B.C. confirms $1.46 billion natural gas revenue overestimation due to spreadsheet errors
A currency conversion mistake and other accounting errors will require roughly $300 million in annual revenue cuts for the next five years.
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British Columbia confirmed September 1 that it overstated natural gas revenue forecasts by approximately $1.462 billion over five fiscal years due to accounting errors, the largest of which stemmed from a spreadsheet mistake.
Energy and Climate Solutions Minister Adrian Dix told reporters the errors resulted from human mistakes, including Canadian dollars being incorrectly converted to American dollars when they should not have been converted at all. The ministry said an independent economist reviewed the numbers and found the currency conversion issue responsible for most of the discrepancy, though a few other minor errors were also identified.
"A serious mistake, but it was a human error," Dix said. The correction requires roughly $300 million to be shaved off provincial revenues for this year and each of the next four years.
Premier David Eby said "I'm not pleased by this situation." The admission comes days after Business in Vancouver published an investigation on August 26 highlighting the budget error.
The errors were first flagged in a July letter from Treaty 8 First Nations to Premier Eby. The First Nations blamed the error on the government failing to account for transportation costs and expressed concern that mistakes are being baked into new royalty changes slated to take effect January 1, 2027. The letter stated the incoming royalty regime will deliver real royalty rates of just 11 to 14 per cent, far short of the 50 per cent of profits the province promised in 2022.
Ministry officials dispute the First Nations' characterization, saying the errors are unrelated to transportation costs and that the identified mistakes do not relate to the new royalty regime. When asked whether the province would uphold its 50 per cent commitment, Dix would not commit, saying "We'll provide any information on that when we're ready to announce it."
James Tate, lawyer representing Treaty 8 First Nations, said the nation's technical experts are reviewing the government's explanation and will respond once the review is complete.
Will the government commit to the 50 per cent profit-share promise in the new 2027 royalty regime?
What safeguards are being put in place to prevent similar accounting errors in future budget forecasts?
We'll update this story as answers emerge.
The facts
How much did B.C. overstate its natural gas revenue forecasts?
British Columbia overstated natural gas revenue forecasts by approximately $1.462 billion over five fiscal years due to accounting errors in spreadsheets and currency conversions.
What was the main cause of the revenue overestimation?
A currency conversion mistake was responsible for most of the discrepancy, in which Canadian dollars were incorrectly converted to American dollars when no conversion should have occurred at all.
When was the error first flagged?
The errors were first flagged in a July letter from Treaty 8 First Nations to Premier Eby.
