Good morning, Mr. Chair, vice-chairs and members of the committee.
Thank you for the invitation to appear before you today. We are pleased to be here as part of your study on the Trans Mountain pipeline expansion, specifically to discuss our reports published on this topic.
With me today I have Jason Stanton, advisor and analyst at my office.
Consistent with the Parliamentary Budget Officer’s mandate to provide independent, non-partisan analysis to Parliament, my office has released three reports assessing the Government of Canada’s 2018 decision to acquire, expand, operate and eventually divest of the Trans Mountain pipeline system. The most recent report was published on June 22, 2022. It provided an updated financial valuation of the purchased assets and estimates to the valuation’s sensitivity to several key factors.
At the time of the last report, in 2022, the construction budget for the Trans Mountain expansion project was $21.4 billion, with an anticipated completion date in late 2023. Our assessment was limited to examining the direct financial cost of the pipeline expansion; any other economic costs or benefits associated with the pipeline were not included.
Based on our assumptions at that time, we found that the government's 2018 decision to acquire, expand, operate and eventually divest of the Trans Mountain assets would result in a negative net present value of $0.6 billion. We also conducted a sensitivity analysis to illustrate how the value of the Trans Mountain pipeline system would be impacted by changes to certain key assumptions, including the in-service date, construction costs, pipeline utilization, future service and tolling frameworks, and discount rates.
Since we published our last report, there have been significant developments to the Trans Mountain pipeline system. Notably, there's the completion of the Trans Mountain expansion pipeline, with a commercial commencement date of May 1, 2024, and the total costs for the expansion project having increased to over $34 billion.
At a request of this committee, we have undertaken work to update our analysis. In June, we sent an information request to the Minister of Finance to obtain the most recent comprehensive data available for the Trans Mountain pipeline system. We received all of the requested information, although it is confidential for commercial reasons. We are currently working on the analysis and plan to release our report late next month.
Jason and I would be pleased to respond to any questions you may have regarding our analysis of the Trans Mountain pipeline system or other PBO work.
Thank you, Mr. Chair.