Along with 33 other organizations, MNAI made a submission to a consultation proc…

Along with 33 other organizations, MNAI made a submission to a consultation process that could open the door for natural assets to be properly considered in public sector accounting.

Why does this matter? The Public Sector Accounting Handbook underpins all accounting by Canada’s public sector. Currently, the handbook does not allow natural resources to be counted as “real” assets. It states that “the costs, benefits and economic value of such items cannot be reasonably and verifiably quantified using existing methods.” The handbook suggests that natural assets do not have an inherent value and make no economic contribution. The evidence tells a very different story.

Along with our partners, we look forward to working with the Public Sector Accounting Board to change this situation. Read our submission here. Let us know if you have any questions. Together, we can make nature count.

https://mnai.ca/opening-the-public-sector-accounting-door-…/




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Opening the public sector accounting door for natural assets

Along with 33 other organizations, MNAI made a submission to a consultation process that could open the door for natural assets to be properly considered in public sector accounting.

Why does this matter? The Public Sector Accounting Handbook underpins all accounting by Canada’s public sector. Currently, the handbook does not allow natural resources to be counted as “real” assets. It states that “the costs, benefits and economic value of such items cannot be reasonably and verifiably quantified using existing methods.” The handbook suggests that natural assets do not have an inherent value and make no economic contribution. The evidence tells a very different story.

Along with our partners, we look forward to working with the Public Sector Accounting Board to change this situation.  Read our submission here. Let us know if you have any questions. Together, we can make nature count.

The Municipal Natural Assets Initiative is included in Canada’s national report …

The Municipal Natural Assets Initiative is included in Canada’s national report to the United Nations on the Convention on Biological Diversity!

https://www.cbd.int/doc/nr/nr-06/ca-nr-06-en.pdf



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The Board and Staff of MNAI are really excited to have won an EcoStar Award in t…

The Board and Staff of MNAI are really excited to have won an EcoStar Award in the Environmental Stewardship category! These awards “recognize outstanding environmental achievements and leadership by businesses, organizations and individuals.” http://ecostarawards.com



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Municipal Natural Asset Management 101

A growing number of communities are considering undertaking municipal natural asset management.  It may look daunting at first, but it really isn’t much different than the standard asset management processes for which all local governments in Canada are responsible.  This primer, developed to support the Federation of Canadian Municipalities, is a great place to start to learn basic steps that local governments can take.  Let us know if you have questions.

 

Download document

2018 REFBC Land Awards – Municipal Natural Assets Initiative

Winner in the Land Use and Conservation category for 2018!

Smart Prosperity Institute, Brooke and Associates, David Suzuki Foundation, and the Town of Gibsons

Natural features and ecosystems (like marshes, forests, and shorelines) can deliver services (like stormwater absorption, water filtration, erosion control) to communities.

The Municipal Natural Assets Initiative helps communities to “count” these natural assets and assign a value that’s equivalent to the service a human-built asset would provide. By counting nature as an asset, municipalities can make a strong financial case for protection and conservation, while relying less on engineered assets.

And then there were 11

The next five community projects testing natural asset management across Canada are underway. The communities are: City of Courtenay and the District of Sparwood in British Columbia; the Western Regional Service Commission and Southeast Regional Service Commission in New Brunswick; and the City of Oshawa in Ontario.

In B.C., the city of Courtenay experienced flooding in the Lewis Park Commercial Area in 2009, 2010 and 2014. The frequency of flooding has been far greater than the provincial standard of 1:200 years and is expected to worsen with climate change.

The city will consider current and future roles of natural assets in the Courtenay River corridor in mitigating flood risks in the downtown core, including the costs and benefits of engineered alternatives. Courtenay practices advanced asset management principles and is already recognised as a leader in the field. The city’s 2017 budget included funds for flood mitigation planning, which will become part of an Integrated Stormwater Master Plan.

The District of Sparwood, located on B.C.’s Elk River, is home to 3,784 residents and relies on recreation, tourism and fisheries. The Official Community Plan emphasizes protecting, enhancing and using natural assets.  The district wants to improve water quality in the Elk River by identifying natural assets (wetland, forest, riparian areas, etc.) that provide filtering and storage services, and managing these at an optimal level. Some areas of the river are regularly affected by large stormwater flows dumping sediment and other urban runoff into the river. The project will identify natural assets that can provide stormwater pre-treatment to help control erosion and the discharge of sediment and other effluents. It hopes to improve water quality and recreational fisheries.

In New Brunswick, the Southeast Regional Service Commission region is undertaking projects in Riverview and Riverside-Albert. The Village of Riverside-Albert (population ~350) is located approximately 60 km from the City of Moncton at the upper reaches of the Bay of Fundy.  Water quality and supply in the village limits future economic development and growth and there are financial constraints to addressing this issue.   The monitoring, management, and rehabilitation of natural assets that provide drinking water may allow the village to address water supply and quality at lower cost than engineered alternatives.

This project will determine the water supply value of the watershed providing the drinking water and develop natural asset–related strategies and actions that the village can take to improve water quality and supply at a reasonable cost.  A particular focus will be on whether bogs and wetlands in the area can be restored to meet the village’s water quality and supply needs.  This could support economic development in very practical ways.

The Western Valley Regional Service Commission region in New Brunswick has long experienced annual flooding, which under climate change has become an increasing hazard. The communities along the St. John watershed have experienced severe flooding, erosion, infrastructure damage and property loss.  The project focuses on the Town of Florenceville-Bristol, a community of 1,604 people located mostly along the banks of the St. John River. The goal is to minimize erosion and reduce maintenance of culverts and roadside ditches in the Bristol Heights subdivision catchment areas. They will be considering natural assets that provide erosion control benefits including the forested and vegetated cover behind the subdivision.

In Ontario, the City of Oshawa is committed to developing an asset management policy that includes natural assets. Oshawa’s Strategic Plan identifies the need to manage and fund present and future assets, including parks and open spaces, to ensure safe and reliable infrastructure. The city wants to Increase the quality and resilience of the riparian area and stream banks along the Oshawa Creek south of Oshawa’s downtown core to minimise erosion from more frequent storm events. The project will incorporate naturalizing the areas along the creek, which is located within the subwatershed of the Oshawa Creek Watershed. The creek is affected by new developments north of the downtown core and is a prime conveyance of stormwater to Lake Ontario.

We’ll update you on progress as these projects continue.

City of Courtenay, British Columbia

District of Sparwood, British Columbia

City of Oshawa, Ontario

Western Regional Service Commission, New Brunswick

Southeast Regional Service Commission, New Brunswick: Riverview, Riverside-Albert

Opening for natural assets in Canada’s accounting books

The Public Sector Accounting (PSA) Handbook underpins all accounting by Canada’s public sector. The handbook does not allow inherited natural resources to be counted as “real” assets, arguing that “the costs, benefits and economic value of such items cannot be reasonably and verifiably quantified using existing methods.”

We respectfully disagree. The handbook suggests that natural assets have no inherent value and do not make an economic contribution. Natural capital valuations and the growing experience of municipalities testing the value of their natural assets say otherwise. The handbook sends the wrong message and gives local governments limited incentive and no direction, from an accounting perspective, to inventory or value their natural areas.

Local governments are already creatively working around the handbook’s wording and interest is mounting for changes. The Public Sector Accounting Board is now consulting on two documents that could open the door for natural assets to be properly considered in public sector accounting.

This marks a real opportunity for change. MNAI is working with partners to provide input into the PSAB consultations by the November 28 deadline.  Contact us if you want to be involved. General information on the consultations can be found here.

Interview with Isabel Gordon, director of financial services, District of West Vancouver

Isabel Gordon is director of financial services for the District of West Vancouver. She was previously director of finance for the City of North Vancouver for 25 years. She spoke with MNAI about the municipal accounting profession’s evolving understanding of natural assets.

MNAI: How has the way you perceive natural assets evolved over the course of your career as an accountant and CFO?

Like many accountants, I didn’t start out thinking much about natural assets. On the face of it, forests and streams are fundamentally different from the way accountants think about assets.

However, a few years ago, I was approached by the David Suzuki Foundation to become a natural capital ambassador. I was skeptical, but once I started looking at the data, I realized that there was a strong case to be made for the importance of nature as an asset.

Then, Emanuel Machado and the Town of Gibsons started doing the work of inventorying, valuing and managing natural assets at a local government level. This created more evidence, and a practical direction for other municipalities to go. Their work was followed by the Municipal Natural Assets Initiative, in which the District of West Vancouver participated.

Now, I am starting to see very clear evidence that natural assets provide communities with vital services that have real value.

MNAI: What are the risks and opportunities to local governments in inventorying, valuing and managing nature as an asset?

The main risks to local governments are in not inventorying, valuing and managing nature as an asset.

First, if local governments have not inventoried or valued their natural areas, they simply have no sense of the extent to which they rely on them, or the extent of their exposure if the assets were to fail.

Second, the reality is that if you do not value the services from natural assets then you don’t protect them. In many urban areas there is pressure to develop, and this often means destroying natural assets unless we understand their value. And once nature is gone, it can be hard to get back.

Third are opportunity costs. If local governments do not manage nature assets to provide a stream of cost-effective and reliable services then they may be missing opportunities to save capital and operating costs — money that could be used on other priorities.

To state this in the positive, measuring and managing natural assets can be a way to deliver core services to taxpayers less expensively than through engineered means, and through an asset that will appreciate over time.

MNAI: What challenges do you foresee with municipal natural asset management?

The accounting profession is in the early days of coming to grips with natural assets and questions arise the second we start looking at them.

A key issue is control. Accountants think of assets as resources that are controlled by [the] entity whose accounting you’re doing. This is challenging at a local government level, because in many cases, a stream, river or forest is not wholly controlled by them and may be influenced by multiple other stakeholders, including private landowners, the province and other local governments.

Another issue is valuation. Some of the numbers that get used to value ecosystem services are not accounting numbers as they are not based on fair market value or a transaction.

Ultimately, the accounting profession will need to reconsider what an asset actually is for natural assets to be included fully in the accounting framework. Until this happens, complications will inevitably arise.

However, as we are already seeing in Gibsons, the District of West Vancouver and elsewhere this is by no means an argument for doing nothing; quite the contrary.

MNAI: What do you see as the path forward on accounting for municipal natural assets?

Fundamental shifts need to happen in the accounting sector for natural assets to be fully integrated into our frameworks. None of us can, or should, wait for this shift to happen of its own accord, however.

These shifts will happen precisely because local governments are starting to inventory, value and manage their natural assets. Their work is deepening our understanding and evidence base by the day and will drive larger change.

MNAI: What is your advice for other local governments?

Local governments should consider natural assets first when it comes to delivering services to citizens. Engineered assets are very expensive to maintain. By contrast, there are tremendous advantages when we simply get out of nature’s way or manage and protect it. Practically, this means I would encourage other local governments to start identifying, inventorying, valuing and managing their natural assets.

Once they get information on their natural assets, it becomes very hard to ignore.

Opportunity for a municipal natural assets project in a BC watershed: extended

In municipalities across Canada, infrastructure is aging, capital and operating costs are rising, and service delivery is strained by growing populations and shifting conditions.  Solutions may be around us: there is growing evidence that natural assets provide, or could be restored to provide, services just like engineered assets, and often at lower costs.

However, most local governments lack policies and methods to measure the services provided by natural assets or the risks to services if the natural assets become degraded.

The Municipal Natural Assets Initiative (MNAI) offers a methodology and support for local governments to integrate natural assets into core asset management and financial processes using the same systems as for engineered assets.

MNAI is now offering a watershed-level program in B.C. focussed on the needs and capacities of smaller / rural local governments in a single geographic region.

We have extended the period for local governments to submit applications until after the BC municipal elections and will keep it open until a suitable candidate is identified.

More information and Request for Expressions of Interest

Click here to learn more about the Municipal Natural Assets Initiative.

Please contact [email protected] for additional information and questions.