Socio-Economic Impact of the Presence of Asian carp in the Great Lakes Basin

Prepared by
Salim Hayder, Ph.D.

Edited by
Debra Beauchamp

Fisheries and Oceans Canada, Policy and Economics
501 University Crescent, Winnipeg, Manitoba R3T 2N6

Table of Contents

• Executive Summary
• Introduction
  • Objectives of the Study
  • Organization of the Study
• Chapter 1: A Brief Overview of the Study Area
  • Socio-Demographic Profile
  • A Brief Overview of the Great Lakes
  • AIS Threats to the Great Lakes
• Chapter 2: Literature Review
• Chapter 3: Methodology Adopted
  • Data Sources
  • Scope of the Study
• Chapter 4 - Baseline Values of Activities around the Great Lakes
  • Water Use
  • Raw Water Use
  • Industrial Water
  • Agricultural Water
  • Commercial Fishing
  • Recreational Fishing
  • Recreational Hunting
  • Recreational Boating
  • Beaches and Lakefront Use
  • Wildlife Viewing
  • Commercial Navigation
  • Oil and Gas
  • Ecosystem Services
  • Option Value
  • Non-Use Value
  • Aggregated Economic Contribution
  • Limitations/Gaps Identified in the Study
• Chapter 5: Social and Cultural Values of the Great Lakes
• Chapter 6: Scenario Based on Biological Risk Assessment
• Chapter 7: Socio-Economic Impact Assessment
  • Commercial Fishing
  • Recreational Fishing
  • Recreational Boating
  • Wildlife Viewing
  • Beaches and Lakefront Use
  • Other Sectors
  • Ecosystem Services
  • Social and Cultural Impact
• Chapter 8: Conclusion
• Bibliography
• Matrix 1: Total Economic Valuation Flowchart
• Definitions
• Matrix 2: The Great Lakes - Total Economic Valuation Flowchart
• Matrix 3: Summary of Empirical Studies Used for Valuation of Economic Activities in the Great Lakes basin
• Annex 1: Selected Socio-Economic Indicators for Ontario
• Annex 2: Aboriginal identity population by Sexes, Age Groups, Median Age for Ontario and Canada
• Annex 3: Estimated Water Consumption and Values by Sector, Lake and Province for the Year 2008
• Annex 4: Landings and Landed Values of Commercial fisheries in the Great Lakes by Species and Lake in 2011
• Annex 5: Number of Fish Harvested All Anglers Who Fished on the Great Lakes, by Species and Lake, 2005
• Annex 6: Heat-Map - Commercial and Recreational Fishing for 20 and 50 Years

Chapter 4 - Baseline Values of Activities around the Great Lakes

This chapter provides the situational overview, estimating the economic values to Canada generated by the major activities in and around the Great Lakes. As stated in Chapter 3, the values in aggregate provide a baseline value of the major activities from which the impact of Asian carp in the Great Lakes is estimated.

Based on relevant literature, the study identified the following major activities for the development of the baseline: (i) water use; (ii) commercial fishing; (iii) recreational fishing; (iv) recreational hunting; (v) recreational boating; (vi) beaches and lakefront use; (vii) wildlife viewing; and (viii) commercial navigation. In order to estimate the economic values of the above-mentioned activities, the study tried to arrive at the best estimates of the expenditures made, as well as the consumer surplus generated by the identified activities, as information from extant literature permitted (see Matrix 3).

The following portion of the chapter provides a detailed discussion of the methods applied and then estimates the economic values of activities around the Great Lakes in Canada.

Water Use

Canadians consistently rank water as this country’s most important asset (Renzetti, Dupont and Wood, 2011). Water withdrawn from the Great Lakes is used in neighbouring municipalities and supplied to homes, businesses, and institutions like schools and hospitals for a diverse range of activities, such as drinking, washing, gardening, fire-fighting and landscape irrigation. In the manufacturing and agricultural sectors, water is used as raw material to support the production of goods and services. Water is also used for electricity generation (heating/cooling), oil/gas extraction, and mining (e.g. cleaning ore, cooling drills).

The Great Lakes Commission (2010) categorized water use from the Great Lakes basin as follows: (i) public water supply; (ii) self-supply domestic; (iii) self-supply irrigation; (iv) self-supply livestock; (v) self-supply industrial; (vi) self-supply thermoelectric power; (vii) self-supply hydroelectric power; and (viii) self-supply other.

According to the Great Lakes Commission (2010), approximately 850.5 billion gallons of water was withdrawn from the Great Lakes basin per day in 2008, of which almost 24% was withdrawn in Ontario (203.24 billion gallons per day). Of the total withdrawal in Ontario, hydroelectric use accounted for 93%. The remaining 13,697.1 million gallons per day was distributed as follows: nuclear plants, 74%; fossil fuel power, 11%; industrial users, 7%; public water supply, 6%; domestic (residential, commercial, institutional) and agricultural users, 1%; and other,^{Footnote 31} 1%.^{Footnote 32} In Québec, of the total water withdrawals of 305.2 billion gallons per day from the St. Lawrence River basin, hydroelectric power accounts for 304 billion per day (99.6%). The remaining 14 billion gallons per day was distributed as follows: public supply (residential, commercial, and institutional), 81%; industrial users, 9%; domestic supply, 5%; fossil fuel power, 3%; and agricultural users, 2%.

The valuations of water used from the Great Lakes basin provided in this section are based on consumption and withdrawal data primarily taken from the Great Lakes Commission (2010) and on water use values information compiled from literature review.^{Footnote 33}

Raw Water Use^{Footnote 34}

Twenty four million people drink water that is drawn from the Great Lakes every day (U.S. Environmental Protection Agency, 2003). The Great Lakes Commission (2010) estimated that Ontario’s annual water withdrawal and consumption by public sector and self-supply domestic categories were 1,203 and 180 million m³, respectively. In Quebec, total withdrawal and consumptive use were 1,618.8 and 161.7 million m³, respectively (see Table 1).

Source: The Great Lakes Commission (2010)

In terms of the economic value of drinking water, Statistics Canada estimated that, in 2007, the operating and maintenance costs of treating 180.5 million cubic metres of raw intake water from the Great Lakes basin was approximately $260 million (Marbek, 2010b). Assuming that water revenue structures closely reflect the full cost of water production, the present study inflation-adjusted the 2007 value of $260 million to determine the present value of drinking water derived from the Great Lakes, as follows:

Estimated Value of Drinking Water in Ontario (EV_DW) = C₂₀₀₇ * π_(2011/2007)

Where C is the cost of water production and π is inflation rate.

To calculate the value of water consumption from the Great Lakes basin in Quebec, the study first calculated the unit costs of raw intake water from Statistics Canada’s estimate of the operating and maintenance costs of water intake from the Great Lakes basin in Ontario, and then applied the unit costs to consumption data for Quebec as follows:

Estimated Value of Drinking Water in Quebec (EV_DW) = Q₂₀₁₁ * UC₂₀₀₇ * π_(2011/2007)

Where Q is consumption, UC is the unit cost of water production and π is inflation rate. Following this approach, the total economic contributions of the Great Lakes raw water consumption is estimated to be in the amount of $531.7 million/year (Ontario - $280.4 and Quebec - $232.8).

Industrial Water^{Footnote 35}

Water from the Great Lakes is also used as input in a variety of industrial sectors. Using data for 2000, the Great Lakes Commission (2010) estimated that Ontario’s industrial users withdrew 1,275.6 million m³ of water from the Great Lakes and consumed 80.4 million m³ each year. In Quebec, total withdrawal and consumptive use were 173.4 and 17.3 million m³, respectively (Table 2).

Source: The Great Lakes Commission (2010)

Pertaining to industrial water use value, using data for Canadian business sector industries for the period 1981-1996, Dachraoui and Harchaoui (2004) estimated that the shadow price^{Footnote 36} of water intake was $0.73/m³ and varied significantly across industries. The value is reported to be slightly lower than that estimated for the top seven water using industries ($0.76/m³).^{Footnote 37}

In order to estimate the value of water provided to industrial facilities in the Great Lakes, the present study multiplied the consumption data provided by the Great Lakes Commission (2009) with the average value of water intake estimated by Dachraoui et al. (2004), after adjusting for inflation, as follows^{Footnote 38}:

Estimated Value of Industrial Water (EV_IW) = Q₂₀₁₁ * (V₁₉₉₆ * π_(2011/1996))

Where Q is consumption, π is inflation rate, and V is the average value of water intake. Following this approach, the economic contributions of the Great Lakes water consumption by industrial sector in Canada is estimated to total $96.4 million/year (Ontario - $79.3, Quebec - $17.1).

Agricultural Water^{Footnote 39}

In the agricultural sector, water from the Great Lakes basin is used by farms as input into the production process, livestock watering and irrigation. About one-third of the land located in the Great Lakes basin is used for agriculture. This amounts to nearly 25% of the total Canadian agricultural production (including dairy, grain, corn, livestock, and a variety of orchards, vineyards and other specialty crops) being supported by the Great Lakes.^{Footnote 40}

The Great Lakes Commission (2010) estimated that the agricultural sector withdrew a total of 110.3 million gallons per day of water for irrigation and livestock uses from the Great Lakes basin. The following table provides water withdrawal data for irrigation and livestock purposes by province and lake:

Source: The Great Lakes Commission (2010).
Note: * Staff estimation, Policy and Economics, Fisheries and Oceans Canada, based on consumption coefficient data provided in The Great Lakes Commission (2010).

In terms of the value of water used for these agricultural sector purposes, a few studies (e.g. Dachraoui and Harchaoui, 2004; Bruneau, 2007) provided estimates of the value of water used for these purposes in the southern Saskatchewan region of Canada. Using an economic rent approach, Gardner Pinfold (2006), estimated that the average short-run and long run values of water use to be $0.06/m³ and $0.014/m³, respectively, in the South Saskatchewan River basin area. Samarawickrema and Kulshreshtha (2008) estimated that the short-run and long-run estimates of irrigation water use range from $0.017 - $0.088/m³ and $0.010 - $0.068/m³, respectively, in a number of sub-basins in the South Saskatchewan River basin.

Using a residual imputation method, Bruneau (2007) estimated the values of water withdrawn for a variety of reasons (e.g. irrigation, livestock) in the South Saskatchewan River basin. The values presented in the study (20 to 100 times more than the average household pays) showed the value-added per unit of water used in livestock production, under the assumption that livestock owners, faced with a water shortage, would be forced to reduce their herds.^{Footnote 41} Therefore, the values may be treated as the maximum WTP of the owners to obtain water and as upper estimates, as the entire net value was attributed to water input and excluded other unmeasured inputs also critical to production (Bruneau, 2007). Using data for Canadian business sector industries for the period 1981-1996, Dachraoui et al. (2004) estimated that the shadow price of water intake for agricultural and related service sector was $0.46/m³.

Estimates of the value of water used in irrigation for a variety of crops in the Big Creek watershed in southern Ontario were provided by To (2006), cited in Marbek (2010b). Using the average market crop price received by producers from 2000-2004, the study calculated the loss in profitability in the short-term due to a decrease in water, assuming fixed costs. These estimates ranged from $3.79/m³ for ginseng, to 0.22/m³ for sweet corn.

Given that estimates of water use values for irrigation/livestock purposes vary by geographic location (Bruneau, 2007), and to maintain consistency in the estimation of the value of water used from the Great Lakes for other purposes discussed above (e.g. industrial use), the study at hand refrained from using value estimations from a few studies in other regions in Canada.

Therefore, to estimate the values of water withdrawn for irrigation and livestock from the Great Lakes, an inflation adjusted average ($1.10/m³) of the estimates of the short-run values of water for irrigation provided by To (2006) was used.^{Footnote 42} As a result, the estimated values should be considered as very conservative estimates of the water use values.

Estimated Value of Agricultural Water (EV_AW) = Value of Irrigation Water + Value of Livestock Water

(i) Value of Irrigation Water = Q_I x (V_I2004 x π_(2011/2004))

(ii) Value of Livestock Water = Q_L x (V_L2004 x π_(2011/1996))

Where Q is quantity, π is inflation rate, and V is water use value. Following this approach, the economic contributions to Canada of the Great Lakes water consumption by the agricultural sector is estimated to be in the amount of $164.7 million/year (Ontario - $131.9 (Irrigation $87.0, Livestock $44.9) and Quebec - $32.8 (Irrigation $11.5, Livestock $21.3)).

Commercial Fishing

The Ontario Ministry of Natural Resources (OMNR) is responsible for regulating Ontario’s commercial fishery. There are more than 500 active commercial fishing licences in Ontario^{Footnote 43} and, in 2011, approximately 12,141t of fish were commercially caught from the Great Lakes, generating an estimated landed value of $33.6 million. OMNR (2010) estimated that, in 2008, Ontario's commercial licence holders caught nearly 14,808t of fish, for which the dockside/wholesale^{Footnote 44} value was $29.2 million. Once the fish has been processed and sent to food stores and restaurants in Ontario, the US and around the world, the industry’s total contribution to the economy in 2008 was in the range of $180 - $215 million^{Footnote 45}, with an average value of $197.5 million. This implies that the value added to the landings by the processors resulted in a value more than six times higher than the dockside value.

However, neither the existing data nor the literature provides the total economic value (e.g. WTP) of commercial fishing generated for the Canadian economy.^{Footnote 46} With respect to the contributions of the Great Lakes commercial fishery, it should be noted that since the fishing industry is fairly competitive because of the availability of close substitute goods (e.g. fish from other parts of Canada or meat), the associated consumer surplus could be safely assumed to be insignificant.

Therefore, to calculate the economic contributions of commercial fishing in the Great Lakes, the present study tallies only the market values of the landings, calculated by applying the ratio of market value to dockside value (as mentioned above) to the landed value for the year 2011, as follows:^{Footnote 47}

Estimated Market Value of Commercial Fishing (EV_CF) = LV * M/D

Where LV is landed value; M and D are market and dockside prices. Following this approach, the economic contributions of commercial fishing in the Great Lakes to the Canadian economy is estimated to be $226.5 million per year.^{Footnote 48}

Recreational Fishing

There are a number of sources (e.g. Austin et al., 2007; DFO, 2008; EC, 2000) that estimated the value of recreational fishing in the Great Lakes, employing different methodologies, such as survey question sequencing or Nested Logit models. For Canada, the most relevant and recent information on expenditures incurred for recreational fishing estimated in DFO (2008) employs travel costs and expenditures for fishing trips to estimate the contributions of recreational fishing in the Great Lakes. Moreover, the consumer surplus value associated with recreational fishing that is not captured by expenditures is reported in EC (2000).

In terms of expenditures, DFO (2008) estimated that anglers spent a total of $214.6 million in Canada in direct recreational fishing expenditures in the Great Lakes in 2005, which was 25.1% and 8.7% of the totals of $856.2 million (weighted) and $2.5 billion direct expenditures on recreational fishing activities in Ontario/Quebec and in Canada, respectively.^{Footnote 49}

Source: Survey of Recreational Fishing in Canada 2005, DFO.
Notes: * Includes campsite, licences, and access fees; ** Includes household boat costs, boat rentals, and supplies; *** Includes expenses such as travel, guides.

In 2005, anglers invested $228.3 million in major purchases and investments that could be wholly attributable to recreational fishing in the Great Lakes. The investment accounted for 31.5% and 8.8% of the totals of $715.5 million (weighted) and $2.6 billion worth of purchases and investments made for recreational fishing in Ontario/Quebec, and in Canada, respectively.

Source: Survey of Recreational Fishing in Canada 2005, DFO.
Notes: * Includes expenditures on fishing rods, reels, depth finders, etc.; ** Resident anglers only.

The total direct expenditures and major purchases/investment of $443.0 million in recreational fishing in the Great Lakes accounts for 28.7% of the weighted total of $1.5 billion expended in Ontario and Quebec in 2005 (see Table 6).^{Footnote 50}

Source: Survey of Recreational Fishing in Canada 2005, DFO.
Notes: * Excludes St. Lawrence; ** Includes St. Lawrence only.

Pertaining to the estimation of consumer surplus, following the contingent valuation methodology, based on 39 studies and 122 estimates for the US, Rosenberger & Loomis (2001) presented a range of estimates for consumer surplus of fishing to be USD3.03 to USD369.15. Apogee (1990) used a value of $70 in consumer surplus per angler-day for recreational fishing on the Great Lakes. Dupont (2003) presented WTP values for three user categories (active user, potentially active user and passive user) with respect to three recreational activities (swimming, boating and fishing) using data for Hamilton Harbour, Ontario. The fishing estimates ranged from $10.89 - $39.37 for unspecified improvements to recreational fishing. The most widely used consumer surplus value associated with recreational fishing in Canada is reported by EC in 2000. Based on the results of a survey conducted in 1996, EC (2000) estimated the consumer surplus associated with recreational fishing to be $10.80 in 1996 dollars.

Therefore, to calculate the total economic contributions of recreational fishing in the Great Lakes to Canada, the present study added the inflation-adjusted expenditures on recreational fishing in 2005 estimated by DFO (2008) and the inflation-adjusted economic values estimated by EC (2000), as follows:

Estimated Value of Recreational Fishing (EV_RF) = Expenditures in Recreational Fishing (E_RF) + Value of Consumer Surplus (CS)

(i) Estimated Expenditures in Recreational Fishing (E_RF) = I_RF2005 * π_2011/2005

(ii) Value of Consumer Surplus (CS_RF) = N_D * (V₁₉₉₆ * π_2011/1996)

Where I_RF is direct expenditure and investment in recreational fishing, π is inflation rate, N_D is number of angling days, and V is consumer surplus per day. Following this approach, the economic contributions of the recreational fishing industry around the Canadian side of the Great Lakes is estimated to be $560.3 million/year.^{Footnote 51}

Recreational Hunting

A few studies (e.g. Rosenberger, 2001; EC, 2000) provided estimates for Canada (and the US) of the number of hunters and the economic values of hunting activities. However, none of the literature estimated either the number of hunters or the benefits accrued by hunting activities (e.g. waterfowl) occurring specifically along the Great Lakes.

Austin et al. (2007) estimated that approximately 20,000 hunters and 200,000 hunting trips depend on Great Lakes ecosystems each year. These estimates are based on 5% of the estimated 400,000 waterfowl hunters and up to 4 million days of waterfowl hunting per year in the Great Lakes states in 2004 and 2005. Applying USD32 per trip to 200,000 Great Lakes waterfowl hunting days, the report estimated a surplus value of hunting in the amount of USD6.4 million around the Great Lakes in the US.

Using meta-assessments of the literature based on 13 recreation demand studies carried out during 1967-1998, Rosenberger (2001) presented a range of USD3.8 - 249.9 consumer surplus per waterfowl hunting day. Applying conjoint valuation approach analysis on waterfowl hunters in Louisiana,^{Footnote 52} Gan and Luzar (1993) estimated a WTP in the amount of USD395.77 to increase the daily duck bag limit from the currently mandated three ducks per day, with lower and upper limit estimates of USD326.66 and USD490.72, respectively.^{Footnote 53}

From the Canadian perspective, EC (2000) found that residents of Ontario spent $4.3 billion on nature-related activities in 1996, of which $200.6 million was spent on hunting wildlife. ^{Footnote 54} The average hunter spent $639 during the year, or $37/day of participation. Quebec residents spent $285.6 million on hunting wildlife, of a total of $2.1 billion spent on nature-related activities. The average Quebec hunter spent $726 during the year, or $50/day of participation in hunting. Pertaining to the estimation of consumer surplus, the report estimated that the consumer surplus associated with hunting^{Footnote 55} was $219.7/yearly or $17.9/daily, in 1996 dollars.

As the above values are not Great Lake specific, to calculate the total economic contributions of hunting in the Great Lakes, the present study scaled down the hunting expenditures and the economic values estimated by EC (2000), ^{Footnote 56} and adjusted for inflation as follows:

Estimated Value of Hunting (EV_H) = Expenditures in Hunting (E_H) + Value of Consumer Surplus (CS_H)

(i) Estimated Expenditures in Hunting (E_H) = 0.265 * (Ontario_I1996 * π_2011/1996) + 0.046 * (Quebec_I1996 * π_2011/1996)

(ii) Value of Consumer Surplus (CS_W) = 0.265 * [Ontario_NH * (Ontario_V1996 * π_2011/1996) + 0.046 * [Quebec_NH * (Quebec_V1996 * π_2011/1996)

where I is expenditure in hunting, π is inflation rate, NH is number of hunters, and V is consumer surplus per year. Following this approach, the economic contributions of recreational hunting around the Great Lakes in Canada was estimated to be $105.7 million/year (Ontario - $85.5, Quebec - $20.2).

Recreational Boating

Several studies (e.g. Dutta, 1984; Hushak, 1999, Dupont, 2003) have assessed the economic values associated with recreational boating in the Great Lakes from both the Canadian and the US context.

From the US side, using travel-cost method, Dutta (1984) found that the economic value of recreational boating and fishing activities in the Central Basin of the Ohio portion of Lake Erie was USD48.44 million in 1982. Husak (1999) estimated that the total boating expenditures of Ohio’s boat-owning households was USD2.6 billion during October, 1997 - September, 1998.^{Footnote 57} The Great Lakes Commission reported that there were about 4.3 million recreational boats in the eight Great Lakes states and that nearly one-quarter of all recreational boats in the Great Lakes states belonged to residents of Great Lakes shoreline counties. More than 910,000 boats are used primarily on Great Lakes waters.^{Footnote 58} Applying an input-output model, the Commission also estimated that expenditures on boats and boating activities in the Great Lakes states totaled nearly USD16 billion in 2003. With secondary effects, the number grew to USD19 billion in sales, USD6.4 billion in personal income, and USD9.2 billion in value added. These expenditures directly supported 107,000 jobs, which grew to 244,000 jobs with the inclusion of secondary effects. The U.S. Army Corps of Engineers (2008) estimated that 911,000 recreational boaters in the Great Lakes States spent USD3.68 billion/year on boating trips, and USD2.25 billion/year on boats, equipment and supplies. These expenditures resulted in the creation of 60,000 jobs and USD2.76 billion in personal income.

In the Canadian context, a few studies (e.g. Thorpe and Stone, 2000) have estimated that there were 1.2 million recreational boats in Ontario, of which approximately 780,000 (65%) were used in the Great Lakes.^{Footnote 59} Every year, more than 1.5 million recreational boaters travel the waters of the Great Lakes (OMNR, 2012, March). Using data from online surveys and publicly available information from Industry Canada, Genesis Public Opinion Research Inc. (2007) estimated that the total direct and indirect expenditures from recreational boating in Ontario was in the amount of $7.3 billion in 2006, but provided no specific estimate for the Great Lakes.

With respect to consumer surplus, Dupont (2003) estimated that the median WTP for improvements to Hamilton Harbour, Ontario, Canada, to support recreational boating was in the $8.20 to $43.27 range for passive and active boating users, respectively. Though no specific value was provided for boating, EC (2000) estimated that the consumer surplus associated with outdoor activities in natural areas^{Footnote 60} for Ontario residents was $146.6/yearly, or $9.7/daily, in 1996 dollars.

Therefore, to calculate the total economic contributions of recreational boating in the Great Lakes basin in Canada, the present study added inflation-adjusted expenditures estimated by Genesis Public Opinion Research Inc. (2007) (weighted by 65%) and the inflation-adjusted economic values estimated by Environment Canada (2000), as follows:

Estimated Value of Boating (EV_B) = Expenditures in Boating (E_B) + Value of Consumer Surplus (CS_B)

(i) Estimated Expenditures in Boating^{Footnote 61} (E_B) = 0.65 * (I_B2006 * π_2011/2006)

(ii) Value of Consumer Surplus (CS_B) = N_B * (V₁₉₉₆ * π_2011/1996)

where I_B is boating expenditure, π is inflation rate, N_B is number of boaters, and V is consumer surplus per year. Following this approach, the economic contributions of recreational boating around the Great Lakes in Canada is estimated to be $7.3 billion per year.^{Footnote 62}

Beaches and Lakefront Use

Literature relating to the benefits of beach and lakefront use along the Great Lakes is rich compared to that for other activities.

From the US perspective, using results from a survey of 1500 Chicago beach-goers in 2004, Shaikh (2004) estimated that the average day at the beach was worth approximately USD35 to an individual. The total seasonal value for beach-goers was estimated in the range of USD800 million - USD1.0 billion. Based on survey data for recreational use of ocean beaches, Austin et al. (2007) estimated that the annual number of swimmers and swimming days at Great Lakes beaches were 8 million and 80 million, respectively. Furthermore, the study estimated that the economic benefit of a 20% reduction in beach closings and advisories would be in the range of USD130–USD190 million per year.^{Footnote 63}

From a Canadian perspective, using survey data and the travel-cost method, Sohngen (1999) estimated that the recreational value of a day trip to Lake Erie beaches was in the range of $26 - $44. Using data from a 1995 contingent valuation study of recreational improvements for Hamilton Harbour, Hamilton, Ontario, Dupont (2001) estimated individual, sex-specific WTP for swimming, boating, and fishing in the Harbour, and found that the mean WTP for swimming for men and women were $30.55 and $27.69, respectively. Those values were much lower than a recent study that investigated the WTP for improvements to Hamilton Harbour, which determined the range to be $16.06 - $75.18 for swimming activities (Marbek, 2010b). Krantzberg et al. (2006) estimated the WTP value for Canadian Great Lakes beach goers to be in the range of $200 - $250 million, which was derived by proportionally scaling the value derived by Shaikh (2004) for the US.

To calculate the total economic contributions of beaches and lakefront use in the Great Lakes, the present study used inflation-adjusted average value from a range of values estimated by Krantzberg et al. (2006), as follows:

Estimated Expenditures in Beaches and Lakefront Use (E_BL) = I_BL * π_2011/2006

where I_BL is beaches and lakefront expenditure, and π is inflation rate. Following this approach, the economic contribution of Canada’s beaches and lakefronts around the Great Lakes is estimated to be $247.8 million per year.

Wildlife Viewing

A number of studies highlighted and estimated the economic value of wildlife viewing for regions of the US and Canada. However, information on the economic values generated by wildlife watching specifically for the Great Lakes is sparse.

From the US perspective, the U.S. Fish and Wildlife Service (2001) estimated that there were 46 million bird watchers in the US, whose expenditures related to wildlife watching in the US were approximately USD32 billion for the year 2001. Using the contingent valuation method, the survey found that the net economic value for a wildlife watcher in their resident state was USD257/year or USD35/day of wildlife watching. Wildlife watchers who travel outside their state have a different demand curve and therefore have higher net economic values of USD488/year and USD134/day of wildlife watching. Kerlinger (unspecified) estimated that there were 10 million bird watchers in the US and that bird watching related expenditures were over USD20 billion per year in the US. The annual spending by active bird watcher averages between USD1,500 and USD3,400. Rosenberger and Loomis (2001) reviewed literature spanning 1967 to 1998 in the US and Canada, and covered 760 value measures estimated from 163 separate empirical research efforts spanning 21 recreational activities. The study found that the consumer surplus for wildlife watching activity was in the range of USD2.36 - 161.59/person/day.

Austin et al., 2007 estimated birding activities specifically for the Great Lakes and found that there were about 17 million bird watchers in the Great Lakes states and 5 million in the Great lakes basin in the US. Surplus value generated by birding was found to be in the range of USD40 – USD153 per trip, with a weighted average value of about USD50/trip. Assuming 2 million traveling bird watchers each visit the Great Lakes basin once per year, the study estimated that the total surplus value was in the range of USD5 – USD10 million annually.^{Footnote 64}

From Canadian perspective, EC (2000) found that Ontario residents spent $410.9 million on wildlife viewing in 1996. On average, the wildlife viewers spent $263/year or $16/day of participation. For Quebec residents, wildlife viewing expenditures were estimated at $281.0 million in the same year. On average, Quebec residents spent $239, or $17/day of participation in wildlife viewing. ^{Footnote 65} Pertaining to consumer surplus, the report estimated that the consumer surplus associated with wildlife viewing was $88.4/yearly or $7.5/daily, in 1996 dollars.

From the Great Lakes context, using the contingent valuation method, Hvenegaard (1989) estimated that bird-watching expenditures were $224/trip, or $66/day, for trips to Point Pelee National Park, Ontario, in 1987. The total expenditures for the year were estimated to be in the amount of $5.4 million, broken down as follows: travel 27.2%; food 26.3%; and accommodations, 22.5%. The WTP (or “net economic value”) was estimated to be in the amount of $256/trip or $76/day, and $6.3 million for the year.

As the values were not Great Lake specific, to calculate the total economic contributions of wildlife viewing in the Great Lakes, the present study scaled down the wildlife viewing expenditures and economic values estimated by EC (2000) and adjusted for inflation as follows:^{Footnote 66}

Estimated Value of Wildlife Viewing = Expenditures in Wildlife Viewing (E_W) + Value of Consumer Surplus (CS_W)

(i) Estimated Expenditures in Wildlife Viewing (E_W) = 0.265 * (Ontario_I1996 * π_2011/1996) + 0.046 * (Quebec_I1996 * π_2011/1996)

(ii) Value of Consumer Surplus (CS_W) = 0.265 * [Ontario_NW * (Ontario_V1996 * π_2011/1996) + 0.046 * [Quebec_NW * (Quebec_V1996 * π_2011/1996)]

where I is wildlife viewing expenditure, π is inflation rate, N_W is number of viewers, and V is consumer surplus per year. Following this approach, the economic contributions of wildlife viewing around the Great Lakes in Canada is estimated to be $217.5 million/year (Ontario - $196.7; Quebec - $20.9).

Commercial Navigation

The Great Lakes provide means of transporting goods from the industrialized core of North America. The Great Lakes-St. Lawrence Waterway extends 3,700 kilometers (2,300 miles) (Martin Associates, 2011), making it the largest inland waterway in the world (Canadian Shipowners Association, 2006). The waterway complements the region’s rail and highway network and offers customers a cost-effective means of moving raw materials, agricultural commodities and manufactured products. It includes 110 system ports located in the eight Great Lakes states and the provinces of Ontario and Quebec. In 2010, a total of 322.1 million metric tons of cargo was “handled” (based on approximately 164 million metric tons of cargo “moved”) by all US and Canadian ports and marine terminals on the Great Lakes-Seaway system (Martin Associates, 2011).

In the US, estimations of the economic contributions made by the Great Lakes - St. Lawrence Seaway System and the 16 major individual ports located on the US side of the border include USD3.4 billion of business revenue to firms providing transportation and cargo handling services, an additional USD1.9 million of local purchases and consumption expenditures, and USD1.3 billion in expenditures by the firms providing the cargo handling and transportation services (Krantzberg et al., 2006).

Martin Associates (2011) estimated that 32 US and Canadian Great Lakes-Seaway system ports contributed USD9.7 billion in personal income and generated 128,227 US jobs (direct, indirect and induced) in 2010. As a result of maritime activity on the Great Lakes-Seaway system, business revenue accrued in 2010 in the US was over USD18.0 billion.

According to Statistics Canada (2008), the Great Lakes region accounts for the majority of the total inbound tonnage from the US. In 2008, the total international shipping of commodities (coal, grain, iron ore, aggregates, salt, and petroleum products) handled (loaded and unloaded) in the Canadian portion of Great Lakes region was 44.3 million tonnes.

LECG (2004) conservatively estimated that, in 2003, over $2.2 billion of provincial gross domestic product (GDP) and over 18,000 jobs were generated by the Great Lakes/St Lawrence waterway Transport and Environment Canada (2004) estimated that the Great Lakes - St. Lawrence Waterway added $3.0 billion annually, and approximately 17,000 jobs, to the Canadian economy. Martin Associates (2011) estimated that the seaway provided an economic benefit of $3.7 billion in personal income and the generation of 76,608 Canadian jobs (direct and indirect) in 2010. As a result of maritime activity on the Great Lakes-Seaway system, in 2010, business revenue accrued was approximately $16.0 billion in Canada.

The Canadian Shipowners Association^{Footnote 67} reported an economic contribution of $4 billion (direct and indirect impact) from cargo handling, vessel services, and inland transportation services on this integrated waterway system in Canada.^{Footnote 68}

The present study calculated that the total value generated by commercial navigation in the Great Lakes in Canada is in the amount of $4.2 billion, by revising the estimate of the Canadian Shipowners Association for inflationary impact, as follows:

Estimated Value of Commercial Navigation (V_CN) = V₂₀₀₈ * π_2011/2008

where V is value of transportation services and π is inflation rate.

Oil and Gas

In 2009, there were 96 commercial oil and gas producers in Ontario. There were 1,200 active oil wells, 1,300 commercial natural gas wells and 500 private gas wells. Five hundred (500) of the gas wells were located offshore on Crown land under the Lake.^{Footnote 69}

Ontario Ministry of Natural Resources (2012) reported that about 88,000 cubic meters of crude oil with a wellhead value of $50 million was produced in Ontario in 2009. In 2008, approximately 240 million cubic meters of natural gas with a retail value of $80 million was produced in Ontario.  All of Ontario's crude oil and natural gas production is consumed within Ontario.^{Footnote 70}

The study calculated the total value of oil and natural gas produced from the Great Lakes in the amount of $136.8 million as follows:

Estimated Value of Oil (V_O) = V₂₀₀₉ * π_2011/2009

Estimated Value of Natural Gas (V_G) = V₂₀₀₈ * π_2011/2008

Where V is value of resources and π is inflation rate.

Ecosystem Services

The Great Lakes provides invaluable services to society through maintaining ecosystems and biodiversity. Some of these are captured with the corresponding direct benefits to the Great Lakes economy. The intrinsic values of ecosystems and biodiversity are harder to define because they are much more intangible (Krantzberg et al., 2008, 2006). For example, the Great Lakes provide clean, breathable air by regulating gases (e.g. carbon dioxide) and protect the general maintenance of a habitable planet by regulating the local weather and climatic conditions of the region. These services are usually categorized in the literature as follows:^{Footnote 71} gas regulation; local climate regulation; water regulation; disturbance prevention; soil formation/retention; waste treatment; nutrient cycling; and habitat, refugium and nursery (Marbek, 2010b; Krantzberg et al., 2008, 2006).^{Footnote 72} Thus far, however, there has not been sufficient practical guidance provided on how to measure them.

A few studies have attempted to evaluate the value of some of the afore-mentioned specific ecological services provided by the Great Lakes, following different methodologies and primarily from a Canadian or provincial perspective. Yap, Reid, de Brou, and Bloxam (2005) estimated health damages of about $6.6 billion per year of the total economic damage of $9.6 billion per year, which some studies cited as benefits (i.e. avoided costs), associated with reduced air pollution through gas regulation services provided by Lakes. In terms of waste treatment, Brox, Kumar and Stollery (2003) estimated the WTP for different changes in water quality in the Grand River Watershed in Ontario. The study found that households have average WTP in the range of $6.09 - $11.07 per month for minor and major changes in water quality. The study calculated a present value of $1,869 per household as the WTP for a one-time investment in a capital project for water quality improvements. In terms of evaluating wetlands’ value in providing habitat and/or habitat protection, using a meta-analysis approach on 39 wetland valuation studies, Woodward and Wui (2001) estimated an average value of $1,363.79 per hectare. Kazmierczak (2001) estimated the value of habitat and species protection to be $843.55 per hectare. Using the benefit transfer approach, Costanza et al. (1997) estimated a global average of the habitat ecosystem service of $690.71 per hectare. Krantzberg et al. (2008, 2006) cited that wild unprocessed biodiversity in Canada was worth $70 billion, which included values of nutrient cycling, flood control, climate control, soil productivity, forest health, genetic vigour, pollination and natural pest control.^{Footnote 73}

Literature providing relevant values for the entire Great Lakes basin is still limited. Wilson (2008) estimated that the Lake Simcoe watershed’s non-market ecosystem services were worth $975 million ($2,948/hectare/year). Wetlands are worth an estimated $435 million per year ($11,172/hectare) because of their high value for water regulation, water filtration, flood control,^{Footnote 74} waste treatment, recreation, and wildlife habitat. The ecosystem service attributed to habitat is valued at $6,234.14 per hectare of wetland in Lake Simcoe’s basin. Expanding this approach, the International Lake Ontario-St. Lawrence River Study Board (2006) (cited in Marbek (2010b)), calculated a value of $2,184.40 per hectare of wetland for all Canadian Great Lakes restoration projects.^{Footnote 75} Wetlands and other natural ecosystems fixate nutrients in their soils. Two of the main non-point source pollutants in the Great Lakes Basin are phosphorous and nitrogen (Marbek, 2010b). Wilson (2008) found that the annual total value for waste treatment of nitrogen and phosphorus by wetlands in the Lake Simcoe watershed is an estimated $83.7 million or $2,148 per hectare (based on a range of values from $1,061 to $3,235/ha/year).

The International Joint Commission (IJC) Study Board (cited in David Suzuki Foundation (2008)) estimated the annual value for wetlands habitat services in the Great Lakes basin at around USD548 million, or USD5,830 per hectare, based on the average annualized wetland habitat restoration costs for a group of relevant Great Lakes Sustainability Fund projects.

Wilson (2008) determined the soil carbon storage of wetlands in Lake Simcoe to be 125 – 312 tonnes per hectare, depending on the type of wetland, and estimated an annual value in the range of $559 - $1,388 per hectare, per year. The annual value of the carbon storage is an estimated $21.9 million, based on the average damage cost of carbon emissions ($52/tonne of carbon). Moreover, wetlands sequester between 0.2 to 0.3 tonnes of carbon per hectare each year, which was valued at $14 per hectare.

The Great Lakes basin provides important erosion control services for society, although the water in the Lakes themselves is one of the main causes of erosion to the surrounding shorelines. Two of the main economic benefits related to erosion control are the public benefit of reduced sedimentation and avoided private property damage.

Pertaining to the public benefit of reduced sedimentation, the cost of replacement method is usually used to provide a monetary estimate of this benefit of decreased water turbidity of the water source caused by increased sedimentation. In the Great Lakes context, the mean cost of sediment removal for municipal water treatment facilities in southern Ontario was estimated to be $28.57/tonne of sediment (Fox and Dickson, 1990).^{Footnote 76}

In terms of avoided private property damage, the International Lake Ontario St. Lawrence River Study Board (2006) (cited in Marbek, 2010b) found that on Lake Ontario, around 600 homes are at imminent risk of damage from erosion and flooding. The David Suzuki Foundation (2008) valued shoreline protection of Sauble Beach, Lake Ontario, beach front and dunes at $6 million. Kriesel (1988) estimated that the average WTP as $80,283 to increase the number of years from 1 to 21 years until the distance between the house and the lake is zero.

There is no existing literature on the potential economic value of natural local climate regulation by the Great Lakes, due to the lack of information and the uncertainty around predicting the future (e.g. knowledge of local weather and climate patterns).

Option Value

Neither economic theory nor empirical literature provides adequate information to quantify the option values. Thus, option value is excluded from the computation of the baseline values. It should, however, be noted that assets with less perfect substitutes are likely to have larger option values. The Great Lakes and associated unique biodiversity characteristics might be a case in point (Marbek, 2010b).

Non-Use Value

As mentioned in Section 4, society, and in particular, people residing in and near the Great Lakes region, derives substantial non-use value from the services provided by the Great Lakes.^{Footnote 77}

In terms of non-use values of the resources embedded in the Great Lakes, a few studies have estimated non-use values for different areas of Canada and the US, using direct stated preference methods (contingent valuation, discrete choice experiments). The total non-use value for the Great Lakes has not been studied so far due to the lack of extensive data. Moreover, neither has there been any applicable study that could serve as proxy values for the Great Lakes. However, some specific estimates of non-use values have been conducted in the Great Lakes context.

In the US, Loomis (1987) found that non-use values were approximately 73 times as large as the corresponding use values at Mono Lake, California. Whitehead et al. (2009) found that 23% of non-users of recreational benefits of the Saginaw Bay coastal marsh in Michigan reported positive WTP for those benefits, generating a present value of USD635/acre.

Using 1980 recreational use and survey data on 218 resident Colorado households, Walsh et al. (1984) estimated separate WTPs for option, existence and bequest values for increments of wilderness designated land. The study found that the three components of non-use value have a relatively equal weight, with existence and bequest values each being slightly more than option value, as follows: option value - USD10.2 million; existence value - USD12.3 million; and bequest value - USD12.5 million.^{Footnote 78}

From the Canadian perspective, Dupont (2003) estimated that passive users of recreational activities in Hamilton Harbour, Ontario, had WTP for improvements as follows: $20.5 for swimming, $10.9 for boating, and $11.7 for fishing. These estimated non-use values excluded existence and bequest values of these activities by active users, and other ecological benefits valued by both groups. Reviewing relevant literature, Apogee (1990) provided additional estimates of non-use values associated with water quality and concluded that the non-use component was 50% of TEV.

Biodiversity itself also provides substantial non-use value, which may roughly be captured by people’s WTP to preserve endangered species. Bishop (1987) estimated the taxpayers’ WTP for the striped shiner (designated as an endangered species) to be in the range of USD10.2 - USD13.8. Aggregating all of Wisconsin’s taxpayers, the WTP was estimated to be USD29 million, which was almost 20% of the estimated direct use value of all of Wisconsin’s sport and commercial fisheries in the Great Lakes (USD154 million). Because this fish has no identified use value to society, this WTP can be interpreted as the total non-use value. These values give an indication of the magnitude of non-use values associated with Great Lakes resources.

Although, as indicated, it is a significant challenge to capture the benefits of non-use values, almost all the literature noted that even if non-use values might be insignificant at the individual level, aggregated values for an entire economy are significant. For example, Freeman (1979) stated that the total non-use values might fall in the range of 60% - 80% of TEV.

Aggregated Economic Contribution

Based on the methodology adopted in Chapter 3 and the subsequent calculations in Chapter 4, the present study estimates that, in Canada, the value of economic contributions of the activities in and around the Great Lakes is in the amount of $13.8 billion dollars. Table 7 and Matrix 2 show the details on the values adopting the TEV framework discussed in Chapter 3.

Source: Fisheries and Oceans Canada Staff calculation, Policy and Economics, Central and Arctic Region.

Of the total quantified direct use values of $13.8 billion, non-extractive use and extractive use values accounted for $12.0 billion (86.8%) and $1.8 billion (13.2%), respectively. Moreover, of that $13.8 billion total, expenditures made, as well as imputed values/prices for the activities in and around the Great Lakes, comprised $13.4 billion (96.9%) and the consumer surplus constituted the remaining $0.4 billion (3.1%).

The Great Lakes basin also provides opportunities for research activities that inform and benefit others and provide a better understanding of the ecology. Research is often integrated with education. Although, estimating the economic value of these uses is difficult, their contribution in this area cannot be overlooked. Public outreach programs can improve public awareness, understanding and appreciation of the values of the ecosystems. Such programs also provide an opportunity to educate the public about activities that are carried out and about the negative impacts that human activities sometimes have on these ecosystems.

There are some associated private values held by people who live near or who visit the Great Lakes, usually captured in the literature as “aesthetic and amenity values”. For example, while the carbon storage and nutrient cycling services of wetlands are public goods, there is also a private benefit to homeowners from living near the wetland (Marbek, 2010b). There is a growing economic literature (e.g. Johnston et al., 2001; Earhhart, 2001; Pompe, 2008) pertaining to the implicit prices people are willing to pay to benefit from environmental amenities. This study excludes aesthetic and amenities values from the overall calculation of the economic values in order to avoid double-counting problems, as these values overlap some of the benefits of recreational activities (e.g. recreational fishing and boating).

The estimations of the economic contributions of the Great Lakes discussed in this chapter should be viewed as conservative estimates. The conservative estimates are provided by: (i) adjusting estimation variables where significant variations and uncertainties exist in the literature; and (ii) using reasonable proxies based on literature review and experts’ opinions. For example, if candidate proxies showed significant variations (e.g. proxies used for water use), the study adopted the lower values to avoid overestimation of the economic contributions of the activities/sectors. In addition, there were some underestimations of values in some sectoral activities due to lack of complete information required to provide defensible estimates, an issue further elaborated below.

Limitations/Gaps Identified in the Study

While undertaking an assessment of the economic contributions generated by the Great Lakes basin, the study found the following data gaps/limitations:

Water Use: Pertaining to water consumption from the Great Lakes, there were shortcomings in the study’s analysis due to incomplete information, and that resulted in a failure to capture the full spectrum of the value of the consumed water to the economy. The study particularly suffered from incompleteness stemming from the use of proxies for the valuations of water used for residential, agricultural, and industrial purposes. For example, the study used Statistics Canada’s estimates of operating/ maintenance costs of raw intake water from the Great Lakes basin, assuming that water revenue structures closely reflect the full cost of water production. For industrial water uses, the study used the shadow price of water intake for Canadian business sector industries from Dachraoui and Harchaoui (2004). Similarly, for agricultural water use, the study used the estimated value of water used in irrigation for Southern Ontario as proxy, both for Great Lakes water used for irrigation and for livestock. No Great Lakes specific data on the valuation of water used for those purposes was found. Furthermore, the study excluded consumer surplus values of water use from the assessment due to missing information on subject areas.

Heating and Cooling (including nuclear and thermal plants): The Great Lakes Commission (2010) estimated that Ontario’s annual water withdrawal and consumption were 2,028 and 18 million m³ by the fossil fuel power plants, and 13,990 and 126 million m³ by nuclear power plants, respectively. In Quebec, fossil fuel power plants annually withdrew and consumed 65 and 6 million m³, respectively.^{Footnote 79} In terms of the economic value of this water in the process of heating and cooling thermal power plants, the Industrial Water Use Survey found that Ontario’s thermal power generating plants spent $9.1 billion on water intake operating and maintenance costs for the intake of 23,228 million m³ of water in 1996. This expenditure results in an average intake cost of 0.39/m³ (Marbek, 2010b).^{Footnote 80} Unfortunately, an estimate of the full benefits (e.g. avoided electricity production, avoided pollution costs) of this usage was not available and therefore, has been excluded from the baseline calculation of the present study.

Hydropower Production: The Great Lakes provide important low cost and clean electricity generation opportunities through hydropower production. Ontario Power Generation currently operates 65 hydroelectric stations (including a green power portfolio of 29 small hydroelectric plants) and 240 dams on 24 river systems, with the majority stationed throughout the Great Lakes basin. In total, hydroelectric generation produced 32.4 terawatt-hours of power in 2011.^{Footnote 81}

According to the Great Lakes Commission (2010), Ontario’s annual water withdrawal from the Great Lakes basin under this category was approximately 262 billion m³ (190 billion gallon per day). Marbek (2010b) reported that the Sir Adam Beck power plant on the Niagara River used in the range of 9 -11 billion m³ of water each month, and produced $100 - $150 million worth of electricity. However, due to the absence of information on the hydropower generated by other plants (Long Sault and Moses Saunders) and the lack of a detailed cost structure of hydropower production, the present study excluded these benefits generated by the Great Lakes from the baseline values.

Self-Supply of Water for Other Uses: The Great Lakes Commission (2010) category of “self-supply of water used for other purposes” includes water used to maintain levels for navigation, for recreation, for fish and wildlife habitat creation and enhancement (excluding fish hatchery operations), flow augmentation/diversion, sanitation, pollution confinement, temporary or immediate emergency situations (e.g., fighting forest or peat fires), and other water quality purposes and agricultural activities/services other than those directly related to irrigation, such as, field drainage. According to the Great Lakes Commission (2010), Ontario’s annual water withdrawal from the Great Lakes basin under this category was approximately 276 million m³ (200 million gallon per day). Unfortunately, estimates of the values of these usages were not available and, therefore, were excluded from the baseline calculation of the present study.

Commercial Fishing: The economic contributions of commercial fishing were underestimated because of missing information on landings from St. Clair river basin. The estimation may also have differed from actual contributions because market price proxies were used to fill in the gap in market value/price data.

Recreational Hunting, Wildlife Viewing: The recreational hunting and wildlife viewing expenditures were not available for the Great Lake basin. As a result, the study scaled down residents’ expenditures and consumer surplus values from Environment Canada (2000) and further adjusted 1996 survey data for current year. The estimated values therefore were, to some extent, underestimations of the actual contributions, as it excluded the relevant values generated by non-resident Canadians and foreign participants. Recent estimates of expenditure and consumer surplus values specific to the Great Lakes basin would allow for a better assessment of the economic contributions of this sector.

Recreational Boating: The recreational boating expenditures were not available for the Great Lake basin. Therefore, the study scaled down expenditures estimated for Ontario from Genesis Public Opinion Research Inc. (2007) and consumer surplus values from Environment Canada (2000), and made further adjustments for inflation. Moreover, unlike recreational fishing, expenses wholly attributable to recreational boating was not available. Therefore, due to the lack of lake-specific information and expenses wholly attributable to recreational boating, the estimates may have contained inaccuracy to some extent.

Beaches and Lakefront Use: The beaches and lakefront uses data were not available for the Great Lake basin. As a result, the study used inflation-adjusted average value from Krantzberg et al. (2008), which was scaled down from a US estimate done in 2004. Moreover, no information was available on consumer surplus values of these activities in the Great Lakes. Therefore, the assessment made in the study likely underestimated the actual contributions of these activities. More recent Great Lakes-specific estimates of expenditure and consumer surplus values would have allowed for a better assessment of the economic contributions of this sector.

Aquaculture: Commercial cage aquaculture in Ontario mostly occurs in the North Channel of Lake Huron (Manitoulin Island) and in Georgian Bay.^{Footnote 82} Statistics Canada valued the aquaculture industry in Ontario in 2004 as having a gross output of $22.7 million, consisting of the sales value of products and services. Ontario’s commercial aquaculture industry (Great Lakes and land-based) contributes about $65 million to the province’s economy and produces over 4,500t of fish annually.^{Footnote 83} These numbers represent aquaculture in Ontario and not just from the Great Lakes, however the majority of aquaculture in Ontario occurs in Lake Huron. The Great Lakes play a vital role as one of the inputs used in the production process of the aquaculture industry. However, due to the absence of information on a detailed cost structure of aquaculture production, the study excluded the contributions of the Great Lakes to the development of the aquaculture industry from the baseline values.

Other Recreational Benefits: The Great Lakes provide additional benefits from a variety of other recreational uses, such as skiing and snowmobiling in the winter, and hiking, camping and golfing. Several studies (e.g. Environment Canada, 2000, Office of the Great Lakes, 2009, and Price Waterhouse Coopers, 2004) documented the benefits of such activities associated with tourism, with no attempts to separate the individual categories. For example, Environment Canada (2000) estimated that Ontario residents spent $2,851 million on “outdoor activities in natural areas” in 1996. Along with activities such as hiking and camping, the list of “outdoor activities in natural areas” also included sightseeing in natural areas, swimming/beach activity and power boating, which have been included in the present study as individual categories. Therefore, as it was not feasible to extract the values of individual activities, some recreational benefits have been excluded from the calculation of economic benefits in the study.