Private pipelines better than public infrastructure to stimulate Canada's economy, says Joe Oliver
Former natural resources minister co-authored report for Montreal Economic Institute
Pipeline projects that are in the works in Canada will stimulate the economy far more effectively than public infrastructure spending, says a report co-authored by former natural resources minister Joe Oliver.
Four major pipeline projects designed to carry Alberta oil across Canada and into the U.S. represent $34 billion in private investment across the country, says Oliver, a senior fellow at the Montreal Economic Institute (MEI).
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That's almost the same amount as the Liberals $30-billion budget deficit forecast for this fiscal year.
"All the funding will be provided by the private sector and it will enable us to deal with a critical strategic issue, which is the need to diversify our energy markets," Oliver told CBC News.
Canada benefits from these projects without having to go into debt or increase taxes, he added.
The four projects studied in the report include Energy East, Northern Gateway, Trans Mountain and Keystone XL.
The main benefit of the pipelines is to get Canadian oil to the global market, allowing producers to obtain higher prices — boosting the economy by an estimated $13.5 billion a year, according to the report.
"You have a private sector discipline, then you're more likely to get projects done more efficiently and more expeditiously, and that's of course a good thing for the government and therefore for taxpayers."
The Liberal government has pledged to spend $120 billion on new and existing infrastructure over 10 years — double what was projected by the previous government.
However, the report says the "real amounts devoted to boosting the economy are small" this year.
While it concedes that some municipalities will benefit more than others from the pipeline projects, it notes that large infrastructure projects should be evaluated from a "pan-Canadian perspective" on issues of safety, environmental risks, and economic spinoffs.