The report from the Infrastructure Renewal Department says $600,000 in temporary repairs is needed by September for the seawall in Gabarus, which has been battered over the years by surf and storms.
"The situation in Gabarus is urgent," it says.
"Short-term measures should be implemented as soon as possible ... to help mitigate the present risks of a seawall failure."
The report outlines a number of "extensive defects" of the crumbling seawall, including widespread rotation and undercutting, breaches and displacement of armour stone.
The May 18 report, written by a department structural engineer, goes on to suggest three options for long-term solutions, which all involve replacing the wall and range from $4.3 million to $5.3 million.
Tim Menk, a resident and organizer of Friends of Gabarus, a group that has been pushing for the seawall's repair, said the report is a step forward.
But he said some residents are skeptical it will spur the federal or provincial government to act.
"Some are convinced that nothing will happen," said Menk, who received the report this week.
The seawall has been the subject of bureaucratic wrangling for years.
Residents of the 300-year-old fishing village in Cape Breton have been in a four-year battle to find the money to fix the wall. But they have found themselves mired in a tussle between the federal and provincial governments, neither of whom claim responsibility for the 400-metre long structure.
Menk says the seawall was built by the federal government but rests on provincial land.
Since 1995, when responsibility for harbour operations was transferred to the Fisheries Department from Transport Canada, Fisheries began divesting some assets such as wharfs and breakwaters and no longer subsidized repairs, said Menk.
The Fisheries Department has said the Gabarus wharf was divested in 2001, but the seawall was not because it was not the federal government's to divest, he said.
Still, Fisheries commissioned the Public Works Department to conduct two studies on the wall in 1995 and 1999.
"The federal DNA has been ... on that seawall, and it continues to be there, and that imprint cannot be erased unless there's something that we have not turned up that says someone else took possession of that, and its responsibility," Menk said.
"But if that were the case, I'm sure the Department of Fisheries and Oceans and the federal government would have pointed to that long since."
The community is waiting to hear from the federal Justice Department to determine ownership of the wall.
The Justice Department referred requests for comment Friday to Fisheries, who said it is not known when the decision of ownership would be made.
"That decision-making process is still ongoing," Fisheries said in an email.
The report builds on an assessment of the seawall released in April by the province's Natural Resources Department.
Bruce Nunn, a spokesman for that department, said the provincial government does not claim responsibility for the wall, but "we have an interest in seeing that it's looked after for the good of the fishermen and the community."
Nunn said the province's studies are being carried out as research so that a next step can be determined.
He said the department is working with the federal government to determine how to cover the costs and would consider contributing funds, but a decision has not been made.
The Cape Breton Regional Municipality announced in January that it would provide $100,000 in funding for the wall, contingent on both the provincial and federal governments providing funds.
The local fishing industry, road access to the village and several private homes are at risk if the wall fails, residents say.
About 70 people live in Gabarus year-round, but that number can triple in the summer.