WHAT’S FUELLING OUR ECONOMY: Is Kinder Morgan’s Proposed Pipeline Inconsistent with New Economic Trends and Realities?

Report Compiled by Liz McDowell, Tarah Stafford and Felicity Lawong

Conversations for Responsible Economic Development (CRED)

November 2016

Executive Summary

British Columbia is leading economic growth in Canada, largely due to a diverse and thriving economy. Extractive industries, including oil and gas, play a surprisingly small role. The biggest sectors are real estate, construction and wholesale and retail trade.

Despite regional variation, Canada’s economy has some clear parallels to BC. Wholesale and retail trade and construction are thriving nationally, and the majority of the country’s jobs are found in wholesale and retail trade and the health sector, like in BC. Even before the price of oil began its steep decline in 2014, this sector was responsible for just 1% of employment across Canada, and provided very low tax contributions. It is the finance and insurance industries, as well as the manufacturing sector, that contribute the largest tax revenues toward social services.

The federal government has been faced with a difficult decision on whether or not to invest in the Kinder Morgan pipeline. Our analysis shows that the pipeline would create few jobs, minimal tax revenues and would not impact energy security or guarantee a long-term solution to Alberta’s ailing economy. The pipeline also comes with the additional concerns (and costs) of an oil spill. Beyond the direct clean-up costs, the indirect economic impacts would be long lasting, impacting sectors from tourism to agriculture.

It’s crucial that the federal government reject the KM pipeline and instead support sectors in BC that create family- sustaining jobs, make significant tax contributions, insulate the regional economy from boom-and-bust cycles, and promote economic growth compatible with Canada’s national climate commitments.

Our key findings:

  • BC Jobs: Technology, tourism, construction, film and television each create more jobs than oil, gas, and mining combined.
  • National trends are similar to BC: Oil and gas have a bigger role in Canada as a whole than in BC, but real estate, finance and manufacturing contribute more in federal corporate tax.
  • More people across Canada work in the beer economy than in the oil sands.
  • The proposed Kinder Morgan pipeline would only create 50 permanent jobs and generate an insignificantamount of taxes federally and provincially in BC.
  • A large oil spill could have a $1.2 billion impact on BC’s economy.
  • Canada’s emissions growth between 1990 and 2014 was driven primarily by increased emissions from mining and upstream oil and gas production and transport. Now that Canada has committed to a national climate plan, emissions from extractive sectors must be taken into consideration when considering project approvals.
  • Labour market outlook: Neither activity nor employment in Canada’s oil and gas industry will recover to levels prior to 2014’s steep decline in the industry.

Read more: http://credbc.ca/wp-content/uploads/2016/11/Whats-Fuelling-Our-Economy_KM_WEB.pdf