The British Columbia government has acknowledged a series of forecasting mistakes that overstated projected natural gas revenues by approximately $1.46 billion over five fiscal years, with officials pointing to errors ranging from incorrect currency conversions to the use of outdated data.
Energy Minister Adrian Dix described the most significant mistake a 44-cent overstatement in the forecasted price of natural gas per gigajoule for the current fiscal year as a “serious mistake.”
Dix stressed, however, that the errors concern the province’s revenue forecasts rather than actual revenues. Natural gas revenues can fluctuate considerably from one year to another as market prices move. He pointed to the sharp increase in gas prices following Russia’s invasion of Ukraine, followed by a subsequent decline, as an example of market movements that have caused the province to both underestimate and overestimate revenues in previous years.
“That part is a normal part. What isn’t a part of it is human error that we’re acknowledging today and correcting in the budget,” Dix told reporters in Vancouver.
Senior officials from the ministries of energy and finance said during a technical briefing Tuesday that the errors had been independently verified. The government plans to include the corrections in its quarterly fiscal report, expected later this month.
The report will also clarify the effect of the revised forecasts on B.C.’s deficit, which was last estimated at $7.7 billion for the 2025-2026 fiscal year.
Currency conversion at the centre of the largest error
The most significant mistake involved the conversion between U.S. and Canadian dollars.
B.C.’s natural gas revenue forecasts rely on private-sector estimates for future gas prices. Those estimates can be provided in either Canadian or U.S. dollars.
According to Dix, Energy Ministry staff incorrectly assumed that figures were expressed in U.S. dollars when they were actually in Canadian dollars. A formula was then applied across a spreadsheet, converting the figures into Canadian dollars a second time.
The result was an overstatement of projected revenues.
Correcting the mistake lowered the forecasted natural gas price by 44 cents per gigajoule for 2026-2027.
Budget 2026 had previously listed forecasted prices ranging from $2.34 to $4.83 per gigajoule at plant inlet, referring to natural gas that has not yet undergone processing.
“We’re making changes to the way the process happens to ensure that such errors do not occur in the future,” Dix said.
Additional errors reduced projected gas prices
Officials identified several other mistakes.
A second error involving the conversion of energy units reduced the forecasted price by another five cents per gigajoule.
Two further errors resulted from using 2025 data instead of figures from the current year. Together, those mistakes reduced the forecasted plant-inlet price by one cent per gigajoule, while increasing the forecasted outlet price by three cents per gigajoule.
Taken together, correcting the errors is expected to reduce projected revenues by an average of approximately $292 million per year from the current fiscal year through the fiscal year beginning in 2030.
For the current fiscal year alone, the revision amounts to $306 million. That represents a roughly 24 per cent reduction in forecasted natural gas revenue, from $1.297 billion to $991 million.
The Energy Ministry said it is now working with experts to strengthen its quality-assurance procedures and improve the forecasting process going forward.
First Nations raised concerns before errors were found
The issue first came to the government’s attention in June, when Treaty 8 First Nations in northeastern B.C. alerted officials to what they believed was an error in the province’s accounting for natural gas processing and transportation costs.
Government staff reviewed those calculations and determined that the costs had been properly incorporated into the forecasts.
However, in July, officials discovered the separate series of errors involving the conversion of natural gas currency units.
The information presented during Tuesday’s technical briefing was provided on background and therefore was not attributed to an individual official.
Opposition questions credibility of government forecasts
The B.C. Conservatives did not immediately respond to a request for comment.
Last week, however, Opposition finance critic Gavin Dew called on the auditor general to investigate the flawed revenue forecasts after the issue was initially reported by Business in Vancouver.
“This isn’t just an accounting error. It’s a credibility problem,” Dew said in a statement.
Opposition Leader Kerry-Lynne Findlay also argued that B.C. could not afford to build its budgets on “wishful thinking.”
The government’s admission comes as B.C. prepares to introduce an updated framework for collecting natural gas royalties. The new system is scheduled to take effect on January 1 and is designed to return 50 per cent of profits after companies’ production costs have been taken into account.
Royalty framework remains under scrutiny
Treaty 8 First Nations have also raised concerns that the new royalty framework may not achieve the government’s stated 50-per-cent target.
Officials acknowledged those concerns during Tuesday’s briefing and said additional information would be made available this fall.
Dix said the government remains confident that it is “on the right track.”
He said the objective is to establish a royalty system that is fair to both taxpayers and the owners of the province’s natural resources, including First Nations.
At the same time, he said the government must maintain a workable balance with the natural gas industry.
“We have to make sure (there’s) a good return for the people so that we can help pay for things that are really important to me, like health care and education, on the one hand, and you’ve got to ensure that we have an industry that’s in the province.”
