Canadian Manufacturing

Northern Gateway Pipeline job-creation estimates inflated: report

Alberta-based think tank says Enbridge's proposed Northern Gateway pipeline will only create a “handful of permanent new jobs” when complete.

VANCOUVER— Enbridge Inc.’s proposed $5.5-billion Northern Gateway Pipeline won’t create nearly as many jobs as the company has proposed, says a new report.

The Canadian Centre for Policy Alternatives says the Alberta-to-B.C. pipeline will create 1,850 construction jobs per year for three years and a “handful of permanent new jobs” when complete.

The report, Enbridge Pipe Dreams and Nightmares, is the latest salvo over the 1,177-kilometre dual-pipeline’s jobs market impact.

Enbridge has long maintained the pipeline will create 62,700 person-years of construction employment across Canada over three years and 1,150 long-term jobs.

“The point is just to take a bit of a reality check on some of the numbers that have been thrown around by Enbridge itself, as well as the federal government in support of the pipeline, and to do what is more of a traditional cost-benefit analysis,” said author and economist Marc Lee Lee.

“Basically we find that the numbers in support of the pipeline economically are vastly overstated, particularly in terms of jobs.”

While the company has yet to see the report, Enbridge spokesman Todd Nogier is standing firmly behind his company’s employment estimates.

“We’re very confident in our numbers,” he said. “We had our economic-benefits package prepared for us by an economist at the University of Calgary.”

Lee said he began working on the report in January after Natural Resources Minister Joe Oliver wrote a letter, stating foreign-funded environmentalists and jet-setting celebrities were trying to advance a “radical ideological agenda” during the hearings.

“Their goal is to stop any major project _ no matter what the cost to Canadian families in lost jobs and economic growth. No forestry. No mining. No oil. No gas. No more hydro-electric dams,” wrote Oliver.

After those comments, Lee said he studied Enbridge’s submissions, specifically the “input-output model” used to develop the company’s jobs’ estimates.

Input-output models are problematic, said Lee, because they don’t take into account changes in technology, prices, the composition of materials, energy or even labour.

Under the model, Lee argues total job-creation numbers can also be padded because employment numbers are tied to total expenditures.

He said Enbridge’s $5.5-billion investment includes a $500-million contingency reserve, a figure that by itself increases jobs estimates by 10 per cent.

Lee also attacks the company’s estimated spinoff jobs related to the project, which represent 43 per cent of the purported person years of employment.

In the report, Lee also criticizes the project because there is the “minimal processing of oil sands bitumen,” leaving little room for secondary job creation. Bitumen is a thick, tar-like substance that needs processing to extract the oil.

He said that while the company and oil-sands producers will accrue large profits, only a very small share of the income will go to workers.

Lee also says that Enbridge has ignored the economic costs and environmental impacts of the project, adding that a $5-billion investment into green jobs and industries would create between three and 36 times the number of jobs.

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