The federal government is unlikely to recover the billions invested in the Trans Mountain Pipeline, Parliamentary Budget Officer Yves Giroux warned Monday, urging MPs to investigate the massive cost overruns associated with the project.“It’s likely the government will lose money on this,” Giroux told the Commons natural resources committee. Despite ongoing revenue from pipeline tolls, Giroux said taxpayers should not expect a profit.“The pipeline is in operation,” Giroux noted. “It is being used to a large extent. We’ve assumed given the contracts in place right now the utilization rate will be close to full capacity for the next 15 to 20 years. The big unknown is what happens after these long-term contracts expire.”Blacklock's Reporter says the government bought the Kinder Morgan pipeline in 2018 for $4.5 billion, claiming it would turn a profit. However, expansion costs have ballooned to $34 billion, making a net loss increasingly likely.Bloc Québécois MP Mario Simard (Jonquiere, Que.) pressed Giroux on the pipeline’s financial feasibility. “If I said it cost around $40 billion would that be more or less correct?” he asked. “To get that back you’d have to sell it for about $38 billion,” Giroux replied, adding, “We don’t think that’s the price a willing buyer would pay.”Conservative MP Greg McLean (Calgary Centre) criticized the escalating costs.“When the government bought this pipeline it was supposed to cost $7.4 billion for the expansion,” he said, highlighting subsequent estimates of $12.6 billion in 2020, $21.4 billion in 2022, and the current $34.2 billion figure. “It has increased by a factor of five times. This is a significant increase.”McLean questioned how the project’s costs had spiraled so dramatically. “Where did the money go?” he asked. Giroux replied, “That is a very interesting question,” adding that a detailed audit would be necessary to determine whether funds were well spent.“I think it’s certainly worth exploring,” Giroux said when asked whether an audit was warranted. “That is something this committee might well wish to look at given the billions of dollars at stake.”New Democrat MP Rachel Blaney (North Island-Powell River, B.C.) agreed, emphasizing the need for transparency. “Canadians really do want answers on how they get paid back,” she said.Government leaders have consistently defended the project. Then-Finance Minister Bill Morneau in 2020 pledged taxpayers would see a return, stating, “The Canadian approach will be to ensure we make a profit.” Finance Minister Chrystia Freeland echoed this optimism in 2022, saying, “The project will likely allow the government to recoup its expenses.”Prime Minister Justin Trudeau maintained this stance as recently as August 2023, telling reporters, “We are confident the business case for the Trans Mountain Pipeline remains solid.”
