Natural Resources Minister Jim Carr repeatedly points to this figure to justify Ottawa’s approval. He says, “the project is expected to create 15,000 new jobs during construction.”
Alberta Premier Notley relies on it too. “Initially we’re looking at about 15,000 jobs.” Former B.C. premier Christy Clark said, “And then there’s Kinder Morgan, 15,000 new jobs.”
When the figure of “15,000” for new construction jobs emerged, I was confused.
Kinder Morgan had told the National Energy Board that construction employment for the project was an average of 2,500 workers a year, for two years. It was laid out in detail in Volume 5B of the proponent’s application.
Why would elected officials promote a construction jobs figure six times Kinder Morgan’s actual number?
I contacted the prime minister’s office. I asked his staff to explain how the figure their boss relies on was developed. They did not do so. I even wrote the prime minister directly. I received no reply.
Natural Resources Canada said, “The numbers are from the proponent” and “believed” they were based on Conference Board of Canada estimates, while Notley’s office said it came from the industry and directed me to Trans Mountain’s website.
There it was. “During construction, the anticipated workforce will reach the equivalent of 15,000 jobs per year.” Kinder Morgan provided no insight as to how that figure was derived. I inquired directly and was told, “the figures come from two Conference Board of Canada reports.”
I read both reports. Neither included reference to 15,000 construction jobs as Kinder Morgan said they would. What they did provide was a figure of 58,037 person years of project development employment — over seven years, beginning in 2012.
I knew the 58,037 figure to be the same as that provided in a Conference Board of Canada report authored in 2013 and filed by Kinder Morgan as part of the discredited NEB hearing. The Conference Board based its estimate on an Input Output model which — because of its many design flaws — delivers highly exaggerated results.
I was still at a loss as to how the 15,000 construction workforce figure was derived. I wrote Kinder Morgan again. The company responded: “Person years of employment during project development is 58,037. This figure has been divided by 3 years and 10 months resulting in an equivalent of 15,000 jobs.” I asked Kinder Morgan why almost 4 years was chosen as the time horizon for construction, when the project will take two. This is when the company stopped answering my questions on construction employment.
The Conference Board did not estimate construction jobs; Kinder Morgan did. Kinder Morgan divided 48 months into the Conference Board project development figure, then multiplied it by 12 months to arrive at 15,000 jobs a year. Inappropriately, the figure was then renamed as construction workforce. It is unbelievable. It is a misuse of Input Output model results and a deceptive relabelling.
Even if the Conference Board’s figure of 58,037 person years of development employment was reliable — which it is not — that number cannot arbitrarily be divided by 48 months of a much longer project timetable and then the result annualized so the proponent can claim there are 15,000 construction jobs to be created.
Kinder Morgan had no business altering the time horizon or renaming the nature of the employment to characterize it as something it is not. Kinder Morgan’s 15,000 construction workforce figure is meaningless.
The absurdity of Kinder Morgan’s 15,000 construction jobs claim is readily illustrated. Kinder Morgan says its construction schedule will begin in September 2017 with completion slated for December 2019 — 28 months. Using Kinder Morgan’s formula, and the Conference Board figure it abused — 58,037 divided by 28 times 12 — Trans Mountain’s construction workforce catapults from 15,000 a year to 25,000 a year. That’s a figure larger than the entire heavy-engineering and civil-engineering construction workforce in B.C. That’s how outrageous Kinder Morgan’s logic is.
Why would Kinder Morgan pay the Conference Board for an employment estimate derived from an expensive modelling approach and inappropriately turn it into a construction workforce estimate when it has its own, more reliable one of an average of 2,500 workers over two years?
Trans Mountain’s 15,000 construction workforce jobs are a scam. The more realistic figure is less than 20 per cent that size. It is a betrayal of the public trust that Trudeau, Carr and Notley so eagerly got behind Kinder Morgan’s manipulated jobs figure without checking to make sure it made any sense.
Robyn Allan is a B.C. economist.
Top Photo: A ship receives its load of oil from the Kinder Morgan Westridge loading dock in Burnaby.
