Economic Value of Groundwater in the Assiniboine Delta Aquifer in Manitoba

Social Science Series No. 29

Abstract

Knowledge of the relative value of a natural resource is useful in making allocative and other policy-related decisions. This study was undertaken to ascertain the economic value of groundwater in the Assiniboine delta aquifer of Manitoba. The aquifer is located in a predominantly agricultural region, as reflected in the fact that almost 69% of all withdrawal use is for agricultural purposes. The valuation procedure followed in the study was limited to the use-related value of water. This valuation was conducted using two different perspectives: economic efficiency and regional development. In the first approach, the value of water was equated to the lesser of the gains in economic benefits to the user and its opportunity cost. In the latter approach, the value of water was the contribution it makes to the economic activity in the region. The total economic worth of the aquifer water was estimated at between $85 million and $460 million using the economic efficiency perspective, and between $795 million and $4000 million using the regional development perspective. The upper level of the value reflects the increase in the economic activity directly related to the availability of the aquifer water. The study recommends the development of a management plan for the aquifer, along with streamlining of the activities that may become a threat to this natural resource in the future.

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