The International Joint Commission issued a report this week saying pollution continues to enter the Great Lakes., threatening drinking water and fish survival.
The situation is particularly bad in Lake Erie, it says.
Farmers, municipalities and others still have a long ways to go in cleaning up the situation, the report says.
There have been improvements, mainly in cleaning up hot spots in harbours, it acknowledges.
It is the first International Joint Commission report since Ontario, Ohio and Michigan signed an agreement to drastically reduce phosphorous runoff into the Great Lakes.
The report calls for improving drinking water and sewage treatment facilities, and strengthening clean-water regulations, particularly limits on phosphorus runoff that is largely responsible for explosive growth of harmful algae in Lake Erie.
So far governments, including Ontario, have relied mainly on voluntary action by farmers. Few have faced fines, other than for major manure spills.
Agencies also should work faster to identify newer types of contamination, such as fire retardant chemicals, and develop strategies for limiting them, the report says.
"While significant progress has been made to restore and protect the lakes, the governments of Canada and the United States and Great Lakes civil society as a whole are living with the costly consequences of past failures to anticipate and prevent environmental problems," the report says.
"By now, it should be clear that prevention makes environmental, economic and common sense."
The two countries negotiated the first version of the water quality agreement in 1972 following a century of abuse that left portions of the lakes in deplorable condition.
It focuses primarily on toxic pollution, invasive species and nutrient runoff but has been revised several times to include other threats, including climate change.
About 40 million people draw drinking water from the Great Lakes.
"Our municipalities must not be permitted to dump sewage into our drinking water and we call for a 'zero discharge' objective, which will bring to an end the all-too-frequent beach closings," said Gordon Walker, the Canadian co-chairman of the international commission.
Lake Erie, which has the Great Lakes' largest fish population, draws special attention in the report because of a worsening toxic algae plague.
