$1 billion is great, but a pipeline is much, much better

The following is AEG’s monthly column by AEG President Josh Bilyk appearing in the March edition of Business in Edmonton Magazine. If you have tips or suggestions for future columns, please feel free to write or call. 

pipelineIn January word leaked out that Prime Minister Trudeau would focus economic stimulus efforts in oil-producing Alberta and Saskatchewan to help soften the blow of the oil price shock.

Rumour had it the government was in talks to quickly allocate $1 billion in infrastructure projects in the two provinces – money earmarked by the government but not yet delivered.

Edmonton-area Members of Parliament were dispatched to engage with constituents in a series of federal budget roundtable conversations. One of the questions posted by elected representatives was “if you had $1 billion to spend, how would you spend it?”

The unspoken answer that ran through my mind was “keep the $1 billion and approve our pipelines.”

There’s no doubt Alberta deserves and needs every penny of the infrastructure money coming our way from Ottawa. The economic slowdown hasn’t in any way diminished our need for investment in bridges, highways, schools and hospitals.

But if the Trudeau government’s goal is keep Albertans working and paying taxes, $1 billion in infrastructure spending is a drop in the bucket compared to impact of approving Kinder Morgan’s Trans Mountain Expansion Project (TMEP) or TransCanada’s Energy East.

A recent Conference Board of Canada study on the economic impacts of TMEP shows the project’s economic impact in Alberta will be staggering. Between 2012 and 2038, it is estimated the project will create 28,000 person years of employment, while generating $7.5 billion in GDP growth and directly contribute $14.5 billion to the provincial treasury.

TMEP benefits aren’t contained in Alberta. Nation-wide TMEP could create 123,000 person years of employment, generate $95 billion in GDP growth and $28 billion in the bank accounts of various levels of government to help pay for health and education.

Think about that. We’re talking about a single pipeline expansion project. All this growth can happen without a single penny from Ottawa.

It’s worth understanding the magnitude of the decline we’re experiencing in Alberta. The Canadian Association of Petroleum Producers predicts that the industry lost 100,000 workers in 2015 and estimates capital investment declined by $21 billion.

A fast-tracked $1 billion “stimulus” injection of cash into Alberta won’t even leave a mark on the Alberta economy.

That’s not to say we don’t need it. We’ll take it, and we have countless projects across the province that could use the boost. But we need to remind our elected representatives that there is a way they can make a significant contribution to the Canadian economy without spending any public dollars at all.

They can simply find a way to approve the Trans Mountain Expansion Project as quickly as possible. And when they are done that, figure out how to make Energy East a reality.

In the coming months we expect TMEP will be approved by the National Energy Board. At that point it will be in the hands of the Prime Minister and his Cabinet.  It’s up to all of us to help them make the right decision.

Alberta Enterprise Group members and their tens of thousands of employees understand the benefit. We, as Canadians, all need to reach out to Members of Parliament across Canada with a simple message: If you want to create wealth across Canada, approve the Trans Mountain Expansion Project now.

Alberta Enterprise Group is a member-based, non-profit business advocacy organization. AEG members employ more than 150,000 Canadians in all sectors of the economy.