The Shoal Lake watershed covers approximately 960 km2 on the Manitoba-Ontario border, with the area shared almost equally between Manitoba and Ontario. Major waterbodies in the watershed include Shoal Lake, Falcon Lake and High Lake. The Shoal Lake watershed is home to the First Nation communities of Iskatewizaagegan No.39 Independent First Nation and Shoal Lake No. 40 First Nation and has important physical, cultural and spiritual significance. Shoal Lake is the drinking water source for these two communities and the City of Winnipeg. The watershed also supports many interests including angling, hunting, camping, cottagers, tourist resorts and youth camps. Resource development activities in the watershed include mining and forestry.

The Province of Manitoba maintains a long-term water quality monitoring program on Shoal Lake. Since 1991, samples have been collected from a network of 20 stations across the lake in the summer and winter of most years. Water samples are analyzed for general chemistry, nutrients, metals, ions and E. coli. Results are available upon request at: waterquality@gov.mb.ca. In addition, the City of Winnipeg also conducts routine water quality sampling of Shoal Lake, with regular sampling at the drinking water intake (aquaduct) and elsewhere in the Shoal Lake watershed from May to October. Further details on monitoring and results are available at: https://winnipeg.ca/waterandwaste/water/testResults/ShoalLake.stm.

Water quality in the basin typically meets water quality objectives. Shoal Lake is considered mesotrophic, or moderately productive with an average open water total phosphorus concentration of approximately 19 µg/L and an average chlorophyll concentration of 5 µg/L. Estimates of nutrient loading to Shoal Lake indicate that surface runoff and atmospheric deposition contribute the majority of phosphorus to the lake.