"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, Calgary-based Enbridge (TSX:ENB), 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, said the report.
"The net wealth associated with just the oil sands component of the industry is estimated at almost $1.5 trillion, equivalent to about $44,000 for each Canadian or roughly 18 per cent of Canada's entire tangible wealth."
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.
Mulcair's concerns are echoed by studies from the Organization for Economic Co-operation and Development and the International Monetary Fund.
But Mansell told the panel that Dutch disease studies are all over the map, with some finding it brings calamitous change while others concluding it doesn't harm the economy at all.
He said if the key question is whether Dutch disease causes permanent harm to the economy, then the numbers don't add up.
Under Dutch disease, he said in the report, the Canadian dollar should now be falling against the U.S. greenback given oil prices dropped dramatically four years ago and have not recovered. Instead, he notes, the dollar has gone up during that period from 93 cents to par.
Six experts and Northern Gateway president John Carruthers spent a second day Wednesday answering questions from third parties seeking more information on the pipeline.
The joint review panel is hearing evidence and must file a report to the federal government in 16 months on whether the line is needed, whether the oil supply and the buyers are truly out there, and whether the pipe can be built and maintained in an environmentally sustainable manner.
Enbridge wants to build a 1,170-kilometre dual line from Bruderheim near Edmonton to a marine terminal in Kitimat, B.C.
It would ship 585,000 barrels of crude a day over 1,000 streams, First Nations areas and delicate ecosystems in the B.C. Interior.
The project has sharply divided debate in B.C. Critics say given the catastrophic harm that could result from a pipeline or tanker spill, the cost is not worth it at any price.
In his report, Mansell said the line is critical to course correct an industry that is getting caught flat-footed in a nimble and mercurial global market.
"The Canadian petroleum sector is quite unique in that at present virtually all of its exports go to just one foreign market, (the United States)," stated the report.
And that market, it said, doesn't appear set to grow any time soon given that protesters have effectively stalled the transcontinental Keystone XL pipeline and that half the states are now looking at implementing low-carbon fuel standards aimed directly at the oilsands.
"Some groups have been very successful in painting the oilsands as an environmental villain, particularly in terms of (greenhouse gas) emissions, and this appears to be having some effect on U.S. policy-makers," said the report.
It also cited statistics from the Bank of Canada that 85 per cent of Canadian exports across the board are going to low-demand developed regions like the United States and Europe while just eight per cent are going to hungry, developing countries like China, India, Korea, Indonesia, and Brazil.
"In general, the growth in oil imports by Asia is projected to be much greater than the growth in total oil demand," said the report.
In a separate report submitted to the hearing, Texas-based energy consultant Muse Stancil has said Northern Gateway will redraw the rules on oil pricing in North America.
"It can be expected to have a material effect on the distribution patterns and pricing dynamics for Western Canadian crude, as crude producers for the first time will have a high-volume alternative to their historical markets within North America," said the Muse Stancil report.
"Northern Gateway allows the Canadian crude producers to both stop selling to their least attractive refiner clients (from a pricing prospective) and reduces their need to ship heavy crude via comparatively expensive rail transport."
The joint review panel, representing the National Energy Board and the Canadian Environmental Assessment Authority, has been travelling around British Columbia and Alberta throughout the year hearing evidence.
The line, if approved, won't be built until 2014, but it has also already chilled relations between the Alberta and B.C. governments.
British Columbia wants a better revenue sharing deal without further taxing Enbridge. Alberta Premier Alison Redford has said B.C. won't get a dime of oil royalties, saying such a deal would alter the conventions laid down at Confederation.
The hearings run until Saturday, then resume in the Alberta capital from Sept. 17 to 28.
Starting next month, they move to Prince Rupert and Prince George in B.C. for question-and-answer hearings relating to the lines themselves and the environmental risks and contingency plans.
Prime Minister Stephen Harper's government has said it supports the concept of getting oil to the Asian market, but has said the Northern Gateway decision will rest on science rather than politics.
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