Northern Gateway project would add $10.5-billion to GDP, up to 104,400 person years of employment
Calgary—Exporting Canadian oil to Asia will generate billions of dollars for government and create thousands of jobs, according to the Fraser Institute.
A new study released by the think-tank, Ensuring Canadian Access to Oil Markets in the Asia-Pacific Region, examines the economic attractiveness and feasibility of exporting Canadian oil to the Asia-Pacific region rather than relying only on the U.S. market, and how such a move would affect Canada.
The study also outlines the regulatory barriers standing in the way of building oil pipelines, storage and shipping infrastructure to enable Canadian oil to be transported to countries such as China, India, Japan and South Korea.
“The Alberta oilsands present Canadians with a unique nation-building opportunity,” Fraser Institute senior economist and study co-author Gerry Angevine said in a statement.
Angevine claims Canada would add at least $10.5-billion to its GDP and gain up to 104,400 person years of employment with the construction of the Northern Gateway project.
With the proposed project to transport oil from the Alberta oilsands as well as conventional crude oil from Bruderheim near Edmonton to a marine terminal at Kitimat, B.C., the question of exactly who benefits from building and operating new transportation infrastructure is one of the central issues of the debate around Enbridge’s Northern Gateway project.
The bulk of the construction-related jobs would occur in Alberta and British Columbia, according to the public policy institute, with many of those occurring in rural areas, thereby providing employment opportunities for First Nations communities.
Benefits from supplying steel, equipment and other supplies would flow primarily to Ontario and Quebec’s manufacturing sector.
Angevine also notes that Canadian pension plans, which are heavily invested in the oilsands, would see greater returns if oilsands producers could sell Canadian oil for higher prices to Asia-Pacific countries.
The report highlights the $1.8-billion investment the Canada Pension Plan has in the oilsands, along with the $1-billion oilsands investment made by the Ontario Teachers’ Pension Plan.
But the opportunity to use Alberta’s oilsands to increase Canadian prosperity and generate new economic opportunities is at risk of regulatory paralysis, according to the study, stymied by a raft of unnecessary and inefficient rules and processes that could leave new pipeline projects in limbo.
The study claims Canada is home to many outdated regulatory processes and procedures that result in long, drawn-out hearings and reviews that serve only to delay and add to the costs of new energy infrastructure projects.
Opposition to projects by First Nations and environmental concerns are also areas that need to be dealt with in a more proactive manner, the study says.
Angevine and his co-author, Vanadis Oveido, suggest a number of changes governments could make if they want to improve and update the regulatory and review process for energy infrastructure projects.
Additionally, they suggest new measures for consultation with First Nations to address their concerns.
Among the suggestions:
- Restrict the scope of the National Energy Board to matters necessary to protect the public interest such as construction and operational standards and environmental impacts;
- Place limits on the time the National Energy Board or a Joint Review Panel may take to arrive at a decision;
- Require the National Energy Board to convene generic hearings if two or more similar project applications are likely to be brought forward during the next 10 to 20 years;
- Establish joint federal-provincial environmental review processes for projects that require approvals from both levels of government;
- Bring federal and provincial government officials together with First Nations and industry representatives to identify transportation corridors;
- Encourage discussions between project proponents and First Nations well before applications are filed with the regulatory authority;
- Require First Nations’ environmental concerns to be addressed under and in accordance with the Canadian Environmental Assessment Act; and
- Consider legislation and regulations to provide for mandatory settlement mechanisms to resolve compensation disputes with First Nations groups.