Federal government faces potential loss if Trans Mountain pipeline sold: PBO [Video]

The federal government faces a potential loss on the sale of the Trans Mountain pipeline as it estimates it’s worth less than it cost to build, the parliamentary budget officer said Friday.

The pipeline could be worth between $29.6 billion and $33.4 billion, depending on what happens after the initial 20-year contracts expire, the budget watchdog said in an updated financial assessment of the controversial project.

Meanwhile, the cost to build the pipeline, which went into service in May, came in at $34.2 billion, dramatically higher than the $7.4 billion estimate in 2017.

The PBO’s 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.

Whether the government makes a profit or takes a loss depends on what someone is willing to pay for it, the PBO said in its report, noting the numerous variables at play.

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