Politicians must take immediate action to replace Canada's roads, sewers, water mains and bridges - aging at a rate much faster than originally thought - before a major disaster occurs, warns a growing list of industry groups.
Mark Yakabuski, president and CEO of the Insurance Bureau of Canada (IBC), told a luncheon audience at the Economic Club of Toronto that the insurance industry is clearly threatened unless all three levels of government act quickly.
"Systems that are decaying underground and that were originally built for much more modest precipitation patterns simply do not suffice in an age of climate change," he said.
"Very often, (people) take our industry for granted, expecting coverage will always be there, but concerning themselves very little with how important our industry is in managing emerging risks that otherwise could seriously impair our economic wellbeing and social cohesion."
Yakabuski noted that for the first time this year, North Americans have seen three Category 5 weather events.
"The two massive hurricanes that savaged the Yucatan Peninsula would have caused untold damages had they veered northwards into the United States. And here in Canada, we should count our blessings that the incredibly powerful tornado that struck Elie this summer stayed away from the city of Winnipeg.
"Let there be no mistake, severe weather is not something that is coming. It has already begun. We must adapt to its consequences. And we must do it now," Yakabuski urged his audience.
Insurance carriers aren't the only ones sounding the alarm over aging municipal infrastructure.
Less than a week after Yakabuski spoke in Toronto, the Federation of Canadian Municipalities held a press conference in Ottawa with a similar message.
Close to 80 per cent of the roads, bridges and watermains are past their service life and it will cost an estimated $123 billion to bring them back into shape, according to an association report.
They added the longer governments wait, the higher the bill will climb.
Called Danger Ahead: The Coming Collapse of Canada's Municipal Infrastructure, the report breaks down "sub-deficits" for key categories including water and wastewater systems ($31 billion), transportation ($21.7 billion), transit ($22.8 billion), solid-waste management ($7.7 billion) and community, recreational, cultural and social infrastructure ($40.2 billion).
"Most municipal infrastructure was built between the 1950s and the 1970s and much of it is due for replacement. As assets reach the end of their service life, repair and replacement costs skyrocket," Saeed Mizra, a McGill University and study leader, said in a press release.
"Across Canada, municipal infrastructure has reached the breaking point."
Nobody knows about the problem of aging infrastructures more than residents of London, about 200 kilometres southwest of Toronto. Shortly before dawn on Oct. 31, a broken watermain caused a 20-foot sinkhole that stretched across one downtown intersection.
The incident also damaged fibreoptic cables underground, temporarily disrupting services for thousands of area homes and businesses.
Municipal officials acknowledged if the sinkhole had happened two or three hours later, the intersection would have been crowded with early- morning commuters.
"People tend to think that with waterpipes being underground, they don't have to think about it. It's out of sight, out of mind," says Frank Zechner, executive director of the Ontario Sewer and Watermain Construction Association. "That's far from the actual reality of the situation here."
Zechner adds municipalities are also incurring significant losses due to the older pipes leaking. About 20 to 40 per cent of all treated water goes back into the ground before it reaches people's taps, according to an association news release sent out last July.
For Toronto residents, even a conservative estimate of 25-per-cent leakage represents a loss of more than 120 million cubic metres of water per year - enough to fill more than 50,000 Olympic-sized swimming pools, the news release added.
"It's going to cost a lot of dollars, but you need to take small steps and the time for that is right now," Zechner told Business Edge. "We've had a general acknowledgement from the government, but nothing in terms of hard dollars."
He said Ontario's experiences are similar to what's happening in other Canadian provinces. Increased housing starts in Alberta and British Columbia mean new sewers are being built along with recent subdivisions. But it doesn't mean they haven't got a problem.
"This is a problem everywhere. Municipalities need to cover the costs of what they are doing now and put money away for their reserve budget. I think it's a matter of necessity," Zechner says.
The same day the Federation of Canadian Municipalities was holding its press conference in Ottawa, another group was at the Ontario legislature holding a news conference of its own, to warn about crumbling bridges.
In a report titled Ontario's Bridges: Bridging The Gap, The Residential and Civil Construction Alliance of Ontario (RCCAO) says that after years of deferred maintenance, irregular inspections and a lack of government oversight, public safety is at risk.
The study found there is no single provincial agency responsible for maintaining the estimated 12,000 municipal bridges in Ontario. The province's transportation ministry is responsible for about 2,800 provincial bridges. But when it comes to municipal ones, local governments are largely on their own. Responsibility for ensuring municipal bridges are inspected every two years, as required by provincial law, falls through the cracks.
Downloading of financial responsibility for these bridges has shifted much of this burden to local governments, and "a single structure requiring several million dollars in repairs can overwhelm the annual budgetary process of a small municipality," according to the study.
It noted municipalities are often faced with other funding demands for capital projects, and they have responded over the years by deferring the work. "Continuing on this path can only lead to negative consequences that will adversely affect public safety," the report adds.
Even the bridge rehabilitation funding on provincial highways may be inadequate. A 2004 provincial auditor's report found almost one-third of Ontario's bridges were in need of major rehabilitation or maintenance, based on Ministry of Transportation figures, and past funding levels were not enough to cover the cost.
"This study is a wake-up call on the deteriorating condition of municipal bridges in Ontario," RCCAO executive director Andy Manahan said in a press release. "We must aggressively address the situation in a co-ordinated way."
The report was done by Toronto-based consultants MMM Group, which sent out surveys to 445 Ontario municipalities, with 150 responses. It tried to estimate how many bridges needed repair either now, or within the next five years.
Manahan said the consequences of ignoring the report could be disastrous, especially with recent bridge collapses in Minnesota and Quebec.
(David Hatton can be reached at hatton@businessedge.ca)
