Source: Institute for Energy Economics and Financial Analysis
The Trans Mountain pipeline generated a massive loss in the first four months that it was owned by the Canadian public – or a small profit, depending on which economist or accountant you talk to, and which financial report you read.
Annual financial statements by the Canada Development Investment Corp. (CDEV), the Crown corporation now responsible for Trans Mountain Corp., report that in the first four months that the pipeline was owned by the Canadian government (September to December 2018), it generated $129 million in revenue and $48 million in earnings before interest, taxes and depreciation.
When interest on debt is deducted, the pipeline had a net loss of $26 million in that time period, according to CDEV financials.
Robyn Allan, an independent economist who has questioned the economics of an expanded Trans Mountain pipeline, says CDEV’s financial statements show the existing pipeline suffered a $58 million loss in the first four months that the government owned it.
That’s based on her calculation that Trans Mountain’s interest payments over four months would amount to $83 million, which, if extrapolated, would total $249 million for a full year. “Trans Mountain is on track to book a loss of $175 million in 2019,” she wrote in an email to Business in Vancouver.
Analysts for the Institute for Energy Economics and Financial Analysis (IEEFA) agree with Allan that the pipeline is losing money. “The amount payable on the loan during the period covered by the audit is $82.4 million,” said IEEFA analyst Tom Sanzillo. “I would conclude that the operating income did not cover the interest payable on the loan.”