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The Parliamentary Budget Office (PBO) estimates the Trans Mountain pipeline is worth less than it cost to build, according to 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.