposes of doing anything under this Part, an auditor may exercise any power of an auditor of a municipality under section 297 of the Municipal Act, 2001 or section 235 of the City of Toronto Act, 2006, as the case may be.

PART IV
Enforcement

Board's orders

40. (1) If, in the opinion of the Board, a regulated entity has done or omitted to do something in contravention of this Act, the Board may issue an order requiring the regulated entity to do or refrain from doing such things as the Board considers advisable.

Request for reconsideration

(2) A regulated entity may, by written application and within the prescribed time period, request a reconsideration of an order issued under subsection (1) and, if such a request is made, the Board shall reconsider the order.

Same

(3) After the Board reconsiders an order under subsection (2), it shall confirm, rescind or vary the order.

Hearing

(4) On any application under subsection (2), the Board shall not confirm or vary the order without first holding a hearing to which the regulated entity is a party.

Minister's supervision

41. The Minister may exercise control and charge over the regulated entity's provision of water services or waste water services to the public if,

(a) the Board advises the Minister that it is of the opinion that the regulated entity has failed to comply with an order issued under this Part;

(b) the Minister considers it appropriate to do so; and

(c) the prescribed time period within which a regulated entity may request a reconsideration of an order issued under this Part has expired or, if such a request is made, the Board has confirmed or varied the order.

PART V
Regulations

Regulations

42. The Lieutenant Governor in Council may make regulations,

(a) prescribing the maximum amount by which a regulated entity may increase charges for the provision of water services and waste water services for any customer or class of customers over a period of time;

(b) prescribing the circumstances under which the Board may approve or may not approve increases to charges by regulated entities for the provision of water services and waste water services for any customer or class of customers beyond the prescribed maximum amount;

(c) prescribing requirements relating to the appointment of the directors, the chief executive officer, and other members of the senior management team of a corporation established under section 32;

(d) prescribing any sources of revenue that a regulated entity is, or is not, permitted to include in the business plan and prescribing conditions or restrictions with respect to those sources of revenue;

(e) prescribing requirements relating to any opinion of an auditor required under this Act;

(f) exempting a regulated entity from any requirement of this Act and prescribing conditions or restrictions to the exemption;

(g) prescribing accounting standards and rules to be used in connection with the preparation of a business plan required under this Act;

(h) prescribing anything that is required or permitted by this Act to be prescribed or done by regulation.

Part VI
Repeal, Commencement and Short Title

Sustainable Water and Sewage Systems Act, 2002

43. The Sustainable Water and Sewage Systems Act, 2002 is repealed.

Commencement

44. This Act comes into force on the day it receives Royal Assent.

Short title

45. The short title of this Act is the Sustainable Water and Waste Water Systems Improvement and Maintenance Act, 2009.

EXPLANATORY NOTE

This Bill enacts the Sustainable Water and Waste Water Systems Improvement and Maintenance Act, 2009 and repeals the Sustainable Water and Sewage Systems Act, 2002.

The Bill sets out the purposes of the Act, which include ensuring that public ownership of water services and waste water services is maintained.

The Bill establishes the Ontario Water Board as an agent of the Crown and sets out the Board's objectives, powers and duties which relate to the regulation of water services and waste water services. The Board is required to submit reports to the Minister that describe the affairs of the Board.

The Bill sets out the responsibilities of municipalities or groups of municipalities that are designated as regulated entities by regulation.

Regulated entities that provide water services or waste water services to fewer than 10,000 customers are required to amalgamate those services with the services of one or more other regulated entities if they determine that it is possible to do so, or if they are directed to do so by the Minister.

Regulated entities must prepare business plans for the provision of water services or waste water services. In preparing these plans, regulated entities are required to take into account various factors, such as the efficient provision of services. The plan must contain, among other things, an assessment of the full cost of providing water services or waste water services to the public and a description of how the regulated entity intends to pay this full cost. The plan must also specify that full metering of customers will be used as a source of revenue, subject to any exceptions prescribed by the regulations.

Regulated entities are required to submit their business plans to the Board for approval and subsequently implement the plans. They are also required to prepare updated business plans and progress reports, and make their plans and reports available to the public.

The Bill requires regulated entities to establish and maintain a corporation to deliver water services and waste water services. Regulated entities are required to be the sole shareholders of the corporations.

The Board is authorized to issue an order requiring a regulated entity to do or refrain from doing something if, in the opinion of the Board, the regulated entity has done or omitted to do something in contravention of the Act. The regulated entity may submit a request for reconsideration and is entitled to a hearing by the Board.

The Minister may exercise control and charge over a regulated entity's provision of water services or waste water services to the public if he or she is advised by the Board that the regulated entity has failed to comply with an order issued by the Board.

The Bill gives the Lieutenant Governor in Council various regulation-making powers.