August 10, 2026

Victoria, British Columbia

Lieutenant Governor of the Province of British Columbia

MAY IT PLEASE YOUR HONOUR:

The undersigned has the honour to present the Public Accounts of the Government of the Province of British Columbia for the fiscal year ended March 31, 2026.

BRENDA BAILEY
Minister of Finance

Ministry of Finance
     Victoria, British Columbia

Honourable Brenda Bailey
Minister of Finance

I have the honour to submit herewith the Public Accounts of the Government of the Province of British Columbia for the fiscal year ended March 31, 2026.

Respectfully submitted,

NICOLE WRIGHT
Comptroller General

PROVINCE OF BRITISH COLUMBIA

PUBLIC ACCOUNTS 2025/26

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PROVINCE OF BRITISH COLUMBIA

PUBLIC ACCOUNTS 2025/26

British Columbia's Public Accounts

In accordance with the Budget Transparency and Accountability Act (BTAA), the Public Accounts are a key element of the province's transparency and accountability in reporting its annual operating results and financial position. The Public Accounts include the Summary Financial Statements of the provincial Government Reporting Entity which includes the financial results of all ministries, Crown corporations and agencies presented on a consolidated basis for the 2025/26 fiscal year against the Budget released in March 2025, and the financial position as of March 31, 2026. The supporting notes and schedules define the accounting policies followed in preparing the province's financial statements and form an integral part of the overall financial picture of the province's financial activities in the fiscal year.

Responsibility for the preparation of the government's financial statements rests with the Office of the Comptroller General. In accordance with section 23.1 of the BTAA, these financial statements are prepared under the generally accepted accounting principles for senior governments in Canada, which are issued by the Public Sector Accounting Board, and are supported by the regulations of Treasury Board.

The application of these standards is the responsibility of the preparer who must use professional judgement to determine the treatment that is most representative of the underlying economic substance and best serves the information requirements of the users of government financial statements. To ensure due diligence in the application of accounting policies, decisions are based on comprehensive understanding of transactions, reference to existing and emerging accounting standards, and consultation with standard setters, other jurisdictions and the audit community. Our obligation is to ensure financial reporting meets the accountability requirements of the public within the framework established in legislation.

Producing the Public Accounts requires the teamwork and collaboration of many people across the Government Reporting Entity. The Office of the Auditor General plays an important role in providing assurance over the province's financial statements. I would like to thank everyone for their cooperation and support in preparing the Public Accounts.

Additional information on the government's financial performance is also provided through the Consolidated Revenue Fund Extracts (available on the Internet - website http://gov.bc.ca/publicaccounts). These extracts compare actual to planned spending of ministries on an appropriation basis, fulfilling ministries accountability back to the Legislative Assembly.

Comments or questions regarding the Public Accounts document are encouraged and much appreciated. Please direct your comments or questions to me by mail at PO Box 9413 STN PROV GOVT, Victoria BC V8W 9V1; e-mail at: Comptroller.General@gov.bc.ca; or by telephone at 250-387-6692.

NICOLE WRIGHT
Comptroller General

PROVINCE OF BRITISH COLUMBIA

PUBLIC ACCOUNTS 2025/26

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PROVINCE OF BRITISH COLUMBIA

PUBLIC ACCOUNTS 2025/26

Contents

PROVINCE OF BRITISH COLUMBIA

PUBLIC ACCOUNTS 2025/26

Contents

Public Accounts Content

Financial Statement Discussion and Analysis (Unaudited)-this section provides a written commentary on the Summary Financial Statements plus additional information on the financial performance of the provincial government.

Consolidated Summary Financial Statements-these audited statements have been prepared to disclose the financial impact of the government's activities. They aggregate the Consolidated Revenue Fund (CRF), the taxpayer-supported Crown corporations and agencies (government organizations), the self-supported Crown corporations and agencies (government business enterprises) and the school districts, universities, colleges, institutes and health organizations (SUCH) sector.

Supplementary Information (Unaudited)-this section provides supplementary schedules containing detailed information on the results of those Crown corporations and agencies that are part of the government reporting entity and the impact of the SUCH sector on the province's financial statements.

Consolidated Revenue Fund Extracts (Unaudited)- the CRF reflects the core operations of the province as represented by the operations of government ministries and legislative offices. Its statements are included in an abridged form. The CRF Extracts include statements and schedules of the financial activities of the CRF, as required by statute.

Provincial Debt Summary-this section presents unaudited schedules and unaudited statements that provide further details on provincial debt and reconcile the Summary Financial Statements debt to the province's total debt. Also included are the audited Summary of Provincial Debt, Key Indicators of Provincial Debt and Summary of Performance Measures.

This publication is available on the Internet at: http://gov.bc.ca/finance

Additional Information Available (Unaudited)

Consolidated Revenue Fund Supplementary Schedules -this section contains schedules that provide details of financial activities of the CRF, including details of expenses by ministerial appropriations, an analysis of statutory appropriations, Special Accounts and Special Fund balances and operating statements, and financing transactions.

Consolidated Revenue Fund Detailed Schedules of Payments-this section contains detailed schedules of salaries, wages, travel expenses, grants and other payments.

Financial Statements of Government Organizations and Enterprises-this section contains links to the audited financial statements of those Crown corporations, agencies and SUCH sector entities that are included in the government reporting entity.

This additional information is available only on the Internet at: http://gov.bc.ca/finance

Legislative Compliance and Accounting Policy Report

The focus of the province's financial reporting is the Summary Financial Statements, which consolidate the operating and financial results of the province's Crown corporations, agencies, school districts, universities, colleges, institutes and health organizations with the Consolidated Revenue Fund. These are general-purpose statements designed to meet, to the extent possible, the information needs of a variety of users.

The Public Accounts are prepared in accordance with the Financial Administration Act and the Budget Transparency and Accountability Act (BTAA).

The BTAA was amended in 2001 with the passing of Bill 5. Under section 20 of that Bill, the government has mandated that "all accounting policies and practices applicable to documents required to be made public under this Act for the government reporting entity must conform to generally accepted accounting principles."

For senior governments, generally accepted accounting principles (GAAP) is generally considered to be the recommendations and guidelines of the Canadian Public Sector Accounting Board.

Financial Statement Discussion and Analysis Report

Highlights

The highlights section provides a summary of the key events affecting the financial statements based on information taken from the Summary Financial Statements and Provincial Debt Summary included in the Public Accounts. The budget figures are from page 1 of the Budget and Fiscal Plan 2025/26-2027/28.

Summary Accounts Surplus (Deficit)

The province ended the year with a deficit of $7,700 million, which was $3,212 million lower than the deficit forecast in the Budget and Fiscal Plan 2025/26-2027/28. The 2025/26 deficit of $7,700 million was $353 million higher than the deficit of $7,347 million in fiscal year 2024/25.

Revenue increased by $2,825 million over fiscal year 2024/25 and was $2,868 million higher than budget. The annual increase in revenue in the current year was mainly due to increases in miscellaneous revenue primarily due to the tobacco settlement.

Expense increased by $3,178 million over fiscal year 2024/25 and was lower than budget by $344 million. The increases in spending in the current year were mainly in the health, general government, debt servicing, and education sectors, offset by a decrease in the natural resource sector.

Financial Statement Discussion and Analysis Report

Capital Spending

Taxpayer-supported infrastructure spending on hospitals, schools, post-secondary facilities, transit, and roads totalled $11,356 million in 2025/26, $4,018 million lower than budget mainly due to project scheduling changes. This spending has been deferred to future years.

Self-supported infrastructure spending on electrical generation, transmission and distribution projects and other capital assets totalled $4,319 million in 2025/26. Self-supported capital spending was $509 million lower than budget.

Provincial Debt

When calculating total provincial debt, the province adds to its financial statement debt all debt guarantees and the debt directly incurred by self-supported Crown corporations, reduced by sinking fund assets and unrealized foreign exchange adjustments of hedged foreign denominated debt translated to March 31, 2026 exchange rates. This balance is referred to as the total provincial debt.

Taxpayer-supported provincial debt increased by $18,351 million in 2025/26 to fund investments in capital infrastructure and to fund operational spending. Self-supported provincial debt increased by $2,567 million due to an increase in capital infrastructure related to power projects. Total provincial debt increased by $20,918 million compared to the budgeted increase of $22,755 million. The key measure of taxpayer-supported debt to GDP ended the year at 26.3%, which is lower than the forecasted 26.7% in the budget.

Financial Statement Discussion and Analysis Report

Discussion and Analysis

The detailed analysis section provides an overview of significant trends relating to the Consolidated Statement of Operations, Consolidated Statement of Financial Position and Summary of Provincial Debt.

Revenue Analysis

Revenue analysis helps users understand the government's finances in terms of its revenue sources and allows them to evaluate the revenue producing capacity of the government.

Revenue by Source

Revenue by source provides an outline of the primary sources of provincial revenue and how results change between those sources over time. Revenues are reported by separate components of taxation, contributions from the federal government, natural resources and other sources, which include fees and licences, contributions from self-supported Crown corporations, and investment income.

2021/22 to 2025/26

Provincial revenues increased by $2,825 million in 2025/26. The increase in provincial revenue was primarily due to an increase in miscellaneous of $2,872 million, contributions from the federal government of $226 million, natural resources of $81 million, and taxation of $19 million. These increases were partly offset by decreases in investment income of $141 million, fees and licences of $130 million, and net earnings from self-supported Crown corporations of $102 million.

Financial Statement Discussion and Analysis Report

In 2025/26, taxation revenue increased by $19 million. Personal and corporate income tax revenue increased by $2,070 million (8.2%) primarily due to increased tax rates for personal income tax and an increased tax base for corporate income tax, provincial sales tax increased $473 million (4.6%) due to higher household spending, property transfer tax decreased $324 million (16.2%) due to a lower number of housing sales, carbon tax decreased $2,355 million (90.4%) due to the elimination of the consumer carbon tax, and other taxation revenues increased by $155 million (1.7%), mainly from increases in property tax and fuel tax partly offset by decreases to employer health tax and tobacco tax.

Contributions from the federal government were $226 million higher than 2024/25 primarily due to increases to the health and social transfers of $283 million.

Miscellaneous revenue was $2,872 million higher than 2024/25 primarily due to British Columbia's share of the tobacco settlement against tobacco companies of $2,561 million.

The net earnings of self-supported Crown corporations and agencies were $102 million lower than 2024/25 mainly from decreased earnings of $133 million in the Insurance Corporation of British Columbia primarily due to increased legal-based claims, $89 million decrease for British Columbia Liquor Distribution Branch due to decreased liquor sales, $29 million decrease for British Columbia Lottery Corporation due to increased costs for slot and table games, partly offset by a $134 million increase for British Columbia Hydro and Power Authority due to increased domestic sales.

Natural resources revenues were $81 million higher than 2024/25, reflecting higher natural gas and petroleum prices.

Own-source Revenue to GDP	2021/22 to 2025/26
The ratio of own-source revenue to GDP represents the amount of revenue the provincial government is taking from the provincial economy in the form of taxation, natural resources revenue, earnings of self-supported Crown corporations and user fees and licences (own-source revenue is all revenue except for federal transfers).           Own-source revenue to GDP has remained stable over the past five years, ending the year at 16.2%.

Financial Statement Discussion and Analysis Report

Percentage Change in Revenue	2021/22 to 2025/26
Trend analysis of revenue provides users with information about significant changes in revenue over time and between sources. This enables users to evaluate past performance and assess potential implications for the future. Over the five years since 2021/22, total revenue has increased in relation with the increase in GDP. Taxation revenue has increased in the year due to higher personal and corporate taxes as well as an increase for provincial sales tax. Contributions from the federal government increased in the year due to increased funding for health and child care programs. Fees and licences decreased in the year primarily due to tuition revenue at post-secondary institutions. Natural resources revenue has decreased due to prices of natural gas, coal and petroleum.

Financial Statement Discussion and Analysis Report

Natural Resources Revenue	2021/22 to 2025/26
The chart of natural resources revenue by source explains past trends of natural resources revenue in total and by major category.           Petroleum, natural gas and mineral revenues increased by $63 million from 2024/25. These categories of natural resources revenue account for 49.1% of natural resources revenue compared to 48.1% in 2024/25.           Forestry revenue increased by $4 million in 2025/26. The proportion of natural resources revenue derived from forestry decreased to 20.7% in 2025/26 from 21.3% in 2024/25.           Water and other resource revenues increased by $14 million in the year. They comprise 30.2% of provincial natural resources revenue.

Government-to-Government Transfers to
Total Revenue	2021/22 to 2025/26
The ratio of government-to-government transfers to total revenue is an indicator of how dependent the province is on transfers from the federal government. An increasing trend shows more reliance and a decreasing trend shows less reliance. Federal transfers increased in 2025/26 by $226 million. The ratio of federal contributions to total revenue decreased to 16.7% due to total revenue increasing $2,825 million over the prior year.

Financial Statement Discussion and Analysis Report

Expense Analysis

The following analysis helps users to understand the impact of the government's spending on the economy, the government's allocation and use of resources, and the cost of government programs.

Expense by Function

Expense by function provides a summary of the major areas of government spending, and changes in spending over time. Functions, which indicate the purpose of expenditures, are defined by Statistics Canada's Canadian Classification of Functions of Government. The province uses the following functions: health, education, social services, other, interest, natural resources and economic development, transportation, protection of persons and property, and general government. The health, education and social services functions account for approximately three quarters of the province's total operating costs.

	2021/22 to 2025/26
Government spending on programs and services increased by $3,178 million in 2025/26. The province increased spending on the health sector by $2,003 million (5.3%), the general government sector by $1,072 million (50.3%), the debt servicing sector by $653 million (15.4%), the education sector by $510 million (2.6%), and the protection sector $192 million (6.0%). Spending in the natural resources and economic development sector decreased $891 million (14.5%), the transportation sector decreased $219 million (7.5%), and spending in the social services sector decreased by $142 million (1.3%) over 2024/25.

 Financial Statement Discussion and Analysis Report

In 2025/26, provincial operating expenses were $94,571 million, a $3,178 million (3.5%) increase from 2024/25. Program spending has increased by $23,442 million (33.0%) since 2021/22. This is compared to increases in GDP of 28.5% over the same period.

Financial Statement Discussion and Analysis Report

Changes in Actual Results from 2024/25 to 2025/26

The year over year increase in total revenue of $2,825 million, and the increase in total expense of $3,178 million, resulted in a deficit that was $353 million more than the 2024/25 deficit. Accumulated surplus (deficit), including remeasurement gains and losses, changed from $(10,010) million in 2024/25 to $(17,122) million at the end of 2025/26.

Financial Statement Discussion and Analysis Report

Changes from 2025/26 Budget

Revenue was $2,868 million (3.4%) higher than the budgeted amount of $84,003 million and expenses were $344 million (0.4%) lower than the budgeted amount of $94,915 million.

Net Liabilities and Accumulated Surplus (Deficit)

In accordance with Canadian generally accepted accounting principles, the government's Consolidated Statement of Financial Position is presented on a net liabilities basis. Net liabilities represent net future cash outflows resulting from past transactions and events. An analysis of net liabilities and accumulated surplus helps users to assess the government's overall financial position and the future revenue required to pay for past transactions and events.

 Financial Statement Discussion and Analysis Report

The accumulated surplus (deficit) represents the sum of the current and prior years' operating results, and accumulated changes in unrealized remeasurement gain (loss). At March 31, 2026, the accumulated surplus (deficit) was $(17,122) million.

Financial assets were $7,462 million higher than 2024/25 as the result of increases in equity in self-supported Crown corporations and agencies of $2,316 million, loans for the purchase of assets recoverable from agencies of $2,094 million, and $3,593 million in other financial assets, offset by a decrease in cash and cash equivalents and temporary investments of $541 million.

Liabilities increased by $22,596 million from 2024/25. This increase was the result of an increase of $18,034 million in taxpayer-supported debt, an increase in self-supported debt of $2,098 million, an increase in deferred revenue of $1,181 million, and an increase of $1,283 million in other liabilities.

Non-financial assets typically represent resources, such as tangible capital assets, that the government can use in the future to provide services. Non-financial assets increased by $8,022 million over 2024/25 representing government's investment in current year infrastructure spending.

Accumulated Surplus (Deficit)	2021/22 to 2025/26
The accumulated surplus (deficit) represents current and all prior years' operating results. In 2025/26, the province had an accumulated surplus (deficit) of $(17,122) million, a change of $7,112 million from 2024/25.

 Financial Statement Discussion and Analysis Report

Components of Net Liabilities

Financial Assets

Trend analysis of financial assets provides users with information regarding the amount of resources available to the government that can be converted to cash to meet obligations or fund operations.

In 2025/26, financial assets increased by $7,462 million primarily due to an increase in equity in self-supported Crown corporations and agencies of $2,316 million, and an increase in recoverable capital loans of $2,094 million for investments in power projects, partly offset by a decrease in cash, cash equivalents, and temporary investments of $541 million. The remaining financial assets including receivables, other investments, and derivative financial instruments increased by $3,593 million.

Liabilities

Trend analysis of liabilities provides users with information to understand and assess the demands on financial assets and the revenue raising capacity of government.

In 2025/26, total liabilities increased by $22,596 million. Liabilities are obligations that must be settled at a future date by the transfer or use of assets. Taxpayer-supported financial statement debt increased by $18,034 million and self-supported financial statement debt increased by $2,098 million. Information relating to the government's debt management can be found in more detail in the analysis of the total provincial debt on page 26. Deferred revenue increased by $1,181 million and accounts payable and other liabilities increased by $1,283 million. Deferred revenue represents unearned revenues and restricted contributions that will be recognized as revenue in future periods.

Financial Statement Discussion and Analysis Report

Non-financial Assets

Trend analysis of non-financial assets provides users with information to assess the management of a government's infrastructure and long-term non-financial assets.

Management of non-financial assets has a direct impact on the level and quality of services a government is able to provide to the public. Non-financial assets typically represent resources that government can use in the future to provide services. At March 31, 2026, non-financial assets were $85,318 million which was $8,022 million higher than 2024/25 and $25,238 million higher than fiscal 2021/22. The majority of the province's non-financial assets represent capital expenditures for tangible capital assets net of amortization. The government has increased its investment in infrastructure by $7,843 million, to ensure service potential is available to deliver programs and services in future periods. Capital expenditures are not included on the Consolidated Statement of Operations and have no effect on the annual surplus (deficit). They reduce future operating results in the form of amortization expense as the service potential of assets is used to deliver programs and services.

Financial Statement Discussion and Analysis Report

Net Liabilities and Accumulated Surplus (Deficit)

Net liabilities increased by $15,134 million in 2025/26. Liabilities include deferred revenue of $17,394 million which represents unearned revenues and restricted contributions that will be recognized as revenue in future periods.

In the year, the financial measure of net liabilities has increased more than the increase in investments in infrastructure, resulting in a decrease in accumulated surplus (deficit). The accumulated surplus (deficit) of the province was $(17,122) million at the end of 2025/26, indicating that the cumulative result of all past annual surpluses and deficits is negative.

Financial Statement Discussion and Analysis Report

Surplus (Deficit) to GDP	2021/22 to 2025/26
The annual surplus (deficit) to GDP ratio is an indicator of sustainability that compares the province's financial results to the overall results of the economy. Results in the positive range of the chart indicate that the economy is growing faster than net government spending. Results in the negative range of the chart reflect increased spending in the health and education sectors due to wage and staffing increases, and increases in debt servicing due to higher interest costs due to increased debt levels.

Financial Statement Discussion and Analysis Report

Total Provincial Debt

Total provincial debt is calculated differently than financial statement debt. Analysis of total provincial debt helps users to assess the extent of long-term liabilities and the government's ability to meet future debt obligations.

When reporting to rating agencies, the province adds to its financial statement debt all debt guarantees and the debt directly incurred by self-supported Crown corporations, reduced by sinking fund assets. This balance is referred to as the total provincial debt.

Total provincial debt is $571 million lower than the amounts reported in the province's financial statements. Total provincial debt includes deductions for sinking funds held to pay down the debt, unrealized foreign exchange adjustments of hedged foreign denominated debt translated to March 31, 2026 exchange rates, and includes guaranteed debt and the debt of self-supported Crown corporations.

Total provincial debt increased by $20,918 million in 2025/26 due to increased borrowing required to fund investments in capital infrastructure and to fund operational spending. Taxpayer-supported debt increased by $18,351 million, including increases for government direct operating debt of $8,911 million, BC Transportation Financing Authority by $3,674 million, the health sector by $2,492 million, the education sector by $1,846 million, and other taxpayer-supported corporations and agencies by $1,428 million. The debt of self-supported Crown corporations and agencies increased $2,567 million for mainly investments in power projects.

 Financial Statement Discussion and Analysis Report

Strong Credit Rating

Reflecting the province's fiscal performance, British Columbia has maintained a strong and stable credit rating with all three credit rating agencies. In 2025/26, Moody's Investors Service Inc. gave the province a Aa2 credit rating (2025: Aaa); Standard and Poor's gave the province a AA- credit rating (2025: AA-); and Dominion Bond Rating Service gave the province a AA (high) credit rating (2025: AA(high)).

Credit Ratings March 31, 2026

___________________________

¹ The rating agencies assign letter ratings to borrowers. The major categories, in descending order of credit quality, are: AAA/Aaa; AA/Aa; A; BBB/Baa; BB/Ba; and B. The "1", "2", "3", "high", "low", "-", and "+" modifiers show relative standing within the major categories. For example, AA+ exceeds AA.

² In April 2026, British Columbia's credit ratings were updated to A by Standard and Poor's and to AA by Dominion Bond Rating Service.

A more comprehensive overview of provincial debt, including key debt indicators, is located on pages 137-150.

Public Debt Charges to Revenue (the Interest Bite)	2021/22 to 2025/26
The public debt charges to revenue indicator is often referred to as the "interest bite". This provides users with the percentage of provincial revenue used to pay interest on debt. The ratio is sensitive to the cost of debt arising from either increasing interest rates or increasing debt, as well as decreases in revenue. If an increasing proportion of provincial revenue is required to pay interest on provincial debt, less money is available to provide core public services. The interest bite has increased over the last five years. In 2025/26, the province spent 4.7 cents of each revenue dollar on interest on the provincial taxpayer-supported debt.

 Financial Statement Discussion and Analysis Report

Non-Hedged Foreign Currency Debt to Total Provincial Debt	2021/22 to 2025/26
The ratio of non-hedged foreign currency debt to total provincial debt shows the degree of vulnerability of a government's public debt position to swings in exchange rates. Non-hedged foreign currency debt directly offset by instruments in the same foreign currency are considered "natural hedges". These amounts are excluded from the ratio. In 2025/26, the province had the equivalent of CAD $95 million in non-hedged debt.

 Financial Statement Discussion and Analysis Report

Economic Highlights

British Columbia's economy expanded by 2.0% in the 2025 calendar year, following 1.2% growth in 2024 according to preliminary GDP by industry data from Statistics Canada. In 2025, B.C.'s economic growth ranked 6th (tied with New Brunswick) among the provinces and exceeded the national average of 1.6%. Statistics Canada's estimate for B.C. real GDP, which incorporates updated underlying economic data, is 0.5 percentage points above government's Budget 2026 estimate of 1.5% growth in 2025.

Real Gross Domestic Product in Calendar Year 2025	Provincial Comparison
Economic growth in 2025 was driven by B.C.'s service-producing sector, with moderate contributions from goods-producing industries after contracting in 2024. Among industries, B.C.'s economic growth in 2025 was led by real estate and rental and leasing (up 2.2%); health care and social assistance services (up 3.5%); mining, quarrying, and oil and gas extraction(up 6.2%); and construction (up 3.0%). Meanwhile, the largest annual declines were reported in administrative and support, waste management and remediation services (down 1.4%) and manufacturing (down 0.5%).

Unemployment Rate	2021 to 2025
British Columbia's annual unemployment rate was 6.2% in 2025, compared with 5.6% in 2024 as labour force gains outpaced job gains. In 2025, B.C.'s unemployment rate remained below the national unemployment rate of 6.8%. Total employment in B.C. rose by 1.1% (increase of 32,200 jobs) and B.C.'s labour force expanded by 1.8%. Meanwhile, employee compensation (aggregate wages, salaries and employers' social contributions) grew by 3.1% in 2025.

Financial Statement Discussion and Analysis Report

Risks and Uncertainties

The government's main exposure to risks and uncertainties arises from variables, which the government does not directly control. These include:

• assumptions underlying revenue and Crown corporation forecasts such as economic factors, commodity prices and weather conditions;

• the outcome of litigation, arbitration, and negotiations with third parties;

• potential changes to federal transfer allocations, cost-sharing agreements with the federal government and impacts on the provincial income tax bases arising from federal tax policy and budget changes;

• utilization rates for government services such as health care, children and family services, and income assistance;

• exposure to interest rate fluctuations, foreign exchange rates and credit risk; and

• changes in Canadian generally accepted accounting principles.

The following are the approximate effect of changes in some of the key variables on the surplus (deficit):

¹Sensitivity relates to stumpage revenue only.

²Sensitivities can vary significantly, especially at lower prices.

Although the government is unable to directly control these variables, strategies have been implemented to mitigate these risks and uncertainties. The development of taxation, financial and corporate regulatory policy to reinforce British Columbia's position as an attractive place to invest and create jobs will help offset the increase in competition for investment as a result of globalization of economic and financial markets.

Risk management in relation to debt is discussed in Note 20 on page 71 of the Notes to the Consolidated Summary Financial Statements.

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Statement of Responsibility
for the Consolidated Summary Financial Statements
of the Government of the Province of British Columbia

Responsibility for the integrity and objectivity of these consolidated Summary Financial Statements for the Government of the Province of British Columbia rests with the government. These consolidated Summary Financial Statements are prepared in accordance with the Budget Transparency and Accountability Act (BTAA), which requires generally accepted accounting principles (GAAP) for senior governments in Canada, supported by regulations of Treasury Board under the BTAA. The fiscal year of the government is from April 1 to March 31 of the following year.

To fulfil its accounting and reporting responsibilities, the government maintains systems of financial management and internal control which give due consideration to costs, benefits and risks. These systems are designed to provide reasonable assurance that transactions are properly authorized by the Legislative  Assembly, are executed in accordance with prescribed regulations and are properly recorded to maintain accountability of public money and safeguard the assets and properties of the Province of British Columbia under government administration.

The Comptroller General of British Columbia maintains the accounts of British Columbia, a centralized summary record of government's financial transactions. Additional information is obtained as required from ministries, Crown corporations, agencies, school districts, universities, colleges, institutes and health organizations to meet accounting and reporting requirements. The information included in these consolidated Summary Financial Statements is based on management's best estimates and judgement, with due consideration given to materiality.

The Auditor General of British Columbia provides an independent opinion on the financial statements prepared by the government. The duties of the Auditor General in that respect are contained in section 11 of the Auditor General Act.

Annually, the consolidated Summary Financial Statements are tabled or deposited with the Legislative Assembly as part of the Public Accounts.

Approved on behalf of the Government of the Province of British Columbia:

BRENDA BAILEY

Chair, Treasury Board

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Independent Auditor's Report

To the Legislative Assembly of British Columbia

Qualified Opinion

I have audited the accompanying consolidated Summary Financial Statements of the Government of the Province of British Columbia ("government"), using my staff and resources. The Engagement Leader, Molly Pearce, CPA, CA, is responsible for this audit and its performance. The consolidated Summary Financial Statements of government comprise the consolidated statement of financial position as at March 31, 2026, and the consolidated statements of operations, change in net liabilities, remeasurement gains and losses and cash flow for the year then ended, notes to the consolidated Summary Financial Statements including a summary of significant accounting policies, and supplementary statements to the consolidated Summary Financial Statements.

In my opinion, except for the effects of the matters described in the Basis for Qualified Opinion section of my report, the consolidated Summary Financial Statements present fairly, in all material respects, the financial position of government as at March 31, 2026, and the results of its operations, change in its net liabilities, remeasurement gains and losses, and its cash flow for the year then ended in accordance with Canadian public sector accounting standards.

Basis for Qualified Opinion

I conducted my audit in accordance with Canadian generally accepted auditing standards. My responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Consolidated Summary Financial Statements section of my report. I am independent of government in accordance with the ethical requirements that are relevant to my audit of the consolidated Summary Financial Statements in Canada, and I have fulfilled my other ethical responsibilities in accordance with these requirements.

I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my qualified opinion.

Deferral of Revenues

Government's accounting treatment for funds received from other governments, and for externally restricted funds received from non-government sources, is to initially record them as deferred revenue (a liability) and then recognize revenue in the statement of operations either on the same basis as the related expenditures occur or, in the case of funds for the purchase or construction of capital assets, to recognize revenue on the same basis as the related assets are amortized.

Under Canadian public sector accounting standards, government's method of accounting for contributions is only

appropriate in circumstances where the funding meets the definition of a liability. Otherwise, the appropriate accounting treatment is to record contributions as revenue when they are received or receivable. In my opinion, certain contributions from others do not meet the definition of a liability, and as such government's method of accounting for those contributions represents a departure from Canadian public sector accounting standards.

This departure has existed since the inception of the standard in 2012. As of March 31, 2026, the liability for deferred revenue is overstated by $10.76 billion, the annual deficit and the accumulated deficit are overstated by $10.76 billion, and revenue is understated by $10.76 billion. This represents the cumulative impact of this departure over time. Of this cumulative amount, $0.91 billion represents the understatement of revenue and corresponding overstatement of annual deficit in the current fiscal year.

Incomplete Contractual Obligations Disclosure

Canadian public sector accounting standards require disclosure of contractual obligations that commit government to certain expenditures for a considerable period into the future. This enables financial statement users to understand the nature and extent to which government's resources are already committed to meet future obligations.

The consolidated Summary Financial Statements did not provide all of the required disclosures. Certain larger contracts, along with many contracts below the $50 million threshold set by government, were not disclosed in Note 28 - Contingent Liabilities and Contractual Obligations. In my opinion, the cumulative impact of excluding these disclosures represents a departure from Canadian public sector accounting standards.

The following table is based on historical information and management's records. It sets out the estimated effect of government's departure from the standards.

Key Audit Matters

Key audit matters are those that, in my professional judgment, were of most significance in my audit of the consolidated Summary Financial Statements of the current period. These matters were addressed in the context of my audit of the consolidated Summary Financial Statements as a whole and in forming my opinion thereon and I do not provide a separate opinion on these matters. In addition to the matters described in the Basis for Qualified Opinion section, I have determined the matters described below to be the key audit matters to be communicated in my report.

Other Accompanying Information

Government is responsible for the information they report in the annual Public Accounts. My opinion on the consolidated Summary Financial Statements does not cover other information included in the annual Public Accounts that accompanies the consolidated Summary Financial Statements and, except for my independent auditor's report on the debt-related statements, I do not express any form of assurance conclusion thereon.

In connection with my audit of the consolidated Summary Financial Statements, my responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated Summary Financial Statements or my knowledge obtained during the audit or otherwise appears to be materially misstated.

Prior to the date of my auditor's report, I obtained a copy of the Public Accounts. If, based on the work I have performed on the other information, I conclude that there is a material misstatement therein, I am required to report that fact in this auditor's report.

As described in the Basis for Qualified Opinion section above, I believe there are material misstatements in government's accounting for deferral of revenues. I have concluded that the other information within the Public Accounts that is affected by this departure from Canadian public sector accounting standards is materially misstated for the same reason as the consolidated Summary Financial Statements.

Responsibilities of the Comptroller General and Treasury Board for the Consolidated Summary Financial Statements

The Comptroller General of British Columbia (comptroller general) is responsible for the preparation and fair presentation of the consolidated Summary Financial Statements in accordance with the Budget Transparency and Accountability Act, and for such internal control as the comptroller general determines is necessary to enable the preparation of the consolidated Summary Financial Statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated Summary Financial Statements, the comptroller general is responsible for assessing government's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting when government will continue its operations for the foreseeable future.

As those charged with governance, the Treasury Board of British Columbia is responsible for the oversight of the financial reporting process including the approval of significant accounting policies.

Auditor's Responsibilities for the Audit of the Consolidated Summary Financial Statements

My objectives are to obtain reasonable assurance about whether the consolidated Summary Financial Statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes my opinion in accordance with generally accepted accounting principles, being Canadian public sector accounting standards for senior governments in Canada. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated Summary Financial Statements.

As part of an audit in accordance with Canadian generally accepted auditing standards, I exercise professional judgment and maintain professional skepticism throughout the audit. I also:

• Identify and assess the risks of material misstatement of the consolidated Summary Financial Statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for my opinion. The risk of not detecting a material misstatement resulting from fraud is higher than one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of government's internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the comptroller general.

• Conclude on the appropriateness of the comptroller general's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on government's ability to continue as a going concern. If I conclude that a material uncertainty exists, I am required to draw attention in my auditor's report to the related disclosures in the consolidated Summary Financial Statements or, if such disclosures are inadequate, to modify my opinion. My conclusions are based on the audit evidence obtained up to the date of my auditor's report. However, future events or conditions may cause government to cease to continue as a going concern.

• Evaluate the overall presentation, structure, and content of the consolidated Summary Financial Statements, including the disclosures, and whether the consolidated Summary Financial Statements represent the underlying transactions and events in a manner that achieves fair presentation.

The audit of the consolidated Summary Financial Statements is a group audit engagement. As such, I also obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the group to express an opinion on the consolidated Summary Financial Statements. I am responsible for the direction, supervision and performance of the group audit and I remain solely responsible for my audit opinion.

I communicate with the Chair of Treasury Board regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that I identify during my audit.

I also provide the Chair of Treasury Board with a statement that I have complied with relevant ethical requirements regarding independence and communicate with them all relationships and other matters that may reasonably be thought to bear on my independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, I determine those matters that were of most significance in the audit of the consolidated Summary Financial Statements of the current period and are therefore the key audit matters. I describe these matters in my auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, I determine that a matter should not be communicated in my report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

In accordance with the Auditor General Act, I am responsible for the independent opinion on the consolidated Summary Financial Statements of the Government of the Province of British Columbia completed by my office.

Bridget Parrish, CPA, CA
Auditor General of British Columbia

Victoria, British Columbia
July 30, 2026

Summary Financial Statements
Consolidated Statement of Financial Position
as at March 31, 2026

The accompanying notes and supplementary statements are an integral part of these consolidated financial statements.

Prepared in accordance with Canadian generally accepted accounting principles. 

NICOLE WRIGHT
Comptroller General

Summary Financial Statements
Consolidated Statement of Operations
for the Fiscal Year Ended March 31, 2026

The accompanying notes and supplementary statements are an integral part of these consolidated financial statements.

 Summary Financial Statements
Consolidated Statement of Change in Net Liabilities
for the Fiscal Year Ended March 31, 2026

The accompanying notes and supplementary statements are an integral part of these consolidated financial statements.

____________________

¹The estimates amounts are from pages 154 - 155 of the Budget and Fiscal Plan 2025/26-2027/28.

Summary Financial Statements
Consolidated Statement of Remeasurement Gains and Losses
for the Fiscal Year Ended March 31, 2026

The accompanying notes and supplementary statements are an integral part of these consolidated financial statements.

¹ Portfolio investments include equities, bonds and certain other investments designated to the fair value measurement category.

Summary Financial Statements
Consolidated Statement of Cash Flow
for the Fiscal Year Ended March 31, 2026 

Summary Financial Statements
Consolidated Statement of Cash Flow-Continued
for the Fiscal Year Ended March 31, 2026

______________________________

¹Interest received during the year was $1,791 million (2025: $1,599 million). Interest paid during the year was $4,343 million (2025: $3,617 million). Interest received includes interest income from the Consolidated Statement of Operations in the amount of $2,018 million (2025: $2,159 million) less the change in accrued interest receivable in the amount of $227 million (2025: $560 million). Interest paid includes interest expense from the Consolidated Statement of Operations in the amount of $4,898 million (2025: $4,245 million) less the change in accrued interest payable in the amount of $555 million (2025: $628 million).

²Financing transaction receipts are from debt issues and disbursements are for debt repayments.

The accompanying notes and supplementary statements are an integral part of these consolidated financial statements.

Notes to Consolidated Summary Financial Statements

for the Fiscal Year Ended March 31, 2026

1. Significant Accounting Policies

(a) BASIS OF ACCOUNTING

The government's Summary Financial Statements are prepared in accordance with the Budget Transparency and Accountability Act (BTAA), which requires generally accepted accounting principles (GAAP) for senior governments in Canada, supported by regulations of Treasury Board under the BTAA.

(b) REPORTING ENTITY

These financial statements include the accounts of organizations that meet the criteria of control (by the province) as established under Canadian Public Sector Accounting Standards. The reporting entity also includes government partnerships.

A list of organizations included in these consolidated financial statements may be found on pages 91 - 93. Trusts administered by government or government organizations are excluded from the reporting entity.

(c) PRINCIPLES OF CONSOLIDATION

Taxpayer-supported Crown corporations, agencies, and the school districts, universities, colleges, institutes, health organizations (SUCH) and the Consolidated Revenue Fund (CRF) are consolidated using the full consolidation method. The government's interests in government partnerships are recorded on a proportional consolidation basis. Self-supported Crown corporations, agencies, entities and government business partnerships are consolidated using the modified equity basis of consolidation.

Organizations are reviewed annually to determine whether they can be expected to meet the definition of self-supported over their normal course of operations. In determining whether organizations will be able to maintain their operations and meet their liabilities from revenues received from sources outside of the government reporting entity, the following factors are considered as they apply:

i) The organization's history of maintaining its operations and meeting its liabilities;

ii) Whether the organization would continue to maintain its operations and meet its liabilities without relying on sales to, or subsidies in cash or kind from, the government reporting entity;

iii) Past, present and future economic conditions within which the organization operates; and

iv) Whether the organization has realistic and specific plans that show how it expects to be able to maintain its operations and meet its liabilities in the future.

The status of self-supported organizations is not changed in response to financial results which are reasonably expected to be temporary in nature. Organizations are classified as self-supported on establishment and during a start up period if they are reasonably expected to meet the definition of self-supported in their normal course of operations.

The definitions of these consolidation methods can be found on page 151.

Adjustments are made for Crown corporations, agencies and entities whose fiscal year ends are different from the government's fiscal year end of March 31. These Crown corporations, agencies and entities consist of all school districts (June 30).

Statistics Canada's Canadian Classification of Functions of Government provides guidance for establishing segment disclosure and function reporting. The Consolidated Statement of Financial Position by Sector and the Consolidated Statement of Operations by Sector are found on pages 94 - 101. These statements include the operations of the CRF, taxpayer-supported Crown corporations and agencies, and SUCH sector organizations. Each taxpayer-supported Crown corporation, agency and SUCH sector organization is assigned to a sector based on its major activity. Sectors are identified using functions. The nature of each function is described in greater detail under Note 1(d) Classification by Sector.

Notes to Consolidated Summary Financial Statements

for the Fiscal Year Ended March 31, 2026-Continued

1. Significant Accounting Policies-Continued

(d) SPECIFIC ACCOUNTING POLICIES

Classification by Sector

The province uses the following sectors: health, education, social services, natural resources and economic development, protection of persons and property, transportation, general government, debt servicing and other.

The health sector includes the provincial health care system. It includes providing medical, hospital and preventive care, and other health-related services such as laboratories and diagnostic facilities.

The education sector includes education services. It includes elementary, secondary, and post-secondary schools. It also includes other education services such as programs to upgrade the skills of individuals and to provide apprenticeship training.

The social services sector includes outlays that the province made to help disadvantaged individuals and families overcome obstacles and circumstances which threaten their well-being. It includes counselling and rehabilitation services, transfer payments to individuals with a physical or mental disability, and services and goods provided by the province to the elderly.

The natural resources and economic development sector includes the promotion and development of industries, as well as the development and conservation of the natural resources on which these industries depend. It includes regulating the various industrial activities that are carried on in the province, as well as research related to resource conservation.

The protection of persons and property sector includes the protection of persons and property from negligence, abuse and crime. It includes policing, operating and maintaining courts of law and correctional facilities. It includes services related to new immigrants. It also includes negotiations to resolve land, resources, governance and jurisdictional issues with First Nations.

The transportation sector includes the operation and maintenance of transportation systems. This includes highway infrastructure, other road systems and public transit.

The general government sector is composed of three sub-categories. These are general administration, executive and legislature, and other general government services. General administration includes central accounting, budgeting, tax administration and collection, and other centralized administrative services. Executive and legislature includes the political, law enactment and constitutional activities of the province.

The debt servicing sector represents the financial impacts of activities related to management of public debt.

The other sector consists of activities, such as housing and culture, which cannot be allocated to any of the specifically described sector classifications.

Revenue

All revenue is recorded on an accrual basis. For corporate income tax, the cash received from the federal government is used as the basis for estimating the tax revenue. Annual tax revenues also include adjustments between the estimated revenues of previous years and actual amounts, as well as revenues from reassessments relating to prior years. Revenues do not include estimates of unreported taxes, or the impact of future reassessments that cannot be reliably determined.

Personal income tax revenue is accrued in the year earned based on estimates of household and taxable income. The revenue reported in the fiscal year is based on a pro-ration of the calendar year estimates.

Direct taxes, such as sales, fuel, carbon and tobacco, are recorded during the period in which the taxable event occurs and when authorized by legislation. Property tax revenues are recorded based on a pro-ration of actual property tax billings for each of the calendar years that comprise the fiscal year.

Notes to Consolidated Summary Financial Statements

for the Fiscal Year Ended March 31, 2026-Continued

1. Significant Accounting Policies-Continued

In the normal course of business, taxpayer-supported Crown corporations, SUCH and the CRF are charged provincial taxes, including provincial sales tax, employer health tax, carbon tax, property transfer tax and fuel tax. These transactions are not eliminated upon consolidation and are reported on a gross basis in taxation revenue, expense, and the historical cost of tangible capital assets. The amount of these transactions cannot be reliably determined.

Tax concessions are accrued on the same basis as the associated tax revenues and reduce gross taxation revenue, but are not considered valuation allowances.

Royalty revenue is reported net of allowable credits integral to determining the amount of royalty. Amounts are reported as revenue when received or receivable.

Government transfers are recognized as revenues in the period during which the transfer is authorized and any eligibility criteria are met. Government transfers are deferred if they are restricted through stipulations for specific programs such as health transfers.

Transactions where goods or services are provided for consideration include performance obligations to a specific payor. Revenue from these transactions is recognized as the performance obligations are satisfied. Transactions without performance obligations are recognized when the revenue is received or receivable.

Expense

The cost of all goods consumed and services received during the year is expensed. Interest expense includes debt servicing costs such as amortization of discounts and premiums, realized foreign exchange gains and losses, and issue costs.

Pension expense is calculated as the cost of pension benefits earned by employees during the year, interest on the pension benefits liability, net of pension plan assets, and amortization of the government's share of any experience gains or losses, less contributions made by members. The estimated total cost of government's share of plan amendments related to past service is expensed in the year the plan is amended. Government transfers include grants, entitlements and transfers under agreements, as defined in the definitions on pages 151 - 153. Government transfers are recognized as expenses in the period in which the events giving rise to the transfer occurred, as long as the transfer is authorized, eligibility criteria have been met and a reasonable estimate of the amount can be made.

Financial Instruments

Financial instruments include primary instruments, such as cash, receivables, investments, payables, and debt, and derivative instruments such as interest rate swaps and currency swaps. Derivatives, portfolio investments in equities and bonds quoted in an active market, and certain other investments are measured at fair value. All other financial assets and liabilities are measured at cost or amortized cost. When a financial instrument is derecognized, a gain or loss is recognized in the Consolidated Statement of Operations. A government classifies fair value measurements using a hierarchy with the following levels:

Level 1: quoted prices in active markets for identical assets or liabilities

Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability

Level 3: inputs that are not based on observable market data.

Examples include, certain portfolio investments measured using quoted prices (Level 1), derivatives measured using internal models developed from observable market data (Level 2), and certain other investments measured with inputs not based on observable market data (Level 3). Unrealized gains and losses from changes in the fair value of financial instruments are recognized in the Consolidated Statement of Remeasurement Gains and Losses. Upon settlement, cumulative gains or losses are reclassified to the Consolidated Statement of Operations.

Notes to Consolidated Summary Financial Statements
for the Fiscal Year Ended March 31, 2026-Continued

1. Significant Accounting Policies-Continued

Assets

Assets are recorded to the extent they represent cash and claims upon outside parties, items held for resale to outside parties, prepaid expenses, deferred charges, derivative financial instruments, tangible capital assets, or purchased intangible assets, acquired as a result of events and transactions prior to year end.

Financial Assets

Cash and cash equivalents include cash on hand, demand deposits and short-term highly liquid investments that are readily convertible to known amounts of cash. These are subject to an insignificant risk of changes in value. These short-term investments generally have a maturity of three months or less and are held for the purpose of meeting short-term cash commitments rather than for investing.

Temporary investments and Warehouse Program investments include short-term investments recorded at the lower of cost or market value. The fair values of short-term investments approximate their carrying values because of the short-term maturity of these instruments. Warehouse Program investments are short-term investments related to specific borrowings in advance of requirements under the Warehouse Borrowing Program.

Inventories for resale are expected to be sold within one year and include property that has been purchased, or for which development costs have been incurred, and that is held for ultimate resale or lease to outside parties. Inventories for resale are recorded at the lower of cost or net realizable value.

Equity in self-supported Crown corporations and agencies represents the province's investment (including long-term advances) in those self-supported Crown corporations and agencies at cost, increases/decreases in the investees' net assets, and other comprehensive income.

Loans for purchase of assets recoverable from agencies are recorded at maturity value, less unamortized premium or discount and sinking fund balances. Premium/discount is amortized using the effective interest rate method.

Loans and advances are recorded at cost less adjustment for any prolonged impairment in value. Mortgages receivable are recorded at the principal amount less valuation allowance, are secured by real estate and are repayable over varying terms. Concessionary loans and mortgages are recorded at net present value at issue, and related present value discounts are expensed. Valuation allowances are made when collectibility is considered doubtful. Interest is accrued on loans receivable only when collection is certain. Otherwise, it is recognized on the cash basis.

Investments in equities and bonds quoted in an active market and certain other investments are recorded at fair value. Other investments are recorded at the cost of acquisition, which may be adjusted by attributed income. Valuation adjustments are made when the value of investments is impaired.

Sinking fund investments are cash and marketable securities held specifically for the purpose of repaying outstanding debt at maturity. Sinking fund investments in marketable securities are recorded at fair value.

Tangible Capital Assets

Tangible capital assets are recorded at historical cost, plus asset retirement obligations, less accumulated amortization and valuation adjustments. The recorded cost, less the residual value, is generally amortized over the estimated useful lives of the assets on a straight-line basis.

All significant tangible capital assets and purchased intangible assets of government organizations and operations have been capitalized. Intangible assets that are not purchased and items inherited by right of the Crown, such as forest, water and mineral resources, are not recognized in these financial statements. Crown land is capitalized at a nominal value of one dollar.

The value of collections (e.g. artifacts, documents, specimens, works of art) has been excluded from the Consolidated Statement of Financial Position. When collections are purchased, these items are expensed.

Notes to Consolidated Summary Financial Statements

for the Fiscal Year Ended March 31, 2026-Continued

1. Significant Accounting Policies-Continued

Liabilities

All liabilities are recorded to the extent they represent claims payable to outside parties as a result of events and transactions prior to year end. This includes probable losses on loan guarantees issued by the province, contingent liabilities (when it is likely a liability exists and the amount of the liability can be reasonably determined on an individual or portfolio basis), unfunded pension liabilities, and derivative financial instruments. Liabilities are not recorded for tax concessions or royalty credits which are integral in determining the amount of revenue.

Guaranteed debt includes guarantees by the Minister of Finance, made through specific agreements or legislation, to repay promissory notes, bank loans, lines of credit, mortgages and other securities. Loss provisions on guaranteed debt are recorded when it is likely that a loss will occur. The amount of the loss provision represents the best estimate of future payments less recoveries. The loss provision is recorded as a liability and an expense in the year determined and is adjusted as necessary to ensure it equals the expected payout of the guarantee.

Employee Pension Plans

The province accounts for employee pension plans by recognizing a liability and an expense in the reporting period in which the employee has provided service. The amount is calculated using the accrued benefit actuarial cost method. Where plans are in a net asset position and Joint Trusteeship Agreements restrict access to the assets, the province records the value of plan net assets as nil. The province records a liability for its share where plans are in a net obligation position. Changes in net liabilities/assets, which arise as a result of actuarial gains and losses, are amortized on a straight-line basis over the average remaining service period of employees active at the date of the adjustments. Past service costs from plan amendments are recognized in full in the year of the amendment.

Public Debt

Public debt represents the direct debt obligations of the Province of British Columbia, including borrowings incurred for government operating purposes, the acquisition of capital assets, re-lending to authorized government bodies and borrowings in advance of future requirements under the Warehouse Borrowing Program. Public debt is reported at amortized cost and consists of short-term promissory notes, notes, bonds and debentures, bank loans, capital leases, public private partnership obligations and mortgages payable. These obligations are recorded at principal less unamortized premium or discount and are adjusted for unrealized foreign exchange gains or losses.

Public debt is reported under two categories:

(i) Taxpayer-supported debt-includes direct debt used for government operating and capital purposes, the debt of those Crown corporations, agencies and SUCH sector entities who require an operating or debt servicing subsidy from the provincial government, and the debt of an entity that is fully consolidated within these financial statements.

(ii) Self-supported debt-includes the portion of debt of self-supported organizations and entities that has been borrowed through the government's fiscal agency loan program. It does not include all debt of self-supported organizations as these entities are consolidated on the modified equity basis. Self-supported organizations fully fund their operations and debt from revenue generated through the sale of goods and/or services at commercial rates to buyers that are outside the government reporting entity. Self-supported debt includes debt of the Warehouse Borrowing Program.

Debt premium/discount is amortized using the effective interest rate method. Unamortized premium/discount on bonds is amortized over the life of the debt.

Notes to Consolidated Summary Financial Statements
for the Fiscal Year Ended March 31, 2026-Continued

1. Significant Accounting Policies-Continued

Foreign Currency Translation

Monetary assets and liabilities denominated in foreign currencies are translated to Canadian dollars at the exchange rate prevailing at year end. Foreign currency transactions are translated at the exchange rate prevailing at the date of the transaction. Adjustments to revenue or expense transactions arising as a result of foreign currency translation are credited or charged to operations at the time the adjustments arise. Unrealized foreign currency gains and losses on long-term, fixed-term monetary assets and liabilities are reported in the Consolidated Statement of Financial Position and in the Consolidated Statement of Remeasurement Gains and Losses. Non-monetary assets and liabilities are translated at historical rates of exchange.

Derivative Financial Instruments

The province is a party to financial instruments whose value may vary due to fluctuations in foreign currency exchange rates, interest rate fluctuations and counterparty default on financial obligations, and utilizes derivative financial instruments in hedging strategies to mitigate risk. The fair value of derivative financial instruments is reported in the Consolidated Statement of Financial Position and in the Consolidated Statement of Remeasurement Gains and Losses. The province does not use derivative financial instruments for speculative purposes. Off-balance sheet position data is given in the form of nominal principal amounts outstanding. Amounts earned and expenses incurred under derivative contracts upon settlement are recognized and offset against the related interest expense.

Other Comprehensive Income

Any recognition of other comprehensive income for self-supported Crown corporations has been reflected in the equity in self-supported Crown corporations and agencies, and in the accumulated surplus (deficit).

Asset Retirement Obligations

The province recognizes asset retirement obligations where there is a legal obligation to retire a tangible capital asset and a reasonable estimate of the fair value of the obligation can be determined. For assets that are not fully amortized, the associated retirement costs are capitalized as part of the carrying value and amortized over the underlying assets' useful lives. Costs relating to obligations for fully amortized assets or assets no longer in productive use are expensed.

Notes to Consolidated Summary Financial Statements
for the Fiscal Year Ended March 31, 2026-Continued

2. Measurement Uncertainty

The preparation of financial statements requires the province to make estimates and assumptions that affect the amounts of assets, liabilities, revenues and expenses during the reporting period. Uncertainty in the determination of these amounts is known as measurement uncertainty.

Some of the more significant estimates used in these financial statements affect the accrual of tax revenues, Canada Health Transfer and Canada Social Transfer entitlements, liabilities for pension obligations and other employee future benefits, accruals for environmental obligations, future payments related to contingent liabilities, and valuation allowances for loans, investments and advances. Actual results could differ from estimates. For many common financial statement items, such as accounts payable and allowances for doubtful accounts, measurement uncertainty is inherent but inestimable.

A provision for environmental clean-up is included in accounts payable and accrued liabilities. The provision is subject to a high degree of measurement uncertainty because the existence and extent of contamination, the responsibility for clean-up, and the timing and cost of remediation cannot be reliably estimated in all circumstances. The degree of measurement uncertainty resulting from the estimation of the provision cannot be reasonably determined. Environmental clean-up disclosure is included in Note 28.

A provision for asset retirement obligations is included in accounts payable and accrued liabilities. The provision is subject to a high degree of measurement uncertainty due to the long-term nature of these liabilities and often indeterminate settlement dates. The degree of measurement uncertainty resulting from the estimation of the provision cannot be reasonably determined. Asset retirement obligation disclosure is included in Note 36.

The amount of personal income tax attributable to the year can change as a result of changes in the underlying revenue assumptions, such as policy neutral elasticity, household income growth and tax base growth, and as a result of tax assessments and reassessments. The amount of corporate income tax attributable to the tax year can change as a result of tax assessments and reassessments in subsequent years. Tax transfer expenses related to refundable tax credits attributable to the year are also impacted by both personal income tax and corporate income tax assessments and reassessments. The variability of the final amounts attributable to the year cannot be reasonably determined.

Estimates are based on the best information available at the time of preparation of the financial statements and are reviewed annually to reflect new information as it becomes available. The amount of variability cannot be reasonably determined at this time.

 Notes to Consolidated Summary Financial Statements
for the Fiscal Year Ended March 31, 2026-Continued

2. Measurement Uncertainty-Continued

Measurement uncertainty exists in these financial statements, as identified in the table below, for items with a variability of over $10 million:

Variability is based on the potential differences between the estimates for the economic factors used in calculating the accruals and actual economic results.

______________________________

¹Actual amount recorded for each program area may not represent the entire amount in the financial statement line item.

²Canada Health Transfer and Canada Social Transfer payments are transfers from the federal government based on the provincial share of national population figures.

Notes to Consolidated Summary Financial Statements
for the Fiscal Year Ended March 31, 2026-Continued

3. Accounts Receivable

4. Inventories for Resale

Inventories for resale are charged to the Consolidated Statement of Operations when sold. During the year, the total cost of sales was $158 million (2025: $115 million) including the effect of write-downs of $10 million (2025: $8 million). Write-downs occurred due to obsolete materials no longer used, damaged goods, and reductions in the market value of goods.

5. Due from Other Governments

______________________________

¹Local governments are municipal units established by the provincial government which include regional and metropolitan municipalities, cities, towns, townships, districts, rural municipalities and villages.

Notes to Consolidated Summary Financial Statements
for the Fiscal Year Ended March 31, 2026-Continued

6. Due from Self-supported Crown Corporations and Agencies

See Statement of Financial Position for Self-supported Crown Corporations and Agencies on pages 102 - 103 for details.

7. Equity in Self-supported Crown Corporations and Agencies