Northern Gateway Project May Damage Canadian Economy

B. McPherson

Economist Robyn Allan has strong words about the economic feasibility of the Enbridge Northern Gateway pipeline project. Allan is quoted in the Calgary Herald this morning:

"The emperor has no clothes," Allan said in an interview. "We're told it is a gross producing economic opportunity, but in fact it's an oil price shock to the economy."

Allan, a respected economist, once named in the top 200 CEOs in Canada, presented her report to the commission charged with hearings about the project which would ship bitumen (oil sands product) overseas.

Her report that the proposed pipeline would have a depressing effect on the Canadian economy is in sharp contrast to the sunny predictions put about by the Canadian PM Steven Harper and his Minister of Natural Resources of many good jobs and wealth to the government coffers. The cards seemed stacked from the start of the hearings into the pipeline project when the Minister of Natural Resources dubbed those in opposition to the project radicals and pawns of foreign interests. Confidence in the neutrality of the commission is further eroded by the refusal of the National Energy Board to grant Allan intervenor status at the table. The Alberta Federation of Labour(AFL)  which did have status chose to use her report in their presentation.

The AFL has also made the full report available on line. It makes for particularly interesting reading

in the section that specifically addresses the ownership interests of the PRC (People’s Republic of China)( starting page 33). The report addresses the expected economic impact of shipping the crude product offshore rather than refining it in country and garnering the value added impact.

The promise of widespread employment in the $5.5 billion project may also be a dream of a different kind of pipe. The federal government is pushing for a free trade agreement with Europe. The agreement well into its final stages call the Comprehensive Economic and Trade Agreement (CETA) will have far reaching labour consequences which will allow foreign companies to import labour for projects that they will be able to bid on. Currently the TILMA agreement between Alberta and British Columbia mandates that municipalities and improvement districts must not restrict contracts worth more than $50 000 to local bidders.

Vancouver construction workers saw a similar event when an extension to the taxpayer funded SkyTrain was being built. The company that won the bid brought in low paid workers from Mexico, shutting out locals.

There have been vocal presentations about the environmental costs and risks in building the Northern Gateway pipelines, but have been told that the risks are worth it for the ‘greater good’ of the country. Now it seems that the ‘greater good’ will be those offshore interests that will refine Canadian petroleum and sell it back to us for our ‘greater loss’.