A provincial report says the Energy East oil pipeline comes with significant environmental risk and small economic reward for northern Ontario.

The report comes out of a year-long review of the project by the Ontario Energy Board.

Part of that review were a series of public hearings held across the north last year.

The report estimates that 2,206 workers will be needed to convert the pipeline that crosses the north from natural gas to oil.

But a permanent workforce of 190 will be needed after that. The energy board report said it's unclear if those will be new hires or employees transferred from the existing natural gas operations.

It also said that the property taxes paid to northeastern municipalities will likely go up $1.6 million a year, from the current $12.1 million. But most of that will be concentrated in the few communities where new pumping stations are to be built.

Kapuskasing Mayor Al Spacek said he still sees the pipeline as a big economic boost for towns like his.

"Ten jobs or 20 jobs in a small community is very significant," said Spacek, who has a section of the pipeline running through his municipality.

Protecting water sources

The new report also recommends options for re-routing the pipeline around drinking water sources, like North Bay's Trout Lake, should be looked at.

Tunis station

The Ontario Energy Board report says much of economic impact from Energy East pipeline on northern Ontario will come from the construction of pumping stations, similar to the compressor stations that already exist along the natural gas pipeline, like this one near Iroquois Falls. (Erik White/CBC)

Spacek said like most northerners he worries about the environmental risks that come with transporting oil across the region, but doesn't think that's a reason to scrap Energy East all together.

"What's the alternative? We know what the alternative is, we saw it in Gogama."

In the month since that fiery oil train derailment made national headlines, the pipeline versus rail debate has sparked up again.

But in North Bay Mayor Al McDonald doesn't want to get drawn into that argument about what's the safest way to ship oil.

"We've been laser-focused on trying to stick to our message that it's about our drinking water," he said.

TransCanada spokesman Tim Duboyce said the company is open to route changes, including a change in the Quebec section to avoid a wetland.

But he noted that it's less likely in northern Ontario, where an existing pipeline that is already buried in the ground will be converted to carry crude oil.

"It becomes a question of common sense and science," said Duboyce. "Those are the overriding principles that guide that kind of decision."

This report from the Ontario Energy Board will form part of the province's submissions to the National Energy Board, which will rule on whether Energy East goes ahead.

That process has been set back about a year, following a decision last week to abandon plans for a Quebec shipping terminal

TransCanada now estimates that the first oil will flow through the pipeline in early 2020.

TransCanada Energy East pipeline

TransCanada's proposed Energy East pipeline would ship crude from Alberta to New Brunswick. (Canadian Press)