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State of The Lakes Ecosystem Conference
        A Changing Great Lakes Economy:
      Economic and Environmental Linkages

                  October 1994
              Environment Canada
               nvironmental Protection Agency
                 EPA 905-D-94-001f

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State of the Lakes Ecosystem Conference
A CHANGING GREAT LAKES
ECONOMY: ECONOMIC AND
ENVIRONMENTAL LINKAGES
         David R. Allardice
     Federal Reserve Bank of Chicago
          Chicago, Illinois


           Steve Thorp
       Great Lakes Commission
        Ann Arbor, Michigan
            July 1994

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Table of Contents

Acknowledgments	iii

EXECUTIVE SUMMARY	  1

1.0 INTRODUCTION	  3
       1.1 Concepts of Ecosystem Health	  3
       1.2 Great Lakes Aquatic Ecosystem Objectives	  5
       1.3 Indicators  	  6
             1.3.1 Fish and Wildlife Health Indicators	  6
             1.3.2 Community Health Indicators	  7

2.0 STATUS AND TRENDS FOR FISH AND WILDLIFE HEALTH	  11

3.0 STATUS AND TRENDS FOR COMMUNITY HEALTH	  15
       3.1 Case Study: Lake Erie  	  17
       3.2 Oligotrophic Waters	  18

4.0 MANAGEMENT IMPLICATIONS	  21
       4.1 Evaluation of Stresses	  21
       4.2 Management Challenge	  22

5.0 LITERATURE CITED	  25

Figures	  29


                              NOTICE TO READER

These  Working  Papers   are intended to provide  a  concise overview  of the  status
of conditions  in   the   Great  Lakes.    The information  they  present  has  been
selected  as  representative   of  the   much  greater   volume   of  data.     They
therefore   do  not  present  all  research   or   monitoring  information   available.
The   Papers  were  prepared   -with  input  from   many  individuals  representing
diverse sectors of society.

The  Papers  will   provide  the  basis  for  discussions  at  SOLEC.   Readers  are
encouraged   to  provide   specific   information  and  references  for  use   in
preparing  the  final post-conference   versions  of  the  Papers.     Together  with
the   information   provided   by  SOLEC  discussants,   the  Papers   will   be
incorporated into   the  SOLEC  Proceedings,  which   will  provide  key  information
required by managers to make better environmental decisions.
                                                                             11

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ACKNOWLEDGEMENTS
Several individuals have contributed material for this paper or have offered comments. The
authors appreciated their contributions.

Mike Donahue, Great Lakes Commission
Carol Ratza, Great Lakes Commission
John Hankins, CICNet
Linda Aguilar, Federal Reserve Bank of Chicago (FRBC)
Bill Testa, FRBC
Eric Hartman, Northeast-Midwest Institute
Ted Cowan, Environment Canada
Angela Zeiler, Environment Canada
Tom Muir, Environment Canada
Sally Lemer, University of Waterloo
                                                                                m

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                                NOTICE TO READER
These Working Papers are intended to provide a concise overview of the status of conditions
in the Great Lakes.  The information they present has been selected as representative of the
much greater volume  of data.   They therefore do not present all research or monitoring
information available.   The  Papers were  prepared with  input from  many  individuals
representing diverse sectors of society.

The Papers will provide the basis for discussions at SOLEC.  Readers are encouraged to
provide specific information and references for use in preparing the final post-conference
versions of the Papers. Together with the information provided by SOLEC discussants, the
Papers will be incorporated into the SOLEC Proceedings, which will provide key information
required by managers to make better environmental decisions.
                                                                                  IV

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EXECUTIVE SUMMARY
The Great Lakes Basin, containing the world's largest system of fresh water, is the resource
centerpiece of a major industrial and agricultural region of North America.  Although the region
straddles an international border which separates distinct political traditions and national cultures,
an integrated resource base and manufacturing complex has developed. This binational regional
economy with its historical ties to the Great Lakes and its manufacturing sector strengths is
continuing to evolve.  Increased  competition within  the  domestic  and global  economies,  a
maturing industrial and supporting infrastructure, continued urbanization and the environmental
impacts of economic and social activity have placed the region at a strategic and historic
crossroads.  A new development path is inevitable.

In the development of the Great Lakes region, water was not just important; it  was the most
important factor guiding settlement and establishing the economy.  The natural water routes and
canal links channeled territorial expansion, and with it came the underpinnings  for economic
development, including water-dependent transportation and industrial operations. From this water
genesis, an agricultural-industrial complex was created, and it continued to expand abetted by a
productive labor force and an entrepreneurial business class. Technological innovation was the
rule-of-the-day as new manufacturing methods were  pioneered, resulting in  a profusion of
products.  Standardization of goods and mass production combined with relatively high wages
created a consumer society. The region with its concentration of steel and iron production and
metal fabricating naturally spawned a large cluster of durable goods manufacturing operations.
Machinery, transportation and other  equipment, appliances, motor vehicles and construction
materials became manufacturing mainstays. Through this production bonanza, the region helped
build the rest of Canada and America.

Within the Great Lakes region, the Canadian and U.S. economies reveal strong present-day
linkages and many similarities to  one another. They  are  not,  though, mirror  reflections, but
portray significant differences in  economic performance and structure.   For example,  as the
greater regional economy becomes more diversified and less concentrated in the manufacturing
sector,  Ontario   and  parts  of the western Great  Lakes region continue to  industrialize.
Nevertheless, the flow of resources, merchandise and information between Ontario  and the Great
Lakes states inextricably binds the two sides of the regional economy together and makes it an
economic force in the global arena.

The Great Lakes Basin represents nearly 11% of total employment and 15% of manufacturing
employment for the two nations. Total Basin employment increased between 1970 and 199,0 but
it should be noted that on the U.S. side of the border the growth rate of total employment in the
Basin was less  than  half the  growth  rate for  total employment in the U.S. (25% vs. 53%).
Similarly, while  total employment in  Canada during  this period grew at a 15% rate,  total
employment in the Canadian counties in the Basin grew by only 6%.

The most dramatic employment change that has occurred in the region is the redistribution of

A changing Great Lakes economy - SOLEC working paper                                     1

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jobs among industries as is demonstrated by the decline in manufacturing jobs.  Nearly 21% of
the Basin's manufacturing jobs were lost between 1970 to 1990, with the greatest number of jobs
being lost in the manufacturing industries within the Lake Michigan  basin. In contrast, while
hardly robust, total manufacturing jobs in the U.S. actually increased by only .3%, whereas in
Canada, they grew strongly by 22%.

The transboundary integration of the regional economy has had much to do with making U.S.-
Canada trade the largest such bilateral relationship in the world.  The United States and Canada
are each other's most important trading partners  in terms of value.   U.S. exports to Canada
comprise more than one-fifth of total U.S. exports, and Canada's exports to the U.S.  make up
more than two-thirds of its total exports. Trade between Canada and the eight Great Lakes states
in  1992 was valued  at $106 billion, or 56.2%  of the U.S.-Canada total.   Much of this trade
volume and value has an Ontario connection with nearly three-fifths of that amount concentrated
in autos, automotive  parts and engines. Commodity movement via land crossings predominate
in total transits  and merchandise value, all of which is  focused on only 27 highway crossings,
11  rail crossings and 6  ferry crossings.

People, as well  as goods, cross the international border  in great numbers. The purpose of such
trips is quite varied, including job commuting, retail shopping and a wide range of leisure travel.
As for U.S.-Canada travel, the Great Lakes states generated 20.4 million person trips to Canada
in  1992, or 63% of all such U.S. trips.  Great Lakes state travelers accounted for 4.7 million
overnight visits to Ontario, which represented about 75% of all such visits to the province.  On
the other hand,  nearly half of Canadian visitors to the United States report a  "presence" in the
region, but such travel is dominated by day-only stays and pass-through travel.  Ontario travelers
account for about three-quarters of all Canadian visits to the Great Lakes states.

A region's economy and employment characteristics have a connection to demographic patterns.
Great Lakes Basin population figures vary because of different methodologies used to sort out
metropolitan and urban county populations that overlap  the hydrologic boundary. A reasonable
estimate for 1991 is 33.4 million people for the combined Canadian and U.S. Basin populations,
including that portion of northeastern Illinois within the original watershed prior to that created
with the inter-basin diversion at Chicago.  The most populous individual Lake basin is Lake
Michigan's,  with more  than  10 million people, or  nearly a third of the total Great Lakes Basin
population.

In recent years, compared with its earlier heyday, the Great Lakes Basin population has seen very
little growth relative  to the rest of the U.S. and Canada. While the combined  population of the
U.S. and Canada grew by 22% from 1970 to 1990, rising from 225 million to 275 million, the
binational population of the Great Lakes Basin grew by less than 1%. Much of  the region's
population is concentrated in metropolitan areas and most of the  Basin metropolitan areas have
coastal locations.  On  the Canadian side, only six metropolitan areas, ranging in size from
Oshawa to Toronto represented 75% of the 1991 Canadian Basin population. The eleven largest
U.S. metro areas located completely or partially in the Basin accounted for 81% of the 1990 U.S.
Basin population. These 17  Basin metropolitan areas represent nearly 26 million residents.

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The Great Lakes'  coastal population and areas of concentration reflect the Basin's historical
connection to its shorelands. However, the U.S. Great Lakes coastal population overall has not
been growing in recent decades. As a percent of the eight-state population, the coastal population
dropped a percentage point in each of the last two decades and the total number of residents in
these counties has  also declined since 1960.  This pattern of decline masks a dispersal from the
large urban  counties to suburban  shore counties where "coastal amenities" and  growing
employment  opportunities have combined to increase these county populations.  Nevertheless,
building activity in Great Lakes coastal counties  has  been relatively light  compared to other
coastal regions.  According to the U.S.  National Oceanic and Atmospheric Administration, the
Great Lakes  counties, between  1970 and 1989,  ranked last in residential, retail and office
construction and accounted for only 17% of industrial building during that period. In the region,
as elsewhere, industry and service business development have been decentralizing from built-up
city locales to suburban—exurban fringe areas and connecting corridors between metropolitan
areas.  Land  and water availability, lower wage scales, transportation access, proximity to new
residential markets and other cost/service factors are propelling this kind of sprawl.

The most significant population  and related  development issue in the Great Lakes Basin and
surrounding region is the continuing growth  of  major metropolitan areas and the virtually
uncontrolled  sprawl of lower density residential areas and other development  The detrimental
consequences of these trends are well-known.  Increased  water and air pollution generation,
higher transportation and residential energy use, increasing encroachment on agricultural lands
and natural areas, higher housing costs, disinvestment in older communities and related social
disruption and burdensome physical infrastructure requirements portend a more difficult, if not
unsustainable, future for the Great Lakes Basin ecosystem.  However,  the  escalating cost of
extending utilities and other basic urban services to these lower density regions may ultimately
slow the process and stimulate a more sustainable pattern.  This new land stewardship ethic
would rely more on intensification of development within prescribed boundaries and existing
infrastructure capacity.

The Great Lakes Basin, with more than 100,000 square miles  of navigable water  and 10,579
miles of Great Lakes and connecting channels shoreline anchors an important and growing
marine and coastal recreation industry.  On the U.S. side of the Basin,  of the 178  state  parks,
110  have  coastal  locations.   On both  sides  of the  border,  coastal parks  represent  a
disproportionate large amount of park system visits. The natural beauty of the Great Lakes shore
with large tracts of relatively undeveloped land, coupled with good highway access and proximity
of population centers have promoted recreation and tourism-related travel.   The  recreational
boating  industry in the Great Lakes is represented by boat manufacturers and retailers, marina
operators, marine business suppliers as well as the millions of recreational boaters and anglers.
For the Great Lakes alone, it is estimated that between 900,000 and 1 million U.S. and Canadian
boats operate each year with a direct spending impact of more than $2 billion. With a strong
connection to boating, the Great Lakes sport fishery is a major part of regional fishing activity.
U.S. federal surveys projected 2.55 million U.S. anglers fished the Great Lakes in 1991 and had
total trip-related and equipment expenditures of $1.33 billion.  Expenditures per angler were
figured at about $500 for the year. These examples of coastal and marine  recreation activity

A changing Great Lakes economy - SOLEC working paper                                     3

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illustrate the key role the Great Lakes play in the regional economy.

The Great Lakes Basin and surrounding region faces a future filled with opportunities as well as
uncertainties.  Contending with its historical economic and environmental legacy, the region's
next development path can be one that both supports the economy and preserves the environment
This "sustainable development" course will require new measures to enhance economic growth
as well as institutional mechanisms among the public and private sectors designed to foster
cooperation and coordination in environmental protection.

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 1.0       The  Greater  Regional   Economy  -
             Historical  Development
The province of Ontario and the eight Great Lakes states comprise a major industrial and
agricultural region of North America.  Although the region straddles an international border
which separates distinct political traditions and national cultures, an integrated resource base and
manufacturing complex has developed.  The substantial economic activity nurtured in the Great
Lakes region has had much to do with making U.S.-Canada trade the largest such bilateral
relationship in the world.

Economic development created the modem Great Lakes region. Employment opportunities paved
the way for a relatively high standard of living and associated quality of life.  But with these
good times of ever-increasing prosperity, came the seeds of future challenges. The industrial and
supporting infrastructure matured and competition within a developing global economy sharpened.
Hundreds of thousands of high-paying jobs disappeared resulting in severe economic dislocation
for some communities and families.

Environmental degradation was another  outcome of the pell-mell industrial era. The binational
region's bountiful natural resources which helped sustain economic growth also were depleted,
in some cases recklessly.  The Great  Lakes, the region's resource centerpiece and the world's
largest system of freshwater, was damaged by Basin development and is still threatened.

In the development of the Great Lakes  region, water was not just important; it was the most
important factor for guiding settlement and establishing  the economy.  A growing seaboard
population and the 19th-century influx of immigrants spurred westward movement toward the
Great Lakes. The natural water routes and canal links channeled territorial, expansion and with
it  came the underpinnings of economic development  The passenger and freight network
distributed people and goods throughout the waterway system.  Localized services for shore
communities gradually expanded to support larger markets and hinterlands.  The first major
"gateway" cities in the region began as ports, such as Montreal, Cincinnati, Toronto, Pittsburgh,
Buffalo, Cleveland, Detroit, Chicago, Milwaukee, and Minneapolis-St. Paul. When the railroads
came,  they connected the cities of the water-based urban system.

An early dependence on water characterized these developing cities of the North  American
interior.   The major  settlement period  of  the Great Lakes region coincided with the rapid
development of industrial technologies and processes. Proximity to productive agricultural land
and access to important raw materials, coupled with a growing labor force, gave the region an
unparalleled advantage in domestic and overseas markets. Direct application of water power had
a more  limited role  in the Great Lakes cities compared  with places inland; rather, water
transportation was the foundation of shore-based manufacturing and related activities.  Water-
intensive industrial operations, whether located on the waterfront or nearby, were a natural result


A changing Great Lakes economy • SOLEC working paper                                  5

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of water availability. In many cases, the waterborne shipment option for raw material delivery
and movement of finished goods was a major location determinant

One of the first major water-connected industries to make use of the Great Lakes was logging
and sawmilling,  with gigantic log rafts moved around the system as the extensive white pine
forests surrounding the upper Lakes were logged.  Coal made its way overland to  the eastern
Great Lakes ports and from there was distributed by vessel for heating and, later, steelmaking
and  electricity generation.  Massive movements of iron ore from northern  Minnesota and
Michigan to lower Lakes steel mills and grain flows to eastern flour mills made the Great Lakes
transportation system the busiest in the world for many years.  This shipping "backbone" of Great
Lakes commercial navigation was made possible with the construction of a ship canal and lock
system, opened in 1855 at Sault Ste. Marie, Michigan and upgraded several times over the years.
The iron ore and coal movements coupled with grain flows to eastern flour mills made the Great
Lakes transportation system the busiest in the world  for many years.   These commodity
movements materialized in response to the  developing continental industrial base that  was
concentrated in the Great Lakes region.

This agricultural-industrial complex continued to expand, abetted by a productive labor force and
an entrepreneurial business class.  Technological innovation was the rule-of-the-day, as new
manufacturing methods were pioneered resulting in a profusion of products. Standardization of
goods and mass production combined with relatively high wages created a  consumer society.
The region with its  concentration of steel and iron production and metal  fabricating naturally
spawned a large cluster of durable goods manufacturing  operations. Machinery, transportation
and other equipment, appliances, motor vehicles and construction materials became manufacturing
mainstays.  Through this production bonanza, the region helped build the rest of Canada and
America.

Within the Great Lakes region the Canadian and U.S.  economies reveal strong present-day
linkages and many similarities to one another. However, both sides of the border are not mirror
reflections, but portray significant differences in economic performance and  structure.  For
example, as the greater regional economy becomes more diversified and less concentrated in the
manufacturing sector,  Ontario and  parts  of the  western  Great Lakes  region continue to
industrialize.  Nevertheless, the flow of resources, merchandise and information between Ontario
and the Great Lakes states inextricably binds the two sides of the regional economy together and
makes it an economic force in the global arena.

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    2.0       The Great Lakes  Basin - Population
                 and  Employment
    2.1  Population

    The  Great  Lakes Basin is the principal geographical feature  of  the  binational  region.
    Encompassing nearly 300,000 square miles, including 95,000 square miles in the Great Lakes and
    connecting waters themselves, the Basin forms the central core of the region with more than a
    third of the area's population and a substantial portion of its industrial activity.  The magnificent
    water resources of the Basin, which make up 20% of the surface freshwater on earth, have had
    a key role in supporting the Basin population and area industrial development

    Great Lakes Basin population figures vary because of different methodologies used  to sort out
    metropolitan and urban county populations that overlap the hydrologic boundary. A  reasonable
    estimate for 1991 is 33.4 million people for the combined Canadian and U.S. Basin populations.
    Table 1 shows the population for the individual Great Lakes basins.

                                         TABLE 1
                        POPULATION OF THE GREAT LAKES BASINS
Indiana
                      1,087,494
                        339,264
                                       1,426,758
Illinois
                      3,494,115
                                                 3,494,115
Michigan
142,606
1402,687
 3,007,954
 4,646,843
               9300,090
Minnesota
212,796
                                                   212,796
New York
                                   765,537
                                   2,702,065
                                       3,467,602
Ohio
                                 4,023,625
                                                 4,023,625
Pennsylvania
                                   242,261
                                     2,219
                                        244,480
Wisconsin
 70,146
           2,467,463
                                       2437,609
U.S. TOTAL*
425,548
1402,687
10,057,026
10,017430
2,704,284
24,707,075
Canada TOTAL**
181473
1,191,467
Not applicable
 1,664,639
5,446,611
 8,487,210
Great Lakes Basin
TOTAL
607,121
2,694,151
10,057,026
11,682,169
8,150,895
33384,157
    *     U.S. total is based on 1990 census data
    **    Canada total is based on 1991 census data
    Source: Great Lakes Commission and Environment Canada
    A changing Great Lakes economy - SOLEC working paper

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In recent years, compared with its earlier heyday, the Basin population has seen very little growth
relative to the rest of the U.S.  and Canada.  For example, while the combined population of the
U.S. and Canada grew by 22% from 1970 to 1990, rising from 225 million to 275 million, the
binational population of the  Great Lakes Basin  grew by less  than 1%.  This disparity in
population growth rates indicates a redistribution in  regional  economic  activity with older,
industrialized regions, such as the Basin, losing population in favor of newer, expanding regions.
In the U.S. this has taken the form of people relocating to the South and Southwest as the rapid
growth of these economies has become a magnet for migration.  Climate-influenced retirement
moves have added to the outbound numbers.

Both sides of the border reflect similar and divergent population trends. Ontario, with more than
a third of Canada's population, has been gaining population nearly twice  as fast as  the Great
Lakes states but its rate of growth is also slowing.  By 1990, the Great Lakes States' population
increased by only 1.7% since 1970 whereas Ontario's 1991 population increased by nearly a third
or 31% from  1971.  Both Canada and the United  States are experiencing similar age structure
changes as the post-war  baby  boom bulge advances.  A new baby boom is likely to kick in by
the end of the 21st century's first decade when births are expected to increase steadily. Fertility
patterns by race and ethnicity  are expected to remain varied.

Household Structure
Household structure is  another major demographic factor that is affecting  society and  the
economy.  American household size has declined  to record low levels (2.6 persons in 1990).
Fewer children, more one-person households and  one-parent families have contributed to  the
decline. A major socio-economic problem is the increase in one-parent households and its effect
on family income—these families represent three-fifths of all families living below the poverty
level. A "cycle of poverty" among these households has contributed to increasingly violent and
dysfunctional urban environments, particularly in the large U.S. cities including those in the Great
Lakes region.  Another ominous portent for the region linked to the increase in relatively poor
single-parent households as well as  the general aging of the population, is the dampening of
demand for  durable goods  and  its  consequent  effect on  one  of the region's  strengths,
manufacturing employment

Much of the region's population is concentrated in metropolitan areas.  With  the exclusion of
New York and Pennsylvania, two-fifths of the binational region's population is concentrated in
just seven urban areas:  Chicago, Cleveland, Detroit, Indianapolis, Milwaukee, Minneapolis-St
Paul and Toronto. Within the Great Lakes Basin, the urban dominance is even more pronounced.
On the Canadian side only six metropolitan areas, ranging in size from Oshawa to Toronto,
represented 75% of the 1991 Canadian Basin population. The 11 largest U.S. metro areas located
completely or partially in the Basin accounted for 81% of the 1990 U.S. Basin population.  These
17 Basin metropolitan areas represent nearly 26 million residents.  Table 2 shows population and
labor force data for selected Basin metropolitan areas.

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                                               TABLE 2
           POPULATION, TOTAL BASIN EMPLOYMENT AND LEADING ECONOMIC
      SECTORS
                            FOR SELECTED METROPOLITAN AREAS*
Chicago
6,069,974
3,176,270
634,884
552,686
672,938
Detroit
4,665,236
2326,077
459,629
517,267
500,172
Cleveland
2,102,248
1359,901
276,344
292,728
309,772
Milwaukee
1,432,149
 742,474
150,153
168,746
166,568
Buffalo
1,189,288
 584,658
124,118
101,947
148,058
Rochester
1,002,410
 519,059
 92,289
132,954
128,640
Toronto
3,893,046
2,229,090
389,555
384,815
451,835
Hamilton
 599,760
 322,875
 58,290
 70330
 74,645
London
 381,522
 211,690
 37,965
 33,425
 55,900
Kitchener
 356,421
 200,715
 35,600
 51,830
 41,755
Windsor
 262,421
 133,445
 21,820
 36,580
 29,915
Oshawa
 240,104
 131,990
 21,296
 31,605
 25,595
         U.S. data is from 1990 census.
         Canada data is from 1991 census
         Listed city is the principal city for metropolitan statistical area which may have a multiple city designation
         Community services includes such occupations as health, education, religion etc.

      Coastal  Development
      Most of the Basin metropolitan areas have coastal  locations.  Other coastal areas represent a
      sizable portion of the remainder Basin population. The 85 coastal counties in the Great Lakes
      states have about 19 million residents, which represents about 17% of the U.S. coastal population.
      With only 25%  of the total Great Lakes states' population located in coastal counties, this
      attribute is not a hallmark of the region compared to other coastal areas,  but it is particularly
      significant for several states. Michigan and Illinois  have about half of their states' populations
      residing  in  coastal counties and Wisconsin has  more  than  a third.   Nevertheless, the coastal
      county population is spread quite unevenly. For example, coastal population density ranges from
      a paltry  22 people per square mile in Minnesota to 4,040 in Illinois but averages 275 persons
      throughout the region compared to 183 persons per square mile for the entire eight  state area.
      Another measure of coastal population entails a calculation based on shoreline mile and on this
      basis the Great Lakes county shorelines in 1988 had the highest  average number of persons per
      A changing Great Lakes economy • SOLEC working paper

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mile (3,835) for a major coastal area in the U.S. Illinois' two coastal counties lead the nation
with more than 91,000 persons per mile of shoreline and Indiana's three counties with nearly
16,000 persons per shoreline mile is second highest in the region.  If  Indiana's Lake Michigan
basin population is used which represents only parts of the three coastal counties, then the
population per shoreline mile is more than 24,000.

The Great Lakes' coastal population and  areas of concentration reflect the Basin's historical
connection to its shorelands.  However, the overall U.S. Great Lakes coastal population  has not
been growing in recent decades. As a portion of the eight-state population, the coastal population
dropped a percentage point in each of the last two decades, and the total number of residents in
these counties has also declined since 1960. This pattern of decline masks a dispersal from the
large urban counties to  suburban shore  counties  where "coastal  amenities" and growing
employment opportunities have combined to increase these county populations.

As for more distant outlying counties, the heyday for second-home development appeared to peak
in the 1960s,  and the National Oceanic and Atmospheric Administration (NOAA) projects
relative slow population growth for most of these  counties from 1988 to 2010, with a few
exceptions.  In the binational Great Lakes region, the tens of thousands of inland lakes within
the Basin and nearby have acted to "deflect", to a certain extent, interest in residing on  a Great
Lakes shore.  This factor combined with already extensive second-home development and
retirement living within the coastal zone have probably blunted Great Lakes development
pressure from what might have occurred had the inland resort areas not been available.
According to NOAA, between 1970 and 1989 building activity in Great Lakes coastal counties
was particularly light compared with other  coastal areas.  As  reflected  in  the number of
building permits issued, the  Great Lakes counties ranked last in residential, retail and office
construction and accounted for only 17% of industrial building during that twenty-year period.
In the region as elsewhere, industry and service business development have been decentralizing
from built-up city locales to suburban—exurban fringe areas and connecting corridors between
metropolitan areas.  Land and water availability,  lower wage scales, transportation  access,
proximity to new residential  markets and other cost/service factors are propelling this kind of
sprawl.

Immigration
A population  issue that is receiving  increasing  attention in the  region  is the level  of
immigration and related pattern of settlement and lifestyles.  Ontario  is presently a destination
for more than 50% of immigrants to Canada, and two thirds of these new residents, or about
100,000 a year, have been locating in the Greater Toronto Area.   For the Great Lakes states,
immigration is not as focused geographically, with the major metropolitan areas each receiving
attention by one or more ethnic or racial groups. For example, the Chicago metropolitan area
is attractive to  persons of Hispanic origin whereas Detroit has the largest Middle Eastern
contingent in the United States.  Asian and Pacific Islander immigration to both Canadian and
U.S. places in the Great Lakes Basin is reasonably  strong.

In the U.S. an emerging political issue concerns the estimated 3.85 million illegal immigrants
in the country and the associated cost of social welfare programs. Several southern states have
sued the federal government seeking reimbursement for some of these costs. In Canada, public
debate  about  the government's immigration policy concerns the level and  impact  on the


                                                                                   10

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national economy. During recent recession periods, sensitivity about these issues increased
with concern expressed particularly about the number of non-working persons admitted under
the family reunification category.  Recent studies of immigrant households in the U.S., may
assuage some of these concerns—that average household income of legal immigrants surpasses
that of natives over  time.  Immigrants present new challenges and opportunities for their
communities and the Great Lakes Basin.  Immigrants infuse spirit in their new locales with
distinct cultural traditions and entrepreneurial propensities. However, they also add to the total
population pressures on the environment and can strain health, welfare and education systems.
Lifestyles of immigrants  though,   may resist  ready  incorporation of "western" resource
consumption habits and associated environmental impacts but relentless acculturation processes
usually narrow the gap over time.

Urban Sprawl
The most significant population issue in the Great Lakes Basin and surrounding region is the
continuing growth of major metropolitan areas and the virtually uncontrolled sprawl of lower
density residential areas.   The negative  consequences  of these  trends  are  well known.
Population-related pollution generation, higher transportation  and residential  energy use,
increasing encroachment  on agricultural lands and natural areas and burdensome physical
infrastructure requirements portend an unsustainable future.

The northern shore of western Lake Ontario exemplifies these current population growth and
distribution pressures within the Basin. Anchored by the Greater Toronto Area (GTA), the area
has experienced a 50% population increase since 1970 and contains  10 of Canada's 25 largest
municipalities.  Urban sprawl has spread  more than 100 kilometers from central Toronto
making surrounding counties the fastest growing in the province. This settlement pattern in
the GTA has resulted in  a substantial cumulative loss of productive agricultural land, now
estimated at 5,000 hectares per year.  From 1981 to 1986 urban development in the GTA
consumed nearly 21,000 hectares.

Development is impacting all elements of the region's ecosystem from degraded water and air
quality to increased costs for managing  the urban services infrastructure.  The provision of
adequate transportation services is particularly stressed by increasing urban sprawl.  Traffic
volume  in the  GTA is  expected to  increase about 6%  per year straining the  area's
transportation system with increasing road congestion, pollution and longer commuting  times
and distance.  By 2011, commuter trips for Metro Toronto, based on current trends, could
nearly double to around 500,000 each day but this level may be impossible to achieve unless
transit use is dramatically increased.  The GTA already has a high level of transit use by
commuters for a major metropolitan area at 25%, but much of this is concentrated in the City
of Toronto where the population density is 6000  people per square kilometer (15,540 per
square mile). Beyond the city boundary, population densities are less than half this figure—not
enough to support a viable transit system.

Another area of the Western Lake Ontario region that is confronting  particular land use issues
is the City of Hamilton and its harbor area which supports the largest concentration of heavy
industry in Canada. The bulk of Canada's steel manufacturing, with two large integrated mills,
is based on the south shore of the harbor. Of the 45 kilometers of harbor shoreline, more than
half are occupied by  industrial facilities.  Residential use is 11% and only 2% is public open

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space, mostly marinas and parks. Public access to the waterfront has become a major concern
for the residents of the Hamilton metropolitan area.  Hamilton harbor water quality is also a
public  concern and certainly has broad land use implications. The area of the harbor itself
represents only  4%  of its watershed and water conditions in the harbor are significantly
affected by natural runoff and agricultural land use practices (two-thirds of the watershed is
agricultural).  Pollutants also enter the harbor from combined sewer overflows, atmospheric
deposition and loadings from harbor sediments.  A Remedial Action Plan process is underway
for Hamilton Harbor to address water quality problems and restore beneficial uses.

Northwestern Indiana, northeastern Illinois and southeastern Wisconsin are part of the greater
Lower Lake Michigan Megalopolis, the third largest greater metropolitan area in the United
States  after  the Northeast Corridor  and Southern California.    Lake Michigan is this
metropolitan region's defining natural resource, serving as a principal source of drinking water
and industrial water supply and shaping transportation routes and population settlement as well
as having a major influence on the natural environment  Population growth for all these
geographic components has stabilized but distribution characteristics reflect the decentralizing
trend in evidence throughout the Basin.

In Northwest Indiana, the three-county population actually decreased about 4% from 1970 to
1990 but all of the loss was in the  most urban and industrialized county.  In northeastern
Illinois, the overall population of the six-county area increased only 4.1% from 1970 to 1990
but residential land consumption increased by an estimated 46%. One hundred and sixty-five
municipalities, mostly in outlying  areas  gained more than 1 million residents while 90
municipalities nearer  to  the  region's center had  a net loss of 771,000.  A disturbing
consequence of this decentralization pattern is the impact on the tax base for those communities
not part of the growth picture and associated impact on the provision of basic infrastructure
and social services.

In the seven-county Wisconsin  area,  which  includes the Milwaukee  metropolitan area,
population increased by less than 1% from 1970 to 1980 and by about 3% from 1980 to 1990.
Although only  a  quarter of this area has an  urban land  use  classification,  the rate  of
urbanization is accelerating.  From 1970 to 1985 urban land uses increased by 20% totaling
an additional  100  square miles.  Much of this land consumption has been at the  expense of
prime agricultural land which is now the focus of targeted preservation programs.
2.2 Employment

Employment trends in the Great Lakes Basin are influenced by demographic factors and many
sector-specific issues.  The Basin represents nearly 11% of total employment in the U.S. and
Canada.

As Figure 3 shows, total employment has increased, but it should be noted that on the U.S. side
of the border the growth rate in  the Basin was less than half that of the U.S. (25% vs 53%).
Similarly, while total employment in Canada during this period grew at a 15%  rate, total
employment in the Canadian counties in the Basin grew by only 6%.
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The Basin represents 15% of manufacturing employment for the two nations. The most dramatic
change that has occurred in the region is the distribution of jobs among industries.  It is the
economic core of the Basin that has been hardest hit over this period as is demonstrated by the
decline in manufacturing jobs (see Figure 4).  Domestic and global competitive pressures have
led to significant employment decline and a heavy emphasis on enhanced productivity. While
the Basin's manufacturers have been able to make great strides to enhance their competitive
position through important gains in productivity, the manufacturing employment base has been
significantly altered. Nearly 21% of the manufacturing jobs from 1970 to 1990 have been lost,
with the greatest number of jobs being lost in  the manufacturing industries within the Lake
Michigan drainage basin.  In contrast, while hardly robust, total manufacturing jobs in the U.S.
actually increased by .3%. In Canada they grew by 22%.

Growth  in  service-sector  employment has been dramatic.  Since 1970, more than 2 million
"service" jobs were added in the Basin, with a growth rate slightly greater than 100% (see Figure
5).  However, these jobs have often been lower paying than those in manufacturing that they are
replacing.  Furthermore, even this impressive rate of growth is behind the combined national
growth rates for service jobs from 1970-1990.  Given this, it is not surprising to find  that as the
number of manufacturing jobs declined, personal income growth also slowed noticeably.  From
1970 to  1980 personal income in the Basin grew by 140%, while from 1980 to 1990 the growth
rate fell to 83%.

This restructuring of the Great Lakes Basin economy has been a painful process as jobs have
been lost and key industries have seen their economic significance dissipate.  However,  this
difficult and continuing process is producing more efficient competitors who are succeeding in
meeting global competition. However, it is this very competition which will provide the ongoing
challenge to the region.  Current economic research  has shown that in economic regions,
industries are  found to be arranged in clusters, where the productivity of all the region's firms
both big  and small, service and manufacturing, reinforce the competitive position of the area
economy. An important finding of this research is that regions, not nations or individual states,
will compete for jobs and economic growth in the 1990s.  The Great Lakes Basin possesses
economic and geographic/resource advantages that are enviable.  The Basin, despite considerable
economic change, still represents a personal income total of more than $520 billion, nearly 11%
of total employment and 15% of manufacturing employment for the two nations.  These strengths
give the region a base from which to launch its future.
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3.0       U.S.  - Canada Trade
The United States and Canada maintain the largest bilateral trade relationship in the world, and
are each other's most important trading partners. U.S. exports to Canada comprise more than
one-fifth of total U.S. exports and Canada's exports to the U.S. make up more than two-thirds
of its total exports.  Trade between  Ontario and the Great Lakes states accounts for more than
half of this binational trade, with three-fifths of the amount concentrated in autos, automotive
parts and engines.

The eight Great Lakes states in 1992 exported $45.191 billion in goods and services to Canada,
and imported $61.036 billion from Canada. The states' $15.845 billion deficit is nearly twice
as big as the overall U.S. deficit of roughly $8 billion with Canada.  Table 3 shows the state-by-
state trade totals for 1992.
                                     TABLE 3
               CANADA - GREAT LAKES STATE TRADE FOR 1992
 Illinois
$5.789 billion
$5.234 billion
 Indiana
2.157
2.903
 Michigan
25.707
15.100
 Minnesota
2.252
1.775
 New York
14.817
6.955
 Ohio
4.819
7.638
 Pennsylvania
3.524
3.536
 Wisconsin
1.971
2.050
 TOTALS
61.036
45.091
U.S-Canada trade policy has evolved over many years.  One significant development along the
way was the  1965 Auto Pact, which ended certain Canadian export subsidies and imposed
performance requirements on U.S. auto producers in exchange for the privilege of selling autos
in Canada.  These requirements led American manufacturers to establish a large assembly base
north of the border. More recently, the U.S.-Canada Free Trade Agreement (FTA), which took
effect on January 1,1989, was designed to ratchet down all bilateral tariffs to zero by 1998, with
provisions to further enhance trade liberalization including a dispute settlement process.

Because of the FTA's phase-in process and the fact that the great majority of U.S.-Canada goods
trade already  crossed the border duty free, a quick  and substantial trade stimulus was not
A changing Great Lakes economy - SOLEC working paper
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expected.  Although FTA implementation coincided with economic slowdowns in both countries,
bilateral trade has increased since 1989, and Canada's significant trade surplus with the U.S.
increased.  Despite these developments, public opinion, particularly in Canada, reveals a deep
reservoir of skepticism about the FTA's benefits. The agreement has been widely blamed for
plant shutdowns and significant job losses in manufacturing that have occurred in Canada since
1989. Public concern on both sides of the border has also transferred to the North American Free
Trade Agreement (NAFTA), which took effect on January 1,1994 and seeks to fully incorporate
Mexico in continental trade liberalization.

Canada's economic woes since the FTA took effect were caused far less by the FTA than by high
interest rates and a recession that hammered Canada hard, with gross domestic product falling
0.5% in 1990 and 1.7% in 1991.  The FTA actually helped to keep merchandise exports to the
United States strong even during that recession, rising 19% from 1988 to 1991. By 1992, the
U.S. market absorbed Canadian merchandise exports worth $98.5 billion, out of total Canadian
exports of $125 billion.  The C.D. Howe Institute of Canada found in a 1992 study that Canada's
export gains to the United States were especially rapid in those sectors where  trade rules were
liberalized by the FTA.  In the category of office, telecommunications  and precision equipment,
for example, exports  to the United States rose by 74% from 1988 to 1991,  at a time when
Canada's  exports  of these  goods to the rest  of the world fell by 5.5%.   To be sure, some
Canadian industries have faced far keener competition as the FTA opened up the Canadian
market to more U.S. goods.  U.S. bilateral export gains, like Canada's, have been rapid in many
sectors affected by the FTA, with increases of 100% or more recorded between 1988 and 1992
in categories such as furniture, chemical products, plastics, paper products, apparel, and electric
machinery.

One of the FTA's most widely heralded achievements is in the area of dispute settlement For
the first time, binational panels were given the power to make binding rulings on each nation's
use  of laws  against below-cost "dumping" and unfair subsidization  of exports.  Canada has
prevailed in most of the cases heard by such panels.  The issue of subsidization has become the
focal point of concern  about the FTA  and  even NAFTA.  Critics  argue that the scope  of
binational reviews is too narrow. In a challenge to a U.S. anti-subsidy ruling, for example, the
tribunal can decide only if U.S. law was correctly applied, not whether the law's definition of
unfair subsidy was sound.  Others also argue that dispute resolution takes too long and is too
inconclusive,  as  cases  are  repeatedly  remanded  to each nation's  trade  agencies  for
reconsideration.   Hence, agreement on a common definition  of trade-distorting subsidies and
dumping is at the top of the agenda as North American trade policy develops and the NAFTA
process sorts itself out
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4.0       Selected Economic  Sector Profiles
4.1  Manufacturing

The eight Great Lakes states comprise more than one-third of the national manufacturing output
while the province of Ontario accounts for more than 50% of Canada's manufacturing activity.
The manufacturing sector's share of total  employment in  both the province and the states is
similar at more than  20%. For 1990, 6,770,000 Great Lakes state residents were employed in
manufacturing enterprises, and 966,000 Canadians were so employed in Ontario. The binational
region's manufacturing share of employment significantly exceeds that of their respective nations.
The region's manufacturing sector also illustrates the interconnected nature of industries on both
sides  of the border.  For example, in  the  mid-1980s, U.S. corporate  affiliates in Ontario
comprised more than a third of the province's manufacturing employment and an even higher
share of related value-added.  Canadian direct investment in  the Great Lakes states is less
pronounced but still accounted for 55,000 more jobs in  1987 than in 1977.

Among individual manufacturing industries, the two parts  of the binational regional economy
have  similar concentrations  of jobs in such  "metal bending" activities as primary metals
production, metal fabrication and transportation equipment  For example, the Great Lakes states
account for more than 70% of U.S. steel production, and Canada's four large integrated mills are
all in Ontario. In vehicle and related parts production the region also stars, with the Great Lakes
states producing 6 out of every 10 automobiles made in the U.S., and more than half of the
national truck and bus total.  Ontario has more than four-fifths of Canada's vehicle  assembly
work.

Ontario and the Great Lakes states differ, though, with respect to other major industry groupings.
Ontario firms are more concentrated in labor-intensive and resource-intensive industries such as
paper, lumber, furniture, textiles and apparel than are firms  on the U.S. side of the border.  The
U.S. region tends to have greater representation in industries  where capital and technology
intensity characterize the production processes, as in Pharmaceuticals, machinery, instruments and
electronics.

Substantial changes are occurring in Ontario's and the Great Lakes states' manufacturing sectors.
Ontario's share of Canada's manufacturing output has been growing slowly over the longer term
— up around 4% since the 1970s. On the other hand,  the U.S. Great Lakes region compared
with the nation,  has suffered a decline over the same period.  Since 1970, manufacturing
employment has declined significantly, with the Great Lakes states experiencing approximately
a 15 to 20% sector job loss.  American manufacturing is decentralizing throughout the U.S. in
response to such cost factors as wages, energy and land prices. In Canada, industry is continuing
to expand  in Ontario, building on such advantages as access to population centers and markets
and Toronto's burgeoning financial center status.

The Great Lakes region's abundant water supply is an important resource connection for industry.
Water use  in manufacturing operations is concentrated in five major sectors:  steel production,


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food processing, petroleum refining, chemicals/allied products and paper—all of which are well-
represented in the regional economy.  This intensity of water use is illustrated by the fact that
the Great Lakes states account for 40% of U.S. industrial water use, and much of this demand
is based in the Basin. Great Lakes water satisfies more than three-quarters of total industrial
demand in the Basin. In Ontario, the degree of dependency is even more pronounced at nearly
85%. Indiana and Michigan are the top states for industrial water use in the Great Lakes Basin,
while Ontario, at 2,058 million gallons per day, leads all jurisdictions.

On both sides of the border,  the  region's manufacturing sector has  been pruning inefficient
operations and investing in new technology. These aggressive modernization programs have not
been launched across-the-board,  but  key  industries have benefitted, resulting  in significant
productivity improvements.  One  key factor in the region's continuing strong manufacturing
performance is the implementation of so-called lean or agile manufacturing techniques, which
emphasizes quality and speedy response to market conditions based on technologically advanced
equipment and a flexible production process. Teamwork and participatory management are also
important to lean manufacturing.

The manufacturing workplace is gradually transforming itself from one of mass production with
its traditional hierarchical management and stress on total output to one of customized production
and employee  empowerment.   This process of "re-engineering"  a company's way  of doing
business also has the potential for new collaborative industry arrangements.  Temporary alliances
among  businesses where each company may specialize in design, manufacturing or marketing
with respect to a particular product are  possibilities spawned from the Great Lakes region's
cluster  of durable goods  manufacturing enterprises.

Along with industrial restructuring has come the loss of high-paying jobs and disruption of family
and community life in the region,  particularly, in areas where major industrial operations were
concentrated.  One such area, stretching from southeast Chicago into northwest Indiana (Calumet
Crescent Corridor) has become an incubator of ideas and demonstration projects designed to both
revitalize the local economy and aggressively address environmental problems by relying on
inherent community strengths and opportunities.  For example,  a major regional  project,  the
Environmental Technology Network, has been proposed by two organizations, City Innovation
(based  in Minnesota) and the Employment Research and Development Institute of Wilmette,
Illinois. Four major outcomes are projected:

        Create a sense of ownership in the future of what the Calumet region is now and can
        become.
        A collaborative regional vision that helps grassroots leaders relate  community interests
        to the larger  interests  of industries, workers, residents and investors throughout  the
        Corridor.
        Development of entrepreneurial skills and small business opportunities in environmental
        cleanup technology for a profit to help establish international leadership for the Corridor
        in this industry.
        Community-led strategies  for attracting and mobilizing resources  to the advantage of
        communities throughout the Corridor.

The Calumet Crescent Corridor  project offers a unique opportunity  to fuse  the technical
capabilities of existing businesses with the availability of skilled workers to tackle, among other

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problems, the issue of remediating polluted inactive industrial sites.  The Great Lakes Basin
contains thousands of such sites or "brownfields" where once thriving industrial operations have
now become, not  only blighted  areas of neglect, but in many cases, sources  of continuing
pollution. For example, Cuyahoga County in Ohio has between 10 and 14% of its land area or
roughly 40,000 acres categorized as brownfield. For the three Lake Michigan-adjacent counties
in Indiana, polluted groundwater and contaminated soils and sediments at manufacturing locations
have resulted in the designation of 8 Superfund cleanup sites, one Area of Concern designated
by the  International Joint Commission and more than 200 toxic waste sites warranting some
level of cleanup. These problem places particularly in the central urban areas within the Great
Lakes Basin, have handicapped efforts at redevelopment New development is deferred because
of cleanup costs and lingering uncertainty over liability issues thus encouraging such development
to migrate to outlying areas or undeveloped "greenfields."  Legislation and other remedies have
been proposed to address  the issue through targeted and expedited cleanups as well as new
business recruitment strategies that wisely match sites with appropriate uses.
4.2 Transportation

Transportation was a pivotal factor in the development of the Great Lakes-St Lawrence region.
The combination of a natural water transport infrastructure and a strong resource base promoted
settlement, agricultural development and a manufacturing economy.

As a trade route among native peoples and a corridor of discovery and commerce for the
Europeans, the Great  Lakes-St Lawrence River system, along with other rivers, formed  an
established transport system long before the United States and Canada became nations.  Over
time, an extensive rail, road  and pipeline grid was laid out and eventually a high-capacity air
transportation network was built

Today, the region's strong multi-modal transportation system compares favorably with any in the
world. Much of modem transportation technology was either invented or first implemented on
an efficient scale in this region. Freight movements in the binational region serve both domestic
markets and international trade.

Among the principal vehicle freight modes, a competitive and yet complementary relationship
has evolved.  The region's relatively high freight generation level is attributable, in part, to the
system's transport efficiencies. Particular modal patterns are evident in commodity movement
and route  structure.  Historically, east-west freight routes have had more capacity and volume
compared  to north-south links. However, in recent years, cross-border "north-south" commodity
flows have been increasing and the infrastructure to support this trend is receiving more attention.

The Great Lakes-St. Lawrence transportation system,  stretching more than 3,700 kilometers, is
a unique deep-draft navigation  route unlike  any other in the world.  Recent studies of the
system's economic impact indicate that more than 60,000 Canadian and U.S. jobs are dependent
on the cargo movements and these activities generate more than $3 billion in business revenue
and personal income.

Great Lakes and St Lawrence River  commodity movements are dominated by relatively low


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value bulk commodities. Total annual U.S. and Canadian tonnage (shipments and receipts) for
the 145 ports and terminals in the system has averaged around 200 million tons (181 million
metric tons) in recent years. Grain flows have been quite variable as the world grain market is
continually adjusting in terms of supply and demand.   North  American steel production and
related raw materials movement have been affected by recession periods and fluctuating levels
of imported steel.  Coal shipments, particularly those to electricity generating stations are more
stable but utility decisions on fuel contracts have dramatically altered some supply patterns. Salt,
which is used primarily for road de-icing, represents 5 to 8% of Canadian Great Lakes tonnage.
Petroleum products movement is significant for St Lawrence River ports and Sarnia, Ontario,
a major Great Lakes refinery center.  Movement of general cargoes (higher value containerized,
palletized and other processed  or manufactured goods) is declining on the Great Lakes and such
traffic now constitutes only a small percentage of SL Lawrence Seaway tonnage.

Since 1959, the modern Seaway with its seven river locks coupled with the older Welland Canal
has transitted more than 1.4 billion metric tons with an estimated value of $200 billion. With
few exceptions, annual tonnage for the Montreal-Lake Ontario Seaway section increased until the
peak year of 1977, when over 57.4 million metric tons were reported.  While there have been
year-to-year fluctuations since the late  1970s, the 31.9  million metric  tons recorded in 1993
indicate a substantial overall decline  in average Seaway tonnage.

Rail and motor carrier freight transportation  complement waterborne commerce in the Great
Lakes-St. Lawrence region but both maintain well-established service profiles while engaging in
intermodal operations and head-to-head competition in some instances.  Although annual truck
and rail freight fluctuate in response to business cycles, two trends are significant The combined
modes account respectively for three-fifths and two-thirds of Canadian and U.S. intercity tonnage,
but highway use, particularly  for the movement of manufactured goods, is expanding rapidly.
For example, U.S. highways carried  a third more total tonnage in 1990 than in 1980, whereas
U.S. rail movement of manufactured goods declined by about 15% during the decade. Intermodal
operations (rail haul of truck trailers and containers) have also been increasing in both countries
as shippers and carriers emphasize coordination in an effort to create a "seamless" transportation
system.

As the hallmark  of the region's manufacturing economy, the personal motor vehicle also
dominates passenger transportation. A relatively dense road network, encompassing around one
million miles of right-of-way, represents a mobility asset, though also a tremendous maintenance
and land use burden.  Rail passenger transportation plays a commuter role for several cities in
the region.  Although the region accounts for nearly 75% of U.S. and Canada station activity
(arrivals and departures), intercity rail travel is not growing.  On the other hand, air travel has
been expanding  its  mode  share.   The  region, because of  its  concentration of corporate
headquarters, generates a disproportionate amount of business-related air travel.

Within the Great Lakes Basin, commodities move across the international border by all modes
(air, water, rail and highway)  but land crossings predominate in total  transits and merchandise
trade value.  Minnesota, Michigan and New  York, the three Great Lakes states with Canada
border crossings, accounted for 82%  of 1992 U.S.-Canada trade value associated with the land
crossings or $123.2 billion. Table 4 indicates these shipments were handled through 27 highway
crossings, 11 rail crossings and 6 ferry crossings (3  vehicular and 3  railroad).  A growing
integration of the region's binational transportation system is evident. For rail operations this is

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indicated by the substantial amount of Canadian carrier-owned line located in the Great Lakes
states and the fact that half of Canadian rail revenues derived from movements between Canada
and the U.S. has an Ontario or Quebec connection.  Such transborder rail traffic is growing, now
accounting for 18% of total Canada-U.S. merchandise trade value and representing 23% of total
Canadian rail tonnage. Scheduled improvements to Michigan-Ontario rail crossings, including
a new tunnel at Port Huron-Sarnia, will enhance this trend. Cross-border truck movements have
keep pace with increasing  trade flows and for Ontario, one-quarter of  its trucking industry
revenues are tied to such movements.

                                     TABLE 4
         GREAT LAKES STATE AND PROVINCE BORDER CROSSINGS

 STATE    - HWY            RAIL            FERRY           TOTAL
 PROVINCE

 Michigan - Ontario 43613

 Minnesota   -8                4                0                12
 Ontario

 New   York   - 8                1                0                9
 Quebec

 New   York   - 7                3                0                10
 Ontario

 Total            27               11               6               44

      Source: Michigan Department of Transportation
Each of the transportation modes faces a unique set of challenges that will guide its future
development and  use.  The region's  overall transportation system is a  dynamic network
continuing to change in response to new challenges as well as opportunities. Even though the
private marketplace is the main arena for transportation decision-making,  public policy,  as
expressed through regulations, taxation and land use policies, has played a major role in the
movement of people and goods. The region's commodity movement patterns have developed
not only in response to geography and the orientation of population settlement but also from
government policy. National goals for transportation sufficiency and economic development
have fostered regulatory regimes and subsidy programs for various commodities and the
transport modes themselves. This welter of rules and practices has undeniably shaped the flow
of goods throughout the region.

For the region's deep-draft maritime sector, several issues pose serious problems.  A nine-
month navigation season for through traffic, vessel size limits, Canadian Seaway tolls and the
cumulative impact of pilotage costs for long-distance system movements have aU combined to
dampen growth prospects for Seaway general cargo shipping.   Bulk cargo, prone to  much
annual variability, also faces long-term threats from increasing tolls, various government cost


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recovery initiatives, dredging problems, rail competition and changes in supply sources.

The dredging issue illustrates the complexity of maritime sector challenges. Periodic dredging
to maintain authorized project depths is essential for Great Lakes commercial navigation.  For
example, for a 1,000-foot bulk carrier, the loss of one inch of vessel draft translates into a loss
of 270 tons of cargo carrying capacity.  Siltation levels  are high for many ports, especially
those at the outlets of rivers where the drainage basin is characterized  by heavy agricultural
activity.  Most of the 119 U.S. commercial harbors in the Great lakes are maintained by the
Army Corps of Engineers, with the others under private control. In recent years, an average
of 3 to 5 million cubic yards of material have been dredged each year at  a cost of up to $33
million.  Some of this dredged material is polluted, particularly that from industrialized harbors
and must be disposed of in confinement facilities.  In the United States, of the 26 such sites
built  since the 1970s, a few are  completely filled and all but two will be full or at design
capacity by the year 2006.  The difficulty in finding suitable sites for new disposal facilities
coupled  with a need to remediate existing  sites and the lack of adequate future financing for
this aspect of the Great Lakes dredging program are critical issues to be addressed for not only
commercial maritime interests but also for  governments at all levels.

Another significant issue relates to border crossings.  Vehicular traffic at  border crossings in
the Great Lakes region exhibits a  wide range in volume from a few thousand vehicles to more
than  8 million autos, trucks and  busses annually for a particular crossing.  For example, in
1992 only four border crossings—2 bridges and a tunnel  in eastern Michigan and a bridge in
western New York—accounted for nearly  30 million vehicle crossings, or 50% of the total
crossings in the region.  These facilities also handled about three-quarters of all truck crossings
on the region's international border.  The fact that most of the region's international border is
comprised of the Great Lakes and connecting channels, the St. Lawrence River and other
smaller rivers and lakes, tunnel and bridge  border crossings are more limited, which tends to
concentrate traffic and creates  particular  congestion, inspection/processing  and physical
infrastructure investment challenges. Unimpeded flow of cross-border traffic, whether it relates
to personal travel or goods movements especially with growing trade volumes and development
of just-in-time delivery and inventory systems, is vital to the region's economy.

Other important issues for the region's transportation system are pollution generation potential,
energy use  and land use impacts.  These issues were not high priority concerns during the
system's intensive development period.  Since the 1970s, with the periodic energy crises and
advent of concerted environmental regulation, these issues have become more salient, both for
government and private business. Pollution elimination and reduction policies coupled with
energy conservation measures are beginning to drive transportation activities, but land use
planning as a means to control transportation impacts has not progressed very far. Awareness
of the problems and the need for comprehensive transportation planning is growing.  As this
new transportation policy direction takes hold, society is challenged to devise effective and
practical means  to  institutionalize this  aspect of ecosystem management and sustainable
development
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4.3 Agriculture

The Great Lakes region encompasses a significant portion of the United States' and Canada's
farm sector and is a major part of the overall economy of the two nations and the region.  As
part of the greater region, Great lakes Basin agriculture is also diverse and productive, even
though it represents only 5.3% of total agriculture employment for both Canada and the U.S.

With respect to  value and  volume, dairy, cash grain and livestock sales are the  region's
mainstays. Unique climatic-production niches have also  contributed to a wealth of specialty
crops.  The high level of agricultural productivity is partly a function of geography.  The part of
the region located between 39° and 45° latitude has a combined soil and climate regime that
makes it a prime agriculture area. With  the  exclusion of the podzolic soils of the Canadian
Shield, the northern tier states, and mountain districts in New York and Pennsylvania, most of
the region is suitable for large-scale farming. Average annual precipitation within the prime area
ranges between 24 and 42 inches.  Along with an average 145-day growing season, the prime
area has moderate levels of potential evapotranspiration and solar radiation. These characteristics
make the region suitable for production of eight of the ten top food crops in the world.

Estimates  for 1990 show the Great Lakes states contain about 136 million acres of farmland,
representing a seventh of all land in farms in the United States and more than half the nonfederal
total land area of the states. U.S. Basin cropland and pasture area is estimated at about 28 million
acres. With almost 600,000 farms in the eight states (a quarter of the national total), the size of
the average farmstead is less than half of that for farms elsewhere. From an income perspective,
fanners in the region received more than $36 billion in cash receipts from farm commodity sales
with several billion dollars more in direct government farm program payments in 1989, or about
23% of the nationwide total. Eighty percent of farm  sales are tied to five commodities: milk,
corn, soybeans, cattle and calves and hogs.

With less than 10% of Canada's farmland, Ontario accounts for more than a quarter of the total
value of Canadian agricultural sales. The 1991 Census of Agriculture found 68,633  Ontario
farms, a 6% decrease since 1986.  Total farmland amounted to 13.5 million acres, a decrease of
4%  over  five years.  At 62% of total  Ontario farmland,  land devoted to crop production
decreased  only slightly from the previous census, but it represents a substantially smaller relative
share of land use compared  with that in the  Great Lakes  states.  Much of Canada's com and
soybean production is based in the province which  also grows  about half  of the  nation's
vegetables. Significant production niches in Southern Ontario exist for grapes, tobacco, tree fruits
and nursery products.

Great Lakes Basin agricultural productivity and the quality of its forestry resources could be in
jeopardy if significant climate change occurs. More so than for most occupations, fanning entails
gambling  on the vagaries of weather and climate.  Prolonged dry spells and seasonal droughts
have occurred throughout the Great Lakes region and  disrupt agriculture and harm forests on a
periodic basis. But the threat posed to area agriculture by CO2 -driven global warming and ozone
depletion caused by man-made gasses is real and serious.  There is evidence that over the last
100 years the average surface temperature in the Northern Hemisphere has increased 1° F and
the rate of warming is accelerating. Another degree or two of increase may result in significant
climate change.  Interior continental areas could experience longer, more persistent droughts,


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rainfall patterns may change precipitously, and on a positive note,  the growing season could
increase north of the 45th parallel.  For the Great Lakes region, a lengthened growing season
might  be  offset by more instability in rainfall amounts and planting/harvesting dates.   The
possible depletion of the ozone layer could compound the impact on  agricultural productivity if
it parallels the "greenhouse effect" An increase in ultraviolet radiation may cause some food and
non-food  plants  to  lose their tolerance to  sunlight  with  disastrous consequences for the
environment.

A major  agriculture-related problem for the  Great  Lakes Basin is soil erosion  and related
sedimentation.  Exacerbated by improper and inadequate land management practices, runoff and
wind erosion result  in  substantial  economic costs and  environmental  harm.  Agricultural
productivity is reduced, resulting in lower yields and/or greater fertilizer use.  Sediment transport
and deposition degrades water quality, limits uses of water resources and incurs significant
infrastructure costs,  including  harbor dredging.   According to the  1987 National Resources
Inventory conducted by the U.S. Department of Agriculture, more than 63 million tons of soil
erode annually  in the U.S. portion of the Great Lakes Basin.  Much of this erosion comes from
the more  than 20 million acres of Basin cropland.  In recent years  more responsible land-use
practices in agricultural areas have gained only modest ground, but future prospects are brighter
as more demonstration programs and assistance are directed to the problem.  The Conservation
Reserve Program and Great Lakes Basin Program in the U.S. and Ontario's Conservation and
Environment Protection  Assistance Program,  along with an array of other measures such as
contour plowing, conservation tillage, vegetative and woodland cover in erosion-prone areas, filter
strips, and sediment  detention ponds, have proved that progress  is possible.

Agricultural chemical use in the Great Lakes Region is a difficult issue with both economic and
environmental consequences. From row and field crop monoculture to specialty crops vulnerable
to disease and  infestation, many North American and  Basin fanners are hooked on chemical
pesticides, herbicides and fertilizers as a means to enhance yields and maintain product quality.
Agricultural chemicals are ubiquitous in the rural landscape but are also linked to urban areas:
the producing plants, the transportation system, at distribution  points and in the human food
chain. Toxic contamination of food and water supplies and personal exposure to such hazardous
substances are  fast  becoming major issues  in  agricultural policy.   Even though modern
monoculture is dependent on chemicals, alternatives do exist  Reducing chemical concentrations
may affect yield but can also reduce input costs.  Mechanical weed control that concentrates on
emergent weeds is an option. Time release and faster degradation formulations for chemicals can
reduce some risk to the environment Integrated pest management strategies and biotechnologies
that rely on natural control mechanisms such as enhancing predator/prey dynamics, sterilization
of breeding populations, hormone control meshed with natural growth cycles and development
of disease and  pest resistant corps and livestock are receiving increased research attention and
are gradually being introduced in day-to-day agricultural practice.

Over the last two decades, the farms in the region  have become more specialized, with domestic
production for export increasingly tied to larger-size farms. Also, farm receipts from crop sales
have increased in response to export market growth. The vagaries of export demand, though,
have challenged producers. When farm income declines, rural areas and part of the nonfarm
economy  also suffer because a large share of the farm sales are recycled as a result of farmers'
purchases of manufactured inputs, labor and services. Although the marketplace is the principal
arbiter  of   agricultural  production,  government  policy  relating  to  trade,   commodity

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production/price supports, soil conservation, habitat preservation, and rural development will play
a critical role in the future prosperity of the Great Lakes region's agriculture sector.


4.4 Energy

As is characteristic of modern industrial societies, Canada and the U.S. are energy-dependent
In the Great Lakes region, energy sources and consumption by end-use sector reveal particular
economic strengths and vulnerabilities. Although all conventional energy resources are found in
the region, most of the area's energy is derived from imported fuel sources.   For example,
petroleum is the principal energy source for the Great Lakes states, representing about a 37%
share in the late 1980s, whereas regional production amounted to only 4% of consumption. More
than three-fifths of this petroleum use is consumed by the transportation sector, which accounts
for nearly one-quarter of all U.S. regional energy use. The sector's almost total dependence on
petroleum-based fuels raises serious questions about related pollution and future  availability as
well as cost.  This level of petroleum consumption is likely to grow because of increasing use
by the transportation sector, coupled with decreasing use in other sectors.

Coal has the next largest energy share at 30%.  It is the dominant energy resource available in
the Great Lakes states where nearly 29% of U.S. coal reserves are located. Mining in the region,
which has been declining, is 20% of U.S. production, but the area consumes a third of national
production. Ontario has no coal mining, but imports low-sulfur Canadian coal and U.S. coal for
electricity generation and other industrial production.  Coal usage throughout the United States
has  been  undergoing a  dramatic  change over the last two  decades, primarily because of
environmental regulation that restricts the use of high-sulfur coal, the dominant coal found in the
Great Lakes region. To meet demand, the Great Lakes states must import coal, mainly from the
low-sulfur sources in the West

Natural gas and nuclear power are the other principal energy sources in the region. The Great
Lakes states  use eleven times more natural  gas  than they  produce.   The commercial  and
residential sectors are more  dependent on gas than other sectors, accounting for 49  and  60%
respectively of their total energy requirements.

Nuclear power as an energy source has  grown dramatically in the region. In the late 1980s,
nuclear power represented 8.6% of the Great Lakes states' total energy requirements, an increase
from just 0.4% in 1970.  With 41 of the nation's 110 operable nuclear  generating stations, the
Great Lakes states have lessened dependence on fossil fuels for producing electricity. Ontario
has  18 of Canada's 20 nuclear power plants.  These plants generate  more than 50% of the
electricity used in the province, and new stations will increase the figure to around 60% during
the 1990s.  The region's use of nuclear power has eliminated the need for an equivalent amount
of electricity derived from other fuel sources—mainly coal and natural gas. The proportionate
reduction in sulfur dioxide and to a lesser extent carbon dioxide has had a beneficial effect on
the environment but problems with radioactive waste disposal, particularly for the used nuclear
fuel, may offset air quality benefits.

The  principal renewable energy source used commercially  in the  Great Lakes  region is
hydropower tied  to electricity generation.  In Ontario,  hydropower represented 29% of the


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province's electricity output in 1992.  Among the Great Lakes states, New York ranks first in
hydroelectricity production  with three large facilities, an 800 megawatt (MW) plant on the St.
Lawrence River, a 2400 MW plant  on the Niagara River and a 1000 MW pumped storage
facility, all which supply about 10% of the state's power demand.  New  York,  because  of
electricity  imports from Canada, also ranks highest in use of electricity derived from hydro
facilities—around 18% of total state use.  Michigan is second in production with  most  of its
hydropower output coming  from a pumped storage plant at Ludington on Lake Michigan. This
facility, opened in 1973, is one of the largest in the world rated at 1872 MW and it complements
"baseload" coal fuel and nuclear generation capacity by providing electricity at peak periods.
Wisconsin, in contrast, relies  on a system of more than 70 hydropower sites to generate  about
4% of the state's electrical production. Wisconsin's stake in hydroelectricity is historic; the
world's first such central generating station  was built there in  1882.

The Great Lakes states' industrial sector is the largest energy-consuming sector, with petroleum,
coal and natural gas  all supplying between 25 and 30% of basic fuel needs along with electricity
at around  17%.  Even though the Great Lakes states have a concentration of energy-intensive
manufacturing such  as steel, petrochemicals and automobiles, its usage in this sector on  a per
capita basis is less than that  for the nation because of large energy efficiency improvements made
during the 1980s. Changes in  production processes and waste heat utilization have helped region
manufacturing operations maintain their competitive  position as well as reduce their energy-use
impact on the environment

The transportation sector's almost total dependence on petroleum-based fuels raises serious
questions about  related pollution and future availability as well as cost   In Canada  and the
United States, road  transport is the dominant mode for  fuel use  dwarfing all  other modes
combined (See Table 5).
                                        TABLE 5
                       TRANSPORTATION ENERGY USE - 1988
                                   (percentage by mode)

                       MODE              Canada      U.S.*

                       Air                 8.4          8.7

                       Marine              5.4          5.9

                       Pipelines            7.1          3.9

                       Road                74.5         72.5

                       Rail                 4.6          2.3

       *      U.S. figures do not include off-highway use (2.9%) and military use (3.5%)

       Sources:       Transportation Energy Data Book: Edition 11, Oak Ridge National Laboratory and
                     Martin Marietta Energy Systems, Inc., U.S.  Dept of Energy, 1991, and Energy and
                     Environmental Factors in Freight Transportation, Transport Canada, A.M. Khan, 1991.


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Transportation is also a major contributor to air pollution, particularly for certain pollutants.
According to the Organization for Economic Cooperation and Development, the transport
sector in Canada and the United States accounts for the following portions  of total North
American emissions: 71% of carbon monoxide; 47% of nitrogen oxides; 39% of hydrocarbons
and 14% of particulates. Transportation vehicles contribute only a small percentage of another
important pollutant, sulfur dioxide, and the  amount varies greatly depending on the sulfur
content of a particular fuel.  For the principal air pollutants, gasoline-fueled automobiles are
the major  sources and urban areas  the most heavily affected places.  However, freight
transportation, dependent on diesel fuel, makes a significant contribution to pollution levels but
the impacts vary according to mode and operations.

Fuel efficiency and emission control improvements across all modes are taking place spurred
by the  relatively high cost  of petroleum-based fuels  and environmental regulation.  Also
operational changes such as optimal routings for trucks and trains and better load management
resulting in fewer empty running miles have improved energy use and thereby reduced related
pollution.  Automobile use remains the most difficult transportation energy issue.  Principal
goals are to continue to increase auto fuel economy,  dampen the growth in  vehicle miles
travelled through increasing vehicle  occupancy levels and more  mass transit use and  the
gradual introduction of alternative fuel vehicles with supporting infrastructure.

The region's electric utility industry is adapting  to a new environment where  the enormous
costs  of installing  new generating  capacity have  stimulated great  interest  not  only in
conventional  demand-side management programs but in securing alternate  and flexible
electricity supplies.  Matching generating capacity with demand is fraught with uncertainty as
evidenced by the region's recent experience of capacity expansion coupled  with periodic
economic downturns with less industry electricity use.  Regional per capita use though, shows
a steady upward trend.  In the Great Lakes states,  per capita electricity use increased 47.4%
between 1970 and 1988 and in Ontario for the period of 1970 to  1992, such  use increased
49.9%.  Utilities have aggressively developed special rate programs to encourage less peak
period electricity use and have undertaken other  efforts to support electro-technologies to
improve efficiency of electricity use by all types of customers.   Arranging for flexible
electricity supplies is a widespread effort among  utilities through  a variety of mechanisms
including linkages with nonutility generators, building peak-load response faculties and retail
"wheeling" of supplies from outside of service territories. Cross border movement of electricity
between Canada and the Great Lakes states is an important part of the region's supply picture.
Electricity trade between Canada and the U.S. began in 1901 at Niagara Falls, reached a peak
in 1987 and for 1992, Canada's exports constituted 5.2% of total electricity generation.  U.S.
exports are relatively small.  In 1992 the Great Lakes states accounted for 30% of Canadian
exports or 7.3 million megawatts.

The region's use of nuclear power has eliminated the need  for an equivalent amount of
electricity derived from other fuel sources—mainly coal and natural gas. The  proportionate
reduction in sulfur dioxide and greenhouse gases such as carbon dioxide has had a beneficial
effect on the environment but radioactive material disposal, particularly for used nuclear fuel,
has created problems.   The  method of disposal and/or storage of "spent fuel", the highly
radioactive material removed from nuclear reactor cores generated  during periodic refueling,
is a current issue at several Great Lakes Basin nuclear plants.  Eventually all plants will need

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to cope with mounting quantities of spent fuel that have exceeded limited on-site, in-water
storage capacity.  Because of great uncertainty as to availability of a national storage site, the
nuclear power industry has resorted to above ground,  dry fuel storage faculties at nuclear
generating stations.  These facilities are seen as  only temporary and as with nuclear power
plants themselves there is a risk of  radiation release resulting from natural calamities or
sabotage as well as during removal and transportation of material.  A long-term issue of
ensuring safe plant  decommissioning  with its complex planning requirements is a serious
challenge for the utility industry.
4.5 Travel,  Tourism  and Outdoor Recreation

The Great Lakes, as a world-class freshwater resource, contribute to the region's global identity
and a comparable reputation for outstanding tourism and recreation opportunities.  Business and
leisure travel along  with outdoor recreation make a substantial contribution to the region's
economy and quality of life.  Although travel and tourism respond to the business cycle and other
variables such as weather and gasoline prices, associated employment, personal expenditures and
tax revenue have been growing faster than for most other sectors in the region.  Such activity has
led to the establishment of a wide range of attractions, facilities and services.

The Great Lakes region benefits from a large intraregional travel flow, with nine out of ten non-
local trips completed within the province of Ontario or the eight Great Lakes state region for trips
originating in their respective jurisdictions.  The proximity  of the international border and
presence of major  air transportation gateways also result in significant numbers of international
travelers in the region: for example, more than half of Canada's international visitors arrive by
way of Ontario.  The Great Lakes states account for around 40% of the U.S. foreign visitor total.

As for U.S.-Canada travel, the Great Lakes states generated 20.4 million person-trips to Canada
in 1992 or 63% of all such U.S.  trips.  Great Lakes state travelers accounted for 4.7 million
overnight visits to  Ontario, which  represented about 75% of all such U.S. visits to the province.
On the other hand, Statistics Canada data indicate that while nearly half of Canadian visitors to
the United States report a "presence" in the region, such travel is dominated by day-only stays
and pass-through travel. Ontario travelers account for about three quarters of all Canadian visits
to the Great Lakes states.

For residents of the Great Lakes region and visitors to the area, outdoor recreation is more than
a quality-of-life issue—it is a way of life.  Many natural and cultural assets of the region are
preserved and managed through separate state/provincial and national park systems. Of the 637
state parks in the Great Lakes states, 178 are located within the Great Lakes Basin and of these,
110 have  coastal locations.   On  both  sides of  the border,  coastal  parks represent a
disproportionate amount of park system attendance. The natural beauty of the Great Lakes shore,
with large tracts of relatively undeveloped land, coupled with good highway access and proximity
of population centers, have promoted recreation and tourism-related travel.  Through state-
provincial cooperation  in the establishment of the successful Great Lakes  Circle Tour, a 6,500-
mile designated scenic road system, and the "North  America's Fresh Coast" overseas visitor
attraction campaign, governments  and businesses have found unique ways to tap into the Great
Lakes scenic attributes and coastal recreation potential.


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The Great Lakes Basin, with more than 100,000 square miles of navigable water, anchors an
important and growing marine recreation industry.  The number of registered recreational boats
in the Great Lakes states was 3.84 million in  1992, or 34% of the U.S. total.  The number of
boats has increased by more than 570,000 since 1986.  No comprehensive, system-wide data on
Great Lakes recreational boating activity is available.    However,  using the results  and
methodology of several university studies which addressed state-specific boating activity, it is
estimated that between 900,000 and  1 million  U.S. and Canadian registered boats are operated
on the Great Lakes each year. Michigan has the largest number of registered recreational boats
in the U.S. and surveys indicate that nearly a third of its "boat days" are tied to the Great Lakes,
even though less than a fifth of the boats are dedicated to  exclusive Great Lakes use.  For the
Great Lakes alone, it is estimated that recreational boater direct spending is more than $2 billion
per year.

The recreational boating industry in  the Great Lakes is represented by boat manufacturers and
retailers, marina operators, marine business suppliers as well as the millions of recreational
boaters/anglers.  Retail boat/trailer, outboard motor, and marine accessories sales for the Great
Lakes states amounted to more than $3 billion in the late 1980s, or more than a third of national
spending.  Li 1993, total sales wee $1.5 billion or only 13.6% of the national total.  According
to the U.S. Bureau  of Labor Statistics, the eight Great Lakes states account for about  6,000
private sector, marina-related jobs and 10,000 boat dealer and supplier jobs. Marina development
and related facilities in the Great Lakes have been expanding to keep pace with recreational boat
usage.  In Michigan, more than 750 marinas had been developed by the late 1980s along its
3,200 miles of Great Lakes shoreline, representing a 20% increase from the late 1970s. Many
of the boat facilities are part of residential waterfront developments.  For lower Lake Michigan
these developments are accounting for around 1,000 new boat slips a year. A survey undertaken
by The Center for the Great Lakes indicated that 13,000 new slips were added around the Great
Lakes between 1986 and 1991 as part of waterfront projects.  Annual boat shows also play an
important part in industry promotion and local economic impact

Another regional boating activity is the significant passenger vessel sector on the Great Lakes
and  St  Lawrence River.  At present, several million people take these day excursions and
ferry trips during the navigation season. Overnight cruise passengers visiting Canadian ports
on the St   Lawrence River reached a modern-day  record of 51,000 in  1991.  Passenger
capacity for the approximately 150 regularly scheduled U.S.  and Canadian operations is nearly
60,000.  However, passenger movement by vessel mode is substantially less than what it was
when immigrants boarded boats for westward destinations and millions of travelers embarked
on trips during the famed "Resort Era" in the  early twentieth century. In the wake of current
interest in reviving the overnight cruise business, feasibility studies and marketing surveys have
been completed indicating substantial demand for multi-day  cruise service for the Great
Lakes/St. Lawrence System.

With a strong connection to boating, the Great Lakes sport fishery is a major part of regional
fishing activity.   The  1991 National Survey of  Fishing, Hunting  and Wildlife-Associated
Recreation, conducted by the U.S. Departments of Interior and Commerce, indicated that 2.55
million  U.S.  anglers fished the  Great Lakes  that year.   Previous U.S. and Ontario fishing
surveys indicate that the number of  freshwater anglers in the Great Lakes is declining overall


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but slowly. This trend appears more pronounced among younger age groups partly attributable
to fewer people in this population group. In 1991, Lake Erie had 35% of all Great Lakes
anglers followed closely by Lake Michigan at 34%.  Great Lakes connecting waters attracted
10% of the anglers.  The U.S. survey projected 25.3 million days of fishing or an average of
10 days per angler.  Michigan Great Lakes waters accounted for 9.9 million days of fishing
or nearly 44% of the Great Lakes total.   Two types of fish, walleye and perch, dominated
fishing activity together comprising about 70% of the time spent fishing. Great Lakes sport
fishing results in a substantial economic impact, particularly for coastal communities that are
near the  "hot spots."  For 1991, total U.S. Great Lakes fishing expenditures were projected
at  $1.33  billion.   Trip-related expenditures,  including food, lodging,  transportation and
guide/package fees amounted to $869 million with equipment-related costs  the remainder.
Expenditures per angler were figured at about $500 for the year.  It is estimated that about half
of Great Lakes sport fishing is  done from boats, some of which make up a growing charter
fishing industry. Within the last 20 years, roughly paralleling the growth in sport fishing, the
number of fishing boats-for-bire increased from 500 to more than 3000.

The Great Lakes Basin's tourism and outdoor recreation sectors are well-established, but face
many  challenges.   Climate change that translated into  more seasonal  temperature and
precipitation variability could have short or long term negative impacts for susceptible activities
and places.  Other factors such as relatively low wage rates and benefits for many tourism jobs,
particularly in the accommodation and restaurant business  and long-term and place-specific
labor  shortages may  significantly influence  employment  opportunity and small  business
stability.  Successful planning by both  the public and private sectors will be needed to meet
these and other challenges.

One current issue with ramifications for the future concerns local and  system-wide water
quality conditions and its impact on fishing resources and the perception of marine recreation
opportunities. For example, the rapidly improving clarity of Lake Erie water, due, in part, to
the zebra mussel infestation, has made  swimming, boating and fishing more enticing, but the
mussel may threaten the Lake's celebrated fishery. This nonindigenous bivalve mollusc is an
efficient filter feeder and is altering levels  of plankton and thereby could affect the Lake's food
chain. These problems along with the mussel's colonization of hard surfaces, including rocky
shoals important for walleye spawning, could create serious future  fish resource problems.

The recreational boating sector has experienced long-term growth in the Great Lakes region
but particular issues may alter this trend. Cyclical swings in the national economy tend to have
pronounced impacts on boat and equipment sales. These impacts reverberate throughout the
coastal recreational economy.  Fewer trips or ones  of shorter duration translate into fewer
restaurant meals  and overnight lodgings  as well as less gas and  supplies  purchased.  The
current smaller baby bulge compared with the parents  (baby boom) generation may dampen
future boating trends and will likely manifest itself in different boating activities. For example,
with fewer young people fishing, recreational boating may lose some of its fishing connection
and larger boats used for cruising may increase demand for transient  slip  usage.  Also,
increasing marina congestion tied  to transient boaters and new restrictions on  shore home
building  and marina construction could dampen Great Lakes boating trends.

Other  important issues  relate  to  sufficient investment  in and proper  management  of

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game/wildlife and habitat resources  and park lands in order to maintain current  levels of
hunting and camping activity, each with their significant economic benefits. Many  state and
provincial parks in the Great Lakes region have inadequate staffing and funding for needed
maintenance as well as improvements. Great Lakes-adjacent parks are particularly vulnerable
to funding problems because of generally higher visitation levels. For example, in Michigan,
coastal parks account for 50% of total system attendance.  As for hunting, habitat and game
management practices  are becoming increasingly important.  One forest  management/deer
habitat issue that generates controversy is old-growth forest versus traditional timber harvest
policies. Ecologists are arguing for retention of more continuous acreage of post-mature forest
to create greater environmental diversity.  Unfortunately, this type of habitat does not support
large deer populations.

The region's travel, tourism and outdoor recreation sectors have  many unique challenges but
also opportunities for public and private sector cooperation. The  region's natural features and
cultural heritage provide a solid  base from which to develop diverse and quality travel and
recreation facilities to serve visitors and residents alike.  As the prominent geographic feature
and natural resource  for the region, the Great  Lakes represent  an invaluable asset for
environmentally-compatible recreation and tourism development
4.6  Information  and  Communications

Telecommunications services and facilities have played an important role in the Great Lakes
region since their introduction in the early part of this century.  Initially limited to voice services,
telecommunications vendors today provide an increasing amount of data and video services
utilizing  digital switching and  fiber  optic  transmission technologies.   The growth of
telecommunications services and infrastructure in the region has been heavily influenced by both
advances in technology and policy, particularly on the U.S. side of the Great Lakes.

The   breakup   of  AT&T  created  a  climate  of greatly  increased  competition  in the
telecommunications industry beginning in  1984.   Canada has seen a similar trend towards
deregulation and increased competition, though the pace has been slower.  The divestiture of
AT&T's local Bell operating companies led to greatly increased competition in long distance
services but maintained government-regulated monopolies for local access. At this writing, both
Congress and the Clinton administration appear determined to end the local access monopolies
and to bring the same level of competition in this area that has been seen in the long distance
arena.

The trend towards the use of digital facilities for data and video networking has accelerated
rapidly in the past decade and  is now the focus of a  series of national, state, and provincial
initiatives.  The most well-known of these, the National Information Infrastructure, introduced
by the Clinton administration, is aimed at nothing less than transforming some of the most basic
ways  in which  individuals and organizations access, process, and utilize information.  While
telecommunications and information  initiatives have,  in the past,  typically centered on the
telecommunications industry, the cable television industry is playing an increasingly larger role
in this area and is likely to be a strong contributor to the region's networking activities in the
future.

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The Great Lakes region has been particularly strong in the development of data networking and
Internet services.  These activities have their roots in a number of academic consortia but today
include regional and national telecommunications vendors, cable TV companies, and a growing
number of entrepreneurial organizations.   Beginning  with the Merit Computer Network in
Michigan, which  became operational in  1972, today every  state and province has at least one
state-wide data networking organization.  This has resulted in the phenomenal growth of sites in
the region connected to the Internet from less than 150 in 1990 to almost 1,000 today. Internet
services are supported by a combination of customer fees and state, provincial, and federal grants
with total spending exceeding $30 million.

One notable use of the region's Internet capabilities was the establishment of the Great Lakes
Information Network (GLIN) in 1993.  GLIN is used to link the region's environmental scientists
and policymakers and is operated by the Great Lakes Commission  and CICNet under a grant
from  Ameritech Foundation.  Currently, GLIN provides access to data at numerous state and
federal agencies, the International Joint Commission, the USEPA's Great Lakes National Program
Office, and other organizations.  Information housed on GLIN is accessible by anyone on the
Internet

The use of telecommunications technology  in support of distance education and curriculum is
another important trend that is  quickly gaining momentum throughout the  region.  At the
community, provincial, and state level there are numerous projects underway using data and
video networks to bring a wide variety  of educational resources into schools, businesses, and
homes. These activities range from the use of electronic mail for international pen pal programs
to access to full-color, real-time weather  images for high school science classes, to the offering
of entire graduate programs in the workplace.

Telecommunications and computing technology  continues to grow in its potential to influence
the lives of residents  in the Great Lakes region. With this  growing potential comes a number
of important issues that merit careful attention.  Perhaps the most important is the delivery of
information to  the home.  Until  now, information and telecommunications vendors have been
divided into local and long-distance telephone services  and cable TV services. As a result of
continued deregulation and technological advances, these divisions are likely to disappear quickly
during the last half of this decade leaving the consumer with the advantage of a more competitive
marketplace but the disadvantage of a much more confusing set of services and, potentially, less
assurance of uniform  service offerings in rural areas of the region.

Another issue that is of critical importance is the use of these new telecommunications services
in educational activities. Two-way video and access to the global Internet hold the potential for
a greatly expanded slate of educational resources for students in both urban and rural settings.
At the same time, the region's educators and policymakers need to understand  the most cost
effective way to  deploy these services in order to avoid large expenditures on technological
services that do  not  deliver the necessary educational improvements.  Finally, the business
community's incorporation of telecommunications technologies as strategic tools that can provide
the Great Lakes region with a competitive edge in a wide variety of business sectors is expected.
Data networking, in particular, as well as video and voice services, hold the potential to transform
the way in which business is conducted.
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5.0        Infrastructure  Issues
Adequate infrastructure is the foundation that supports and sustains most economic activity.
There is widespread recognition of the importance of infrastructure for economic growth, but
questions regarding the magnitude of the effect remain.  Studies have shown that infrastructure
stimulates local development and also acts as an ingredient in the business attraction recipe. The
environmental benefits and  costs  that accrue from infrastructure development underline the
important connection between the economy and environment.

Concern about the level of investment in public works infrastructure such as roads, sewers and
water supply systems, has become a major public policy issue.  An aging infrastructure, coupled
with tightening governmental budgets, has produced a widening gap between needs and existing
facilities. During the  1980s, several U.S.  infrastructure needs studies were completed.  The
general findings were:

       •     the nation's vast infrastructure has been maintained unevenly;

       •     many public facilities have  not been maintained adequately and are in such
             disrepair as to pose risks to public health and safety;

       •     the problem is widespread, not confined to a few categories,  or certain cities or
             geographic areas; and

       •     the cost of meeting future demands for public infrastructure will be very high.

All levels of government have a role in providing and maintaining public works  projects.  The
guiding policy  for  infrastructure investment  has been to  assure an equitable distribution of
services through the efficient use  of resources. These  "services" not only support economic
activity but are an important factor in enhancing the quality of life.  Public  works expenditure
trends over the past two decades indicate that the growth of such investment has  slowed due to
shifting public expenditure priorities.  Today, infrastructure investment as a percent of total public
expenditures is  less than half of what it was in the mid-1960s.  A fall-off in capital spending,
coupled with rapidly increasing expenditures for maintenance of the existing capital base, reflects
the gradual maturing of the public works capital plant

Overall infrastructure investment requirements are growing.  Although infrastructure needs vary
from place to place and according to category,  future investment decisions will be constrained
by fiscal limits  and political  considerations  concerning environmental and social equity issues.
Replacement and rehabilitation costs will account for most of the needed investment Continuing
dispersal of economic activity, abetted by population growth and migration along with new safety
and environmental standards, will contribute to escalating investment requirements. For example,
a study funded by the Clean Water Council, a lobby organization, estimated that $167 billion will
be needed between 1990 and the year 2000 to achieve U.S.  water quality and wastewater
treatment standards currently in force, as well as those expected to be adopted over the period.
About half of this amount is expected to be available  through the usual capital expenditure
channels. For the eight Great Lakes  states, the total shortfall is $36.7 billion, or more than 46%

A changing Great Lakes economy - SOLEC working paper                                    33

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of the national total.

The transportation sector encompasses a major part of the infrastructure picture.  Other than the
freight rail and  pipeline modes, much of the transportation sector's infrastructure is publicly
funded and accounts for between two-thirds and three-fourths of the identified U.S. infrastructure
investment requirements.  Construction  and maintenance  of  the national road system is  an
immense  task not only dollar-wise, but in terms  of manpower deployment and  materials
requirements.    Seventy-three percent  of all  government  expenditures for transportation
infrastructure are spent on the road system.  The Great Lakes states, with 923,000 miles of public
roadway, have a relatively dense road network compared with the nation as a whole.  Seventy-
eight percent of the road miles is concentrated in rural areas, and reflects the influence of the
township and range land survey system as well as the historical development of farm-to-market
access.   The  region's  road  and bridge system has a continuing  need for repair  including
replacement  An estimated one-third of the region's bridges are deficient  Freeze-thaw cycles
wreak havoc  on road  and bridge  structures.  Damage to vehicles  and weight restrictions,
particularly for rural farm areas, add up to significant costs for the transportation system.

Transportation services depend on an adequate infrastructure base, one well-suited for its intended
purpose. More pavement and roadway mileage has been the traditional means through which this
need was met for the highway mode.  The relentless growth in vehicle miles traveled and the
number of vehicles is creating significant capacity problems. Improved road system efficiency,
including more traffic  monitoring  and control, use  of "smart vehicles" and congestion fee
policies, has been a major planning tool.  Such an efficiency approach can work for all other
transportation modes.   Multimodal and intermodal operations have become commonplace in
freight transportation, recognizing the inherent efficiencies and cost advantages for individual
transport  options.  With transportation as an energy intensive activity, a major  generator of
pollution  and  a big consumer of land, the need to  seek  environmentally friendly movement
alternatives is required if the goal of a sustainable society is to be realized.

Technology is transforming the production, consumption and distribution of goods and services.
The rapidly changing circumstances of economic activity necessitates a more flexible approach
to infrastructure development  Market mechanisms, as they  are gradually introduced to the
infrastructure decision-making process, show promise in making efficiency a major criterion for
infrastructure investment No longer should political muscle be the chief determinant of the what
and where of infrastructure.   Building  infrastructure to last  with  a greater emphasis  on
maintenance and  design efficiency will  channel  and preserve capital flows.   Long-term
management strategies  are needed to  preserve system integrity and maintain  environmental
benefits.
                                                                                      34

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6.0       Sustainable Development
6.1  Public Policy

The abundant natural resources on which the regional economy was founded continue to sustain
it, even though resource depletion and degradation have taken their toll.  Excessive timber
harvest, overfishing in the Great Lakes, extensive cropland development, destruction of wildlife
habitat, air pollution, soil and water contamination and other man-induced challenges to nature
are all part of  the region's history of development  Over the past twenty years, the regional
economy has changed considerably, becoming more diversified but less robust in many sectors.
During this  time, concern  about environmental conditions in  the Basin came to the  fore.
Increasing public awareness of environmental issues and aggressive environmental regulation
combined to focus attention on environmental - economic linkages and have led some to explore
"sustainable  development" concepts.

Sustainable development, based on the interdependence of the economy and the environment and
aimed at achieving their mutual sustainability, is both a policy and practice.  It calls for a way
of life that meets the needs of the present without compromising the ability of future generations
to meet their own needs. The basic concept was nurtured through countless individual and
organizational efforts, but it received full-fledged expression with publication of Our Common
Future, the 1987 report of the World Commission on Environment and Development Under the
leadership of Norway's Gro Brundtland, the Commission's efforts focused world attention on the
reality  of accelerated  population growth, a limited resource support base, and environmental
degradation.

The  global  implications  of "business as usual"  were reemphasized at  the United Nations
Conference on  Environment and Development held in Brazil in 1992.  Following these efforts,
individual countries have identified sustainable  development as a goal  and are beginning to
develop appropriate policies.  In the United  States, a President-appointed Council  has  been
established with a mandate to recommend federal sustainable development policies by June 1995.
In December 1990, Canada released its  environmental action plan or  "Green Plan"  which
expressly identifies sustainable development as a government and society objective. In releasing
the Green Plan, the Prime Minister said:  "The challenge we now face is to build upon our
economic strengths in harmony with our environment, the basis of our  health and prosperity.
Every Canadian has a role to play in achieving this goal of sustainable development"
6.2 Institutional Arrangements

The evolution of the region's socio-economic status has both shaped and been shaped by an
elaborate system of governance that transcended traditional political boundaries to recognize, on
a binational basis, shared environmental and economic characteristics. In fact, the Canada-United
States  boundary within  the  Great  Lakes region has  long been the locus for extended
experimentation in political, diplomatic and institutional endeavors.
A changing Great Lakes economy - SOLEC working paper                                  35

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The origin of such experimentation is found in the earliest years of U.S. constitutional history
and relations with Great Britain and, for the most part, was motivated by shared interest in
economic development.  For example, in 1895 the two countries established a Deep Waterways
Commission to investigate the feasibility of constructing a seaway to permit transportation access
from the Great Lakes to the Atlantic.  This entity later developed into the International Joint
Waterways Commission (1903)—a precursor of the International Boundary Waters Treaty of
1909 and its implementing agency, the International Joint Commission. More recently, interstate
deliberations  in the mid-1900s leading to the formation of the Great Lakes Commission were
promoted by an emerging sense of regionalism brought about in large  part by the impending
opening of the St Lawrence Seaway.  The formation of the  binational Great Lakes Fishery
Commission during that same period was the culmination of a long-standing economic concern:
the decline of the commercial fishery.  More recently, the formation of the Council of Great
Lakes Governors in  the  early 1980s was fueled in part  by the midwest's shared economic
recession and recognition of the benefits of collective action.

While resource management and environmental protection issues have been of concern at the
binational level for many decades, it is generally agreed that issues of economic development
were the  principal catalyst for early binational institution-building efforts.   Recognition of
environmental/economic linkages, in fact, is  explicit in the enabling legislation for all of the
above mentioned institutions. Thus, it can be argued that the conceptual basis for sustainable
development has been established for some time, although its emergence as a pre-eminent guiding
principle in Basin governance is a recent phenomenon.

The decade of the 1980s distinguished itself as a turning point  for sustainable development at the
basin level.  A renewed regional consciousness was sparked and sustained by the emergence of
complex resource policy and environmental issues  (e.g., diversion and consumptive use, toxic
contaminants), and a sense  of desperation brought  on by prolonged economic recession.  The
latter found the region's leaders as unwitting  shareholders in  an economy characterized by the
decline of the industrial base, high unemployment, and poor future prospects due, in part, to the
strength of overseas  industrial competition and  the  competitiveness of the "sun belt" states.
These same leaders—most notably the governors and premiers—found in the Great Lakes a hope
for the  future.   A shared resource  with  unique and under-utilized characteristics, the lakes
represented a common bond between the jurisdictions, symbolizing the  strength and resiliency
of the region as well as  its untapped potential.  It was recognized that the region could not
support  a strong economy without a well-managed,  high-quality natural resource base.  In turn,
it was recognized that the region could not afford a well-managed resource without a strong
economy and associated tax base.

As Ecosystem management  principles and practices have become increasingly important in the
Great Lakes Basin, a parallel need for sustainable development has also been identified by a wide
range of organizations and groups. For example:

      In  late 1992,  the Ontario Round Table on Environment and Economy submitted its
      strategy for sustainable development  to the Premier  and the people of Ontario. This
      farsighted plan  proposed many innovative  ideas  on  how  to develop a  more
      environmentally-responsive economy  and  emphasizes industrial and governmental
      accountability as sustainability goals are established and achieved.
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       In 1993 the Chairman of the Council of Great Lakes Governors, Ohio Governor George
       Voinovich said in his Annual Chairman's Report:  "Over the last decade, the Great
       Lakes Governors have articulated a vision of the region as a world leader in natural
       beauty and economic might.  It is a vision that recognizes that the restoration and
       protection of the Great Lakes is dependent upon a world-class economy.  A vibrant
       manufacturing base,  utilizing advanced technologies and highly skilled workers, is
       essential to meet the ultimate environmental objectives of the region. At the same time,
       the Governors recognize that the health of the Great Lakes is central to the region's
       economic  future.  The region's industries will be not be competitive  in  the world
       economy, unless they are world leaders in clean, sustainable production."

       The International Great Lakes St. Lawrence Mayors' Conference adopted a sustainable
       development  resolution  at  its  1993  Annual  Meeting in Montreal. This  binational
       organization urged the regional leadership in the Great Lakes-St. Lawrence Basin "to
       develop a plan to convert the concept of sustainable development into an agenda for
       action" and to identify a  "regional  laboratory" to demonstrate the application  of
       sustainability principles.

       In January 1993, the Regional Council  of Hamilton-Wentworth, Ontario, adopted the
       final report of the Chairman's Task Force on Sustainable Development as a basis for
       all decision making.  Entitled, VISION 2020: The Sustainable Region, this report was
       the result of 2-1/2 years of study, involving more than 1,000 citizens.  VISION 2020 is
       an expression of a desired future for the community and provides everyone, including
       citizens, elected representatives, business leaders, public servants, and local agencies
       with a common goal.  The report is wide ranging with more than 400 recommendations
       covering topics such as, natural areas, water and air quality, waste reduction, economic
       change, transportation, agriculture, and community empowerment.

       The Environmental Defense Fund's Great Lakes  Pollution Prevention  Alliance has
       targeted its current collaborative efforts toward the fostering of sustainable activities
       including reducing toxics use, increasing transportation efficiency and promoting social
       justice and safe employment in livable communities.

       The Minnesota Sustainable Development Initiative launched in early 1993 is a  broad-
       based  effort with strong state agency support. The goal of the Initiative is to assist the
       state's Environmental Quality Board as  it develops a Minnesota Strategic Plan for the
       Environment and the Department of Trade and Economic Development as it revises its
       Economic Blueprint for Minnesota. Seven Initiative Teams have been designated, each
       responsible for a specific economic sector. A "Congress" was held in early 1994 where
       interested individuals and organizations advised the Initiative teams.

       Surveys and reports from around the Great Lakes region indicate growing private and
       public  sector interest in sustainable development, particularly at the  local level.
       Neighborhood projects and community-wide activities are experimenting with selected
       sustainable development practices ranging from waste reduction to zoning changes.
       Futuristic models and visioning exercises have also become part of these efforts.
A changing Great Lakes economy - SOLEC working paper                                   37

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      One manifestation of strengthening environmental economic linkages in the region is
      the emergence of a substantial "environmental industry" sector. Many new firms have
      been established  that specialize in resource conservation, pollution remediation and
      reduction technology and other goods and services intended to help the economy reduce
      its negative impact on the physical  and social environment.  In Ontario alone, these
      industries are already the third largest employer.

      The Great Lakes Commission, in cooperation with many regional organizations, is
      coordinating development of an Ecosystem Charter for the Great Lakes-St. Lawrence
      Basin. The charter sets forth a series of principles and commitments to improve and
      sustain the environmental health and economic viability of the world's greatest
      freshwater system. Signatories will use the charter as guidance in the development of
      their work plans and priorities, as  a means to enhance communication and cooperation
      with other stakeholders,  and as a benchmark for assessing progress toward a shared
      vision for the Great Lakes-St Lawrence Basin Ecosystem.

Recognition of economic/environmental  linkages in resource  management and protection is
increasing  within the Great Lakes  "institutional ecosystem," and is generally reflected in
Remedial Action Plans,  Lakewide Management Plans and a host of other initiatives. While
such recognition is a necessary condition for sustainable development, it is not a sufficient one.
Many agencies and organizations at various levels have embraced the concept of sustainable
development, however defined,  but have found the  leap from concept to application to be a
formidable one. Sustainability, as an outcome, can be achieved when environmental protection
is fully integrated with economic activity so that a sound basis exists for future development
Wise and efficient use of resources and emphasis on pollution prevention, quality production
and effective information dissemination are considered necessary measures if harmony between
the economy and environment is to be established.

The relative sophistication of the Great Lakes  institutional  ecosystem has provided  a
supportive—albeit  sometimes  painstaking—vehicle for  the  gestation  of  management
innovations. Within this arena, principles of sustainable development will be formulated, tested
and applied over time. Case  studies to date suggest that sustainable development principles
are most effectively applied at a local level, either on a small watershed or community basis.
Ensuring that an adequate institutional infrastructure exists at these levels is a priority concern.
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7.0       CONCLUSION
With all its diversity, strength, and common ground, the Great Lakes region is a remarkable and
unique place.  This impressive economic region, rich in resources—people,  industry, natural
resources and institutions—is challenged by the need to maintain its strengths and pursue new
opportunities.  Throughout the region's notable history, challenges  were met and difficulties
overcome.  Now, the  continual quest for economic  growth and prosperity reckons with the
realities of the international marketplace and environmental protection. Uncertainty, whether it
pertains to personal economic circumstances, the welfare of community or the flux of national
politics, is ever-present Faith  in the future may be an age-old expression, but for Great Lakes
region residents, it is as fresh and forceful as the new day it heralds.
A changing Great Lakes economy - SOLEC working paper                                  39

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40

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8.0        REFERENCES
Brown, Ralph H.  Historical Geography of the United States. Harcourt, Brace and World Inc. New York, 1948.

Campbell, Paul R.  Population Projections for State by Age. Sex. Race and Hispanic Origin  1993 to 2020.  U.S.
       Department of Commerce, Bureau of the Census, Washington, DC.  1994.

Congress of the United States. Office of Technology  Assessment  Delivering the Goods:  Public Works
       Technologies. Management, and Financing.  Washington DC.  1991.

Davis, Stacy C, and Morris,  Melissa D. Transportation Energy Data Book:  Edition 12.  Oak Ridge National
       Laboratory. Prepared for U.S. Department of Energy, Office of Transportation Technologies.  March 1992.

Environment Canada.  The State of Canada's Environment - 1991.  Ottawa, ONT.  1991.

Environment Canada.  Canada's Green Plan. Ottawa, ONT. 1990.

Environment Canada. Development Potential and Other Benefits from Restoration. Enhancement and Protection of
       Great Lakes Basin Watersheds.  Report Prepared by the Hickling Corporation.  Toronto, ONT. 1993.

Friend, Anthony M. The Stress Between Economic Development and the Environment in the Great Lakes Basin:
       A Current Assessment  Institute for Research on Environment and Economy, University of  Ottawa.
       Ottawa, ONT. 1992.

Gallon, Gary. "Environmental Industries: Part of the New Canadian Economy."  National Round Table Review,
       Fall 1993. Ottawa, ONT

Great Lakes Commission. Annual Report of the Great Lakes Regional Water Use Data Base Repository (1991).
       Ann Arbor, MI.  1993.

Great Lakes Commission. Land Use Patterns and Erosion Rates in the Great Lakes Basin:  An Examination of the
       1987 National Resources Inventory Data.  Ann Arbor, MI.  1991.

Great Lakes Commission. Great Lakes Region Agriculture.  Ann Arbor, MI. 1987.

Martin O'Connel Associates. The Economic Impacts of the Great Lakes Saint Lawrence Seaway System. Prepared
       for the Saint Lawrence Seaway Development Corporation.  1992.

Mills, WJL, O'Leary, J.T. et al. Lake Michigan Marina Fisheries Study:  Review of Fisheries and Social Effects.
       Department of Forestry and Natural Resources, Purdue University, West Lafayette, Indiana.  1990.

Mitchell,  Bruce (ed.)  Ontario:   Geographical Perspectives  on Economy  and  Environment  Department of
       Geography, University of Waterloo,  Waterloo, ONT.  1991.

National Council on Public Works Improvement  The Nation's Public Works: Defining the Issues.  Washington,
       DC. 1986.

National Marine Manufacturers Association.  Boating 1993.  Chicago, IL.  1994

Natural Resources Canada.  Electric Power in Canada. Ottawa, ONT. 1993

Ontario Round Table on Environment and Economy. Restructuring for Sustainabilitv.  Toronto, ONT. 1992.
A changing Great Lakes economy • SOLEC working paper                                       41

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Ontario Ministry of Natural Resources.  1990 Survey of Recreational Fishing in Ontario. December 1993.

PAHLS Inc., (People Against Hazardous Landfill Sites). The Environment of Northwest Indiana:  Contrasts and
        Dilemmas.  Valpariso. Indiana.  1993.

Porter, Michael. The Competitive Advantage of Nations.  Free Pr. New York. 1990

Ray, Daniel K.  Water Works 1991:  A Survey of Great Lakes/St. Lawrence River Waterfront Development The
        Center for the Great Lakes. Chicago, IL.  1991.

Regier, Henry A.  and  Bales, Andrew G. Environmental Impacts of Immigration:  A Preliminary Examination.
        Institute for Environmental Studies, University of Toronto.  Toronto.  1991.

Reutter, J.M. and Hartman, Wl. A History of Human Impacts on the Lake Erie Fish Community.  Pages 163-176
        in J.F. Downhower (editor), The Biogeography of the Island Region of Western Lake Erie. Ohio State
        University Press. Columbus, Ohio.  1988.

Royal Commission  on the  Future of the Toronto Waterfront.   Regeneration:  Toronto's Waterfront and the
        Sustainable City: Final Report  Ministry of Supply and  Services.  Canada, 1992.

Rubin, Barry M.  Economic Impacts of  Global Climate Change on  the Great Lakes Region.  Paper presented at
        Global Climate Change Workshop held December 6-8,1993. Ypsilanti, MI

Rubin, K., Jakubiak, S., and Aschauer,  D.  America's Environmental Infrastructure:  A Water and Wastewater
        Investment Study. Clean Water Council, Washington, DC.  1990.

Saint Lawrence Seaway Development Corporation and The St Lawrence Seaway Authority.  The St. Lawrence
        Seaway Traffic Report -1993 Navigation Season.  Washington, DC.

Schnorbus, Robert and Ballew, Paul. Domestic Consumption Patterns and the Midwest Economy. Working Papers
        Series. Federal Reserve Bank of Chicago.  April 1994.

Seely, B.  To Build a Nation:  America's Infrastructure. The Wilson  Quarterly. Washington, DC. Winter 1993

Southeastern Wisconsin Regional Planning Commission. Regional Land Use Plan for 2010 Completed. Newsletters,
        March-April, 1992. Waukeosha, Wisconsin.

Spotts, Daniel M. (ed.)  1986 Travel and Tourism in Michigan:  A Statistical  Profile.   Travel  Tourism and
        Recreation Resource Center, Michigan State University,  East Lansing, MI.

Statistics Canada. Census of Agriculture 1991.  Ottawa, ONT.  1993.

Talhelm, Daniel R. et al. 1986.  Recreational Boating Survey.  Department of Park and Recreation Resources.
        Michigan State University, East Lansing, MI.  1988.

Testa, W.A. (ed.). The Great Lakes Economy: Looking North and South.  Federal Reserve Bank of Chicago and
        the Great Lakes Commission. Chicago, IL.  1991.

Thorp, S. Great Lakes and St Lawrence River Commerce:  Safety. Energy and Environmental Implications of
        Modal Shifts.  Great Lakes Commission. Ann Arbor, MI.  1993.

Transmode Consultants Inc. Economic Impact of the Canadian Great I-afres/St. Lawrence Seaway Transportation
        System.  Prepared for Transport Canada, 1992.

Troyak, M. and Muir, T. Development Growth and Sustainabilitv. Buffalo Environmental Law Journal, Fall 1993.
        Buffalo, New York.

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U.S. Department of Commerce.  50 Years of Population Change Along the Nation's Coast 1960-2010.  National
        Oceanic and Atmospheric Administration. Washington, DC.  1990.

U.S. Department of Commerce.  Building Along America's Coasts:  20  Years of Building Permits. 1970-1989.
        National Oceanic and Atmospheric Administration. Washington,  DC. 1992.

U.S. Department of the Interior, Fish and Wildlife Service and the U.S. Department of Commerce, Bureau of The
        Census. 1991. National Survey of Fishing. Hunting and Wildlife-Associated Recreation. U.S. Government
        Printing Office, Washington, DC. 1993.

U.S. Department of Transportation. Environmental Programs and Provisions - Intennodal Surface Transportation
        Efficiency Act of 1991.  Federal Highway Administration.  1992.

U.S. General Accounting Office.  Future Needs For Confining Contaminated Sediment in the Great Lakes Region.
        Washington, DC. 1992.
A changing Great Lakes economy - SOLEC working paper                                         43

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                               The Great Lakes  Basin
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                                                                    Legend
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Figure 1.  The Great Lakes Basin

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Figure 2.  Population of the Great Lakes Basins

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