Evidence of meeting #114 for Natural Resources in the 44th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was report.
A video is available from Parliament.
Conservative
Ted Falk Conservative Provencher, MB
Your report also indicates an equity position of $8.3 billion. Where did that come from?
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
It came from the Trans Mountain corporation's own annual report.
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
Yes.
Conservative
Ted Falk Conservative Provencher, MB
Okay.
When the government bought it, they bought an equity position, presumably?
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
Yes. They bought the existing pipeline and the rights to expand the pipeline.
Conservative
Ted Falk Conservative Provencher, MB
There's been a lot of discussion here about the discount rate. CDEV and you yourself concluded on an 8% discount rate prior to the announcement of proposing an emissions cap: How will that affect the discount rate?
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
It's hard to assess for sure. One can speculate that it could further increase the discount rate, given that it limits the emissions of the oil and gas sector in the country—
Conservative
Ted Falk Conservative Provencher, MB
Limiting the emissions would create a scenario in which they would be producing about a million barrels a day less oil and gas. Is that correct?
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
We haven't done the analysis yet. There's work that has started in my office, given the recent release of the regulations on that.
Conservative
Ted Falk Conservative Provencher, MB
Do you know if the expansion portion of the TMX is able to facilitate what kind of volume on a daily basis?
Conservative
Ted Falk Conservative Provencher, MB
My question is whether it is basically the equivalent of the cap discount.
Advisor and Analyst, Office of the Parliamentary Budget Officer
The maximum capacity for the expansion pipeline is, I believe, 590,000 barrels per day, but as for the impact of the oil and gas cap, we haven't really factored that in.
Conservative
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
Not yet.
Conservative
Ted Falk Conservative Provencher, MB
Okay. Fair enough.
What would the toll rate have to be in order to generate a $39-billion sale price?
Advisor and Analyst, Office of the Parliamentary Budget Officer
No, we haven't done that.
November 18th, 2024 / 12:05 p.m.
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
We haven't done that analysis, not the toll rate itself. We use scenarios of pipeline utilization or the tolling structure, long-term versus shorter-term contracts, but not the levels themselves.
Conservative
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
Well, the long-term contracts have a value from a longer-term utilization rate, which guarantees an income stream, whereas the shorter-term contracts are more unlikely in terms of revenues that flow into the owning corporation.
Conservative
Ted Falk Conservative Provencher, MB
Okay. That is something that the Canada Energy Regulator determines anyway.
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
Exactly.
Conservative
Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
It's the oil producer. If the toll rates are higher, it's the oil producer using the pipeline that ends up paying.