{"id":149634,"date":"2025-09-17T04:51:07","date_gmt":"2025-09-17T04:51:07","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/149634\/"},"modified":"2025-09-17T04:51:07","modified_gmt":"2025-09-17T04:51:07","slug":"b-c-s-record-setting-deficit-understated-auditor-general-says","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/149634\/","title":{"rendered":"B.C.\u2019s record-setting deficit \u2018understated,\u2019 Auditor-General says"},"content":{"rendered":"

Open this photo in gallery:<\/a><\/p>\n

B.C. Premier David Eby and Finance Minister Brenda Bailey in Burnaby, B.C., on July 7. Mr. Eby says the dispute between his Finance Ministry and the Auditor-General is just a technical disagreement about accounting tactics.DARRYL DYCK\/The Canadian Press<\/p>\n

British Columbia\u2019s independent Auditor-General says the province\u2019s record-setting deficit forecast for this year is understated, because Finance Ministry officials were slow to account for a multibillion-dollar settlement that the provinces reached in March with big tobacco companies<\/a> over health damages.<\/p>\n

This week, B.C. Finance Minister Brenda Bailey tabled a fiscal update<\/a> that shows the provincial deficit in the current fiscal year is forecast to hit $11.6-billion. <\/p>\n

The opposition Conservatives say the total is misleading because it counts as revenue a lump sum of $2.7-billion \u2013 an amount due to be collected in instalments from the big tobacco companies over the next 20 years \u2013 making this year\u2019s deficit look smaller.<\/p>\n

But Auditor-General Sheila Dodds said in an interview Tuesday the province was correct to book the full amount as a lump sum, although it should have been counted against last year\u2019s deficit instead.<\/p>\n

\u201cThe impact was that the financial statements were incorrect last year,\u201d she said. <\/p>\n

B.C.\u2019s deficit to rise to $11.6-billion after dropping carbon tax<\/a><\/p>\n

B.C. Premier David Eby faces internal backlash over immigration comments<\/a><\/p>\n

If accounted for as the Auditor-General preferred, the result would have been to reduce the deficit by $2.7-billion last year, and this year\u2019s deficit would be on track to exceed $14-billion.<\/p>\n

Ms. Dodds signed off on the public accounts for the fiscal year that ended on March 31 with a qualification about the tobacco funds. <\/p>\n

\u201cIn my opinion, there is no uncertainty regarding the existence of an asset which was created with the approval of the settlement on March 6, 2025,\u201d Ms. Dodds wrote in August. <\/p>\n

\u201cAt March 6, 2025, government should have recorded an asset, corresponding revenue and related legal expenses. This represents a departure from Canadian public sector accounting standards.\u201d<\/p>\n

The historic deal, which calls for three major tobacco companies to pay out billions in compensation to provinces and territories, as well as former smokers across Canada, cleared its final legal hurdle in early March, before the end of the last fiscal year. The companies will pay more than $24-billion to provinces and territories over about two decades.<\/p>\n

Across Canada, provinces are counting their settlement funds in different ways.<\/p>\n

Alberta is counting only its upfront payment this year \u2013 money it is putting into its Heritage Savings Trust Fund. Newfoundland tried to book the full amount in its budget in May, but backed down in the face of protests, and its updated books now only record the initial instalment, applied against the past fiscal year.<\/p>\n

In Ontario\u2019s 2025 budget, unveiled in May, the province said it expected to receive $4.45-billion more than it had anticipated in \u201cother non-tax revenue,\u201d an amount it said mainly reflects its share of the tobacco settlement but also includes money from other sources. According to figures from the Canadian Cancer Society and reported by The Canadian Press, the province is set to eventually receive $7.1-billion in total from the deal \u2013 but as of Aug. 29, it was only to have received $1.8-billon. <\/p>\n

B.C. Premier David Eby said the dispute between his Finance Ministry and the Auditor-General is just a technical disagreement about accounting tactics.<\/p>\n

\u201cWhat we did was we followed the spirit of the Auditor-General\u2019s advice. We recorded the full amount in a single year,\u201d he told reporters Tuesday. <\/p>\n

\u201cIf we had spread it out over multiple years, we\u2019d be accused of manipulating future years\u2019 budget numbers by assigning arbitrary values going forward. There\u2019s just no way to claim this windfall in a way that wouldn\u2019t arise in criticism of some kind or another.\u201d<\/p>\n

An advocate for tobacco control says the provinces all have it wrong \u2013 the settlement money should be spent on health care, with a portion earmarked for prevention programs.<\/p>\n

\u201cThe premise of the lawsuit was to recoup previous health care costs resulting from industry negligence and deception,\u201d said Les Hagen, executive director of the national advocacy organization Action on Smoking & Health.<\/p>\n

He said he was disappointed that provinces such as B.C. are simply absorbing their settlement funds into general revenues. <\/p>\n

The money should be earmarked for health care, he said, with an emphasis on smoking prevention programs.<\/p>\n

\u201cPrevention is far more effective than treatment.\u201d<\/p>\n

In March, when details of the settlement were finalized, B.C. Attorney-General Niki Sharma<\/a> said the settlement would \u201cdeliver critical funding for health care systems across Canada and establish a foundation to support treatment research.\u201d<\/p>\n

With a file from Jeff Gray in Toronto<\/p>\n","protected":false},"excerpt":{"rendered":"Open this photo in gallery: B.C. Premier David Eby and Finance Minister Brenda Bailey in Burnaby, B.C., on…\n","protected":false},"author":2,"featured_media":149635,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[901,888,902,879,877,903,48,876,895,896,891,878,875,46,549,295,894,887,914,880,881,893,43,889,890,884,904,885,909,910,44,912,907,911,905,908,882,898,899,714,897,906,865,61,41,39,42,40,900,892,886,883,913],"class_list":["post-149634","post","type-post","status-publish","format-standard","has-post-thumbnail","category-headlines","tag-alberta","tag-arts-news","tag-bc","tag-breaking-news","tag-breaking-news-video","tag-british-columbia","tag-canada","tag-canada-news","tag-canada-sports","tag-canada-sports-news","tag-canada-trafficcanada-weather","tag-canadian-breaking-news","tag-canadian-news","tag-economy","tag-education","tag-environment","tag-federal-government","tag-foreign-news","tag-globe-and-mail","tag-globe-and-mail-breaking-news","tag-globe-and-mail-canada-news","tag-government","tag-headlines","tag-life-news","tag-lifestyle","tag-local-news","tag-manitoba","tag-national-news","tag-new-brunswick","tag-newfoundland-and-labrador","tag-news","tag-northwest-territories","tag-nova-scotia","tag-nunavut","tag-ontario","tag-pei","tag-photos","tag-political-news","tag-political-opinion","tag-politics","tag-politics-news","tag-quebec","tag-sports-news","tag-technology","tag-top-news","tag-top-stories","tag-topnews","tag-topstories","tag-travel","tag-trudeau","tag-us-news","tag-world-news","tag-yukon"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/149634","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=149634"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/149634\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/149635"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=149634"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=149634"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=149634"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}