Methodology Used by Manitoba Infrastructure & Transportation to Identify Mitigation Costs for Wetland Impacts KIMBER OSIOWY, M.Sc., P.Eng. Manager of Environmental Services, Manitoba Infrastructure and Transportation WORKSHOP A: SYSTEMS FOR INCORPORATING FULL ENVIRONMENTAL COSTS IN DECISION MAKING Transportation Association of Canada Annual Conference Halifax- Nova Scotia September 2010

2 Presentation Outline  Introduction of Full Cost Accounting  Description of Methodology used by Manitoba Infrastructure and Transportation (MIT) to Identify Costs of Mitigation of Wetland Impacts  Example

3 Full-cost Accounting In the Manitoba Sustainable Development Act Full-cost Accounting is defined as: accounting for economic, environmental, land- use, human health, social and heritage costs and benefits of a particular decision or action to ensure no costs associated with the decision or action, including externalized costs, are left unaccounted for.

4 Full-cost Accounting Full-cost Accounting is an all inclusive field of Accounting with two major dimensions: Full-cost Accounting is an all inclusive field of Accounting with two major dimensions: internal costs which generate environmental cost information to help management decisions on pricing, on controlling overhead and projects costs etc. internal costs which generate environmental cost information to help management decisions on pricing, on controlling overhead and projects costs etc. external or societal costs associated with costs to individuals, society and the environment in general. external or societal costs associated with costs to individuals, society and the environment in general.

5 Internal vs External Costs Although it may not be practical to implement all aspects of full-cost accounting, in particular as it pertains to external environmental societal costs, an attempt must be made to monetize all measurable internal costs so that more informative decisions on the viability of a project are made. Full-cost Accounting

6 Manitoba Habitat Mitigation/ Compensation Program  A partnership between Manitoba Infrastructure and Transportation, Manitoba Conservation and the Manitoba Habitat Heritage Corporation  The partnership was formalized under the Manitoba Habitat Mitigation/Compensation Program (MHMCP)  Initial emphasis on the North American Waterfowl Management Plan Target Area in South Western Manitoba with the intent of expanding it at a later date to cover other habitats of conservation importance in the province.

7 The Manitoba Habitat Mitigation/ Compensation Program (MHMCP)  The MHMCP expands the widely accepted Hierarchy of Mitigation Options (Avoidance, Minimizing and Compensation) to meet or surpass the goal of no-net-loss.  It has a formalized procedure that includes Three Basic Components: 1. Accounting System to track habitat gains and losses and to allow the transfer of habitat debits and credits from one project to another. 2. Transfer of Suitable Habitats: suitable habitats created or acquired under the program can be transferred to an appropriate agency to manage in perpetuity. 3. Habitat Compensation Fund to receive monetary contribution, in lieu of implementing in-kind, on-site mitigation measures that may be too small to be productive. The fund is held in trust by the Manitoba Habitat Heritage Corporation and is used to fund approved projects to provide holistic ecosystem functions and improved biological diversity.

8 The Habitat Compensation Fund A key component of the fund is the calculation of the costs of wetland impacts Procedure STEP 1 Very early in its planning, a project is discussed by the three partners and all direct and indirect impacts are identified. At this stage every effort is made to avoid and minimize impacts. The unavoidable impacts are measured and affected habitats are classified using industry-accepted normal procedures and total areas of Class 1, 2, 3 and 4 wetlands are calculated.

9 The Habitat Compensation Fund STEP 2 Manitoba Conservation and the Manitoba Habitat Heritage Corporation review the affected ecosystem where the project is located and identify the best way to compensate for the impacts and specify what percentage of the impacts would have to be compensated by restoring or enhancing existing wetlands and what percentage of the impacts would have to be compensated by establishing conservation agreements of private lands.

10 The Habitat Compensation Fund STEP 3 Compensation ratios are discussed and determined. Usually the following ratios are used: WETLAND RESTORATIONPRESERVATION Class 1 8:1 15:1 Class 2 6:1 12:1 Class 3 5:1 6:1 Class 4 3:1 3:1

11 The Habitat Compensation Fund STEP 4 At this point the per unit costs to restore or to preserve are reviewed and agreed upon. Presently the following unit costs are used in Manitoba: Preservation$300/acre Restoration$ $3500/acre ( depending on size) STEP 5 Totals are calculated, Treasury Board approval is received and funds are transferred into the Fund STEP 6 Mitigations are implemented Mitigations are implemented

12 Example  A recent proposal By Manitoba Infrastructure And Transportation for the Extension of The Brandon Eastern Access resulted in direct or indirect impacts to 20 acres of wetlands (Class 3) and associated upland habitats.  It was decided that these impacts would be compensated as follows: 30% by restoration/enhancement of existing wetlands 70% by conservation agreements for the protection of existing wetlands on private lands

13 Example Calculations Cost of Compensation by Restoration/Enhancement 20 ACRES X 30/100 = 6 ACRES 6 ACRES X 5 (RATIO 5:1 FOR CLASS 3 WETALNDS) = 30 ACRES 30 ACRES X ( $1690/ACRE *) = $ 50, * cost per acre to restore the area involved

14 Example Cost Of Preservation (Conservation Agreement) 20 ACRES X 70/100 = 14 ACRES 14 ACRES X 6 ( 6:1 RATIO FOR CLASS 3 WETLANDS) = 84 ACRES 84 ACRES X $ 300/ACRE = $ 25, Total Cost Of Compensation $ 50, $ 25, = $ 76,800.00

15 Example #1  Restoration by a 2.5 ft soil plug

16 Example #2  Restored and secured by the program

17 Example #3  Preserved by the program

18 Thank You ! Questions?