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Experts, First Nations and the official opposition are demanding transparency from the provincial government after the premier’s office admitted last week that an error in the 2026 budget inflated British Columbia’s expected share of natural gas royalties by $1.5 billion over five years.<\/p>\n
An analysis by Nancy Olewiler, Simon Fraser University economics professor emeritus, says the province’s $1.5-billion number is on the low end of what the budget error means to provincial coffers, which she calculates could be out many millions more per year than the province is letting on.<\/p>\n
Olewiler says the premier’s office identified the error as “relating to unit and currency conversions” which she finds confusing. <\/p>\n
“I don’t understand that, frankly,” she said. “There are Canadian prices for gas that comes out at the plant gate \u2026 so I believe they are using Canadian dollars. I don’t know where the exchange rate comes in.”<\/p>\n
She also questioned references to “safety costs.”<\/p>\n
“I don’t have a clue what they’re talking about with safety costs … I’ve reviewed the old royalty system and never saw that in hundreds of pages of the royalty handbook.”<\/p>\n
The provincial government collects royalties in exchange for the rights given to companies to extract gas from Crown land.\u00a0<\/p>\n
B.C. has been in a natural gas boom for over a decade thanks to the evolution of fracking. As a result, the province is transitioning to a new royalty framework in order to collect its fair share of the windfall, with a stated goal of capturing 50 per cent of industry profits for the public purse.<\/p>\n
The province said the budget error was not a result of the new royalty framework being rolled out by the Ministry of Energy and Climate Solutions on Jan. 1, 2027.\u00a0<\/p>\n
Earlier this summer, Treaty 8 First Nations raised concerns that the province’s chosen framework only stood to capture 11 to 14 per cent of profits.<\/p>\n
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Canada\u2019s clean LNG pitch \u2014 and why not everyone is buying it<\/p>\n
A letter from the nations given to Premier David Eby<\/a> in July referred to “a number of errors” in the 2026 budget and demanded the province “publicly explain and transparently correct the errors.”<\/p>\n “Otherwise, your government will lose tens of billions of dollars for the people of British Columbia based on your own errors and misinformation,” it reads.<\/p>\n James Tate, a lawyer representing a Treaty 8 First Nation, says the province is trying to downplay the ramifications of a flawed royalty framework while sweeping the magnitude of the budget error under the rug.<\/p>\n “The fix is to essentially analyze, using proper forecasting for natural gas, what the new royalty system is actually going to bring to British Columbians, and select a system that produces a fair return that’s not going to lose many billions of dollars,” said Tate.\u00a0<\/p>\n Treaty 8 territory in northeastern B.C. is rich in natural gas and the nations receive a share of royalties collected by the province.<\/p>\n What’s really behind the budget error?<\/p>\n According to Olewiler, the major error in the 2026 budget looks to be around what’s called the “plant inlet price,” which is calculated by taking the market price of gas and subtracting the cost of transport and processing it to get to the plant gate.\u00a0<\/p>\n Olewiler believes the province neglected to subtract the transport and processing costs, thereby overestimating the profit that would flow to the province and First Nations.\u00a0\u00a0<\/p>\n “I would love to see clarity about what the new system looks like and how they came up with the numbers that they’ve got. And what share is going to British Columbians,” said Olewiler. <\/p>\n The Treaty 8 letter to Eby flagged the same concern.\u00a0<\/p>\n “The Ministry has built its royalty forecasts on flawed price forecasts that reflect basic errors in transcription and math which artificially inflate the plant inlet price by 76 per cent to more than 100 per cent and ultimately obscure the true extent of the revenue destruction caused by the chosen [royalty] path,” it reads.\u00a0<\/p>\n![\"Natural](\"https:\/\/www.newsbeep.com\/ca\/wp-content\/uploads\/2026\/09\/1788239900_626_default.jpg\")
A natural gas facility operates in northeastern B.C. The industry is producing a record level of natural gas in Western Canada. (Kyle Bakx\/CBC)<\/p>\n