The Securities Commission has granted an exemption to FortisBC Energy Inc. and FortisBC Inc. (collectively referred to as the BC Filers) from the requirement to prepare their financial statements in accordance with Canadian GAAP as outlined in section 3.2 of National Instrument 52-107 Acceptable Accounting Principles and Auditing Standards. Instead, the BC Filers are permitted to use U.S. GAAP for their financial statements.
This decision is based on the fact that the BC Filers are subsidiaries of Fortis Inc., which is an SEC registrant and files its consolidated financial statements in U.S. GAAP. The BC Filers have been using U.S. GAAP since 2012 under previous exemptions and have rate-regulated activities. They are not SEC issuers themselves, but if they were, they would be allowed to file financial statements in U.S. GAAP under section 3.7 of NI 52-107.
The exemption is subject to termination on the earliest of three events: January 1, 2027; the date the BC Filer ceases to have rate-regulated activities; or the date a mandatory IFRS standard for rate-regulated entities becomes effective, plus two years for implementation.
The decision is made under the securities legislation of multiple Canadian jurisdictions and is supported by the fact that it meets the test set out in the legislation for the decision makers to grant such an exemption.