FINAL REPORT - International Joint Commission

Since the value of shore protection will increase over time as new shore protection is built as part of the
erosion performance indicator, it is difficult to separate the baseline economics for the shoreline protection
maintenance indicator and the erosion performance indicator. However if only the properties with existing
shoreline protection are used, a conservative estimate results. Combining shore protection value with
building value provides a total investment value of US$1.5 billion. A 3.6% depreciation rate yields an
annual depreciation of roughly US$54 million to be used as the baseline economic value for Lake Ontario
shore protection maintenance. In other words, regardless of the regulation plan in place, it is estimated
that property owners would spend approximately $54 million annually to maintain their property values.
Thus, gains and losses associated with a specific regulation plan can be measured relative to this amount.
ANNEX 2
With respect to flooding on Lake Ontario, there are approximately 2,400 developed properties that are
within 2.0 m of chart datum and considered at risk from flooding. The building and contents value for
the 2,400 properties is estimated at $500 million. Based on the 3.6% rate the depreciation measure is
US$18 million. Among the counties assessed on the upper St. Lawrence River (Jefferson and St. Lawrence
Counties), there were approximately 600 properties at risk of flooding, representing a US$75 million
building and contents value. The resulting baseline economic value, based on 3.6% depreciation, would
be US$2.7 million.
On the St. Lawrence River downstream of the Moses Saunders dam, there are an estimated 5,770 singlefamily
dwellings within the 100-year floodplain, with an estimated value of US$380 million, with a
depreciation value of $13.7 million to be considered the baseline for downstream flooding damages.
Thus, the sum of these flooding-related depreciation costs is US$18.0 million + US$2.7 million +
US$13.7 million = US$34.4 million. As pointed out above, gains and losses associated with a specific
regulation plan can be measured relative to this amount.
Downstream shore protection maintenance damages should be relative to the depreciation of the
$200 million in shore protection infrastructure for a baseline of $7.2 million.
Table C-2 shows the baseline economics for the coastal performance indicators, in millions of U.S. dollars
annually.
Table C-2: Economic Baselines for the Coastal Performance Indicators ($US million)
COASTAL
Economic Baseline
Lake Ontario $82.8
Shore Protection Maintenance $54.0
Erosion of Unprotected Developed Parcels $10.8
Flooding $18.0
Upper St. Lawrence River $2.7
Flooding $2.7
St. Lawrence $20.9
Flooding $13.7
Shore Protection Maintenance $7.2
Options for Managing Lake Ontario and St. Lawrence River Water Levels and Flows
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