Ontario, Quebec will benefit most from proposed Energy East pipeline: report
Published Tuesday, September 10, 2013 11:41AM EDT
Last Updated Tuesday, September 10, 2013 1:20PM EDT
CALGARY -- A study commissioned by TransCanada Corp. shows Ontario and Quebec to be among the biggest economic winners from construction of its proposed Energy East pipeline, though company CEO Russ Girling admits it will take more than rosy numbers to win public support for the $12-billion project.
The report by Deloitte & Touche LLP, released Tuesday by TransCanada, predicts some 10,071 direct full-time equivalent jobs across the country will be needed to develop and build Energy East until 2018. Of that, Quebec represents 36 per cent and Ontario represents 23 per cent.
Once the pipeline is up and running, Deloitte sees the creation of some 1,081 direct jobs, at which point Alberta will start to see a bigger share of direct employment.
The study also found the project will add about $35 billion to Canada's gross domestic product during the development and construction phase and over the 40-year life of the project. As well, it's expected to add $10 billion in tax revenues at the municipal, provincial and federal levels the over that time.
The premiers of Alberta and New Brunswick are staunch supporters of the project, but it's not known whether other provinces -- notably Quebec -- will embrace it.
"There'll be other issues with respect to the routing of our pipeline, impacts on landowners and other stakeholder issues that we're going to need to understand and manage our way through," Girling told reporters from Fredericton.
"And those other issues, along with the economic benefits, I think will play into the support that we garner or don't for this project.
The 4,500-kilometre Energy East pipeline would connect up to 1.1 million barrels per day of western crude to refineries and export terminals in Quebec and New Brunswick. The proposal involves converting a portion of TransCanada's underused natural gas mainline to oil service and building 1,400 kilometres of new pipe from west of Montreal to Saint John, N.B.
The economic figures don't include the impact of higher Canadian crude prices that would result from being able to sell the product in lucrative overseas markets. Nor does it incorporate the lower crude costs eastern refineries may enjoy, said Deloitte's Trevor Nakka, one of the study's authors.
"In this context, the study is conservative in nature," Nakka told reporters. "It doesn't seek to extend the boundary or scope of economic impacts. The economic impacts are estimated to be only those related to the project itself."
Ontario is expected to see a boost of nearly $2.7 billion to its gross domestic product during construction and $10.3 billion during the pipeline's operation. Nakka said the big increase during the operations phase is mainly due to the large amount of electricity the 30 pump stations in the province will use.
Deloitte sees about $3.1 billion being added to Quebec's GDP during construction and more than $3.2 billion during its operation.
The economic benefits to Alberta, though relatively modest initially, are expected to pick up significantly once the pipeline is operational. It is seen having a $1.7 billion boost to GDP over the next six years and then a $6.1-billion boost over the subsequent 40 years.
New Brunswick -- home to the country's largest oil refinery -- is expected to see its GDP rise by nearly $1.2 billion during development and construction and by $1.6 billion during operations.
Meanwhile, TransCanada is seeking approval from the U.S. State Department to build its controversial $5.4 billion Keystone XL pipeline, which would enable oilsands crude to flow to U.S. markets.
In touting the benefits of that proposal, TransCanada has said it expects tens of thousands of jobs to be created during construction, but those figures have been questioned by many critics. Even U.S. President Barack Obama has said he expects the jobs created by Keystone XL to be a fraction of what TransCanada is projecting.
"There's certain folks that are firmly opposed to the development of our pipelines and I think have purposefully tried to confuse the job numbers," said Girling.
"What we're trying to do here is be as transparent as possible in terms of the communication of the job numbers...Our objective here is not to confuse anybody. It's to be as transparent as possible."
Given the diverging views of Keystone XL's economic impact, Greenpeace Canada's Keith Stewart said the latest Energy East figures should be viewed with a "skeptical eye."
But more broadly, Stewart said it's a question of the kind of economy Canadians want to build.
"We would create more jobs and build a better economy if we spent $12 billion on public transit and greener vehicles that reduce our oil consumption, rather than on building a pipeline that fuels climate change by deepening the world's addiction to dirty oil," Stewart said.