Ottawa Will Likely Lose Money Selling Trans Mountain Pipeline, Budget Officer Says

Parliamentary Budget Officer Yves Giroux waits to appear before the Senate Committee on National Finance in Ottawa on Oct. 17, 2023. The Canadian Press/Adrian Wyld

Any sale of the Trans Mountain Pipeline will likely see the federal government lose money, the Parliamentary Budget Officer says.

Budget Officer Yves Giroux made the comments during an appearance at the Standing Committee on Natural Resources on Nov. 18, as first reported by Blacklock’s Reporter.

The Trans Mountain Pipeline is 1,492 kilometres long and runs from Edmonton to Burnaby, B.C.

Ottawa bought the project in 2018 with the idea of divesting it after it became operational. The pipeline started delivering oil in May, but reports indicate the government may hold off selling it until after the next election.

“There are a number of factors here, and there may be contradictions, which leads us to suggest that the sale price will probably lead to a financial loss for the government,” Giroux said, referring to his 2024 report on the pipeline.

He said any future owner of the pipeline would have to consider the government’s environmental policy limitations.

“We certainly can’t say at the same time that the pipeline will be very valuable—can be sold for a high price—at least not as high as one might expect.”

The report also said the total cost of the project had increased from $21.4 billion to $34.2 billion.

Giroux said the pipeline would need to sell for $38 billion for the government to make money off the deal.

Conservative MP Jeremy Patzer asked if it was likely the government could sell it for that price.

“We don’t think that’s the price a willing buyer would pay,”  Giroux replied.

He told the committee that the estimated lifespan of the pipeline is 40 years.

Finance Minister Chrystia Freeland has previously said the government expects to see its $34 billion returned in any sale.

Freeland made the comments during her appearance before the committee on Nov. 4.

When questioned by NDP MP Charlie Angus about whether the government would get the $34 million back, Freeland responded, “I’m very confident we will, yes.”

Angus questioned her again later in the meeting about whether the government expected to make its money back from a sale of the pipeline.

“Well, we’re going to get our money back because we do not intend to be the long-term owner of the pipeline,” Freeland responded. The market analysis consensus is that the project “is worth a lot of money,” she said.

The finance minister also said she hoped the pipeline would sell for more than $34 billion.