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| Questions on Federal Spending on the Trans Mountain Pipeline made for Skeena-Bulkley Valley NDP MP Nathan Cullen's commentary at Parliament Hill on Thursday |
Thursday's Question Period in the House of Commons provided brought the Trans Mountain Pipeline purchase into the spotlight, with Skeena-Bulkley Valley NDP MP Nathan Cullen calling out the Federal government over reports that the government paid too much for the pipeline when it closed the deal last year.
The source of the debating topic for Thursday's Question Period exchange came from the Parliamentary Budget Office Report, the synopsis of the report outlined the following findings
The Fall Economic Statement 2018 outlined the Government of Canada’s $4.4 billion purchase of the Trans Mountain Pipeline, Trans Mountain Expansion Project, and related assets in August 2018.
The Parliamentary Budget Officer (PBO) estimates that the TMP and TMEP have a value of between $3.6 billion and $4.6 billion. As such, the Government negotiated a purchase price at the higher end of PBO’s valuation range.
One significant finding of this study is that delays in pipeline construction, an increase in construction costs and/or changes in the risk profile of the TMEP (reflected by the discount rate) can negatively influence the final sale price that the Government can negotiate for the TMP, TMEP and related assets.
The PBO finds that completing the project one year behind the planned schedule would reduce the value of the TMEP by $693 million. Similarly, a 10 per cent increase in construction costs would lower its value by $453 million.
This study also estimates that the peak annual impact on real gross domestic product (GDP) and employment due to the construction of the TMEP would be 0.11 per cent and 7,900 jobs in 2020; this would decline thereafter.
One of the key elements of their overview is the delay in the twinning construction that has been found since the purchase and served to devalue the Federal purchase in the following months.
You can review the full Report here.
Mr. Cullen picked up on some of those themes, comparing the Liberal approach to the Prime Minister going house hunting and paying too much, as well as taking a pass on the home inspection, the NDP MP took the Finance Minister to task for Liberals free wheeling spending, while wondering if more of the same may be on the way as they move forward with their other pipeline policies.
The Finance Minister spoke to the job creation that the project will deliver as well as the government's desire to find other markets beyond the United States for our energy resources, options that require some form of ocean access through the West Coast.
The Parliamentary Budget Office report made for the research material, the NDP MP and the Finance Minister delivered on the talking points.
You can explore the exchange below.
A sample of some of the Parliament Hill coverage can be reviewed below:
Ottawa may have overpaid for TransMountain by up to $1B, parliamentary budget officer says
Trans Mountain expansion delays would reduce oil pipeline's value by hundreds of millions, report says
PBO report on Trans Mountain purchase is sombre reading for a government that likely overpaid
Ottawa paid 'sticker price' for Trans Mountain; construction delays to erode pipeline's value
Resale value of Trans Mountain pipeline expansion will drop by $700M from year of delay: PBO
For more items of note from the House of Commons see our archive page here.
Cross posted from the North Coast Review
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