Federal government faces potential loss if Trans Mountain pipeline sold: PBO
By The Canadian Press on November 8, 2024.
The Parliamentary Budget Officer estimates the Trans Mountain pipeline is worth less than it cost to build in an updated assessment of the controversial project. In this photograph taken with a drone, the Trans Mountain Burnaby Terminal tank farm is seen in Burnaby, B.C., on Thursday, April 4, 2024. THE CANADIAN PRESS/Darryl DyckOTTAWA – The Parliamentary Budget Officer estimates the Trans Mountain pipeline is worth less than it cost to build in an updated financial assessment of the controversial project.
The budget watchdog says the pipeline could be worth between $29.6 billion and $33.4 billion, depending on what happens after the initial 20-year contracts expire.
Meanwhile, the cost to build the pipeline that went into service in May came in at $34.2 billion, dramatically higher than the $7.4 billion estimate in 2017.
The PBO says its valuation estimate doesn’t factor in sunk costs, such as the $4.5 billion the federal government paid to buy the project in 2018, or capital spending before 2024.
It says government-owned Trans Mountain Corp. has assets of $35.2 billion, liabilities of $26.9 billion and shareholder equity of $8.3 billion.
The PBO says that if the government were to sell the pipeline at either of the valuation estimates, it would not cover the shareholder equity that the corporation would have to write off and record a loss.
This report by The Canadian Press was first published Nov. 8, 2024.
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How many billion was paid to the First Nations so it could be built?