Economist and former Insurance Corporation of British Columbia (ICBC) CEO Robyn Allan has come out against Enbridge's Northern Gateway pipeline.
Allan, who holds a masters degree in economics, argues the higher price Canadian oil is expected to command if the pipeline is built will have negative consequences for the rest of the economy.
The fallout will come in the form of an "inflationary price shock, which will have a negative and prolonged impact on the Canadian economy by reducing output, employment, labour income and government revenues," Allan said in an economic assessment.
"Higher oil prices mean a decrease in family purchasing power, higher prices for industries who use oil as an input into their production process, higher rates of unemployment in non-oil industry related sectors, a decline in real GDP, a decline in government revenues, an increase in inflation, an increase in interest rates and further appreciation of the Canadian dollar."
Predictions of $270 billion in economic benefits from the pipeline fail to account for offsetting effects from the project, Allan said. Allan held ICBC's top job on an interim basis in the early 1990s when the NDP held power, but was passed over for the permanent position after it was revealed she had a poor driving record.
The National Energy Board refused to grant Allan status as an intervener in regulatory hearings, the Alberta Federation of Labour (AFL) said, so it included her
report in the AFL's submission.
AFL president Gil McGowan said the answer is to do more upgrading and refining in Canada and to develop markets in eastern Canada instead of Asia.
Enbridge spokesperson Paul Stanway said he cannot comment directly on the report because it's evidence presented to the panel reviewing the proposal.
"We want to show respect for the process and we will have an opportunity starting in September to question the registered intervenors about the evidence they've introduced," Stanway said.
In its application to the NEB, Enbridge predicts the price of a barrel of oil will rise $2 to $3 with the pipeline's completion.
"That's the strategic argument for Northern Gateway, is that it provides a higher price for Canada's most valuable export," Stanway said.
"Right now, we're selling better than 98 per cent of oil and gas we produce in Canada into the American market and, with crude oil, the price within the American market is much lower than on the world stage."
The review process is currently in the public consultation stage and the three-person federal panel will be in Prince Rupert on Tuesday and Wednesday.
