Preliminary Empirical Findings

Authors: Professor Brady Deaton Jr. and Bethany Lipka

Key Empirical Research Question: are First Nations equally likely to be engaged in water sharing arrangements (WSAs) as similarly situated Ontario municipalities? 


Our empirical dataset is comprised of 821 water systems in Ontario: 296 municipal water systems, and 118 First Nations water systems. Of those 821 water systems, 259 were engaging in water sharing with at least one neighbour during our study period of 2009-2010.


This map highlights the communities participating in these arrangements in red. Importantly, only 12 of these WSAs involved a First Nation community partner.  

This map provides a specific example of water sharing taking place through two large distribution networks around the City of London, Ontario.


In this area, treated water is distributed to participating municipalities through two regional networks: the Lake Huron Primary Water Supply System (LHPWSS), and the Elgin Area Primary Water Supply System (EAPWSS).


Situated at the centre of these two regional supply networks are three First Nations: Chippewas of the Thames First Nation, Oneida Nation of the Thames, and Munsee-Delaware Nation. Despite being situated within the service areas of both of these regional supply networks, these First Nations are not engaged in water sharing. 


WSAs in Ontario: Bargaining vs. Rationing

In Ontario, municipalities are local governing units created by the Province, with rights and duties defined by provincial legislation: the Municipal Act (2001). The Municipal Act defines municipal responsibilities with respect to services like drinking water provision. Some municipalities in Ontario are placed within WSAs per force of law - we refer to these arrangements as rationing. Other municipalities have to negotiate in order to enter into WSAs - we refer to these arrangements as bargaining.


Importantly, First Nations have a relationship with the federal government, and are not subject to Provincial legislation when it comes to the provision of services in their communities. For this reason, First Nations must always bargain to enter into a WSA. The figure below provides a summary of the number (and proportion) of First Nations in our data set participating in bargaining WSAs during our study period (2009-2010), as well as the number (and proportion) of municipalities participating in bargaining and rationing WSAs during our study period. 

We controlled for a number of community characteristics in order to best assess our research question. These characteristics include, but are not limited to: community population, community population density, climate variables, and proximity to neighbouring water systems. Summary statistics for some of our key variables are provided in this table.


Key Finding:

After controlling for variation in community characteristics and institutions governing the emergence of water sharing arrangements (i.e., rationing vs. bargaining), we were able to empirically assess our key research question: are First Nations equally likely to be engaged in water sharing arrangements (WSAs) as similarly situated Ontario municipalities? We find that compared to similarly situated municipalities, First Nations are not significantly less likely to be engaged in a water sharing arrangement¹.


We identify a number of other factors that seem to significantly influence the likelihood of water sharing for all communities, specifically:

  • *list*

Importantly, many of these characteristics - northerness, small population densities, and geographic remoteness -- are disproportionately characteristic of First Nations. However we find when these characteristics are controlled for, similarly situated (i.e. in terms of these characteristics) First Nations and municipalities do not have different likelihoods of engaging in water sharing.


Importantly, as outlined above, there are key institutional differences between how municipalities and First Nations are governed, producing different constraints and costs of transacting with neighbouring communities. Additionally, social capital between First Nations and neighbouring municipalities can vary from region to region, impacting the likelihood of collaborative relationships. The qualitative case study component of this research aims to shed light on these situational factors that cannot be captured in broader empirical analysis. 


¹The magnitude of this result is sensitive to model specification, and may be influenced by continued research. However, the sign and significance has remained consistent across all models estimated.