A new report says the Northern Gateway pipeline would boost crude oil prices $2 to $3 per barrel annually over the next 30 years, causing significant damage to consumers, businesses and the Canadian economy.

The economic assessment of the $5.5-billion project by former Insurance Corporation of British Columbia CEO Robyn Allan says the price shock will have “a negative and prolonged impact on the Canadian economy by reducing output, employment labour income and government revenues.”

Allan, an economist who researched the effect of the pipeline proposal out of curiosity, says it has been touted by proponents as a nation-building enterprise, but it really represents a “serious economic risk” to the Canadian economy.

“The emperor has no clothes,” Allan said.

“We’re told it is a gross producing economic opportunity, but it’s an oil price shock to the economy.”

Allan said when the price of oil rises, that means consumers and businesses will pay more for anything produced by that oil. That will result in inflation, business being down-sized and employees being laid off, she said.

Enbridge forecast a $2 to $3 annual increase in the price per barrel of crude in its pipe-line application to the joint National Energy Board-Canadian Environmental Assessment Agency panel.

Enbridge representative Paul Stanway said the company can’t comment in detail about the report because it is evidence tabled before the NEB-CEAA at its pipeline hearings, but it will have a chance to rebut the report in September.

Stanway confirmed, though, the projected price increase in the application.

“The price of oil in Canada is estimated to increase as a result of market diversity and exposure to global pricing,” he said. “That’s correct, but that is taken into account in our estimation of an overall benefit of about $270 billion to the Canadian economy.”

Allan said Enbridge has exaggerated the benefits of the pipeline and played down the economic effect of price shock on Canadian refineries and businesses and consumers. “They used the wrong model to answer the question of what will happen to the economy when Northern Gateway is successful in raising oil prices,” she said. Allan, named by the Financial Post as one of Canada’s top 200 CEOs, said she wanted to present her information to the hearing panel and question Enbridge on its model, but was denied intervener status.

The 145,000-member Alberta Federation of Labour included her report in its submission to the panel this week.

If approved, the 1,177-kilometre line will carry 525,000 barrels of oilsand crude from near Bruderheim, outside Edmonton, to Kitimat for export by tanker to Asian refineries.