FINAL REPORT - International Joint Commission

ANNEX 2
Erosion of Unprotected Properties
Erosion along the lower St. Lawrence was calculated for unprotected properties. On the lower river there
are very few developed, unprotected eroding properties. The land that is eroding is primarily located on
undeveloped islands. On the Lake, no value was given to this land lost because a gain was assumed
elsewhere in the system. This is not necessarily the case on the River, where sediments are carried
downstream towards the ocean. However, two important findings played into the analysis. First, the economic
value of the property lost was so small that it simply did not factor into the plan-evaluation decision process.
Second, based on field observations and modeling studies, it was determined that in many areas along the
lower river, erosion is primarily ship-wake driven. While water levels play a significant role in erosion
processes along the River, regulation of Lake Ontario outflow is seen to have an influence on erosion rates
that is secondary to the large seasonal fluctuations in River levels (Davies and MacDonald, 2004a).
Shoreline Protection Maintenance
About half of the total frontage on the lower St. Lawrence River has shore protection. Economic analysis
shows that the cost of shore protection far outweighs the economic value of land lost due to erosion.
Shoreline protection maintenance is calculated in a St. Lawrence River Model (SRM) developed by Pacific
International Ltd. The scour at a structure is determined from a set of polynomial equations with
coefficients that vary according to water level. Required structure crest elevation is computed from the
higher statistics of the maximum quarter-monthly water levels using a moving 10-year window. These
are combined with data on structure locations and type in order to compute the change in the annual
equivalent cost of shore protection. A detailed survey was undertaken to document the individual shore
protection structures along the lower river. Scour modeling was validated by comparison of the rate of
bed downcutting to that at unprotected eroding sites in the vicinity. The water level fluctuation statistics
used for determination of structure crest elevation were compared with those from more detailed models
(Davies and MacDonald, 2004a).
Baseline Economics
An estimated 25,000 privately owned riparian properties are located on Lake Ontario and the St. Lawrence
River upstream of the Moses Saunders Dam. There are three components of baseline economics in the
case of shoreline properties: (i) developed properties without shoreline protection, (ii) properties with
existing shoreline protection, and (iii) properties at risk of flooding.
With respect to erosion, there are close to 2,700 developed properties in the coastal database (i.e., properties
with residential or commercial buildings) that do not currently have shore protection, which places them at
risk of erosion damages. The assessed building value for these properties is close to US$300 million (not
including land value). There are approximately 5,000 developed properties that already have good quality
(level 1 or 2) shore protection. The shore protection structure value itself is close to US$500 million and
the assessed building value is roughly US$1 billion. (Baird, 2005b). The difficulty lies in the fact that these
are the values of the housing and property stock. They are not appropriate as baseline measures because
what is needed is an estimate of the scale of the annual flow of economic activity.
To provide the right context for annualized damages, a value for a building needs to be put in annualized
terms. A standard way to develop a context measure, suggested by the economic advisors, was to use the
depreciation of the shoreline building. Depreciation is an estimate of the amount of expenditure needed to
keep the value of the housing stock unchanged. As a result, it provides an estimate of annual loss of
investment irrespective of regulation plan. Based on a depreciation rate of 3.6%, as suggested by the
economic advisors, the annual depreciation of the US$300 million building value at risk of erosion is roughly
US$10.8 million. This represents the denominator to be used in assessing the percent benefit gained or
lost by any given plan relative to plan 1958-DD for the erosion performance indicator. In the case of erosion
to undeveloped, protected properties on Lake Ontario, Plan B + has a net benefit of -US$0.17 million relative
to Plan 1958-DD. The percent damage for this performance indicator then, would be -US$0.17 million
divided by US$10.8 million for a loss of 2%.
62 Options for Managing Lake Ontario and St. Lawrence River Water Levels and Flows