There's no proof the game-changing economic boom that would accompany the proposed Northern Gateway pipeline would hammer central Canada's manufacturing sector, an economist told a federal panel Wednesday.
"It is not credible that one could argue this would cause Dutch disease," Robert Mansell told the three-member joint advisory panel reviewing the controversial project.
"Would it do as has been alleged - cause the rate of inflation to go up and then force the monetary authorities to tighten the money supply and thereby shrink the economy? The answer is no.
"Monetary policy is based on what's called the core inflation rate, which excludes the price of food and energy."
Mansell, answering questions on behalf of the pipeline builder, Calgarybased Enbridge, pointed to his updated report on the economic impacts of the proposed $6-billion plan to ship oilsands crude to a port on the B.C. coast and on to Asia by supertanker.
The report notes access to the exploding markets in Asia would boost Canada's GDP by $312 billion over 25 years - about $9 billion a year - and bring in $98 billion in government revenue.
Given that the resource industry is one of the key drivers of Canada's economy, the profit boost from diversified markets would bring more wealth and jobs across Canada, the report said.
A profit spike in the keystone industry brings concerns from critics, notably federal NDP leader Thomas Mulcair, that it will swamp other producers, such as manufacturers in central Canada.
Dutch disease is named for a downturn in the Netherlands' economy in the 1970s when peaking natural-gas prices were blamed for driving up inflation and driving down exports of manufactured goods.
