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Alternatives for development of unreclaimed land in the kootenay river floodplain, creston, British Columbia… Bowden, Gary K. 1971

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ALTERNATIVES FOR DEVELOPMENT OF UNRECLAIMED LAND IN THE KOOTENAY RIVER FLOODPLAIN, CRESTON, BRITISH COLUMBIA: A BENEFIT-COST ANALYSIS  by  GARY K. BOWDEN B.A., U n i v e r s i t y  of B r i t i s h Columbia, 1966  A THESIS SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF ARTS  i n the Department of Economics  We a c c e p t t h i s t h e s i s as conforming t o the r e q u i r e d s t a n d a r d  THE UNIVERSITY OF BRITISH COLUMBIA F e b r u a r y , 1971  In p r e s e n t i n g an  this  thesis  in partial  advanced degree a t the U n i v e r s i t y  the  Library  I further for  shall  agree  scholarly  make  that permission  h i s representatives.  of  this  gain  permission.  Department o f  D a t e  Columbia  • T A g ^ J l v ' S , \q-||  Columbia,  I agree  that  f o r r e f e r e n c e and s t u d y .  f o rextensive  copying o f this  thesis  by t h e Head o f my D e p a r t m e n t o r  I t i s understood  thesis f o r financial  The U n i v e r s i t y o f B r i t i s h V a n c o u v e r 8, C a n a d a  of B r i t i s h  available  p u r p o s e s may be g r a n t e d  by  written  i t freely  f u l f i l m e n t o f the requirements f o r  shall  that  copying or p u b l i c a t i o n  n o t be a l l o w e d w i t h o u t  my  A B S T R A C T  T h i s t h e s i s i s an i n v e s t i g a t i o n of the economic p o t e n t i a l f o r use of 15,000 a c r e s of l a n d i n the Kootenay R i v e r f l o o d p l a i n at C r e s t o n , t i s h Columbia. f l o o d p l a i n and Border. Border  The  The Kootenay R i v e r flows n o r t h i n t o Canada through  Bri-  this  e n t e r s Kootenay Lake 20 m i l e s n o r t h of the I n t e r n a t i o n a l  t o t a l area of the f l o o d p l a i n between Kootenay Lake and  i s approximately  the  36,000 a c r e s , of which 20,000 a c r e s have been  reclaimed f o r a g r i c u l t u r e .  T h i s study  i s concerned  w i t h 15,000 a c r e s  which remain undeveloped, 10,000 a c r e s b e i n g p r o v i n c i a l Crown l a n d ,  and  5,000 b e i n g I n d i a n Reserve. At p r e s e n t Kootenay R i v e r .  t h i s l a n d i s inundated  I t p r o v i d e s an important  ments of m i g r a t o r y waterfowl,  The  impending completion  the f r e s h e t of  c a t t l e b e f o r e and  of L i b b y Dam,  and  fishermen,  after  the  fresh-  upstream on the Kootenay  R i v e r a t L i b b y , Montana, w i l l reduce the e x t e n t of annual the c o s t s a s s o c i a t e d w i t h more i n t e n s i v e use there i s considerable i n t e r e s t  the  l i n k i n the h a b i t a t r e q u i r e -  i s used l i g h t l y by hunters  and p r o v i d e s l i m i t e d g r a z i n g f o r beef et.  a n n u a l l y by  of the l a n d .  f l o o d i n g and Consequently,  i n i n t e n s i v e development of t h i s l a n d ,  e i t h e r f o r a g r i c u l t u r e as w i t h the r e s t of the f l o o d p l a i n , or as a w i l d l i f e management a r e a f o r the p r o d u c t i o n of w i l d l i f e and use i n  outdoor  recreation. Resource managers f a c e the problem of d e t e r m i n i n g which of a l t e r n a t i v e s r e p r e s e n t s the optimum l a n d use. lem,  and  This i s a d i f f i c u l t  i t s s o l u t i o n r e q u i r e s t h a t the b e n e f i t s and  these prob-  costs associated  w i t h each a l t e r n a t i v e be reduced to a common b a s i s This  f o r comparison.  study attempts to make such comparisons on a r i g o r o u s  the use  of b e n e f i t - c o s t a n a l y s i s .  t e r n a t i v e i s a s s e s s e d , and  The  basis  through  f e a s i b i l i t y of each land use a l -  comparisons made on  the b a s i s of the net  pre-  sent worth of b e n e f i t s minus c o s t s . The its  p r i n c i p l e s of b e n e f i t - c o s t a n a l y s i s are w e l l developed,  a p p l i c a t i o n i s not  d i f f i c u l t when p r o j e c t c o s t s and  adequately r e f l e c t e d i n f a c t o r p r i c e s .  benefits  and  are  D i f f i c u l t i e s are encountered i n  the p r e s e n t study, however, where the output from development f o r w i l d l i f e and reflect  outdoor r e c r e a t i o n i s not marketed and the v a l u e s  using  n o n - p r i c e d r e s o u r c e uses.  d i r e c t r e c r e a t i o n a l use,  r e c e n t l y developed  the p r e s e r v a t i o n  of w i l d l i f e independent  of r a r e s p e c i e s ,  the  for  migratory b i r d s ) .  of  fulfillment The  analysis  t h i s a l t e r n a t i v e i s thus r e s t r i c t e d to a comparison between the  of of  full  those b e n e f i t s which are expressed i n monetary terms.  A f u r t h e r important i s s u e i s that f i t s and  concepts  While v a l u e s are e s t a b l i s h e d  (the p r o d u c t i o n  i n t e r n a t i o n a l obligations regarding  only  im-  other important a s p e c t s of the output under t h i s  development are not v a l u e d  c o s t s and  to  the w i l d l i f e - r e c r e a t i o n a l t e r n a t i v e , v a l u e s are  puted to the r e c r e a t i o n a l o p p o r t u n i t i e s  r e c r e a t i o n a l use,  are no p r i c e s  created.  In a n a l y s i n g  in evaluating  there  c o s t s may  differ,  depending on  p o i n t of view the a n a l y s i s i s conducted.  the r e l e v a n t measure of bene-  the  ' r e f e r e n t group' from whose  To demonstrate the  importance  pf t h i s matter the a n a l y s i s i n t h i s study i s conducted from the of view of t h r e e  r e f e r e n t groups, the  l o c a l C r e s t o n economy, the  point province  of B r i t i s h Columbia, and Canada as a whole. cost analysis may  The outcome of a benefit-  also be s e n s i t i v e to the discount rate adopted, and  the s e n s i t i v i t y i s tested i n this study using rates of six, eight and 10 per  cent. Despite the d i f f i c u l t i e s of expressing  a l l costs and benefits  i n monetary terms, a rigorous analysis i s .undertaken and provides basis for a clear choice of the optimum form of land use. of a g r i c u l t u r a l reclamation  the  Analysis  reveals i t to be f e a s i b l e , with net  present  values of primary and secondary benefits ranging from $2.4 m i l l i o n from the l o c a l perspective to $2.2 m i l l i o n from the p r o v i n c i a l and national points of view.  Offset against these tangible net benefits are the i n -  tangible costs associated with the destruction of existing w i l d l i f e habitat and w i l d l i f e species.  Analysis of the w i l d l i f e - r e c r e a t i o n develop  ment produces widely varying r e s u l t s , depending on the referent group adopted.  The net present value of primary and secondary benefits i s  estimated at $2.1 m i l l i o n from the l o c a l viewpoint, $4.6  m i l l i o n provin-  c i a l l y , and $7.3 m i l l i o n from the point of view of Canada as a whole. In addition to these quantified values, this development w i l l produce important unmeasurable benefits. In comparing the two,  the net benefits estimated for a g r i c u l t u r a l  development can be interpreted as maximum values, ignoring as they do some of the costs associated with w i l d l i f e losses.  The net benefits  estimated from the w i l d l i f e - r e c r e a t i o n development are regarded as minimum  values, since important additional values associated with w i l d l i f e  production are not quantified.. Viewed i n this l i g h t the choice between  alternatives favors the w i l d l i f e - r e c r e a t i o n development from both provinc i a l and national perspectives, but i s less clear at the l o c a l l e v e l . Since a basic premise of the study i s that the p r o v i n c i a l viewpoint i s appropriate for decision making, i t i s concluded that the w i l d l i f e recreation development represents the optimum land use.  TABLE OF CONTENTS  LIST OF TABLES  v i i  LIST OF APPENDICES  viii  INTRODUCTION  . .  1  CHAPTER I II III IV V  VI  VII  VIII  THE UNDEVELOPED LAND AT CRESTON  4  BENEFIT-COST ANALYSIS IN LAND USE PLANNING  15  PRESENT USE OF THE UNDEVELOPED LAND  22 .  AGRICULTURAL RECLAMATION AS A DEVELOPMENT ALTERNATIVE . . . 42N WILDLIFE HABITAT AND OUTDOOR RECREATION AS A DEVELOPMENT ALTERNATIVE THE ALTERNATIVES COMPARED: BENEFITS AND COSTS FROM AGRICULTURE AND FROM WILDLIFE AND OUTDOOR RECREATION  65  . . .103  THE IMPACT OF ALTERNATE DEVELOPMENTS ON THE LOWER KOOTENAY INDIAN BAND  123  SUMMARY AND CONCLUSIONS  130  . .  LITERATURE CITED  .136  APPENDICES  139  vl  LIST OF TABLES  Table  Page  1  The Unreclaimed Land:  E s t i m a t e d Acreage  .  5  2  Summary o f G r a z i n g , Unreclaimed Land,. 1968  24  3  Farm O p e r a t o r s by Number o f C a t t l e Grazed  25  4  D i s t r i b u t i o n o f B i r d Hunting A c t i v i t y , 1968  30  5  Summary of Primary B e n e f i t - C o s t Comparison f o r A g r i c u l t u r a l Reclamation: By Area;;  5.1  6  The B e n e f i t s and Costs of A g r i c u l t u r a l Reclamation  7  Summary of P r e s e n t V a l u e s , B e n e f i t s From W i l d l i f e and Outdoor R e c r e a t i o n Development .  74  The P r e s e n t V a l u e of P r i m a r y . C o s t s , W i l d l i f e and Outdoor R e c r e a t i o n Development  85  8  9  Comparison  . . .  61  of Primary B e n e f i t s and Costs by  R e f e r e n t Group  97  10  The B e n e f i t s and C o s t s o f W i l d l i f e - R e c r e a t i o n Development 101  11  Comparison  o f A l t e r n a t i v e s From the L o c a l Viewpoint  12  Comparison  o f A l t e r n a t i v e s From the P r o v i n c i a l V i e w p o i n t  107  13  Comparison  o f A l t e r n a t i v e s From the N a t i o n a l Viewpoint  109  14  The A l t e r n a t i v e s Compared on the B a s i s o f I n d i v i d u a l Units  . .  .  105  116  LIST OF APPENDICES  Appendix  Page  A  Regional  Income M u l t i p l i e r s  . . . . .  B  S i z e and Number of Farms and P r e s e n t  141  P a t t e r n of  P r o d u c t i o n , Reclaimed Land, C r e s t o n F l a t s C  The  D  Reclamation  E  Q u a l i f i c a t i o n s to B a s i c F e a s i b i l i t y A n a l y s i s  147  Economics of Farm P r o d u c t i o n , C r e s t o n F l a t s ,  Costs  1968  for Agriculture  151  165  for Agriculture F  .  190  R e c r e a t i o n a l Use of the C r e s t o n F l a t s : B i r d Hunting During 1968  The  Case of 212  G  Estimated  H  P r e s e n t Value C a l c u l a t i o n s B e n e f i t s From Hunting, F i s h i n g , Non-Consumptive R e c r e a t i o n , A g r i c u l t u r e and Trapping  257  U n i t Values f o r Outdoor R e c r e a t i o n i n Resource Development P r o j e c t s  264  The P r e s e n t Recreation  274  I  J  K  L  U t i l i z a t i o n of R e c r e a t i o n F a c i l i t i e s  Value  of Costs  f o r W i l d l i f e and '  . . . .  239  Outdoor  The E f f e c t of A l t e r n a t e D i s c o u n t Rates on the B e n e f i t Cost A n a l y s i s , W i l d l i f e Development  286  E s t i m a t e d Gross B u s i n e s s Revenues R e s u l t i n g From Spending A s s o c i a t e d With Proposed W i l d l i f e Development  292  INTRODUCTION  A problem of r e s o l v i n g c o n f l i c t i n g  demands on a l i m i t e d  resource  base has e x i s t e d f o r some time a t C r e s t o n , i n the C e n t r a l Kootenay r e g i o n of  B r i t i s h Columbia.  The problem i s to determine the optimum use f o r  15,000 a c r e s o f undeveloped l a n d i n the Kootenay R i v e r f l o o d p l a i n between the I n t e r n a t i o n a l Border  and Kootenay Lake.  Reserves h e l d by t h e Lower  Kootenay I n d i a n Band comprise 3,000 a c r e s of t h i s l a n d , w h i l e t h e remainder i s u n a l i e n a t e d p r o v i n c i a l Crown l a n d . Three p o s s i b l e uses f o r t h i s l a n d a r e r e l e v a n t a t p r e s e n t : i t can be l e f t veloped  i n i t s p r e s e n t undeveloped s t a t e ;  i t can be r e c l a i m e d and de-  f o r i n t e n s i v e a g r i c u l t u r a l p r o d u c t i o n ; o r i t can be developed f o r  i n t e n s i v e w i l d l i f e management and a s s o c i a t e d outdoor use o f t h i s l a n d i s l i g h t , and i t y i e l d s l i t t l e L i b b y Dam expected  recreation.  apparent  Present  b e n e f i t ; with  to p r o v i d e f l o o d c o n t r o l on the Kootenay R i v e r by 1973  t h e r e a r e growing p r e s s u r e s  to p u t t h i s l a n d to more i n t e n s i v e use,  either  as a g r i c u l t u r a l l a n d o r as a managed w i l d l i f e and r e c r e a t i o n a r e a . S e l e c t i n g the optimum use f o r p u b l i c land such as t h i s can be very complicated.  U n l i k e p r i v a t e l y owned l a n d where the owner i s i n t e r -  ested s o l e l y i n maximizing the n e t f i n a n c i a l r e t u r n , p u b l i c r e s o u r c e managers must c o n s i d e r r e s o u r c e uses where r e t u r n s a r e not u s u a l l y measured in financial one  terms.  When competing a l t e r n a t i v e s a r e b e i n g  o f which y i e l d s a c l e a r l y  considered,  i d e n t i f i a b l e f i n a n c i a l r e t u r n , and the  o t h e r does not, making a r a t i o n a l c h o i c e between them i s d i f f i c u l t .  Determining the f u t u r e use requires  a choice  of t h i s n a t u r e .  to a g r i c u l t u r e can be put  The  recreation.  a v a i l a b l e , and  returns  The  opposite  at C r e s t o n  to the land i f a l l o c a t e d  i d e n t i f i e d w i t h r e l a t i v e ease —  i s s o l d through normal markets and  readily available. and  of the undeveloped l a n d  a g r i c u l t u r a l out-  measures of f i n a n c i a l r e t u r n  are  o c c u r s w i t h development f o r w i l d l i f e  Measures of the v a l u e of the output are not i t i s often d i f f i c u l t  to p r e d i c t e i t h e r the  readily production  of w i l d l i f e or the e x t e n t of use by r e c r e a t i o n i s t s . Benefit-cost  a n a l y s i s i s an economic t e c h n i q u e which can be  p l o y e d to d e a l w i t h such problems. which the n e c e s s a r y i n f o r m a t i o n consistent  and  I t p r o v i d e s a framework through  can be  r a t i o n a l decisions  em-  c o l l e c t e d and  can be made.  This  ordered so thesis  that  investigates  the a l t e r n a t i v e s f o r development of the u n r e c l a i m e d l a n d at C r e s t o n attempts, through comparative b e n e f i t - c o s t optimum f u t u r e  the  development.  Chapter I d e s c r i b e s development, and  the undeveloped l a n d s ,  the economic c o n s i d e r a t i o n s  of b e n e f i t - c o s t a n a l y s i s as i t i s a p p l i e d o u t l i n e d i n Chapter I I . l a n d , and  a n a l y s i s , to determine  and  the o b j e c t i v e s  involved.  The  technique  to p r o j e c t s of t h i s k i n d i s  Chapter I I I examines the p r e s e n t use  p r o v i d e s an e s t i m a t e of the v a l u e s generated by  i n i t s present s t a t e .  Chapters IV and  of  V c a l c u l a t e the net  the  of  the  land  economic  v a l u e of i n t e n s i v e development f o r a g r i c u l t u r e and w i l d l i f e - r e c r e a t i o n purposes r e s p e c t i v e l y .  The  estimates- o f b e n e f i t s and  a l t e r n a t i v e are compared i n Chapter V I . economic i m p l i c a t i o n s  c o s t s under each  In Chapter V I I  the s p e c i a l  of development f o r the Lower Kootenay I n d i a n  Band  are investigated, and Chapter VIII i s a summary.of fy presentation,  findings.  To s i m p l i -  the detailed calculations supporting the analysis are  omitted from the main body of the thesis and appear i n Appendices A through L.  CHAPTER I  THE UNDEVELOPED LAND AT CRESTON  The  l a n d which t h i s r e p o r t i s concerned w i t h a d j o i n s the  Inter-  n a t i o n a l Border a t the southern end of the C e n t r a l Kootenay a r e a of B r i t i s h Columbia. couver, and  By road i t i s a p p r o x i m a t e l y 470 m i l e s e a s t o f Van-  325 m i l e s west of C a l g a r y .  Access to the U n i t e d S t a t e s i s  a c h i e v e d through a border c r o s s i n g at R y k e r t s ; the highway l e a d s i n t o Idaho w i t h c o n n e c t i o n s throughout  the P a c i f i c Northwest r e g i o n o f the  United States. Economic a c t i v i t y i n the C e n t r a l Kootenay r e g i o n depends p r i m a r i l y on an i n t e g r a t e d f o r e s t i n d u s t r y , w i t h m i n i n g , a g r i c u l t u r e , and ism r a n k i n g next i n importance  ( P r o v i n c e of B r i t i s h Columbia  1966).  the immediate area of C r e s t o n s e r v i c e i n d u s t r i e s p r o v i d e the  account  come ( P r o v i n c e o f B r i t i s h Columbia  1970).  the Undeveloped Land  The Kootenay R i v e r . f l o w s n o r t h i n t o B r i t i s h Columbia e n t e r i n g Kootenay Lake approximately 20 m i l e s n o r t h o f the  mately  The  a  f o r a g r e a t e r t o t a l of gross i n -  The Kootenay R i v e r F l o o d p l a i n and  Border.  In  largest  source of employment, a l t h o u g h f o r e s t i n d u s t r i e s , a g r i c u l t u r e and s m a l l amount of manufacturing  tour-  at t h i s p o i n t , International  t o t a l area o f the f l o o d p l a i n i n B r i t i s h Columbia  i s approxi-  36,000 a c r e s . D u r i n g i t s s p r i n g f r e s h e t the Kootenay R i v e r o v e r f l o w s i t s banks  and f l o o d s the s u r r o u n d i n g lowlands  ( u s u a l l y d u r i n g May  and June) f o r a  p e r i o d o f up t o e i g h t weeks.  Any development  i n t h i s f l o o d p l a i n thus  r e q u i r e s the c o n s t r u c t i o n of dykes, and i n s t a l l a t i o n o f pumping and drainage f a c i l i t i e s .  To date a p p r o x i m a t e l y 21,000 a c r e s o f t h i s  flood-  p l a i n have been put under a g r i c u l t u r a l c u l t i v a t i o n , behind the p r o t e c t i o n o f an e x t e n s i v e network o f dykes.  Approximately 15,000 a c r e s r e -  main undeveloped, and these l a n d s c o n s t i t u t e t h e s u b j e c t of t h i s i n vestigation. The 15,000 a c r e s which remain undeveloped a r e i n s i x p h y s i c a l l y separate areasoor u n i t s .  These u n i t s a r e shown on the accompanying  and the approximate acreage of each i s p r e s e n t e d i n T a b l e 1.  TABLE 1 THE UNRECLAIMED LAND:  ESTIMATED ACREAGE  ESTIMATED ACREAGE  UNIT  200  W. H. D a l e U n i t I n d i a n Reserves  3,000  ( 1 , 1A, IB)  Corn Creek  1,400  Leach Lake  2,900  Six  2,650  M i l e Slough  Duck Lake  4,700 Total:  A l l Units  14,850  map,  CRESTON  BRITISH COLUMBIA  KOOTENAY LAND DISTRICT  Scale I inch = 2 miles :  AREA DESIGNATIONS Are a 1 •••Indian Reserves 1, IA,IB Area 2 = Corn Creek Area 3= Leach Lake Area 4 = Six Mile Slough Aroa 5  :  Duck Lake  Area 6 = W. A. Dale Unit  /I  / J  The W. H. D a l e U n i t Approximately  acres i n s i z e , t h i s u n i t i s located  immediately  n o r t h o f the I n t e r n a t i o n a l Border on the western edge of the  floodplain.  Except  f o r the peak r u n o f f p e r i o d when i t i s f l o o d e d by both Boundary  Creek and Due  200  the Kootenay R i v e r , most of the l a n d i n t h i s u n i t remains  to i t s s m a l l a r e a , and the f a c t  dry.  that i t i s cut by a s e r i e s o f o l d  stream c h a n n e l s , t h i s u n i t has l i t t l e  attraction for intensive  agricul-  t u r a l development, and would s i m i l a r l y have a v e r y low p r i o r i t y as a w i l d l i f e development p r o j e c t .  For these reasons t h i s u n i t w i l l be  ted from d e t a i l e d a n a l y s i s l a t e r i n t h i s  I n d i a n Reserves  1, 1A,  and  omit-  report.  IB  I n d i a n Reserves 1, 1A and IB, t o t a l a p p r o x i m a t e l y 3,000 a c r e s .  The  Kootenay R i v e r forms the boundary on the south and west, w h i l e the Goat R i v e r bounds the u n i t on the n o r t h . minates  On i t s e a s t e r n b o r d e r the a r e a  ter-  i n the L i s t e r behchlands, and i s a l s o bounded by p a r t o f the Goat  River f l a t s . area remains  F l o o d e d a n n u a l l y by both the Kootenay and Goat R i v e r s ,  the  r e l a t i v e l y dry once the f l o o d w a t e r s recede.  The Corn Creek U n i t T h i s u n i t l i e s on the western  edge of the f l o o d p l a i n , west o f the  Nicks I s l a n d Dyking D i s t r i c t , and south of the Southern Highway.  The a r e a of t h i s u n i t i s e s t i m a t e d at 1,400  Trans-Provincial  acres.  In a d d i t i o n  to the annual f l o o d w a t e r s o f the Kootenay R i v e r , the r u n o f f from the mount a i n s to the west flows through the u n i t i n t h r e e major streams Creek, French's Slough, and Summit Creek.  —  Corn  Although completely f l o o d e d  d u r i n g the s p r i n g r u n o f f , most of t h i s u n i t remains d r y throughout the r e s t of the y e a r . The Leach Lake U n i t The Leach Lake U n i t i s immediately n o r t h of the Corn Creek a r e a , and extends from the mountains i n the west to the N i c k s I s l a n d Dyking District  and the Kootenay R i v e r .  The e n t i r e area i s f l o o d e d e v e r y y e a r  when the Kootenay R i v e r i s a t peak r u n o f f , and the waters o f Summit Creek a l s o e n t e r t h i s area from the west.  While r o u g h l y o n e - h a l f of t h i s  unit  i s dry except f o r the s p r i n g f l o o d , the r e s t remains under water a l l y e a r and forms a s h a l l o w l a k e known as Leach Lake.  T o t a l area i n t h i s  u n i t i s a p p r o x i m a t e l y 2,900 a c r e s . The S i x M i l e Slough U n i t T h i s u n i t i s e s s e n t i a l l y a long narrow i s l a n d , bounded on the n o r t h by Kootenay Lake, and on the west and east by channels of the Kootenay R i v e r .  The Canadian P a c i f i c Railway embankment forms a b a r r i e r  a c r o s s the n o r t h end of the u n i t , s e p a r a t i n g i t from Kootenay Lake. a r e a i n t h i s u n i t i s a p p r o x i m a t e l y 2,650 a c r e s . d u r i n g the s p r i n g f r e s h e t , a p p r o x i m a t e l y 1,200  Almost c o m p l e t e l y acres of t h i s u n i t  The flooded  remains  dry the r e s t of the y e a r . The Duck Lake U n i t Duck Lake, encompassing a t o t a l of 4,700 a c r e s , l i e s on the e a s t ern s i d e of the f l o o d p l a i n a c r o s s the e a s t channel of the Kootenay R i v e r from S i x M i l e Slough.  The area i s p r o t e c t e d from the Kootenay R i v e r by  the p e r i p h e r a l dyke o f the Duck Lake Dyking D i s t r i c t , a l t h o u g h i t has  never been r e c l a i m e d .  The waters of Duck Creek, which enter the  p l a i n from the e a s t at Wynndel, are d i v e r t e d n o r t h and at i t s s o u t h e a s t  corner.  flood-  e n t e r Duck Lake  With the e x c e p t i o n of s e v e r a l hundred  acres  of l a n d known as West P o i n t , the e n t i r e area i s under water year  round.  Status of the Undeveloped Land Two Reserves  forms of tenure  (1, 1A,  and  to these u n r e c l a i m e d  IB) are o f f i c i a l  Lower Kootenay I n d i a n Band. Indian  apply  areas.  Indian Reservations  The  h e l d by  Indian the  T h e i r s t a t u s i s d e f i n e d under the f e d e r a l  Act. Except  f o r the W.  H. Dale u n i t the r e s t of the lands have remained  as u n a l i e n a t e d p r o v i n c i a l Crown l a n d .  In 1968  these areas were i n c o r p o r -  ated under the C r e s t o n V a l l e y W i l d l i f e Management Area Act  ( P r o v i n c e of  B r i t i s h Columbia 1968)  to be s e t a p a r t f o r w i l d l i f e c o n s e r v a t i o n , manage-  ment and  The Act p r o v i d e s  development.  ment a u t h o r i t y r e p r e s e n t i n g both Branch and  f o r the e s t a b l i s h m e n t  the B r i t i s h Columbia F i s h and  of a manageWildlife  the Canadian W i l d l i f e S e r v i c e .  The W.  H. Dale u n i t , f o r m e r l y p r i v a t e l a n d , was  r e c e n t l y acquired  by the B r i t i s h Columbia F i s h and W i l d l i f e Branch.  T h i s l a n d w i l l be i n -  t e g r a t e d i n the C r e s t o n V a l l e y W i l d l i f e Management  Area.  I m p l i c a t i o n s of the L i b b y C o n s t r u c t i o n of L i b b y Dam was  agreed  Canada. power, and  Dam  on the Kootenay R i v e r near L i b b y , Montana  to under the Columbia R i v e r T r e a t y between the U n i t e d S t a t e s The primary  f u n c t i o n of the dam  i t i s scheduled  f o r completion  and  i s to generate h y d r o - e l e c t r i c by 1973.  An important  secondary  f u n c t i o n of t h i s dam  w i l l be to p r o v i d e f l o o d  c o n t r o l f o r reclaimed  farm-  lands i n the Kootenay R i v e r f l o o d p l a i n between L i b b y and Kootenay Lake. The fits will  e f f e c t i v e n e s s of the L i b b y Dam depend, however, on how  For t h i s reason a second dam the r e g u l a t i o n of stream to  i n p r o v i d i n g f l o o d c o n t r o l bene-  i t i s used to meet power  downstream from the L i b b y Dam  flow.  The  requirements. i s planned  f u n c t i o n of t h i s second dam  will  for be  c o n t r o l r a p i d f l u c t u a t i o n s i n the l e v e l of the Kootenay R i v e r which  c o u l d r e s u l t from p e r i o d s of peak drawdown on the L i b b y The  reservoir.  combined e f f e c t of these dams i n r e g u l a t i n g the flow of  Kootenay R i v e r i s the most important  the  f a c t o r b e a r i n g on the p o t e n t i a l  velopment of the f l o o d p l a i n a t C r e s t o n .  de-  In the case of f u r t h e r a g r i c u l -  t u r a l r e c l a m a t i o n the e x i s t e n c e of a degree of c o n t r o l over the Kootenay R i v e r reduces  the expense;of dyke c o n s t r u c t i o n , and  dykes b e i n g breached way  by u n u s u a l l y h i g h r u n o f f i n any y e a r .  In the same  the c o s t s of development f o r i n t e n s i v e w i l d l i f e management are g r e a t l y  reduced. for  removes the r i s k of  As the date f o r completion  of L i b b y Dam  the development and use of the unreclaimed  draws near,  pressures  l a n d become more i n t e n s e .  O p p o r t u n i t i e s f o r Development There are two claimed l a n d .  realistic  a l t e r n a t i v e s f o r development of the  I t can be brought under a g r i c u l t u r a l p r o d u c t i o n as  been done w i t h the other l a n d i n the f l o o d p l a i n , or i t can be  unrehas  developed  f o r w i l d l i f e and r e c r e a t i o n as envisaged by the C r e s t o n V a l l e y W i l d l i f e Management Area A c t . are  similar.  In e i t h e r case the p h y s i c a l s t r u c t u r e s r e q u i r e d  A g r i c u l t u r a l development requires the construction of dykes, development of drainage networks, and i n s t a l l a t i o n of pumps and other maintenance f a c i l i t i e s . ing  After Libby Dam i s b u i l t the c a p i t a l cost of bring-  a l l the land into a g r i c u l t u r a l production i s estimated at $1.3 m i l l i o n . Development of the land for intensive w i l d l i f e and recreational  use would c l o s e l y p a r a l l e l that of a g r i c u l t u r a l reclamation.  Much the  same structures i n terms of dykes, drainage, and pumps w i l l be required, but they w i l l be developed more intensively and are much more costly. F u l l development f o r w i l d l i f e management would see each unit protected from the Kootenay River by a peripheral dyke, just as i n agriculture. Behind these dykes water levels would be manipulated to meet the needs of w i l d l i f e and r e c r e a t i o n i s t s and an extensive network of cross dykes and pumps i s planned so that habitat conditions can be varied within each u n i t .  Construction of these cross dykes and additional pumping  capacity adds s i g n i f i c a n t l y to the costs of w i l d l i f e development.  In  addition since the units w i l l remain under water most of the time, access has to be provided  along the dykes.  This requires a much wider  and more expensive dyke than f o r farming purposes where access i s achieved by roads within each area.  For these reasons the t o t a l capi-  t a l cost of the w i l d l i f e development plan, including the construction of an administrative centre, i s estimated at $1.96 m i l l i o n .  In addition  to these c a p i t a l costs, maintenance and salary expenses w i l l be high, approximately $134,000 per year a f t e r 1978. The Objectives of Development Selecting the optimum form of development for this land requires  careful analysis of each alternative i n the l i g h t of e x p l i c i t objectives. Two  forms of development f o r this land are possible, and the  of benefits and costs under each w i l l d i f f e r s i g n i f i c a n t l y .  incidence In addition  two forms of tenure apply to the land and the objectives to be served w i l l vary accordingly. are discussed  The objectives which are adopted i n this study  separately for each form of tenure.  are c r i t i c a l to the conclusions  These objectives  drawn from the analysis of the study.  Development of Crown Land Development of Crown land i n the Creston Valley W i l d l i f e Management Area should proceed i n the manner which maximizes the net benefits to the c i t i z e n s of B r i t i s h Columbia, for whom i t i s held i n trust. choosing between the two possible developments-the appropriate  In  framework  thus becomes that of the entire province. The development which maximizes net benefits to B r i t i s h Columbia may  also be that which maximizes the net benefit to the l o c a l area or  to Canada as a whole, but this w i l l not necessarily be the case. relevant costs and benefits to be considered  The  d i f f e r when the viewpoint  i s changed from one j u r i s d i c t i o n to another as i s demonstrated i n this study.  Despite these differences a choice between the alternatives  should be based on the net gains to B r i t i s h Columbia;  considerations  involving only the l o c a l economy, or the larger national economy, should not affect the choice of development.  Development of Indian Reserves 1, 1A, and  IB  Unlike the undeveloped Crown lands, tenure over the Indian Reserves  i s v e s t e d i n the Lower Kootenay I n d i a n Band.  T h i s p a t t e r n of ownership  removes the I n d i a n Lands from the c a t e g o r y of a p u b l i c l y owned r e s o u r c e and p u t s them on the same f o o t i n g as any p r i v a t e l y owned l a n d . A p r i v a t e owner would be expected to put h i s l a n d to t h a t use which maximized h i s net f i n a n c i a l r e t u r n .  The same type of b e h a v i o u r  would be expected from the Indians except f o r two r e a s o n s .  The  Indians  themselves are not c u l t u r a l l y o r s o c i a l l y c o n d i t i o n e d to assume an ent r e p r e n u r i a l r o l e i n terms of a major development p r o j e c t , and the D e p a r t ment of I n d i a n A f f a i r s has r e t a i n e d a degree of c o n t r o l over f i n a n c i a l and l a n d management a f f a i r s . While i t i s m a i n t a i n e d t h a t the I n d i a n Band i s the a p p r o p r i a t e r e f e r e n t group f o r s e l e c t i n g a development program, i t should be acknowledged a t the same time t h a t any development i s not l i k e l y  to be under-  taken by the Indians themselves, but by o u t s i d e i n t e r e s t s .  We  would,  t h e r e f o r e , expect the Indians to choose whatever development  maximized  t h e i r net g a i n —  provincial  w i t h o u t r e g a r d to the impact on the l o c a l ,  or n a t i o n a l economy. It i s d i f f i c u l t  to f o r e c a s t which form .of development would be  chosen by the Indians as the e x t e n t to which they w i l l b e n e f i t from any a l t e r n a t i v e depends  l a r g e l y on t h e i r s t r e n g t h i n b a r g a i n i n g w i t h  an outside:; d e v e l o p e r .  We  can draw some i n f e r e n c e s r e g a r d i n g the amount  and type of b e n e f i t which the Indians might expect from the a l t e r n a t i v e s , but t h e i r share cannot be determined w i t h any c e r t a i n t y .  What we  can be  more c e r t a i n about i s the t o t a l b e n e f i t from e i t h e r development of the I n d i a n l a n d s and the r e s p e c t i v e impacts on o t h e r s e c t o r s of the economy.  T a k i n g these matters i n t o account the approach adopted i n t h i s study i s t o a s s e s s t h e . o v e r a l l d i s t r i b u t i o n of the b e n e f i t s and c o s t s of any development of the I n d i a n Reserves — Indians a l o n e .  not the n e t g a i n t o the  While b e n e f i t s t o the Indians remain the b a s i c  t e r i o n f o r a choice  cri-  among a l t e r n a t i v e s , we a r e a b l e t o e s t i m a t e i n  a d d i t i o n the n e t b e n e f i t s which would accrue t o other development of the I n d i a n  sectors  from  Reserves, and hence the o v e r a l l economic  f e a s i b i l i t y of any investment.  Summary:  P r o s p e c t s f o r the Undeveloped Land  Completion o f L i b b y Dam, expected by 1973, w i l l g r e a t l y enhance the p r o s p e c t s at C r e s t o n .  f o r f u r t h e r development i n the Kootenay R i v e r f l o o d p l a i n T h i s study w i l l examine two a l t e r n a t i v e uses f o r p r e s e n t l y  undeveloped l a n d : a g r i c u l t u r e or w i l d l i f e - r e c r e a t i o n . The  undeveloped l a n d has a r i c h p o t e n t i a l and p r o s p e c t s  are that  e i t h e r type o f development could y i e l d a s u b s t a n t i a l l e v e l o f n e t benefit.  Choosing the b e s t  o r most d e s i r a b l e a l t e r n a t i v e r e q u i r e s  t h a t the  r e s p e c t i v e b e n e f i t s and c o s t s of each be l o g i c a l l y ordered f o r comparison.  B e n e f i t c o s t a n a l y s i s w i l l be used f o r t h i s purpose and as a guide  to d e c i s i o n making. Choosing between a l t e r n a t i v e s a l s o r e q u i r e s a c l e a r u n d e r s t a n d i n g of the o b j e c t i v e s t o be met through development. i n t h i s study v a r y veloped land.  The o b j e c t i v e s  adopted  due to the d i f f e r e n t forms o f tenure over t h e unde-  For p r o v i n c i a l Crown l a n d i t i s assumed t h a t the o b j e c -  t i v e of development i s t o maximize the n e t b e n e f i t s t o the P r o v i n c e of  B r i t i s h Columbia.  For the Indian Reserves i t i s assumed that the objec-  t i v e i s to maximize the net benefits to the Indians.  In both cases the  implications of the alternative developments for the l o c a l and national economies w i l l also be examined.  CHAPTER II BENEFIT-COST ANALYSIS IN LAND USE PLANNING Planning the future use of the undeveloped land at Creston r e quires choosing  from the t e c h n i c a l l y f e a s i b l e a l t e r n a t i v e s . The prob-  lem i s to choose that a l t e r n a t i v e , or combination of a l t e r n a t i v e s , which w i l l generate the greatest excess of benefits over costs for those i n whose i n t e r e s t the resources are managed.  Benefit-cost analy-  s i s i s a technique used to measure the economic f e a s i b i l i t y of investment or resource development projects.  The analysis of i n d i v i d u a l pro--  jects i s carried out so that the results are d i r e c t l y comparable with analyses of other projects.  When alternative uses for a basic land re-  source are analyzed i n this way,  i t i s possible to determine which use  yields the greatest o v e r a l l net gain to society. Measuring the t o t a l net gain to society requires that a l l costs and a l l benefits from any development be considered and set o f f against one another to measure the net gain (or l o s s ) .  This implies taking a  very broad view of any project and considering a l l the r e a l costs and benefits, i n addition to purely f i n a n c i a l ones.  Real costs or benefits  include purely f i n a n c i a l measures, but go beyond them to include other effects of a development not d i r e c t l y reflected i n project costs or benefits.  In the case of a hydro-electric development, for example,  i n addition to purely f i n a n c i a l costs of construction, other r e a l costs may  be incurred i f recreational opportunities are destroyed or i f timber  producing  land i s flooded.  An adequate benefit-cost analysis, i n con-  sidering such factors, must be more comprehensive than a purely f i n a n c i a l  analysis.  By c o n s i d e r i n g a l l r e a l c o s t s and b e n e f i t s i t i s p o s s i b l e  that the conclusions  of a b e n e f i t - c o s t a n a l y s i s r e g a r d i n g  i t y o f any p r o j e c t c o u l d d i f f e r purely f i n a n c i a l analysis.  reached through a  Only when a comprehensive b e n e f i t - c o s t frame-  work i s used can we be assured development of our n a t u r a l  from t h e c o n c l u s i o n s  the f e a s i b i l -  of r e a l i z i n g  the maximum b e n e f i t through  resources.  Measures o f B e n e f i t s and Costs When conducting portant fined  an a n a l y s i s from such a broad v i e w p o i n t  t h a t measures of c o s t and b e n e f i t a r e r i g o r o u s l y ordered  so t h a t o n l y a p p r o p r i a t e b e n e f i t s and c o s t s a r e compared.  ilitate  and deTo f a c -  t h i s economists c l a s s i f y the b e n e f i t s and c o s t s a s s o c i a t e d  a p r o j e c t i n two c a t e g o r i e s : United  i t i s im-  primary and secondary  (Sewell et  with  at 1962,  S t a t e s Government 1962, P r e s t and Turvey 1965). Primary c o s t s and b e n e f i t s a r e those d i r e c t l y a s s o c i a t e d w i t h a  project.  They i n c l u d e such t h i n g s as the d i r e c t  p l u s any o t h e r d i r e c t which a r e c r e a t e d  r e a l costs —  costs of construction  benefits include a l l real benefits  as the primary output of the p r o j e c t .  Secondary c o s t s and b e n e f i t s a r e those which stem i n d i r e c t l y from,, or a r e induced dustry  by, the main p r o j e c t .  I f , f o r example, a p r o c e s s i n g i n -  i s e s t a b l i s h e d t o handle the p r i m a r y output of a p r o j e c t , then  t h a t i n d u s t r y ' s output c o n s t i t u t e s a secondary b e n e f i t w h i l e i t s o p e r a ting  c o s t s a r e secondary c o s t s . Within  these two c a t e g o r i e s  the extent  to which the b e n e f i t s and  c o s t s a r e amenable t o economic e v a l u a t i o n w i l l v a r y . which a r e n o r m a l l y lems.  Goods and s e r v i c e s  exchanged through the market pose no e v a l u a t i o n p r o b -  The v a l u e o f such commodities i s r e g i s t e r e d by t h e i r p r i c e s and  they are referred to as tangible benefits or costs.  Other goods and  services are not usually exchanged through a market, although they  may  be measurable i n monetary terms by procedures which attribute a value to them.  Such benefits and costs are referred to as intangible.  A t h i r d d i s t i n c t i o n i s drawn for costs or benefits which are' considered terms.  unmeasurable since they cannot be quantified i n monetary  (Sewell et  di  1962,  p. 6).  These three d i s t i n c t i o n s , deriving  from the extent to which benefits and costs are amenable to economic evaluation, apply equally at the primary and secondary l e v e l s .  Comparison of Benefits and Costs To determine whether a project i s feasible the estimates of p r i mary and secondary benefits are compared with the estimates of primary and secondary costs.  The objective of this comparison i s to determine  a) the net benefit (or loss) from a project, taken as t o t a l benefits minus t o t a l costs; and b) the r e l a t i v e e f f i c i e n c y of the project as measured by the r a t i o of t o t a l benefits to t o t a l costs. In making these comparisons the immediate problem which i s encountered i s that benefits and costs may  occur at widely varying  The heaviest project costs are most often incurred i n i t i a l l y , by annual costs for maintenance and repair. are seldom r e a l i z e d immediately.  times.  followed  The benefits of a project  Benefits commonly accrue i n annual i n -  crements over a project's l i f e , frequently i n an irregular pattern.  The  problem which must then be dealt with i s one of comparing costs which are incurred i n one pattern through time with benefits which accrue i n a d i f f e r e n t time pattern.  To deal with these problems, a l l estimates of costs and benefits are reduced to present values i n a base year through the process of d i s counting.  The discounting procedure allows for the fact that a d o l l a r  of benefit or cost i n the future does not have the same value as a d o l l a r of benefit or cost at present.  Future values are therefore  discounted  back to their 'present value equivalents' so that costs and benefits occurring at d i f f e r e n t times i n the future and i n d i f f e r e n t amounts can be made d i r e c t l y comparable i n terms of their values at the present. Selection of an appropriate discount or i n t e r e s t rate i s an important matter i n any benefit-cost analysis.  A low discount rate r e -  duces future values much less than a high discount rate.  I t i s con-  ceivable, therefore, that for a project requiring a heavy i n i t i a l c a p i t a l outlay, with benefits dispersed over a long period of time, changing from a high to a low discount rate could a l t e r the outcome of f e a s i b i l i t y studies.  Proper s e l e c t i o n of a discount rate remains l a r g e l y a  p o l i t i c a l decision, although for purposes of evaluating public projects, the i n t e r e s t rate paid by the relevant government on long-term bonds i s often adopted as an acceptable  proxy.  C r i t e r i a for Decision Making When a l l benefits and costs have been estimated and discounted to an equivalent basis, they are then compared to determine whether or not a given project i s f e a s i b l e . comparison:  Two basic measures result from this  (a) a measure of net benefit (or loss) determined by sub-  t r a c t i n g t o t a l costs from t o t a l benefits; and (b) the benefit-cost r a t i o , determined by dividing t o t a l benefits by t o t a l costs.  Many of t h e b a s i c q u e s t i o n s  s u r r o u n d i n g any n a t u r a l  resource  development can be answered w i t h the a i d o f these measures. the q u e s t i o n s  which can be answered  Some of  include:  1.  The b a s i c q u e s t i o n  of a p r o j e c t ' s  feasibility.  2.  The optimum s i z e f o r any p r o j e c t c o n s i d e r e d  by  itself. 3.  The most e f f i c i e n t  a l l l o c a t i o n of a g i v e n  allotment  of funds over s e v e r a l development p r o j e c t s . 4.  The optimum c h o i c e between two competing  projects  or m u t u a l l y e x c l u s i v e a l t e r n a t i v e s f o r the same s i t e . The differ  c r i t e r i a f o r answers to these q u e s t i o n s  and can be q u i t e i n v o l v e d .  restricted of t h i s  appropriate  t o the f o u r t h q u e s t i o n  may  At t h i s p o i n t d i s c u s s i o n w i l l be as i t summarizes the c e n t r a l o b j e c t  study. The  b a s i s f o r choosing between competing p r o j e c t s o r m u t u a l l y  e x c l u s i v e a l t e r n a t i v e s f o r any p a r t i c u l a r r e s o u r c e  should  be the maxi-  mum net b e n e f i t generated by each a l t e r n a t i v e ( P r e s t and Turvey 1965, p.  704). By examining each of the t e c h n i c a l l y p o s s i b l e r e s o u r c e  uses  i n t u r n , i t i s p o s s i b l e t o s e l e c t t h a t which makes t h e g r e a t e s t n e t c o n t r i b u t i o n to s o c i e t y ' s  The  Referent  welfare.  Group, o r Viewpoint f o r A n a l y s i s  A f i n a l important p o i n t i s the m a t t e r of t h e r r e f e r e n t group o r the v i e w p o i n t from which a b e n e f i t - c o s t a n a l y s i s i s undertaken.  This  i s important, p a r t i c u l a r l y i n the study of undeveloped l a n d a t C r e s t o n , s i n c e what c o n s t i t u t e b e n e f i t s o r c o s t s from the p o i n t of view o f one  region may not be s i m i l a r l y classed from the viewpoint of a d i f f e r e n t jurisdiction.  The effect on the benefit-cost comparison of changing the  referent group i s demonstrated i n this study by.assuming three d i f f e r e n t viewpoints, namely the l o c a l Creston area, B r i t i s h Columbia, and Canada. With the s i g n i f i c a n t effect which changes i n the viewpoint have on the outcome of the benefit-cost comparison, i t i s c r i t i c a l that the approp r i a t e referent group be unequivocally established before any decisions are taken.  Benefit-Cost Analysis i n this Study In this study benefit-cost analysis i s applied to the problem of selecting the best use f o r undeveloped land i n the Kootenay River floodp l a i n at Creston, B r i t i s h Columbia.  The alternatives are to leave the  land i n i t s present state, to develop i t f o r agriculture, or to develop i t f o r w i l d l i f e management and recreation. A b r i e f investigation reveals that continuing with present use i s an undesirable alternative — the range of choice being narrowed to agriculture or w i l d l i f e and recreation. Application of benefit-cost analysis to a g r i c u l t u r a l developments i s a standard economic procedure.  The c a p i t a l costs of reclaiming the  land and putting i t into production are estimated.  The annual p r o f i t s  from a g r i c u l t u r a l production are estimated, discounted to present values, and compared with costs to assess the project's f e a s i b i l i t y . lems are encountered  While prob-  i n estimating both costs and b e n e f i t s , the procedure  i s r e l a t i v e l y standard and represents nothing new i n the application of economics to resource management problems.  Using benefit-cost analysis i n the case of the w i l d l i f e development alternative i s much more innovative.  The basic approach i s the  same, beginning with an estimate of the costs of development.  Problems  are encountered i n estimating benefits to compare with costs, however, and new techniques must be employed.  Recreational use i s not e a s i l y  predicted, and benefits are d i f f i c u l t to evaluate.  We are forced f i r s t  to derive estimates of use and then impute values to that:use. evaluation of recreation remains a r e l a t i v e l y undeveloped  The  area i n econo-  mics, and the assumptions underlying the values adopted i n this study are discussed at length i n Appendix I. Emphasis here i s r e s t r i c t e d to•the fact that this represents a r e l a t i v e l y new approach i n the application of economics to resource management problems, and that i f anything i t f a i l s to give f u l l measure to the values associated with w i l d l i f e and recreation. and evaluation i n this area remain d i f f i c u l t .  Quantification  In any case, q u a n t i f i c a -  tion and evaluation i s possible for only some of the values —  many of  the important values associated with w i l d l i f e remain as unmeasurable and are appended to the o v e r a l l r e s u l t s .  CHAPTER I I I  PRESENT USE OF THE UNDEVELOPED LAND  I t was noted e a r l i e r the undeveloped  t h a t c o n t i n u i n g w i t h the p r e s e n t use of  l a n d does not p r e s e n t an a t t r a c t i v e a l t e r n a t i v e —  z a t i o n i s l i g h t , and b e n e f i t s a p p a r e n t l y s m a l l .  utili-  But the l a n d i s used i n  i t s p r e s e n t s t a t e , a l b e i t e x t e n s i v e l y , and any new regime i n v o l v i n g i n t e n s i v e development would d i s p l a c e p r e s e n t u s e r s .  To the e x t e n t t h a t  p r e s e n t uses a r e d i s p l a c e d by new developments l o s s e s may be i n c u r r e d . A complete assessment o f any development would have to take such l o s s e s i n t o account,  d e d u c t i n g them from any b e n e f i t s generated.  Similarly,  where an i n t e n s i v e development i n v o l v e s the c o n t i n u a t i o n and improvement of some a s p e c t s of p r e s e n t use the t o t a l output  should n o t be c r e d i t e d  to the development, o n l y the i n c r e m e n t a l output.  Thus, w h i l e c o n t i n u i n g  w i t h p r e s e n t p a t t e r n s o f use may not be an a t t r a c t i v e a l t e r n a t i v e i n i t s e l f , some knowledge o f p r e s e n t use and the a s s o c i a t e d b e n e f i t s and c o s t s i s r e q u i r e d f o r a comprehensive a n a l y s i s of proposed In i t s p r e s e n t s t a t e the undeveloped  developments.  land a f f o r d s seasonal graz-  i n g f o r beef c a t t l e and r e c r e a t i o n a l o p p o r t u n i t i e s ' f o r w a t e r f o w l  hunters,  f i s h e r m e n and n a t u r a l i s t s . I t a l s o p r o v i d e s a key stopover f o r l a r g e numbers o f m i g r a t o r y w a t e r f o w l ,  and p r o v i d e s n e s t i n g h a b i t a t f o r some  important w i l d l i f e s p e c i e s , such as the osprey. p r e s e n t use i n c l u d e a l i m i t e d h a r v e s t o f f u r s  A d d i t i o n a l a s p e c t s of  (muskrat  and b e a v e r ) , and  the p r o v i s i o n o f water s t o r a g e i n s o f a r as the area h o l d s o v e r f l o w water  from the Kootenay R i v e r d u r i n g and  i t s freshet.  s i g n i f i c a n c e o f these uses i s presented  A summary of t h e e x t e n t here t o p r o v i d e  a bench-  mark a g a i n s t which changes can be measured, and t o i n d i c a t e t h e l o s s e s which might be i n c u r r e d by p r e s e n t  users  under a new form  of u s e .  Present  A g r i c u l t u r a l Use  Seasonal g r a z i n g of beef c a t t l e i s the o n l y form of a g r i c u l t u r e at p r e s e n t  on the u n r e c l a i m e d l a n d .  f e r s among the v a r i o u s u n i t s .  Administration  Private negotiations  and management  dif-  a r e made between  the g r a z i e r s and l a n d l o r d s i n the case o f W. H. Dale U n i t and the I n d i a n Reserves, w h i l e  g r a z i n g i n the Corn Creek and Leach Lake areas  i s under F o r e s t S e r v i c e p e r m i t .  On S i x M i l e Slough the g r a z i n g i s  covered by l e a s e from the Lands Department, w h i l e Lake i s t r e s p a s s The  g r a z i n g around Duck  grazing.  t o t a l amount o f s e a s o n a l  l a n d i s summarized i n Table  2.  g r a z i n g a f f o r d e d by the unreclaimed  Approximately 1,200 c a t t l e a r e grazed  on the u n r e c l a i m e d l a n d every summer, the l e n g t h of the g r a z i n g v a r y i n g w i t h weather c o n d i t i o n s and water l e v e l s .  season  TABLE 2 SUMMARY OF GRAZING,* UNRECLAIMED LAND, 1968  NO. OF CATTLE GRAZED  AREA  D a l e  NO. OF A.U.M.S** GRAZING  40  200  Indian Reserves  370  1,485  Corn Creek and Leach Lake  550  2,208  Six Mile Slough***  100  500  Duck Lake  110  600  1,180  4,993  Total  * The few horses grazed are ignored i n this summary.  ** An animal-unit month (A.U.M.) of grazing i s defined as one mature cow grazing f o r one month. Cows with calves under 6 months of age are considered as one animal u n i t . Yearlings or steers over 6 months constitute one animal u n i t . Average l e v e l of use i n recent years. This overstates current use which has been affected by change i n the ownership of the lease.  Economic Implications of Extensive  Grazing•  Cattle grazing on the unreclaimed  land i s not an intensive form  of land use. Nevertheless, i t i s important  to those persons whose i n -  comes are enhanced by i t , and i t does generate a small amount of economic a c t i v i t y i n the area.  To assess the economic s i g n i f i c a n c e of this  grazing, a b r i e f survey of c a t t l e graziers i n the area was conducted  i n the f a l l of 1968.  The results of this investigation w i l l be summar-  ized very b r i e f l y . Size of herds.—Few of. the beef operations are of economic s i g nificance.  Only 10 of the 32 farm operators grazing c a t t l e on unre-  claimed land grazed more than 50 head.  The d i s t r i b u t i o n of farm oper-  ations by the number of c a t t l e grazed i s summarized i n Table 3.  TABLE 3 FARM OPERATORS BY NUMBER OF CATTLE GRAZED  NO. OF CATTLE GRAZED  NO. OF FARMS  More than 100  2  50 - 100  8  21 -  49  9  10 - ,20  4  Less than 10  9  Total number of farms  32  Due to the s c a r c i t y of summer grazing i n the Creston area, a l l operators depend heavily on this grazing to maintain cow-calf operations. A l l operators indicated that without this grazing they would have to abandon cow-calf operations, and i f they were to remain i n beef production would have to switch to feed-lot operations. Income and investment.—Few farm operators depend heavily on their grazing-oriented beef operations as a source of income.  Only 10 graziers  depended s o l e l y on farming f o r their incomes, four of these depending e n t i r e l y on beef c a t t l e , the other s i x being i n mixed farming including hay, grain, and dairying. Net earnings from these beef operations are generally very low, and i n few cases does the farm operator earn enough to compensate for the value of his labor and pay a return on his investment.  Total cur-  rent revenue from the sale of c a t t l e dependent on grazing the unreclaimed land i s estimated at $124,770 i n 1968.  Of t h i s , $85,090 or  68.2 per cent was required to meet current operating expenses, leaving a current p r o f i t of $39,680.  This amount i s available to farm oper-  ators to pay a return on their investment and compensate for t h e i r labor." Investment  i n beef operations averaged $49,000 and ranged from  $14,500 to $108,000.  On the average 42 per cent of this investment  was i n land, 12 per cent i n buildings, 17 per cent i n machinery equipment, and 29 per cent i n the basic herd.  and  Operators grazing more  than 20 c a t t l e on the unreclaimed land had a t o t a l of $927,000 invested i n t h e i r beef operations i n 1968. Net Economic Returns The current operating p r o f i t of $39,680 calculated above represents a rate of return of 4.3 per cent on this c a p i t a l , without allowing  * With the Corn Creek unit, cow-calf type of could be adapted  exception of a few farms on the benchlands most of this investment i s not irrevocably beef operation. Buildings, machinery, and to alternative a g r i c u l t u r a l uses, as could  west of the t i e d to a equipment most of  f o r the v a l u e o f the o p e r a t o r s ' l a b o r i n p u t . farm o p e r a t o r s i n f a c t i n c u r a net to t h e i r beef e n t e r p r i s e .  economta  This i n d i c a t e s that loss  I f i n s t e a d they had  by committing  invested their  the  capital capital  at the e a s i l y o b t a i n e d r a t e of s i x per c e n t , they would have earned $15,940 more than the net p r o f i t  from t h e i r c a t t l e e n t e r p r i s e s .  In  a d d i t i o n , they would have been a b l e to earn a r e t u r n on the l a b o r o t h e r w i s e devoted  to c a t t l e r a i s i n g b y . s e e k i n g a l t e r n a t i v e  sources  of employment. I t should be noted t h a t t h e s e are t o t a l f i g u r e s , and  conceal  w i t h i n them the range of p r o f i t a b i l i t y of v a r i o u s o p e r a t i o n s .  However,  they do p o i n t out the f a c t  cattle  o p e r a t i o n s depending  that i n t h e i r p r e s e n t form the beef  on unreclaimed  economic g a i n to the community —  l a n d f o r g r a z i n g p r o v i d e no  positive  the output b e i n g worth l e s s , i n r e a l  terms, than t h e i n p u t s r e q u i r e d to produce  it.  Indeed,  the f i g u r e s p r e -  sented above p r o b a b l y u n d e r s t a t e the net l o s s as they do not i n c l u d e p u b l i c expenses made f o r c a t t l e g u a r d s and range management i n the  Corn  Creek and Leach Lake u n i t s . F i n d i n g s such as t h e s e , w i t h f a c t o r s e a r n i n g l e s s than they c o u l d i n a l t e r n a t i v e employment, are not uncommon i n a g r i c u l t u r e where the i n d u s t r y has been v e r y slow i n making l o n g - r u n adjustments i n g market c o n d i t i o n s .  to chang-  A study of beef o p e r a t i o n s by the B r i t i s h Colum-  b i a Department of A g r i c u l t u r e showed t h a t i n 1967  the r e t u r n on  capital  the p r i v a t e l y owned l a n d . Indeed, much of the l a n d used i n these cowc a l f o p e r a t i o n s appears to be more h i g h l y v a l u e d i n some a l t e r n a t i v e form of a g r i c u l t u r a l p r o d u c t i o n .  of less than $50,000 was and $100,000 - 0.12 2.28  per cent.  -r5;60 per cent, on c a p i t a l between $50,000  per cent, and on c a p i t a l i n excess of $100,000  Cow-calf operations showed a return to c a p i t a l of  -3.15  per cent (Province of B r i t i s h Columbia 1968a).' The low returns earned at Creston can be expected i n view of.the fact that the area i s not well suited to cow-calf operations, grazing i s of poor q u a l i t y , and the grazing i s poorly managed and divided among small farm operations. Prospects of Continued A g r i c u l t u r a l Use Extensive c a t t l e grazing on the unreclaimed  land y i e l d s no net  benefit when the true economic costs are considered.  After allowing  for the r e a l cost of c a p i t a l and labor, i t can readily be demonstrated that the r e a l cost of inputs exceeds the value of output.  This conclu-  sion i s supported by other beef studies done i n B r i t i s h Columbia. Were this grazing continued i n i t s present form there i s l i t t l e l i k e l i h o o d of any s i g n i f i c a n t change i n these relationships.  A major  reorganization of the available grazing might give scope for improved performance i f small i n e f f i c i e n t operations could be eliminated, allowing expansion of well managed economic u n i t s .  This appears highly un-  l i k e l y however, the farm operators are not very co-operative among themselves, and the diverse forms of tenure over the land are not conducive to co-ordinated management. The effect of the Libby Dam to be n e g l i g i b l e .  on this form of land use i s l i k e l y  While the peak flood levels of the Kootenay River  w i l l be reduced after Libby Dam  i s completed, without  claimed lands w i l l s t i l l flood annually.  dykes the unre-  I f , as appears l i k e l y , the  period of flooding i s prolonged but at lower levels after Libby Dam i s completed i t may have the effect of reducing the area available for grazing, or the grazing season, or both.  Present Recreational Use Many persons use the unreclaimed land on the Creston f l a t s f o r recreational purposes.  This recreation includes sporadic use by b i r d  watchers and others f o r nature observation, warmwater sportsfishing in Duck Lake, and b i r d hunting during the f a l l season.  While data  on this recreational use i s f a r from precise, reasonably accurate e s t i mates of use have been gleaned from several sources and are reviewed here. Bird Hunting Much of the unreclaimed land i s used by hunters during the f a l l hunting season each year.  Hunters pursue migratory birds (ducks, geese,  and doves) and a small resident population of pheasants.  Hunting i s  done on private reclaimed farm land, as well as on the Indian Reserves and Crown land. No information was available on the extent of this hunting a c t i v i t y i n past years.  To provide accurate data for an assessment of  recreational use of unreclaimed land i n the area, a mail survey was conducted of hunters using the area i n the 1968 hunting season. t a i l e d results of this survey are presented i n Appendix F. sis  De-  The analy-  of recreational use presented here i s based on the findings of that  survey.  During the 1968 h u n t i n g season 661 persons hunted b i r d s on the Creston f l a t s .  L o c a l hunters from the C r e s t o n area accounted, f o r 242  h u n t e r s , t h e r e were 391 n o n - l o c a l hunters from o t h e r c e n t r e s i n B r i t i s h Columbia,  and 28 h u n t e r s from t h e U n i t e d S t a t e s .  These h u n t e r s spent a t o t a l of 6,350 hunter days a t t h e i r s p o r t i n 1968.  Not a l l h u n t i n g was done, however, on u n r e c l a i m e d l a n d .  Table  4 summarizes the d i s t r i b u t i o n of t h i s h u n t i n g a c t i v i t y among the v a r i o u s lands open to h u n t e r s . of the t o t a l .  Hunting  Hunting  on p r i v a t e l a n d accounted  on unreclaimed  f o r 24 per cent  l a n d was c o n f i n e d almost s o l e l y to  Crown l a n d , as o n l y 105 hunter days were spent on the I n d i a n Reserves.  TABLE 4 DISTRIBUTION OF BIRD HUNTING ACTIVITY, 1968  PLACE OF HUNTING ACTIVITY (Hunter Days) PRIVATE FARM LAND  ORIGIN OF HUNTERS  CROWN LAND  Local  2,055  906  88  Non-Local  2,394  641  15  248  4  2  4,697  1,551  105  Foreign T o t a l Hunter Days  Warmwater  Sport F i s h i n g  The warmwater s p o r t f i s h e r y Lake.  INDIAN RESERVE  i s c o n f i n e d t o the waters  of Duck  P r e s e n t u t i l i z a t i o n i s somewhat r e s t r i c t e d by the l a c k o f easy  access t o t h e a r e a , and the d i f f i c u l t y  of launching boats.  Fishermen  a r e m a i n l y r e s i d e n t s o f the l o c a l a r e a , a l t h o u g h some f i s h i n g i s done by n o n - r e s i d e n t s d u r i n g the t o u r i s t season.  The f i s h sought i n c l u d e  b a s s , p e r c h , and s u n f i s h , the season of use e x t e n d i n g f o r about 25 weeks from May to October. A c c u r a t e d a t a a r e not a v a i l a b l e on the e x t e n t of t h i s a c t i v i t y , and p r a c t i c a l d i f f i c u l t i e s prevented had been done w i t h h u n t e r s . z a t i o n a r e based  fishing  s u r v e y i n g f i s h e r m e n as  The b e s t e s t i m a t e s o f the e x t e n t o f u t i l i -  on p e r s o n a l o b s e r v a t i o n by the s t a f f of the F i s h and  W i l d l i f e Branch a t C r e s t o n , supplemented by c o n v e r s a t i o n s w i t h persons who f i s h the area f r e q u e n t l y .  On t h i s b a s i s i t i s e s t i m a t e d  t h a t the f i s h e r y s u p p o r t s 28 fisherman-days 25 week p e r i o d when fishermen a r e a c t i v e .  of use p e r week over the Annual u t i l i z a t i o n i s thus  e s t i m a t e d to be a p p r o x i m a t e l y 700 f i s h e r m a n B i r d Watching and Nature  several  days.  Observation  F u r t h e r r e c r e a t i o n a l use o f the u n r e c l a i m e d l a n d i s made by b i r d watchers  and o t h e r persons  Even l e s s i s known about known about  f o r the s i m p l e purpose  of observing nature.  the a c t i v i t i e s of these r e c r e a t i o n i s t s  sportsfishermen.  The n a t u r e o f such a c t i v i t y takes  than i s partici-  pants out o f the range o f o r d i n a r y o b s e r v a t i o n and makes i t d i f f i c u l t to e s t i m a t e the e x t e n t of t h e i r There  activity.  are two main a t t r a c t i o n s f o r such r e c r e a t i o n a l  One i s the annual m i g r a t i o n o f w a t e r f o w l  activities.  through the a r e a , h i g h l i g h t e d  by the presence o f l a r g e numbers of w h i s t l i n g swans.  A second  attrac-  The C r e s t o n V a l l e y i s o f t e n r e f e r r e d t o as the " V a l l e y of the Swans."  t i o n i s t h e p r e s e n c e of a l a r g e b r e e d i n g p o p u l a t i o n o f ospreys which can be observed w i t h r e l a t i v e ease f i s h i n g i n the s h a l l o w waters o f the u n r e c l a i m e d  land.  I n a d d i t i o n to these r e l a t i v e l y r a r e b i r d s , a  wide v a r i e t y o f t h e more common s p e c i e s can a l s o be observed  through-  out t h e a r e a . I t i s estimated that the unreclaimed 150  l a n d s support  days of r e c r e a t i o n a l use i n t h i s form a n n u a l l y .  approximately  This estimate i s  p r e s e n t e d on t h e b a s i s o f p e r s o n a l o b s e r v a t i o n , and o b s e r v a t i o n s by F i s h and W i l d l i f e Branch p e r s o n n e l a t C r e s t o n . Economic I m p l i c a t i o n s of P r e s e n t R e c r e a t i o n a l Use Any  d i s c u s s i o n of the economic i m p l i c a t i o n o f outdoor  must be pursued  with caution.  recreation  When l a n d i s s e t a s i d e f o r r e c r e a t i o n a l  use i t s 'product' c o n s i s t s o f o p p o r t u n i t i e s f o r r e c r e a t i o n a l - e n j o y m e n t . U n l i k e most p r o d u c t s i n our economy, we do n o t commonly s e l l  opportu-  n i t i e s f o r w i l d l i f e - o r i e n t e d r e c r e a t i o n , so t h e r e i s no w e l l e s t a b l i s h e d measure of t h e i r v a l u e .  I f we a r e t o t a l k about the primary b e n e f i t , o r  v a l u e , o f r e c r e a t i o n a l o p p o r t u n i t i e s we must e s t i m a t e what these  opportu-  n i t i e s a r e worth to people who a r e n o t r e q u i r e d to pay f o r them.  The  e v a l u a t i o n of n o n - p r i c e d r e c r e a t i o n a l o p p o r t u n i t i e s has been the s u b j e c t of c o n s i d e r a b l e economic r e s e a r c h i n r e c e n t y e a r s , and two main  approach-  es t o t h e problem have e v o l v e d (Knetsch and Davis 1966, Pearse and Bowden 1969). In t h e survey o f b i r d hunters made t o determine son.  on t h e C r e s t o n f l a t s , an attempt was  t h e v a l u e o f the h u n t i n g o p p o r t u n i t i e s i n the 1968 s e a -  T h i s i s r e p o r t e d i n d e t a i l i n Appendix F.  U s i n g the approach adop-  ted i n t h i s survey, the average v a l u e of a day  spent h u n t i n g i s e s t i -  mated to be $4.50. By a p p l y i n g t h i s e s t i m a t e of the d a i l y v a l u e of a r e c r e a t i o n a l o p p o r t u n i t y to f i s h i n g and n a t u r e o b s e r v a t i o n as w e l l as h u n t i n g ,  we  can e s t i m a t e the primary b e n e f i t d e r i v e d from r e c r e a t i o n a l o p p o r t u n i t i e s on the u n r e c l a i m e d on u n r e c l a i m e d days and  lands.  l a n d i n 1968,  A t o t a l of 4,802 hunter-days  i n a d d i t i o n to the e s t i m a t e d  150 days spent i n n a t u r e o b s e r v a t i o n .  were spent  700  fishermen-  T h i s t o t a l of 5,652 days  of r e c r e a t i o n has an e s t i m a t e d v a l u e of $25,490. The primary  c o s t s a s s o c i a t e d w i t h t h i s r e c r e a t i o n are n e g l i g i b l e .  There are no d i r e c t c o s t s i n c o n n e c t i o n w i t h the ation opportunities. i n g of h u n t e r s and  ' p r o d u c t i o n ' of r e c r e -  There w i l l be some s m a l l expense i n s o f a r as  fishermen i s r e q u i r e d .  S i n c e F i s h and  Wildlife  Branch s t a f f would be r e q u i r e d a t C r e s t o n even i f t h e r e were no i n g or h u n t i n g done on the f l a t s ,  fish-  the a p p r o p r i a t e measure of expense  i n t h i s r e g a r d i s the e x t r a amount spent p o l i c i n g b i r d hunters fishermen.  T h i s i s p r o b a b l y l e s s than $500 per y e a r .  and  The v a l u e of  the net primary b e n e f i t from r e c r e a t i o n a l use of the unreclaimed is  thus a p p r o x i m a t e l y  use through at e i g h t per  polic-  $25,000 a n n u a l l y .  land  Assuming a c o n s t a n t l e v e l of  time, t h i s has a p r e s e n t v a l u e of $312,000 when d i s c o u n t e d cent.  L i b b y Dam  A  w i l l not have any  use of unreclaimed  land.  a p p r e c i a b l e e f f e c t on  recreational  The warmwater f i s h e r y i n Duck Lake i s p r o -  t e c t e d from the Kootenay R i v e r by dykes at p r e s e n t and w i l l not  be  Based on the p r e c e d i n g a n a l y s i s of r e c r e a t i o n a l a c t i v i t y d u r i n g 1968. T h i s assumes t h a t a c t i v i t y d u r i n g 1968 was t y p i c a l , or r e p r e s e n t a t i v e of an average y e a r .  a f f e c t e d by changes In the peak p e r i o d f l o w , and  the a c t i v i t y of b i r d  watchers and o t h e r s should a l s o be unchanged.  The Undeveloped Land as W i l d l i f e H a b i t a t The  examination  f a r been c o n c e n t r a t e d tion.  of p r e s e n t use of the unreclaimed on d i r e c t use by people  l a n d has  f o r farming  The r o l e which these lands p l a y as key h a b i t a t  and  fowl  lands p r o v i d e important  (ducks, geese and  recrea-  'for many, spe-  c i e s of w i l d l i f e must a l s o be c o n s i d e r e d as a v e r y important The unreclaimed  so  h a b i t a t f o r migratory  swans), a l a r g e colony of herons,  "use." water-  a nesting  p o p u l a t i o n of o s p r e y s , and many o t h e r s p e c i e s of w i l d l i f e . W i l d l i f e H a b i t a t as a Form of Land At f i r s t  g l a n c e i t may  Use  seem i n a p p r o p r i a t e to r e f e r to l a n d which  p r o v i d e s h a b i t a t f o r w i l d l i f e as b e i n g  " i n use."  U n l i k e the uses  cussed p r e v i o u s l y , t h i s does not i n v o l v e d i r e c t p a r t i c i p a t i o n by and we  people,  have become c o n d i t i o n e d to c o n s i d e r i n g land which i s not under  d i r e c t u t i l i z a t i o n as  'waste' or  'barren.'  But  i t must be  t h a t t h e r e i s a c e r t a i n v a l u e c r e a t e d by l a n d which simply h a b i t a t or l i v i n g and  dis-  above  space f o r w i l d l i f e —  and  E x p r e s s i o n of these v a l u e s can be observed  ment a c t i v i t i e s of W i l d l i f e Agencies w i l d l i f e management b e i n g p o p u l a t i o n l e v e l s , and  —  provides  that t h i s i s a value  any v a l u e s based on d i r e c t r e c r e a t i o n a l  the government s e c t o r they are expressed  recognized  over  participation. a t many l e v e l s .  In  i n the p r o t e c t i o n and manageone of the b a s i c f u n c t i o n s of  "the maintenance of c e r t a i n s p e c i e s a t d e s i r e d  the p r e s e r v a t i o n of s p e c i e s from  extinction"  (Wright 1968).  In the private sector there are many organizations dedi-  cated to the preservation of w i l d l i f e through habitat management, Ducks Unlimited being perhaps the best known i n North America. ple  A recent exam-  s p e c i f i c to B r i t i s h Columbia involves the purchase by private c i t i -  zens of land i n the Okanagan Valley to provide wintering habitat for Bighorn sheep. In the case of migratory species, recognition and protection of these values requires international co-operation.  The Migratory Birds  Treaty between Canada and the United States which was  signed i n 1916  i s designed to bring about co-operation i n the management of migratory species between the two countries.  Canada's fulfilment of her o b l i g a -  tions under this treaty i s carried out under the Migratory Birds Convention Act of 1917.  The contribution of the unreclaimed  lands at  Creston i n maintaining w i l d l i f e populations, and providing key habitat for  migratory birds^ represents an important s  factor i n Canada's f u l f i l -  ment of obligations under the Migratory Birds Treaty.  This i s another  important aspect of the values associated with "using" land as w i l d l i f e habitat. U t i l i z a t i o n by W i l d l i f e Estimating the numbers of the various species of w i l d l i f e using the habitat at Creston i s very d i f f i c u l t .  Waterfowl use i s almost ex-  c l u s i v e l y during migration and as a summer staging area for moulting birds.  Few ducks or geese nest successfully i n the area, as most  nests are destroyed by the annual flood of the Kootenay River.  The  few exceptions include tree nesting species (wood duck and goldeneye)  and a few nests located above high, water mark. Migratory use i s intensive, however. Whistling swans pass through i n large numbers during their spring migration, returning i n l a t e f a l l and winter.  At present approximately 3,000 swans use the  area f o r an average of 60 days each — swanruse-days.  an annual t o t a l of 180,000  Canada geese also make extended use of the area, with  as many as 3,000 geese i n the area at one time.  Total goose-days of  use i s estimated at 180,000, an average of 60 days per goose. use i s much higher, during both spring and f a l l migrations.  Duck  As many  as 70,000 ducks may be i n the area on any one day achieving a t o t a l u t i l i z a t i o n of 4,200,000 days at an average of 60 days per duck. Coots are also numerous i n the area, with annual use of approximately 1,500,000 days by 15,000 coots. There i s a r e l a t i v e l y large osprey colony i n the area, containing approximately approximately per nest.  25 nesting p a i r s .  These birds are i n the area for  six months each year, rearing an average of three young  The t o t a l population of ospreys i n this area appears to be  r e l a t i v e l y stable. There i s also a large colony of herons i n the area, with as many as 80 nesting p a i r s .  As with the ospreys these birds appear to be r e l a -  t i v e l y constant i n number, having reached the carrying capacity of a v a i l able habitat. The Value of W i l d l i f e Habitat We can recognize the values associated with such w i l d l i f e habitat, but i t i s impossible to place an absolute  estimate, i n terms of  d o l l a r s , on this value.  I t i s possible to talk about the velat'ive  values,  based on the importance and s c a r c i t y of the different species using the area as habitat, but such r e l a t i v e values cannot be compared d i r e c t l y with the values created by other resource uses. The  'relative value' of maintaining additional numbers of a par-  t i c u l a r w i l d l i f e species depends to a large extent on the o v e r a l l abundance of that species.  With a very common species, the value of one  extra animal or bird i s generally low.  For rare species the value of  an extra animal tends to be high as i t takes on a much greater s i g n i f i cance i n r e l a t i o n to "desired population l e v e l s . "  This i s exemplified  by the Whooping Crane i n North America where the value of an extra b i r d i s unquestionably very high, both i n r e l a t i o n to other w i l d l i f e species, and to other resource uses which might compete for their habitat. The r e l a t i v e scarcity of the b i r d species found at Creston i s im-.< portant i n describing the value of w i l d l i f e habitat as a form of land use.  The undeveloped lands provide excellent habitat for many b i r d s ,  probably the most important of which are ducks, geese, swans, and ospreys. The r e l a t i v e abundance of these four species provides a good i l l u s t r a t i o n of the importance of scarcity i n determining the value of habitat use. Ducks are quite common throughout  North America, and the value of an ex-  tra duck, compared to other species, would be quite low. Geese are much less common than ducks, and an extra goose might be given a value as much as 15 to 20 times that of a duck.'.  Swans i n turn are even rarer.and the  value of a swan r e l a t i v e to either ducks or geese would be very high. For each of these waterfowl species the unreclaimed lands at Creston pro-  v i d e important  h a b i t a t , and  The unreclaimed  form a key  l i n k i n their migration routes.  lands a l s o p r o v i d e important  a colony of o s p r e y s , or f i s h hawks.  L i k e many s p e c i e s of p r e d a t o r y  b i r d s the c o n t i n e n t a l p o p u l a t i o n of ospreys has recent years their  (Peterson 1969).  nesting habitat for  declined d r a s t i c a l l y i n  The n a t u r a l r a r i t y of these b i r d s , p l u s  'endangered' s t a t u s , makes them e x c e p t i o n a l l y v a l u a b l e .  developed  lands p r o v i d e i d e a l h a b i t a t f o r o s p r e y s , and  The  un-  t h i s form of  w i l d l i f e use g i v e s the h a b i t a t a v e r y h i g h r e l a t i v e v a l u e . While these b i r d s comprise the f o u r major s p e c i e s u t i l i z i n g undeveloped l a n d , i t s importance to the heron c o l o n y , s o n g b i r d s ,  shore-  b i r d s , c o o t s , hawks and owls, as w e l l as deer, muskrats, mink and should not be  beaver  overlooked.  L e f t i n i t s p r e s e n t s t a t e the l a n d p r o v i d e s a p a r t i a l to the c o n t i n u e d s u r v i v a l of many of these s p e c i e s .  guarantee  Loss of t h i s h a b i -  t a t would mean a s i g n i f i c a n t r e d u c t i o n i n the numbers of most and  the  the p r o b a b l e  to a t t r i b u t e any  e l i m i n a t i o n of the osprey p o p u l a t i o n .  We  waterfowl  are  unable  a b s o l u t e v a l u e to t h i s f u n c t i o n of the l a n d , o t h e r  than a r e c o g n i t i o n of i t s r e l a t i v e l y h i g h v a l u e g i v e n the s p e c i e s which depend on i t . an important  In the same c o n t e x t p r e s e r v a t i o n of t h i s h a b i t a t makes c o n t r i b u t i o n to Canada's f u l f i l m e n t o f o b l i g a t i o n s under  the M i g r a t o r y B i r d s T r e a t y . The  impending completion  of L i b b y Dam  w i l l p r o b a b l y have  e f f e c t on the u t i l i z a t i o n of t h i s h a b i t a t by w i l d l i f e .  While extreme  v a r i a t i o n s i n the l e v e l of the Kootenay R i v e r w i l l be reduced, a r e a w i l l s t i l l be inundated improve.  a n n u a l l y , and n e s t i n g h a b i t a t w i l l  M i g r a t o r y b i r d s p a s s i n g through  little  the not  the area i n . e a r l y s p r i n g  and l a t e f a l l w i l l not be affected, and summer residents such as ospreys and herons w i l l also be unaffected.  Other Uses of the Undeveloped Land Other uses of the undeveloped land at present include a small annual fur harvest taken by trappers, and i t s function as a water storage area during high water on the Kootenay River each summer. Fur Production Fur bearing species on the undeveloped lands include beaver, muskrat, and mink, with muskrat most numerous. pers i s s l i g h t .  U t i l i z a t i o n by trap-  Data collected from several persons trapping i n the  area indicates that the gross value of furs harvested on the undeveloped lands seldom exceeds $1,000 annually. Incomes from trapping have been low throughout  B r i t i s h Columbia  i n recent years (Newby 1969) , and the returns from trapping at Creston are no exception.  Disregarding the value of the labor input i n trap-  ping, the net income from the fur harvest on the undeveloped land i s approximately  $800 per year.  Water Storage In another present function the unreclaimed lands provide water storage by absorbing flood waters during the annual freshet of the Kootenay River.  As the r i v e r r i s e s during runoff i t overflows  and inundates the unreclaimed land.  Dispersal of the freshet waters  over this area relieves part of the pressure.on-'dykes'in area and also lowers the floodcrest for areas downstream.  the Creston While Duck  Lake does not absorb  water from the Kootenay R i v e r d i r e c t l y , i t does  c o n t a i n the r u n o f f from Duck Creek and serves the same purpose o f r e l i e v i n g p r e s s u r e on downstream a r e a s . The v a l u e of t h i s s t o r a g e depends on many f a c t o r s w i t h i n the whole watershed  ( K r u t i l l a 1961, 1967).  I t i s the increment  i n water  s t o r a g e o r f l o o d p r o t e c t i o n a f f o r d e d by a p a r t i c u l a r a r e a , i n r e l a t i o n to  t o t a l r i v e r b a s i n needs, t h a t i s important  A f t e r the completion the unreclaimed b a s i n needs.  i n determining  i t s value.  of L i b b y Dam the i n c r e m e n t a l s t o r a g e p r o v i d e d on  lands w i l l be of l i t t l e  s i g n i f i c a n c e to o v e r a l l  river  F o r p r a c t i c a l purposes the v a l u e of water s t o r a g e , i f p r e -  sent l a n d use i s c o n t i n u e d , can s a f e l y be i g n o r e d .  Summary. P r e s e n t Use of the Undeveloped Land T h i s c h a p t e r reviews is  the e x t e n t t o which the undeveloped l a n d  used a t p r e s e n t and p r o v i d e s a benchmark a g a i n s t which the gains o r  l o s s e s of a l t e r n a t i v e developments can be measured. of  use y i e l d  little  measurable n e t b e n e f i t .  Present  patterns  In the case o f c a t t l e  g r a z i n g t h e r e i s a c t u a l l y a net l o s s when a l l economic c o s t s a r e cons i d e r e d , and the n e t g a i n from r e c r e a t i o n i s s m a l l — $25,000 p e r y e a r . unreclaimed ing  approximately  The e x c e p t i o n t o t h i s assessment i s the use of the  l a n d as w i l d l i f e h a b i t a t .  While t h e r e i s no way of measur-  the a b s o l u t e v a l u e of t h i s form of l a n d use, i t i s a s s e r t e d t h a t  the s c a r c i t y o f the v a r i o u s s p e c i e s r e l y i n g on t h i s h a b i t a t g i v e s i t a very high r e l a t i v e value. The  completion  of L i b b y Dam w i l l  enhance the f e a s i b i l i t y o f  alternative, more intensive, uses of this land.  Since the net benefits  from present use are low;, any move toward a form of u t i l i z a t i o n which y i e l d s a s i g n i f i c a n t net benefit i s to be desired.  In assessing the  f e a s i b i l i t y of alternatives, this discussion of present use should not be regarded as i r r e l e v a n t .  To determine whether i n fact a development  generates a net benefit i t s impact on present use must be considered. While there would apparently be no net economic loss from the elimina-. tion of c a t t l e grazing, there would be a serious and substantial loss were the w i l d l i f e habitat destroyed.  These factors w i l l be considered  i n analysis of the o v e r a l l f e a s i b i l i t y of the alternatives for development .  CHAPTER IV  AGRICULTURAL RECLAMATION AS A DEVELOPMENT ALTERNATIVE  F u r t h e r r e c l a m a t i o n and  a g r i c u l t u r a l p r o d u c t i o n on the undeveloped  l a n d at C r e s t o n i s t e c h n i c a l l y f e a s i b l e .  Assessing  the economic  i t y of f u r t h e r r e c l a m a t i o n p r o j e c t s r e q u i r e s t h a t the b e n e f i t s be compared w i t h  the c o s t s .  The  the b e n e f i t s generated, w i l l a c c r u e  annual b e n e f i t s i s d i f f i c u l t , and  E s t i m a t i n g the f u t u r e  the most f r u i t f u l approach a t  i s to examine the b e n e f i t s which accrue  from p r e s e n t l y r e c l a i m e d  then be used as the b a s i s f o r e s t i m a t e s  f u r t h e r r e c l a m a t i o n and  a g r i c u l t u r a l p r o d u c t i o n and  mation c o s t s to determine the f e a s i b i l i t y  of such  These comparisons are made i n t h i s c h a p t e r . net incomes.of farms on p r e s e n t l y r e c l a i m e d estimated  c o s t s of r e c l a m a t i o n .  land.  regarding  compared w i t h  recla-  undertakings. Data r e l a t i n g to  1962,  to them, and  p. 6 ) .  Such comparisons are awkward; i n a d d i c o s t s some important  f u r t h e r e f f e c t s a r e unmeasurable ( S e w e l l  Furthermore, w h i l e  the  the  effects  a g r i c u l t u r a l r e c l a m a t i o n are i n t a n g i b l e , although monetary v a l u e s  attributed  level  Creston  l a n d are compared w i t h  t i o n to e a s i l y measured t a n g i b l e b e n e f i t s and of  project, while  through the f u t u r e i n the form of  annual p r o f i t s from the s a l e of farm produce.  These b e n e f i t s can  generated  c a p i t a l c o s t s of r e c l a m a t i o n w i l l be i n -  c u r r e d over a v e r y s h o r t time a t the commencement of any  of  feasibil-  t a n g i b l e primary, b e n e f i t s and  et  are at  costs  can e a s i l y be compared f o r i n d i v i d u a l r e c l a m a t i o n u n i t s , i n t a n g i b l e and unmeasurable e f f e c t s are not r e a d i l y d i v i s i b l e on the same b a s i s .  In an attempt  to draw some o r d e r out of the r e s u l t i n g chaos com-  p a r i s o n s f o r each u n i t w i l l be based on . t a n g i b l e primary b e n e f i t s costs only.  While  this constitutes only a p a r t i a l b e n e f i t - c o s t  son such measures are the o n l y f i r m e s t i m a t e s which t h i s b a s i s , and they do r e f l e c t  compari-  can be compared on  the b a s i c f e a s i b i l i t y of r e c l a i m i n g  u n i t as w e l l as demonstrating the d i f f e r e n t m e r i t s of i n d i v i d u a l Qualifications  and  to these comparisons  each  units.  are then i n t r o d u c e d , b e f o r e t u r n i n g  to i n t a n g i b l e and unmeasurable primary b e n e f i t s and c o s t s and  secondary  b e n e f i t s and c o s t s .  These  u n r e c l a i m e d l a n d and  the aggregate b e n e f i t - c o s t r e l a t i o n s h i p i s then  demonstrated  l a t t e r e f f e c t s are d i s c u s s e d f o r the e n t i r e  from the v i e w p o i n t of the l o c a l economy, B r i t i s h . C o l u m b i a ,  and Canada.  P r o d u c t i v i t y , of the S o i l s  Of the many assumptions perhaps ilar  u n d e r l y i n g the a n a l y s i s of t h i s c h a p t e r  the most important i s t h a t p r o d u c t i v i t y of new  to t h a t i n e x i s t i n g r e c l a m a t i o n u n i t s —  are uniform.throughout  the f l o o d p l a i n .  survey on the C r e s t o n f l a t s . completed  i n January of 1949  an assumption  f o r the B.C.  sim-  t h a t s o i l -types  There has been no i n t e n s i v e  The.only s o i l map  C. C. K e l l y , Surveyor, and J . S. D.  farms w i l l be  which i s a v a i l a b l e  soil was  Department of. A g r i c u l t u r e by  Smith, A s s i s t a n t .  T h i s map  classified  most of the s o i l as Kuskanook, a s i l t y c l a y s o i l , w h i l e some, p r i m a r i l y i n the Goat R i v e r outwash, i s c l a s s e d as Wigwam Mix, h a v i n g more g r a v e l and sand than the Kuskanook s o i l .  While s l i g h t v a r i a t i o n s i n these s o i l  types  were observed throughout the a r e a ,  they were not f e l t  to be s i g n i f i c a n t  f o r mapping purposes. S o i l s throughout the r e c l a i m e d and  areas have proven t o be f e r t i l e ,  produce heavy crop y i e l d s (see Appendix C ) .  slight decline i n f e r t i l i t y north older,  There i s , however, a  and s u i t a b i l i t y f o r a g r i c u l t u r e the f u r t h e r  the s o i l s from the I n t e r n a t i o n a l Border.  S o i l s i n the south a r e  c o n t a i n more humus, and a r e b e t t e r d r a i n e d  deposited  than the more r e c e n t l y  s o i l s near Kootenay Lake, which tend to be o f a h e a v i e r  Were t h e r e  an a c t i v e market f o r l a n d i n t h i s area,  might be r e f l e c t e d i n land v a l u e s ; frequently  t h a t no s y s t e m a t i c  For  however, land  these  clay.  differences  changes hands so i n -  measure o f t h i s d i f f e r e n c e i s a v a i l a b l e .  t h i s a n a l y s i s the i n i t i a l assumption w i l l be t h a t s o i l s i n  the u n r e c l a i m e d areas a r e u n i f o r m and of the same q u a l i t y as p r e s e n t l y reclaimed  soils.  Insofar  as the d a t a p e r t a i n i n g  on an average o f a l l p r e s e n t r e c l a m a t i o n Later,  units  t o p r o d u c t i v i t y , are based  t h i s , assumption i s v a l i d .  d i s c u s s i o n w i l l d e a l w i t h q u a l i f i c a t i o n s to t h i s assumption and  v a r i a t i o n between s o i l s i n the undeveloped a r e a s .  Comparison o f Primary B e n e f i t s  D e t e r m i n i n g the economic f e a s i b i l i t y jects requires  that  of proposed r e c l a m a t i o n  pro-  the p r e s e n t worth of a l l expected b e n e f i t s be compared  w i t h the p r e s e n t worth of a l l c o s t s . p r o j e c t i s economically f e a s i b l e . the n e t b e n e f i t s  and Costs by A r e a  I f the b e n e f i t s exceed the c o s t s the  Feasibility  can be measured i n terms o f  (the excess of the p r e s e n t v a l u e of b e n e f i t s over the  present value of costs)  o r i n terms o f a b e n e f i t - c o s t r a t i o  ( r a t i o of the  present value of benefits to the present value of costs).  Both of these  measures are employed i n examining the economic f e a s i b i l i t y of reclamation on the f i v e areas of unreclaimed  land.  As explained, these comparisons  are based on estimates of tangible primary costs and benefits only. Tangible Primary Benefits Tangible primary benefits w i l l consist of increases i n net i n comes of farmers using the land and w i l l be realized annually out the l i f e of the project.  through-  These benefits must be discounted to a pre-  sent value to be comparable with reclamation costs which are incurred i n the i n i t i a l year of the project. i s of major importance.  Choosing the appropriate discount rate  In this analysis a rate of eight per cent i s used.  Selection of this rate, and the s e n s i t i v i t y of the results to changes over a range from s i x to ten per cent, i s discussed i n Appendix E. To prepare estimates of primary benefits from further a g r i c u l t u r a l reclamation data was obtained on the current production and income structure of farms on reclaimed land.  The inherent assumption i s that future  production on additional unreclaimed that on presently reclaimed land.  land w i l l be similar i n nature to  While the presentation of most of this  data has been relegated to appendices (Appendices B and C), the  important  results are reviewed here. Several methods of estimating the net return to farm enterprises are outlined i n Appendix C.  The estimated net returns per acre vary  widely between d i f f e r e n t crops.  After allowing f o r an eight per cent  return on invested c a p i t a l , net returns per acre range from $17 under  barley to $93 i n clover seed (see Table C-4).  Correspondingly, the prer  sent worth of these net annual incomes varies from a low of $212  to a high  of $1,162, when discounted at eight per cent. A more meaningful presentation of this data i s achieved by reducing these various estimates to the basis of a t y p i c a l or representative acre. Assuming that the present pattern of production w i l l remain r e l a t i v e l y constant, a t y p i c a l acre i s expected to y i e l d a net return of $30.06 after deducting a l l costs, except the value of the farm operator's labor.  When the  cost of operator's labor has been accounted f o r , net returns per acre are $26.31, equivalent to a present value of $329 (see Appendix C). Several other methods were used to estimate the net worth of an acre of cropland.  While the estimates derived from these methods do not  coincide exactly with the figures given above, they do support the r e l i a b i l i t y of the estimates.  Analysis on the basis of complete farm enter-  p r i s e s , not i n d i v i d u a l crops, indicated a present value of $350 per acre. Information on the sale and rental value of land, while not available on a consistent basis, nevertheless tends to support the e a r l i e r estimates of present value. On the basis of these investigations the annual net income per acre on presently reclaimed land after allowing for the value of operator's labor income i s estimated to be $26.31, having a present discounted value of $329.  This forms the basis of estimated primary benefits f o r compari-  son with estimates of reclamation cost. This value i s based on an acre of reclaimed land, already i n production.  As such, i t i s not d i r e c t l y applicable for comparison with the  costs of f u r t h e r reclamation.  T h i s i s because t h e r e w i l l be a l a g o f a t  l e a s t one y e a r between the time r e c l a m a t i o n c o s t s a r e i n c u r r e d and the first  annual b e n e f i t s b e g i n t o a c c r u e . T h i s time l a g has a s i g n i f i c a n t e f f e c t on the comparison o f bene-  fits  and c o s t s , and can be i n c o r p o r a t e d i n the a n a l y s i s i n two ways.  t e r e s t can be charged  on r e c l a m a t i o n c o s t s up t o the time t h a t the f i r s t  b e n e f i t s a c c r u e , the p r e s e n t v a l u e of b e n e f i t s a t t h a t time b e i n g to  the i n i t i a l  the stream  cost plus i n t e r e s t .  adopted here  A l t e r n a t i v e l y , the p r e s e n t v a l u e o f  —  they are i n c u r r e d .  This l a t t e r  approach  the p r e s e n t v a l u e of b e n e f i t streams i s c a l c u l a t e d i n  the y e a r i n which b e n e f i t s commence and then f u r t h e r d i s c o u n t e d for  compared  o f f u t u r e b e n e f i t s can be d i s c o u n t e d over the time l a g t o be  comparable t o c o s t s at the time is  In-  a time l a g o f one y e a r .  to allow  T h i s has the e f f e c t of r e d u c i n g the p r e s e n t  v a l u e o f an a c r e of l a n d which w i l l be r e c l a i m e d t o $305. T a n g i b l e Primary The primary ities, for  Costs  main d i r e c t  c o s t s o f a g r i c u l t u r a l r e c l a m a t i o n a r e the t a n g i b l e  c o s t s o f c o n s t r u c t i n g dykes and i n s t a l l i n g pumps, d r a i n a g e and some access s t r u c t u r e s . These c o s t s a r e estimated  each u n i t i n Appendix D.  C a p i t a l c o s t s p e r acre v a r y  facil-  i n detail  significantly  between u n i t s , the lowest e s t i m a t e b e i n g $37 f o r Indian Reserves 1, 1A and  IB, the h i g h e s t $191 f o r the Corn Creek u n i t .  A d d i t i o n a l costs f o r  removal o f e x i s t i n g v e g e t a t i o n and ground b r e a k i n g average $10 p e r a c r e , w i t h t h e range of t o t a l c a p i t a l c o s t s p e r acre thus b e i n g from $47 t o $201  (see Table D-3).  The  Timing  of  Reclamation  A g r i c u l t u r a l r e c l a m a t i o n can be completed i n a v e r y s h o r t and  time,  i t i s assumed t h a t crop p r o d u c t i o n would b e g i n i n the year f o l l o w i n g  i n i t i a t i o n of r e c l a m a t i o n .  In the case of Duck Lake r e c l a m a t i o n c o u l d  b e g i n i n 1970  of both,the  as 1970  and  estimates  present values.  b e n e f i t s and  For the remaining  c o s t s can be  areas r e c l a m a t i o n would not  b e g i n u n t i l 1973  when.Libby Dam.provides e f f e c t i v e c o n t r o l over  Kootenay R i v e r .  To be comparable w i t h  e s t i m a t e d b e n e f i t s and  taken  the  the Duck Lake e s t i m a t e s , and  the  c o s t s of the a l t e r n a t i v e w i l d l i f e - r e c r e a t i o n  de-  velopment, the p r e s e n t v a l u e of the b e n e f i t s . a n d c o s t s of a g r i c u l t u r a l r e c l a m a t i o n i n these areas i s f u r t h e r d i s c o u n t e d e l a p s e d between 1970 The  and  of the I n d i a n Reserves would  and b r i n g 2,070 a c r e s i n t o c u l t i v a t i o n .  worth per acre of $305, t o t a l primary  $97,000 (Appendix.D, T a b l e D-3)  As  i n d i c a t e s the f e a s i b i l i t y  of r e c l a i m i n g  the r a t i o of b e n e f i t s  t h i s area would not be r e c l a i m e d u n t i l 1973  values are f u r t h e r discounted of r e d u c i n g  s o i l p r e p a r a t i o n c o s t s of  B e n e f i t s exceed c o s t s by $534,000 and  to c o s t s i s 6.5:1.  With a p r e s e n t  net b e n e f i t s are e s t i m a t e d a t $631,000.  Comparing t h i s w i t h the t o t a l of r e c l a m a t i o n and  this land.  time  1973.  Indian Reserves.—Reclamation  commence i n 1973  to a l l o w f o r the  the e s t i m a t e s  to 1970  equivalents.  This.has  the  these  effect  of b e n e f i t s to $501,000, c o s t s to $77,000 and  net b e n e f i t s to $424,000; the b e n e f i t - c o s t r a t i o remains unchanged. Corn C r e e k . — A s w i t h a r e a would b e g i n i n 1973.  the I n d i a n Reserves,  r e c l a m a t i o n of  Comparison of b e n e f i t s and  this  costs, f o r t h i s  area y i e l d s a d i f f e r e n t r e s u l t depending on whether r e c l a m a t i o n of p a r t  of  I n d i a n Reserve 1C i s i n c l u d e d .in the p r o j e c t (see Appendix D ) .  By  i n c l u d i n g p a r t of I n d i a n Reserve 1C i n the r e c l a m a t i o n p r o j e c t , an a d d i t i o n a l 180 a c r e s a r e brought i n t o c u l t i v a t i o n , r a i s i n g the t o t a l c u l t i v a b l e acreage fits  generated.  to 1,440 from 1,260 and thus i n c r e a s i n g the bene-  Reclamation  costs are estimated  to be $275,000 whether  the I n d i a n Reserve i s i n c l u d e d o r not (see T a b l e D-3), but t o t a l c o s t s v a r y a f t e r i n c l u d i n g the per a c r e allowance  f o r s o i l preparation.  With  p a r t of I n d i a n Reserve 1C i n c l u d e d i n the r e c l a m a t i o n , n e t b e n e f i t s a r e approximately values).  $119,000, w h i l e without  the Reserve they a r e $77,000 (1970  While these f i g u r e s i n d i c a t e that r e c l a m a t i o n o f the a r e a i s  f e a s i b l e , n e t b e n e f i t s a r e not l a r g e , and the b e n e f i t - c o s t r a t i o s a r e low.  T h i s assessment i n v o l v e s the assumption t h a t the a d j o i n i n g Leach  Lake u n i t - w o u l d  be r e c l a i m e d i n c o n j u n c t i o n w i t h  the Corn Creek u n i t  (see Appendix D ) . Leach L a k e . — A s s u m i n g t h a t the Corn Creek u n i t would be r e claimed c o n c u r r e n t l y , the t o t a l c o s t of r e c l a i m i n g t h i s a r e a and p r e p a r i n g the s o i l  f o r c u l t i v a t i o n i s estimated  a t $196,000  (Table D-3).  With 2,600 a c r e s i n c u l t i v a t i o n the p r e s e n t worth of primary fits  i s $793,000 i n d i c a t i n g an excess  n e t bene-  of b e n e f i t s over c o s t s of $597,000.  As t h i s a r e a would not be r e c l a i m e d u n t i l 1973 d i s c o u n t i n g these mates f u r t h e r to 1970 v a l u e s reduces $474,000 r e s p e c t i v e l y . lishing this  them to $156,000, $630,000 and  The b e n e f i t - c o s t r a t i o i s 4.0:1, c l e a r l y  the economic f e a s i b i l i t y  esti-  estab-  of. f u r t h e r a g r i c u l t u r a l . r e c l a m a t i o n i n  area. Six  M i l e Slough.—The estimated  c o s t of c o n s t r u c t i n g access to  t h i s a r e a , d i t c h i n g , dyking, D-3).  and s o i l p r e p a r a t i o n , i s $199,000  The p r e s e n t worth o f primary  (Table  b e n e f i t s i s $732,000 based on 2,400  a c r e s i n c u l t i v a t i o n a t $305 per a c r e . the b e n e f i t - c o s t r a t i o b e i n g 3,7:1.  B e n e f i t s exceed c o s t s by $533,000,  T h i s a r e a , too, would not be r e c l a i m e d  u n t i l 1973, and d i s c o u n t i n g these e s t i m a t e s  t o a l l o w f o r t h i s l a g reduces  the e s t i m a t e o f n e t b e n e f i t s to $423,000, c o s t s b e i n g $158,000 and benefits  $581,000. Duck L a k e . — T h e c a p i t a l c o s t o f r e c l a i m i n g an a d d i t i o n a l 3,000  a c r e s i n Duck Lake has been estimated  a t $240,000.  S o i l preparation  c o s t s w i l l r a i s e t h i s by $10 per acre t o a t o t a l of. $270,000 (Table D-3). In comparison w i t h these c o s t s the p r e s e n t worth o f primary is  estimated  fit-cost  net b e n e f i t s  a t $915,000, y i e l d i n g a n e t b e n e f i t o f $645,000, and a bene-  r a t i o of 3.4:1.  Summary o f B e n e f i t - C o s t Comparisons The b e n e f i t - c o s t comparisons presented ther a g r i c u l t u r a l reclamation i s economically under study. fits  above i n d i c a t e t h a t f u r f e a s i b l e f o r a l l the areas  These comparisons and the r e s u l t i n g e s t i m a t e s  and b e n e f i t - c o s t r a t i o s a r e summarized i n T a b l e 5.  o f net bene-  For a l l areas  the b e n e f i t - c o s t r a t i o s a r e f a v o r a b l e , r a n g i n g from a low o f 1.3:1 i n the Corn Creek a r e a to 6.5:1 i n the I n d i a n Reserves.  Net b e n e f i t s range  from $77,000 f o r the Corn Creek a r e a to $645,000 i n the case o f Duck Lake.  . TABLE 5. SUMMARY OF PRIMARY BENEFIT-COST COMPARISON FOR AGRICULTURAL RECLAMATION: BY AREA  RECLAMATION COST, PRESENT VALUE 1970 (C)  A R E A  1.  The I n d i a n  2.  The Corn.Creek U n i t : I n d i a n Reserve 1C included Indian  Reserves  PRESENT WORTH OF BENEFITS 1970 (B)  BENEFITS MINUS COSTS (B-C)  BENEFITCOST RATIO B/C  $77,000  $501,000  $424,000  6.5:1  229,000  348,000  119,000  1.5:1  228,000  305,000  77,000  1.3:1  Reserve 1C  excluded 3.  Leach Lake  156,000  630,000  474,000  4.0:1  4.  Six Mile  158,000  581,000  423,000  3.7:1  5.  Duck Lake  270,000  915,000  645,000  3.4:1  Slough  *Note:  Supplementary The  Tangible  primary b e n e f i t s and c o s t s  o n l y a r e compared.  Considerations  a n a l y s i s p r e s e n t e d above has i n d i c a t e d t h a t there would be  s u b s t a n t i a l t a n g i b l e primary n e t b e n e f i t s from f u r t h e r a g r i c u l t u r a l r e c l a mation on the C r e s t o n f l a t s .  The b e n e f i t - c o s t r a t i o s f o r i n d i v i d u a l r e -  camation p r o j e c t s a r e v e r y f a v o r a b l e , t i c u l a r l y high.  w i t h those f o r some u n i t s b e i n g p a r -  These r e s u l t s a r e u n u s u a l f o r an a n a l y s i s o f a g r i c u l t u r e ,  i n B r i t i s h Columbia and the v a l i d i t y examined b e f o r e i t i s a c c e p t e d .  o f the a n a l y s i s s h o u l d be c a r e f u l l y  ?S2  The most s i g n i f i c a n t f a c t o r i n d e t e r m i n i n g and hence the f e a s i b i l i t y , Dam.  the c o s t o f r e c l a m a t i o n ,  i s the l e v e l o f . t h e Kootenay R i v e r a f t e r L i b b y  The e f f e c t o f the L i b b y Dam i s t o almost  e l i m i n a t e the need f o r p r o -  t e c t i v e dyking a g a i n s t waters o f the Kootenay R i v e r — d u c t i v e farmland any  making h i g h l y p r o -  a v a i l a b l e a t a minimum c o s t (see Appendix D ) .  More  than  o t h e r f a c t o r t h i s e x p l a i n s the v e r y f a v o r a b l e r e s u l t s of the a n a l y s i s  of f u r t h e r r e c l a m a t i o n p r o j e c t s . Many other, f a c t o r s c o u l d a f f e c t gains from a r e c l a m a t i o n program. static,  Market f o r c e s o f course do n o t remain  and changes i n the r e l a t i v e c o s t s o f a g r i c u l t u r a l i n p u t s and o u t -  puts a r e expected- through bility  the f i n a l outcome or t r u e n e t  time —  c o n c l u s i o n s reached  above.  w i t h consequent r e s u l t s f o r the f e a s i P r e d i c t i n g : e i t h e r the degree o r d i r e c -  t i o n of these r e l a t i v e changes beyond the immediate f u t u r e i s v e r y  uncer-  t a i n , however.  from  Furthermore, many p h y s i c a l r e l a t i o n s h i p s r e s u l t i n g  the new regime on the Kootenay R i v e r w i l l o n l y be f u l l y apparent decade or s o .  Among the many a d d i t i o n a l c o n s i d e r a t i o n s t h a t may a f f e c t  the g a i n s t o be expected were judged  ina  from a g r i c u l t u r a l r e c l a m a t i o n , the f o l l o w i n g  t o warrant s p e c i a l  investigation:  1.  I n c r e a s e d dyke e r o s i o n due to the reduced sediment l o a d of the Kootenay R i v e r below L i b b y Dam.  2.  Kootenay Lake l e v e l s . a f t e r L i b b y  3.  Variation i n . s o i l  4.  5.  Dam.  capabilities.  S e n s i t i v i t y of the r e s u l t s t o changes i n the . discount rate. The e f f e c t of changes i n crop p r a c t i c e s and m a n a g e r i a l i n t e n s i t y a f t e r L i b b y Dam.  6.  Long-run trends i n the p r i c e s of a g r i c u l t u r a l output.  7.  The e f f e c t of a time l a g between the of r e c l a m a t i o n and f i r s t h a r v e s t .  8.  The f e e d f r e i g h t s u b s i d y and i t s e f f e c t on a p p r o p r i a t e measure of b e n e f i t .  Detailed Appendix E.  tical  The  major c o n c l u s i o n s  first  here.  Possible  l e v e l s a f t e r L i b b y Dam  examined.  and  The  b a s i c premise of  The  no  e f f e c t of a two-year time l a g between commercial h a r v e s t  s i g n i f i c a n t , e f f e c t on  the b e n e f i t - c o s t  also  benefit-  the f e a s i b i l i t y  of  and  shown  s i g n i f i c a n t , however, and.could  such f a c t o r i s the p o s s i b i l i t y o f , i n c r e a s e d  re-  analysis.  an important r o l e i n d e t e r m i n i n g the f i n a l , f e a s i b i l i t y , of One  was  P r o v i n c i a l . f e e d f r e i g h t s u b s i d i e s were c o n s i d e r e d  r e m a i n i n g f a c t o r s are  feasibil-  r a t e over a  While t h i s r e s u l t e d i n both lower net b e n e f i t s and  to have a n e g l i g i b l e e f f e c t on The  projects.  r e a l i z a t i o n of the f i r s t  c o s t r a t i o s , there was clamation.  cent.  are  expected to have a . s i g n i f i c a n t  i n s e n s i t i v e to changes i n the d i s c o u n t  range of s i x to ten per  prac-  were examined, and w h i l e the proposed changes  e f f e c t on f u r t h e r r e c l a m a t i o n  reclamation  d i s c o u n t e d as of l i t t l e or no  changes i n the r e g u l a t i o n of Kootenay Lake  of a c o n j e c t u r a l n a t u r e , they are not  found to be  to  from examination of these f a c t o r s  f o u r f a c t o r s can be  significance.  i t y was  the  d i s c u s s i o n of these f a c t o r s has.been r e l e g a t e d  are reviewed b r i e f l y The  initiation  play  reclamation.  bank e r o s i o n by  the  Kootenay R i v e r w h i c h . w i l l . b e c a r r y i n g a g r e a t l y reduced s i l t l o a d a f t e r L i b b y Dam.  While the e x t e n t of such e r o s i o n  i s again speculative, i t  c o u l d be extremely  important.  The main f a c t o r r e s p o n s i b l e f o r the v e r y  f a v o r a b l e r e s u l t s of the b e n e f i t - c o s t a n a l y s i s i s the e f f e c t of L i b b y Dam  i n minimizing  reclamation, c o s t s .  I f extensive erosion p r o t e c t i o n  becomes necessaryy -„ much of. t h i s b e n e f i t may could s i g n i f i c a n t l y a l t e r benefit-cost  be negated.  This  factor  the c o s t s of r e c l a m a t i o n and hence the  entire  analysis.  Another s i g n i f i c a n t f a c t o r i s the v a r i a t i o n i n s o i l , p r o d u c t i v i t y among the u n r e c l a i m e d productivity,  areas.  While the main a n a l y s i s assumed a  t h e r e i s some i n d i c a t i o n t h a t t h i s may  not be so.  uniform It  appears t h a t the I n d i a n Reserves are s i g n i f i c a n t l y above average i n f e r tility,  while  the Corn Creek a r e a and Duck Lake may  be below  average.  I f the Corn Creek a r e a s o i l s are s i g n i f i c a n t l y below average p r o d u c t i v i t y it  c o u l d render r e c l a m a t i o n of t h i s a r e a i n f e a s i b l e — o f  b e i n g c o n s i d e r e d i t has cost  the lowest net b e n e f i t s and  the f i v e  areas  the lowest b e n e f i t -  ratio. Long-run e x p e c t a t i o n s f o r g r a i n p r i c e s are not good.  d e c l i n e i n the v a l u e of farm output would reduce both f u r t h e r r e c l a m a t i o n and  A permanent  the net b e n e f i t s of  the r a t i o s of b e n e f i t s to c o s t s .  Offsetting  the  r a t h e r b l e a k o u t l o o k f o r g r a i n markets i s a s t r o n g t r e n d away from g r a i n p r o d u c t i o n which i s expected f l o o d threat removed.flats and  to s h i f t  after  the completion  farming i s expected  of L i b b y Dam.  With  the  to become.more i n t e n s i v e ,  toward crops which y i e l d ..a h i g h e r net r e t u r n than g r a i n .  Such a t r e n d would have the e f f e c t of enhancing  the f e a s i b i l i t y  of f u r t h e r  reclamation. In an o v e r a l l assessment i t must be concluded c u l t u r a l r e c l a m a t i o n on.the C r e s t o n f l a t s  that f u r t h e r a g r i -  i s economically f e a s i b l e .  In  t h i s regard  the summary p r e s e n t e d i n T a b l e 5 w i t k a t o t a l p r e s e n t  of t a n g i b l e p r i m a r y net b e n e f i t s from $2,043,000 to $2,085,000 be c o n s i d e r e d b e n e f i t s and could  as the b e s t costs  a p p r o x i m a t i o n of the p r e s e n t  involved.  I t i s recognized  cause the f e a s i b i l i t y to d e v i a t e  mates.  Due  value  of  value  should the  that several f a c t o r s  s i g n i f i c a n t l y from t h e s e  to the n a t u r e of the f a c t o r s i n v o l v e d  i t i s not  esti-  possible  to e s t i m a t e t h e i r s i g n i f i c a n c e without e x h a u s t i v e t e c h n i c a l s t u d i e s which are beyond the scope of t h i s i n v e s t i g a t i o n .  I n t a n g i b l e and  Unmeasurable Primary B e n e f i t s and  I t i s assumed t h a t t h e r e w i l l be no  Costs  i n t a n g i b l e or unmeasur-  able primary b e n e f i t s associated with a g r i c u l t u r a l reclamation Creston  flats.  on  the  There w i l l , however, be major primary c o s t s of both  types as a r e s u l t of the d e s t r u c t i o n of important w i l d l i f e h a b i t a t the l o s s of o p p o r t u n i t i e s  f o r outdoor r e c r e a t i o n .  Outdoor r e c r e a t i o n at p r e s e n t f i s h e r y i n Duck Lake, b i r d watching and fowl hunting.  The  extent  j e c t of Appendix F, and  and  $25,000 a n n u a l l y .  value  includes  nature observation,  a f f o r d e d by  i n Chapter I I I .  The  and  sport  water-  i s the value  subof_  the u n r e c l a i m e d land i s e s t i m a t e d  These o p p o r t u n i t i e s have a p r e s e n t  $312,000, assuming constant  future u t i l i z a t i o n .  w i l d l i f e h a b i t a t by a g r i c u l t u r a l r e c l a m a t i o n t u n i t i e s , representing  the warm water  of t h i s r e c r e a t i o n a l use  i s also treated  recreational opportunities to be  and  Destruction  value of  of  this  would e l i m i n a t e • t h e s e  oppor-  a l o s s , or i n t a n g i b l e p r i m a r y c o s t of $312,000.  Perhaps more important than the l o s s of o p p o r t u n i t i e s  for  recreation would be the loss of w i l d l i f e as a r e s u l t of the elimination of key habitat.  The s i g n i f i c a n c e of this habitat for many important  waterfowl species, plus breeding populations i s discussed  i n Chapter I I I .  of both ospreys and herons  There i s no way of estimating  of this habitat i n i t s more passive role of simply providing space for w i l d l i f e .  the value living  Loss of the habitat would mean loss of the wild-'  l i f e , however, constituting a s i g n i f i c a n t r e a l l o s s , and one which we are committed, through national p o l i c y , to avoid (Wright 1968). losses must be considered  Such  as unmeasurable primary costs when an attempt  i s made to measure the true gains from a g r i c u l t u r a l reclamation. While i t was possible to compare the tangible primary benef i t s and costs for each reclamation  area, i t i s not possible to estimate  either the intangible or unmeasurable primary costs on this basis.  With-  i n the unreclaimed areas the d i s t r i b u t i o n of recreational a c t i v i t y varies from year to year, and the w i l d l i f e which provides the basis for such recreation depends on a l l areas for t o t a l habitat requirements.  Recla-  mation of one area which supports only s l i g h t recreational use could s t i l l r e s u l t i n a large recreational loss i n other areas due to the d i s ruption of habitat and destruction of w i l d l i f e .  The same d i f f i c u l t i e s  arise i n any attempt to a t t r i b u t e the unmeasurable costs to i n d i v i d u a l areas. Because intangible and unmeasurable costs cannot be e s t i mated for i n d i v i d u a l areas they were omitted from the comparison of p r i mary benefits and costs on an area basis.  These costs are brought into  the benefit-cost analysis on an aggregate basis when the t o t a l b e n e f i t cost relationship i s demonstrated.  Secondary Benefits and Costs  As pointed out i n Chapter I I , secondary costs and benefits stem i n d i r e c t l y from, or are induced by, a development project.  An example  was given of a processing industry established to handle the output of a project —  i t s output constituting  being secondary costs;  secondary benefits, i t s costs  A comprehensive benefit-cost analysis requires  that a l l these costs and benefits be considered i n conjunction with primary benefits and costs. Secondary benefits and costs are important mainly when a project i s being analyzed from a regional point of view.  While they may measure  a project's impact on a given area, they are of much less interest from a broader viewpoint.  As a general rule i t can be argued that projects  which are similar i n nature would have approximately the same secondary impact i f undertaken elsewhere i n the nation.  I t i s argued, therefore,  that emphasis should be on e f f i c i e n t u t i l i z a t i o n of the basic resources, as measured by primary benefits and costs, rather than on secondary impact (Ciriacy-Wantrup 1969, Sewell et at 1962). It i s unlikely that any new processing industries would be established at Creston to deal with production from further reclamation. What would be expected i s an increase i n the business of existing processing and d i s t r i b u t i o n centers, and i n a l l businesses serving the farm sector. In attempting to measure the "net value" of this secondary impact, there i s a danger of serious confusion. Matters such, as employment created, incomes (usually i l l - d e f i n e d ) , business revenues, and taxes paid, are often stressed as important  second-  ary  benefits.  But most of these are "gross" measures, generally costs  rather than benefits, and do not i n any way r e f l e c t on .the net gain from the secondary a c t i v i t y . of net secondary benefits —  For this- reason a very narrow d e f i n i t i o n the net economic gain, or the value of  the secondary product or service over and above the costs of inputs  —  i s adopted for this analysis. Discussion of net secondary benefits f i r s t requires an estimate of  the t o t a l amount of secondary business a c t i v i t y which would be gener-  ated by reclamation of an additional 11,500 acres at Creston.  From  these estimates the true net annual gain can be derived and then d i s counted to a present value equivalent. The detailed calculations required for these estimates are r e l e gated to Appendix A.  The f u l l "multiplied" impact on secondary business  revenues w i l l vary between the l o c a l , p r o v i n c i a l and national levels after allowing for the non-export  content of Creston a g r i c u l t u r a l out-  put at each l e v e l and the different regional m u l t i p l i e r s .  It i s e s t i -  mated that with further reclamation at Creston the increase i n annual secondary business revenues, which would not occur i n the absence of reclamation, would be i n the order of $1,310,000 i n the l o c a l economy, AA  $1,320,000 within B r i t i s h Columbia and $1,264,000 throughout Canada;  The export-base thesis and i t s significance for regional multip l i e r analysis i s reviewed i n Appendix A. AA  Only export content has ing, the degree to which secondary occur otherwise are attributed to This accounts for the lower l e v e l level.  been considered relevant i n determinbusiness revenues which would not further a g r i c u l t u r a l reclamation. of secondary spending at the national  These are estimates of gross business revenues which would be generated by a g r i c u l t u r a l spending.  But only a small part of this w i l l  be a net gain, because of the costs involved i n providing the goods and services purchased.  Net gains w i l l exist only to the extent that i n -  comes w i l l be higher as a result of the a g r i c u l t u r a l development than they would be i f the labor and c a p i t a l at the secondary l e v e l were otherwise employed.  Net benefits must therefore take the form of i n -  come i n excess of the normal earnings which these inputs would earn i n other employment.  Since these alternative earnings tend to be r e -  flected i n the costs (wages, rent, i n t e r e s t , etc.) of the business ent e r p r i s e s , net gains are manifested i n the form of income i n excess of costs —  business p r o f i t s after the operators have allowed a normal  rate of return f o r their own c a p i t a l and labor input. With the degree of competition which exists i n the r e t a i l and service sectors of the economy, such p r o f i t s tend to be low.  Profits  as a proportion of sales are probably i n the order of two to three per cent, and a rate of three per cent i s adopted i n this study. Applying a rate of three per cent to the estimates of business revenues above, the net secondary benefit per annum i s estimated as follows:  within the l o c a l economy, $39,300; at the p r o v i n c i a l l e v e l ,  $39,600; within Canada as a whole, $37,900.  Discounted at a rate of  eight, per cent the respective present value equivalents are $490,000, $495,000 and $474,000.  The Aggregate Benefit-Cost Relationship This, chapter has investigated the benefits and costs of a g r i c u l t u r a l reclamation at the primaryvand  secondary l e v e l s .  The findings at  these l e v e l s are integrated i n an aggregate comparison i n Table 6.  The  table indicates the results of the analysis from three viewpoints:  the  l o c a l community, the province of B r i t i s h Columbia, and Canada.  Agricul-  t u r a l reclamation i s f e a s i b l e from a l l points of view, although the magnitude of net benefits that can be expected v a r i e s .  The unquantified  loss that would result from the destruction of present w i l d l i f e habitat forms an important q u a l i f i c a t i o n to these conclusions. Tangible primary benefits and costs are i d e n t i c a l from each viewpoint.  The present value of annual p r o f i t s from a g r i c u l t u r a l pro-  duction i s estimated at $2,975,000, while the present value of r e c l a mation costs i s $890,000.  Since the costs of reclamation and the values  generated under agriculture would a l l be incurred by l o c a l i n t e r e s t s , their magnitudes remain constant i n each referent group. Intangibles and unmeasurable costs and benefits are included i n Table 6.  No intangible or unmeasurable benefits are expected from a g r i -  c u l t u r a l reclamation, but s i g n i f i c a n t costs are expected from the loss of w i l d l i f e habitat and opportunities for outdoor recreation. A present value of $312,000 has been placed on recreational use of the unreclaimed land and i t s loss represents an i n t a n g i b l e primary- cost, • With half of the present recreational use by l o c a l residents the loss to the l o c a l referent group i s given as $156,000, while the f u l l loss of $312,000 i s appropriate from the point of view o f . B r i t i s h Columbia and Canada.  TABLE 6 THE BENEFITS AND COSTS OF AGRICULTURAL RECLAMATION (Present D i s c o u n t e d V a l u e s , 1970)  REFERENT GROUP, OR VIEWPOINT LOCAL COMMUNITY (CRESTON)  BRITISH COLUMBIA  CANADA  Tangible $ 2,975,000 Intangible nil Unmeasurable n i l  $ 2,975,000 nil nil  $ 2,975,000 nil nil  Secondary b e n e f i t s :  $16,375,000  $16,500,000  $15,800,000  Total benefits:  $19,350,000  $19,475,000  $18,775,000  B E N E F I T S Primary b e n e f i t s :  C O S T S Primary c o s t s :  Tangible $ Intangible Unmeasurable  890,000 $ 890,000 $ 890,000 156,000 312,000 312,000 l o s s o f w i l d l i f e h a b i t a t and w i l d l i f e species "small" value " l a r g e " value "very l a r g e " to l o c a l r e s i to a l l B r i v a l u e to dents t i s h Columbians Canadians  Secondary  costs:  $15,885,000  $16,005,000  $15,326,000  Total  costs:  $16,931,000  $17,207,000  $16,528,000  $ 2,419,000  $ 2,268,000  $ 2,247,000  Net  * Benefits .  As d i s c u s s e d i n the t e x t , unmeasurable c o s t s must be s e t o f f a g a i n s t t h i s measure of net b e n e f i t t o p r o v i d e a t r u e measure o f net g a i n .  Unmeasurable primary costs are also incorporated i n Table 6. I t i s not possible to estimate the absolute value of the w i l d l i f e habitat to the various referent groups, but some inferences are drawn regarding i t s r e l a t i v e value between these groups..  Such non-consumptive bene-  f i t s accrue i n r e l a t i v e l y small degree to l o c a l residents.  The mainte-  nance of continental waterfowl habitat and the protection of rare species i s largely the concern of the federal government, and to a lesser extent the p r o v i n c i a l government.  Thus the value of the existing habitat i n -  creases as the point of view broadens from the l o c a l community to the province and f i n a l l y to Canada as a whole. Secondary costs and benefits vary between the referent groups, due to the effect of the various m u l t i p l i e r s , and the d i f f e r e n t export content of a g r i c u l t u r a l spending when assessed from three d i f f e r e n t points of view.  The annual gross receipts of secondary business are  discounted to present values and presented as secondary benefits i n Table 6, and the present value of annual business costs i s given as secondary costs.  On balance the present values of net secondary bene-  f i t s are small, only $490,000 i n the l o c a l community, $495,000 within B r i t i s h Columbia, and $474,000 i n Canada. When a l l the relevant costs and benefits are brought into b a l ance i n this way some conclusions can be drawn regarding the f e a s i b i l i t y of further a g r i c u l t u r a l reclamation at Creston..  Taken together,  tangible-primary and secondary benefits represent a net gain with a present value of approximately  $2.6 m i l l i o n .  Offset against this i s  the loss of intangible recreational opportunities with a present worth  of approximately $312,000 and an additional unmeasurable loss of important w i l d l i f e species through, the destruction of their habitat.' On the basis of those benefits and costs which are evaluated the o v e r a l l net gain from a g r i c u l t u r a l reclamation appears to be million.  $2.3  This gain would have to be set o f f against the w i l d l i f e losses  which are not evaluated.  Whether the o v e r a l l balance would favor a g r i -  culture or not depends on the value of this••,wildlife.  If the w i l d l i f e  i s worth more than $2.3 m i l l i o n society as a whole would suffer a net loss by permitting further reclamation.  If the w i l d l i f e has a value  less than $2.3 m i l l i o n there would be an o v e r a l l net gain by s a c r i f i c i n g i t i n favor of a g r i c u l t u r a l development. The value to society of the w i l d l i f e supported by the undeveloped land remains the c r i t i c a l l i n k i n determining the o v e r a l l f e a s i b i l i t y of reclamation for a g r i c u l t u r a l purposes.  If a g r i c u l t u r a l development i s  f e a s i b l e , however, the key question i n determining whether i t i s the most desirable  form of use f o r the land must be the net gains which  would be generated by alternative uses.  Consideration of the other  development p o s s i b i l i t y , w i l d l i f e and recreation development, i s the subject of the next chapter.  Comparison of the net gains from these  alternatives w i l l then provide a basis for selecting the optimum use for the presently undeveloped land.  The Distribution.of Net Benefits Under Agricultural. Development A basic question which i s not addressed i n the usual context of benefit-cost analysis concerns the d i s t r i b u t i o n of net b e n e f i t s .  In the p r e c e d i n g a n a l y s i s , f o r i n s t a n c e , we s i d e r a b l e net b e n e f i t s would be put  have concluded t h a t  generated i f the u n r e c l a i m e d l a n d were  into intensive a g r i c u l t u r a l production.  We  have not  g i v e n any  s i d e r a t i o n to the d i s t r i b u t i o n of these b e n e f i t s , however —assuming t h a t both the b e n e f i t s entrepreneurs undertaking The'distribution l e v e l , should be the l a n d  con-  and  the  con-  simply  c o s t s would be borne by  the  reclamation. of these b e n e f i t s , i n a d d i t i o n to t h e i r a b s o l u t e  taken i n t o account when comparing a l t e r n a t i v e uses f o r  i n t h i s study  ( K x u t i l l a and  Eckstein  1958).  The  p r i m a r y bene-  f i t s which have been e s t i m a t e d from a g r i c u l t u r a l r e c l a m a t i o n would accrue to a s m a l l this benefit  group of e n t r e p r e n e u r s .  to the r e s o u r c e owners, B r i t i s h Columbia and  Kootenay I n d i a n Band, could This  R e d i s t r i b u t i o n of p a r t  contrasts  the Lower  a c h i e v e d through s a l e , l e a s e , or r e n t a l .  w i t h a w i l d l i f e and  b e n e f i t s would be opportunities.  be  of  recreation  d i s t r i b u t e d i n the  development where most  form of n o n - p r i c e d  These d i f f e r e n t p a t t e r n s  f e r r e d to f u r t h e r i n Chapter VI where the  recreational  of d i s t r i b u t i o n w i l l be a l t e r n a t i v e s are  re-  compared.  CHAPTER V  WILDLIFE HABITAT AND  OUTDOOR RECREATION AS A DEVELOPMENT ALTERNATIVE  Development of the unreclaimed  l a n d to improve i t s q u a l i t y  as  w i l d l i f e h a b i t a t and i n c r e a s e i t s u s e f u l n e s s f o r outdoor r e c r e a t i o n i s planned as an a l t e r n a t i v e to a g r i c u l t u r a l r e c l a m a t i o n .  The  physical  s t r u c t u r e s r e q u i r e d f o r t h i s development were d i s c u s s e d b r i e f l y i n Chapter  I.  While  ing  standpoint, i t i s d i f f i c u l t  development.  t e c h n i c a l l y f e a s i b l e and r e l a t i v e l y  When examining  to a s s e s s the economic  the f e a s i b i l i t y  p r e d i c t i o n s of y i e l d s and incomes were based i d e n t i c a l l a n d which had been r e c l a i m e d . development we The  simple from an  engineer-  feasibility  of  this  of a g r i c u l t u r a l r e c l a m a t i o n , on e x p e r i e n c e on  almost  In the case o f w i l d l i f e - o r i e n t e d  do not have such a convenient b a s i s f o r p r e d i c t i o n .  development which i s planned w i l l be the f i r s t  B r i t i s h Columbia.  While  of i t s k i n d i n  s i m i l a r p r o j e c t s have been undertaken  S t a t e s and e l s e w h e r e . i n Canada, the c o n d i t i o n s d i f f e r  i n the U n i t e d  significantly,  p r o v i d e l i t t l e . m o r e t h a n . g e n e r a l g u i d e l i n e s . t o what may  be a c h i e v e d .  and The  exact d e t a i l s of management i n the C r e s t o n p r o j e c t cannot be s p e c i f i e d i n advance as an optimum management regime w i l l o n l y be known a f t e r mentation with l o c a l c o n d i t i o n s .  Similarly,  the exact t i m i n g of d e v e l o p -  ment cannot be p r e d i c t e d as i t , too, depends on a c e r t a i n degree i m e n t a t i o n and e x p e r i e n c e w i t h l o c a l Given these q u a l i f i c a t i o n s ,  experi-  of  exper-  conditions. t h i s chapter w i l l f i r s t  n a t u r e of primary b e n e f i t s which c o u l d be r e a l i z e d  through  d i s c u s s the the d e v e l o p -  ment plan and the area's•capacity  for such benefits.  The extent to which  this capacity w i l l be used, and the use expected i n each future year i s estimated, and values placed on t h i s use where possible.  Analysis then  turns to q u a n t i f i c a t i o n of primary costs, followed by a review of secondary benefits and costs.  Benefit-cost relationships are then  considered  at both the primary and secondary l e v e l s , with the f i n a l section of the chapter dealing with the d i s t r i b u t i o n of net benefit and the separate implications of the project for. the l o c a l community, B r i t i s h Columbia, .. and Canada.  Primary Benefits The primary benefits which would be generated through the w i l d l i f e - r e c r e a t i o n project are diverse.  The benefits that can be expected  are c l a s s i f i e d as follows: 1.  Provision of habitat and production f i s h and w i l d l i f e .  2.  Education and  3.  Outdoor recreation.  4.  A g r i c u l t u r a l production.  5.  Commercial fur  6.  Water storage.  of  research.  production.  This c l a s s i f i c a t i o n of benefits encompasses tangible, intangible, and unmeasurable benefits.  Tangible benefits include a g r i c u l t u r a l produc-  tion, commercial fur production,  and water.storage.  these c l a s s i f i c a t i o n s is. normally sold at a p r i c e .  The output i n each of For this study imputed  values are assigned .to the output of outdoor recreation. !  The f i r s t  two  categories of primary, benefit, the provision of habitat and production of f i s h and w i l d l i f e , .and education and research opportunities, are classed as unmeasurable since they cannot be quantified i n monetary terms.  Quantifiable Primary Benefits Recreational opportunities are the most s i g n i f i c a n t primary benef i t s which can be quantified i n monetary terms.  As measures of value are  not r e a d i l y available for these intangible benefits, values must be assigned to the recreational output of the project.  This output and  i t s estimated values are discussed f i r s t i n the following paragraphs. Tangible primary benefits are then discussed, and a b r i e f summary draws together the t o t a l estimated value of quantifiable primary benefits. Outdoor Recreation One of the most important, and c e r t a i n l y the most e a s i l y i d e n t i f i e d benefit from the development of a w i l d l i f e management area w i l l be the opportunities created f o r outdoor recreation. improved ing  Opportunities w i l l be  for warmwater sportsfishing, hiking and t r a i l walking, b i r d watch-  and nature photography, and waterfowl and upland bird hunting.  While  a l l of these a c t i v i t i e s take place i n the area at present, the i n t e n s i t y of use i s expected to increase dramatically as the area i s developed. One of the major factors r e s t r i c t i n g use of these areas at present i s the lack of access.  Provision of adequate access f o r recreation-  i s t s w i l l lead to the r e a l i z a t i o n of s i g n i f i c a n t recreational benefits. At  the same time this may lead to management problems i n trying to balance  the number of d i f f e r e n t types of r e c r e a t i o n i s t s i n an area at any one time, and the requirements of w i l d l i f e for undisturbed habitat.  This  people-wildlife "conflict could become p a r t i c u l a r l y severe and i t s resolution requires a c a r e f u l l y worked out compromise between desires to serve people or w i l d l i f e . There w i l l be three major types of outdoor recreation as a result of the w i l d l i f e - r e c r e a t i o n plan —  warmwater sportsfishing, waterfowl and  upland b i r d hunting, and non-consumptive recreation including hiking, b i r d watching, nature interpretation, and photography. Warmwater s p o r t f i s h i n g . — P r e s e n t development plans c a l l f o r warmwater sportfishing to be r e s t r i c t e d to approximately 3,000 acres on Duck Lake with the rest of the area developed s o l e l y as nesting habitat. It i s f e l t that the maximum capacity of the area would be 60 fishermen per day (one fisherman per 50 acres) over a six-month season from May through October or a t o t a l of 10,800 fisherman-days  of use annually.  F u l l use of this capacity f o r sportfishing i s not expected 1984; G.  until  the pattern of increase i n use i s described i n d e t a i l i n Appendix  The procedure adopted to estimate the value of this recreation i s r e -  viewed i n Appendix H, where the value of warmwater sportfishing i s e s t i mated at $4.00 per fisherman-day.  Applying this value to the estimated  future pattern of use of the fishery, and discounting the expected  annual  values at eight per cent, y i e l d s a c a p i t a l i z e d present worth of s p o r t f i s h ing opportunities of $301,000 (see Table H - l ) . Waterfowl and upland bird hunting.--After development i t i s expected that about f o u r ^ f i f t h s of the area or approximately 10,670 acres w i l l be open f o r hunting-each year.  It i s assumed that development plans for w i l d l i f e habitat w i l l r e s u l t i n a net of 90 per cent of the area being usable after dykes and  Hunting w i l l be the least intensive of a l l recreational uses. Hunters can e a s i l y overcrowd an area so that the q u a l i t y of every hunter's experience deteriorates.  The usual consequence of overcrowded hunting  areas i s poor hunting practice? leading to high c r i p p l i n g loss, and waste of gamebirds (Anderson 1961, Bednarik 1961). At present i t i s f e l t that the saturation point for hunters w i l l be reached with a concentration of one hunter per 100 acres, with two ' s h i f t s ' a day of about four to f i v e hours each.  This indicates a capa-  c i t y to support approximately 215 hunters i n the area per day.  Over a  hunting season of 10 weeks duration (70 days), the capacity of the area would then be i n the order of 15,000 hunter-days per year.  The  unreclaimed  lands (Crown and Indian Reserves) presently support about 5,000 hunter-days of use annually (Appendix F ) , and f u l l development of the area w i l l provide opportunities to increase this use by 10,000 hunter-days. As a result of increased populations of birds i n the area, addit i o n a l hunting opportunities w i l l arise on private land adjacent to the management area.  It i s d i f f i c u l t to estimate the number of days of hunter  u t i l i z a t i o n which may be realized on this land.  Landowners w i l l be re-  luctant to permit uncontrolled public hunting, and may to levy fees f o r hunting.  find i t necessary  Most of the farm operators on the f l a t s  live  i n the town of Creston and not on their farms, and administration and control of hunters on private property w i l l be d i f f i c u l t .  Additional  access construction, the same assumption as was employed for agriculture. However, the e n t i r e area of Duck Lake w i l l be usable for w i l d l i f e purposes, as w i l l the W. H. Dale Unit. This increases the net usable area to 13,340 acres, f o u r - f i f t h s of which w i l l be used by hunters.  constraints w i l l be imposed by the types of crops grown, and yearly variations i n the time of harvest. At present approximately 1,500  hunter-days are realized on private  land on the Creston f l a t s (Appendix F ) .  Assuming a s i g n i f i c a n t increase  i n b i r d populations after habitat improvement and a convenient administ r a t i v e arrangement for private land owners, this use may  increase to  5,000 hunter-days annually, an increment of 3,500 hunter-days. F u l l use of the hunting capacity of the area w i l l be reached by 1977.  Appendix H presents the estimated pattern of growth i n hunting  activity.  Based on a study of waterfowl hunters at Creston (Appendix  G)  the value of hunting a f t e r the project i s complete i s estimated at $8.00 per hunter-day.  When this unit value i s applied to the expected annual  pattern of growth i n hunting a c t i v i t y and discounted at eight per cent, the c a p i t a l i z e d present worth of hunting opportunities i s estimated at $640,000. Hiking, use of nature interpretation t r a i l s , b i r d watching, and photography,r-These a c t i v i t i e s w i l l probably account for the bulk of ons i t e recreational use.  The upper l i m i t to this use of the area w i l l be  determined by the tolerance of w i l d l i f e to human presence, and the t o l e r ance of people to the presence of other people.  It i s expected that dur-  ing the nesting season access to some marshes may have to be r e s t r i c t e d . Major attractions for these a c t i v i t i e s w i l l be the rarer b i r d species such as ospreys, swans and geese.  At the same time there w i l l  be a great abundance of more common species of b i r d s , and i t i s no exaggeration to claim that the richness and d i v e r s i t y of w i l d l i f e w i l l be unequalled i n North America.  With, f u l l development of f a c i l i t i e s f o r photography, b i r d watching, nature interpretation t r a i l s , and p i c n i c s i t e s the area could e a s i l y support 250,000 visitor-days per year by persons interested i n these pur^suits.  The pattern of growth i n u t i l i z a t i o n of non-consumptive recrea-  tion f a c i l i t i e s i s estimated i n Appendix G.  It i s estimated that capacity  would be f u l l y u t i l i z e d by 1985, with the l e v e l of use remaining constant thereafter.  The value of non-consumptive recreation i s estimated at $5.00  per v i s i t o r - d a y .  Applying this value to the estimated pattern of future  use and discounting at eight per cent yields a capitalized present worth of non-consumptive recreation of $10,088,000 (see Table H-3). A g r i c u l t u r a l Production Present plans c a l l for approximately 30 per cent of the area to be developed f o r a g r i c u l t u r a l production complementary to the management of w i l d l i f e habitat.  This may  take the form of grazing for c a t t l e , or  the production of selected crops, and w i l l occupy about 3,500 acres. It i s assumed that productivity on this land w i l l be the same as on presently reclaimed land. Gross productivity per acre w i l l average $105, with an average annual net productivity of $26.  (See Appendix C, page C-14).  On 3,000  acres this w i l l mean an annual gross output of $315,000, indicating a p r i mary benefit of $78,000. The f i n a l d i s t r i b u t i o n of this production may d i f f e r from that on presently reclaimed land.  Land devoted to crops w i l l be under a share-  crop agreement, with the Management Area's share (approximately one-third) l e f t i n the f i e l d as feed and cover for w i l d l i f e .  This portion of crop  p r o d u c t i o n becomes a d i r e c t i n p u t i n game management, and through  the normal market channels.  The  not e n t e r c a l c u l a t i o n of the primary Rather,  share l e f t  does not  for w i l d l i f e  pass  does  b e n e f i t of a g r i c u l t u r a l p r o d u c t i o n .  i t r e p r e s e n t s a c o s t of w i l d l i f e management which i s not  direct-  ly registered. The  net v a l u e s i n a g r i c u l t u r a l p r o d u c t i o n are e s t i m a t e d  on  the  same b a s i s as employed i n the a n a l y s i s of a g r i c u l t u r a l development i n Chapter  IV.  The  p r e s e n t v a l u e of a g r i c u l t u r a l p r o d u c t i o n on 2,300 a c r e s  (2/3 of the t o t a l acreage $549,000. remaining  used f o r a g r i c u l t u r e ) i s e s t i m a t e d  Values would i n c r e a s e i n each y e a r from 1971 constant a f t e r  Commercial Fur  t h a t time  (see Table  to be  through  1983,  H-4).  Production  H a b i t a t development and water l e v e l c o n t r o l w i l l c r e a t e opport u n i t i e s f o r an i n c r e a s e d h a r v e s t of f u r s f o r the commercial market. The v a l u e s i n commercial f u r h a r v e s t s w i l l not be l a r g e . likely  I t seems  un-  t h a t the gross v a l u e of the annual h a r v e s t of f u r s would exceed  $10,000 and w i l l more l i k e l y be i n the neighbourhood of $5,000. t h i s , approximately  $4,000 would be expected  as net r e t u r n s to t r a p p e r s  and  r o y a l t i e s on f u r s ,  The  c a l c u l a t i o n of p r e s e n t v a l u e s a r i s i n g from t h i s h a r v e s t  i n Table H-5.  comprising  Of  the primary b e n e f i t from t r a p p i n g . is.summarized  T h i s c o n s t i t u t e s a minor b e n e f i t , the p r e s e n t v a l u e i n  b e i n g $37,000.  Water  Storage The p o r t i o n s of the a r e a which are dyked and maintained  poundments f o r w a t e r f o w l fits  may  a l s o s e r v e as water s t o r a g e a r e a s .  as  im-  Bene-  r e s u l t i n g from water s t o r a g e are i n the form of downstream f l o o d  1970  p r o t e c t i o n , and s t a b i l i z a t i o n of downstream  power g e n e r a t i o n .  Realiza-  t i o n of such b e n e f i t s w i l l depend on the manner i n which these  impound-  ments a r e managed. Downstream b e n e f i t s w i l l o n l y be generated  i f water l e v e l s i n  the impoundments a r e r a i s e d d u r i n g the f r e s h e t on the Kootenay R i v e r , and drawn down l a t e r i n the y e a r .  T h i s w i l l not be the case, however,  s i n c e the o b j e c t of dyking and e s t a b l i s h i n g impoundments i s to s t a b i l i z e water l e v e l s  throughout  stant there w i l l , freshet period. expected  to be  the n e s t i n g season.  i n f a c t , be no b e n e f i t from s t o r a g e d u r i n g the c r i t i c a l Thus primary b e n e f i t s i n the form of water s t o r a g e a r e  insignificant.  In any case, a f t e r the completion v a l u e s must be r e l a t e d b a s i n needs. L i b b y Dam  With .water l e v e l s h e l d con-  of L i b b y Dam  ( K r u t i l l a 1961, 1967).  Q u a n t i f i a b l e Primary  lands  The e f f e c t s of water  storage  analysis.  Benefits  The p r e s e n t v a l u e e s t i m a t e s p r e s e n t e d I n making  river-  p r o t e c t i o n p r o v i d e d by  the i n c r e m e n t a l v a l u e of s t o r a g e on.the unreclaimed  are t h e r e f o r e not c o n s i d e r e d f u r t h e r i n . t h i s  T a b l e 7.  storage  to the i n c r e m e n t a l c o n t r i b u t i o n to o v e r a l l  With the s t o r a g e and downstream  w i l l be n e g l i g i b l e  Summary:  water  above are summarized i n  t h i s summary two p o i n t s s h o u l d be emphasized.  First,  the b e n e f t s which have been e v a l u a t e d a r e the i n c r e m e n t a l b e n e f i t s d i r e c t l y a t t r i b u t a b l e to the proposed development — the a r e a .  not the t o t a l output of  T h i s i s of consequence o n l y f o r f i s h i n g and h u n t i n g where some  u t i l i z a t i o n p r e s e n t l y takes p l a c e i n the absence of any development. Secondly,  these v a l u e s a r e o n l y f o r those  types of 'output' f o r which  v a l u e s can be q u a n t i f i e d i n monetary terms. benefits associated f i s h and w i l d l i f e  They t h e r e f o r e  omit the  w i t h the p r o v i s i o n o f h a b i t a t and p r o d u c t i o n  of  (except i n s o f a r as t h i s generates the r e c r e a t i o n  measured), and the b e n e f i t s from e d u c a t i o n a l  and r e s e a r c h  use.  These  b e n e f i t s a r e d e a l t w i t h subsequently i n the category o f unmeasurable benefits.  TABLE 7 SUMMARY OF PRESENT VALUES, BENEFITS FROM WILDLIFE AND OUTDOOR RECREATION DEVELOPMENT  PRESENT VALUE, 1970  B E N E F I T  Intangible: Fishing Hunting Non-Consumptive R e c r e a t i o n  $ 301,000 $ 640,000 $10,088,000  A g r i c u l t u r a l Production Trapping  $ $  $11,029,000  Tangible: 549,000 37,000  P r e s e n t Value o f I n t a n g i b l e and T a n g i b l e B e n e f i t s , 1970  As d i s c u s s e d , t h i s summary primary b e n e f i t s o n l y .  includes  $  586,000  $11,615,000  t a n g i b l e and i n t a n g i b l e  Unmeasurable Primary  Benefits  I t i s not p o s s i b l e to a s s i g n monetary v a l u e s portant  a s p e c t s of the p r o j e c t ' s output —  Such b e n e f i t s remain as  they i n c l u d e the p r o v i s i o n of h a b i t a t and  of f i s h and w i l d l i f e ,  and  educational  im-  b e n e f i t s which a c c r u e beyond  those r e a l i z e d through o n - s i t e p a r t i c i p a t i o n . unmeasurable —  to some of the  and  research  production  opportunities.  Unmeasurable b e n e f i t s are p a r t i c u l a r l y important i n a p r o j e c t of t h i s n a t u r e and  are d i s c u s s e d  P r o v i s i o n of H a b i t a t This  and  i n the f o l l o w i n g paragraphs.  Production  of F i s h and  Wildlife  c a t e g o r y of unmeasurable b e n e f i t s a r i s e s from the  wildlife-  r e c r e a t i o n development independent of o n - s i t e r e c r e a t i o n a l or other There w i l l be increase  important b e n e f i t s from the h a b i t a t development which w i l l  the p r o d u c t i o n  of w i l d l i f e —  such b e n e f i t s b e i n g  important w i t h r a r e or endangered s p e c i e s . the maintenance and not  use.  Further  particularly  b e n e f i t s accrue from  improvement of flyway h a b i t a t f o r m i g r a t o r y  species  "produced" o n - s i t e , i n c l u d i n g the f u l f i l m e n t of i n t e r n a t i o n a l t r e a t y  obligations. Waterfowl p r o d u c t i o n . — T h e proposed h a b i t a t development w i l l greatly increase and  swans as w e l l as ducks.  w a t e r f o w l has and  the o n - s i t e p r o d u c t i o n  of w a t e r f o w l , i n c l u d i n g geese  In the p a s t  been almost n e g l i g i b l e .  the o n - s i t e p r o d u c t i o n  of  S t a b i l i z a t i o n of water l e v e l s  development of n e s t i n g h a b i t a t w i l l , l e a d to the e s t a b l i s h m e n t  l o c a l breeding populations. population  The  d e n s i t i e s as i t has  growing c o n d i t i o n s  f o r aquatic  area  a very feed.  can be  expected to support  of high  f e r t i l e s o i l and.will create  ideal  Under f i n a l development, i t i s e s t i m a t e d duce 5,000 ducks a n n u a l l y , comprised P r o d u c t i o n by  mainly  t h a t the area w i l l  pro-  of m a l l a r d s , widgeon and. t e a l .  t r e e - n e s t i n g s p e c i e s such as wood ducks w i l l be enhanced by  the i n s t a l l a t i o n of n e s t i n g boxes, but  they w i l l  form a minor p o r t i o n of  the t o t a l n e s t i n g p o p u l a t i o n . C o n t r o l of water l e v e l s and enable  the e s t a b l i s h m e n t  c r e a t i o n of n e s t i n g i s l a n d s  of a l a r g e r e s i d e n t p o p u l a t i o n of Canada geese.  Annual p r o d u c t i o n of young i s expected w i l l be p a r t i c u l a r l y important  to be i n the o r d e r of 2,000.  the Duncan Dam  reservoir.  W h i s t l i n g swans are common to the a r e a , p a s s i n g through numbers d u r i n g t h e i r s p r i n g m i g r a t i o n , and While some d i f f i c u l t y  i n large  returning i n late f a l l  can be encountered  and  i n developing a  breed-  i n g p o p u l a t i o n a t C r e s t o n , i t i s hoped t h a t o v e r a l l enhancement of h a b i t a t w i l l e v e n t u a l l y l e a d to t h i s . is  This  i n r e p l a c i n g p r o d u c t i o n l o s t on the Duncan  Marshes which have been d e s t r o y e d by  winter.  should  Annual p r o d u c t i o n of 100  the  cygnets  estimated. P r o d u c t i o n of upland  pheasants, velopment.  game b i r d s . — U p l a n d  as  grouse and mourning doves w i l l a l s o b e n e f i t from h a b i t a t deThese b e n e f i t s w i l l be i n c i d e n t a l to a g r i c u l t u r a l  aimed a t p r o v i d i n g food and p e s t i c i d e s and  cover, w i t h s t r i c t  chemical sprays.  is  c o n t r o l over  utilization  the use  of  B i r d s such as pheasants w i l l b e n e f i t  g r e a t l y from s t a b i l i z e d marsh l e v e l s , and mately 500  game b i r d s such  an annual p r o d u c t i o n of a p p r o x i -  expected.  Source of e s t i m a t e s , D. D. Moore, S u p e r v i s o r , C r e s t o n V a l l e y W i l d l i f e Management Area.  Other b i r d s . — M a n y attractive.  other s p e c i e s w i l l  f i n d a managed h a b i t a t  Marsh, water and shore b i r d s such as g r e a t b l u e herons,  killdeer, bitterns,  sandpipers,  c o o t s , g u l l s and t e r n s can be  expected  to i n c r e a s e i n number, as can j a y s , k i n g b i r d s , woodpeckers, d i p p e r s and v a r i o u s sparrows. crease.  Predatory  b i r d s such as owls and hawks w i l l a l s o i n -  Of s p e c i a l s i g n i f i c a n c e i n t h i s r e g a r d i s the b r e e d i n g  t i o n o f ospreys r o l e simply  i n the a r e a .  popula-  W i l d l i f e management w i l l p l a y a s i g n i f i c a n t  i n s e c u r i n g t h e i r h a b i t a t a g a i n s t human encroachment.  is a definite possibility  There  t h a t the p o p u l a t i o n may a c t u a l l y i n c r e a s e as  the p r o d u c t i o n of f i s h i n the s h a l l o w  l a k e s and marshes i n c r e a s e s .  While  such an i n c r e a s e might only be i n the order of one. or two b r e e d i n g  pairs,  t h i s i s n e v e r t h e l e s s s i g n i f i c a n t f o r such a r a r e species.. Furbearing  animals.—Muskrat populations  can be expected  to i n -  c r e a s e as water l e v e l s a r e s t a b i l i z e d and more a q u a t i c v e g e t a t i o n i s introduced. Production full  Beaver and mink may a l s o f i n d  the h a b i t a t a t t r a c t i v e .  of 15,000 muskrats and 400 mink p e r year i s expected  after  development B i g g a m e . — B e n e f i t s to b i g game animals  of major s i g n i f i c a n c e .  a r e n o t expected  to be  There may be some s l i g h t use by deer as a w i n t e r -  i n g area, b u t no s i g n i f i c a n t i n c r e a s e i n p r o d u c t i o n i s expected. F i s h p r o d u c t i o n . — F i s h produced w i t h i n the a r e a w i l l c o n s i s t mainl y of warmwater s p o r t s f i s h such as b l a c k bass, f i s h a r e p r e s e n t l y found  perch,  and s u n f i s h .  These  i n Duck Lake, S i x M i l e Slough and Leach Lake.  Development and management of the a r e a f o r w i l d l i f e and w a t e r f o w l h a b i t a t  w i l l greatly enhance the production of these f i s h due to the s t a b i l i z a tion of water l e v e l s . Flyway habitat.-^-The benefit from w i l d l i f e management i n this case w i l l not be i n the nature of d i r e c t waterfowl production, but rather i n the provision of temporary habitat for/migrating b i r d s . unreclaimed requirements  The  lands presently serve i n . t h i s function, meeting the habitat of migratory waterfowl i n three d i s t i n c t ways.  These are:  (a) as a staging area f o r spring migrants en route to northern breeding grounds; (b) a summer moulting and staging area f o r ducks from widely scattered areas;, and (c) a staging area f o r f a l l migrants en route to southern wintering areas. Migratory stopovers [(a) and (c) above] on the unreclaimed  lands  vary greatly from year to year depending on the weather, habitat condition, and continental waterfowl populations.  At present i t i s estimated  that migratory u t i l i z a t i o n by ducks averages 4,200,000 days of use per year (70,000 ducks at 60 days per duck).  With intensive management i t i s  f e l t that this can be raised to approximately  15,000,000 days of use —  an increase of roughly 11,000,000 duck-use-days.  Total goose-days of use  at present averages 180,000 annually (3,000 geese at an average of 60 days) and use by migratory swans i s i n the same order — days by about 3,000 swans.  180,000 swan-use  Geese respond readily to new habitat condi-  tions and i t i s estimated that usage may exceed 1,000,000 days annually a f t e r development, an increase of roughly 800,000 days.  While migrating  swans are less responsive to habitat changes i t i s f e l t that use by them may double to 360,000 days.  A t p r e s e n t , both Duck Lake and Leach Lake r e c e i v e c o n s i d e r a b l e use by ducks which a r e undergoing mainly  t h e i r summer moult [(b) above].  Use i s  by males of the v a r i o u s s p e c i e s which depart from the b r e e d i n g  grounds w h i l e females  a r e on the n e s t s and seek. out. s u i t a b l e h a b i t a t f o r  t h e i r e c l i p s e moult.  At this  time  to p r e d a t o r s f o r about a month.  they become f l i g h t l e s s and v u l n e r a b l e Male d i v i n g ducks make g r e a t e s t use o f  expanses of open water on these l a k e s , w h i l e males o f d a b b l i n g s p e c i e s r e l y more h e a v i l y on the marsh areas and p r o t e c t i o n of emergent  vegeta-  tion. In a d d i t i o n to. t h i s summer m o u l t i n g  use by a d u l t males, the un-  r e c l a i m e d lands a c t as l a t e summer s t a g i n g and g a t h e r i n g areas  f o r females  and young r a i s e d on n e s t i n g grounds which may be many m i l e s away. To  the e x t e n t  t h a t use.of  t h i s a r e a f o r m o u l t i n g and l a t e summer  s t a g i n g i s made by b i r d s which n e s t t h a t improving  elsewhere,  i t is difficult  the h a b i t a t w i l l i n c r e a s e o v e r a l l use.  t o argue  Increased n e s t i n g  p o p u l a t i o n s w i l l i n c r e a s e use by l o c a l b i r d s , but u n l e s s n e s t i n g areas elsewhere i n the flyway expand, use by n o n - l o c a l b i r d s f o r m o u l t i n g not be expected  to i n c r e a s e .  can-  One e f f e c t of improved h a b i t a t , however,  may be to i n c r e a s e the s u r v i v a l r a t e of b i r d s m o u l t i n g  i n the a r e a .  F u l f i l m e n t of I n t e r n a t i o n a l O b l i g a t i o n s The  c o n t i n e n t a l nature  of b e n e f i t s from the management of water-  f o w l p o p u l a t i o n s i s r e c o g n i z e d i n the M i g r a t o r y B i r d s T r e a t y o f 1916 between Canada and the U n i t e d S t a t e s . t r e a t y o b l i g a t i o n s through The  Canada has undertaken t o f u l f i l h e r  the M i g r a t o r y B i r d s Convention  A c t o f 1917.  c o n t r i b u t i o n of the development a t C r e s t o n t o the f u l f i l m e n t of these  obligations i s an additional benefit which must go unmeasured and unvalued, but which i s nevertheless important.  Such international o b l i -  gations are a formal recognition of the benefits which are classed as "provision of habitat and production of f i s h and w i l d l i f e " — ing  their importance and interdependence  recogniz-  between nations as well as  their i n t e r n a l importance to .Canada. Educational and Research Use There w i l l be many.opportunities the management area.  f o r s c i e n t i f i c research within  The study of many species of waterfowl and upland  game birds w i l l provide information of value i n game management.  Research  and i t s benefits should not be r e s t r i c t e d to game management alone  —  there w i l l also be opportunities f o r ecological and environmental r e search i n such f i e l d s as pesticides- and herbicide control which w i l l be of wider s i g n i f i c a n c e . The. value of such basic research l i e s i n the general a p p l i c a b i l i t y of findings and their use i n improving standards of l i v i n g .  There  i s no s a t i s f a c t o r y means of assessing the value of past research of this nature and i t would be f o o l i s h to try to estimate the value of future research.  Nevertheless, there may be s i g n i f i c a n t values i n education  and research as part of the w i l d l i f e - r e c r e a t i o n development and these values form an important b e n e f i t .  Summary.of Primary Benefits The preceding discussions indicate the significance of primary benefits generated under development of the unreclaimed land f o r . w i l d l i f e  management and benefits not  outdoor r e c r e a t i o n .  can be  possible.  t o t a l l e d and  Preparing  a summary i n which these  t h e i r r e l a t i v e importance e s t a b l i s h e d  is  Primary b e n e f i t s which are q u a n t i f i e d i n monetary terms  have a t o t a l p r e s e n t v a l u e of $11,615,000 of which r e c r e a t i o n a l benefits  are by  f a r the most important, a c c o u n t i n g f o r $11,029,000.  the unmeasurable b e n e f i t s a s s o c i a t e d e q u a l or g r e a t e r  importance,vas they p r o v i d e t h e . b a s i c  development ( P r o v i n c e fits the  w i t h t h i s development may  of B r i t i s h Columbia 1968b).  cannot be q u a n t i f i e d i n monetary terms, and t o t a l v a l u e of primary b e n e f i t s cannot be  sents a s e r i o u s parisons only be  be  of  purpose f o r  the  These l a t t e r beneas a consequence,  estimated.  shortcoming of the a n a l y s i s , and  But  This  repre-  when b e n e f i t - c o s t com-  are made f o r t h i s development, these important b e n e f i t s  can  appended as q u a l i t a t i v e amendments.to the monetary comparisons.  Primary Costs  Improving the u n r e c l a i m e d l a n d f o r w i l d l i f e and quires  the c o n s t r u c t i o n  of dykes and  the  recreation  i n s t a l l a t i o n of pumping capa-  c i t y which w i l l p r o v i d e a means of r e g u l a t i n g the water l e v e l s i n marshes.  A l l primary c o s t s  tangible costs,  unmeasurable are  No  the  of the w i l d l i f e - r e c r e a t i o n development  c o n s i s t i n g of goods and  market t r a n s a c t i o n s .  re-  are  s e r v i c e s normally p r i c e d i n  primary c o s t s which are  either intangible  or  i d e n t i f i e d w i t h the w i l d l i f e - r e c r e a t i o n p r o j e c t .  Nature of the W i l d l i f e - R e c r e a t i o n  Project  F l u c t u a t i n g water l e v e l s are  the  l i f e b l o o d of the marshes  marshes c o n t i n u e to e x i s t only because a s t a b l e e q u i l i b r i u m i n water  —  l e v e l and plant,communities i s not established.  "A marsh survives and  i s productive only because of the i n s t a b i l i t y of i t s water l e v e l s . Were the marsh held stable, the edges would gradually invade the middle and there would be nothing but a vast bed of Phragmites" (Hochbaum and Ward 1964). Despite the fact that f l u c t u a t i n g water levels are necessary i f a marsh i s to exist at a l l , the f l u c t u a t i o n which occurs i n nature may be excessive and prevent optimum u t i l i z a t i o n by w i l d l i f e . even good, clean water —  "Water  —  i s often of reduced value to waterfowl i f  the l e v e l i s constantly stable or i f water levels change at the wrong time" (Green et al 1964) . Such i s the case with the unreclaimed land at Creston.  The sea-  sonal r i s e i n water levels during the waterfowl nesting season destroys v i r t u a l l y a l l the nests which have been established except f o r some treenesting species.  When spring and f a l l migrants a r r i v e i n the area water  levels have receded and only a f r a c t i o n of the t o t a l area i s available for use. Habitat development has two basic objectives.  These are to make  the area suitable for nesting waterfowl, and to increase i t s capacity to support migratory b i r d s .  The methods of achieving these objectives  d i f f e r and are discussed separately below. Improving nesting habitat.-—For successful nesting, waterfowl r e quire-; both .a stable water l e v e l and a suitable shoreline (Moore 1969). Water l e v e l s on.the unreclaimed land can be s t a b i l i z e d by dyking  against  the Kootenay River freshet, and i n s t a l l i n g pumps and control structures so that evapotranspiration losses can be o f f s e t .  Suitable shoreline can  be  c r e a t e d by  constructing  i s l a n d s or broad s h a l l o w d i t c h e s .  The e s s e n t i a l  requirement i s that water l e v e l f l u c t u a t i o n be minimized d u r i n g Increasing capacity  nesting.  the c a p a c i t y to support m i g r a t o r y b i r d s . — T h e  f o r n o n - n e s t i n g w a t e r f o w l can b e s t be  s t a b i l i z a t i o n of water l e v e l s , but Plant  c r i t i c a l times.  be  c o n t r o l l e d by p e r i o d i c drawdown of water l e v e l s . food  so much by  through m a n i p u l a t i o n of water l e v e l s  at  growth of p r e f e r r e d  species  i n c r e a s e d not  carrying  and  s p e c i e s , and  undesirable  vegetation  or algae  By promoting  the  r e g u l a t i n g the. water s u r f a c e  the c a r r y i n g c a p a c i t y of the marshes can be g r e a t l y  can  area,  increased.  To meet b o t h the above o b j e c t i v e s , p e r i p h e r a l dykes to p r o t e c t the marshes from the Kootenay R i v e r  f r e s h e t are e s s e n t i a l .  lopment i n the form of i n t e r n a l c r o s s dykes w i l l s e r v e the u n i t s , a l l o w i n g quirements  for v a r i a t i o n i n habitat conditions  of d i f f e r e n t w a t e r f o w l  Facilities  to  Further  deve-  compartmentalize  to meet the  re-  species.  f o r outdoor r e c r e a t i o n . — I n  a d d i t i o n to improvements to  the w i l d l i f e h a b i t a t , a major p a r t of the proposed development w i l l be cerned w i t h p r o v i d i n g  access and  These f a c i l i t i e s w i l l  i n c l u d e such t h i n g s  ers, ing  b l i n d s f o r b i r d watching and points  and  a m e n i t i e s f o r outdoor r e c r e a t i o n i s t s . as t r a i l s and  the P r e s e n t V a l u e of  launch-  s i g n i f i c a n c e of L i b b y Dam  Costs  f o r f u t u r e development of the  l a n d s has  a l r e a d y been emphasized.  ginning  extensive  c a p i t a l c o n s t r u c t i o n on these lands  —  for hik-  photography, canoe " t r a i l s " , boat  claimed  operative  footpaths  p o s s i b l y permanent b l i n d s f o r w a t e r f o w l h u n t e r s .  Timing of Development and The  other  con-  unre-  There would be no p o i n t i n  i t would be p o i n t l e s s to c o n s t r u c t  b e f o r e L i b b y Dam  beis  dykes capable of w i t h s t a n d -  ing present Kootenay River levels i f their required l i f e i s only two to three years. It i s expected that the f i r s t effect of Libby Dam w i l l be f e l t i n 1972, with f u l l control expected i n 1973.  Thus with the exception  of Duck Lake and some aspects of Leach Lake, no major c a p i t a l outlays are expected before 1973.  Capital costs w i l l not a l l be incurred i n  the i n i t i a l year of development. To calculate present values these costs are discounted back to their worth i n 1970. Timing of the Duck Lake development w i l l be an exception.  Duck  Lake i s already protected from the Kootenay River by dyke, and c a p i t a l construction and i n s t a l l a t i o n of necessary pumps can proceed regardless of the completion of Libby  Dam.  The present values of c a p i t a l costs f o r each area are summarized i n Table 8.  Annual maintenance costs w i l l depend on the extent of develop-  ment, reaching maximum annual levels only after f i n a l development.  To  calculate the present value of maintenance costs i t has been assumed that they increase i n d i r e c t proportion to the extent of c a p i t a l ment each year.  develop-  Salary and management costs w i l l also increase i n r e l a -  tion to the extent of development, reaching an upper l i m i t i n 1976 of $75,000 per year.  The present values of annual maintenance and salary  expenses are also included i n Table 8.  Calculation of the present values  summarized i n Table 8 i s presented i n d e t a i l i n Appendix J .  TABLE 8 TEE. PRESENT VALUE OF PRIMARY COSTS, WILDLIFE AND OUTDOOR RECREATION DEVELOPMENT  PRESENT VALUE OF CAPITAL COSTS  I T E M  $  PRESENT VALUE OF ANNUAL MAINTENANCE  20,000  $ 19,000  223,000  62,000  Corn Creek  78,000  53,000  Leach Lake  330,000  119,000  Six Mile Slough  149,000  56,000  Duck Lake  594,000  208,000  Indian Reserve 1A Indian Reserves 1, IB  TOTAL  $1,565,000  $581,000 $833,000  Salaries Present value of c a p i t a l costs  $1,565,000  Present value of annual costs  $1,414,000  In Table 8 a l l future costs are discounted back to 1970 values using a discount rate of eight per cent.  The present worth of annual  costs and s a l a r i e s has been calculated assuming a stream of annual expenditures i n perpetuity.  The present value of a l l costs i s estimated  at $2,979,000, of which. $1,565,000 C53 per cent) i s the present value of c a p i t a l costs, and $1,414,000 (47 per cent) represents the present value of annual costs.  The simplest interpretation of these present values i s that they represent  the amount which would be required i n a lump sum.at the pre-  sent to meet a l l future costs.  Thus, i f a t o t a l of $2,979,000 was i n -  vested today at eight per cent a l l future c a p i t a l and operating costs could be met from i t . Present values have been presented as of 1970 although f o r most areas there w i l l be l i t t l e development u n t i l 1973.  The development of  Duck Lake w i l l begin i n 1970 as the f i r s t step i n the o v e r a l l development.  1970 i s thus regarded as the commencement date f o r the entire  project and a l l costs have been discounted back to this basis.  Secondary Benefits and Costs The nature of secondary benefits and costs was discussed i n Chapters I I and IV. ter IV —  The d e f i n i t i o n of net secondary benefit applied i n Chap-  the net economic gain, or the value of the secondary product  or service over and above the cost of inputs —  i s adopted here.  Second-  ary benefits from this development w i l l r e s u l t from spending by recreationi s ts and others i n conjunction with u t i l i z a t i o n of the area. Discussion of these net secondary benefits requires that the t o t a l amount of secondary business a c t i v i t y which would be generated by the proj e c t be estimated.  The true net annual gain can then be derived from these  estimates and discounted to a present value.  The calculations necessary  for such estimates are presented i n Appendix L. A variety of factors w i l l operate i n determining the magnitude and d i s t r i b u t i o n of secondary benefits from this project.  The major  force w i l l be r e c r e a t i o n i s t s ' spending, but i n addition spending w i l l  be generated through agriculture and trapping. Secondary benefits w i l l develop slowly, not being f u l l y realized u n t i l 1985 when recreational u t i l i z a t i o n reaches the f u l l capacity of the area. Estimates of this impact are d i f f i c u l t due to the d i f f e r e n t timing assumed f o r the various types of u t i l i z a t i o n .  It i s estimated that  business revenues w i l l reach a maximum by 1985 when spending by recreationi s t s , farmers, and trappers w i l l be about $2,000,000. Secondary Benefits i n the Local Economy In dealing with the net benefit resulting from this spending r e f e r ence i s made to the discussion of income and employment m u l t i p l i e r s i n Appendix A.  The analysis i n Appendix A follows from the export base the-  s i s i n which only new income to a region i s considered relevant i n determining the multiplied impact of new investments.  At the l o c a l l e v e l ,  spend-  ing by Creston residents f o r recreation does not represent new income to the region —  simply a spending of income already earned i n the l o c a l economy.  We assume that Creston residents would spend the same amount i n the area even i f the p a r t i c u l a r recreation opportunities were not developed. Therefore, to measure the net secondary impact attributable to development we deal only with recreational spending by non-local persons, plus spending generated by agriculture and trapping. These are the categories of spending which would not occur i f there were no development. Taking account of these factors reduces the appropriate measure of i n i t i a l secondary business receipts as of 1985 to $1,960,000.  The l o c a l  impact  of this spending w i l l be expanded through, the m u l t i p l i e r to approximately $3,058,000.  Of t h i s , approximately three per cent, or $92,000, can be  taken as net secondary benefit.  This i s a measure of the net secondary  benefit f o r the year 1985 only, however. 1  Allowing f o r the annual i n -  crease i n benefits up to this l i m i t , and a constant l e v e l beyond, the present value i n 1970 i s $731,000. Secondary Benefits at the P r o v i n c i a l l e v e l To be consistent with the export base thesis spending considered at  the p r o v i n c i a l l e v e l includes only spending by recreationists from  outside B r i t i s h Columbia.  We assume that B r i t i s h Columbia  residents  would spend the same amount i n B r i t i s h Columbia i n the absence of recreational opportunities at Creston. to  A g r i c u l t u r a l spending i s also adjusted  take account of non-export content.  When these adjustments are made  i t i s estimated that gross receipts of secondary businesses would be i n creased by $3,237,000 i n 1985 as a d i r e c t result of the proposed development at Creston ($1,413,000 i n the i n i t i a l or f i r s t round; $3,237,000 i n t o t a l after the m u l t i p l i e r e f f e c t ) .  Net secondary benefit i n t h i s year  would be approximately $97,000, remaining constant thereafter.  The pre-  sent value of net secondary benefit at the p r o v i n c i a l l e v e l , allowing for annual increments to 1985 i s estimated to be $773,000. Secondary Benefits at the National Level Expanding the analysis to the national l e v e l further reduces the secondary benefit whichtis considered relevant.  At this l e v e l only ex-  penditures by non-Canadians are relevant, under the assumption that Canadians who  spend money on recreation at Creston would spend the same amount  i n Canada even i f the w i l d l i f e development did not take place. Appropriate  adjustments are also made to a g r i c u l t u r a l l y generated spending to  allow f o r non-export content at the national l e v e l . When these adjustments are made i t Is estimated that the gross receipts of businesses i n Canada i n 1985 would be increased by $1,790,000 due to the w i l d l i f e development at Creston.  Net benefits i n this year  would be approximately $54,000, the present value of a l l net secondary benefits being $431,000. These are interesting estimates, as they are only s l i g h t l y more than half of the comparable estimates when the referent group i s B r i t i s h Columbia.  This i s due to the fact that at the national l e v e l only spend-  ing attracted to Canada from outside the national borders i s considered relevant.  At the p r o v i n c i a l l e v e l a l l spending attracted from outside  B r i t i s h Columbia was relevant, representing a much larger amount. This i l l u s t r a t e s very aptly that secondary impact i s mainly of interest when a project i s being analyzed from a narrow regional viewpoint.  These measures are of l i t t l e interest from a national point of  view —  at this l e v e l i t can usually be\argued that a similar project  would have the same secondary impact i f undertaken elsewhere i n the nation.  A second reason for emphasizing this point i s that i t should  focus attention on the importance of primary benefits i n resource development.  Most of the primary benefits of this p a r t i c u l a r project accrue  to people from outside the l o c a l community, and i n this case the estimated primary benefits increase as the viewpoint of the a n a l y s i s - i s  broadened.  To summarize, net secondary benefits are defined as the true economic gains from business a c t i v i t y generated by recreational and other uses under the proposed w i l d l i f e development.  The present value of these  b e n e f i t s t o the C r e s t o n economy i s e s t i m a t e d a t $731,000, to the p r o v i n c i a l economy $773,000 and n a t i o n a l l y $431,000. mainly  o f i n t e r e s t from  the l o c a l  Such b e n e f i t s a r e  (Creston) p e r s p e c t i v e , . b e i n g of l e s s  i n t e r e s t a t the p r o v i n c i a l and n a t i o n a l  levels.  B e n e f i t - C o s t R e l a t i o n s h i p s and the D i s t r i b u t i o n Among R e f e r e n t Groups  The  economic f e a s i b i l i t y  o f the w i l d l i f e - r e c r e a t i o n p r o j e c t can  be a s s e s s e d by comparing the p r e s e n t v a l u e o f b e n e f i t s w i t h the p r e s e n t value of costs. a t both  E s t i m a t e s o f the p r e s e n t v a l u e o f c o s t s and b e n e f i t s ,  the primary and secondary  i n g s e c t i o n s of t h i s c h a p t e r .  l e v e l s , were p r e s e n t e d  i n the p r e c e d -  I n comparing b e n e f i t s and c o s t s the n e t  assessment of the p r o j e c t ' s f e a s i b i l i t y depends on the v i e w p o i n t f o r the a n a l y s i s .  I n the f o l l o w i n g d i s c u s s i o n the b e n e f i t - c o s t  sons a r e summarized from the p o i n t o f view o f the t h r e e r e f e r e n t adopted  i n this  Primary  B e n e f i t - C o s t Comparisons  adopted comparigroups  study.  The p r e s e n t v a l u e o f primary  c o s t s was summarized above i n T a b l e  8, and the p r e s e n t v a l u e of primary b e n e f i t s (except unmeasurable benef i t s ) was summarized i n T a b l e 7.  These a r e g e n e r a l summaries, however,  and i g n o r e the d i s t r i b u t i o n of primary ious referent  c o s t s and b e n e f i t s among the v a r -  groups.  P r e s e n t p r o p o s a l s c a l l f o r primary  c o s t s to be shared between the  B r i t i s h Columbia F i s h . a n d W i l d l i f e Branch,  the Canadian W i l d l i f e S e r v i c e ,  and Ducks U n l i m i t e d (Canada).  Ducks U n l i m i t e d w i l l pay f o r the c a p i t a l  c o s t s o f d e v e l o p i n g the Leach Lake and S i x M i l e Slough a r e a s , t a l p r e s e n t v a l u e of $479,000.  xvlth  a to-  C a p i t a l c o s t s of d e v e l o p i n g the I n d i a n  Reserves and be borne by  Corn Creek, h a v i n g a t o t a l p r e s e n t v a l u e of $321,000, w i l l the Canadian W i l d l i f e S e r v i c e , and  F i s h and W i l d l i f e Branch w i l l bear  the B r i t i s h  the c o s t s of Duck.Lake and  i s t r a t i v e Centre, w i t h p r e s e n t v a l u e s of $765,000. and  Columbia the Admin-  Annual maintenance  s a l a r y c o s t s , h a v i n g a t o t a l p r e s e n t v a l u e of $1,414,000, w i l l  shared e q u a l l y by The  the p r o v i n c i a l and  be  f e d e r a l governments.  d i s t r i b u t i o n of the p r e s e n t v a l u e of primary  c o s t s between  the p a r t i c i p a t i n g bodies w i l l be as f o l l o w s :  Ducks U n l i m i t e d (Canada) Canada (Canadian W i l d l i f e S e r v i c e ) B r i t i s h Columbia ( F i s h and W i l d l i f e Branch) Total  The p a r t i c i p a t i o n by Ducks U n l i m i t e d p r o v i d e s an p o i n t i n a b e n e f i t - c o s t a n a l y s i s such as t h i s .  $ 479,000 $1,028,000 $1,472,000 $2,979,000  interesting  Ducks U n l i m i t e d i s a  p r i v a t e , n o n - p r o f i t o r g a n i z a t i o n d e d i c a t e d to the c o n s e r v a t i o n of North American w a t e r f o w l  r e s o u r c e s by p r e s e r v a t i o n and  h a b i t a t i n Canada. i n 1937, 1938.  and  Ducks U n l i m i t e d was  development of b r e e d i n g  i n c o r p o r a t e d i n the U n i t e d  the o r g a n i z a t i o n of Ducks U n l i m i t e d  (Canada) completed i n  Ducks U n l i m i t e d (Canada) p r o v i d e s a.means by which donations  p r i v a t e funds  States  and  from the U n i t e d S t a t e s can be spent on h a b i t a t improvement  i n Canada (Gavin  1964).  I n s o f a r as t h i s money comes from o u t s i d e Canada, the development of the Leach Lake and  S i x M i l e Slough  areas i s e s s e n t i a l l y c o s t l e s s  Canadians. T h e r e f o r e , whether the r e f e r e n t group i s the l o c a l a r e a ,  to Bri-  t i s h Columbia, or Canada, the c o s t s of these developments ( e s t i m a t e d a t  $479,000, p r e s e n t while  value  1970) a r e a p p r o p r i a t e l y omitted  any b e n e f i t s a c c r u i n g  from a n a l y s i s ,  t o Canada from these developments a r e i n -  cluded. In the same way t h a t primary c o s t s a r e spread  between the d i f f e r -  ent r e f e r e n t groups, primary r e c r e a t i o n b e n e f i t s may a l s o be w i d e l y persed.  R e c r e a t i o n i s t s using  the a r e a may be l o c a l r e s i d e n t s , r e s i d e n t s  from elsewhere i n B r i t i s h Columbia, Canada, or the U n i t e d thus p a r t i c u l a r l y  important t h a t the p r o j e c t ' s f e a s i b i l i t y  from the p e r s p e c t i v e The  States.  It is  i s examined  of the d i f f e r e n t r e f e r e n t groups.  l o c a l economy:  primary c o s t s and b e n e f i t s . — C o s t s would be  i n c u r r e d by the l o c a l a r e a only i n s o f a r as i t c o n t r i b u t e s and  dis-  f e d e r a l g e n e r a l revenue.  It is difficult  to p r o v i n c i a l  to argue t h a t any p a r t i c u -  l a r f r a c t i o n of the c o s t s borne by e i t h e r the F i s h and W i l d l i f e Branch or the Canadian W i l d l i f e S e r v i c e can be t r a c e d to revenues from the C r e s t o n area.  I t c o u l d be argued on one hand t h a t no c o s t s a r e borne by the l o -  c a l area, An  s i n c e a l l funds w i l l come from h i g h e r  l e v e l s of government.  a l t e r n a t i v e argument might be t h a t l o c a l c i t i z e n s c o n t r i b u t e t o the  c o s t s on an equal p e r c a p i t a b a s i s w i t h  o t h e r c i t i z e n s of B r i t i s h  Colum-  b i a and Canada.  On t h i s b a s i s c o s t s borne l o c a l l y a r e i n s i g n i f i c a n t ,  having  value  a present  of roughly  $5,000.*  C r e s t o n a r e a p o p u l a t i o n i s 1/3 o f one p e r cent o f B.C. p o p u l a t i o n , 1/30 of one p e r cent o f Canadian p o p u l a t i o n . T o t a l expenditures by B.C. F i s h and W i l d l i f e Branch w i l l be $1.5 m i l l i o n , by Canadian W i l d l i f e S e r v i c e $1.0 m i l l i o n . On a p e r . c a p i t a b a s i s the l o c a l content of p r o v i n c i a l e x p e n d i t u r e would be $4,950, of Canadian W i l d l i f e S e r v i c e e x p e n d i t u r e a p p r o x i m a t e l y $330.  While c o s t s r e l a t i v e to the l o c a l economy a r e hard it  i s a r e l a t i v e l y s t r a i g h t f o r w a r d matter to i d e n t i f y  the l o c a l a r e a . ($549,000) and persons.  a l l the b e n e f i t s from t r a p p i n g ($37,000) accrue  In terms of hunting,, a p p r o x i m a t e l y  estimated  the b e n e f i t s to  I t i s assumed t h a t a l l the b e n e f i t s from a g r i c u l t u r e  or $320,000 i s expected is  to i d e n t i f y ,  local  50 per cent of the b e n e f i t ,  to .accrue to l o c a l r e s i d e n t s .  t h a t approximately  to  Similarly, i t  50 per cent of the b e n e f i t from the  warmwater s p o r t f i s h e r y , o r $150,000 would accrue  to l o c a l  fishermen.  F o r non-consumptive r e c r e a t i o n the p r o p o r t i o n of l o c a l use w i l l be low —  not i n excess  of two  to t h r e e per c e n t .  The  very  p o p u l a t i o n i n the  C r e s t o n a r e a i s low and use by l o c a l r e s i d e n t s w i l l c e r t a i n l y not keep pace w i t h use by o t h e r s .  A b e n e f i t i n the order of $300,000 i s thus  a p p r o p r i a t e f o r non-consumptive r e c r e a t i o n . Totalling  these f i g u r e s the p r i m a r y . b e n e f i t s a c c r u i n g to the  l o c a l area have a p r e s e n t . v a l u e of approximately b e n e f i t s a r e compared to the almost  $1,356,000.  When these  n e g l i g i b l e e s t i m a t e of primary  costs  a net b e n e f i t e s t i m a t e of $1,350,000 appears i n o r d e r . B r i t i s h Columbia:  primary  c o s t s and b e n e f i t s . — W h e n the  ent group i s expanded to i n c l u d e t h e . e n t i r e p r o v i n c e of B r i t i s h all  c o s t s borne through  referColumbia,  the F i s h and W i l d l i f e Branch become r e l e v a n t .  These c o s t s have a t o t a l p r e s e n t v a l u e of $1,472,000 as d i s c u s s e d above. The ing  r e l e v a n t b e n e f i t s i n t h i s case i n c l u d e a l l b e n e f i t s a c c r u -  to c i t i z e n s of B r i t i s h Columbia.  Again,  it.is  assumed t h a t a l l  A t p r e s e n t l o c a l hunters account f o r 48.per cent of the u t i l i z a t i o n on the C r e s t o n f l a t s . T h i s i s expected to i n c r e a s e to 50 per c e n t a f t e r development, w i t h l o c a l r e s i d e n t s b e i n g i n a p r i v i l e g e d p o s i t i o n w i t h r e s p e c t to a c c e s s to hunt on p r i v a t e l a n d .  b e n e f i t s from a g r i c u l t u r e and ($549,000 and benefit —  $37,000 r e s p e c t i v e l y ) .  $640,000 —  Approximately f i s h e r y may  t r a p p i n g accrue to B r i t i s h  Columbians  In terms of h u n t i n g , the  i s assumed to accrue to B r i t i s h  entire  Columbians.  65 per cent of the u t i l i z a t i o n of the warmwater s p o r t -  be by B r i t i s h Columbians, h a v i n g a p r e s e n t v a l u e of $196,000.  Both f i s h i n g  and h u n t i n g tend to be r e p e t i t i v e  outdoor  recreation  a c t i v i t i e s and a h i g h degree of u t i l i z a t i o n by B r i t i s h Columbians i s expected.  E s t i m a t i n g the amount of non-consumptive r e c r e a t i o n taken  B r i t i s h Columbians i s more d i f f i c u l t . repetitive,  w i t h most v i s i t o r s  at most one  t r i p to the area.per  Such r e c r e a t i o n i s l a r g e l y  of  (Appendix  non-  ( o u t s i d e l o c a l r e s i d e n t s ) p r o b a b l y making year.  A f t e r reviewing f i g u r e s r e l a t i n g Columbia  by  G), i t appears  to park attendance  unlikely  t h a t more than 35 per cent  the u t i l i z a t i o n i n non-consumptive r e c r e a t i o n w i l l be by  Columbians from o u t s i d e the l o c a l a r e a .  in British  British  Combined w i t h t h r e e per cent  u t i l i z a t i o n by l o c a l r e s i d e n t s , t o t a l use by B r i t i s h Columbians i s 38 per cent, w i t h a p r e s e n t v a l u e of $3,833,000.  B r i t i s h C o l u m b i a n s . p r e s e n t l y account f o r 96 per cent of the h u n t i n g i n the a r e a and h u n t e r s from the U n i t e d S t a t e s f o u r per c e n t . A f t e r expansion and development there w i l l be s u f f i c i e n t p r e s s u r e from B r i t i s h Columbians to u t i l i z e a l l o p p o r t u n i t i e s .  ** T h i s may be a c o n s e r v a t i v e e s t i m a t e . I t i m p l i e s t h a t i n the y e a r 1985 about 95,000 v i s i t o r - d a y s would be taken by B r i t i s h Columbians. I f our p o p u l a t i o n grows at e i g h t per cent per y e a r i t . w i l l t o t a l about 7.5 m i l l i o n i n 1985. 95,000 v i s i t o r - d a y s r e p r e s e n t s a one day v i s i t by 1.3 per cent of the p o p u l a t i o n of B r i t i s h Columbia. While t h i s may appear low, i t s h o u l d be noted t h a t C r e s t o n i s a c o n s i d e r a b l e d i s t a n c e from B r i t i s h Columbia•s p o p u l a t i o n c e n t r e , and . t h a t B r i t i s h Columbians f a c e many high quality recreational alternatives.  The  t o t a l present value  i n 1970  of a l l b e n e f i t s a c c r u i n g w i t h i n  the B r i t i s h Columbia r e f e r e n t group i s thus $5,652,000, composed as follows: B e n e f i t s to B r i t i s h Columbians from: Agricultural  production  $549,000  Trapping  When compared w i t h  37,000  Hunting  640,000  Fishing  196,000  Non-consumptive r e c r e a t i o n  3,833,000  Total  $5,255,000  the p r e s e n t  value  of c o s t s borne by B r i t i s h Columbia of  $1,472,000 t h i s y i e l d s a net b e n e f i t e s t i m a t e Canada:  of $3,783,000.  primary c o s t s and b e n e f i t s . — W h e n  Canada a l l c o s t s and  the r e f e r e n t group i s  b e n e f i t s a c c r u i n g w i t h i n the country become r e l e v a n t .  A l l c o s t s except those borne by Ducks U n l i m i t e d are i n c l u d e d i n the sis,  i n c r e a s i n g the measure of t o t a l c o s t s to $2,500,000 (present v a l u e The  main e f f e c t on b e n e f i t s w i l l be  tion  per cent  to Canadians  of f i s h i n g  to approximately  Hunting b e n e f i t s  ( B r i t i s h Columbians), and we  expect the  b e n e f i t s to i n c r e a s e from 65 per cent f o r B r i t i s h 80 per  cent, w i t h a p r e s e n t  v a l u e of $240,000.  accrue proporColumbians Referring  a g a i n to the campground attendance f i g u r e s i t appears t h a t as much as per  cent of the non-consumptive r e c r e a t i o n a l use  from o u t s i d e of B r i t i s h Columbia.  1970).  to i n c r e a s e the r e c r e a t i o n a l  b e n e f i t s i n c l u d e d i n the comparison w i t h c o s t s . 100  analy-  c o u l d be by  T h i s would i n c r e a s e t o t a l  40  Canadians utilization  by Canadians to 78 per cent, the present value of which i s $7,869,000. The remaining u t i l i z a t i o n and benefit would accrue to non-Canadians, almost a l l of whom would be from the United States. For both agriculture and. trapping a l l benefits accrue to l o c a l residents and hence to Canadians..  The t o t a l present value i n 1970 of a l l  benefits accruing i n Canada i s estimated to be $9,335,000, composed as follows: Benefits to Canadians from: A g r i c u l t u r a l production Trapping  $549,000 37,000  Hunting  640,000  Fishing  240,000  Non-consumptive recreation  7,869,000  Total  $9,335,000  Compared with the present value of t o t a l costs accruing within Canada of $2,500,000 net primary benefits are estimated to be $6,835,000 (present value 1970). Summary:  Primary Benefit-Cost Comparisons The preceding analysis establishes the economic e f f i c i e n c y  proposed w i l d l i f e development.  of the  The f e a s i b i l i t y estimates are summarized  i n Table 9 which indicates the significance of changes i n the referent groups.  TABLE 9 COMPARISON OF PRIMARY BENEFITS AND COSTS. BY REFERENT GROUP  CRESTON (LOCAL ECONOMY)  Present value of primary benefits (B)  BRITISH COLUMBIA  CANADA  $1,356,000  $5,255,000  $9,335,000  5,000  1,472,000  2,500,000  1,351,000  3,783,000  6,835,000  Present value of primary costs (C) Net primary benefits (B-C) Primary benefit-cost r a t i o (B/C)  In presenting  271:1  3.6:1  3.7:1  this summary, i t should f i r s t be reiterated that  unmeasurable primary benefits are not included i n this analysis. For this reason we have only a p a r t i a l comparison•of primary benefits with the f u l l measure of primary costs and the f e a s i b i l i t y estimates must be interpreted accordingly — bility.  they understate the true degree of f e a s i -  I t i s expected that the magnitude of unmeasurable primary bene-  f i t s w i l l vary between the referent groups.  While such benefits are not  included i n this summary, they are integrated i n the t o t a l benefit-cost comparison l a t e r i n this chapter. Secondly, this summary provides an excellent i l l u s t r a t i o n of the way  i n which the f e a s i b i l i t y of a project varies depending on the r e f e r -  ent group adopted.  For the l o c a l economy net primary benefits are e s t i -  mated at $1.35 m i l l i o n , the r a t i o of benefits to costs being 271:1. This i l l u s t r a t e s aptly that benefits to a l o c a l area tend to be disproportionate when most costs of a development are borne by outside bodies.  The per  province  of B r i t i s h Columbia i s r e s p o n s i b l e  f o r r o u g h l y 50  cent o f the development c o s t s , but c i t i z e n s o f B r i t i s h  w i l l r e a l i z e only fact  45 p e r cent o f the b e n e f i t .  This  Columbia  i s r e f l e c t e d i n the  t h a t the b e n e f i t - c o s t r a t i o i s lowest when the r e f e r e n t group i s  B r i t i s h Columbia.  A t the n a t i o n a l l e v e l ,  Canadians o t h e r than B r i t i s h  Columbians w i l l reap a l a r g e r share o f the r e c r e a t i o n a l b e n e f i t s r e l a t i v e to the c o s t s borne by the Canadian W i l d l i f e S e r v i c e . encounter a h i g h e r b e n e f i t - c o s t r a t i o ,  A t . t h i s l e v e l we  i n d i c a t i v e of the f a c t t h a t some  of the spending by the B r i t i s h Columbia F i s h and W i l d l i f e Branch w i l l generate b e n e f i t s per  to Canadians o u t s i d e  B r i t i s h Columbia.  Eighty-four  cent of the t o t a l c o s t s a r e borne w i t h i n Canada, and 81 p e r cent  of t o t a l b e n e f i t s r e a l i z e d w i t h i n Canada. b e n e f i t s n o t accounted f o r w i t h i n almost e x c l u s i v e l y to r e s i d e n t s  I t i s expected t h a t c o s t s and  the Canadian r e f e r e n t group w i l l  o f the U n i t e d  accrue  States.  D i s c u s s i n g , the r e l i a b i l i t y or a c c u r a c y o f these f i n d i n g s i s a difficult it  task.  Many a s p e c t s o f the p r o j e c t w i l l b e . e x p e r i m e n t a l , and  i s a pioneering  e f f o r t i n B r i t i s h Columbia —  s h i p s between i n p u t and output a r e t h e r e f o r e  basic  technical relation-  very d i f f i c u l t  Compounding t h i s i s the f a c t t h a t almost the e n t i r e output  to e s t i m a t e . (except  agri-  c u l t u r e and t r a p p i n g ) w i l l c o n s i s t o f non-marketed goods and s e r v i c e s w i l d l i f e , and o p p o r t u n i t i e s  f o r outdoor r e c r e a t i o n .  made a n a l y s i s d i f f i c u l t and f r e q u e n t l y  These f a c t o r s have  laborious.  D e s p i t e these problems, i t i s f e l t ing  —  t h a t the assumptions  the output from t h i s p r o j e c t , and i t s v a l u e ,  regard-  a r e r e a l i s t i c and i f  they a r e i n e r r o r i t i s an e r r o r of understatement.  Recent e x p e r i e n c e  with attendance and p a r t i c i p a t i o n at s i m i l a r f a c i l i t i e s throughout.North America supports this view. While i t i s impossible to any  to submit the estimates of this analysis  tests other than that of judgement, one aspect which can be  tested  i s the e f f e c t of the discount rate on the outcome of the analysis.  The  analysis summarized above i s based on values discounted to 1970  at a rate  of eight per cent.  discount  The analysis has also been carried out with  rates of six and ten per cent and the results of this are summarized i n Appendix K. Due  to the varied d i s t r i b u t i o n of costs and benefits through time,  these alternative discount rates a l t e r the degree of f e a s i b i l i t y , although only s l i g h t l y .  A six per cent rate deals less harshly with benefits i n  the future and hence increases the f e a s i b i l i t y , while a rate of 10 per cent discounts  future benefits more severely and .reduces the estimated  present value of net benefits.  These changes are not s i g n i f i c a n t , how-  ever, and the project remains f e a s i b l e over the range of discount from six to ten.per cent. discussed  rates  The significance of the discount rate i s  further when comparisons are drawn between the a g r i c u l t u r a l  and w i l d l i f e development a l t e r n a t i v e s . Secondary Benefit-Cost.Comparisons Secondary benefits and costs were treated thoroughly e a r l i e r i n this chapter.  At the secondary l e v e l a l l benefits and costs are tangible,  and no problems a r i s e from either intangible or unmeasurable secondary effects.  Estimates of the present value of net secondary benefits vary  among the referent groups.  At the l o c a l l e v e l they .are estimated as  $731,000, $773,000 p r o v i n c i a l l y , and $431,000 n a t i o n a l l y . benefits and costs are incorporated sons of Table 10.  Secondary  i n the t o t a l benefit-cost compari-  Annual: gross receipts of secondary businesses are  discounted to present values and presented as benefits, and the present value of annual business costs i s given as secondary costs.  Total Benefit-Cost  Comparisons  A t o t a l benefit-cost comparison incorporating both primary and secondary benefits and costs i s presented i n Table 10, with separate comparisons for each referent group.  Net benefits which are quantified  i n monetary terms t o t a l $2,082,000 within the l o c a l referent group, $4,556,000 within B r i t i s h Columbia and $7,266,000 within Canada.  In-  corporating unmeasurable primary benefits renders the t o t a l comparison rather awkward, and the t o t a l net benefit estimates must be q u a l i f i e d accordingly since they understate the true net benefits of the w i l d l i f e recreation project.  Under the w i l d l i f e - r e c r e a t i o n development a l l un-  measurable e f f e c t s f a l l i n the primary benefit category, the  opposite  of the proposed a g r i c u l t u r a l development where a l l unmeasurable effects were primary costs. When a l l r e a l costs and benefits are compared i n this manner,.it i s clear that the proposal ment represents  for w i l d l i f e and outdoor recreation develop-  a f e a s i b l e investment project.  This analysis alone,  however, does not answer the question of the most e f f i c i e n t use for the undeveloped land.  This question can only be answered through a compari-  son of the f e a s i b i l i t y estimates for the two alternatives, agriculture and w i l d l i f e - r e c r e a t i o n , which i s the task of the next chapter.  TABLE 10 THE BENEFITS AND COSTS OF WILDLIFE-RECREATION DEVELOPMENT  REFERENT GROUP? OR VIEWPOINT LOCAL COMMUNITY (CRESTON)  BRITISH COLUMBIA  CANADA  B E N E F I T S Primary b e n e f i t s : T a n g i b l e Intangible Unmeasurable  $ 586,000 $ 586,000 $ 586,000 $ 770,000 $ 4,669,000 $ 8,749,000 p r o v i s i o n of h a b i t a t and p r o d u c t i o n of w i l d l i f e species. "small" value to l o c a l area  " l a r g e " value to a l l B r i t i s h Colum'^ bians  "very l a r g e " v a l u e to Canadians  Secondary b e n e f i t s :  $24,364,000  $25,764,000  $14,365,000  Total benefits:  $25,720,000  $31,019,000  $23,700,000  $  5,000 n i l n i l  $ 1,472,000 n i l n i l  $ 2,500,000 n i l nil  Secondary c o s t s :  $23,633,000  $24,991,000  $13,934,000  Total costs:  $23,638,000  $26,463,000  $16,434,000  $ 2,082,000  $ 4,556,000  $ 7,226,000  C O S T S Primary c o s t s :  Total.-Net  Benefits*  Tangible Intangible Unmeasurable  As d i s c u s s e d , unmeasurable b e n e f i t s must be added to these net b e n e f i t e s t i m a t e s to p r o v i d e a t r u e measure of n e t g a i n .  The  T h i s chapter has using  D i s t r i b u t i o n of  paid l i t t l e  Benefits  a t t e n t i o n to the b a s i c i s s u e  a p u b l i c l y owned land r e s o u r c e  (excepting  of course the  of  Indian  Reserves) to b e n e f i t a p a r t i c u l a r group i n s o c i e t y , mainly outdoor recreationists. local,  The  d i s t r i b u t i o n of c o s t s and  p r o v i n c i a l , and  n a t i o n a l economies was  t h i s the more b a s i c q u e s t i o n ists) will  b e n e f i t s between a n a l y z e d , but  A g a i n we b e n e f i t , not  of whether the u s e r s of the l a n d  Band) has  not  f a c e the q u e s t i o n  i t s t o t a l amount.  entered  (recreation-  of the f i n a l d i s t r i b u t i o n of the  Of p a r t i c u l a r i n t e r e s t are  Whatever the arrangements they do not only i t s f i n a l d i s t r i b u t i o n . important and  a f f e c t the  at greater  when the development a l t e r n a t i v e s are  l e v e l of net  length  compared.  the  net  types of  of the I n d i a n  D i s t r i b u t i o n a l considerations  are d i s c u s s e d  the  into this analysis.  arrangements which can be made f o r r e c r e a t i o n a l use  be  beyond  compensate the owners of the land .(the p u b l i c at l a r g e and  Lower Kootenay I n d i a n  may  the  Reserves.  benefit,  of t h i s n a t u r e  i n the next  chapter  CHAPTER VI THE ALTERNATIVES COMPARED: BENEFITS AND COSTS FROM AGRICULTURE AND FROM WILDLIFE AND OUTDOOR RECREATION The preceding chapters have examined the economic f e a s i b i l i t y of continuing with present land use on the Creston f l a t s , of reclaiming the land for a g r i c u l t u r a l production, outdoor recreation purposes. revealed  and of developing I t for w i l d l i f e and  A b r i e f investigation of present land use  i t to be an unattractive a l t e r n a t i v e , and i t i s dismissed  further discussion.  from  For both the a g r i c u l t u r a l and w i l d l i f e alternatives  the investigations reveal fundamental economic f e a s i b i l i t y , with s i g n i f i cant net benefits generated i n each case.  The object of this chapter i s  to compare these two alternatives and.decide whether either can be c l e a r l y established as a superior development.  Use of the Benefit-Cost  Framework for Comparison and Choice  Benefit-cost analysis of the two alternatives has so far answered only the very basic question of the f e a s i b i l i t y of each.  Both alternatives  are shown to be f e a s i b l e , and measures of net benefit and benefit-cost r a t i o s are available for each.  To choose consistently between the two  projects on the basis of this information requires that the appropriate basis for the decision be c l e a r l y established. The d i f f e r e n t applications of benefit-cost analysis were referred to b r i e f l y i n Chapter IX.  The question which must be answered i n this  instance i s very clear, and f a l l s into the fourth category i d e n t i f i e d ,  "the optimum choice between the two competing projects or mutually exclusive alternatives for the same'site." The appropriate very c l e a r :  c r i t e r i o n for a decision of t h i s nature i s also  the choice should be based on the maximum net benefits  generated by the respective projects.  Thus, f o r the comparisons which  follow,the basis for establishing the superiority of one project over the other w i l l be the net benefits generated, discounted to present values i n 1970.  The Alternatives Compared: Local, P r o v i n c i a l , and National Referent'Groups In the case of the w i l d l i f e - r e c r e a t i o n development, changing the referent group i n the analysis has important implications f o r the present value of net benefits.  In the case of a g r i c u l t u r a l development the r e -  sults vary only s l i g h t l y .  The measures of net gain Cor loss) derived i n  Chapters IV and V are compared below for each of the three relevant viewpoints or referent groups. Comparison of Alternatives from the Local Viewpoint Analysis from this viewpoint i s the narrowest i n scope. mary benefits from a g r i c u l t u r a l production  All pri-  are included as i t i s assumed  that l o c a l residents w i l l undertake.''any development of this nature.  Only  a f r a c t i o n of the primary benefits from the w i l d l i f e development w i l l be included, however, as most b e n e f i c i a r i e s are expected to come from outside the Creston area. To f a c i l i t a t e discussion,-"the various measures of net benefit or  c o s t f o r t h e two a l t e r n a t i v e s a r e summarized i n T a b l e 11.  This  table  should  be regarded as a rough b a l a n c e sheet s e t t i n g out t h e r e l a t i v e  merits  of the two a l t e r n a t i v e s from the l o c a l v i e w p o i n t . At  fits  t h i s l e v e l the present  value  of q u a n t i f i e d primary n e t bene-  ( t a n g i b l e and i n t a n g i b l e ) from the a g r i c u l t u r a l development exceeds  the c o r r e s p o n d i n g v a l u e  from the w i l d l i f e - r e c r e a t i o n development by approx-  imately  T h i s f o l l o w s as a d i r e c t r e s u l t o f the narrow scope  $0.58 m i l l i o n .  i m p l i e d by t h i s v i e w p o i n t , t h e r e b y o m i t t i n g most o f t h e b e n e f i t s from the wildlife-recreation alternative.  TABLE 11 COMPARISON OF ALTERNATIVES FROM THE LOCAL VIEWPOINT  ESTIMATED VALUE OF:  A.  Net Primary  WILDLIFE-RECREATION DEVELOPMENT  Benefits  Tangible ) Intangible ) Unmeasurable  B.  AGRICULTURAL DEVELOPMENT  Net Secondary B e n e f i t s  $1,929,000  (COST) d e s t r u c t i o n of h a b i t a t and l o s s of r a r e w i l d l i f e species  $  398,000  $1,350,000  (BENEFIT) e n hancement of habitat,i n creased product i o n of w i l d l i f e , e d u c a t i o n :-and r e s e a r c h use $  731,000  The present value of net secondary benefits i s greatest In the case of the w i l d l i f e development, exceeding the comparable measure i n agriculture by $0.33 m i l l i o n .  This i s explained by the fact that i n  the long run spending generated by r e c r e a t i o n i s t s w i l l exceed that generated through agriculture by a s i g n i f i c a n t margin. Differences between the two projects are most pronounced at the l e v e l of unmeasurable benefits or costs.  The w i l d l i f e development would  create important unmeasurable benefits through the on-site  production  of w i l d l i f e , enhancement of habitat., and provision of educational and research opportunities.  For the a g r i c u l t u r a l development there are no  unmeasurable benefits, but serious unmeasurable costs.  These costs a r i s e  from the destruction of habitat and loss of rare w i l d l i f e species. The balance between the alternatives from the l o c a l point of view i s d i f f i c u l t to determine. The scales are tipped i n favor of agriculture by the measures of net primary and secondary benefits which exceed the corresponding measures from w i l d l i f e development by a t o t a l of $0.25 million.  Offsetting this advantage, however, are the unmeasurable  costs associated with the a g r i c u l t u r a l development, i n opposition to unmeasurable benefits from the w i l d l i f e - r e c r e a t i o n development. A choice between the two projects at this l e v e l hinges on these unmeasurable benefits and costs. value on the production  I f the l o c a l community places  little  of w i l d l i f e and protection of rare, species, a  choice made at this l e v e l would favor the a g r i c u l t u r a l a l t e r n a t i v e with i t s preponderance of net measurable benefits.  The preferences  of the  l o c a l community alone, however, do not provide a s a t i s f a c t o r y basis f o r such a choice.  A larger community of interest i s more appropriate when  such values are involved.  Comparisons from the point of view of the  province and the nation follow. Comparison of Alternatives from the P r o v i n c i a l Viewpoint Broadening the scope of analysis to the province as a whole has a marked e f f e c t on the comparison of the two a l t e r n a t i v e s .  At this  l e v e l recreational benefits.included i n the analysis w i l l encompass a l l those accruing to persons who are residents of B r i t i s h Columbia, not j u s t residents of the Creston area.  The various measures of bene-  f i t s and costs at this l e v e l are summarized i n Table 12. Regarding this again as a rough balance sheet, i t can be seen that s h i f t i n g the viewpoint to the p r o v i n c i a l l e v e l w i l l also s h i f t the choice i n favor of a w i l d l i f e - r e c r e a t i o n development rather than a g r i c u l t u r a l development.  TABLE 12 COMPARISON OF ALTERNATIVES FROM THE PROVINCIAL VIEWPOINT  ESTIMATED VALUE OF:  A.  WILDLIFE-RECREATION DEVELOPMENT  Net Primary Benefits Tangible ) Intangible ) Unmeasurable  B.  AGRICULTURAL DEVELOPMENT  Net Secondary Benefits  $1,773,000 (COST) Destruction of habitat and loss of rare wildl i f e species  $  413,000  $3,783,000 (BENEFIT) enhancement of habitat, increased production of w i l d l i f e , education and r e search use $  773,000  At t h i s l e v e l the present value of quantified primary net benefits  (tangible and intangible) from the w i l d l i f e development exceeds  that from the a g r i c u l t u r a l alternative by $2.01 m i l l i o n .  In terms of  net secondary benefits the w i l d l i f e project again appears superior with an estimated present value of $0.36 m i l l i o n greater than that for a g r i culture. Differences between the two projects are again pronounced i n terms of unmeasurable benefits or costs.  While these factors are of the same  nature as when discussed i n the l o c a l context, they w i l l be of greater weight when the viewpoint of a l l B r i t i s h Columbians i s considered vant.  rele-  Thus, the unmeasurable benefits from the w i l d l i f e project would  be given a greater emphasis, adding to the project's favorable balance, while the unmeasurable costs associated with the a g r i c u l t u r a l development would also receive greater emphasis, detracting from i t s l e v e l of benefits. The uncertainty which surrounded a decision at the l o c a l l e v e l i s removed when the alternatives are assessed from the p r o v i n c i a l perspective. ment.  A l l measures c l e a r l y favor the w i l d l i f e - r e c r e a t i o n develop-  Net primary and secondary benefits have a combined present worth  which exceeds that i n agriculture by $2.37 m i l l i o n , while the balance of. unmeasurable benefits also favors the w i l d l i f e development.  Choosing  between the alternatives at the p r o v i n c i a l l e v e l r e s u l t s i n the unequivocal s e l e c t i o n of the w i l d l i f e ^ r e c r e a t i o n development as the most approp r i a t e land use.  Comparison of A l t e r n a t i v e s from the N a t i o n a l  Viewpoint  From a n a t i o n a l v i e w p o i n t t h e b e n e f i t s a c c r u i n g  t o a l l Canadians  from t h e proposed developments become r e l e v a n t , as do a l l c o s t s w i t h i n Canada.  T h i s has the e f f e c t of i n c r e a s i n g the p r e s e n t v a l u e of  q u a n t i f i e d primary n e t b e n e f i t s life  ( t a n g i b l e and i n t a n g i b l e ) from the  and r e c r e a t i o n development t o $6.89 m i l l i o n .  a g r i c u l t u r a l development the p r i m a r y b e n e f i t - c o s t i t was i n a n a l y s i s at the p r o v i n c i a l l e v e l . parisons  incurred  at the n a t i o n a l  wild-  In the case of the comparison remains as  T a b l e 13 summarizes com-  level.  TABLE 13 COMPARISON OF ALTERNATIVES FROM THE NATIONAL VIEWPOINT  ESTIMATED VALUE OF:  A.  Net Primary  WILDLIFE-RECREATION DEVELOPMENT  Benefits  Tangible Intangible  ) )  $1,773,000  Unme as ur ab1e  B.  AGRICULTURAL DEVELOPMENT  Net Secondary  (COST) D e s t r u c t i o n o f h a b i t a t , l o s s of r a r e w i l d l i f e species, breach of i n t e r n a t i o n al obligations  Benefits  $  401,000  $6,835,000 (BENEFIT) e n hancement o f habitat, i n creased product i o n of w i l d l i f e , fulfilment of i n ternational o b l i gations, education and r e s e a r c h $  431,000  At  the n a t i o n a l l e v e l t h i s comparison r e i n f o r c e s the c o n c l u s i o n  reached from the p r o v i n c i a l p e r s p e c t i v e life  development i s c l e a r l y e s t a b l i s h e d .  almost f o u r times as great $1.77  million).  —  the s u p e r i o r i t y o f the w i l d Primary n e t b e n e f i t s a r e  as i n a g r i c u l t u r e  ($6.84 m i l l i o n v e r s u s  Net secondary b e n e f i t s are r o u g h l y comparable a t  t h i s l e v e l , and b o t h a r e d e f l a t e d below p r e v i o u s l e v e l s due to" the.-removal of "non-export" spending. Comparison of unmeasurable b e n e f i t s o r c o s t s a g a i n y i e l d s the same r e s u l t as from the p r o v i n c i a l v i e w p o i n t . associated  The unmeasurable  costs  w i t h the a g r i c u l t u r a l development are s i g n i f i c a n t and c o n s t i -  tute a reduction  i n the l e v e l of t o t a l b e n e f i t s .  F o r the w i l d l i f e de-  velopment on the o t h e r hand important unmeasurable b e n e f i t s must be counted i n a d d i t i o n t o those q u a n t i f i e d i n monetary terms. Unmeasurable b e n e f i t s a r e p a r t i c u l a r l y s i g n i f i c a n t from the national point and  of view.  Maintaining  c o n t i n e n t a l waterfowl h a b i t a t  protecting rare w i l d l i f e species  i s l a r g e l y the concern of the  f e d e r a l government which has commitments i n t h i s regard Migratory Birds Treaty.  under the  The w i l d l i f e - r e c r e a t i o n development a t C r e s -  ton w i l l make an important c o n t r i b u t i o n t o these i n t e r n a t i o n a l commitments, i n a d d i t i o n to the importance o f such unmeasurable b e n e f i t s t o many p e o p l e throughout Canada.  Summary: The by  The A l t e r n a t i v e s Compared  p r e c e d i n g comparison of the b e n e f i t s and c o s t s  generated  the a l t e r n a t i v e developments produces an i n t e r e s t i n g r e s u l t .  At the  Ill  n a t i o n a l and p r o v i n c i a l l e v e l the w i l d l i f e development i s s u p e r i o r i n all  r e g a r d s to a g r i c u l t u r a l development.  However, no d e f i n i t e  s i o n s can be drawn from the comparison at the l o c a l l e v e l . t u r a l development appears c l e a r l y  conclu-  The  agricul-  s u p e r i o r i n terms of net primary and  secondary b e n e f i t s , i t s o n l y drawback b e i n g the unmeasurable  costs.  T h i s a r i s e s when r e c r e a t i o n a l b e n e f i t s a c c r u i n g to persons from o u t s i d e the C r e s t o n area are excluded from the f e a s i b i l i t y life  a n a l y s i s of the w i l d -  alternative. T h i s r e s u l t makes the s e l e c t i o n of the a p p r o p r i a t e  referent  group v e r y important i n d e t e r m i n i n g the b e s t p a t t e r n of development f o r t h i s land.  I f the o b j e c t i v e of l a n d development i s to maximize net  b e n e f i t s to the l o c a l area o n l y , a g r i c u l t u r a l development appears to be slightly  s u p e r i o r to the w i l d l i f e - r e c r e a t i o n development.  But a f i r m con-  c l u s i o n cannot be drawn i n t h i s r e g a r d w i t h o u t e x h a u s t i v e i n v e s t i g a t i o n of the s i g n i f i c a n c e at the l o c a l l e v e l o f the unmeasurable c o s t s w i t h a g r i c u l t u r a l development.  associated  I f the o b j e c t i v e s of development are to  maximize the net b e n e f i t s w i t h i n some l a r g e r framework ( B r i t i s h  Columbia  or Canada), the c h o i c e i s c l e a r and the l a n d should be developed f o r w i l d l i f e and r e c r e a t i o n a l purposes. I t was  suggested i n Chapter I I that the a p p r o p r i a t e r e f e r e n t  group f o r any d e c i s i o n r e g a r d i n g the development o f p r o v i n c i a l Crown l a n d i s the p r o v i n c e of B r i t i s h Columbia as a whole.  T h i s argument i s  put forward on the b a s i s that Crown l a n d s of t h i s n a t u r e are the prope r t y o f a l l B r i t i s h Columbians, and as such, should be developed to the  greatest advantage of.the entire province, not some segment of the province.  On this b a s i s , i t has been c l e a r l y established that the  optimum use of the unreclaimed p r o v i n c i a l Crown land would be under the proposal for w i l d l i f e and outdoor recreation development. Not a l l of the unreclaimed land i s p r o v i n c i a l Crown land, with Indian Reserves 1, 1A and IB comprising of the t o t a l .  3,000 acres, about o n e - f i f t h  This land i s the property of the Lower Kootenay Indian  Band and i t was  suggested that they formed the relevant referent group  with respect to the development of their land. the preceding  Within the context of  analysis of benefits and.costs, i f the Indians are con-  sidered as members of the various referent groups then the drawn w i l l hold.  conclusions  Treatment as an independent referent group for the  development of reserves 1, 1A and IB requires a d i f f e r e n t approach with d i f f e r e n t objectives, however, and i s touched on i n Chapter VII. Analysis of the benefits and costs to B r i t i s h Columbia and to the Indian Band i s appropriate where the referent group i s indicated by ownership of the resource.  But the costs of the w i l d l i f e develop-  ment w i l l be shared with sources outside these referent groups -- the Canadian W i l d l i f e Service representing the government of Canada, and Ducks Unlimited United  (Canada) consisting of private contributions from the  States. It i s assumed that those responsible for the investment of  Ducks Unlimited funds are s a t i s f i e d with their prospects of returns, or the investments would not. be made. From the point of view of the government of Canada, the question must be raised as to whether p a r t i c i p a t i o n i n the w i l d l i f e development  r e p r e s e n t s an t h a t i t does.  e f f i c i e n t use At  of funds.  While t h i s i n d i c a t e s  most e f f i c i e n t use To  that  the r a t i o of b e n e f i t s  the p r o j e c t  e n t i r e l y outside  the  at C r e s t o n would have to be  the B a s i s  But  necessary —  considered.  of I n d i v i d u a l  the  significantly  (see Chapter IV,  Table 5).  Units  been based on  the  used e i t h e r i n a g r i c u l -  t h e r e are  feasibility  of  wildlife  reclamation  the r e s u l t s were found to vary Reclamation of the  Corn Creek  I n d i a n Reserves  desirable.  When compared w i t h the w i l d l i f e development on an aggregate the i n d i v i d u a l d i f f e r e n c e s comparison i s then based on son  i s not  to  f i v e p h y s i c a l l y separate  u n i t appears l e a s t d e s i r a b l e , w h i l e r e c l a m a t i o n of the the most  under-  t o t a l d e v o t i o n of the area  For a g r i c u l t u r e the  a s s e s s e d f o r each p h y s i c a l u n i t , and  would be  compared  the p o s s i b i l i t y of some combination of a g r i c u l t u r e and  s h o u l d a l s o be was  recreation.  or the o t h e r i s not  u n i t s and  the  study.  p r e c e d i n g comparison of a l t e r n a t i v e s has  t u r e or i n w i l d l i f e and use  invest-  elsewhere i n Canada, an  assumption t h a t a l l the undeveloped l a n d would be  one  i s 3.7:1.  at Creston represents  scope of the p r e s e n t  A l t e r n a t i v e s vCompa'red on  The  to c o s t s  of f e d e r a l funds a v a i l a b l e f o r investment i n w i l d l i f e .  w i t h a l t e r n a t i v e .investment o p p o r t u n i t i e s  The  suggests  a t C r e s t o n i s an e f f i c i e n t  i n d i c a t e whether the p r o j e c t  answer t h i s q u e s t i o n the p r o j e c t  taking  preceding analysis  the n a t i o n a l l e v e l net primary b e n e f i t s have a p r e -  sent v a l u e of $6.84 m i l l i o n and  ment, i t does not  The  in agricultural feasibility the average e f f i c i e n c y .  e n t i r e l y s a t i s f a c t o r y , but  basis  d i s a p p e a r and  T h i s means of  i t i s employed because of  the  compari-  constraints  imposed by the nature of the w i l d l i f e a l t e r n a t i v e . When.analyzing the w i l d l i f e and recreation alternative i t i s d i f f i c u l t to consider any one unit as a separate entity due l y i n t e r r e l a t e d functions  of each i n the o v e r a l l plan.  or production of the t o t a l area can be i d e n t i f i e d ,  Areas which are reserved as sanctuaries  close-  While the output  the actual location  of various a c t i v i t i e s within the o v e r a l l development may to year.  to the  vary from year  one year may  be open  to recreational use i n the next and i n addition the location and  extent  of a g r i c u l t u r a l use w i l l vary to meet the needs of w i l d l i f e management. Therefore, while i t was  possible to establish the t o t a l f e a s i b i l i t y of  the w i l d l i f e project, i t i s very d i f f i c u l t to estimate the of developing any p a r t i c u l a r segment on i t s own. unit can be i d e n t i f i e d , but the benefits may  The  feasibility  costs for each  not be s p e c i f i c to the area.  Despite the problems associated with making comparisons on  the  basis of i n d i v i d u a l units, a b r i e f attempt at such a comparison i s made here.  This i s done to r e c t i f y the shortcomings of the comparison on an  aggregate basis which overlooked the v a r i a t i o n i n a g r i c u l t u r a l f e a s i b i l i t y between units. Making such a comparison becomes very.complex, due  to the re-  currence of problems associated with the referent groups i n the w i l d l i f e development.  The  incidence  of benefits and  costs creates no problems i n  the case of a g r i c u l t u r a l analysis where a l l costs and benefits are borne locally.  In the case of w i l d l i f e - r e c r e a t i o n development, maintenance and  salary costs w i l l be divided equally between the p r o v i n c i a l and governments, while c a p i t a l costs w i l l be met (see Chapter V).  federal  from a variety of sources  To compare the alternatives for any unit thus e n t a i l s  s o r t i n g out the r e l a t i v e c o s t s and b e n e f i t s f o r each r e f e r e n t group i n the case of w i l d l i f e ,  and comparing them w i t h those from  agriculture.  T h i s has been done f o r B r i t i s h Columbia and Canada as r e f e r e n t and  the r e s u l t s are summarized.in T a b l e 14 which compares the  on the b a s i s of net primary b e n e f i t s ( t a n g i b l e and  groups, alternatives  i n t a n g i b l e ) f o r each  unit. To make these comparisons i t was  assumed t h a t the w i l d l i f e -  r e c r e a t i o n b e n e f i t s a t t r i b u t a b l e to each u n i t would be i n d i r e c t  propor-  t i o n to i t s a r e a .  area  Thus Duck Lake, w i t h 32 per cent of the t o t a l  under development i s a s s i g n e d 32 per cent of the b e n e f i t s a t both f e d e r a l and p r o v i n c i a l l e v e l s .  A s i m i l a r procedure was  adopted  the  in dis-  t r i b u t i n g g e n e r a l s a l a r y and p e r s o n n e l c o s t s between the f i v e u n i t s . t o t a l c o s t s of the A d m i n i s t r a t i v e Centre was  The  a p p o r t i o n e d between u n i t s i n  t h i s manner a l s o , w i t h the d i s t r i b u t i o n of t h i s p a r t i c u l a r c o s t between B r i t i s h Columbia and Canada f o l l o w i n g t h a t g i v e n i n Chapter The review. the f i r s t  V.  comparisons p r e s e n t e d i n T a b l e 14 w i l l be g i v e n o n l y a b r i e f  The e s t i m a t e d net primary b e n e f i t s i n a g r i c u l t u r e a r e g i v e n i n column, and  these e s t i m a t e s remain c o n s t a n t f o r both the p r o -  v i n c i a l and n a t i o n a l v i e w p o i n t s .  The  second  column summarizes the net  primary b e n e f i t s of the w i l d l i f e - r e c r e a t i o n development from  the p r o v i n -  c i a l v i e w p o i n t , w h i l e the t h i r d column p r e s e n t s the same e s t i m a t e s the n a t i o n a l p e r s p e c t i v e .  Comparing each u n i t i n t h i s manner bears  the e a r l i e r c o n c l u s i o n s based natives.  on an aggregate  comparison of the  from out  alter-  In a l l c a s e s , the w i l d l i f e - r e c r e a t i o n development r e p r e s e n t s  the optimum use f o r the u n r e c l a i m e d  land.  TABLE 14 THE ALTERNATIVES COMPARED ON THE BASIS OF INDIVIDUAL UNITS  WILDLIFE-RECREATION  U N I T S  1.  2.  3.  4.  5.  6.  THE INDIAN RESERVES Net Primary B e n e f i t  AGRICULTURE  PROVINCIAL VIEWPOINT  NATIONAL VIEWPOINT  $  $  910,000  $1,371,000  361,000  THE CORN CREEK UNIT Net Primary B e n e f i t  101,000  413,000  657,000  LEACH LAKE Net Primary  Benefit  403,000  858,000  1,517,000  SIX MILE SLOUGH Net Primary B e n e f i t  360,000  811,000  1,440,000  DUCK LAKE Net Primary  Benefit  548,000  791,000  1,850,000  ALL AREAS Net Primary  Benefit  1,773,000  3,783,000  6,835,000  These comparisons a r e based only on e s t i m a t e s o f the n e t p r i mary t a n g i b l e and i n t a n g i b l e b e n e f i t s from each a l t e r n a t i v e . Unmeasura b l e c o s t s and b e n e f i t s are i g n o r e d s i n c e they can only be appended as q u a l i f i c a t i o n s and would make comparisons f o r each u n i t awkward. Inclus i o n of unmeasurable c o s t s or b e n e f i t s would s e r v e to enhance the superi o r i t y of the w i l d l i f e - r e c r e a t i o n a l t e r n a t i v e i n each a r e a . The p r e s e n t v a l u e s of primary n e t b e n e f i t s i n a g r i c u l t u r e a r e below those g i v e n i n Chapter IV because i n t a n g i b l e c o s t s have been i n cluded i n c a l c u l a t i n g net b e n e f i t s .  Final Qualifications: Comparison of Alternatives Through Benefit-Cost  Analysis  This report has aimed at comparing the r e l a t i v e merits of two alternatives for undeveloped land i n the Kootenay River floodplain at Creston through a comparative benefit-cost analysis.  The results of this  comparison, as outlined i n this chapter, consistently favor the investment i n w i l d l i f e and recreation over the alternative investment i n a g r i c u l t u r a l development. Performing the analysis, however, required many simplifying and sometimes arbitrary assumptions.  The e f f e c t of these assumptions on the  outcome of the analysis cannot.be tested, but i t i s believed that the assumptions are r e a l i s t i c and the results of the analysis are v a l i d . Nevertheless some f i n a l q u a l i f i c a t i o n s to the outcome of this analysis are appended here. A.  Changing Relative Values The analysis of benefits a r i s i n g from both the recreational and  a g r i c u l t u r a l development has been based on current values f o r the two types of output.  The. prices of a g r i c u l t u r a l produce are readily observed  and e a s i l y adopted to estimate the value of output.  The value of recre-  a t i o n a l output i s not so e a s i l y observed, and our analysis was based on imputed values i n this case. Consideration  of the l i k e l i h o o d of changes i n the.relative value  of these two outputs leads to a . q u a l i f i c a t i o n of the conclusions.  Aside  from changes i n the general price l e v e l , i t i s e n t i r e l y l i k e l y that there w i l l be pronounced changes i n the r e l a t i v e values placed ouptut and recreation opportunities  i n the future.  on a g r i c u l t u r a l  Improvements i n a g r i c u l t u r a l technology and i n production to other  services. placed  declining, relative  to s c a r c e r goods and  be produced.  This  w i l l increase  i n the  on i n c r e a s e s  t r e n d has  i n p r o d u c t i o n - w i l l .be s t e a d i l y s e r v i c e s which c o u l d a l t e r n a t i v e l y  a l r e a d y been s t r o n g l y apparent i n Canada,  growing i n c r e a s i n g l y s c a r c e r e l a t i v e goods and  services.  f o r outdoor r e c r e a t i o n  to the p o p u l a t i o n  The  value  placed  a v a i l a b i l i t y of such o p p o r t u n i t i e s w i l l r i s e i n the placed  and  future.  the other hand, o p p o r t u n i t i e s  t i o n of other  relative  With an abundance of a g r i c u l t u r a l output  i n Canada the v a l u e  the v a l u e  efficiency  mean, t h a t a g r i c u l t u r a l output i s becoming cheaper  goods and  On  increased  on other  Based on s t a t i c ,  goods and  and  the  are  produc-  on i n c r e a s e s  in  the  future, r e l a t i v e  to  services.  or c u r r e n t v a l u e s ,  we  have e s t i m a t e d that  net  b e n e f i t s under a w i l d l i f e development w i l l exceed those of an a g r i c u l t u r a l development by are  t h a t these margins can be  t i v e value B.  s i g n i f i c a n t margins.  of the  two  The  i m p l i c a t i o n s of t h i s  qualification  expected to widen s i g n i f i c a n t l y as  the  rela-  outputs changes through time.  E f f e c t of the D i s c o u n t Rate on Comparison of A l t e r n a t i v e s The  already  importance of the d i s c o u n t  been s t r e s s e d , and  n a t i v e was  rate i n benefit-cost analysis  the s e n s i t i v i t y of the r e s u l t s f o r each  t e s t e d f o r r a t e s of s i x , e i g h t , and  i n g the r a t e over t h i s range a u t o m a t i c a l l y i n no case were the b a s i c c o n c l u s i o n s  had  regarding  ten per  cent.  alter-  While chang-  a b e a r i n g . o n the r e s u l t s , feasibility  of i n d i v i d u a l  projects altered. But  due  to the d i f f e r e n t d i s t r i b u t i o n of c o s t s and  through time i n the  two  has  benefits  a l t e r n a t i v e s the p o s s i b i l i t y remains t h a t  com-  paring alternatives at d i f f e r e n t rates could change the results of the comparison.  While this p o s s i b i l i t y i s not investigated i n great  detail  i t can be checked by comparing the analysis of Appendix.E with respect to discount  rates with that i n Appendix K.  Such a comparison reveals  that the results obtained when the alternatives are compared with d i f ferent discount  rates are not changed.  It i s concluded that the basic results of t h i s analysis, are i n no way changed by selecting discount  rates over the range of s i x to  ten per cent. C.  Problems i n W i l d l i f e and Recreation  Evaluation  The problems involved i n evaluation of recreation and w i l d l i f e resources have already been discussed.  In the case of the w i l d l i f e  and recreation development we were able to place values on most of the output (recreation, agriculture and trapping), but were unable to do so for educational  and research use,  the provision of habitat and produc-  tion of w i l d l i f e , and the s a t i s f a c t i o n of international treaty o b l i g a tions.  These factors tend to drop from sight i n the course of the  benefit-cost analysis as d o l l a r values are not attached to them.  They  represent additional benefits from a w i l d l i f e development, however, and as such should not be ignored. seems appropriate  to treat the value estimates derived from the other  forms. of.output as minimum values development.  Considering these additional factors i t  created by w i l d l i f e and recreational  This q u a l i f i c a t i o n i s e s p e c i a l l y important when the deve-  lopment i s being compared w i t h an alternative such as agriculture where d o l l a r values can be attached to the entire output.  D.  D i s t r i b u t i o n a l Aspects of the Alternatives When the alternatives are compared i t should be recognized  that  the d i s t r i b u t i o n of benefits and costs varies s i g n i f i c a n t l y between the two projects.  In the case of agricultural, reclamation  the d i r e c t on-  s i t e costs would be borne by farmers, and primary benefits i n the form of a g r i c u l t u r a l incomes would also accrue to them.  This analysis cannot  estimate the extent to which this net benefit might be redistributed from farm operators to the landowners (the c i t i z e n s of British. Columbia, and the Indian band), and i n any case, r e d i s t r i b u t i o n does not reduce the l e v e l of net benefit. In the case of the w i l d l i f e and recreation a l t e r n a t i v e the pattern of benefit and cost d i s t r i b u t i o n (ignoring those benefits a r i s ing from agriculture and trapping) i s much d i f f e r e n t .  While develop-  ment costs would be borne by c i t i z e n s at large through, the p r o v i n c i a l and federal governments, the benefits i n the form of recreational opport u n i t i e s would be d i s t r i b u t e d free of charge to the users.  With this  form of d i s t r i b u t i o n the benefit i s not 'captured' i n the normal sense, and not available to be r e d i s t r i b u t e d . This should be an important consideration i n an analysis of this nature.  Yet within the benefit-cost framework i t s e l f there i s no means  of giving weight to such matters.  Benefit-cost analysis i s concerned  with measuring the net gain to a p a r t i c u l a r referent group from any proj e c t •— not the d i s t r i b u t i o n of benefits and costs within that group. The actual incidence of benefits and costs within the referent group does not a f f e c t the measure of net benefit, or the benefit-cost r a t i o ,  a f a c t which i s f r e q u e n t l y o v e r l o o k e d when a p p l y i n g benefit-cost analysis  ( K r u t i l l a and  In c h o o s i n g the a p p r o p r i a t e reclaimed l e a s t be  land at C r e s t o n , acknowledged.  Eckstein  the r e s u l t s of  1958).  form of development f o r the  these d i s t r i b u t i o n a l p a t t e r n s  A g r i c u l t u r a l reclamation  should  unat  y i e l d s b e n e f i t which  would accrue to a s m a l l group of f a r m e r s , w i t h the p o s s i b i l i t y o f some of t h a t b e n e f i t being at  large  r e d i s t r i b u t e d to the c i t i z e n s of B r i t i s h  ( i n c l u d i n g the  Indian  Band).  Columbia  Under the proposed w i l d l i f e  r e c r e a t i o n development the major b e n e f i t s would be  and  of a non-marketed  n a t u r e , w i t h d i s t r i b u t i o n r e s t r i c t e d to a l a r g e number of r e c r e a t i o n i s t s from many areas, benefit E.  and  little  or no  opportunity  to  'capture'  for redistribution.  P r e c i s i o n of E s t i m a t e s f o r Comparative Purposes In attempting to draw p o s i t i v e c o n c l u s i o n s  an a n a l y s i s such as t h i s , one c i s i o n of the r e s u l t s . the f u t u r e and  should  not be m i s l e d  p r e c i s e magnitudes are d i f f i c u l t of c o s t s would be  stages of e i t h e r p r o j e c t , c o s t e s t i m a t i o n t e n s i v e t e s t i n g and  from the r e s u l t s of by  the apparent  For both p r o j e c t s a l l c o s t s and  Although the m a j o r i t y  benefits l i e i n  to a s c e r t a i n . i n c u r r e d i n the  is difficult.  n i f i e d by  initial  Even w i t h  been completed.  Even g r e a t e r  c u l t i e s are encountered when d e a l i n g w i t h the e s t i m a t i o n of b e n e f i t s .  pre-  ex-  i n v e s t i g a t i o n the t r u e c o s t of such u n d e r t a k i n g s i s  o f t e n known o n l y when the p r o j e c t has  life  this  and  diffi-  evaluation  In t h i s p a r t i c u l a r a n a l y s i s , the normal problems are mag-  the non-market n a t u r e of the b e n e f i t s generated through w i l d -  development.  While v a l u e s  were imputed f o r most of the  output  associated with the w i l d l i f e development, some output defies  evaluation  and as a r e s u l t i s omitted from the d i r e c t benefit-cost comparison. Consequently, this analysis should not be regarded as certain within a narrow range of precision.  Instead, the results should be i n -  terpreted as the best estimates possible, given the present about future values.  uncertainty  In the event that the two alternatives were found  to be closely comparable this analysis would have to be regarded as i n s u f f i c i e n t to support a choice on one side or the other.  However, i n  this p a r t i c u l a r study there are s i g n i f i c a n t differences between the alternatives, and cision.  these differences are great enough to warrant a de-  On the basis of investigations carried out the proposal for  w i l d l i f e and outdoor recreation development appears to be  superior  i n a l l regards to an undertaking aimed at further a g r i c u l t u r a l r e c l a mation.  CHAPTER VII  THE-IMPACT OF ALTERNATE DEVELOPMENTS ON THE LOWER KOOTENAY INDIAN BAND  The Indian Band as A Referent Group The need for c l e a r l y defined development objectives and r e f e r ent groups was.stressed i n Chapter I.  That discussion noted that  Indian Reserves 1, 1A, and IB constituted a special case with respect to selection of the referent group.  These Reserves are not Crown  land, as i s the case with the rest of the unreclaimed land, but are the property of the Lower Kootenay Indian Band.  As such, the Indians  constitute the appropriate referent group i n analysis of development alternatives for t h e i r land. But the analysis to this point has not focused on the Indian Band as a referent group.  Instead, the alternatives of w i l d l i f e or  a g r i c u l t u r a l development have been analysed from the broader perspective of the Creston economy, B r i t i s h Columbia, and Canada.  While this analy-  s i s has indicated the r e l a t i v e d e s i r a b i l i t y of developing the Indian Reserves from the point of view of these larger interest groups, i t has not shed any l i g h t on the r e l a t i v e impact of the alternatives on the Lower Kootenay Indian Band. Such an analysis represents a d i f f i c u l t undertaking within a standard economic framework.  Perhaps the most meaningful form of bene-  f i t which the Indians might r e a l i z e from development of their land  would be i n terms of s o c i a l "involvement" or c u l t u r a l integration.  But  the degree to which such benefits may be realized i s p r a c t i c a l l y impossible to predict and i n any case they are not benefits which economists are capable of quantifying. What we can indicate within the context of this analysis i s the extent to which more e a s i l y measured benefits such as incomes and employment, might accrue to the Indian Band.  With rough approximations  of the impact to be expected i n these more conventional terms i t i s then possible to speculate on the l i k e l i h o o d of s i g n i f i c a n t " s o c i a l " benefit following from land development. Incomes and Employment Under Agriculture Under the alternative f o r a g r i c u l t u r a l development incomes could accrue to the Indians i n two forms.  Band members could engage d i r e c t l y  i n the business of farming and earn incomes i n that way,  or income could  arise from rents paid for the land by Creston area farmers.  Given the  present levels of s k i l l and managerial a b i l i t y of the band members, i t i s f e l t that the f i r s t alternative i s highly u n l i k e l y , and that the only r e a l i s t i c approach to a g r i c u l t u r a l development of these Reserves i s through some form of a rental or lease agreement with Creston area farmers.  While employment creation i n i t s e l f i s not considered a net benefit within a broader s o c i a l context, i n the case of the Irldian Band where unemployment i s one of the most serious.social problems, the creation of jobs can be taken as a direct form of benefit.  Income to the Indians would then depend on the r e n t a l or lease arrangements made.  These arrangements i n turn would depend on  who  assumed r e s p o n s i b i l i t y for dyking and reclaiming the Reserves.  Recla-  mation could be undertaken by the Indian Band (or the Department of Indian A f f a i r s and Northern Development on their b e h a l f ) , or i t could be done by the farmers who  intended to rent the land.  In either case,  the net impact on the Indian Band w i l l be e s s e n t i a l l y the same —  the  only difference being i n the s h i f t i n g of r e s p o n s i b i l i t y for reclamation. Incomes w i l l accrue to the band i n the form of annual rental payments, and w i l l be available for whatever purposes the Band Council desires. These Reserves are the most f e r t i l e of a l l the  unreclaimed  land for a g r i c u l t u r a l purposes and.as such would earn r e l a t i v e l y high rental or lease payments.  Assuming annual rentals i n the order of $15  per acre, with 2,070 acres i n c u l t i v a t i o n , the Indian Band could expect approximately  $31,000 annually.  While the generation of incomes to the Indian Band should be considered an important benefit from a g r i c u l t u r a l reclamation, the creation of employment opportunities for the band members i s probably of equal importance.  Given the present s k i l l s of the Band members,  the p o s s i b i l i t y of.Indians engaging d i r e c t l y i n farming has already been discounted.  It i s equally u n l i k e l y that opportunities for em-  ployment on farms would be a v a i l a b l e to Indians, At the present moment there are no Indians capable of maintaining a f u l l - t i m e farm job.  Chief Zachary B a s i l has estimated that  there are about 15 adult males capable of employment and t r a i n i n g , but  at present they are unreliable and poor farm workers.  While they may  have the p o t e n t i a l to be trained and employed, i t i s unlikely that Creston area farmers would be w i l l i n g to assume the duties of this training.  As long as non-Indian farm labor can be hired in" the l o c a l  area, there i s no reason to expect that Indians would be offered employment on farms. This contention i s supported by examining the conditions on presently reclaimed f l a t l a n d s .  There are already several Indian  Reserves which are included i n dyking d i s t r i c t s and are being farmed (Indian Reserves 1C, 2, 3, 4 and 5).  Yet no employment i s generated  for Indians on these lands, or on any other reclaimed lands.  There  i s no reason to expect that the s i t u a t i o n would be any d i f f e r e n t with respect to Indian Reserves 1, 1A, or-IB. To summarize, reclamation of Indian Reserves 1, 1A, and IB f o r a g r i c u l t u r a l purposes would probably have l i t t l e s i g n i f i c a n t impact on the members of the Indian Band.  I t i s unlikely that the Indians them-  selves would operate farms on the land, and equally unlikely that they would receive employment opportunities from farmers renting the Reserve lands.  Redistribution of net benefits from the farmers to the Indians  i n the form of annual r e n t a l s would generate incomes which could be used as the Band Council desired.  The impact of this income (approximately  $31,000 annually) on i n d i v i d u a l band members would probably, be n e g l i g i b l e i n terms of s o c i a l and economic development.  Incomes and Employment Under W i l d l i f e and Recreational Development It  i s d i f f i c u l t to forecast what the Indians might expect i n  terms of annual incomes from a w i l d l i f e and recreational development on t h e i r Reserves.  The Canadian W i l d l i f e Service i s presently leasing  these Reserves for $50,000 per year, and this can be taken as a rough guide to the payments which might be expected under a permanent w i l d l i f e development.  In addition, the Indians could anticipate receipts from  the  sale of hunting permits y i e l d i n g as much as $5,000 per year when  the  area i s f u l l y developed. Opportunities for employment under t h i s alternative might be  s l i g h t l y better than under a g r i c u l t u r a l development, but would  still  not  be s i g n i f i c a n t .  the  Indians to work on maintenance and development of the w i l d l i f e habi-  tat,  and the p o s s i b i l i t y of providing guiding services f o r hunters and  other t o u r i s t s . the  There would probably be some opportunities f o r  temperament  While work of this nature might be better suited to of the Indians than farming, i t s t i l l remains unlikely  that f u l l - t i m e employment equivalents for more than two or three persons would be created.  The Alternatives Compared From The-Perspective of the Indian Band In  the preceding discussion we have been unable to i d e n t i f y any  s i g n i f i c a n t benefit to the Indians from either development a l t e r n a t i v e . Under either form of development the Indians would expect to receive a rent or lease payment for the use of their land, but the magnitude of  such payments i s d i f f i c u l t to estimate.  Annual cash returns i n the  order of $55,000 might be expected from a w i l d l i f e and recreational development, versus approximately $31,000 under a g r i c u l t u r a l development.  While the income prospects are s i g n i f i c a n t l y greater under a  w i l d l i f e and recreational development, i n neither case are the incomes s i g n i f i c a n t r e l a t i v e to the needs of the Indian Band. Employment prospects are almost c e r t a i n l y non-existent i n the case of an a g r i c u l t u r a l development, as witnessed by the current lack of employment for Indians i n Creston agriculture.  In the case of a  w i l d l i f e and recreation development there are prospects of a small amount of i n i t i a l employment with l a t e r opportunities rendering touri s t services.  The extent to which Indians would be assimilated into  such work i s , of course, open to speculation. It i s d i f f i c u l t to draw any d e f i n i t e conclusions as to the most desirable development of Reserves 1, 1A and IB from the point of view of the Lower Kootenay Indian Band.  It appears that actual cash  flows and employment opportunities w i l l be small under either a l t e r native, although there w i l l be greater advantages under a w i l d l i f e and recreation development than under agriculture.  S i m i l a r l y , the  prospects for s o c i a l "involvement" or c u l t u r a l integration as a r e sult of development of the land are poor. While, these prospects are not encouraging, they should not be surprising.  Both of the alternatives, which have been discussed are  concerned with development and u t i l i z a t i o n of the basic land resource; neither alternative i s concerned with development of human resources.  It appears from our investigations that any project which, i s concerned with development of the land resource alone w i l l have l i t t l e impact on the Indian people.  CHAPTER VIII  SUMMARY AND  CONCLUSIONS  This report presents the findings of an economic investigation into possible patterns of development for 15,000 acres of land i n the Kootenay River floodplain at Creston, B r i t i s h Columbia.  Three a l t e r -  natives for the future use of this land were considered i n this study. These alternatives are:  (a) continuation of present patterns of use;  (b) reclamation and development f o r agriculture; and  (c) development  as w i l d l i f e habitat f o r intensive outdoor recreation use. Present patterns of use are investigated, i n some d e t a i l i n Chapter I I I .  This chapter assesses the f e a s i b i l i t y , of continuing with  the present regime and provides a benchmark f o r measuring the value of present resource uses which might be s a c r i f i c e d under more intensive developments. Continuing with present use on the unreclaimed attractive alternative.  lands i s an un-  The i n t e n s i t y of use i s low and the land y i e l d s  a negative economic return under c a t t l e grazing.  Annual flooding with  extreme variations i n water levels produces habitat conditions which are far from optimum for waterfowl production or recreational use.  While the  completion of Libby Dam would reduce the variation, i n water l e v e l s , i t would have l i t t l e e f f e c t on the quality of the habitat f o r waterfowl production or recreational use and there i s a p o s s i b i l i t y that i t would reduce the season of use for c a t t l e grazing.  With the f e a s i b i l i t y of  more intensive forms of land use greatly enhanced by Libby Dam i t i s concluded that continuing with present use i s an unacceptable a l t e r native . The  two development alternatives are investigated i n Chapters  IV ( A g r i c u l t u r a l Reclamation as a Development Alternative) and V ( W i l d l i f e Habitat and Outdoor Recreation  as a Development A l t e r n a t i v e ) .  Both  alternatives are t e c h n i c a l l y f e a s i b l e , and benefit-cost analysis has been used to provide a l o g i c a l framework for assessing  the economic implications  of these alternatives and for choosing between them.  Selection of the  most economically desirable a l t e r n a t i v e i s made on the basis of the net primary benefits generated within the relevant referent groups. The magnitude of these measures varies widely depending on the 'referent group' or point of view from which a decision i s to be made. Before a meaningful decision can be reached on the basis of these economic measures, i t i s thus necessary to ensure that they r e l a t e to the appropriate  referent group.  ton), the province  Three referent groups, the l o c a l area  (Cres-  of B r i t i s h Columbia, and Canada are suggested i n t h i s  study and the f e a s i b i l i t y of each a l t e r n a t i v e i s examined and compared within those frameworks. Optimum Land Use From The Local Viewpoint A g r i c u l t u r a l reclamation  has been successfully carried out on  21,000 acres of land adjacent to the land under study. the point of view of the l o c a l economy, reclamation  Considered from  and a g r i c u l t u r a l de-  velopment of the entire 15,000 acres (with the possible exception Corn Creek unit) appears economically f e a s i b l e .  of the  Investment i n this un-  d e r t a k i n g would y i e l d net primary b e n e f i t s h a v i n g an e s t i m a t e d v a l u e of $1,929,000. fits  i n secondary  A d d i t i o n a l secondary  present  b e n e f i t s i n the form of p r o -  b u s i n e s s e s have an e s t i m a t e d p r e s e n t v a l u e of $398,000.  O f f s e t a g a i n s t these e s t i m a t e d b e n e f i t s from a g r i c u l t u r a l r e c l a m a t i o n are c o s t s c r e a t e d by d i s p l a c i n g p r e s e n t l a n d uses.  These c o s t s  i n c l u d e the d e s t r u c t i o n of w i l d l i f e h a b i t a t , and e l i m i n a t i o n of r a r e spec i e s of w i l d l i f e . secondary  From a p u r e l y l o c a l v i e w p o i n t ,  the net primary  and  b e n e f i t s would p r o b a b l y outweigh such l o s s e s , r e n d e r i n g a g r i -  c u l t u r a l r e c l a m a t i o n f e a s i b l e on t o t a l  balance.  However, a d e c i s i o n to proceed w i t h a g r i c u l t u r a l development would o n l y be r a t i o n a l i f a comparison had  f i r s t been made w i t h the net  g a i n s to be expected  from  the a l t e r n a t i v e development f o r w i l d l i f e  and  outdoor  A t the l o c a l l e v e l , net primary b e n e f i t s from  the  recreation.  w i l d l i f e development have an e s t i m a t e d p r e s e n t v a l u e of $1,350,000 w h i l e the p r e s e n t v a l u e of net secondary While  a g r i c u l t u r a l development e n t a i l e d  b e n e f i t s i s e s t i m a t e d at $731,000. the l o s s of h a b i t a t and e l i m i n a -  t i o n of w i l d l i f e s p e c i e s , such v a l u e s would be p r e s e r v e d and under t h i s a l t e r n a t i v e .  enhanced  P r e s e n t l e v e l s of g r a z i n g c o u l d a l s o be accommo-  dated w i t h i n the needs of w i l d l i f e management. Choosing  between these a l t e r n a t i v e s from the p o i n t of view of  the l o c a l community i s v e r y d i f f i c u l t .  D i r e c t l y measured g a i n s from  an  a g r i c u l t u r a l development are g r e a t e r , although not to a s i g n i f i c a n t  de-  gree,  and  than they would be  secondary  from the w i l d l i f e development  benefits totalling  (net primary  $2,327,000 compared to $2,081,000).  But  the  d e s t r u c t i o n of w i l d l i f e s p e c i e s r e s u l t i n g from a g r i c u l t u r a l r e c l a m a t i o n  could t i p the scales i n favor,of a w i l d l i f e development. of the present analysis must therefore.be the l o c a l point of view.  considered  inconclusive from  Without extremely detailed and  investigations i t i s impossible  The results  exhaustive  to conclude that either alternative i s  c l e a r l y superior.  The P r o v i n c i a l Viewpoint and Optimum Land Use While comparison of the development alternatives was from the l o c a l viewpoint, perspective, i s adopted.  inconclusive  such i s not the case when the broader p r o v i n c i a l From this point of view the estimated  present  value of net primary benefits under the w i l d l i f e development i s more than twice as great as under agriculture ($3,783,000 vs. $1,773,000).  Net  secondary benefits also have a much higher present value under the w i l d l i f e development ($773,000) than they do i n the case of a g r i c u l t u r a l development ($413,000).  On the basis of these estimates alone the choice c l e a r l y fav-  ors the w i l d l i f e and recreational development.  Consideration of addition-  a l factors associated with the preservation of rare w i l d l i f e species to reinforce the choice.  serves  From the p r o v i n c i a l point of view, s e l e c t i o n of  the optimum land use i s therefore quite clear —  on a l l counts the w i l d l i f e  development appears c l e a r l y superior.  Optimum Land Use From The National Point of View From the national point of view, choice between the alternatives i s even.more clear than at the p r o v i n c i a l l e v e l .  I t i s estimated  that  the present worth of primary net benefits under the w i l d l i f e development  w i l l be $6,835,000, as compared with an estimate of $1,773,000 under a g r i c u l t u r a l development.  From the national perspective net  benefits are not important under either.alternative —  secondary  $431,000 under  w i l d l i f e development, $401,000 with agriculture. Again, these estimates alone c l e a r l y indicate the w i l d l i f e and recreation development as the optimum form of land use.  Preservation  values associated with the w i l d l i f e development take on a greater . s i g n i ficance at the national l e v e l than they did p r o v i n c i a l l y , and i n t e r national obligations to maintain waterfowl populations reinforce the choice of t h e ' w i l d l i f e alternative for development.  Adopting Canada.as  a whole as the referent group for a decision again produces an unequivoc a l choice —  development of the land for w i l d l i f e and outdoor recreation  i s c l e a r l y the superior a l t e r n a t i v e .  Conclusions This study embodies an innovative approach i n using economic analysis to select the optimum use for undeveloped land at Creston, B r i tish Columbia.  Analysis of the a g r i c u l t u r a l alternative i s t r a d i t i o n a l  and straightforward.as the value of a l l output i s readily measured. Analysing the w i l d l i f e and recreation development presents serious problems, however, as this represents a non-marketed form of resource use the "product".of which must be c a r e f u l l y defined and can only partly be valued.  Despite these problems, a comparative  analysis of the two  alternatives has been carried out, and the results appear s u f f i c i e n t l y r e l i a b l e to indicate the optimum choice between alternatives.  In a comparative a n a l y s i s of t h i s nature,  i t i s important to  determine c l e a r l y i n whose i n t e r e s t any development should be undertaken.  To demonstrate the s i g n i f i c a n c e o f t h i s p o i n t the a n a l y s i s i n  t h i s r e p o r t has been c a r r i e d .out from t h r e e of view of the l o c a l community  (Creston),  levels —  from the p o i n t  the p r o v i n c e  of B r i t i s h  Colum-  b i a and Canada. I n s o f a r as most o f the l a n d under study i s Crown l a n d , h e l d i n t r u s t f o r the c i t i z e n s o f B r i t i s h Columbia, the n e t b e n e f i t a c c r u i n g to the p r o v i n c e making.  as a whole p r o v i d e s  On .this b a s i s , s e l e c t i o n of the w i l d l i f e and r e c r e a t i o n a l de-  velopment i s c l e a r l y s u p e r i o r . if  the a p p r o p r i a t e b a s i s f o r d e c i s i o n  T h i s i s an important d i s t i n c t i o n , f o r  the l a n d were t o be developed only i n t h e i n t e r e s t o f the l o c a l commu-  nity,  the c h o i c e between  the a l t e r n a t i v e s i s n o t c l e a r .  On a p u r e l y  l o c a l b a s i s , the a g r i c u l t u r a l development appears t o be of roughly m e r i t when compared w i t h  the w i l d l i f e  equal  development.  When p a r t i c i p a t i o n i n development by the f e d e r a l government i s considered  and the n a t i o n a l p o i n t o f view adopted, the w i l d l i f e and o u t -  door r e c r e a t i o n development i s a g a i n  clearly  superior.  LITERATURE CITED  Anderson, J . M. 1961. Q u a l i t y r e c r e a t i o n on p u b l i c l a n d s . Proceedings Fifty-first Convention of the International Association of Game* Fish, and Conservation Commissioners, pp. 45-50.  Bednarik, K. E. 1961. Waterfowl hunting on a controlled Ohio D i v i s i o n o f W i l d l i f e , P u b l i c a t i o n W - 127.  public  area.  C i r i a c y - W a n t r u p , S. V. 1964. B e n e f i t - c o s t a n a l y s i s and p u b l i c r e s o u r c e development. I n Economics and public policy in water resource development (Smith and C a s t l e e d s . ) . Iowa S t a t e U n i v e r s i t y P r e s s , Ames.  Gavin, Angus. 1964. Ducks Unlimited... I n Waterfowl Tomorrow ( J . P. L i n duska e d . ) . U.S. Dept. o f I n t e r i o r , Washington, D.C.  Green, W. E., L. G. McNamara and F. M. U h l e r . 1964. Water o f f and on. In Waterfowl tomorrow ( J . P. L i n d u s k a e d . ) . U.S. Dept. of I n t e r i o r , Washington, D.C.  Hochbaum, H. A. and P. Ward. 1964. The Delta Marsh: problems associated with its management, planning a course for future action. Unpublished r e p o r t , D e l t a Waterfowl Research S t a t i o n , Manitoba.  Knetsch, Jack L. and Robert K. D a v i s . 1966. recreation evaluation. I n Water . research Johns Hopkins, B a l t i m o r e .  K r u t i l l a , John V. and O t t o E c k s t e i n . velopment. Johns Hopkins P r e s s ,  Comparison o f methods f o r (Kneese and Smith e d s . ) .  1958. Multiple Baltimore.  purpose  river  K r u t i l l a , John V. 1961. Columbia R i v e r development: some problems of i n t e r n a t i o n a l c o o p e r a t i o n . I n Land and water: planning for economic growth. U n i v e r s i t y o f Colorado P r e s s , B o u l d e r .  de-  K r u t i l l a , John V. " 1967. The Columbia River an international river basin development. Baltimore.  Treaty the economics of Johns Hopkins P r e s s ,  Moore, Dwight D. 1969. A development plan for 1 1A and IB and the Creston Valley Wildlife B.C. mimeo r e p o r t , C r e s t o n . 3  3  the Indian Reserve lands Management Area Creston  Newby, N. J . • 1969. The British Columbia trapping industry and public administrative policy. U n p u b l i s h e d M.A. T h e s i s , U n i v e r s i t y of B r i t i s h Columbia.  Pearse, P e t e r H. and Gary K. Bowden. 1969. Economic e v a l u a t i o n o f r e c r e a t i o n a l resources: problems a n d . p r o s p e c t s . Transactions thirty-fourth north american wildlife conference. Wildlife Management I n s t i t u t e , Washington, D.C.  P e t e r s o n , Roger T. 1969. The osprey endangered w o r l d c i t i z e n . National Geographic. 136(1):52-67.  P r e s t , A. R. and Ralph Turvey. 1965. Economic Journal. 73(3):683-735.  Cost-benefit analysis:  a survey.  P r o v i n c e of B r i t i s h Columbia. 1966. Regional index .of British Columbia. Department o f I n d u s t r i a l Development Trade and Commerce, Economics and S t a t i s t i c s Branch.  Department  Valley  . 1968a. Farm .business: beef o f A g r i c u l t u r e , Farm Economics D i v i s i o n .  Wildliue  . . 1968b. An act to establish Management Area. B i l l No. 65.  1967.  the  Creston  1970. The Central Kootenay Region an economic survey. Department of I n d u s t r i a l Development Trade and Commerce, Economics and S t a t i s t i c s Branch.  S e w e l l , W. R. D., John D a v i s , A. D. S c o t t , and D. W. Ross. to benefit-cost analysis. Ottawa, Queen's P r i n t e r .  1962.  Guide  United States Government. 1962. Policies standards and procedures in the formulation, evaluation, and review of plans for use and development of water and related land resources. Report by the President's Water Resources Council, 87th Cong., 2nd sess., S.Doc. 97,  Wright, J . M. 1968. Performance indicators and program evaluation f o r w i l d l i f e management. . Transactions of the thirty-second federal provincial wildlife conference. Ottawa, Queen's P r i n t e r .  A P P E N D I C E S  A P P E N D I X  A  APPENDIX A REGIONAL INCOME MULTIPLIERS Regional income m u l t i p l i e r s have developed from the export base thesis which assumes that the economic growth of a region depends on i t s earnings from export industries (by d e f i n i t i o n no region i s s e l f - s u f f i c i e n t ) .  Export  or basic industries s e l l products outside the region, or i n the case of services s e l l to non-residents, thereby bringing new Part of t h i s new  incomes to the area.  income i s respent within the region and has a 'multiplied'  e f f e c t on incomes.  Regional income m u l t i p l i e r s are used to estimate  the  e f f e c t of changes i n basic industries on the t o t a l incomes within a region. As a general rule income m u l t i p l i e r s w i l l vary d i r e c t l y with the size of the region being considered  (Archibald 1967,  Rosenbluth 1967).  Small  regions which rely heavily on imports r e t a i n l i t t l e of the income which accrues to basic industries i n the region and hence income m u l t i p l i e r s are small.  Conversely  for larger regions with more d i v e r s i f i e d economic a c t i v i t y  the share of income retained from basic industries i s higher and the t o t a l impact on incomes i s much greater. For any region the multiplying e f f e c t of successive rounds of respending applies only to the f r a c t i o n of expenditures  that remains i n the  area a f t e r the f i r s t round of spending i n the basic industry.  This f r a c t i o n ,  the l o c a l spending component of gross industry receipts (L), w i l l vary between basic i n d u s t r i e s , and i n t h i s study w i l l be estimated separately for a g r i culture and recreation-tourism.  The s i z e of the m u l t i p l i e r which acts on t h i s  l o c a l income component depends on ( i ) the proportion of any increase i n regional incomes that i s spent within the region (MPS ), and ( i i ) the pror  portion of regional expenditure  that accrues as income to residents of the  region ( Y ) . r  The formula used to determine the value of the m u l t i p l i e r i s :  1 1 - (MPS )(Y ) r  r  In this study m u l t i p l i e r s are required for two basic industries i n three 'regions' corresponding to the referent groups adopted.  For each of  these regions the factors which determine the multiplied e f f e c t of new incomes (L, MPS , Y ) w i l l vary. r  Regional m u l t i p l i e r s f o r the two basic  r  industries and each of the three referent groups are derived below.  When  applied they must be related only to that part of output which i s an export v i s - a - v i s the relevant region.  Regional M u l t i p l i e r s i n Agriculture Local M u l t i p l i e r s In the Creston economy the value of MPS i s estimated at .7 r  (Asimakopulos 1966).  1965)  and the value of Y  r  at .24 (Dominion Bureau of S t a t i s t i c s  The l o c a l m u l t i p l i e r thus has a value of 1.20. At the l o c a l l e v e l  the value of L i s estimated to be ,9 of the i n i t i a l receipts by farm enterprises.  Farm operators w i l l pay out 69 per cent of t h e i r receipts to l o c a l  businesses and retain 31 per cent as payment to hired and operator's labor (Josling and Trant 1966, pp. 59-60).  Since only 70 per cent of labor earnings  are spent l o c a l l y the t o t a l spending i n Creston businesses w i l l be equal to 90 per cent of the gross farm receipts.  * Asimakopulos reports a proportion of income spent of .8, but since not a l l incomes w i l l be spent l o c a l l y t h i s i s reduced to .7 for the Creston area, I t i s assumed that the composition of spending i s 87% on r e t a i l purchases having a 20% l o c a l income component and 13% on services with a l o c a l income component of 50%. On balance the proportion of regional expenditure which accrues as l o c a l income (Y ) i s thus ,24. r  The e f f e c t of the m u l t i p l i e r w i l l be to further increase t h i s l o c a l spending by 20 per cent beyond the i n i t i a l round.  An increase i n farm  receipts of $100,000 would have the following e f f e c t on Creston businesses: i n i t i a l spending by farmers and employees t o t a l spending after m u l t i p l i e r e f f e c t (1.20)  Provincial  $90,600, $108,900.  Multiplier  The p r o v i n c i a l m u l t i p l i e r f o r agriculture i s estimated i n the same manner as the Creston m u l t i p l i e r , but new values are adopted f o r L, MPS and r  Y  r  to correspond to the new 'region' - the province of B r i t i s h Columbia rather  than the Creston area alone. the product of MPS and Y r  At t h i s l e v e l L i s estimated to be .94, while  i s estimated to be ,45 (Price Waterhouse and  Company 1968), r e s u l t i n g i n a m u l t i p l i e r of 1.8. The impact on the province of B r i t i s h Columbia of a $100,000 increase i n farm incomes at Creston would thus d i f f e r s i g n i f i c a n t l y from the impact on the Creston area alone. initially  Non-farm business revenues would increase by $93,800  and expand to $169,000 as a result of the m u l t i p l i e r .  National M u l t i p l i e r Within Canada L w i l l remain the same as i t was p r o v i n c i a l l y , .94, but the m u l t i p l i e r acting on t h i s spending w i l l be much higher, approximately 2.8 (Price Waterhouse and Company 1968).  At t h i s l e v e l non-farm business  revenues would increase by $93,800 i n i t i a l l y , f i n a l multiplied  impact.  expanding to $263,000 with the  Regional M u l t i p l i e r s In Recreation Local M u l t i p l i e r M u l t i p l i e r s to estimate the impact of spending by t o u r i s t s and recreationists are derived i n the same manner as f o r agriculture, with the only changes being i n the magnitude of L f o r the various regions. of L f o r the Creston economy i n t h i s case i s estimated at .51.  The value  In the l o c a l  economy the impact on business revenues of a $100,000 increase i n spending by recreationists would develop as follows: wages and p r o f i t s would account f o r 30 per cent of the i n i t i a l spending, 70 per cent of which, or $21,000, would be spent i n Creston.  Of the remaining $70,000 approximately $30,000 would be  spent In Creston, with $40,000 going d i r e c t l y to outside suppliers.  The  I n i t i a l respending i n the Creston economy would thus be roughly $51,000, The regional m u l t i p l i e r of 1.2 w i l l expand t h i s to a f i n a l impact of $61,200. Provincial Multiplier For the province i n the case of recreation-tourism the value of L i s estimated at .84 ($24,000 spent from wages and p r o f i t s , $60,000 spent within B r i t i s h Columbia f o r supplies).  The m u l t i p l i e r has the same value as that  used i n the case of agriculture, 1.8.  At t h i s l e v e l a $100,000 increase i n  recreation spending would lead to a further increase i n revenues of $84,000, reaching $151,000 a f t e r successive rounds of respending.  National M u l t i p l i e r From the national perspective an i n i t i a l increase i n t o u r i s t revenues of  $100,000 would lead to f i r s t - r o u n d respending of $97,000.  m u l t i p l i e r of 2,8 t h i s would eventually reach $272,000.  Acted on by a  REFERENCES. APPENDIX A  Archibald, G.C. 1967. Regional m u l t i p l i e r e f f e c t s i n the U.K. Economic Papers (New Series). 19(1):22-39.  Oxford  Asimakopulos, A. 1965. Analysis of Canadian Consumer Expenditure Surveys. Canadian Journal of Economics and P o l i t i c a l Science. May, 1965. Dominion Bureau of S t a t i s t i c s . 1966. Census catalogues 97-602, 97-603, 97643, and 97-647. Ottawa, Queen's P r i n t e r . J o s l i n g , JvT, and G.I. Trant, 1966, Interdependence among a g r i c u l t u r a l and other sectors. Publication No. 2, A g r i c u l t u r a l Economics Research Council of Canada. Price Waterhouse and Company. 1968. The growth and impact of the mining industry i n B r i t i s h Columbia. Vancouver. Rosenbluth, Gideon. 1967. Macmillan of Canada.  The Canadian, economy and disarmament.  Toronto,  A P P E N D I X  B  APPENDIX B  SIZE AND NUMBER OF FARMS AND PRESENT PATTERNS OF PRODUCTION, RECLAIMED LAND, CRESTON FLATS Table B - l gives the d i s t r i b u t i o n of farms by size on presently reclaimed land on the Creston f l a t s . i n 39 different holdings.  A t o t a l of 19,382 acres are cultivated  The average size of farm i s 497 cultivated acres, TABLE B - l *  DISTRIBUTION OF FARMS BY NUMBER OF CULTIVATED ACRES , CRESTON FLATS  No. of Cult. Acres  No. of Farms  T o t a l Cult. Acres  % of A l l Cult. . , .'. Acres  1,500 or more  3  5,451  28.1%  1,000 - 1,499  1  1,024  5.3  6,424  33.2  4,066  21.'0  1,310  6.7  9  1,107  5.7  39  19,382  100.0%  500 -  999  10  300 -  499  10  200 -  299  6  1-199 TOTAL  *  '  ,  Source - W, Wiebe, D i s t r i c t A g r i c u l t u r i s t , Creston. survey, spring, 1968.  Data collected i n  Not a l l of these holdings support a f u l l time farm operation.  Several of the  smaller holdings are cropped on a share b a s i s , or under custom agreement, the  owners being employed elsewhere i n the l o c a l economy.  In addition several  farmers who operate dairy or beef farms on the benchlands  at L i s t e r and  Erickson hold land on the f l a t s which forms a part of t h e i r farm unit.  Taking  these factors into consideration i t i s estimated that holdings on the f l a t s form the basis of 30 farm operations, and are an important part of an additional 5- farms with land on the surrounding benchlands.  Data i n Table B - l  are based on acres i n c u l t i v a t i o n , and do not include farm yards, roads, ditches, e t c . Table B-2 presents the e x i s t i n g pattern of crop production on the Creston f l a t s , based on seeded acreage i n the spring of 1968,  Grains are  the most important crop, with wheat, oats, and barley accounting for 66.8 per cent of the cultivated acreage.  Next i n importance  hay with 11.9 and 10.7 per cent respectively.  are clover seed and  Pasture, potatoes, summer  fallow and other miscellaneous crops account f o r the rest of the acreage. I t i s believed that t h i s pattern of production has been consistent over the past f i v e or s i x years.  The acreage i n seed peas has declined due  to lower market prices and higher costs of production.  At the same time  the production of clover seed on the f l a t s i s r e l a t i v e l y new, having been introduced only i n 1962. While the grain crops do not y i e l d as high a return (gross or net) per acre as some of the other crops, such as clover and potatoes (see Appendix C), they have nevertheless been the dominant crop on a l l farms. result of two factors:  This i s l i k e l y a  a) once accustomed to growing grain, farmers have been  slow or reluctant to change to other crops, and b) growing grain minimizes the loss i n times of flood.  Given the flood r i s k , a grain crop which has very low  seeding costs i n comparison with a crop l i k e potatoes, represents a much lower p o t e n t i a l loss.  TABLE B-2*  DISTRIBUTION OF CROPS. BY SEEDED ACRES. CRESTON FLATS.'1968  Crop  Seeded Acres  % of Total Seeded Acres  Wheat r Spring - Winter .  4,044 1,485  21.0 7.6  Oats  4,008  20.7  Barley  3,392  17.5  Clover Seed - White - Red  2,268 40  Hay  2,066  .10.7  Pasture  951  4.9  Potatoes  425  2.2  Summer Fallow  392  2.0  Seed Peas  288  1.4  Swede Turnip Seed  5  (-)  Corn  4  (-)  14  0.1  Miscellaneous TOTAL Source:  19,382  W. Wiebe - data collected i n survey, spring, 1968. one tenth of one per cent (.001),  100.0% (-) less than  A P P E N D I X  C  APPENDIX C  THE ECONOMICS OF FARM PRODUCTION, CRESTON FLATS,,1968 Several procedures can be used to measure the p r o f i t a b i l i t y of a g r i c u l t u r a l enterprises on the Creston f l a t s .  Estimates can be made of the  net returns from i n d i v i d u a l crops on a per acre basis, or data on farm enterprises as a whole can be analysed and converted to a per acre basis.  A  further check can be made by comparing such data with the rental value of farm land, or with land values when land i s sold. Net Returns Per Acre. Individual Crops The three basic steps i n t h i s analysis include measuring per acre y i e l d s f o r each crop, obtaining r e l i a b l e data on the prices of these crops, and measuring the costs of production; Yields Per Acre While crop y i e l d s may vary greatly from year to year, i t i s nevertheless possible to derive r e l i a b l e estimates of average y i e l d s .  Such estimates  have been prepared f o r crops grown on the Creston f l a t s , based on records of farmers who have been producing them f o r a number of years.  These estimates  represent the average per acre production which a farmer would expect i n the various crops.  This information has been summarized i n Table C - l .  The estimated y i e l d which would be consistently expected on an average acre, given present levels of farm management, i s given i n the f i r s t column. These estimates" are averages of data provided by cooperating farmers, and are weighted by the number of acres of each crop grown.  In the second and  t h i r d columns the range of y i e l d s reported f o r each crop i s presented,  TABLE C - l  PER ACRE YIELDS. CROPS ON CRESTON FLATS  Crop  Y i e l d Per Acre  Lowest Estimate  Highest Estimate  Wheat - Spring - Winter  47.5 bu. 74.5 bu.  40 bu. 70 bu.  55 bu. 80 bu.  Oats  94  bu.  80 bu.  103 bu.  Barley  62  bu.  50 bu.  73 bu.  lbs.  500 l b s .  700 l b s .  Clover Seed Hay Potatoes  530 5  ton  10  ton  4 1/2 ton 10  ton  5 1/2 ton 10  ton  Figures providing an 'output-per-acre' are not available f o r land presently used as pasture (951 acres), as the pasture forms a direct input i n the production of beef.  Since the summer grazing season on the reclaimed  land tends to be short, and supplemental feeding i s done i n f a l l and winter, measuring output on a per acre basis i s extremely d i f f i c u l t .  Returns per  acre f o r beef enterprises w i l l be estimated by analysing farm operations, and converting p r o f i t s to a per acre basis.  Prices Received, and Gross Returns Per Acre Prices received f o r various crops fluctuate from year to year depending on general market conditions. Grain prices i n 1968-69 are lower than previous years, but prices f o r other crops are at or near long run averages.  In Table  C-2 prices received for crops i n recent years are presented where r e l i a b l e data could be obtained.  Prices quoted f o r the 1968 crop are given i n the  f i r s t column, and prices received i n previous years are i n the second  through  f i f t h columns.  TABLE C-2 CROP PRICES. CRESTON  Crop  1968  1967  Year  1966  Wheat - Spring - Winter  $ 1.70 bu. $48/T.  $ 1.75 bu. $48/T.  $ 1.70 bu. $54/T.  $54/T.  Oats  $40/T.  $48/T.  $45/T.  $45/T.  Barley  $36/T.  $45/T.  $43/T.  $42/T.  Clover Seed  40c l b .  Hay  $24/T.  Potatoes  $50/T.  32e l b . $22/T.  30C l b .  $22/T.  1964  1965  27C l b ,  51c l b .  $25/T.  ( h i s t o r i c a l data inconsistent)  On the basis of t h i s information an average p r i c e f o r each crop has been derived, and these figures are presented i n Table C-3. represent an average of market prices i n recent years,  These prices  In the absence cf  severe changes i n market conditions, they would form the basis of short term expectations f o r future prices.  These prices are applied to the y i e l d s  estimated i n Table C - l , to give an estimate of the gross return per acre under each crop,  TABLE C-3  CALCULATED GROSS RETURN PER ACRE FOR INDIVIDUAL CROPS  Crop  • Price  Yield/Acre  Gross Return/ Acre  Wheat - Spring - Winter  $ 1.72 bu. $52.50/T.  47.5 bu. 74.5 bu.  $ 82. $118.  Oats  $44.50/T.  94  bu.  $ 71.  $41.50/T.  62  bu.  $ 62.  lbs.  $191.  Barley  '  Clover Seed  36<? l b .  530  Hay  $23/T.  5 T.  Potatoes  $50/T.  10 T.  $115. $500.  These figures are rounded to the nearest d o l l a r .  Costs of Production , and Net Returns Per Acre The f i n a l step i n t h i s analysis involves the c a l c u l a t i o n of costs of production for the various crops, and net returns per acre.  Data for these  calculations were provided by cooperating farmers and are summarized i n Table C-4.  Costs of production i n Table C-4 include a l l current operating  cost, dyking taxes, p r o v i n c i a l land taxes, and depreciation on machinery and equipment.  Not included i n these costs i s the 'opportunity cost' or income  foregone on money invested i n machinery and equipment.  Capital required f o r  production of these crops i s estimated at $100 per acre, which, i f invested at 8 per cent would earn $8 per year.  This expense Is deducted from the  current operating p r o f i t to give a measure of the true return per acre under  various crops.  C a p i t a l i z i n g t h i s net" return at 8 per cent y i e l d s a measure  of the present worth of an acre of land i n each crop. the f i n a l column of Table  This i s presented i n  C~4.  ' TABLE C-4 COSTS OF PRODUCTION. AND NET RETURNS PER ACRE  Est. Gross Ret. Per Acre  Crop  Prod. Cost . Per Acre  Net Ret. Per Acre  Net Ret. , Less 8% on Capital  Present Discounted Value  Wheat - Spring - Winter  $ 82. $118.  $ 53. $ 88.  $ 29. $ 30.  $ 21. $ 22.  $ 262.50 $ 275.00  Oats  $ 71.  $ 44.  $ 27  $ 19.  $ 237.50  Barley  $ 62.  $ 37.  $ 25.  $ 17.  $ 212.50  Clover Seed  $191.  $ 90.  $101.  $ 93.  $1,162.50  Hay  $115.  $ 87.  $ 28.  $ 20.  $  Potatoes  $500.  $400.  $100.  $ 92.  $1,150.00  250.00  *  weighted by the number of acres of crop grown for each An average cost, p a r t i c u l a r crop. farmer growing a  A wide v a r i a t i o n i n returns per acre between the various crops i s noted i n Table C-4.  After allowing an 8'per cent return on c a p i t a l as an expense,  net returns range from $17 per acre i n barley, to $93 per acre i n clover seed.  Net returns i n grain and hay are grouped between $17 and $22 per acre  however, while both potatoes and clover seed show net returns exceeding per acre.  $90  Discounting these net returns at a rate of 8 per cent y i e l d s  present values per acre which range from $212 f o r land producing barley to  $1,162 f o r land producing clover seed. This wide v a r i a t i o n i n return under each crop, and the consequent range of present values, i s more meaningful i f presented i n terms of an 'average' acre.  This i s done i n Table C-5, where the returns to an 'average'  acre are calculated by weighting the per acre returns under each crop by the number of acres presently i n that crop.  I t must be noted that t h i s data i s  based on information pertaining to the crops itemized i n Table C - l only, and does not include pasture, seed peas, or other miscellaneous crops as a basis for  computation.  TABLE C-5 AVERAGE COSTS AND RETURNS PER ACRE. ALL CROPS  Gross Return  Production Cost  Net Return  Net Return, Less 8% on Capital  Present Worth, @ 8%  A l l Seeded Acres  $106.76  $67.93  $38.83  $30.83  $385.38  A l l Cultivated Acres Including Summer Fallow  $104.62  $66.56  $38.06  $30.06  $375.75  When the data are presented i n t h i s manner, an 'average' acre under crop on the Creston f l a t s i s seen to y i e l d a gross return of $106,76, and a net return of $30,83 a f t e r allowing f o r a l l costs.  However, these figures  are f o r acres i n crop only, and do not take account of the fact that two per cent of the cultivated land i s i n summer fallow.  Including acres i n summer  fallow i n the calculations gives a true picture of the costs and returns on an 'average' acre.  This i s done i n the bottom row of Table C-5, and has the  e f f e c t of reducing the net return on an 'average' acre to $30,06 having a present value of $375,75. Analysis of Farm Enterprise Data  As a second method of measuring the p r o f i t a b i l i t y of a g r i c u l t u r a l enterprises on the Creston f l a t s , data on farm units taken as a whole was analysed  and converted to a per acre basis.  This data includes land used  for pasture and summer fallow, as well as the crops analysed i n Tables C - l through C-4. Calculations of t h i s nature are less precise than those made on a per acre basis for several reasons.  The analysis of farm units was possible  only on the basis of current records, and not over a time series as was done with the analysis of i n d i v i d u a l crops.  Thus unusual or non-recurring  features of any one operation may bias the r e s u l t s .  Further, many farm units  include expenses and receipts associated with custom work, feedlot  operations  for hogs or beef, grain m i l l i n g , and other associated a c t i v i t i e s which do not r e f l e c t the productivity of the land per se.  Separating  the returns to  those associated enterprises from returns to the land i s d i f f i c u l t , and has been done on a very a r b i t r a r y basis.  Despite these q u a l i f i c a t i o n s to the  data, they do provide a measure of per acre returns, and as such provide a check on the calculations made on the basis of i n d i v i d u a l crop analysis. Calculations on t h i s basis were made possible by cooperating  farmers,  and current operating p r o f i t s per acre were calculated which ranged from $26 to $65, and averaged $36 per acre.  Investment i n machinery and equipment and  storage f a c i l i t i e s on these farms was estimated as c l o s e l y as possible, and estimates ranged from $94 per acre to $120 per acre, with the average being $100 per acre.  Allowing a charge of 8 per cent f o r interest on t h i s c a p i t a l  introduced an additional cost of $8 per acre, which reduces the estimated net return to $28 per acre.  Under these calculations the present value of an  acre i s $350,00 when discounted at 8 per cent. These figures correspond quite closely to those derived e a r l i e r by analysing i n d i v i d u a l crops, where the net return on an 'average' acre was estimated to be $30.06, and the present value of an acre $375.75. The Rental and Sale Value of Land Rental Value In a competitive market f o r the rental of farm land, rents b i d f o r land should closely r e f l e c t i t s net earning power.  Data pertaining to the  present r e n t a l market f o r reclaimed land i n the Creston area Is sketchy, and not available from any one source.  However, some information was  obtained on land presently being rented, and indicated that rents vary from $13 per acre to $32 per acre. Land under lease from the Indian band i s presently sublet f o r $10 per acre, and i n addition a direct levy to the Indian band of $3 per acre i s paid, indicating a t o t a l rent of $13 per acre.  In another case r e n t a l equal  to $15 per acre i s being paid on land rented on a sharecrop basis.  Another  farmer had formerly rented land for $19 per acre, but has since ceased to do so, as he f e l t he was only making a very s l i g h t p r o f i t a f t e r paying the rent. Land producing a l f a l f a i s currently renting f o r $32 per acre, with the land owner being responsible f o r dyking and land taxes, thus earning a net rent of  approximately  $26 per acre.  With the exception of the a l f a l f a land, rentals for which information was  obtained are generally below $20 per acre, and closer to $15 per acre.  These figures are considerably below the estimated net earning power of the land, and t h i s discrepancy merits investigation.  Several possible explan-  ations are explored below: a)  In the case of land on the Creston f l a t s the assumption of a competitive market for land rentals i s open to question. are r e l a t i v e l y few farm operators i n the area who  There  are i n a  position to b i d f o r the rental of land, and land tends to be concentrated i n large holdings (see Table B - l ) , Thus there i s r e l a t i v e l y l i t t l e opportunity f o r a system of competitive bidding to draw forth the maximum rental values of land, b)  Many rents have been established over a r e l a t i v e l y long time period, and may  r e f l e c t past conditions more than those of the  present. c)  Rental land tends to be devoted to grain growing, which has a lower net return than other crops such as potatoes and clover seed.  d)  Rented land f o r which data were obtained may have s o i l or l o c a t i o n a l disadvantages, or for other reasons may not be t y p i c a l of most farmland on the f l a t s .  e)  Rentals paid may be below net earnings by a premium to allow f o r the flood r i s k .  f)  Part of the discrepancy allows f o r the value of the farm operator's labor input.  Rental currently being paid for a l f a l f a producing land i s an i n t e r e s t i n g exception to the above cases.  Land i n a l f a l f a t y p i c a l l y rents  for $32 per acre, with the land-owner receiving a net per acre of approximately $26 after paying taxes.  This appears to be closer to the true  earning power of the land, and suggests that competition i s more e f f e c t i v e i n the r e n t a l of hay land than i n grain. may be so. B.C.  There are several reasons why t h i s  Recent cessation of hay cutting on Crown land managed by the  Forest Service has forced many beef growers i n the West Creston area to  look elsewhere for hay supplies, and they have been competitive i n bidding for the r e n t a l of hay lands.  Dairy and beef producers on the benchlands  around Erickson and L i s t e r have also been seeking a d d i t i o n a l hay supplies, and have contributed to the competitive nature of the market.  Further,  since t h i s i s a recent market occurrence prices paid more closely r e f l e c t current market conditions than those paid for grain land.  Sale Value The price paid for land i n a competitive market should r e f l e c t the discounted value of i t s future stream of net earnings.  While t h i s would hold  i n a competitive market, the land market on the Creston f l a t s does not appear to be e f f e c t i v e l y competitive.  Land changes hands infrequently, and market  values are not c l e a r l y established.  Persons queried about the value of land  generally f e l t i t t o b e worth from $250 to $350 per acre.  Assuming a d i s -  count rate of 8 per cent t h i s r e f l e c t s a net earnings stream ranging from $20 to $28 per acre.  These figures correspond  f a i r l y closely with c a l -  culations made e a r l i e r on an i n d i v i d u a l crop basis.  A farm on the f l a t s currently offered f o r sale i s quoted at approximately $400 per acre, and a recent sale was reported with a value of approximately $325 per acre.  I t i s d i f f i c u l t to determine whether these  prices are based on the current earning power of the land alone, or include a speculative premium due to the impending influence of the Libby Dam.  In  any case, prices i n the region of $250 to $400 per acre, given an imperfect market and the existence of uncertainty, are not inconsistent with the e a r l i e r calculations on i n d i v i d u a l crops and farm enterprises.  Summary It has been the purpose of t h i s appendix to shed some l i g h t on the economics of a g r i c u l t u r a l production on reclaimed lands on the Creston f l a t s . Individual crops were investigated* on a per acre b a s i s , and i t was concluded that an 'average' acre on the Creston f l a t s had a net earning power of $30.06 per year.  Discounted at 8 per cent this indicates a present value,  per acre, of $375.75. These calculations were checked against an analysis based on complete farm units which indicated a net return of approximately  $28 per acre.  A  further check included a b r i e f investigation of the rental and sale value of reclaimed land.  These r e s u l t s , although tending to support the e a r l i e r  findings, were inconclusive due to the s c a r c i t y of r e l i a b l e data. It i s concluded that under present cropping practices and levels of farm management an 'average' acre of reclaimed land on the Creston f l a t s has an annual net earning power of $30.06 and a present discounted value of $376, The preceding calculations of net returns per acre included as costs, non-cash charges to cover depreciation and interest on average investment i n  equipment and b u i l d i n g s .  No charges were deducted to cover the value or  "opportunity-cost" of the farm operator's own  labor input.  The net return per acre of $30.06 thus represents the combined earnings of the land and the farm operator's labor.  This i s the normal  measure of f i n a n c i a l return or p r o f i t used by farm operators.  In deter-  mining the earning power or value of the land alone, a further deduction must be made to account f o r the value of the operator's labor. Imputing a value to operator's.labor i s d i f f i c u l t .  The value which  i s sought should measure the income which a farm,operator could earn i f he were a l t e r n a t i v e l y employed.  This i s d i f f i c u l t to estimate, and at Creston  w i l l vary greatly on a per acre b a s i s , depending on the size of the farm operation. One method of approximation i s to estimate the average number of hours of operator's time per acre, and charge for t h i s time at an hourly rate.  Assuming an hourly rate of $2.50 and an annual input, on the average,  of 1.5 hours per acre, t h i s introduces an additional charge of $3.75 per acre. Deducting t h i s cost reduces the net return per acre to $26.31, and the present value of-an acre of land to $329, as compared to $30.06 and $376 when no allowance i s made f o r the operator's labor input.  The-  differences i n these figures should be stressed. Net earnings of $30.06  It i s assumed that farmers could earn $2.50 per hour i f they were not farming. The estimate of 1.5 hours per acre i s an average f o r a l l farms. On farms of 2,000 acres and more t h i s probably overstates the input, while on farms under 1,000.acres it.may be an under-estimate.  per acre represents the return to land and labor.  Earnings of $26.31 are  the return to land alone. The l a t t e r f i g u r e . $26.31 per acre, equivalent to a present value of $329. w i l l be used i n t h i s study.  The object of our analysis i s t o  estimate the net productivity of land under a g r i c u l t u r a l production.  This  measure must be "net" of the value of a l l Inputs, and the value of the farm operator's labor cannot be excluded from the cost of inputs.  A P P E N D I X  D  APPENDIX D  RECLAMATION COSTS FOR AGRICULTURE  Reclamation Costs:  An Overview  At present 21,000 acres of land have been reclaimed and are farmed i n the Kootenay River floodplain at Creston.  The 15,000 acres which remain  unreclaimed are p h y s i c a l l y similar to those which are now being farmed. Reclamation  of these lands f o r a g r i c u l t u r a l purposes Is f e a s i b l e from a  purely technical point of view, and i n the case of Duck Lake the unreclaimed land i s already protected from the Kootenay River by dyke. In estimating reclamation costs there w i l l be substantial differences i n cost depending on whether reclamation i s done by l o c a l contractors or dyking d i s t r i c t s , or by outside contractors.  Local dyking d i s t r i c t s have  done a l l the reclamation i n the area to date, have s u f f i c i e n t machinery and equipment to undertake further reclamation, and enjoy a d i s t i n c t cost advantage over outside contractors. It i s estimated that i f reclamation work i s contracted l o c a l l y , i t can be done for between 1/3 to 1/2 the cost of having the work done by outside contractors.  Local contractors (dyking d i s t r i c t s ) are experienced at  building dykes In the area, and t h i s alone gives them a d i s t i n c t advantage over outside contractors.  They already have a l l the necessary equipment  for reclamation, and i t i s e s s e n t i a l l y on-site.  Furthermore, l o c a l con-  tractors enjoy a s i g n i f i c a n t advantage i n labor costs.  By using l o c a l  labor (farm employees during the winter months when farm demands are s l a c k ) ,  labor costs are reduced below those faced by outside contractors h i r i n g union workers. Figures supplied by the United States F i s h and W i l d l i f e Service support t h i s argument.  While pointing out that costs vary depending on  materials, distance to haul, s p e c i f i c a t i o n s of dyke, etc., the following figures are applied as general guides f o r reclamation costs: I f the F i s h and W i l d l i f e Service undertakes the work using t h e i r own equipment, d i r t can be moved and dykes b u i l t f o r approximately 20<: per cubic yard. If work i s done by contract, costs are 75<? per cubic yard, provided mats are not required under draglines; i f mats are used under draglines, costs are approximately 90<? per cubic yard. Due to the differences i n the cost of both c a p i t a l and labor between Canada and the United States, these figures cannot be assumed to represent the actual cost of dyke construction at Creston.  They are useful however  insofar as they i l l u s t r a t e the s i g n i f i c a n t v a r i a t i o n i n costs which can be expected depending on who carries out reclamation work.  Reclamation Costs.  Creston  In the past dykes have been constructed i n the Creston area f o r as l i t t l e as 180 per cubic yard, although average costs have been approximately 27£ per cubic yard.**  There have been no major reclamation projects i n recent  years however and i t i s estimated that current costs f o r dyke construction  In a l e t t e r to Dwight Moore, Supervisor, Creston Valley W i l d l i f e Management Area,  ** Source:  Mr, V. Mosher, P. Eng, engineer i n charge of reclamation.  are 80£ per cubic yard. In the following estimates i t i s assumed that material for the cons t r u c t i o n of dykes w i l l be obtained on-site, and no hauling charges w i l l be incurred.  D i r t w i l l be dredged from outer perimeters  each unit to b u i l d dykes.  and pulled back into  For a g r i c u l t u r a l reclamation a dyke with a 10  foot width at top and a 3 to 1 slope i s assumed.  This meets the s p e c i f i -  cations of both the International J o i n t Commission and International Power and Engineering Consultants Ltd.  (IPEC).  Clearing the r i v e r bank i n preparation for dyking can be an additional cost.  In most areas the r i v e r banks are b u i l t up i n natural  levees, and support  a heavy growth of cottonwood trees.  These trees and  t h e i r roots must be removed to prepare f o r coring and construction of dykes. Assuming that a s t r i p 132 feet wide must be cleared, I t w i l l be necessary to clear 16 acres per mile of dyke. acre, or $8,000 per mile. clearing costs may  Cost of clearing i s estimated at $500 per  In some areas the growth of trees i s l i g h t  and  be lower, but t h i s figure i s used as an average cost.  Pumping and Maintenance Maintenance costs on the reclaimed land include the repair and maintenance of dykes and ditches and pumping of seepage and runoff.  These  costs are currently approximately $3 per c u l t i v a t e d acre, although they vary between dyking d i s t r i c t s .  Maintenance work i s carried out by the respective  dyking d i s t r i c t s and financed by a per acre tax on-, reclaimed  land.  Dykes recently constructed by the C.V.W.M. Authority have varied i n cost from 60£ to $1.00 per cubic yard, 80<? per cubic yard i s used here as an average cost.  Maintenance costs w i l l be considered i n estimating future reclamation costs.  Maintenance costs have already been included i n  estimating the net earning power of land under agriculture (Appendix C) and to include them again would be  Net Reclaimable  double-counting.  Area  An additional consideration involves the loss of land to dykes, A  ditches, and roads.  Persons experienced i n reclamation at Creston  estimate  that t h i s loss w i l l be approximately ten per cent of the gross area of any u n i t being reclaimed.  After reclamation 90 per cent of the land area w i l l  be available f o r c u l t i v a t i o n . Libby  Dam A c r i t i c a l matter which w i l l a f f e c t both the type and cost of dyke  construction i s the e f f e c t of the Libby Dam Kootenay River.  on the annual freshet of the  Currently under construction at Libby, Montana  (upstream  from Creston) the primary function of Libby Dam i s h y d r o - e l e c t r i c power generation.  However, an important secondary  function w i l l be the provision  of flood control f o r reclaimed land i n the Kootenay River floodplain. Management for flood control i n the United States w i l l provide s i m i l a r benefits for farmland on the floodplain at Creston, Much of the effectiveness of Libby Dam on how  i t i s used to meet power requirements.  f o r flood control w i l l depend For t h i s reason there i s a  p o s s i b i l i t y that a second dam may be constructed downstream from Libby to regulate stream flow.  Dam  This dam would control rapid fluctuations i n r i v e r  Messrs, A, Staples, W. Piper J r . , and V. Mosher.  flow which, could result from periods of peak, drawdown, on the Libby reservoir. To date the best estimates available indicate that the e f f e c t of Libby Dam w i l l be to reduce the high water l e v e l at times of peak runoff by about ten feet.  The estimated high and low water l e v e l s at various points from  the United States border to Kootenay Lake are presented i n Table D - l . TABLE D-l  '  ESTIMATES OF KOOTENAY RIVER LEVELS AFTER LIBBY  Location  DAM  High Water 100% of 90% of time time below below  Low Water 100% of 90% of time time above above  (elevation i n feet above sea level) P o r t h i l l (U.S. border)  1756.6'  1752.6*  1738.6'  1739.6'  Goat River  1755.0  1751.7  1738.4  1739.4  Creston Ferry  175.4.9  1751.6  1738.4  1739.4  Corn Creek  1753.9  1750.9  1738.3  1739.3  Kuskanook (Kootenay Lake)  1752.0  1750.0  1738.1  1739.1  These estimates are based on work done by the Water Rights Branch, Department of Lands, Forests and Water Resources, V i c t o r i a , and presented i n correspondence to Dr. J . Hatter, Director, F i s h and W i l d l i f e Branch, A p r i l 15, 1969. The estimates as presented are amended i n accordance with a l a t e r l e t t e r to D.D, Moore, Supervisor, Creston Valley W i l d l i f e Management Area.  There i s a s l i g h t drop i n elevation moving north from P o r t h i l l to Kuskanook,  After Libby Dam  construction of dykes with a two foot leeway or  freeboard would require a dyke of 1759' elevation on the Indian  Reserves.  Further north at Six Mile Slough a dyke of elevation 1754' would be sufficient.  To deal with h i s t o r i c r i v e r levels dykes on reclaimed land i n  the south are presently b u i l t to an elevation of 1770', while those at DuckLake, i n the north, are b u i l t to 1764 . 1  The Impact of Libby Dam w i l l thus be to greatly reduce dyking requirements and costs compared to those incurred i n the past.  Reclamation Costs f o r Individual Areas The Indian Reserves The combined area of Indian Reserves 1, 1A and IB i s estimated at 3,000 acres (see Map).  U n t i l recently most of t h i s land presented the  p o t e n t i a l for a g r i c u l t u r a l reclamation, and previous estimates of the costs of reclamation were based on developing the e n t i r e area.  With any  reclamation plan the most d i f f i c u l t aspect i s the control of the Goat River which flows into the Kootenay River and forms the northern boundary of Reserve IB,  The banks of the Goat are low and i r r e g u l a r , and levees are poorly  formed.  S o i l s i n t h i s area are very porous and deep coring under dykes would  be necessary to prevent seepage.  Despite these problems previous reclamation  plans envisaged development of the entire area of these Indian Reserves. Within the l a s t two years however the problems associated with the Goat River have become f a r more serious.  The Department of Highways has  diverted a major part of the flow of the Goat River into a more southerly  Reference here i s to an independent and intensive study by Wm. Piper J r . , of Creston 1964-1965, and to estimates conveyed to Dr. W.J.D, Stephen of the Canadian W i l d l i f e Service by Underwood McLellan and Associates of Edmonton, January 29, 1968.  channel where i t crosses the highway to the east of Reserve IB, This has resulted i n serious channelization and erosion throughout the northern half of Reserve IB. As a r e s u l t of t h i s diversion of the Goat River any development plan being prepared at present would not consider t h i s portion of the Indian Reserves as a p o t e n t i a l area for a g r i c u l t u r a l reclamation.  The a d d i t i o n a l  problems created by having two branches of the Goat River to contain, severely channeled and eroded land, plus the repercussions which any development would have on private land to t h e east, have rendered t h i s area unattractive f o r further a g r i c u l t u r a l reclamation.  The alternative would be  to construct a dyke across Indian Reserve IB to the south of the area affected by the Goat River, as indicated with a dotted l i n e on the map. This would preclude approximately  700 acres from development but i s the  only f e a s i b l e a l t e r n a t i v e , given recent diversion of the Goat River. For reasons given above the reclamation plan considered i n t h i s study i s based on an area of 2,300 acres only.  After dykes, roads, and ditches  are b u i l t i t i s assumed that.90 per cent, or 2,070 acres' could be put into a g r i c u l t u r a l production.  Estimates of dyke requirements  and costs are based  on Kootenay River levels as given i n Table D - l Dyke requirements  along the Kootenay River, which forms the western  boundary of the reserves, w i l l be minimal.  The Kootenay River w i l l not  exceed 1756.6' at the south end of the Indian Reserves ( P o r t h i l l ) or 1755.0' i n the north (Goat River).  Allowing a two foot freeboard on dykes i n t h i s  area requires a top elevation of 1759' i n the south, f a l l i n g to 1757' at the northern end.  At present the rtverbank i n t h i s area i s consistent at elevations between 1760' and 1762', with small gaps i n only three places.  With the  exception of these gaps the natural, levee i s broad and w e l l established and with gaps f i l l e d i n would serve as a more than adequate dyke with a leeway of 6 to 8 feet above maximum r i v e r l e v e l s .  Dyking costs along the  Kootenay River would thus be minimal - consisting only of the cost of f i l l i n g the gaps i n the levee - at the most $10,000. A second dyke w i l l be required across the north of this area to cont a i n the Goat River.  The required dyke, as outlined e a r l i e r , w i l l be about  9,000 feet long with a top elevation of 1758' at i t s eastern end, f a l l i n g to 1757'  at the west end. Construction of t h i s dyke w i l l require approximately  36,000 yards of f i l l ,  costing approximately  $36,000.  Additional costs f o r i n t e r n a l ditching and i n s t a l l a t i o n of pumps, approximately $76,000.  $30,000, brings the t o t a l c a p i t a l costs of reclamation to  On a per acre b a s i s , with 2,070 c u l t i v a b l e acres, t h i s amounts to  $37.  Under h i s t o r i c conditions there have been problems i n some areas where water has seeped through porous s o i l under dykes and saturated s o i l s i n low lying areas of reclamation units. Seepage i s prevented by "coring" or digging a trench into the porous s o i l under the dyke and r e f i l l i n g with nonporous material. While seepage problems might have been expected were the Indian Reserves reclaimed under h i s t o r i c conditions, they are not l i k e l y to occur a f t e r Libby Dam. Kootenay River levels w i l l only be above the lowest areas i n the Indian Reserves by about 4 feet and pressure would be i n s u f f i c i e n t to cause seepage. I t i s assumed therefore that there w i l l be no costs f o r coring along the Kootenay River,  ** Costs of $1 per yard are assumed after considering the need to haul f i l l and the distances involved. A s i m i l a r although much shorter dyke constructed recently i n the southern part of the Indian Reserves had costs of $1 per yard.  The Corn Creek. Unit There are approximately 1,400  acres i n the Corn Creek unit up to  elevation 1758' and terminating at Summit Creek i n the north.  The cost of  reclaiming t h i s area depends on the methods used to control Summit Creek In the north, and Corn Creek i n the south.  These streams enter the area from  the mountains to the west, and meander extensively through the floodplain, with a considerable streamflow during spring-runoff.  Both of these streams  would have to be controlled, and I t i s assumed that canals would be dug to  * carry them across the floodplain to the Kootenay River.  In addition to con-  t r o l l i n g Corn and Summit Creeks the canal banks would act as dykes against the waters of the Kootenay River. There are two alternatives f o r c o n t r o l l i n g Corn Creek,  These a l t e r -  natives depend on whether that portion of Indian Reserve 1C which l i e s on the west bank of the Kootenay River can be included i n the reclamation unit. There are approximately 200 acres i n t h i s portion of Indian Reserve 1C; 100 acres at the south end of Nick's Island, outside the dyking d i s t r i c t , and an additional 100 acres on the west bank of the Old Kootenay Channel. If i t were possible to include this portion of Indian Reserve 1C i n the  Corn Creek area, the simplest approach would be to extend the dyke along  the  eastern side of the Island to a point near the southern t i p .  could then be placed across the Old Kootenay Channel;  A fill  dyke  Cora Greek wquld be  most e f f e c t i v e l y controlled by digging a canal which would carry i t east  This has recently been done with Summit Creek as part of a development program f o r Leach Lake. Summit Creek was diverted i n t o a canal which enters the Kootenay River north of the Nick.' s Island dyking d i s t r i c t at a cost of approximately $150,000.  N I C K S  I S L A N D  from the point where I t enters the floodplain, to enter the Old Kootenay Channel j u s t south of the proposed f i l l dyke.  This altnernative would,  bring an additional 200 acres into the area, bringing the t o t a l acreage to approximately If  1,600  acres.  these portions of Indian Reserve 1C were not included i n the  reclamation project, the a l t e r n a t i v e would be to place a f i l l dyke across the Old Kootenay Channel j u s t north of Indian Reserve 1C, and adjoining the e x i s t i n g dyke at that point.  Corn Creek could then be confined to a canal  which would s k i r t the Indian Reserve and enter the Old Kootenay Channel south of  the proposed crossdyke. An important assumption i n both of these alternatives i s that any  new  dykes could be joined to the e x i s t i n g dykes of the Nick's Island Dyking D i s t r i c t which l i e s to the east of the Corn Creek area.  This would eliminate  the need to construct a dyke along the eastern boundary of the Corn Creek u n i t , and by combining with the Nick's Island Dyking D i s t r i c t , annual maintenance costs could be  reduced.  Whether Indian Reserve 1C i s Included i n t h i s reclamation or not, the cost of c o n t r o l l i n g Corn Creek w i l l be approximately equal.  The advantage of  including Reserve 1C i n the reclamation area l i e s i n increasing the area of c u l t i v a b l e land and s i g n i f i c a n t l y reducing per acre reclamation costs. With control of both Corn and Summit Creeks the dykes thrown up to contain streamflow would also serve as b a r r i e r s to high water from the Kootenay River.  Pressure from the Kootenay would be l i g h t however, given the  r i v e r levels of Table D - l .  Most of the land within the Corn Creek unit l i e s  between 1752'-1754'; the Kootenay River i s not expected to exceed 1753.9' at its  maximum i n the Corn Creek area, and 90 per cent of the time w i l l be below  1750-.9*.  To be e f f e c t i v e against the Kootenay River dykes would have to be  b u i l t to an elevation of 1756', and* any dykes b u i l t to control Corn or Summit Creeks would exceed t h i s elevation. The cost of diverting and channelization for both streams i s estimated to be $300,000.  I f the Corn Creek area were reclaimed independent of any  work i n Leach Lake (immediately to the north) then the entire cost of cont r o l l i n g both streams would be a t t r i b u t a b l e to the Corn Creek reclamation. I f reclamation of Corn Creek were carried out i n conjunction with development of Leach Lake however only one-half of the cost of Summit Creek control would be charged to the Corn Creek, area.  Thus c a p i t a l costs for control of  these two major streams could be either $300,000, or $225,000, depending on whether or not a j o i n t reclamation of Leach Lake were undertaken. In addition;, a peripheral ditch would be required along the western edge of the unit to c o l l e c t the runoff from several small streams draining the adjacent benchlands.  Cost of t h i s ditch, plus necessary i n t e r n a l ditching,  and the i n s t a l l a t i o n of limited pumping capacity would be $50,000 at the maximum.  The t o t a l c a p i t a l cost of reclaiming t h i s unit would thus vary  from $275,000 to $350,000 depending on the status of Leach Lake development. I f the portion of Indian Reserve 1C discussed above i s included i n this area, 1,440 acres would be c u l t i v a b l e a f t e r reclamation. Reserve 1C i s not included, 1,260  acres would be available.  I f Indian  Estimated  c a p i t a l costs per acre vary from $191 to $278, as summarized i n Table D-2.  Work presently underway to control Summit Creek i s expected to be completed f o r $150,000. Control of Corn Creek, would cost approximately the same amount.  TABLE D-2  ESTIMATED TOTAL AND PER ACRE RECLAMATION COSTS. CORN CREEK AREA  Per Acre Costs Capital Costs  I.R. 1C Included (1,440 Acres)  I.R. 1C Excluded (1,260 Acres)  Reclamation Independent of Leach Lake  $350,000  $243  $278  Reclamation i n Conjunction with Leach Lake  $275,000  $191  $218  The Leach Lake Unit There are approximately 2,900 acres i n t h i s unit which would y i e l d 2,600 c u l t i v a b l e acres a f t e r reclamation. As with the Corn Creek area, the future course of Summit Creek i s important, as i t forms the southern boundary of the Leach Lake unit.  Again  i t i s assumed that Summit Creek i s taken d i r e c t l y across the floodplain to the Kootenay River by digging a canal, and i n t h i s case the north dyke of the canal w i l l form the dyke for the south end of the area. c o n t r o l l i n g Summit Creek i n t h i s manner i s approximately  The cost of  $150,000. I f  reclaimed i n conjunction with Corn Creek only one h a l f of t h i s , $75,000, would be attributed to Leach Lake reclamation costs. The Leach Lake area i s bounded by the Kootenay River f o r 6 miles on the west and north.  After Libby Dam the Kootenay River w i l l not exceed  1753,9' i n t h i s area (reading given f o r Corn Creek which i s upstream from  LEACH  L A K E  Leach Lake).  For a g r i c u l t u r a l purposes dykes would have to crest no  than 1755.9', allowing a two foot freeboard.  lower  Throughout most of the area at  present the n a t u r a l riverbank and levee has an elevation varying from to 1760'  and dyking would not be required.  1758'  The only exception i s i n the  extreme north west edge of the area where there i s a break i n the levee f o r 1/4 mile.  This would require dyke construction, and there are several other  areas where i r r e g u l a r i t i e s i n the levee may have to be straightened as w e l l as one area where severe bank erosion would have to be arrested. estimate of the cost of these works would be $25,000.  A liberal  Ditching within the  unit and i n s t a l l a t i o n of a pump to handle i n t e r n a l drainage, including small creeks from the benchlands i n the west, would cost an additional $70,000, T o t a l reclamation costs would thus be $170,000 i f work i s carried out i n conjunction with Corn Creek reclamation, $245,000 i f carried out independently. Per acre costs would vary from $65 to $94.  Six Mile Slough The Six Mile Slough area i s an i s l a n d bounded by the east and west channels of the Kootenay River immediately  south of Kootenay Lake,  At the  north end of the area the Canadian P a c i f i c Railway embankment provides a b a r r i e r to the waters of Kootenay Lake. 1758'  Estimates place the area up to the  contour at 2,650 acres. At the north end of t h i s unit (Kuskanook) the Kootenay River w i l l not  exceed 1752,0' a f t e r Libby Dam,  while i n the south, a distance of s i x miles,  i t could be expected to reach 1753'.  E f f e c t i v e protection for agriculture  would require a dyke b u i l t to top elevation of 1755' 1754'  i n the north.  i n the south, f a l l i n g to  At present the periphery of the unit i s consistent between elevations 1756' to 1758' along the east side.  Elevations along the west side of the  unit are also from 1756' to 1758' except for approximately 3,000 feet i n the north end where the elevation i s only 1754', and 1,000 feet where i t i s only 1752'.  There Is also a very short break i n the levee on the west side where  water flows out of the area when the Kootenay River i s low. end of the unit elevations are generally low (1744  1  Across the north  to 1752').  The C.P.R.  railway embankment forms the northern boundary of the unit and acts as a b a r r i e r to Kootenay Lake.  While i t would protect the unit from wind and wave  erosion, i t i s constructed of quarried rock and would not prevent water seepage. E f f e c t i v e protection of the unit for a g r i c u l t u r a l purposes would require closing the small gap on the west s i d e , r a i s i n g 1,000 feet of the levee by two feet to elevation 1754', and building a dyke across the north end of the unit inside the railway embankment. Cost of b u i l d i n g the dyke across the north end of the unit to a crest elevation of 1754' i s estimated at $55,000.  Cost of r a i s i n g  1,000  feet of levee on the west by two feet and closing the narrow gap i n the levee i s estimated  at $12,000.  The cost of i n t e r n a l ditching and i n s t a l -  l a t i o n of pumping capacity would be minimal as the area i s an i s l a n d and does not have any mountain runoff to pump.  The area slopes consistently  toward the centre so that any drainage system could take advantage of the natural drainage which e x i s t s .  The cost of ditching and i n s t a l l a t i o n of  necessary pumping capacity i s estimated at $30,000.  68,740 cubic yards of f i l l , at 80<? per cubic yard.  Total reclamation costs are thus i n the order of $100,000, equal to $42 per acre for 2,400 c u l t i v a b l e acres. An important farm Six Mile Slough.  additional cost i s involved i n planning to reclaim and This involves the provision of access to the area.  The area i s an i s l a n d and at present has no road access.  Access i n the  past has been by means of a small p r i v a t e f e r r y which i s used mainly to transport l i v e s t o c k to the area f o r summer grazing. This ferry would not provide adequate access to the area i f i t were being farmed intensively.  A Bailey bridge adequate to carry farm trucks and  machinery would cost approximately installed.  $75,000, or a small cable ferry could be  While the i n i t i a l cost of the ferry might be less than that of the  bridge annual operating and maintenance costs would probably make i t a less desirable a l t e r n a t i v e than a bridge i n the long run.  It i s assumed here  that access i s provided by means of a bridge at a cost of $75,000.  This has  the e f f e c t of increasing c a p i t a l costs to $175,000, or $73 per acre. Duck Lake Unlike the other areas of unreclaimed  land, Duck Lake i s already  protected by dyke from the Kootenay River as i t l i e s within the Duck Lake Dyking D i s t r i c t ,  Duck Lake l i e s at the north end of the Dyking D i s t r i c t  and i s used to store the spring runoff of Duck Creek which enters the f l o o d p l a i n at Wynndel,. Duck Lake i s separated from the cultivated land i n the D i s t r i c t by a cross dyke with a crest elevation of 1752.0'.  Water l e v e l  fluctuations within the lake are presently kept within s i x feet ( E l . 1742' to E l . 1748') by o u t l e t pumps at the north end of the lake which pump the stored water i n t o Kootenay Lake.  Planimetry estimates place the t o t a l area of unreclaimed the 1758' contour at 4,671 acres. p o t e n t i a l l y arable.  land up to  However, not a l l of t h i s land i s  Persons farming i n the Duck. Lake Dyking D i s t r i c t  estimate that only about 3,000 acres of t h i s land would be suitable f o r farming,  The rest of the land i s f e l t to be too low, and to have such a  heavy clay s o i l that i t would not be suitable f o r c u l t i v a t i o n . The major problem i n reclaiming further land i n t h i s area w i l l be the control of Duck Creek.  This would be best achieved by constructing a con-  t r o l dyke along the eastern edge of the area, commencing the e x i s t i n g cross dyke.  This dyke would prevent the waters of Duck Creek  from inundating further reclaimed land. then be necessary  at the point of  An east to west cross dyke would  at the north end of further reclaimed land.  Construction of such a control and cross dyke would be r e l a t i v e l y inexpensive, as the dykes would not have to withstand the pressure of the Kootenay River, and no preparatory clearing would be required. necessary however to rip-rap the dyke facing on the remaining area to prevent wave erosion.  I t may be unreclaimed  In a l l between 3.5 and 4 miles of dyke would  be required, costing an estimated  $80,000.  Additional pumping capacity would be required to pump the runoff from Duck Creek i n t o the Kootenay River.  Based on the cost of new pumps  currently being i n s t a l l e d by B.C. Hydro,  t h i s would require a c a p i t a l out-  lay of $160,000. With these estimates, the t o t a l c a p i t a l cost of reclaiming an additional 3,000 acres i n Duck Lake i s placed at $240,000; $80,000 f o r  * Two e l e c t r i c a l l y powered 150 h.p. 30 i n . pumps, each having a capacity of 30,000 gallons per minute.  dyking, and $160,000 for pumps.  This involves an i n i t i a l c a p i t a l outlay  of $80 per acre. It has been suggested as an alternative to t h i s reclamation plan that further reclamation i n Duck Lake could be achieved without the cons t r u c t i o n of new  control or cross dykes.  This alternative assumes that  the i n s t a l l a t i o n of additional pumping capacity w i l l make i t possible to reclaim more land simply by lowering the l e v e l of Duck Lake.  I f t h i s were  so, and an additional 3,000 acres reclaimed, then the i n i t i a l c a p i t a l outlay would be reduced to $160,000 or $53 per acre.  I t i s doubtful that  t h i s i s a r e a l i s t i c alternative however, as i t i s f e l t that cross and cont r o l dyking would be required to control the flow of Duck Creek, and to protect additional reclaimed land from the remnant of Duck Lake.  Summary of Estimated  Reclamation  Cost f o r Individual Areas The preceding estimates of reclamation costs f o r i n d i v i d u a l areas are assembled and summarized i n Table D-3.  C a p i t a l costs per acre vary from  a low of $37 i n the Indian Reserves to a high of $218  for the Corn Creek  Unit (I.R. 1C excluded). This wide v a r i a t i o n i n costs between areas can be attributed to differences i n the size and p h y s i c a l aspects of the areas.  Per acre costs  i n the Corn Creek area are far i n excess of those f o r other areas.  The  Corn Creek area i s the smallest reclamation unit being considered, and the need to control the runoff from Summit and Corn Creeks makes i t r e l a t i v e l y very costly.  Per acre costs for the other areas are more uniform, as they  TABLE D-3 SUMMARY OF ESTIMATED RECLAMATION  AREA AND  ESTIMATES  ACRES IN CULTIVATION AFTER RECLAMATION  CAPITAL  COSTS FOR INDIVIDUAL AREAS*  COSTS PER ACRE  TOTAL  COST OF INITIAL SOIL PREPARATION ($10/ACRE)  TOTAL COST (SUM OF CAPITAL COSTS PLUS INITIAL SOIL PREPARATION) T o t a l Area P e r Acre  2,070  $76,000  $ 37  $20,700  $ 97,000  $ 47  CORN CREEK UNIT I n d i a n Reserve 1C Included  1,440  275,000  191  14,400  289,400  201  I n d i a n Reserve 1C Excluded  1,260  275,000  218  12,600  287,600  228  2,600  170,000  65  26,000  196,000  75  73  24,000  199,000  83  80  30,000  270,000  90  1.  INDIAN RESERVES 1, 1A, IB  2.  3.  LEACH LAKE  4.  SIX MILE SLOUGH  2,400  175,000  5.  DUCK LAKE  3,000  240,000  AA  The c a p i t a l c o s t s summarized here f o r both Corn Creek and Leach Lake assume that development of these two areas would be undertaken i n c o n j u n c t i o n . AA  Includes c o s t of b r i d g e access to area.  are generally twice as large as the Corn Creek unit and do not face the same Internal drainage problems.  Cost of I n i t i a l S d i l Preparation In addition to these direct c a p i t a l costs f o r reclamation there w i l l be an i n i t i a l cost i n preparing the s o i l for c u l t i v a t i o n .  This w i l l include  such things as burning off marsh vegetation, brush and tree; removal, and the f i r s t s o i l breaking.  For most areas these costs w i l l be low. The land  that has been i n marsh and overlain with water supports r e l a t i v e l y l i t t l e vegetation.  I f the areas are dried out and most of the vegetation burned  off there would be l i t t l e involved i n the i n i t i a l plowing and disking. In some areas brush and tree removal may add to these expenses. In estimating these costs we must consider the extent to which they represent costs i n excess of normal c u l t i v a t i n g costs.  Even on cropland  that has been i n c u l t i v a t i o n f o r some time there i s an annual expense f o r plowing and c u l t i v a t i n g .  I n i t i a l s o i l breaking costs should be considered  as a separate expense only to the extent that they exceed normal c u l t i v a t i o n I  costs. With this i n mind i n i t i a l s o i l preparation costs are estimated to average $10 per acre f o r further reclaimed land at Creston.  These costs are  included i n Table D-3 i n the summary of o v e r a l l reclamation costs.  A P"?P E N D I X  E  APPENDIX E QUALIFICATIONS TO BASIC FEASIBILITY ANALYSIS FOR AGRICULTURE  This appendix discusses several important on the f e a s i b i l i t y of further investment  factors which might bear  i n a g r i c u l t u r a l reclamation on the  Creston f l a t s . Increased Dyke Erosion by the Kootenay River With Libby Dam protection the Kootenay River w i l l not reach the flood peaks which i t has i n the past, but i t w i l l remain at high levels for a longer time due to the gradual release of the runoff,  Libby Dam  reduce the sediment load of the Kootenay River and t h i s may  will  result i n  accelerated erosion below the dam due to the increased carrying capacity of the r i v e r .  At present no studies have been undertaken which give any  indication of the probable magnitude of increased erosion.  We are dealing  i n conjecture i n trying to assess the impact which this may have on further reclamation projects. Two problems could result from the Kootenay River being at high levels f o r a prolonged period. other increased erosion.  One involves increased water seepage and the  The p r o b a b i l i t y of serious crop damage as a result  of seepage appears r e l a t i v e l y low.  With Libby Dam  the r i v e r levels w i l l not  be high enough, r e l a t i v e to the land being cropped, to create s u f f i c i e n t pressure to cause extensive seepage,' While t h i s remains l i t t l e more than a guess, we w i l l discount at t h i s point the probability of increased water seepage following Libby  Dam,  Of more consequence Is the question of increased erosion due to the reduced sediment load of the Kootenay River. serious i t may  I f t h i s should prove to be  require extensive rip-rap along the outer side of dykes,  rap would have to be hauled to the s i t e and would be very expensive.  Rip-  This  could be a s i g n i f i c a n t factor i n a f f e c t i n g the f e a s i b i l i t y of further reclamation.  Areas which do not require a dyke may  s t i l l have to be cleared  and the banks graded f o r the placement of rip-rap, an expense which would not otherwise be incurred. It i s impossible to do anything other than qualify the e a r l i e r si  f e a s i b i l i t y estimates to allow for the p r o b a b i l i t y of t h i s expense. i s no substantive information on which to base estimates.  There  Duck Lake can be  excepted from such q u a l i f i c a t i o n , as further reclamation i n t h i s area would not require additional protection against the Kootenay River.  For the other  areas rip-rap costs could be considerable and would reduce the l e v e l of net benefit to be expected from reclamation.  However, for a l l areas except Corn  Creek reclamation appears very favorable and the "erosion threat" can only be taken as a limited q u a l i f i c a t i o n to the basic f e a s i b i l i t y estimates.  Kootenay Lake Levels After Libby  Dam  Another "variable" which may bear on the long run f e a s i b i l i t y of a g r i c u l t u r a l reclamation i s the l e v e l of Kootenay Lake.  At present the levels  of Kootenay Lake are controlled within l i m i t s by West Kootenay Power-and Light Company's dam at Bonnington F a l l s .  The maximum authorized storage  l e v e l of the lake i s 1745.32' although flood peaks of course exceed t h i s . The l e v e l s of Kootenay Lake have a s i g n i f i c a n t e f f e c t on the water l e v e l i n  the Kootenay River immediately south of the lake, and hence on the  unreclaimed  land i n the f l o o d p l a i n . After Libby Dam  i t i s expected that the flood peaks on Kootenay Lake  w i l l be reduced as a consequence of the reduced peak on the Kootenay River. Studies indicate that flood peaks on Kootenay Lake would not exceed 1752,0* * a f t e r Libby Dam.  On the basis of t h i s information i t appears that the  levels of Kootenay Lake w i l l not have any adverse e f f e c t s on the l e v e l of Kootenay River or the f e a s i b i l i t y of further reclamation i n the f l o o d plain. It has been suggested that a f t e r the completion  of Libby Dam  the  Water Rights Branch and the International J o i n t Commission may be asked to authorize a two foot increase i n the maximum storage l e v e l of Kootenay Lake. If t h i s increase i s authorized i t w i l l have l i t t l e impact on reclamation. The c r i t i c a l period for reclamation projects i s the annual freshet when r i v e r and lake l e v e l s are at a peak f a r i n excess of the authorized l e v e l s for storage.  Increasing the authorized storage l e v e l w i l l have l i t t l e  e f f e c t during t h i s c r i t i c a l period, and during the rest of the year lake l e v e l s w i l l s t i l l be too low to have any adverse e f f e c t . Again we are dealing i n conjecture, as a decision on t h i s matter i s not expected u n t i l Libby Dam  has been: i n operation, and there i s no  i n d i c a t i o n as to whether or not increased storage would be authorized.  In  Computer studies by the U.S. Army Corps of Engineers for each flood season of the years 1928-1958 indicate that the highest l e v e l of Kootenay Lake would have been E l . 1752.0* on the 18th and 19th of J u l y , 1954 with Libby Dam regulation. While higher levels could occur the p r o b a b i l i t y i s very small. SOURCE: Contained i n a l e t t e r from the Water Rights Branch, V i c t o r i a , B.C., to D.D. Moore, Supervisor, Creston Valley W i l d l i f e Management Area.  arty case i t appears unlikely that increased storage would have any adverse e f f e c t on the f e a s i b i l i t y of further reclamation.  Variation i n S o i l C a p a b i l i t i e s The estimated returns from further reclamation are based on a study of farms on presently reclaimed lands.  Applying these estimates to further  reclamation assumes, as discussed e a r l i e r , uniform productivity and c a p a b i l i t y of s o i l s *  This i s f e l t to be a reasonable assumption  as the  presently reclaimed land encompasses the same type of s o i l s as would be expected on further reclamation projects.  This assumption too should be  questioned - although to do so i s d i f f i c u l t as there have been no comprehensive s o i l studies made on the Creston f l a t s . Observations by persons f a m i l i a r with the undeveloped  areas indicate  that there i s a considerable v a r i a t i o n between the s o i l s of the unreclaimed areas.  I t Is generally agreed that the s o i l i n the Indian Reserves i s the  most f e r t i l e i n the v a l l e y and would be considerably above average i n productivity.  In the Corn Creek unit large areas of poor sandy s o i l are  encountered and the s o i l s are probably below average i n productivity. S o i l s i n the Leach Lake unit probably are close to average i n productivity.  At the south end of the unit they are f a i r l y well built-up while  i n the north they have remained covered by the shallow waters of Leach Lake. S o i l s at the bottom of Leach Lake are at approximately the same elevation as those now farmed on the Duck Lake Dyking D i s t r i c t . Again i n the Six Mile Slough area s o i l s would be close to average i n productivity.  At the south and around the perimeter of the area s o i l s tend  to be well developed, while i n the center they are lower and covered by water.  Low productivity" s o i l s would be encountered i n further reclamation of Duck Lake.  The s o i l s here are low and tend toward a heavy clay which i s not  w e l l suited to grain crops.  They are adaptable however to crops such as  clover seed, and could probably be improved"considerably  by t i l l i n g  and  legume crops. These discussions indicate that we might expect s o i l c a p a b i l i t i e s to be above average on the Indian Reserves, approximately  average i n Leach  Lake and Six Mile Slough, and below average i n the Corn, Creek and Duck Lake units.  Such assessments are r e a l l y l i t t l e more than conjecture as there have  been no rigorous studies of the s o i l s In the area which would substantiate them.  We would expect s o i l capability to have an.adverse effect.oh the  f e a s i b i l i t y of further reclamation only i n the Corn Creek and Duck Lake areas. In the Duck Lake area the net benefit and benefit cost r a t i o s are both high, and while a lower productivity might reduce these estimates i t would not a l t e r the basic conclusion regarding f e a s i b i l i t y .  ,.  '  S e n s i t i v i t y to Changes i n the Discount Rate Selection of the appropriate discount rate for benefit cost analysis has received considerable attention (McKean 1958, Marglin 1963).  The problem  i s to i d e n t i f y the appropriate borrowing or lending rate f o r the agency whose point of view i s adopted i n the analysis. This i s d i f f i c u l t i n the present analysis, as benefits and costs are being compared from the point of view of three "referent groups" - the Creston area, the province of B r i t i s h Columbia, and Canada.  Furthermore the  o v e r a l l analysis involves two d i f f e r e n t types of p r o j e c t s , agriculture and w i l d l i f e development.  A g r i c u l t u r a l development i s e s s e n t i a l l y a private  undertaking the benefits of which accrue to those undertaking the development.  W i l d l i f e development i s a public investment, the benefits of which  w i l l accrue to a much broader group of people than a g r i c u l t u r a l benefits. Nevertheless both farmers and persons who w i l l benefit from w i l d l i f e development are members of the various referent groups, and benefits which accrue to them must be considered benefits to the referent groups. Considering  these factors, selecting an appropriate i n t e r e s t rate f o r  use i n this study i s very d i f f i c u l t .  So that the respective benefits and  costs of the development alternatives can be properly compared the same i n t e r e s t rate should be used throughout. Selection of the proper " s o c i a l discount rate" i s largely a p o l i t i c a l decision.  In the absence of direct p o l i t i c a l guidelines i t has been the  custom i n the past to adopt the i n t e r e s t rate paid by the relevant government on long term bonds.  At the present  government bonds runs from 7 to 8.4  time the y i e l d on various long term per cent.  A rate of 8 per cent i s used  in this study to discount future benefits from both a g r i c u l t u r a l and w i l d l i f e development.  This i s f e l t to be a s a t i s f a c t o r y approximation of the  y i e l d on government bonds, and i n the case of agriculture corresponds to the rate at which loans for land purchases are made by the federal government under the Farm Improvement Loans Act. We must recognize however that the result of a benefit cost analysis w i l l be altered i f d i f f e r e n t discount rates are adopted.  The higher  the  rate used, the more severely are future values reduced i n c a l c u l a t i n g t h e i r present values.  For projects such as a g r i c u l t u r a l reclamation where costs  are incurred over a short i n i t i a l time and benefits accrue over a long time period lower discount rates w i l l enhance f e a s i b i l i t y while higher rates w i l l  reduce i t * To ensure that the basic f e a s i b i l i t y conclusions are independent of the choice of discount rate i t i s customary to test the s e n s i t i v i t y of the r e s u l t s to changes i n this rate.  Discount rates of 6 and 10 per cent are  used here to test the s e n s i t i v i t y of the benefit cost comparisons f o r agriculture.  Six Per Cent Discount Rate With a discount rate of 6 per cent the present value of benefits w i l l be substantially higher than calculated e a r l i e r with a rate of 8 per cent. The present vaiue of the net annual earnings per acre ($26.31) when d i s counted at 6 per cent i s $438, compared with $329 when the rate i s 8 per cent.  Discounting t h i s value to account.for the time elapsed between  reclamation and the f i r s t harvest results i n a per acre value of $413. This has the e f f e c t of greatly increasing both the net benefit and the benefit cost r a t i o s , as summarized i n Table E - l . Ten Per Cent Discount Rate The present value of net benefits per acre i s $263 using t h i s d i s count rate and i t i s further discounted to $239 to allow f o r the one year lag between reclamation and harvests.  Net b e n e f i t s , and benefit cost ratios are  lower with this discount rate than with 8 per cent.  In the case of the Corn  Creek unit a discount rate of 10 per cent renders the project marginal at best.  Net benefits and benefit-cost ratios are so low that this unit  presents a very unattractive investment  opportunity.  TABLE E - l THE EFFECT OF SELECTED DISCOUNT RATES ON BENEFIT COST RESULTS IN AGRICULTURE  6 Per Cent  Area  1. Indian Reserves (2,070 Acres)  8 Per Cent  10 Per Cent  Net Benefit (B-C)  BenefitCost Ratio (B/C)  Net Benefit (B-C)  $758,000  8.8:1  $534,000  6.5:1  BenefitCost Ratio (B/C)  Net Benefit (B-C)  BenefitCost Ratio (B/C)  $398,000  5.0:1  2. Corn Creek Unit i  (1,4AO Acres)  306,000  2.1:1  150,000  1.5:1  55,000 . 1.2:1  ii  (1,260 Acres)  233,000  1.8:1  97,000  1.3:1  14,000  3. Leach Lake (2,600 Acres)  878,000  5.5:1  597,000  4.0:1  425,000  3.2:1  4. Six Mile Slough (2,400 Acres)  792,000  5.0:1  533,000  3.7:1  375,000  2.9:1  5. Duck Lake (3,000 Acres)  969,000  4.6:1  645,000  3.4:1  447,000  2.7:1  1.05:1  Summary The preceding calculations, summarized i n Table E - l , have shown the benefit cost comparisons f o r further a g r i c u l t u r a l development to changes over a broad range i n the interest rate.  to be i n s e n s i t i v e  While the low rate of  6 per cent substantially improved the f e a s i b i l i t y and the high rate of 10 per cent substantially reduced i t , i n only one case (Corn Creek) was the f e a s i b i l i t y of reclamation refuted.  Since the results of the benefit cost  analysis are not sensitive to the discount rate over such a broad range the  e a r l i e r estimates of f e a s i b i l i t y based on an 8 per cent rate are accepted.  Changes i n Crop Practices and Managerial Intensity After Libby Dam  Using present farm returns on the Creston f l a t s to estimate returns from further reclamation assumes that cropping practices and managerial i n t e n s i t y w i l l be the same a f t e r Libby Dam.  At the present time grain crops  account f o r two-thirds of the seeded acreage on the reclaimed land.  While  grain does not y i e l d as high a return (gross or net) per acre as other crops, such as clover and potatoes, i t has been the dominant crop on a l l farms.  The  dominance of grain i s due to a large extent to the flood risk, from the Kootenay River.  Given the p o s s i b i l i t y of annual floods, grain crops which  have very low seeding costs i n comparison with other crops, represent a much lower p o t e n t i a l loss. With t h i s flood r i s k removed by Libby Dam there may be a s i g n i f i c a n t change i n crop practices.  Farmers could move into i r r i g a t e d crops and follow  more intensive management practices.  There i s also a p o s s i b i l i t y that dairy  farms could be established on the f l a t s , as the Creston area at present imports large quantities of milk, A trend away from grain crops could thus follow the completion of Libby Dam,  As a consequence the gross return per acre of c u l t i v a t e d land may  r i s e substantially and there would also be an increase i n net returns.  It i s  not clear that net returns would r i s e i n d i r e c t proportion to gross returns however.  A review of I r r i g a t i o n systems and intensive crop practices i n similar areas of Washington and Idaho,  to the south of Creston, reveals that net  incomes are not greatly increased by more intensive farming practices (U.S. Dept. of Agriculture 1964}'Washington State University 1967).  I t was found  for instance, that on i r r i g a t e d crops the i r r i g a t i o n system had to be designed carefully for both the climate, s o i l , and crop to be grown introducing large c a p i t a l costs.  Irrigated crops also require a . s i g n i f i c a n t  increase i n labor input, a factor which i s often overlooked (Johnson 1969). One drawback to the introduction of more intensive crops on the Creston f l a t s i s the r e l a t i v e . i s o l a t i o n of the Creston area with respect to markets.  In the Washington and Idaho studies referred to above the crops  produced enjoyed r e l a t i v e l y good access to large markets.  For Creston crops  the main B r i t i s h Columbia market would be the Lower Mainland which involves a high transport cost.  (At present i t i s cheaper to import hay into the Lower  Mainland from eastern Washington than from Creston). Another problem associated with the introduction of more intensive cropping i s that farm units would become much smaller than they are at present.  This has the effect of decreasing the e f f i c i e n c y which i s presently  r e a l i z e d from the large scale use of machinery and equipment. Despite these problems, a major s h i f t i n the pattern of production on the Creston f l a t s can be expected a f t e r Libby Dam i s completed.  At the same  time higher gross returns and more intensive management are not a guarantee of proportionate increases i n net returns.  Due to the differences i n the p r i c e and income structures between, these areas and B r i t i s h Columbia the results are of course not d i r e c t l y comparable. They do however indicate the general relationship which might be expected, and are based on farming i n areas which resemble Creston more than any areas i n B r i t i s h Columbia.  In l i g h t of the uncertainties surrounding future production on the Creston f l a t s i t i s d i f f i c u l t to estimate the impact which changes may have on the f e a s i b i l i t y of further reclamation.  The only r e l i a b l e basis f o r any  estimates i s the data pertaining to present returns.  As a l i b e r a l assumption  these returns are increased by 20 per cent to allow f o r changes i n crops and management a f t e r Libby Dam.  This has the e f f e c t of increasing the net return  per acre from $26.31 to $31.57.  The present value per acre, after allowing a  one year time l a g , i s increased to $366 from the former estimate of $305. Under t h i s assumption both the benefit cost ratios and the net benefit estimates are s i g n i f i c a n t l y increased.  Table E-2 summarizes these  TABLE E-2 BENEFIT COST COMPARISONS. ASSUMING A 20 PER CENT '. INCREASE IN NET EARNINGS PER ACRE  Area 1. Indian Reserves  Net Benefit (B-C)  Benefit Cost Ratio (B/C)  $660,000  7.8:1  Including I.R. 1C  238,000  1.8:1  Excluding I.R. 1C  174,000  1.6:1  3. Leach Lake  756,000  4.9:1  4. Six Mile Slough  679,000  4.4:1  5. Duck Lake  828,000  • 4,1:1.  2. Corn Creek  estimates.  These calculations can reasonably be regarded as e s t a b l i s h i n g an  "upper l i m i t " to the benefit cost comparisons for agriculture.  They assume  a 20 per cent improvement over present net earnings, and furthermore assume t h i s improvement could be r e a l i z e d immediately  a f t e r reclamation.  This  l a t t e r i s a generous assumption, as i n fact we would expect such an improvement to be r e a l i z e d over a number of years, and the force of discounting would reduce the net benefits below the estimates i n Table  E-2,  Long Run Trends i n the Prices of A g r i c u l t u r a l Output At present grain crops account for approximately cultivated acreage on the Creston f l a t s (Table B-2). sold on the B.C.  67 per cent of the  Most of t h i s crop i s  feed grain market, as Creston growers have limited quotas  on delivery of grain to the Canadian Wheat Board.  This concentration on  grain production makes the farm economy p a r t i c u l a r l y vulnerable to changes i n the price of grain, Canada, l i k e a l l wheat exporting nations, currently faces a serious surplus problem, and grain prices are depressed.  While there have been  surplus problems i n the past, the underlying causes have been of a short-run nature and markets have eventually been cleared.  The present outlook, how-  ever, i s much more severe. Present wheat surpluses are expected to continue, as wheat exporting nations increase production while world wheat markets shrink.  This  expectation of persistent surpluses i s based on several recent changes i n the world wheat market (Huff 1969). "These include: (1) dramatic wheat production increases i n Less Developed Countries; (2) substantially increased output i n large wheat exporting countries outside of North America - namely  A u s t r a l i a , Argentina, the USSR and France; (3) changes i n the • U.S'. pplicy regarding -its food a i d and.its farm, support programs; (4) increased impact of r e s t r i c t i v e trade p o l i c i e s ; and (5) technological developments i n the baking industry which have allowed a higher percentage of soft wheat to be mixed with hard wheat for breadmaking." Factors 1, 2 and 5 above cannot be regarded as short-run phenomena, and they are of serious consequence.to Canada*s expectations for future wheat exports.  The consequences of t h i s are far-reaching.  "... not only  have rapid increases i n world wheat production fouled up the world wheat market, but there i s evidence that i t has also begun to s p i l l over into the world feed grains market."  (Goodman 1969)  A recent paper by the Federal Task Force on Agriculture (1969) suggested that wheat production i n Canada should be reduced by 9 to 11 m i l l i o n acres.  This paper implied that the acreage removed from wheat could or should  be re-allocated to the production of feed grains.  I t was recognized i n the  paper that export markets would have to be developed e i t h e r for feed grains and/or for l i v e s t o c k to accommodate t h i s adjustment. Any adjustments of t h i s nature which increase the production of feed grains within Canada w i l l have serious consequences for grain p r i c e s received by Creston growers. wheat surpluses.  Feed grain prices are already depressed by the current  A major increase i n production on the Canadian p r a i r i e s can  only depress prices further. With so many uncertainties i t Is p o i n t l e s s to t r y to estimate future grain prices at Creston, or the- e f f e c t on the f e a s i b i l i t y of further reclamation, completion  Eowever, i f the s h i f t i n cropping practices postulated after  of Libby Dam does not occur i t seems safe to say that the long run  expectations are for net earnings i n Creston f l a t s agriculture to be lower.  This i s a s i g n i f i c a n t factor, and could play a very important r o l e i n changing the f e a s i b i l i t y of further agricultural, reclamation projects.  Time Elapsed Between Reclamation and Crop Production Present value calculations have assumed a continuous stream of annual benefits beginning one year a f t e r the i n i t i a l reclamation costs.  This i s  not an unreasonable assumption a f t e r the completion of Libby Dam.  With the  very low levels of the Kootenay River dyking would- take l i t t l e time arid i n t e r n a l drainage could be completed e a s i l y .  Where reclaimed areas dried  out quickly and no problems were encountered i n breaking ground crops could be seeded and harvested V e i l within t h i s time,. Under i d e a l conditions i t i s conceivable, although u n l i k e l y , that a - f i r s t crop could be taken o f f less than a year after reclamation began. A l t e r n a t i v e l y there could be as much as a two year lag between reclamation and the f i r s t harvest of any consequence.... This, could occur I f d i f f i c u l t i e s were encountered i n breaking ground or i f the i n i t i a l crop was not w e l l established.  (It i s assumed f o r s i m p l i c i t y that the f i r s t year crop  would y i e l d a s u f f i c i e n t return to cover v a r i a b l e costs only).  In such a case  the annual benefit stream would not begin u n t i l two years a f t e r the i n i t i a l reclamation costs.  With the force of discounting, t h i s two year lag further  reduces the present value of the benefit stream.  The e f f e c t on the benefit  cost r a t i o s and net benefit calculations for each area i s summarized i n Table E-3.  TABLE ET3  BENEFIT COST COMPARISONS WITH A TWO YEAR TIME LAG  Benefits Minus Costs (B-C)  Areas 1. Indian Reserves  Benefit-Cost Ratio (B/C)  $487,000  6.0:1  I.R. 1C Included  117,000  1.4:1  I.R. 1C Excluded  68,000  1.2:1  3. Leach Lake  537,000  3.7:1  4. Six Mile Slough  478,000  3.4:1 •  5. Duck Lake  576,000  3.1:1  2. Corn Creek  Comparison of the results summarized i n Table E-3 with those of Table 2 i n Chapter Four reveals that both net benefits (B-C) and benefit cost r a t i o s are reduced considerably by the e f f e c t of an a d d i t i o n a l year's time lag.  Even with t h i s additional l a g , and excepting the Corn Creek.  Unit, benefit cost ratios are favorable and the present value of net benefits remains substantial.  Net benefits are reduced by approximately 9 per  cent f o r i n d i v i d u a l reclamation u n i t s , and with the exception of the Corn Creek area a l l benefit cost r a t i o s are above 2.0:1. These calculations provide an i n t e r e s t i n g check to those presented i n Table 2.  I t i s f e l t that the assumption  2 i s based i s v a l i d .  of a one-year l a g on which. Table  However even i f t h i s assumption  should prove to be  f a l s e the r e s u l t s i n Table 4 i l l u s t r a t e that there i s l i t t l e impact on the  o v e r a l l economic f e a s i b i l i t y of  reclamation,  Feed Freight Subsidies and the  Appropriate  Measure of Benefit A f i n a l q u a l i f i c a t i o n i s introduced by considering the p r o v i n c i a l feed freight subsidy paid on grain shipped from Creston. at  Feed grain grown  Creston does not q u a l i f y for freight subsidy under the federal govern-  ment's Livestock Feed Assistance Act,  This places Creston grain at a d i s -  advantage i n B r i t i s h Columbia markets where feed grain from the p r a i r i e provinces receives federal freight subsidy.  In an attempt to offset the  negative e f f e c t on Creston grain of the federal p o l i c y the B r i t i s h Columbia government has i n s t i t u t e d i t s own  feed grain freight assistance f o r Creston  grain. While the p r o v i n c i a l assistance was  i n i t i a l l y e f f e c t i v e , changes i n  the federal p o l i c y i n 1968 put Creston grain i n a p a r t i c u l a r l y d i f f i c u l t marketing p o s i t i o n , even with p r o v i n c i a l f r e i g h t assistance.  Negotiations  have been undertaken by both the federal and p r o v i n c i a l governments to t r y to resolve the problems created by the federal p o l i c y , but l i t t l e has been made.  progress  The future l e v e l of p r o v i n c i a l subsidy payments i s there-  fore a clouded issue, which makes analysis of i t s impact on f e a s i b i l i t y l i t t l e more than conjecture. Any freight assistance paid on the movement of Creston grain must be considered i n analyzing the costs and benefits of further a g r i c u l t u r a l reclamation.  At present the federal freight assistance d i r e c t l y reduces the  p r i c e Creston growers receive f o r t h e i r grain, and the p r o v i n c i a l assistance has been introduced to offset this discrimination.  It i s important to determine who  benefits from t h i s assistance.  Livestock feeders i n B r i t i s h Columbia do not benefit, because without  Creston  grain they can e a s i l y obtain grain at the same price from other areas.  The  transport sector, which moves Creston grain under p r o v i n c i a l assistance, would move grain from other areas i n the absence of the p r o v i n c i a l program. While there may  be some relocation of transport a c t i v i t y , there i s no net  benefit to the transport sector from the p r o v i n c i a l assistance. P r o v i n c i a l assistance does, however, have a d i r e c t e f f e c t on the price Creston growers receive for t h e i r grain.  The p r i c e received per ton  w i l l be increased by the amount of the f r e i g h t assistance.  Thus, given  the  discriminatory impact of the federal program, p r o v i n c i a l assistance on the shipment of grain from Creston represents  a direct subsidy to Creston  grain  growers. Treatment of t h i s subsidy i n c a l c u l a t i n g benefits and costs w i l l d i f f e r depending on the framework, or the 'referent group' being adopted. From the purely l o c a l point of view, (the Creston area economy), this subsidy represents a net benefit.  It i s a transfer of funds from the  revenue of the province to Creston grain growers.  general  Thus i n c a l c u l a t i n g the  benefit of a g r i c u l t u r a l output the t o t a l p r i c e received for grain w i l l be the appropriate measure of benefit. If the analysis i s being conducted from the point of view of the province of B r i t i s h Columbia however, t h i s treatment of the subsidy i s inappropriate.  In this case the subsidy simply represents  funds within the province,  a transfer of  (from general revenue to Creston grain growers),  and there i s no net gain to B r i t i s h Columbia.  In c a l c u l a t i n g the benefits  to B r i t i s h Columbia from a g r i c u l t u r a l output the amount of the  subsidy  should be subtracted from the market value of g r a i n to y i e l d the benefit attributable to production i n the area. S i m i l a r l y , i f the analysis i s conducted  from the broader point of  view of Canada as a whole, the amount of any subsidy paid must be deducted from the market value of grain to y i e l d the benefit attributable to production i n the area. Few d e f i n i t e conclusions can be reached concerning the magnitude of such subsidy payments i n the future*  The amount paid i n subsidy i n any  one year w i l l depend on the p r e v a i l i n g rate of subsidization, a matter which i s presently very unsettled, and the amount of grain shipped which q u a l i f i e s f o r subsidy.  Attempting to predict either of these factors  over any length of time would involve extremely tenuous assumptions.  Some  rather crude estimates of subsidy payments can be made however, based on payments made i n the past. During the 1967-68 f i s c a l year a t o t a l of $24,000 was paid i n subsidy on the movement of grain from Creston.  This i s equivalent to approx-  imately $1.14 per acre of c u l t i v a t e d f l a t l a n d .  I f an additional 11,500  acres are brought into c u l t i v a t i o n , and i f the same relationship holds, annual subsidy payments would be approximately $13,000. If subsidy payments continue at previous l e v e l s , then the appropr i a t e procedure to allow f o r these payments i s to deduct the present value of such payments from the estimated present value of primary benefits. While t h i s i s admittedly a very imprecise means of estimating future subsidy payments, the calculations have been performed and are summarized i n Table E-4. Taking the freight subsidy into account i n this manner has l i t t l e e f f e c t on the o v e r a l l f e a s i b i l i t y of reclaiming any area.  Net benefits are  TABLE E-A REDUCTION IN PRIMARY BENEFITS TO ACCOUNT FOR FREIGHT SUBSIDY  Net Benefits after Accounting for Subsidy  Benefit-Cost Ratio a f t e r Accounting for Subsidy  Net Benefits before Accounting for. Subsidy (B-C) (See Table 2 Chapter IV)  Present Worth of Estimated Subsidy Payments  $534,000  $29,000  $505,000  6.2:1  2. Corn Creek  150,000  20,000  130,000  1.4:1  3. Leach Lake  597,000  36,000  561,000  3.9:1  4. Six Mile Slough  533,000  34,000  499,000  3.5:1  5. Duck Lake  645,000  42,000  603,000  3.2:1  Area  1. Indian Reserves  For the Corn Creek unit i t i s assumed that I.R,> 1C i s included i n reclamation.  reduced, and benefit cost ratios lowered s l i g h t l y , but as before reclamation appears to be economically f e a s i b l e .  While the method used to estimate the  future value of subsidy payments i s admittedly very crude, the above comparisons of benefits and costs-are appropriate i f the analysis i s being conducted from the point of view of the province as a whole.  The comparisons i n  Chapter IV (Table 2) on the other hand would be appropriate only i f the analysis i s being conducted from the point of view of the l o c a l economy. For both the p r o v i n c i a l and n a t i o n a l referent points allowing f o r t h i s feed freight assistance reduces both the net benefits and the benefit cost r a t i o s , so that the estimates of Chapter IV (Table 2) exaggerate the true  l e v e l of net benefits.  But the means of predicting future subsidy payments  are so uncertain that these q u a l i f i c a t i o n s are just as well ignored - they do not affect the results of the benefit cost comparison of Table 2 beyond a range of error which would be expected i n any case.  REFERENCES. APPENDIX E  Federal Task Force on. Agriculture. 1969. Wheat, feed grains and o i l seeds. Paper prepared f o r the Canadian Agriculture Congress, Ottawa. Goodman, R.J. 1969. Wheat, Canada and the world. In Wheat. Canada and the World. Proceedings of the 1969 Workshop of the Canadian A g r i c u l t u r a l Economics Society. Reglna, June 24-26. Huff, H.B, 1969. Canada's future role i n the world wheat market. Journal of A g r i c u l t u r a l Economics. 17(1):1-14. Johnson, J.B. 1969. Personal communication. Department, Washington State University.  Canadian  A g r i c u l t u r a l Extension  Marglin, S.A. 1963. The s o c i a l rate of discount and optimal rate of investment. Quarterly Journal of Economics. 7 7 ( 1 ) : 9 5 - l l l . McKean, R.N. 1958. E f f i c i e n c y i n government through systems analysis. New York, John Wiley and Sons. United States Department of Agriculture. 1964. A g r i c u l t u r a l production and food processing i n the P a c i f i c Northwest 1960-1985. Economic Research Service, C o r v a l l i s , Oregon. Washington State University. 1967. Economics of farm s i z e i n the Washington-Idaho wheat-pea area. Technical B u l l e t i n 52, May.  A P P E N D I X  F  APPENDIX F RECREATIONAL USE OF THE CRESTON FLATS: THE CASE OF BIRD HUNTING DURING 1968  Bird hunting on the Creston f l a t s i s an important recreational purs u i t for many hunters.  Upland birds which are hunted include pheasants and  doves, while waterfowl hunters pursue Canada geese and a wide variety of ducks.  Hunting i s done on both the unreclaimed Crown land, and on private  reclaimed farm lands.  A mail survey of hunters was conducted to determine  the amount of recreational use made of t h i s area during the 1968 hunting season.  The procedure adopted f o r the survey, and the results obtained, are  presented i n t h i s appendix. Sampling Procedure Identifying the 'Population* of Hunters The f i r s t problem encountered i n surveying Creston f l a t s b i r d hunters i s the enumeration or i d e n t i f i c a t i o n of the hunters.  Two sources  of i d e n t i f i c a t i o n were a v a i l a b l e , neither of which was wholly s a t i s f a c t o r y in providing a complete  enumeration.  The f i r s t means of hunter i d e n t i f i c a t i o n was data collected i n road checks of hunters during the season.  These checks were c a r r i e d out by the  Regional b i o l o g i s t and h i s s t a f f , and were intended primarily to provide information on the species composition, age, and sex d i s t r i b u t i o n of the waterfowl harvest.  The names and addresses of hunters checked were recorded,  and made available f o r sampling purposes.  These did not provide a s a t i s -  factory enumeration of hunters f o r two reasons.  The road checks were not  c a r r i e d out on a systematized sampling basis with respect to days i n the hunting season, but were concentrated on weekends, and e s p e c i a l l y weekends at the beginning of the hunting season.  In addition personnel constraints  were such that checkpoints were established where the greatest number of hunters could be interviewed.  Thus hunting a c t i v i t y i n many areas of the  f l a t s , notably on p r i v a t e , land went unchecked, while i n other areas, mainly Crown land, i t was checked more regularly.  For these reasons names and  addresses of hunters obtained at road checks did not form a s a t i s f a c t o r y basis f o r enumeration  of the hunter population, although they were useful  in the sampling procedure, as i s explained below, A more nearly complete enumeration  of hunters was available from  the Canadian W i l d l i f e Service's records of purchasers of migratory game b i r d hunting permits.  A l l persons hunting migratory birds i n Canada are required  to purchase these permits i n addition to regular p r o v i n c i a l hunting licenses. These permits are purchased at post o f f i c e s , and the Canadian W i l d l i f e Service keeps a complete record of a l l permits sold, both by residence of purchaser, and place of purchase.  This information i s available on a  r e t r i e v a l system, and provided the most s a t i s f a c t o r y enumeration * available.  of hunters  * There i s one shortcoming i n using this information as an enumeration of bird hunters however. Migratory b i r d permits are required only to hunt migratory species such as ducks, geese, doves, and pigeons. Persons hunting non-migratory birds such as pheasants are not required to purchase the permit. Thus to the extent that any persons hunted only pheasants on the Creston f l a t s , and did not buy a migratory b i r d tag, they would not be l i s t e d i n the enumeration. This i s of l i t t l e consequence i n p r a c t i c e , however. It can be reasonably assumed that few i f any persons would hunt exclusively for pheasants on the Creston f l a t s . Indeed experience indicates that many hunters automatically purchase the migratory b i r d permit i n addition to required p r o v i n c i a l licences, although they do not actually hunt migratory b i r d s .  To use t h i s information e f f e c t i v e l y the hunters were s t r a t i f i e d according to area of residence.  Three residence areas were established:  A)  l o c a l hunters - residents of Creston and other small communities i n close proximity to the hunting area.  B)  non-local hunters - residents of B r i t i s h Columbia or Alberta from points outside the l o c a l area. This category included such population centres as Cranbrook, Calgary, T r a i l , Nelson, Castlegar, e t c .  C)  foreign hunters - hunters from outside of Canada - i n this case a l l foreign hunters came from the United States.  Local hunters.  I t was assumed that l o c a l hunters would purchase  t h e i r migratory b i r d permits at t h e i r place of residence.  The population  of l o c a l hunters was i d e n t i f i e d from a l l those persons purchasing migratory b i r d permits at post o f f i c e s i n the l o c a l area.  A t o t a l of 322 l o c a l hunters  were i d e n t i f i e d i n t h i s manner and were assumed to represent a l l the l o c a l hunters who would be licenced to hunt birds on the Creston f l a t s .  Non-local hunters.  Identifying the population of non-local hunters  proved to be an intractable problem.  Road check data provided the names and  addresses of some non-local hunters, but, as discussed, could not i d e n t i f y a l l non-local hunters.  Similarly a few non-local hunters purchased migratory  b i r d tags i n the Creston area and could be i d e n t i f i e d .  But to accurately  enumerate a l l non-local hunters who hunted on the Creston f l a t s would have required a survey of a l l migratory permit holders i n B r i t i s h Columbia and  I t i s acknowledged that some l o c a l hunters may have purchased these permits outside of the l o c a l area. This i s f e l t to be unlikely i n the case of l o c a l residents, and i s f e l t to be i n s i g n i f i c a n t f o r the purposes of t h i s survey. In any case a thorough search of a l l l o c a l residents buying permits outside the l o c a l area would have been p r o h i b i t i v e i n terms of both time and money.  parts of Alberta.  This would have been p r o h i b i t i v e l y expensive and time  consuming. Thus the population of non-local hunters could not be i d e n t i f i e d . Names and addresses obtained i n the road checks, and from records of nonl o c a l hunters purchasing migratory b i r d permits i n the Creston area, (a t o t a l of 161) were used i n the survey of hunters.  Estimating the t o t a l number of  non-local b i r d hunters on the Creston f l a t s i s done In a rather crude fashion, as i s explained l a t e r . Foreign hunters. hunt b i r d s .  Those who  Very few non-Canadians come to the Creston area to  do must purchase both a B r i t i s h Columbia hunting  licence, and a migratory b i r d permit.  It was assumed that any non-Canadian  coming to the Creston area to hunt birds would purchase h i s licence i n the Creston area.  Under this assumption  a population of 28 foreign hunters  was  i d e n t i f i e d from records of migratory b i r d permit sales i n the Creston area.  The Sample of Hunters Since i t was f e l t that the population of both l o c a l and foreign hunters had been i d e n t i f i e d accurately, and i n view of t h e i r r e l a t i v e l y small number, (322 and 28 respectively), a 100 per cent sample was used for the mail survey.  Although the non-local population was not i d e n t i f i e d , 161  names and addresses were available.  Since t h i s number was also small, a 100  per cent sample was employed. A l l hunters were mailed a questionnaire asking, f o r information on t h e i r b i r d hunting a c t i v i t i e s on the Creston f l a t s during the 1968 hunting season.  A l e t t e r of explanation and a stamped return envelope-were included.  A t o t a l of 511 questionnaires were mailed.  Response The response to the survey i s summarized below i n Table F - l .  Of the  511 questionnaires sent to hunters. 8 were returned undelivered by the post office.  With 503 hunters thus receiving the questionnaire, a t o t a l of 245  r e p l i e s were received. from those who  This represents a rate of response of 48.7 per cent  actually received the questionnaire, and 47.9 per cent of a l l  hunters on the mailing l i s t .  TABLE F - l SUMMARY OF RESPONSE TO MAIL QUESTIONNAIRE  Local No. of Hunters Enumerated  Non-Local  Foreign  A l l Hunters  322  161  3  4  Questionnaire  319  157  27  503  No. of Respondents  149  80  16  245  Questionnaires Undelivered  28  511 1  8  No. of Hunters Receiving  Respondents as Per Cent of Recipients  46.7%  50.9%  59.3%  48.7%  Findings of the Survey The Number of Hunters and Hunter Days of Recreation A l l hunters were asked i f they hunted migratory game birds  (ducks,  geese, or mourning doves), or pheasants i n the Creston f l a t s area during the 1968 hunting season.  Responses indicated that 19.6 per cent of a l l those  enumerated did not hunt on the Creston f l a t s , while 80.4 per cent did hunt.  Among the l o c a l hunters 24.8 per cent did not hunt birds on the Creston f l a t s , while 13.8 per cent of the non-local hunters did not hunt.  A l l of the  foreign hunters on the other hand indicated that they did hunt on the Creston f l a t s i n 1968.  This data i s used to estimate the t o t a l number of b i r d  hunters and hunter days of recreation on the Creston f l a t s i n 1968.  Local hunters.  Of the 322 l o c a l hunters licenced to hunt birds on  * the Creston f l a t s , 24.8 per cent, or 80 hunters did not do so.  The number  of l o c a l hunters hunting birds on the f l a t s i n 1968 i s thus estimated to be 242.  Analysis of responses indicates that each of these hunters spent an  average of 12,6 days hunting, or a t o t a l of 3,049 hunter days. duration of a days hunt was Non-local hunters.  The  average  reported to be four hours. Estimating the t o t a l number of non-local hunters  can only be done on a rather conjectural basis.  As discussed e a r l i e r , i t was  not possible to i d e n t i f y s a t i s f a c t o r i l y the population of non-local hunters for sampling purposes. who  For t h i s reason the proportion of non-local hunters  reported that they did not hunt on the Creston f l a t s (13.8 per cent)  could not be applied to a t o t a l population figure to estimate the number of hunters.  Instead an a r b i t r a r y procedure has been adopted, using as a p a r t i a l  guideline the r a t i o of non-local to l o c a l hunters i n road-check information.  * Having 24.8 per cent of those e l i g i b l e reporting that they did not hunt birds near Creston may appear rather high, but i s probably quite reasonable. Many l o c a l area residents have stopped hunting the f l a t s area i n recent years as pheasant hunting has become increasingly poor. The tendency for many of them i s to make one t r i p a year to Alberta f o r b i r d shooting, while much of the hunting done i n B r i t i s h Columbia i s for big game. The nearby East Kootenay region provides some of the f i n e s t b i g game hunting i n North America, and l o c a l b i r d hunting tends to be overshadowed by t h i s .  Road-check data were available for both the 1967 and 1968 hunting seasons.  During the 1967 season the r a t i o of non-local to l o c a l hunters  passing through road checks was 1,28:1, while the r a t i o i n 1968 was 1.65:1. In the absence of a systematic sampling procedure f o r conducting these road-checks, l i t t l e can be concluded from these ratios except that f o r the time and place on which the road-checks were made they represent the r a t i o of non-local to l o c a l hunter a c t i v i t y .  Using these ratios to estimate the t o t a l  number of non-local hunter days during 1968 infers that the times and places at which road-checks were conducted present an unbiased sample of the season-long hunting a c t i v i t y .  There are several reasons to believe that  t h i s i s not true, and they w i l l be discussed shortly. It i s f e l t that these ratios can be used however to indicate an 'upper l i m i t ' to the number of days of use by non-local hunters.  Applying  these ratios to the number of hunter days of use by l o c a l hunters i n 1968 y i e l d s a range of estimates for non-local hunter days from 3,903 to 5,031. These estimates are summarized i n Table F-2. TABLE F-2 NON-LOCAL HUNTER DAYS AS ESTIMATED FROM ROAD CHECK RATIOS  Ratio  Estimate  (1967)  1.28:1  3,903 Hunter Days  (1968)  1.65:1  5,031  "  (1967+1968)  1.40:1  4,269  "  "  This method of estimating the number of non-local hunter days incorporates a s i g n i f i c a n t upward bias for two reasons.  Road-checks were  held on weekends, and e s p e c i a l l y weekends early i n the season.  Most of the  non-local hunting pressure In the area came on weekends, while l o c a l residents spread their hunting a c t i v i t y more evenly through the week,. For this reason the road-check data would tend to overstate the true r a t i o of non-local to l o c a l hunting a c t i v i t y .  As a second factor, road-checks were  almost exclusively oriented to hunters on Crown land.  A much higher pro-  portion of non-local hunters hunted on Crown land than did l o c a l hunters who had better access to hunting on private land.  For these reasons i t i s  f e l t that the estimates presented above s i g n i f i c a n t l y overstate the number of hunter days of use by non-local hunters, and that i t would be unreasonable to assume that the number of days of use could have exceeded any one of these estimates. A more appropriate r a t i o , involving a large element of personal judgment, i s thought to be i n the order of 1:1.  While non-local hunters  might exceed l o c a l hunters on weekends, l o c a l hunting a c t i v i t y through the week, and late in the season, would bring the t o t a l a c t i v i t y to approximately equal l e v e l s .  Non-local hunters are estimated therefore to have spent  3,050 days hunting birds on the Creston f l a t s i n 1968.  Hunters returning  questionnaires indicated that they spent an average of 7,8 days hunting on the f l a t s , averaging f i v e hours per day.  It i s thus estimated that a t o t a l  of 391 non-local hunters hunted birds on the Creston f l a t s i n 1968. Foreign hunters.  A t o t a l of 28 foreign hunters were licenced to hunt  on the Creston f l a t s i n 1968.  Responses to the survey indicated that a l l 28  * foreign, hunters did hunt birds on the f l a t s .  Foreign hunters averaged 9.1  days of hunting each, f o r a t o t a l of 254 hunter days of use.  For these  hunters the average days hunt lasted f o r 4.4 hours. Summary.  The estimates of hunting a c t i v i t y on the Creston f l a t s i n  1968 are presented i n Table F-3.  In a l l a t o t a l of 661 hunters spent 6,353  TABLE F-3  SUMMARY OF HUNTING ACTIVITY CRESTON FLATS. 1968  Local Hunters Number of Hunters Number of Days Hunting Av, No. of Days Per Hunter Av. No. of Hours Per Day  Non-Local Hunters  Foreign Hunters  All Hunters  242  391  28  661  3,049  3,050  254  6,353  12.6  7.8  9.06  9.61  5.40  4.40  4.70  4.06  days hunting birds on the Creston f l a t s .  This was an average of 9.6 days per  hunter, with each hunter-day averaging 4.7 hours.  The average number of days spent hunting by foreign hunters exceeds the average of non-local hunters. This can be explained by the presence of a duck-hunting club whose members are a l l from the United States. This club owns a cabin i n the Creston area and the members make a f a i r l y substantial amount of use of t h e i r f a c i l i t i e s . They accounted f o r 14 of the 28 foreign hunters i n 1968, and as a consequence the average number of hunter days i s r e l a t i v e l y high for this group.  The D i s t r i b u t i o n of Hunting A c t i v i t y Bird hunting a c t i v i t y on the Creston f l a t s took place either on unreclaimed Crown land (Duck Lake, Leach Lake, Six Mile Slough, and the Corn Creek Slough), on private farm land (reclaimed), or on Indian Reserves 1, 1A and IB.  Crown land supported by f a r the most hunting a c t i v i t y , with a  t o t a l of 4,687 hunter days, 73.9 per cent of the t o t a l .  Private farm land  accounted f o r 1,551 days, 2 4 . 4 per cent of the t o t a l , while the Indian reserves accounted f o r only 105 hunter days, 1.7 per cent of the t o t a l .  This  information i s broken down by the o r i g i n of hunters i n Table F - 4 .  TABLE F-4 DISTRIBUTION OF BIRD HUNTING ACTIVITY  PLACE OF HUNTING ACTIVITY (Hunter Days) Crown Land Origin of Hunters  Private Farm Land  Indian Reserve  Local  2,055  906  88  Non-Local  2,394  641  15  248  4  2  4,697  1,551  105  Foreign TOTAL HUNTER DAYS  Hunting oh Crown and Private Land.  The number of hunter-days spent on  Crown land i s more than three times as great as that on private land, although the  amount of reclaimed farm land i s greater than the amount of Crown land.  This concentration of hunters on Crown land i s a result of several factors. The grain harvest was very late i n 1968 and prevented hunting on much private land.  In addition, many farmers prohibit hunting on t h e i r land.  Finally,  even where land i s not posted to prevent hunting, most landowners l i v e i n the town of Creston, and locating the owner of land to ask permission to hunt i s very d i f f i c u l t .  For these reasons hunters tend to exert heavier pressure on  the Crown land, e s p e c i a l l y non-local hunters who are severely handicapped i n getting access to hunt on private land. Hunting on the Indian Reserves.  While hunting i s permitted on the  Indian Reserves, hunters are required to purchase either a $3 d a i l y permit, or a $20 seasonal pass, i n addition to t h e i r regular licence and migratory b i r d permit.  Twenty-nine hunters purchased d a i l y permits i n 1968, while 6  purchased season passes.  These hunters spent a t o t a l of 105 hunter days on  the Indian Reserves i n 1968 - f a r below the area's capacity for b i r d hunting. It i s f e l t that the price of hunting p r i v i l e g e s on the reserve i s not responsible for the very l i g h t hunting pressure,  A more l i k e l y factor i s  the fact that very few persons seem to be aware that they can get permission to hunt there.  Even when persons became interested i n acquiring a permit,  the sales and administration was so awkward i n 1968 that many simply gave up in f r u s t r a t i o n and hunted on the Crown land.  Thus while the hunting pressure  on the Indian Reserves i s n e g l i g i b l e when compared with that on Crown and private land, t h i s should not be interpreted as an indication of the area's capacity.  Rather i t i s a result of the awkward administrative system under  -which hunting p r i v i l e g e s are made a v a i l a b l e .  Spending by Creston F l a t s Bird Hunters.  To provide a measure of  the economic impact of b i r d hunting on the l o c a l economy, and within B r i t i s h Columbia i n general, hunters were asked to estimate t h e i r expenditures i n connection with hunting on the Creston f l a t s .  The estimated t o t a l and  average expenditures are presented i n Table F-5.  Local hunters spent an  TABLE F-5 EXPENDITURE BY HUNTERS FOR BIRD HUNTING ON THE CRESTON FLATS. 1968  Type of Expenditure  Local Total Av.  ORIGIN OF HUNTERS Non-Local Foreign Total Av. Total Av.  A l l Hunters Total Av.  Food & $7.33  $8,078  $20.66  $2,119  $75.67  $11,971  $18.11  1.76  2,100  5.37  1,325  47.33  3,851  5.83  1.47  2,362  6.04  164  5.87  2,882  4.36  12.10  9,333  23.87  1,073  38.33  13,334  20.17  33.95  16,094  41.16  1,004  35.87  25,314  38.30  $13,700 $56.61  $37,967  $97.10  $5,685 $203.07  $57,352  $86.77  Meals  $1,774  Alcoholic Beverages  426  Accommodation  356  Travel Expenses Hunting Equipment & Miscel. Supplies T o t a l of All Expenses Amount Spent Per Day Hunting  2,928  8,216  $4.49  $12.45  $22.38  $9.02  average of $56.61 f o r t h e i r b i r d hunting, non-local hunters averaged $97.10, and foreign hunters $203.07.  Total spending by a l l hunters came to $57,352,  representing an average of $9.02 per day spent hunting.  Spending per hunter  day ranged from a low of $4.49 f o r l o c a l hunters to $22.38 f o r foreign hunters. The expenditures summarized i n Table F-5 do not include the costs of hunting licences and migratory b i r d permits.  Since hunters may hunt  other areas and other game with these basic licences the cost of licences cannot be attributed s o l e l y to hunting i n the Creston area. Licence expenditures which are appropriately attributed to hunting at Creston include permit fees charged for hunting on the Indian Reserves. These fees totaled $207 during 1968.  In addition i t was determined that 20  of the 28 foreign hunters d i d no hunting i n B r i t i s h Columbia other than t h e i r b i r d hunting at Creston.  Therefore the licence and migratory b i r d  permit expenses of these hunters ($540) can also be included as d i r e c t l y attributable to b i r d hunting on the Creston f l a t s .  The addition of these  expenses brings the t o t a l expenditure f o r hunting to $58,099, Not a l l of t h i s money was spent i n the Creston area, or i n B r i t i s h Columbia,  Hunters reported spending a t o t a l of $41,543 i n the Creston area  (72.4 per cent of the t o t a l ) , and $56,467 i n B r i t i s h Columbia (98.4 per cent of the t o t a l ) ,  A more detailed presentation of the d i s t r i b u t i o n of t h i s  spending follows i n Table F-6,  TABLE F-6 GEOGRAPHICAL DISTRIBUTION OF SPENDING FOR BIRD HUNTING ON THE CRESTON FLATS  Location of Spending Creston Area B r i t i s h Columbia Total Spending  ORIGIN OF HUNTERS Local  'Non-Local  Foreign  A l l Hunters  $13,499  $23,244  $4,800  $41,543  13,700  37,967  4,800  56,467  $13,700  $37,967  $5,685  $57,352  The Value of Bird Hunting on the Creston F l a t s It i s a commonly held f a l l a c y that the value of a recreational experience such as hunting can be measured by the amount hunters spend i n t h e i r hunting pursuits.  I t would be equally v a l i d to claim that the value  of a loaf of bread i s what i t costs you to go to the store to get i t - not the price which you pay f o r the bread.  I f outdoor recreation i s considered  as a consumption good i n the same way that a loaf of bread i s considered as a consumption good, then the only s i g n i f i c a n t d i s t i n c t i o n between them i n terms of t h e i r value to the consumer i s that he has to express that value by being w i l l i n g to pay a price f o r the bread, while he consumes h i s outdoor  * recreation free of charge.  Thus while the data on hunters' spending  presented above indicates the cost of this recreation and i t s economic  * This i s not quite true, as hunters do pay a nominal fee for hunting licences. These licence fees generally do l i t t l e more than cover management and regulation costs, however, and are not levied i n d i r e c t r e l a t i o n to the amount of game or recreation consumed.  impact, i t does not measure the value of the hunting experience i t s e l f . Attempts to estimate the value of non-priced recreational opport u n i t i e s have received a good deal of attention recently, and have generally taken one of two main approaches (Knetsch and Davis 1966, Fearse and Bowden 1969),  In the i n d i r e c t approach e f f o r t s are made to estimate the value of  the recreational experience by using the i n d i r e c t evidence of hunters' expenditures.  The direct approach on the other hand attempts to estimate  this value by asking recreationists what they would be prepared to pay i f prices were i n fact charged f o r recreational opportunities.  Both approaches  rely on a series of assumptions regarding the rational-choice process of the r e c r e a t i o n i s t , and the many p i t f a l l s have been discussed extensively i n the l i t e r a t u r e . In t h i s study the direct approach was employed i n asking hunters what i t was worth to them, per day spent hunting, to hunt on the Creston f l a t s . While not a p a r t i c u l a r l y rigorous application of the direct approach,  (Pearse  and Laub 1969, pp. 23-4, 47-52), i t provides at least a general indication of the value of the hunting a c t i v i t y .  I t i s perhaps most interesting from the  point of view of game management i n i n d i c a t i n g that many hunters would be w i l l i n g to pay f o r t h e i r hunting opportunities. A t o t a l of 142 hunters r e p l i e d to the question on how much they valued a day spent hunting on the Creston f l a t s .  Their responses are  summarized i n Table F-7, There are many; problems i n interpreting these responses.  One of the  f i r s t problems involves the treatment of those hunters who did not respond to the question.  On almost a l l questionnaires returned and analyzed the  questions r e l a t i n g to hunting a c t i v i t y and associated expenditures were  completed i n f u l l .  Only 142 of the 195 respondents replied to the question  concerning the value of a day spent hunting however.  Whether the 53 res-  pondents who didn't answer f e l t that the hunting was worth nothing, whether the  question was too hypothetical f o r them to bother with, or whether they  refused to answer out of fear that a p r i c i n g system might actually be i n t r o duced, cannot be known.  With no way of testing these various p o s s i b i l i t i e s ,  i t i s assumed that those who did not answer the question are represented f a i r l y by those who did. TABLE F-7 THE VALUE OF A DAY SPENT HUNTING ON THE CRESTON FLATS - HUNTERS' RESPONSES  Number of Hunters Value of a Day Spent Hunting  Local Hunters  Non-Local Hunters  Foreign Hunters  All Hunters  22  15  3  40  $ 0.01 - 2.50  29  13  -  42  $ 2.51 - 5.00  21  8  2  31  $ 5.01 - 10.00  9  5  2  16  $10.01 - 20.00  5  $20.01 - 50.00  -  -  1  1  86  48  8  142  $0.0  Total Hunters Av. Value of a Day Spent Hunting  $3.57  7  $5.16  -  $7.99  1  2  $4.51  A s i m i l a r problem arises with the i n t e r p r e t a t i o n of those 42 responses which indicated a value of zero for a day spent hunting. include a number of hunters who  f e l t that the hunting at Creston was  p a r t i c u l a r l y poor and not worth anything. the hunting as poor).  I t may  This may  (24 per cent of a l l hunters rated  also include hunters f o r whom the hunting does  have a value but who won't reveal i t f o r fear that a p r i c i n g system may introduced, and i t w i l l include hunters who  be  f e e l that the right to hunt i s  something which they should not be required to pay f o r .  It would also be a  r a t i o n a l response for a hunter who had hunted so much that the marginal value (value of an extra unit) of a days hunting was i n fact zero.  However,  most hunters would be expected to indicate the average value of a days hunting, not the marginal value. In any case, we have no basis f o r imputing any of the above motives to those who  indicated that the hunting was  of zero value.  done except to accept the hunters' evaluations as correct.  L i t t l e can be This must,  however, be reconciled with the fact that a l l hunters did incur some positive costs to hunt on the Creston f l a t s .  At f i r s t glance i t appears to be  i r r a t i o n a l for a hunter to incur positive costs i n order to partake of a recreational experience which has no value to him.  The nature of hunting,  however, i s such that a person must be w i l l i n g to incur most costs before he actually begins to hunt.  Thus spending i s largely based on the subjective,  or expected value of the hunting experience.  For many hunters, however, the  objective or after-the fact evaluation of t h e i r hunting experience may f a r less than what they had expected. for hunters who  This provides one possible explanation  f e l t the Creston f l a t s hunting to be of zero value, but  incurred p o s i t i v e costs to hunt.  be  still  Not a l l hunters f e l t the hunting to be of zero value and t h e i r various evaluations of a days hunting were presented i n Table F-7. hunters the average value of a day spent hunting was who  For l o c a l  $3.57 (including hunters  reported zero value), f o r non-local hunters $5.16, for foreign hunters  $7.99, and f o r a l l hunters combined $4.51. Using these figures as a measure ( i f not precise, c e r t a i n l y very ** plausible)  of the value a hunter places on a days hunting on the Creston  f l a t s , i t i s possible to estimate the t o t a l value of b i r d hunting during the 1968 hunting season.  These estimates are presented i n Table F-8.  The t o t a l  value of hunting i s estimated at $28,652, of which $26,623 (93.0 per cent) was the value received by B r i t i s h Columbians, and $2,029 the value received by American hunters.  Thus b i r d hunters on the Creston f l a t s i n 1968 placed  a value of $28,652 on their hunting experiences, over and above the $57,352 they spent on their hunting t r i p s .  Averages weighted by the number of days spent hunting by each hunter at the value per day declared, (including hunters declaring a zero value),  ** These are most l i k e l y conservative estimates of value. Golfing and s k i i n g are comparable forms of outdoor recreation i n which participants generally acquire expensive and elaborate equipment and often t r a v e l long distances at ungodly hours to enjoy t h e i r sport, S k i i e r s pay d a i l y fees of from $5 - $10, while golfers commonly pay $5 per day i n green fees. The estimates of value for a hunter day c e r t a i n l y compare reasonably with these d a i l y costs i n sports where participants are required to pay f o r t h e i r recreation opportunities.  TABLE F-8  THE VALUE OF BIRD HUNTING ON THE CRESTON FLATS IN 1968 HUNTERS' EVALUATIONS  No. of Days Hunting  Average Value Per Day  Total Value  Local Hunters  3,049  $3.57  Non-Local Hunters  3,050  5.16  15,738  7.99  2,029  4.51  28,652  Foreign Hunters  254  A l l Hunters  6,353  $10,885  Increased Hunting Under Improved Conditions, and Hunters' Willingness to Pay B i r d hunting at Creston was not exceptionally good during the  1968  season (24 per cent of hunters rated i t as poor, and 40.5 per cent as only fair).  In spite of t h i s a t o t a l of 6,353 hunters days of recreation were  taken by 661 hunters during the season.  E f f o r t s are presently being made  under the Creston Valley W i l d l i f e Management Area Act to improve the habitat on the Crown land f o r waterfowl nesting, and also to improve the q u a l i t y of hunting. Improving  the quality of hunting w i l l have two implications for the  l e v e l of u t i l i z a t i o n .  Hunters who  to increase t h e i r hunting a c t i v i t y .  already hunt i n the area can be expected In addition, persons who  i n the area at present may be attracted to i t . for example hunters from T r a i l who b i r d hunting.  do not hunt  This group might include  o r d i n a r i l y make a t r i p to Alberta f o r  An unregulated increase i n hunting pressure can e a s i l y have the effect of negating any e f f o r t s to improve hunting quality,  A s i g n i f i c a n t i n f l u x of  hunters can lead to crowded hunting conditions, poor shooting practices, and actually fewer birds bagged per hunter than formerly (Anderson 1961, 1961).  Bednarik  To counter t h i s e f f e c t i t may be necessary to regulate hunting  pressure by the use of a daily permit or fee system. the problems which may  To throw some l i g h t on  arise i n future management of the area, hunters were  asked how many more days they would hunt i n the area i f hunting quality were s i g n i f i c a n t l y improved.  They were also asked how much they would be w i l l i n g  to pay, per day spent hunting, i f required to do so under a permit system of regulating hunting pressure. Increased u t i l i z a t i o n i n the order of an a d d i t i o n a l 6,000 hunter days could be expected from hunters who  already hunt i n the area i f the hunting  quality were s i g n i f i c a n t l y improved.  Not a l l hunters would increase t h e i r  use of the area however, but those who would not were a small minority i n a l l three groups of hunters.  Seventy-seven  per cent of the l o c a l hunters, 83 per  cent of non-local hunters, and 73 per cent of foreign hunters would increase t h e i r hunting, as presented i n Table F-9, This represents a s i g n i f i c a n t increase i n hunting pressure, and i s almost equal to the amount of use on the area at present.  Furthermore  this  represents increased use by those who hunt the area already, and does not take account of additional pressures which could come from new being attracted to the area.  hunters  Faced with an i n f l u x of new hunters and  increased use by existing hunters i t appears l i k e l y that a means of rationing access and c o n t r o l l i n g hunters w i l l be required to maintain a s a t i s f a c t o r y  l e v e l of hunting quality.  S e l l i n g hunting permits on either a daily or a  seasonal basis i s an e f f i c i e n t and simple means of rationing access and c o n t r o l l i n g hunters,  A l o c a l precedent has already been set by the s e l l i n g  of seasonal and daily hunting permits on the Indian Reserves at Creston, although t h i s has not attracted a large number of hunters i n the past, due to poor management. '  TABLE F-9  INCREASED UTILIZATION IN RESPONSE TO INCREASED HUNTING QUALITY  No. of Hunters Increasing Use  Average Increase Per Hunter (Days)  T o t a l Increase (Days)  Local Hunters  186  12.0  2,232  Non-Local Hunters  324  10.8  3,499  20  12.7  254  530  11.3  5,985  Foreign Hunters A l l Hunters  Willingness to pay f o r s i g n i f i c a n t l y improved hunting was expressed by 80,6 per cent of the hunters vrtio answered the question on t h i s matter, and ranged from a low of $0.50 per day to $40.00 per day. A t o t a l of 144 persons responded  to t h i s question, and t h e i r responses are tabulated i n Table F-10.  As with the e a r l i e r question i n which hunters were asked what value they placed on a day's hunting, not a l l respondents answered the question dealing with their willingness to pay f o r hunting i n the future.  Of those  who did answer, 19,4 per cent indicated that they would not pay any positive price.  The same problems larise i n interpreting the response to both  questions.  In the case of the question dealing with hunters' willingness  to pay f o r future hunting opportunities, i t w i l l be assumed that the question was understood, and that response to i t f a i r l y represents hunters' willingness to pay.  TABLE F-10 WILLINGNESS TO PAY. PER DAY. FOR IMPROVED HUNTING  Daily Fee $0.0  Local Hunters  Non-Local Hunters  Foreign Hunters  A l l Hunters  16  9  3  28  $ 0.01 - 2.50  22  9  -  31  $ 2.51 - 5.00  28  8  2  38  9  8  2  19  $10.01 - 20.00  10  13  1  24  $20.01 - 50.00  1  $ 5.01 - 10.00  T o t a l No. of Hunters  86  1  2 48  4 10  144  Among l o c a l hunters 81 per cent indicated that they would be prepared to pay a positive price f o r hunting opportunities, and the average price indicated was $6.43 per day.  S i m i l a r l y , an average p r i c e of $9.96 was  indicated by 81 per cent of non-local hunters, while a price of $13.66 was average for the 70 per cent of foreign hunters w i l l i n g to pay to hunt.  Treatment  of these average prices requires caution.  The presence of  a few hunters who would be w i l l i n g to pay r e l a t i v e l y high prices has the e f f e c t of r a i s i n g the average price to a l e v e l above what most hunters would be w i l l i n g to pay.  I t i s also easy to s l i p into the error of assuming that  i f the average price were charged a l l hunters would be w i l l i n g to pay i t and hunt.  This i s not true, as an examination of the data i n Table F-10 w i l l  reveal. A further problem i n interpreting such prices i s that hunters have not indicated how many days they would hunt at the prices they would pay. For these reasons data of this nature cannot be r e l i e d on f o r accurate predictions of future permit sales, or expectations of t o t a l There are two interesting aspects to such data.  revenue.  Probably the most  important i s the evidence that most hunters (81 per cent) would be w i l l i n g to pay for hunting opportunities, e s p e c i a l l y i f the quality of hunting could be improved or at least maintained through regulation and control of the number of hunters,  A second important feature i s that such data does give  an indication of what order of prices would be acceptable to most hunters, and how high i t would be necessary to raise prices to control the number of hunters.  From the data i n Table F-10 i t appears that a daily fee i n the  order of $2 - $3 would have the desired e f f e c t of eliminating some hunters, but would s t i l l be acceptable to most. Summary A mail survey was conducted to obtain information on b i r d hunters using the Creston f l a t s area during the 1968 hunting season.  While some  sampling problems were encountered i t was possible to make reasonable  estimates of the number of hunters using the area and t h e i r hunting a c t i v i t y . It i s estimated that a t o t a l of 661 b i r d hunters used the Creston f l a t s during 1968.  Of these, 242 were hunters from the immediate area, 391  were non-local hunters from other areas i n B r i t i s h Columbia, and 28 were foreign hunters from the United States.  Bird hunters spent a t o t a l of  6,353 hunter days on the Creston f l a t s , with the average hunter day being 4.7 hours long.  The harvest of birds included 8,929 ducks, 543 geese, 172  pheasants and 755 doves.  To obtain this harvest hunters spent a t o t a l of  $58,100, averaging $88 per hunter, and $9 per day spent hunting. Bird hunting on the f l a t s did not rate very highly with hunters as a whole.  Hunting was rated as poor by 24 per cent of the hunters and as  only f a i r by 40 per cent.  Despite t h i s , most hunters f e l t the hunting had  been of value to them, and for those w i l l i n g to indicate i t s value, a day spent hunting had an average value of $4.50.  On t h i s basis, hunters enjoyed  $28,652 worth of hunting i n 1968, over and above the $57,352 they spent on hunting. E f f o r t s are currently underway to improve the waterfowl habitat and hunting quality on Crown land at Creston.  Most hunters (80 per cent)  indicated that they would hunt more i n the area i f hunting were s i g n i f i c a n t l y improved, and indicated that they would approximately double the t o t a l hunting pressure.  Maintaining hunting quality i n the face of s i g n i f i c a n t  increases i n hunting pressure often requires means of regulating or cont r o l l i n g the number of hunters and t h e i r d i s t r i b u t i o n .  On the evidence of  responses to the questionnaire, about 80 per cent of the hunters would be w i l l i n g to pay f o r d a i l y permits to hunt on the Creston f l a t s .  It would  appear that a d a i l y fee i n the order of $2 - $3 would be e f f e c t i v e i n l i m i t i n g hunting pressure, but would s t i l l be acceptable to most hunte  REFERENCES. APPENDIX F  Anderson, J.M. 1961. Quality recreation on public lands. F i f t y - f i r s t convention of the International Association of Game. F i s h and Conservation Commissioners, pp. 45-50. Bednarik, K.E. 1961. Waterfowl hunting on a controlled public area. Division of W i l d l i f e , Publication W-127.  Ohio  Knetsch, Jack L. and Robert K. Davis. 1966. Comparison of methods for recreation evaluation. In Water research (Kneese and Smith eds.). Baltimore, Johns Hopkins. Pearse, Peter H, and Gary K. Bowden. 1969. Economic evaluation of recreational resources: problems and prospects. Transactions of Thirty-Fourth North American W i l d l i f e Conference, pp. 283-293. W i l d l i f e Management I n s t i t u t e , Washington, D.C. Pearse, Peter H, and M. Laub. 1969. The value of the Kootenay Lake sport fishery. Department of Recreation and Conservation, V i c t o r i a , B.C.  A P P E N D I X  G  APPENDIX G ESTIMATED UTILIZATION OF RECREATION FACILITIES  There have been many attempts to forecast the aggregate demand f o r outdoor recreation i n recent years.  Key variables which have been i d e n t i f i e d  as primarily responsible f o r the rapid growth i n recreation demand are population  s i z e , per capita disposable  income, mobility, and per capita  l e i s u r e time (U.S. Dept. of I n t e r i o r 1962, 1967).  1  Even the most c a r e f u l forecasts at the aggregate l e v e l have proven wrong i n the past, as demand (measured by p a r t i c i p a t i o n rates) has cons i s t e n t l y outstripped predictions (Clawson and Knetsch 1966).  The weakness  in these forecasts has i n part been due to an i n a b i l i t y to separate the e f f e c t of increases i n the supply of outdoor recreation areas from observed increases i n p a r t i c i p a t i o n , and i n part due to the lack of a rigorous theory of demand as distinguished from observed p a r t i c i p a t i o n rates.  Whatever the  predictions f o r future aggregate demand, the consensus i s that the present upward trend w i l l continue f o r some time, but that i t cannot continue i d e f i n i t e l y as t h i s would lead to absurd attendance rates i n the future. While attempts to predict aggregate p a r t i c i p a t i o n or demand have encountered many d i f f i c u l t i e s , f a r more serious problems occur i n attempting to predict attendance or demand f o r i n d i v i d u a l recreation f a c i l i t i e s .  This  i s p a r t i c u l a r l y true when dealing with a new recreation f a c i l i t y where estimates cannot even be based on a past trend or l e v e l of use. In such a case (the case at Creston, except that we do have a base i n the case of hunters and fishermen) a useful approach i s to obtain data from other s i m i l a r recreation s i t e s and l o c a l i t i e s i n what has been termed  the "geographical analog" method.  This approach i s most successful when  dealing with a homogeneous type of recreation where reasonably similar s i t e s and locations can be found.  In an attempt to apply t h i s method to reservoir  based recreation i n the United States, however, i t was found that the data requirements could not be s a t i s f i e d , the authors concluding that the available data "... do not warrant elaborate s t a t i s t i c a l or mathematical treatment, which would tend to produce a spurious precision and needless refinement on many aspects,.,,,," (Ullman and Volk 1962), When these conclusions can be arrived at i n the United States where there i s a wealth of aggregate attendance data f o r reservoir s i t e s , they are even more applicable to any s i m i l a r attempts i n Canada,  Aside from  limited data on the a c t i v i t i e s of fishermen and hunters there i s a paucity of data on the p a r t i c i p a t i o n i n non-consumptive forms of outdoor recreation. This factor alone makes i t ridiculous to attempt a sophisticated means of predicting attendance at Creston, i n addition to the almost intractable problem of finding a suitable 'analog' on which to base prediction. The only feasible approach which remains i n estimating future attendance at Creston i s referred to by Clawson and Knetsch as the judgment approach  (Clawson and Knetsch 1966), "To arrive at a judgment of future demands for outdoor recreation a c t i v i t i e s of p a r t i c u l a r kinds, or f o r kinds of areas, or i n t o t a l , the following factors seem relevant: (1) h i s t o r i c a l and recent past trends i n usage of a p a r t i c u l a r area of a c t i v i t y , and the reasons behind such trends, as f a r as one can conjecture or measure them; (2) probable future desires of average people f o r the recreation a c t i v i t y or area, as f a r as one may guess them; (3) probable future capacity of average people to enjoy the recreation a c t i v i t y or area; In p a r t i c u l a r , t h e i r a b i l i t y to afford the time and money that such recreation w i l l require f o r i t s enjoyment; and (4) the capacity or supply of areas on which the desired a c t i v i t y can be carried on,"  In using this approach we can benefit greatly by considering each type of recreational p a r t i c i p a t i o n independently.  Warmwater Sportfishing Warmwater sportfishing w i l l be r e s t r i c t e d to the waters of Duck Lake, The capacity of Duck Lake to support fishermen i s e s s e n t i a l l y complete at present - the greatest obstacle to u t i l i z a t i o n being a lack of access f o r fishermen and boats.  Access construction and the i n s t a l l a t i o n of launching  ramps w i l l be among the i n i t i a l development steps for this area, and access to permit f u l l u t i l i z a t i o n of the lake's f i s h i n g capacity should be completed by 1972. The f i n a l capacity of Duck Lake's warmwater sportfishery i s estimated to be 10,800 fisherman days per year.  Present u t i l i z a t i o n totals approx-  imately 700 days per year - almost exclusively by l o c a l area residents who tend to be either advanced i n age or very young.  Preference f o r this  fishery among these age groups i s explained by several factors.  Duck Lake  i s close to the town of Creston, the fishery does not require elaborate or expensive gear, f i s h are e a s i l y caught, and f o r those going out i n boats i t i s r e l a t i v e l y safe.  For these reasons this fishery tends to appeal to the  very young and the very old.  I t i s estimated that u t i l i z a t i o n by l o c a l area  residents w i l l increase substantially when obstacles to access are removed, growing at a r e l a t i v e l y slow rate a f t e r the i n i t i a l expansion. This fishery w i l l have l i t t l e appeal f o r fishermen i n the i n t e r mediate age categories between the very young and the very old.  For these  fishermen the Duck Lake fishery i s overshadowed by the vastly more a t t r a c t i v e sportfishery of Kootenay Lake, immediately to the north of Duck Lake,  This  lake contains one of B r i t i s h Columbia's most productive offers a wide variety of catch.  f i s h e r i e s , and  The fishery of Duck Lake w i l l have l i t t l e  a t t r a c t i o n for fishermen whose age and income are such that f i s h i n g i n Kootenay Lake i s a relevant a l t e r n a t i v e . Thus the 'market' of l o c a l area residents which t h i s fishery w i l l reach w i l l be l i m i t e d i n scope - e s s e n t i a l l y those who the more a t t r a c t i v e Kootenay Lake,  are unable to f i s h  Prospects for increased use by l o c a l  area fishermen therefore appear s l i g h t , except for one s i g n i f i c a n t f a c t o r . There i s considerable evidence that the problems associated with access to the area have been 'bottling up' a s i g n i f i c a n t demand i n the past.  Pro-  v i s i o n of access would remove this obstacle and could lead to a four to f i v e f o l d increase i n f i s h i n g a c t i v i t y over a very short time span.  This  u t i l i z a t i o n would then be expected to l e v e l off and increase at a rate of  * about 4 per cent per year. There i s one other 'market' which this fishery may  serve, and  would consist of non-local summer v i s i t o r s , mainly as family groups.  this In a  recent study of f i s h i n g on Kootenay Lake i t was noted that fishing t r i p s by l o c a l residents were highly r e p e t i t i v e short t r i p s which t y p i c a l l y involved only the enthusiastic fisherman i n a family.  Non-residents on the  other hand were generally v i s i t i n g Kootenay Lake as part of an annual vacation involving a major commitment i n t r a v e l and frequently p a r t i c i p a t i o n by the whole family (Pearse and Laub 1969).  * Sales of resident f i s h i n g licences i n the l o c a l area grew at a rate of 4% per year from 1962 to 1967. There i s no breakdown on the d i s t r i b u t i o n of these sales by age group, and i n any case persons under 18 years of age do not require a f i s h i n g licence. I t i s assumed that the normal rate of growth f o r fishermen interested i n Duck Lake i s the same as that f o r regional licence sales.  The r e l a t i v e l y  inexpensive equipment, high degree of safety and high  l e v e l of success to be expected from the Duck. Lake fishery w i l l have a strong appeal f o r "family f i s h i n g , " e s p e c i a l l y f o r families with young children.  These fishermen can be expected to take advantage of the  f i s h i n g opportunities i n conjunction with summer .visits to observe waterfowl and other birds i n the area.  Major u t i l i z a t i o n by these fishermen could be  expected following development of the o v e r a l l w i l d l i f e habitat.  For the  sake of s i m p l i c i t y i t w i l l be assumed that u t i l i z a t i o n by non-local f i s h e r men begins i n 1974 with 1,000 fisherman days of use.  Growth In use at an  annual rate of approximately 20 per cent i s expected thereafter. While the a r b i t r a r i n e s s of these estimates i s recognized, they are thought nevertheless to be reasonable.  U t i l i z a t i o n would increase each year  u n t i l 1984 when the capacity of the lake would be reached. are summarized i n Table G-l.  These estimates  The f i n a l column i n Table G - l presents the  amounts by which u t i l i z a t i o n i s increased over what i t would be without development.  These are the increases or benefits attributable to development  and they are derived under the assumption that without development present use of 700 days would grow at a rate of 4 per cent annually.  TABLE G-l ESTIMATED UTILIZATION. WARMWATER SPORTFISHERY. DUCK LAKE  Year  Local Area Residents  Non-Local  Total  Increased U t i l i z a t i o n as a Result of Development  (fisherman-days) 1970  700  -nil-  700  71  1,600  -nil-  1,600  870  72  2,600  -nil-  2,600  1,840  73  3,500  -nil-  3,500  2,710  74  3,640  1,000  4,640  3,820  75  3,786  1,200  4,986  4,136  76  3,940  1,440  5,380  4,495  77  4,100  1,730  5,830  4,910  78  4,270  2,080  6,350  5,390  79  4,440  2,500  6,940  5,940  1980  4,620  3,000  7,620  6,580  81  4,800  3,600  8,400  7,320  82  5,000  4,320  9,320  8,200  83  5,200  5,200  10,400  9,235  84  5,400  5,400  10,800  9,590  CAPACITY REACHED IN 1984, CONSTANT UTILIZATION THEREAFTER  -nil'  Waterfowl and Upland Bird Hunting The footing i s soundest when forecasting u t i l i z a t i o n for waterfowl and upland b i r d hunting.  of the area  Appendix F summarizes the results of  a survey of hunters using the area during the 1968 season, and provides much of the basic data f o r forecasts of future use. Development to capacity f o r hunters can be expected before a l l c a p i t a l costs are incurred.  By 1976 87 per cent of a l l c a p i t a l expenditures  w i l l have been completed, including a l l major basic structures.  Expenditures  from 1977 through 1982 w i l l be i n the nature of small improvements and w i l l have l i t t l e significance i n increasing the area's capacity f o r hunting.  It  i s therefore assumed that hunting capacity reaches i t s maximum i n 1977, lagging one year after the t o t a l expenditures incurred up to 1976. Present use of the unreclaimed land by hunters t o t a l s 5,000 days per year, with an a d d i t i o n a l 1,500  days of hunting on private land.  With  development of the habitat and increased numbers of birds a v a i l a b l e , the maximum capacity w i l l be available by 1977 at a l e v e l of 10,000 hunter days per year on Crown land and 5,000 per year on private land. In predicting increased u t i l i z a t i o n  i t i s asserted that hunters w i l l  constantly press on the capacity of the habitat.  The capacity f o r hunting  w i l l be f u l l y u t i l i z e d as soon as i t becomes available. defended by the following arguments:  This assertion i s  there i s at present a s i g n i f i c a n t  latent demand f o r increased hunting opportunities among those hunters already hunt on the Creston f l a t s .  who  Present users have indicated that they  would probably expand use of the area by 6,000 hunter days per year i f opportunities were available (Appendix F ) .  This represents almost a doubling  of present use without expanding  to a new  'market' or population of hunters.  Significant pressure can also be expected by hunters from nearby population centres ( T r a i l , Nelson and Cranbrook) who do not hunt on the Creston f l a t s at present.  With few opportunities for high quality b i r d  hunting nearby i n B r i t i s h Columbia many persons from these areas have been making extended annual t r i p s to Alberta. The a v a i l a b i l i t y of quality hunting opportunities as close as Creston would attract a large number of these hunters for hunting t r i p s of short duration. Additional pressure can be expected from residents of other areas in B r i t i s h Columbia, notably the Lower Mainland.  Bird hunters i n the Lower  Mainland have experienced a marked decline i n the a v a i l a b i l i t y of hunting opportunities i n the past decade as b i r d habitat has been eroded by other land uses.  Many hunters i n t h i s area have more or less abandoned b i r d  hunting i n B r i t i s h Columbia and participate instead i n an annual exodus to Alberta.  Diversion of even a small f r a c t i o n of these hunters to Creston  would have the effect of pushing the demand for hunting opportunities beyond the capacity of the area. Predictions of u t i l i z a t i o n by hunters therefore coincide with the establishment of capacity and are summarized i n Table G-2,  While the t o t a l  capacity of the area w i l l be 15,000 hunter days per year, the area presently supports 6,500 days.  Only the increase i n capacity and use, as summarized  in the l a s t column of Table G-2, development.  should be attributed to the proposed  Maximum capacity would be realized i n 1977 and u t i l i z a t i o n  would remain constant thereafter.  TABLE G-2 ANNUAL INCREASE IN HUNTING CAPACITY AND UTILIZATION Capacity and U t i l i z a t i o n i n Hunter-Days Crown Land  Private Land  Total  Year  Annual Increase  Total Increase Over Present  1970  5,000  1,500  6,500  -nil-  71  6,050  2,235  8,285  1,785  1,785  72  6,300  2,410  8,710  425  2,210  73  6,550  2,585  9,135  425  2,635  74  7,850  3,495  11,345  2,210  4,485  75  8,600  4,020  12,620  1,275  6,120  76  9,350  4,545  13,895  1,275  7,395  77  10,000  5,000  15,000  1,105  8,500  -nil-  MAXIMUM CAPACITY REALIZED IN 1977, CONSTANT THEREAFTER 1  Hiking;. Nature Study. Bird Watching. and Photography The estimated establishment of capacity f o r these pursuits i s summarized in Table G-3.  The estimates i n t h i s table assume capacity to be established i n  direct proportion to c a p i t a l expenditures, with a one-year l a g .  Estimating the  timing of 'capacity a v a i l a b i l i t y ' i n this manner i s a straightforward matter. But estimating u t i l i z a t i o n of the area for these a c t i v i t i e s i s the most d i f f i c u l t aspect of the entire study.  While the greatest capacity w i l l be i n  TABLE G-3  ANNUAL INCREASE IN CAPACITY - HIKING. NATURE INTERPRETATION. BIRD WATCHING. PHOTOGRAPHY  Year  Increase i n Recreation -Day Capacity  Total RecreationDay Capacity  1971  45,000 rec'n -days  45,000 rec'n-days  72  12,500  "  57,500  "  73  10,000  "  67,500  "  74  57,500  "  125,000  "  75  32,500  76  32,500  "  190,000  "  77  27,500  "  217,500  "  78  12,500  "  230,000  '*  79  5,000  "  235,000  "  80  5,000  "  240,000  "  81  5,000  "  245,000  "  82  2,500  "  247,500  83  2,500  "  250,000  157,500  "  MAXIMUM CAPACITY REALIZED IN 1983, CONSTANT THEREAFTER  terms of such recreation, we have the least information i n regard to i t . To formulate any estimates i t i s necessary to f i r s t consider broad aggregate factors which are operative i n the u t i l i z a t i o n of outdoor recreation  f a c i l i t i e s and then turn to p a r t i c u l a r forces which may  be operative at  Creston. The f i r s t observation  i s of course the rather t r i t e fact that demand  for a l l forms of outdoor recreation, as evidenced by p a r t i c i p a t i o n , i s growing at consistently high rates.  Unfortunately  there are few  statistics  which document the p a r t i c i p a t i o n i n non-consumptive w i l d l i f e recreation i n Canada.  Reliable s t a t i s t i c s are available i n the United States, however,  and they indicate that except for boating and f i s h i n g at reservoir s i t e s the fastest growth in outdoor recreation since World War  II has been i n the  use  of national w i l d l i f e refuges, where attendance has grown at a rate of 12 per cent annually  (Clawson 1963).  There i s speculation that the rate of  increase i n such a c t i v i t i e s i n Canada today exceeds the American experience. Comparing the rate of increase i n national parks attendance for the countries supports this speculation.  two  Attendance at Canada's national parks  has increased at an average rate of 12 per cent as compared with 8 per cent i n the United States  (Brooks 1962),  At a more regional l e v e l , a study of the recreation and t o u r i s t industry p o t e n t i a l i n the p a c i f i c northwest area of the United States pred i c t s that recreation p a r t i c i p a t i o n w i l l be four times greater i n the year 2000 than i t was  i n 1960  (U.S.  Dept. of I n t e r i o r 1967).  The same study notes  that the rate of v i s i t a t i o n growth i n the P a c i f i c Northwest exceeds the  * national rate of growth for many, i f not a l l , comparable f a c i l i t i e s . While comparable regional s t a t i s t i c s are not a v a i l a b l e for B r i t i s h Columbia we can note that the same underlying  factors are operative here -  Review of the data i n Appendix E of the above report reveals an annual growth of from 10% - 20% f o r selected types of outdoor recreation.  an expanding economy, high per capita incomes, increased mobility through improved transportation routes, and increased l e i s u r e time per capita. A l l of  these factors give r i s e to a rapid* rate of growth i n p a r t i c i p a t i o n i n  outdoor recreation. Reviewing these broad aggregates does l i t t l e more than dramatize the dynamic state of outdoor recreation p a r t i c i p a t i o n .  Such figures are of  l i t t l e help i n estimating attendance at the p a r t i c u l a r recreation s i t e which would be created on the Creston f l a t s . For  some insights i n t o this matter, the experience with s i m i l a r  f a c i l i t i e s elsewhere i s h e l p f u l . the of  An informative analogy can be drawn from  experience at Wisconsin's Horicon Marsh.  This provides a good example  the way i n which waterfowl w i l l respond to habitat conditions, and people  in turn w i l l respond to the presence of w i l d l i f e .  Extensive habitat develop-  ment was undertaken at the 30,000 acre Horicon Marsh W i l d l i f e Area and National W i l d l i f e Refuge i n the late 1950's (Keith 1964, Clement 1964).  A  dramatic buildup i n the number of Canada geese using the habitat soon followed. the  fall  In 1960 41,500 persons came to the area to watch the geese during (a s i x week period from October to November),  The ranks of b i r d  watchers grew to 75,800 i n 1961, and by 1963 had reached 202,500.  This area  i s admittedly much closer to large population centers than Creston, but at the  same time i t should be noted that the u t i l i z a t i o n recorded i s f o r a s i x  week period only. After reviewing the Horicon Marsh experience i t i s easy to become optimistic about high levels of u t i l i z a t i o n at Creston achieved over a very short time span. are  I t i s sobering therefore to r e f l e c t on what few s t a t i s t i c s  available on park oriented recreation i n B r i t i s h Columbia.  In 1968 the  number of people attending nature interpretation programs, ( v i s i t i n g nature houses, going on conducted nature walks, and self-guiding nature t r a i l s ) totaled 182,000 by actual count (Department of Recreation and Conservation 1969).  It i s impossible to know how many other people may have used the  same f a c i l i t i e s i n an informal fashion, but t h i s figure points out the importance  of location with respect to population centers i n determining the  use of any area. At the same time B r i t i s h Columbia has experienced some notable responses to new  (although not w i l d l i f e - o r i e n t e d ) recreation f a c i l i t i e s .  Recon-  struction of B a r k e r v i l l e i n the Cariboo, and Fort Steele i n the East Kootenays are cases i n point.  Both of these s i t e s are s t i l l  undergoing  development, with Fort Steele being the most recently undertaken. to  Visitors  Fort Steele numbered 13,000 i n 1965, 56,000 i n 1966, 100,000 i n 1967,  107,000 i n 1968.  and  This i s a case of recreational response following d i r e c t l y  on the creation of a recreation s i t e . This more s p e c i f i c review of experience with selected recreation s i t e s yields a better perspective on the u t i l i z a t i o n which might be expected at  Creston, but i t s t i l l does not answer the question of how much use to  expect.  In taking the f i n a l step and making some 'judgment' estimates i t i s  h e l p f u l to refer to the guidelines quoted e a r l i e r . The f i r s t point in  the relevant a c t i v i t y .  c a l l s f o r an examination of past u t i l i z a t i o n trends While these trends cannot be i d e n t i f i e d s p e c i f i -  c a l l y i n B r i t i s h Columbia, u t i l i z a t i o n i s obviously increasing rapidly.  The  second guideline c a l l s f o r reference to the probable future desires of average people for the recreation a c t i v i t y .  Again 'judgment' would point to  a strong upward trend i n peoples' desires for this kind of recreation activity.  There i s at present an increasing appreciation and i n t e r e s t i n  preservation, of the natural environment, p a r t i c u l a r l y among the young. The t h i r d point to be considered i s the capacity of average people to enjoy the recreation a c t i v i t y or area, p a r t i c u l a r l y their a b i l i t y to afford the time and money required f o r p a r t i c i p a t i o n .  Once more the non-  consumptive forms of recreation associated with w i l d l i f e development at Creston rate highly.  The area i s e a s i l y accessible by car, costs of  p a r t i c i p a t i n g i n the recreation are minimal, and the on-site time commitment can be as long or as short as participants desire.  F i n a l cognizance  i s to be taken of the opacity or supply of areas which can support the recreation a c t i v i t y .  In t h i s regard the opportunities created at Creston  w i l l be unequalled elsewhere i n B r i t i s h Columbia.  At the same time,  however, the abundance of other types of outdoor recreation a c t i v i t y i n B r i t i s h Columbia must be recognized. Considering these and other underlying forces estimates have been made of the extent of u t i l i z a t i o n which could be expected by persons interested i n hiking, nature i n t e r p r e t a t i o n , b i r d watching, and These estimates are summarized by year i n Table G-A, estimates i t was considered unreasonable  photography.  In preparing these  to expect i n i t i a l attendance at  Creston to exceed that recorded at such well publicized and popular attractions as Barkerville and Fort Steele.  I f the patterns observed at  other recreation s i t e s i n B r i t i s h Columbia are repeated we would expect a strong upsurge of new interest a f t e r the i n i t i a l development, followed by a gradual s t a b i l i z a t i o n of growth i n attendance at a rate of 5 to 10 per cent a year.  This i s r e f l e c t e d i n the estimates of a strong increase i n  attendance through 1977 with a slower and more stable rate of growth thereafter.  The area's capacity to support such recreation would not be reached  u n t i l 1985 and would have to be s t a b i l i z e d at that l e v e l by some means of  TABLE G-4  ESTIMATED UTILIZATION. HIKING. NATURE INTERPRETATION BIRD WATCHING AND PHOTOGRAPHY  Year  Recreation-Days  Year  Recreation-Days  1971  5,000  1980  192,000  72  10,000  81  205,000  73  20,000  82  219,000  74  85,000  83  232,000  75  120,000  84  246,000  76  130,000  85  250,000  77  150,000  78  165,000  79  178,000  CAPACITY OF AREA REACHED BY 1985, CONSTANT USE THEREAFTER  control beyond 1985.  The slow rate of growth predicted from 1977 through  1985 i s a r e f l e c t i o n of the fact that such v i s i t s are not highly r e p e t i t i v e for most i n d i v i d u a l s .  I t i s also important to estimate the extent of t h i s  use which w i l l be taken by persons from the various referent groups.  Some  insights into the extent of use by B r i t i s h Columbians can be gained by examining s t a t i s t i c s on park attendance i n B r i t i s h Columbia.  Over the four  camping seasons from 1965-68, only 60.6 per cent of campers have been from B r i t i s h Columbia.  These proportions vary widely throughout the province.  In the Kootenay region the per cent of B r i t i s h Columbia users tends to be  much lower due to the proximity to Alberta, and the great attraction of the National Parks i n drawing v i s i t o r s from the United States.  For selected  campgrounds i n the Kootenays these proportions i n 1968 were:  B.C.  Canada  %  %  U.S.A.  %  Champion Lakes  49.2  37.1  13.7  Lockhart Beach  42.0  31.8  26.2  Jimsmith Lake  32.5  41.0  26.5  Mount Fernie  20.5  58.0  21.5  Moyie Lake  30.8  40.0  29.2  Wasa Lake  33.7  54.5  11.8  Yahk  31.7  43.7  24.6  Source:  Parks Branch, Department of Recreation and Conservation.  As one goes further east i n B r i t i s h Columbia, more campground users come from elsewhere i n Canada and the United States than from B r i t i s h Columbia. These figures r e f l e c t campground users only, not t o t a l tourist  traffic,  and as such provide only a rough guide to the r e l a t i v e d i s t r i b u t i o n of nonconsumptive r e c r e a t i o n a l v i s i t o r s .  They do, however, give an interesting i n -  sight into the extent to which free public f a c i l i t i e s may be u t i l i z e d by nonB r i t i s h Columbians,  After reviewing these data i t i s estimated that 3 per cent  of the use for non-consumptive recreation w i l l be taken by l o c a l area residents, 35 per cent by B r i t i s h Columbians from outside the l o c a l area, and 40 per cent by Canadians from outside B r i t i s h Columbia.  The t o t a l use by  B r i t i s h Columbians i s thus 38 per cent and by Canadians 78 per cent.  REFERENCES. APPENDIX G  Brooks, L. 1962. The forces shaping demand for recreation space i n Canada. Background paper, Resources for Tomorrow Conference, Proceedings. V o l . 3. Ottawa. Clawson, Marion. McNally.  1963.  Land and water for recreation.  Clawson, Marion and Jack L, Knetsch, Baltimore, Johns Hopkins.  1966.  Chicago, Rand  Economics of outdoor recreation.  Clement, R.C, 1964. Viewpoint of a n a t u r a l i s t . In Waterfowl tomorrow (J,P. Linduska ed,). United States Department of the I n t e r i o r , Washington. Department of Recreation and Conservation, V i c t o r i a , Queen's Printer.  1969,  Annual report. 1968.  Keith, Lloyd B. 1964. Some s o c i a l and economic values of the recreational use of Horicon Marsh. Wisconsin. University of Wisconsin, Research B u l l e t i n 246. Pearse, Peter H, and M. Laub. 1969. The value of the Kootenay Lake Sport fishery. Department of Recreation and Conservation, V i c t o r i a , B.C. Ullman, Edward L, and Donald J . Volk, 1962, An operational model for predicting reservoir attendance and benefits. Papers of the Michigan Academy of Science Arts and L e t t e r s . XLVII, 473-84. United States Department of the I n t e r i o r , Outdoor Recreation Resources Review Commission. 1962, Prospective demand f o r outdoor recreation. Study Report No, 26, Washington, D.C, . Bonneville Power Administration. 1967. P a c i f i c Northwest economic base study f o r power markets. Vol, 2, Part 9, Recreation. Portland, Oregon.  A P P E N D I X  H  APPENDIX H PRESENT VALUE CALCULATIONS BENEFITS FROM HUNTING. FISHING, NON-CONSUMPTIVE RECREATION, AGRICULTURE AND TRAPPING  In this appendix unit values are applied to the various types of recreational u t i l i z a t i o n estimated i n Appendix G to determine the value of the  recreation realized each year u n t i l the area's capacity i s f u l l y  exploited.  I t i s assumed that u t i l i z a t i o n remains constant once the  capacity l i m i t s of various forms of recreation are reached.  Therefore, i n  Table H-l f o r example, i t i s assumed that the annual value of benefits from TABLE H-l PRESENT VALUE OF BENEFITS FROM FISHING  Year  Value i n Year  Value i n 1970  Year  Value i n Year  Value i n 1970  1971  $3,480  $3,220  1981  $29,280  $12,555  72  7,360  6,310  82  32,800  13,020  73  10,840  8,600  83  36,940  13,580  74  15,280  11,230  84  38,360  163.250  75  16,544  11,260  ti  76  17,980  11,330  it  77  19,640  11,460  ti  78  21,560  11,650  ti  79  23,760  11,890  ii  1980  26,320  12,190  ii  PRESENT  .  $301,545  f i s h i n g w i l l remain constant at $38,000 after 1984, and the present value i n 1970 of t h i s constant stream of benefits i s $163,000. The value of these benefit streams i s discounted back, to present values i n 1970, a discount rate of 8 per cent being adopted.  The unit  values employed are $4 per day f o r f i s h i n g , $8 per day f o r hunting, and $5 per day f o r non-consumptive recreation.  Derivation of these unit values i s  discussed i n Appendix I,  TABLE H-2 PRESENT VALUE OF BENEFITS FROM HUNTING  Year  Value i n Year  Value i n 1970  1971  $14,280  $13,220  72  17,680  15,160  73  21,080  16,730  74  38,760  28,500  75  48,960  33,320  76  59,160  37,280  77  68,000  496.000  It  II  II  PRESENT VALUE, 1970  $640,210  I t i s planned that about 30 per cent of the area, or about 3,500 acres, could be developed f o r a g r i c u l t u r a l production complementary to  w i l d l i f e management.  Under ordinary a g r i c u l t u r a l management this would be  expected to y i e l d a net benefit of $26 per acre (Appendix C), However, i t i s expected that there w i l l be a sharecropping agreement i n t h i s instance,  TABLE H-3  PRESENT VALUE OF BENEFITS FROM NON-CONSUMPTIVE RECREATION (HIKING. NATURE INTERPRETATION. BIRD WATCHING AND PHOTOGRAPHY)  Year  Value i n Year  Value i n 1970  Year  Value i n Year  Value i n 1970  1971  $25,000  $23,150  1981  $1,025,000  $439,620  72  50,000  42,860  82  1,095,000  434,710  73  100,000  79,380  83  1,160,000  426,420  74  425,000  312,375  84  1,230,000  418,690  75  600,000  408,300  85  1,250,000  5.320.000  76  650,000  409,560  •  77  750,000  437,550  •  78  825,000  445,660  •  79  890,000  445,180  •  1980  960,000  444,580  •  $10,088,000  with the •landlord's' share of roughly one-third l e f t as feed and cover f o r wildlife.  Under such an arrangement net benefit i s actually realized on  only two- thirds of theacreage - on the rest the cost of seed, f e r t i l i z e r , and c u l t i v a t i o n becomes a cost of game management.  For t h i s reason  calculations of the net benefit from a g r i c u l t u r a l production w i l l be taken on only two-thirds of the t o t a l farmed area, or 2,300 acres. of net value on this basis are summarized i n Table H-4.  Calculations  For these  calculations i t i s assumed that a g r i c u l t u r a l development takes place i n proportion to t o t a l c a p i t a l expenditure, with a one year time l a g .  TABLE H-4 PRESENT VALUE OF NET BENEFITS FROM AGRICULTURAL PRODUCTION  Year  Value i n Year  Value i n 1970  Year  Value i n Year  Value i n 1970  1971  $10,800  $10,000  1979  $56,000  $28,000  72  13,800  11,800  1980  57,500  26,600  73  16,200  12,900  81  58,600  25,000  74  30,000  22,000  82  59,200  23,500  75  37,700  25,700  83  59,800  275.000  76  45,500  28,700  «  77  52,000  30,400  •  78  55,000  29,700  •  it ti II  $549,300  Values from trapping w i l l not be large, and w i l l reach a maximum i n 1983 when the net benefit w i l l be $4,000. value c a l c u l a t i o n s .  Table H-5 summarixes the present  TABLE H-5 PRESENT VALUE OF NET BENEFITS FROM TRAPPING  Year  Value i n Year  Value i n 1970  Year  Value i n Year  Value i n 1970  1971  $  $  670  1979  $3,760  $1,880  720  72  920  790  1980  3,840  1,780  73  1,080  860  81  3,920  1,680  74  2,000  1,470  82  3,960  1,570  75  2,500  1,710  83  4,000  18,400  76  3,040  1,920  •  77  3,480  2,030  •  78  3,680  1,990  •  II  it tt  PRESENT  $36,750  The summary of a l l present values expected from the w i l d l i f e development project i s presented i n Table H-6.  Net annual benefits are discounted  TABLE H-6 SUMMARY OF ALL PRESENT VALUES. 1970  Fishing  $301,000  Hunting  640,000  Non-Consumptive Recreation A g r i c u l t u r a l Production Trapping PRESENT VALUE OF ALL BENEFITS  10,088,000 549,000 37,000 $11,615,000  to present values i n 1970 using a discount rate of 8 per cent. present values t o t a l l i n g $11,615,000 are estimated.  Overall,  A P P E N D I X  I  APPENDIX I  UNIT VALUES FOR OUTDOOR RECREATION IN RESOURCE DEVELOPMENT PROJECTS  Planners dealing with natural resource development face the problem of placing a value on the recreational use of resources.  Recent progress  in t h i s f i e l d has included a c l a r i f i c a t i o n of the nature of the  'product'  produced i n recreation, and recognition of the need f o r an acceptable evaluation of t h i s product.  Only when recreation i s valued on the same basis  as other uses of natural resources can the optimum pattern of resource use be s p e c i f i e d .  The Recreation Product The primary benefits from recreation areas are those accruing d i r e c t l y to users of the area.  Such enjoyment has economic value i n the  same sense as the enjoyment a r i s i n g from conventionally marketed goods or services such as food or clothing.  However i n the case of most public out-  door recreation, opportunities are supplied free of charge to consumers and we lack conventional market indicators of the value of the resource i n t h i s use. Thus the basic problem i n dealing with recreation as an output of resource employment i s a measurement problem.  We lack clear expressions of  economically meaningful values which can be attributed to resources used for recreation. But the absence of market prices does not mean that there are no values created by this use of resources.  Economic values which are  relevant to resource a l l o c a t i o n decisions and d i r e c t l y comparable to values  imputed to other resource uses are produced.  The problem l i e s not i n an  absence of values but i n the absence of a direct measure of value. Placing a Value on Recreation  Economic values are measured b a s i c a l l y by what people are w i l l i n g to give up or s a c r i f i c e i n order to enjoy a p a r t i c u l a r product or service. A relevant economic measure of recreation values i s therefore  the w i l l i n g -  ness oh the part of consumers to pay f o r outdoor recreation services. These values are inherently the same as those established for other commodities which consumers must pay  for - but i n the case of recreation  no  prices have been established to measure these values. To overcome t h i s problem the value of recreation can be estimated from a demand curve constructed  to indicate what consumers would pay  various units of recreation output rather than go without them. measure of t o t a l user benefit i s equivalent demand curve (the sum  for  The  to the t o t a l area under the  of the maximum prices which various users would pay  for the various units of recreational output from the resource).  This i s  also referred to as "consumer's surplus" and measures the t o t a l economic worth to society of the recreational services provided by a p a r t i c u l a r area. This use of the t o t a l area under the demand curve as a measure of value d i f f e r s from the common use of the demand curve for p r i v a t e l y produced goods and services.  For p r i v a t e l y produced goods and services the t o t a l  value i s t y p i c a l l y a single value or price per unit m u l t i p l i e d by the t o t a l number of u n i t s .  This measure i s appropriate  f o r most p r i v a t e l y produced  goods (shoes for example) where contemplated increases  or decreases i n  production are small r e l a t i v e to t o t a l output and have no influence on the market price charged for a l l units of output. The production  from outdoor recreation areas usually occurs i n large  "lumps" however (non-consumptive recreation at Creston for example), and i s usually immobile.  These features of "lumpiness" and immobility mean that  the production, while possibly not large i n r e l a t i o n to t o t a l n a t i o n a l output, i s large r e l a t i v e to the market served.  Were the product a normally  marketed good i t s addition to or subtraction from the market would have a s i g n i f i c a n t e f f e c t on the price charged.  For t h i s reason the appropriate  measure of value of recreation produced i s the t o t a l area under the demand curve, rather than a unit price applied to the t o t a l output. While t h i s may be t h e o r e t i c a l l y s a t i s f y i n g i t i s hardly p r a c t i c a l . In practice i t would require the construction of a demand curve for each area or resource so that i t s value could be imputed. demand curves may be d i f f i c u l t and i s time consuming.  Construction of such Furthermore, where  demand curves are derived from t r a v e l cost information they introduce a conservative bias i n t o the evaluation by overlooking the cost of time spent in travel.  By ignoring t h i s factor the demand curve underestimates the actual  demand for a given resource  and hence the value imputed to the resource when  used f o r recreation. Some P r a c t i c a l Approaches to Recreation  Evaluation  The evaluation procedure outlined above i s d i f f i c u l t to put into p r a c t i c e , and there i s a danger that the demand curve employed w i l l i n c o r porate a conservative bias.  These d i f f i c u l t i e s have resulted i n other methods  being used to measure the value of recreation produced on resource s i t e s . Some of these methods are patently incorrect and w i l l not be discussed.  A  method which has p r a c t i c a l a p p l i c a b i l i t y however i s that of applying a unit value to the amount of recreation produced. This procedure of adopting a unit value has serious shortcomings as discussed above.  I t i s commonly adopted as the only p r a c t i c a l and workable  alternative f o r recreation evaluation. i t s shortcomings  As such i t i s useful provided that  are kept i n mind and i f e f f o r t s are made to modify the  unit value selected to meet s p e c i f i c s i t u a t i o n s . The f i r s t problem i n using t h i s approach i s the selection of an appropriate unit value.  The most common procedure  i s to relate the unit  value chosen to prices charged at p r i v a t e l y owned recreation areas. method i s used i n the United States by various federal agencies  This  concerned  with the use and development of water and related land resources (United States Government 1962), The American practice i s to adopt a schedule of values which can be applied to the recreation product.  The schedule incorporates a range of  values to allow f l e x i b i l i t y i n selecting a unit value f o r recreation on particular sites.  General recreation a c t i v i t i e s which a t t r a c t "the majority  of outdoor recreationists and which, i n general, require the development and maintenance of convenient access and adequate f a c i l i t i e s " are given unit day values from $0,50 to $1.50 per day.  Specialized recreation days " f o r which  opportunities, i n general, are l i m i t e d , i n t e n s i t y of use i s low, and which often may involve a large personal expense by the user" are given unit values from $2.00 to $6.00. These unit values are intended to measure the amount that users would be w i l l i n g to pay i f payment were required.  They are set forth as  j  interim statements of recreation benefit analysis "pending the development of improved p r i c i n g and benefit evaluation techniques." This method i s sound i n so f a r as i t relates the willingness of users to pay f o r the p r i v i l e g e of using a resource to the value of that resource use. The  actual units selected are open to question however - they simply r e f l e c t  "the consensus judgment of q u a l i f i e d technicians."  Insofar as they are  based on charges at s i m i l a r private areas they should be examined c r i t i c a l l y . The prices paid at private outdoor recreation areas are affected by existence  of v i r t u a l l y free public areas.  recreation areas may  the  Charges levied at private  not r e f l e c t the t o t a l value of recreational experience  so much as the value of benefits i n excess of those available free at public areas.  Prices paid at private recreation areas probably are simply  a bonus or premium paid for a better natural resource, better f a c i l i t i e s , or lack of crowding.  I t i s p r e c i s e l y because private areas are not f u l l y com-  parable to public areas that users are w i l l i n g to pay  fees or charges.  Applying these fees or charges to public recreation r i s k s a serious understatement of the true value of the  recreation.  In any case selection of a unit value for a day of recreation remains a matter of educated guessing and personal judgment. selected the next problem i s estimating days.  Once a unit value i s  the appropriate  number of recreation  The number of recreation days taken at a zero charge w i l l be  than the number at some fixed p r i c e .  larger  Multiplying the value per day by  the  number of recreation-days at a zero charge w i l l result i n an overestimate of the amount which would actually be paid i f prices were charged. This i s not a serious shortcoming, however, as the purpose i n evaluating  recreation i s to measure i t s t o t a l contribution to welfare or  value.  As long as a zero p r i c i n g policy remains i n e f f e c t the actual value  of the resource i n use w i l l exceed what would be paid i f prices were charged. This i s because a payment required f o r goods or services which have t r a d i t i o n a l l y been enjoyed free tends to cause a deterioration i n the individual's standard of l i v i n g and reduce h i s t o t a l consumption of goods and services.  So long as a resource i s supplied free of charge i t  represents a greater addition to t o t a l welfare than when other goods or services must be s a c r i f i c e d for i t . As a result of these countervailing factors i t seems reasonable to adopt a unit value per recreation day and apply i t to t o t a l recreation consumed at zero p r i c e .  While this would only by coincidence y i e l d an estimate  of value equal to the area under the demand curve for that resource i t must be accepted as the only p r a c t i c a l and s a t i s f a c t o r y  approximation.  Adoption of Unit Values f o r Recreation. Creston  Estimating the value of non-priced recreation at Creston i s very difficult.  Aside from the study of waterfowl hunters reported i n Appendix F  there are no detailed studies of the demand for the recreation opportunities which w i l l be created, and such studies would be a major undertaking i n themselves.  Furthermore  there are no^comparable private outdoor recreation areas  which could be used to provide rough guidelines i n the selection of unit values. As an alternative i t i s necessary to impute unit values f o r the various types of recreation days using personal judgment and taking account of the pertinent factors and determinants of demand f o r the Creston area.  These  values can be applied to the annual number of user-days to y i e l d an estimate  of the annual value of the resource f o r recreation. There have been several studies of the demand f o r f i s h i n g and hunting i n B r i t i s h Columbia which have attempted to measure the value of a recreation day.  A review of these studies i s useful i n establishing the relevant range  of values which could reasonably be adopted at Creston. A study of b i g game hunters i n the East Kootenay area revealed that the non-priced or primary value of a hunting t r i p f o r the average hunter was $197, equal to $20.50 per hunter day (Pearse and Bowden 1966, Pearse 1968). In a recent study of sportfisherraen on Kootenay Lake a value of roughly $6.50 per resident angler day was established (Pearse and Laub 1969).  The study  of Creston b i r d hunters reviewed i n Appendix F revealed an average value of $4.50 per hunter day, given present hunting q u a l i t y .  Hunters indicated a  willingness to pay more f o r improved hunting, averaging roughly $8 per day ($6.43 f o r l o c a l hunters, $9.96 for non-local hunters, and $13.66 f o r foreign hunters). The per day values estimated f o r b i g game hunters appear unreasonably high to transpose to Creston r e c r e a t i o n i s t s .  Marsh and reservoir v i s i t o r s  are probably much more casual i n t h e i r pursuits than the intense and somewhat esoteric hunters of East Kootenay b i g game.  On the average they probably  do not value t h e i r recreation experience as highly as a b i g game hunter.  The  other studies provide more comparable estimates, indicating a value i n the order of $4 to $8 per day of recreation. In adopting values f o r the i n d i v i d u a l types of recreation i t w i l l be assumed that a hunter-day under improved conditions has a value of $8 as indicated by hunters.  We expect unit values f o r the warmwater sportfishery  and non-consumptive forms of recreation to be lower.  Considering the  r e p e t i t i v e nature of the s p o r t f i s h i n g done i n Duck Lake and the fact that the species caught are not highly prized a value of $4 per fisherman day seems  appropriate. Persons partaking  a more representative fishermen.  of non-consumptive forms of recreation w i l l form  cross section of the public than e i t h e r hunters or  In t h i s regard we note both the very high quality recreational  experience which w i l l be available at Creston, and the general affluence of B r i t i s h Columbians. non-repetitive  Considering that v i s i t s to the area w i l l be r e l a t i v e l y  for most individuals a value of $5 per recreation day i s  adopted f o r a c t i v i t i e s such as hiking, nature i n t e r p r e t a t i o n , b i r d watching and photography.  REFERENCES. APPENDIX I  Pearse, Peter H. and Gary Bowden. 1966. Big game hunting i n the East Kootenay. Vancouver, Price P r i n t i n g . Pearse, Peter H. 1968. A new approach to the evaluation of non-priced recreational resources. Land Economics. Vol. XLIV, No, 1, 87-99. ' fishery.  and M, Laub. 1969, The value of the Kootenay Lake sport Department of Recreation and Conservation, V i c t o r i a , B.C.  United States Government. 1962, P o l i c i e s standards and procedures i n the formulation, evaluation, and review of plans for use and development of water and related land resources. Report by the President's Water Resources Council, 87th Cong., 2nd Sess., S. Doc. 97.  A P P E N D I X  J  APPENDIX J THE PRESENT VALUE OF COSTS FOR WILDLIFE AND  OUTDOOR RECREATION  Habitat Improvement Costs by Area  Habitat improvement plans have been worked out f o r each of the unreclaimed areas (Moore 1969).  The costs and timing of the proposed  developments are summarized here for each area i n turn, and the present value of c a p i t a l and maintenance costs calculated for 1970 with a discount rate of 8 per cent.  With the exception of the development at Duck Lake,  some aspects of the Leach Lake development, and Indian Reserve 1A, the major c a p i t a l expenditures w i l l not be incurred u n t i l 1973 when f u l l control over the Kootenay River i s r e a l i z e d through Libby  Dam.  Indian Reserves 1. 1A. and IB Two  developments are planned for the Indian Reserve lands.  Reserve  1A w i l l be developed i n a p i l o t project designed to improve both the waterfowl harvest and grazing and w i l l be operated as a separate unit.  Reserves 1  and IB w i l l be developed j o i n t l y as an integrated management u n i t . The c a p i t a l cost of developing Reserve 1A w i l l be $20,000, and annual maintenance costs are estimated at $1,500.  Development of t h i s area  i s expected to be f i n a l i z e d i n 1970 as the elevations i n this section of the Indian Reserves are such that dyking requirements w i l l not be m a t e r i a l l y affected by Libby Dam.  The present value of c a p i t a l costs f o r Reserve 1A i s  thus $20,000 while the present value of maintenance c o s t s i s $18,750.  The development of Reserves 1 and IB involve a much larger undertaking.  Total c a p i t a l costs are estimated at $340,000 and maintenance costs  are expected to s t a b i l i z e at $8,000 annually a f t e r 1977.  Present value  calculations are summarized i n Table J - l .  TABLE J - l INDIAN RESERVES 1. IB - PRESENT VALUE OF COSTS  Year  Capital Cost  Value i n 1970  Operating and Maintenance Costs  Value i n 1970  1973  $67,000  $53,200  74  50,000  36,750  $1,600  $1,200  75  50,000  34,000  2,700  1,800  76  50,000  31,500  4,000  2,500  77  50,000  29,200  5,000  2,900  78  50,000  27,000  6,300  3,400  79  23.000  11.500  8,000  50.000  $340,000  $223,150  TOTAL  $61,800  Corn Creek Total c a p i t a l costs f o r the Corn Creek area are estimated at $126,000 with annual maintenance costs reaching a maximum of approximately $6,500 i n 1980.  Table J-2 summarizes the present value calculations.  CORN CREEK - PRESENT VALUE OF COSTS  Year  Capital Cost  Value i n 1970  1973  $15,000  $12,000  74  20,000  14,700  2,100  1,500  75  20,000  13,600  3,300  2,200  76  12,500  7,900  4,000  2,500  77  12,500  7,300  4,700  2,700  78  12,500  6,700  5,500  3,000  79  12,500  6,300  6,200  3,100  1980  12,500  5,800  6,500  3,000  81  8.500  3.600  6,500  35.000  $126,000  $77,900  TOTAL  Operating and Maintenance Costs $ -  Value i n J970 $ -  $53,000  Leach Lake I n i t i a l c a p i t a l developments are being undertaken on the Leach Lake unit i n 1970 consisting of work on Summit Creek,  This work i s being under-  taken at t h i s time so that f i n a l completion can be achieved s w i f t l y i n late 1972 when Libby Dam becomes e f f e c t i v e .  Total c a p i t a l costs are expected to  be $375,000, with annual maintenance costs probably as high as $12,000, The  present value calculations are presented i n Table J-3. TABLE J-3 LEACH LAKE - PRESENT VALUE OF COSTS  Year  Capital Cost  Value i n 1970  Operating and Maintenance Costs  1970  $110,000  $110,000  71  20,000  18,500  5,000  4,600  72  150,000  128,600  5,000  4,300  73  55,000  43,700  5,000  4,000  74  40.000  29.400  7,500  5,500  75  10,000  6,800  76  10,000  6,300  77  12,000  87.500  $ -  78  II  79  II  •  ••  Value i n 1970  $ -  II  • ti  • TOTAL  $375,000  $330,200  $119,000  Six Mile Slough Total c a p i t a l costs f o r on-site development of the Six Mile Slough area are estimated at $151,000. provide access to the area.  Additional costs w i l l be necessary to  In dealing with a g r i c u l t u r a l development i t was  assumed that such access would cost approximately $75,000 (Appendix D) and the same cost w i l l be assumed here. the order of $7,000,  Annual maintenance costs would be i n  The present value calculations summarized i n Table J-4  assume that access i s provided i n the i n i t i a l year of development and on-site c a p i t a l costs commence the following year, 1974,  TABLE J-4  SIX MILE SLOUGH - PRESENT VALUE OF COSTS  Operating and Maintenance Cost  Value i n 1970  Year  Capital Cost  Value i n 1970  1973  $78,000  $62,000  74  20,000  14,700  1,800  1,300  75  10,000  6,800  2,600  1,800  76  10,000  6,300  3,500  2,200  77  20,000  11,600  5,000  2,900  78  25,000  13,500  7,000  47.300  79  25,000  12,500  1980  18,000  8,300  81  17,000  7,300  82  14,000  5.600  $237,000  $148,600  TOTAL  $ -  $ -  $55,500  Duck Lake Duck Lake development w i l l commence i n 1970 as the area i s already protected by dyke from the waters of the Kootenay River.  Present plans c a l l  for a t o t a l c a p i t a l outlay of $663,000 over s i x years, with annual maintenance costs expected to reach a maximum of $17,500,  Present value c a l -  culations are presented i n Table J-5. TABLE J-5 DUCK LAKE - PRESENT VALUE OF COSTS  Year  Capital Cost  Value i n 1970  Operating and Maintenance Cost  Value i n 1970  1970  $300,000  $300,000  $9,500  $9,500  71  83,000  76,800  12,200  11,300  72  80,000  6*8,600  14,700  12,600  73  80,000  63,500  17,000  13,500  74  60,000  44,100  17,500  161.000  75  60.000  40.800  "  78  80  TOTAL  $663,000  $593,800  $207,900  Capital Costs Associated with W i l d l i f e Development  The costs discussed above have been for d i r e c t habitat improvement and control.  Present plans also c a l l for major c a p i t a l outlays to construct  an administrative centre and develop a campground where Summit Creek enters the f l o o d p l a i n .  Administrative Centre It i s expected that the administrative centre w i l l be b u i l t i n at a cost of approximately $200,000, expected to be $6,000 annually.  1972,  Maintenance and operating costs are  The present values of these costs i n  1970  are $171,000 and $64,000 respectively. Summit Creek Park At present development plans c a l l for the Parks Branch of the Department of Recreation and Conservation  to develop a campground on Summit Creek  at the western edge of the f l o o d p l a i n . camp units at f u l l development.  The maximum capacity would be  200  C a p i t a l cost of constructing the campground  i s estimated at $382,000 with annual maintenance costs i n the order of $12,000. The appropriate treatment of these costs i s not clear at present. I t i s expected that the campground w i l l provide accommodation for v i s i t o r s to the w i l d l i f e development.  At the same time i t would be unreasonable to  expect that a l l campground users w i l l be v i s i t o r s interested i n w i l d l i f e . Similar campgrounds throughout B r i t i s h Columbia are consistently f i l l e d to capacity during the t o u r i s t season.  I t can e a s i l y be argued that a camp-  ground at Summit Creek would also be used to capacity even i f there was  no  w i l d l i f e development. As a preliminary p o s i t i o n i t i s argued here that the costs of constructing and maintaining t h i s campground do not represent costs attributable to the w i l d l i f e development per se.  The campground does not  contribute to w i l d l i f e habitat or production, rather i t serves a  completely  separate function i n providing accommodation for campers, and there i s no guarantee that a l l campers would v i s i t the w i l d l i f e development.  The costs  of developing campgrounds of this nature are more appropriately set off against the 'value' of providing camping space, not the value of  producing  wildlife. Of these two a d d i t i o n a l c a p i t a l costs, the Administrative Centre and Summit Creek Park, only the costs of the Administrative Centre w i l l be included in the analysis of the costs of w i l d l i f e development. Management Costs;  Salaries and  Personnel  The costs enumerated above have included c a p i t a l and maintenance costs for the planned development of each area or unit.  The f i n a l costs to  be considered are those of s a l a r i e s for f u l l and part time s t a f f .  When  f u l l y operative i t i s expected that s t a f f w i l l consist of a supervising b i o l o g i s t , a foreman-manager, 3 f u l l - t i m e employees and a secretary.  In  addition at least 3 part-time employees would be required i n the summer months.  Annual salary costs would thus be i n the order of $75,000, although  this l e v e l of annual costs would not be reached u n t i l approximately  1976.  Estimates of the annual salary costs, and t h e i r present values i n 1970 given i n Table  J-6.  are  TABLE J-6 SALARY COSTS - PRESENT VALUE  Year  Annual Salaries  Value i n 1970  1970  $30,000  $30,000  71  37,000  34,000  72  44,000  38,000  73  56,000  44,000  74  65,000  48,000  75  70,000  48,000  76  75,000  591.000  tl  II  It  TOTAL  $833,000  Summary. The Present Value of Costs f o r W i l d l i f e and Outdoor Recreation Development Table J-7 presents a summary of the costs of the proposed development for w i l d l i f e and outdoor recreation.  Total c a p i t a l outlays are estimated at  $1,961,000, but because these outlays w i l l be spread from 1970 through 1982 the present value of c a p i t a l costs i n 1970 i s only $1,565,000, The present value (1970) of annual maintenance costs which w i l l be incurred through perpetuity i s estimated at $581,000, while the present value of salary expenses w i l l approximate $833,000.  SUMMARY OF PRESENT VALUES - COST OF WILDLIFE AND OUTDOOR RECREATION DEVELOPMENT  Total C a p i t a l Outlays  Present Value of C a p i t a l Costs  Present Value of Operating and Maintenance  Indian Reserve 1A  $20,000  $20,000  $19,000  Indian Reserves 1, IB  340,000  223,000  62,000  Corn Creek  126,000  78,000  53,000  Leach Lake  375,000  330,000  119,000  Six Mile Slough  237,000  149,000  56,000  Duck Lake  663,000  594,000  208,000  Administrative Centre  200.000  171.000  64,000  $1,961,000  $1,565,000  $581,000  Present Value of Annual  I t i s worth noting that the present value of annual costs - s a l a r i e s and maintenance - together t o t a l $1,4 m i l l i o n , almost as much as the present value of c a p i t a l costs.  I t i s important to include these costs i n this form  as they are often overshadowed by the more obvious and immediate c a p i t a l costs.  REFERENCE. APPENDIX J  Moore, D w i g h t D . 1 9 6 9 . A development plan f o r the Indian Reserve Lands 1, 1A arid IB and the Creston Valley W i l d l i f e Management Area, mimeo report, Creston.  A P P E N D I X  K  APPENDIX K THE EFFECT OF ALTERNATE DISCOUNT RATES ON THE BENEFIT COST ANALYSIS, WILDLIFE DEVELOPMENT  As pointed out i n the main text, the discount  rate can have a  s i g n i f i c a n t e f f e c t on the outcome of a benefit-cost analysis.  Future costs  and benefits are discounted at 8 per cent throughout this study as this i s f e l t to be a s a t i s f a c t o r y approximation of the r e a l s o c i a l discount  rate.  To test the s e n s i t i v i t y of the analysis of the w i l d l i f e development to the discount rate t h i s appendix carries out the benefit cost comparisons with alternative rates of s i x and ten per cent. Six Per Cent Discount Rate With a discount rate of s i x per cent the present value i n 1970 of a l l benefits i s $16,524,000, while the present value of costs i s $3,595,000. On the basis of an o v e r a l l comparison net benefits are then $12,929,000, the benefit cost r a t i o 4.6:1, The  figures which provide the basis f o r t h i s comparison are sum-  marized i n Table K - l , appropriate  D i s t r i b u t i n g these costs and benefits among the  referent groups the r e s u l t s of the benefit-cost comparisons are  as summarized i n Table K-2,  COSTS AND BENEFITS FROM PROPOSED WILDLIFE DEVELOPMENT. 6 PER CENT DISCOUNT.RATE (PRESENT VALUES. 1970) DEVELOPMENT COSTS Present Value of Capital Costs: I.R. 1A I.R. 1, IB Corn Creek Leach Lake Six Mile Slough Duck Lake Administrative Centre  $20,000 247,000 87,000 340,000 166,000 609,000 178.000  Total C a p i t a l Costs  $1,647,000  Present Value of Maintenance Costs: I.R. 1A I.R. 1, IB Corn Creek Leach Lake Six Mile Slough Duck Lake Administrative Centre Total Maintenance Costs Present Value of Salary Expenses  $25,000 92,000 78,000 167,000 82,000 279,000 89.000 812,000 1.136.000  Present Value of A l l Costs  $3,595,000  BENEFITS FROM DEVELOPMENT Fishing Hunting Non-Consumptive Recreation Agriculture Trapping Present Value of A l l Benefits  $443,000 910,000 14,337,000 782,000 52.000 $16,524,000  COMPARISON OF BENEFIT COST ANALYSIS FOR VARIOUS REFERENT GROUPS (PRESENT VALUES 1970. 6 PER CENT DISCOUNT RATE)  British Columbia  Canada  A l l Participants (includes nonCanadians)  Present Value of Benefits (B)  $7,480,000  $13,281,000  $16,524,000  Present Value of Costs (C)  $1,761,000  $ 3,089,000  $ 3,595,000  Net Benefits (B-C)  $5,719,000  $10,192,000  $12,929,000  Benefit Cost Ratio (B/C)  4.3:1  4.2:1  4.6:1  Ten Per Cent Discount Rate With a ten per cent discount rate the present value i n 1970 of a l l benefits i s $8,193,000, while the present value of costs i s $2,580,000.  On  an o v e r a l l comparison net benefits are $5,613,000 and the benefit cost r a t i o i s 3.2:1. Table K-3 summarizes the figures which provide the basis f o r c a l culations with a ten per cent discount rate.  The results of the benefit-  cost comparisons f o r the appropriate referent groups are summarized i n Table K-4.  COSTS AND BENEFITS FROM PROPOSED WILDLIFE DEVELOPMENT. 10 PER CENT DISCOUNT RATE (PRESENT VALUE. 1970) DEVELOPMENT COSTS Present Value of C a p i t a l Costs: I.R. 1A I.R. 1, IB Corn Creek Leach Lake Six Mile Slough Duck Lake Administrative Centre  $20,000 202,000 70,000 321,000 134,000 580,000 165.000  Total Capital Costs  $1,492,000  Present Value of Maintanance Costs: I.R. 1A I.R. 1, IB Corn Creek Leach Lake Six Mile Slough Duck Lake Administrative Centre Total Maintenance Costs Present Value of Salary Expenses  $15,000 45,000 39,000 91,000 40,000 155,000 50.000 435,000 653.000  Present Value of A l l Costs  $2,580,000  BENEFITS FROM DEVELOPMENT Fishing Hunting Non-Consumptive Recreation Agriculture Trapping Present Value of A l l Benefits  $221,000 483,000 7,047,,000 414,000 28.000 $8,193,000  COMPARISON OF BENEFIT COST ANALYSIS FOR VARIOUS REFERENT GROUPS (PRESENT VALUES 1970. 10 PER CENT DISCOUNT RATE  British Columbia  Canada  A l l Participants (includes nonCanadians)  Present Value of Benefits (B)  $3,747,000  $6,599,000  $8,193,000  Present Value of Costs (C)  $1,289,000  $2,125,000  $2,580,000  Net Benefits (B-C)  $2,458,000  $4,474,000  $5,613,000  2.9:1  3.1:1  Benefit Cost Ratio (B/C)  3.2:1  A P P EN  D I  X  L  APPENDIX L  ESTIMATED GROSS BUSINESS REVENUES RESULTING FROM SPENDING ASSOCIATED WITH PROPOSED WILDLIFE DEVELOPMENT  Spending by Hunters In 1968 l o c a l hunters spent $4.50 per day f o r hunting on the Creston flats.  Non-local hunters from elsewhere i n B r i t i s h Columbia spent $12.50,  of which $7.60 was spent i n the Creston area (see Appendix F ) .  I t i s assumed  that i n the future hunting w i l l be divided equally between these groups of hunters and that l o c a l hunters w i l l spend $5 per day spent hunting ( a l l spent i n Creston economy) while non-local hunters w i l l spend $13 per day of hunting ($8 l o c a l l y , $5 elsewhere i n B r i t i s h  Columbia).  Spending by hunters attributable to development of the habitat i s estimated as follows. TABLE L - l SPENDING BY HUNTERS  Year  Spending i n Creston Area  Spending i n B r i t i s h Columbia  1971  $11,650  $16,000  72  14,350  20,000  73  17,150  24,000  74 75 76  31,500 39,800  55,000  48,100  67,000  77  55,300  76,000  CAPACITY REACHED IN 1977, CONSTANT SPENDING THEREAFTER  44,000  Spending by Fishermen  Spending by fishermen w i l l be much lower than that by hunters participation  i n the sport i s much less costly, and the age and income  levels of most participants precludes a high l e v e l of spending.  We estimate  that l o c a l fishermen w i l l spend $2 per day spent f i s h i n g , non-local f i s h e r men $4 per day,  TABLE L-2 SPENDING BY FISHERMEN  Year  Spending  Year  Spending  1971  $1,740  1979  $16,200  72  3,680  80  18,400  73  5,400  81  21,000  74  9,300  82  24,000  75  10,300  83  28,000  76  11,400  84  29,000  77  12,700  f  78  14,300  •  II  II  UTILIZATION AND SPENDING CONSTANT AFTER 1984  Under the assumption that non-local hunters coming to the area were on single-purpose t r i p s we included under expenditures i n B r i t i s h Columbia t h e i r spending outside of the Creston area. however.  This w i l l not be done f o r f i s h i n g  We assume that no non-local fishermen make single-purpose t r i p s to  f i s h Duck Lake. relevant.  Thus only t h e i r spending while f i s h i n g at Creston i s  Spending en route to Creston i s not included, as this t r a v e l i s  assumed to be a purpose i n i t s e l f .  Spending estimates are summarized i n  Table L-2, based on a weighted average of spending by l o c a l and non-local fishermen.  Spending by Non-Consumptive Recreationists Spending by this type of recreationist w i l l vary greatly depending on t h e i r point of o r i g i n .  The cost of p a r t i c i p a t i o n f o r l o c a l residents  w i l l be very low - a cost of $1 per day i s assumed to cover t r a v e l costs and some incremental equipment expenses.  For recreation-days by B r i t i s h  Columbians from outside the l o c a l area spending of $6 per day i s assumed,  * and f o r spending by non-British Columbians $7.50 per day.  * These estimates are derived from a review of findings concerning expenditures by v i s i t o r s to B r i t i s h Columbia and other areas. A 1963 study of summer v i s i t o r s to B r i t i s h Columbia (B.C. Government Travel Bureau 1963) found the average expenditure per v i s i t o r day to be $6.40 f o r a l l types of v i s i t o r a c t i v i t y . Figures available on expenditures by park and campground users i n Oregon are much lower, indicating an average of $2.75 per v i s i t o r day (Oregon State Parks Branch, 1965). These figures cover only campground and park users and thereby exclude t o u r i s t s who would spend heavily on motels, hotels, and restaurants. They are also r e s t r i c t e d to expenditures within 25 miles of the campground. Recent studies of non-resident fishermen i n B r i t i s h Columbia indicate a much higher l e v e l of spending. Non-resident fishermen on Kootenay Lake spent $14,50 per day (Pearse and Laub 1969), On a province-wide basis nonresident fishermen spend $16,00 per day spent i n B r i t i s h Columbia (study forthcoming on non-resident fishermen i n B r i t i s h Columbia f o r the B.C. Fish and W i l d l i f e Branch). Per day expenditures by fishermen tend to be high as t r a v e l costs are prorated on the basis of the number of fishermen i n a party. For nonconsumptive recreation i t w i l l be more common for a l l party members to p a r t i c i p a t e , thus lowering costs per recreation day considerably. B r i t i s h Columbia residents are assumed to spend less per day than others as they may make proportionately more one-day t r i p s to the area, not incurring lodging expenses. Other v i s i t o r s are assumed to spend $7.50 per day, an upward revision of the 1963 v i s i t o r day figure.  Total spending i n the Creston area by these r e c r e a t i o n i s t s i s summarized i n Table L-3.  (These estimates are weighted by the number of days  of recreation taken by each group of recreationists.)  As with the f i s h e r -  men i t i s assumed that v i s i t o r s to the Creston area are on multi-purpose t r i p s and therefore include only t h e i r spending while at Creston.  Travel  elsewhere i n B r i t i s h Columbia i s assumed to have purpose i n i t s e l f and these expenditures are excluded.  TABLE L-3  SPENDING BY NON-CONSUMPTIVE RECREATIONISTS  Year  Spending  Year  Spending  1971  $34,000  1981  $1,391,000  72  68,000  82  1,487,000  73  135,000  83  1,574,000  74  580,000  84  1,667,000  75  814,000  85  1,694,000  76  881,000  •  77  1,017,000  •  78  1,120,000  •  79  1,204,000  1980  1,301,000  CAPACITY UTILIZATION BY 1985, CONSTANT SPENDING THEREAFTER  tt II  it II  it  Spending Generated by Farming and Trapping In addition to recreational spending u t i l i z a t i o n  of the area f o r  agriculture and trapping w i l l generate business revenues. inconsequential, gross revenues being only $5,000/year).  (Trapping i s These revenues  w i l l be at two l e v e l s , f i r s t the receipts of farmers and trappers themselves as businessmen, secondly the receipts of other Creston businesses as a result of spending by farmers and trappers. are estimated i n Table L-4.  The amounts of these receipts  The relationship between gross receipts of TABLE L-4  SPENDING GENERATED BY FARMING AND TRAPPING  Year  Gross Receipts of Farmers and Trappers  I n i t i a l Gross Receipts of Creston Businesses  1971  $44,000  $40,000  72  56,000  51,000  73  66,000  60,000  74  123,000  111,000  75  154,000  139,000  76  186,000  168,000  77  213,000  193,000  78  225,000  204,000  79  230,000  208,000  80  235,000  213,000  81  240,000  217,000  82  243,000  220,000  83  245,000  -  FULL UTILIZATION BY 1983. REVENUES CONSTANT THEREAFTER  222,000  farmers and trappers, and receipts of Creston businesses which i s presented here i s discussed i n Appendix A. Combined Spending by A l l Users The combined e f f e c t of this spending by a l l forms of recreationists i s summarized i n Table L-5.  This table summarizes expenditures i n the TABLE L-5  COMBINED BUSINESS REVENUES RESULTING FROM SPENDING ASSOCIATED WITH PROPOSED WILDLIFE DEVELOPMENT  Year  Gross Receipts of Farmers and Trappers  Gross Receipts of Creston Businesses  1971  $44,000  $87,000  72  56,000  137,000  73  66,000  218,000  74  123,000  732,000  75  154,000  1,003,000  76  186,000  1,109,000  77  213,000  1,278,000  78  225,000  1,394,000  79  230,000  1,484,000  1980  235,000  1,588,000  81  240,000  1,684,000  82  243,000  1,786,000  83  245,000  1,879,000  84  it  1,973,000  85  ii  2,000,000  RECEIPTS MAXIMIZED IN 1985, CONSTANT THEREAFTER  Creston area only, omitting those expenditures elsewhere i n B r i t i s h Columbia which were given i n the f i n a l column of Table L - l .  REFERENCES. APPENDIX L  B r i t i s h Columbia Government Travel Bureau. 1963. V i s i t o r s '63 a study of v i s i t o r s to the province of B r i t i s h Columbia. Canada, i n the summer of 1963. V i c t o r i a , Queen's P r i n t e r . Oregon State Parks Branch. Portland, Oregon.  1965. The state park v i s i t o r i n Oregon.  Pearse, Peter H. and M, Laub. 1969. The value of the Kootenay Lake sport fishery. Department of Recreation and Conservation, V i c t o r i a , B.C.  

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