B.C.'s Gas Royalty Error Could Cost Billions

The province of British Columbia is facing a potential financial blow due to an accounting error in its budget, which could cost it billions of dollars in gas royalties.

B.C. Minister Adrian Dix announced that the province would see $2.4 billion more in royalty revenues over the next five years, but experts warn that this estimate is based on flawed numbers and may actually lead to a significant loss for the government.

Nancy Olewiler, an economist at Simon Fraser University, verified the error and estimates that it could reduce B.C.'s natural gas royalties by around $500 million per year. This would mean that the government's expected gains from the new royalty framework, set to come into effect in 2027, may be completely wiped out.

The issue is centered around the 'plant inlet price', which is used to calculate monthly gas royalties. The province failed to subtract transportation and processing costs from this figure, leading to an overestimation of its share of industry profits.