Reflections is a monthly blog series authored by Canadian Water Network’s (CWN) CEO Nicola Crawhall. This series is designed for decision-makers navigating complex water-related challenges. It helps leaders stay ahead of change and make informed decisions that shape the future of water in Canada.

Across Canada, major reviews and new legislation are prompting calls for sweeping changes to how water and wastewater services are governed. However, the rush to restructure risks may be obscuring what truly keeps communities safe.

Recent recommendations from Calgary’s Bearspaw South Feedermain Independent Panel (see footnote 1) and Ontario’s new Water and Wastewater Public Corporations Act both call for shifting the governance of water and wastewater services from municipal departments to separate service corporations.

My experience participating in the Walkerton Inquiry, which examined the deaths of seven people caused by contaminated drinking water, and my involvement in implementing its recommendations has shaped my views about how to deliver water safely (see footnotes 2 and 3). What concerns me is the assumption that changing a utility’s governance structure is, in itself, a solution. Structural reform must be accompanied by critical guardrails, namely direct responsibility, accountability, and oversight.

The urgency of getting this right is underscored by the Bearspaw South Feedermain Independent Panel (the Panel) report (see footnote 4). It provides an insightful analysis of what went wrong in the City of Calgary (see footnote 5) that precipitated a catastrophic feedermain break in the summer of 2024. The report should be mandatory reading for provincial regulators, municipal councils, and senior municipal officials across the country. Among its recommendations, the Panel calls for the creation of “a Water Utility as a separate legal entity wholly owned by The City, governed by an independent expert Board of Directors” (page 9).

Ontario’s Water and Wastewater Public Corporations Act similarly calls for municipal water departments to transform into separate legal entities, but ones that differ from Municipal Service Corporations that are permitted under the Ontario Municipal Act. Unlike in Calgary, Ontario’s legislative changes were not triggered by a water crisis but by the provincial government’s intent to expedite infrastructure decisions that enable housing (see footnote 6).

These two initiatives — one born of crisis and inquiry, the other of growth and urgency — offer a timely opportunity to examine how proposed governance changes measure up against the guardrails of direct responsibility, accountability, and oversight.

Guardrail 1: Direct responsibility — one system, one accountable leader

“Management of the Water Utility became fragmented across multiple teams, with no single owner responsible for end-to end outcomes.” — Bearspaw South Feedermain Independent Review Panel: Final Report (page 20)

The Panel found that the City’s distributed organizational structure left no single designated senior official with authority to make decisions related to the integrity of the entire water system. In the absence of a clearly accountable executive, decisions were often delayed and not escalated. This resulted in a 20-year delay in addressing the lack of redundancy of the critical Bearspaw Feedermain.

The Calgary example shows how direct lines of responsibility for water and wastewater services can be lost through reorganizations intended to deliver multiple services within complex municipal structures. While efficiencies can be gained by consolidating engineering or capital delivery across services like water, waste management, and transportation, those efficiencies must never come at the expense of a clear, direct line of responsibility for the delivery of water and wastewater services.

Both the Panel and Ontario’s Water and Wastewater Public Corporations Act call for a separate legal entity responsible for water and wastewater services, with the head of that entity directly responsible for the entire system. This offers one way of strengthening direct responsibility. It is important to note, however, that direct lines of responsibility can — and in many cases already do — exist within municipal structures through directors or general managers of water services.

Guardrail 2: Accountability — to whom, and for what?

“The absence of clear lines of accountability … contributed to the risk and asset integrity process gaps.” — Bearspaw South Feedermain Independent Review Panel: Final Report (page 20)

The Panel cites failures in escalation accountability, including the deferral or non-escalation of important decisions over many years. It also identified deficiencies in financial accountability, including the lack of ringfencing of water rate revenues. These are both critical elements of accountability that should be addressed by any and all utility structures.

There is another level of accountability that deserves attention but was not explicitly addressed by the Panel: accountability to the public. Establishing and maintaining public trust is the ultimate test of any water governance system. The Panel’s call for a service corporation to be fully owned by the City of Calgary would ensure that strong public accountability is preserved under the proposed model.

Ontario’s Water and Wastewater Public Corporations Act, in stark contrast, absolves all parties of accountability. The Act provides broad immunity from liability and personal liability protection to the province, municipalities, and corporation directors (see footnote 7). While this may be intended to reduce risk aversion in decision-making, its practical effect is a significant weakening of accountability mechanisms. The Canadian Environmental Law Association called out this lack of accountability, noting that it runs counter to Walkerton-era legislative reforms that enshrined a ‘duty of care’ requiring each municipal council to be directly accountable for the safety of its water system (see footnote 8). Under such rules, it is reasonable to ask how public trust will be sustained.

Guardrail 3: Oversight

“Council lacked the visibility and expert support to provide effective oversight.” — Bearspaw South Feedermain Independent Review Panel: Final Report (page 7)

The absence of effective oversight completes the perfect storm of governance failures that allowed issues like the vulnerability of Calgary’s main feedermain to go unaddressed. Without regular updates from staff and without access to independent technical expertise, the Panel concluded that Calgary City Council was not well positioned to fulfill its oversight responsibilities.

In addition to recommending the creation of a service corporation with a professional board of directors to oversee its operations, in the short term before the service corporation is created, the Panel recommended the establishment of an Expert Water Utility Oversight Board. This body would initially provide oversight/governance for a utility operating within a municipal department. This additional level of oversight, drawing on the expertise of the sector, is an important measure that should be considered by municipal water departments.

There is another critical level of oversight needed. The Panel’s report omits any analysis or assessment of provincial oversight of municipal water services delivery. In my opinion, this is a serious flaw that leaves the oversight problem only partially addressed. Strengthening provincial oversight was a cornerstone of the 2003 Walkerton Inquiry recommendations, which led to a comprehensive overhaul of Ontario’s drinking water regulatory framework and re-established the principle that ‘any reasonable person’ should be able to turn on a public utility-serviced tap and trust that the water was safe to drink (see footnote 9). By not examining the provincial role, the Panel addresses only part of the oversight problem.

Oversight concerns also arise under the Water and Wastewater Public Corporations Act. It remains unclear whether new water and wastewater corporations will be privately or publicly owned, who they will ultimately answer to, and what recourse municipal councils will have if they disagree with the direction taken by the service corporation’s board. These entities are neither Crown agencies nor municipal corporations. Yet existing legislative and regulatory frameworks were designed to regulate municipally-owned entities, whether separate service corporations or municipal departments. Effective oversight would therefore require substantial revisions to current provincial laws and regulations.

Conclusion: Guardrails first

CWN is agnostic about the governance structures municipalities choose to deliver water services. Effective governance can be achieved through a range of governance models, including service corporations and municipal departments. What matters most, as Ontario and Alberta move further down this path, is that these models are underpinned by strong guardrails: direct responsibility, robust accountability of all parties, and effective provincial oversight.

There is a real risk in assuming that the shift to service corporations is, on its own, a solution. Strong guardrails will guarantee the effective and safe management of the utility. Without strong guardrails, governance reform may simply recreate the conditions for future failure.

After all, the Town of Walkerton had full confidence in its public utility corporation over the May 24 weekend in 2000. Seven people died, and 2,300 became seriously ill. Structure alone did not protect them. This is why guardrails matter.

Footnotes

1. Stephen Stanley, a member of the independent panel, joined CWN’s board in January 2026. Mr. Stanley had no input into this blog.
2. The author participated in Part II of the Walkerton Inquiry on behalf of the Association of Municipalities of Ontario (AMO) and then assisted the Ontario Minister of Environment in overseeing the implementation of all 121 recommendations.
3. Highlights of the Walkerton inquiry report (CBC News).
4. Bearspaw Feedermain Independent Review.
5. The City of Calgary is a member of CWN’s Municipal Water Consortium. Members of Calgary’s water services had no input on this blog post.
6. Ontario’s Water and Wastewater Public Corporations Act was introduced within broader omnibus legislation.
7. See Sections 16 and 18 of the Water and Wastewater Public Corporations Act.
8. See CELA’s submission on Bill 60.
9. Highlights of the Walkerton inquiry report (CBC News).