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S.O. L.E.C
1994 State of the Lakes Ecosystem
Conference
Background Paper
A Changing Great Lakes Economy:
Economic and Environmental Linkages
August 1995
Environment Canada
United States Environmental Protection Agency
EPA 905-R-95-017
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State of the Lakes Ecosystem Conference
Background Paper
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
August, 1995
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Table of Contents
Acknowledgements iv
EXECUTIVE SUMMARY . 1
1.0 THE GREATER REGIONAL ECONOMY - HISTORICAL
DEVELOPMENT 5
2.0 THE GREAT LAKES BASIN - POPULATION AND EMPLOYMENT 7
2.1 Population 7
2.2 Employment 13
3.0 U.S. - CANADA TRADE 15
4.0 SELECTED SECTOR PROFILES 17
4.1 Manufacturing 17
4.2 Transportation 19
4.3 Agriculture 23
4.4 Energy 25
4.5 Travel, Tourism and Outdoor Recreation 28
4.6 Information and Communications 31
5.0 INFRASTRUCTURE ISSUES 33
6.0 SUSTAINABLE DEVELOPMENT 35
6.1 Public Policy 35
6.2 Institutional Arrangements 35
7.0 RECOMMENDATIONS 39
8.0 CONCLUSION 41
9.0 REFERENCES 43
Figures 46
A changing Great Lakes Economy - SOLEC Background Paper
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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 Lerner, University of Waterloo
IV
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NOTICE TO READER
These Background 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 Background Papers were first released as Working Papers to provide the basis for
discussions at the first State of the Lakes Ecosystem Conference (SOLEC) in October, 1994.
Information provided by SOLEC discussants was incorporated into the these final SOLEC
background papers. SOLEC was intended to provide key information required by managers
to make better environmental decisions.
A changing Great Lakes Economy - SOLEC Background Paper V
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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
A changing Great Lakes Economy - SOLEC Background Paper
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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
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
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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.
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
A changing Great Lakes Economy - SOLEC Background Paper 3
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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
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 modern 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 Background Paper
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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. See Figure
1, 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 and Figure 2 show the population for the individual Great Lakes basins.
TABLE 1
POPULATION OF THE GREAT LAKES BASINS
STATES
Indiana
Illinois
Michigan
Minnesota
New York
Ohio
Pennsylvania
Wisconsin
U.S. TOTAL*
Canada TOTAL**
Great Lakes Basin
TOTAL
Lake
Superior
142,606
212,796
70,146
425,548
181,573
607,121
Lake
Huron
1,502,687
1,502,687
1,191,467
2,694,151
Lake
Michigan
1,087,494
3,494,115
3,007,954
2,467,463
10,057,026
Not
applicable
10,057,026
Lake
Erie
339,264
4,646,843
765,537
4,023,625
242,261
10,017,530
1,664,639
11,682,169
Lake
Ontario
2,702,065
2,219
2,704,284
5,446,61 1
8,150,895
Basin Totals
for
Jurisdictions
1,426,758
3,494,115
9,300,090
212,796
3,467,602
4,023,625
244,480
2,537,609
24,707,075
8,487,210
33,384,157
* 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 Background Paper
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One area of the Great Lakes Basin that presents special problems for determining Basin
population is in the Chicago metropolitan area where substantial alteration of the natural
hydrologic basin and direction of water flow has occurred. As a water quality measure, Lake
Michigan water is diverted through the Illinois waterway at a long-term average rate of 3,200
cubic feet per second. This diversion, which has been in effect since 1989 along with a more
recent one affecting the Calumet River, has converted 673 square miles of original Lake
Michigan watershed into part of the Illinois River-Mississippi River drainage basin. By using
the original Lake Michigan basin boundary rather than the present "man-made" one which
demarks a drainage area only 11 percent of its former size, the population of the Lake Michigan
basin is increased by nearly 3 million persons, almost all residing in Cook county.
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 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
8
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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 about 67% 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.
TABLE 2
POPULATION, TOTAL BASIN EMPLOYMENT AND LEADING ECONOMIC SECTORS
FOR SELECTED METROPOLITAN AREAS*
UNTTEDj STATES
Chicago
Detroit
Cleveland
Milwaukee
Buffalo
Rochester
CANADA
Toronto
Hamilton
London
Kitchener
Windsor
Oshawa
POPULATION
6,069,974
4,665,236
2,102,248
1,432,149
1,189,288
1,002,410
POPULATION
3,893,046
599,760
381,522
356,421
262,421
240,104
LABOR FORCE
3,176,270
2,326,077
1,359,901
742,474
584,658
519,059
LABOR FORCE
2,229,090
322,875
211,690
200,715
133,445
131,990
RETAIL/
WHOLESALE
TRADE
634,884
459,629
276,344
150,153
124,118
92,289
RETAIL/
WHOLESALE
TRADE
389,555
58,290
37,965
35,600
21,820
21,296
MANUFACTURING
552,686
517,267
292,728
168,746
101,947
132,954
MANUFACTURING
384,815
70,330
33,425
51,830
36,580
31,605
COMMUNITY
SERVICES2
672,938
500,172
309,772
166,568
148,058
128,640
COMMUNITY
SERVICES
451,835
74,645
55,900
41,755
29,915
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.
A changing Great Lakes Economy - SOLEC Background Paper
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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
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 outlying counties, the heyday for second-home development appeared to peak in the
1960s, and the National Oceanic and Atmospheric Administration (NO A A) 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
10
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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 also
concentrated geographically but less so within the Basin. The U.S. Bureau of Census projects
that between 1995 and 2000 net immigration to the Great Lakes states will total to 898,000 with
more than half of this amount entering through New York City, Illinois, the other leading region
state for immigration, is expected to have 178,000 new arrivals with most of these people
residing in the Chicago metro region. Some major metropolitan areas receive particular attention
by one or more ethnic or racial groups. For example, the Chicago metropolitan area is attractive
to persons of Hispanic origin whereas the Detroit area 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 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
A changing Great Lakes Economy - SOLEC Background Paper 11
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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
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
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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%.
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. 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 many of 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
A changing Great Lakes Economy - SOLEC Background Paper 13
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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
A changing Great Lakes Economy - SOLEC Background Paper
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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
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 hit 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 recognized 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,
A changing Great Lakes Economy - SOLEC Background Paper 17
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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.
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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
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 modern 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
A changing Great Lakes Economy - SOLEC Background Paper "| 9
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and personal income.
Great Lakes and St. Lawrence River commodity movements are dominated by relatively low
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 St. 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 higher 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
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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
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 - PROVINCE HWY RAD. FERRY TOTAL
Michigan - Ontario 4 3 6 13
Minnesota - Ontario 8 4 0 12
New York - Quebec 8109
New York - Ontario 7 3 0 10
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 all 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 recovery
initiatives, dredging problems, rail competition and changes in supply sources.
A changing Great Lakes Economy - SOLEC Background Paper 21
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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.
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
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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,
farmers 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 corn 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, farming 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 possible threat posed to area agriculture by CO2 -driven global warming
and ozone depletion caused by man-made gasses is 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,
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
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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 inefficient and conflicting land management practices and
policies, 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 farmers 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
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.
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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. In Illinois,
13 nuclear plants produce about 50 percent of the state's electricity needs, highest for any Great
Lakes state. 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
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
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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).
TABLES
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.
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
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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 facilities 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 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 facilities 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
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complex planning requirements is another 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 high amount
of park system destinations. 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.
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 349c 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
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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. In 1993, total sales were $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 on the Great Lakes is declining overall but slowly.
The aging of the population is a factor. The trend also appears 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
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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-
hire 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 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 managernent/deer habitat issue that generates
controversy is old-growth forest versus traditional timber harvest policies. Ecologists are arguing
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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.
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
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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 waste water
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 S36.7 billion, or more than 46%
A changing Great Lakes Economy - SOLEC Background 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.
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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 summer
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 Background 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 pf 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.
36
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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 Background 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 RECOMMENDATIONS
Based on informal peer review of this paper and comments received from participants at the
SOLEC meeting in October 1994, the authors believe some changes to the paper are warranted
if another version is prepared for the next SOLEC meeting. These recommendations are made:
Data
Although this paper takes a broad view of the binational regional economy with an emphasis on
descriptive economic data, more information and analysis of demographic trends and land use
should be included. Settlement patterns and trends particularly for suburban and urban areas
should be discussed in greater detail as this information is pertinent to the overarching trend of
urbanization within the Great Lakes Basin. More discussion of trends in agricultural land
conversion and loss of open space and natural habitat would be appropriate.
With respect to industry sector profiles, several additions are recommended and more in-depth
discussion of particular industry clusters within sectors is needed. Selection criteria should
include but not be limited to industry's relative importance to the Great Lakes region in terms
of employment, production share, value-added factors, utilization of natural resources inputs and
regional environmental impact. Particular industry clusters within the broad sector categories to
be considered are: chemicals and petroleum refining, pulp and paper, mining, fisheries and the
commonly referred to category "green industries" covering both manufacturing and service
companies engaged in pollution prevention/control, remediation, response and resource
conservation activities etc. All of these industry groups have a substantial presence in the Great
Lakes region and connection to natural resources. Pollution issues and related trends associated
with these industries are closely tied to implementation of the binational Great Lakes Water
Quality Agreement and deserve more attention in the next SOLEC paper.
Discussion of industrial and municipal water use should to be expanded. Industry water use in
the Great Lakes Basin is intensive because of the particular industry mix and availability. Also
major changes are occurring in industry water use such as more recycling which have significant
implications for Great Lakes water quality. Discussion of municipal water treatment issues
including levels of infrastructure investment and treatment concerns should be expanded. For
example, some review of Great Lakes water supply for non-industrial purposes would be
appropriate. Also, examples such as the cryptosporidium outbreak in Milwaukee in 1993 and
zebra mussel infestation of water intakes could be used to illustrate investment requirements
related to water supply and treatment.
Native American Authorities/First Nations
Several SOLEC participants indicated that more discussion of tribal economic activities on
reservations is needed. Business/industry recruitment efforts and employment levels could be
addressed. Gaming and casino development should be addressed. The "information and
communications" sector discussion in this paper could be expanded to include a description of
the Great Lakes Regional American Indiana Network, a current project designed to promote and
support Internet connectivity on regional reservations.
Public Policy and Sustainable Development
A changing Great Lakes Economy - SOLEC Background Paper 39
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A more thorough review of activities intended to foster sustainable development that are under
way or planned in the Great Lakes Basin would be desirable. These activities would include
discussion of major pollution prevention initiatives involving key industry sectors and innovative
public-private partnerships. Waste generation, at all levels of society and activities aimed at
reducing it, should be discussed. Coverage of federal policy developments on this issue would
be appropriate. The President's Council on Sustainable Development policy recommendations
scheduled for summer 1995 and related federal agency efforts will provide much additional
information of value for the next SOLEC meeting. For example, appropriate economic and
environmental data sets by which to measure progress toward sustainable development are being
developed as part of this effort. Also, the Department of Commerce's Bureau of Economic
Analysis is developing economic and environmental satellite accounts which will consider natural
and environmental resources as productive assets, therefore providing a means to measure their
contributions to national income, production, consumption and wealth.
The issue of cost effectiveness of environmental regulations relates to sustainable development
polices but may need to be addressed in a separate section. A review of the basic arguments for
and against cost benefit analysis of such regulations would be appropriate. Perhaps the Great
Lakes Water Quality Initiative could be used as a case study example of how this issue could be
applied. Also, more discussion of the impact of environmental regulation of key region industries
along with its effect on interregional competitiveness would be appropriate.
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8.0 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 Background Paper 41
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9.0 REFERENCES
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A changing Great Lakes Economy - SOLEC Background Paper 45
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The Great Lakes Basin
. MINNESOTA,'
; WISCONS
N
-75 0
MO ton
Legend
H Great Lakes Basin
~~ Sub-Basin Boundary
• Provincial and State Boundaries
Figure 1. The Great Lakes Basin
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United States
Canada
Figure 2. Population of the Great Lakes Basins
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1990
Figure 3. Total Employment by Lake Basin.
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WO -i 1980 1990
1970 1990 1990
Figure 4. Manufacturing Employment by Lake Basin,
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Figure 5. Service Employment by Lake Basin.
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