(Reuters) -The Canadian government-owned Trans Mountain oil pipeline is no longer profitable after huge cost over-runs and delays to its expansion project, the country’s parliamentary budget officer (PBO) said on Wednesday.
A report from the office of PBO Yves Giroux said the pipeline has a net present value of negative C$600 million ($463.03 million), based on the difference between Trans Mountain’s cash flows since the government bought it in 2018 and its C$4.4 billion purchase price.
The report from the PBO, which provides independent advice to Parliament, is a blow to Prime Minister Justin Trudeau, whose government bought the pipeline to ensure that the expansion proceeds, unclogging bottlenecks in moving Alberta’s oil.
Trudeau has faced criticism that expanding the oil pipeline is contrary to Canada’s goals of cutting greenhouse gas emissions sharply.
The pipeline moves up to 300,000 barrels per day of oil from near Edmonton, Alberta to the Pacific coast in British Columbia, and the expansion underway would nearly triple capacity.
The cost of building that expansion has jumped to C$21.4 billion from C$12.6 billion and its in-service date delayed by nine months to late 2023, Trans Mountain Corp said in February.