Economic Study of the Federally Developed Water Supply Systems in Southwest Saskatchewan
Thompson, Wayne E
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In 1935 the Prairie Farm Rehabilitation Administration (PFRA)was created by the Canadian government. The purpose of the PFRA was to provide programs to parts of the Canadian Prairies to alleviate the result of years of drought and depression. One of the ways PFRA attempted to do this was the Water Development Program, a part of which involved the construction of a series of dams and associated irrigation works in southwest Saskatchewan. Formulation of sound public policy requires that publicly funded programs are evaluated to determine social impacts of the program. Such was recommended by the Auditor General of Canada in 1986, asking for an evaluation of various PFRA programs, including the infrastructure developed in southwest Saskatchewan under the Water Development Program. This study evaluated the PFRA infrastructure in southwest Saskatchewan using an input-output model. Using this model, the economic impacts on output (sales), GDP (market prices), income, and employment were determined. Since some of these impacts are felt by those that are not direct water users, some regional development benefits are also created. Such benefits become the basis for estimating economic value of water for regional development. Regional development benefits were measured for three regions, ] )southwest Saskatchewan, 2) Province of Saskatchewan, and 3) the Prairie Provinces. Since an input-output model specific to the southwest Saskatchewan region had not been built previous to this study, it was developed using the provincial transactions table, and non-survey technique of location quotient. Furthermore, since the major focus of the study was on agriculture, this sector was further disaggregated. The data used in this study included information about PFRA activities, forage production using irrigation, cattle production, cattle slaughter and processing, drought mitigation, recreation, wildlife infrastructure, domestic water use, municipal water use and industrial water use, and flood control. The economic activities resulted in a total economic output impact of$108.6 million in southwest Saskatchewan, $136.4 million in Saskatchewan and $367.] million in the Prairie region. The results of the study show that cattle production has the largest contribution to the economic activity in southwest Saskatchewan caused by the southwest Saskatchewan water supply systems. The Prairie region benefits from the cattle feedlots related activities and slaughter and processing that occurs outside of southwest Saskatchewan. Using the indirect and induced impacts of various activities, value of water for regional economic development was estimated for the three regions. The value of water for regional development for southwest Saskatchewan was estimated at $65 per dam (cubic decameters) of water used. When all impacts on the province of Saskatchewan were included, this value increased to $111 per dam', extending various impacts of these projects on the Prairie provinces resulted in a value of$394 per dam'.