Long under attack by environmental groups, the proposed Trans Mountain Pipeline Expansion Project is now being criticized by some economists.

A report released Monday by Simon Fraser University and The Goodman Group Ltd., questions Trans Mountain's financial projections, arguing that the economic impacts of jobs and taxes have been overvalued, while the costs associated with possible spills have been understated.

"Our report shows that not only are the benefits for B.C. and Metro Vancouver very small, but the risks are very large," said Brigid Rowan, senior energy economist with The Goodman Group, a California-based consulting firm that worked on the analysis for SFU's Centre for Public Policy Research.

Story continues below advertisement

Trans Mountain officials, whose project proposal is currently before the National Energy Board for review, referred all questions to the Conference Board of Canada, which earlier this year did an economic-impact study on which Trans Mountain based its estimates.

A Conference Board official said Monday the organization stands by its financial analysis, but he would not discuss oil-spill costs because the study did not examine environmental issues.

Trans Mountain estimates the $5.4-billion pipeline project will create 36,000 person-years of employment in B.C., but the SFU-Goodman report disputes that and estimates the number at 12,000 person-years. (A job employing someone for two years represents two person-years of employment.)

The report also is critical of Trans Mountain's estimate that the cost of cleaning up a worst-case oil spill would be $100-million to $300-million. The new study claims a bad spill would actually cost from $1-billion to $5-billion to rectify.

"Putting it all together the benefits are not as good as we've been told, but the costs are much worse," said Ms. Rowan.

Ian Goodman, President of The Goodman Group, said Trans Mountain "dramatically" inflated both job and tax numbers.

"Trans Mountain numbers were overstated. In part because they overestimated jobs, they've overestimated the taxes that will be paid as a result of these jobs," he said. "Also most of the tax revenues go to the federal government and not the provincial government. Kinder Morgan assumes that in turn most of that money will flow back to the provinces, but B.C. will only get a 13-per-cent share."

Story continues below advertisement

Mr. Goodman said if the project is built it will greatly benefit industry and Alberta, but it won't do nearly as much for B.C.

"The big benefit from building the project is to Kinder Morgan [the parent company of Trans Mountain] and to the tar sands producers," said Mr. Goodman. "Kinder Morgan estimates that tar sands producers would receive a benefit of over $2-billion a year from higher crude prices."

He said Alberta will get more than $400-million in taxes and royalties, or about 20 per cent of the total benefit of raising crude prices.

"B.C. meanwhile gets less than 2 per cent of the total – $40-million a year," said Mr. Goodman. "B.C. is not getting its fair share of benefits from this project."

Michael Burt, director for Industrial Economic Trends at the Conference Board of Canada, challenged the credibility of the SFU-Goodman report.

Mr. Burt said the Conference Board used a widely accepted Statistics Canada input-output (IO) model to project economic impact.

Story continues below advertisement

"The IO model that we use is the most detailed model of that type in the country. The federal government uses it, all the provinces use it, most private firms use it to do these types of analyses because it is the most detailed," he said.

Asked what he'd say to anyone confused by the conflicting views of two economists, Mr. Burt replied: "I guess I'd ask people to look at both reports and decide for themselves which one they think uses a more appropriate methodology."