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The Canadian government-owned Trans Mountain oil pipeline is no longer profitable after cost over-runs and delays to its expansion project, the country's parliamentary budget officer (PBO) said on Wednesday.

A report from PBO Yves Giroux said the pipeline has a net present value of negative C$600 million (negative $463.03 million), based on the difference between Trans Mountain's cash flows 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 in 2018 to ensure that the expansion proceeded despite protests. Expansion of other pipelines has since smoothed the flow of crude, one of Canada's most valuable exports.

Trudeau faces criticism that expanding the pipeline is contrary to Canada's goals of cutting greenhouse gas emissions.

Additional delays and increased construction costs would further reduce Trans Mountain's value, the PBO said. If Ottawa cancels the expansion, the government faces a C$14.4 billion write-off, the PBO said.

The cancellation scenario is hypothetical, and the government has no such plans, said a government source. The source added that the PBO analysis of unprofitability does not consider other economic benefits such as jobs.

Trudeau's government has long said it will sell the pipeline once the expansion is nearly complete.

[Rod Nickel and Ismail Shakil]

More: Canada-owned Trans Mountain oil pipeline not profitable -budget officer

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