British Columbia officials say an incorrect exchange rate and a series of other human errors in the 2026 budget led it to overestimate projected revenues from natural gas royalties by nearly $1.5 billion over five years.
Fossil fuel companies are required to pay the province royalties for extracting oil and gas from public lands.
Senior staff with British Columbia’s Ministry of Energy and Climate Solutions said in a technical briefing on Tuesday that errors mean revenues are expected to be $306 million lower than forecast this year, and $292 million lower on average over the following four years.
The latest budget had forecast that total revenues for 2026-27 would be around $85.5 billion.
Officials said the updated revenue forecasts would be included in the next quarterly budget report, set to be released later this month.
Energy ministry officials said the largest impact was due to a currency conversion error in a spreadsheet related to price forecasts. They said an exchange rate to convert U.S. dollars to Canadian dollars was mistakenly applied to some forecasts that had already been converted to Canadian units.
Correcting the mistake decreases the projected royalties by 44 cents per gigajoule for the 2026-27 fiscal year.
Officials said three other key errors contributed to the discrepancy. They included an incorrect unit conversion error that inflated the forecast price by five cents per gigajoule.
Two other errors were identified where the ministry used 2025 data instead of 2026 values when calculating plant inlet and outlet prices. The error in adjusting plant inlet prices would bring down the price by one cent. Correcting the plant outlet error would add three cents to the price this year.
Officials said independent economists were brought in to verify the error and advise on corrected values. They said work was underway with the finance ministry to improve its process for catching mistakes in future budgets.
Treaty 8 First Nations raised concerns about errors in the budget months ago as they were in the process of consultations on a new royalty framework.
The new framework is expected to take effect Jan. 1, 2027, with the goal of returning 50 per cent of industry profits after production costs are accounted for.
A July letter from the First Nations said there appeared to be “substantial errors” in Budget 2026, and the First Nations believed they were caused by errors in calculating processing and transportation costs in the price forecast.
They said the errors raised questions about previous claims from Energy Minister Adrian Dix that the new royalty system could generate $2.4 billion more in revenue than the previous framework.
The Energy Ministry said technical staff determined after receiving the letter that processing and transportation costs had been included in the budget forecast. Officials said a deeper review later uncovered the spreadsheet and conversion errors.
Dix noted on Tuesday that natural gas prices are volatile, and predictions typically don’t reflect the actual revenues reported at the end of the year.
“Sometimes [revenues] are understated or overstated based on other impacts like the price of natural gas, but in this case there was a mistake in the calculation,” said Dix.
Premier David Eby said during an unrelated event earlier on Tuesday that he has invited the auditor general to review the mistake and the steps the province is taking to prevent future errors.
“We need to ensure that the information that goes into the budget is accurate, complete and that people can have confidence in it and that was not the case for these royalty numbers,” said Eby.
He said the impact of the errors would be limited as the province brings in its new royalty framework.
The B.C. Conservatives and B.C. Greens had both called for an auditor general investigation into the revenue shortfall.
B.C. Green MLA Rob Botterell said the new royalty framework should be put on hold until an investigation is complete.
“We need the process safeguards to make sure this won’t happen again, and until an investigation has concluded, the government needs to put the royalty framework on hold. We cannot implement a framework based on flawed data,” said Botterell.
