B.C.’s $3.5-billion tobacco settlement recorded incorrectly, says auditor general

Minister of Finance Brenda Bailey tables her first budget in the legislative assembly at legislature in Victoria, B.C., on Tuesday, March 4, 2025. (Chad Hipolito / The Canadian Press)

VICTORIA — British Columbia’s auditor general says the province’s multi-billion-dollar settlement with tobacco companies should have been recorded in last year’s books, instead of being spread out over this year’s and future financial statements.

A report from acting auditor general Sheila Dodds says the government’s way of noting the $3.5-billion deal will result in an overstatement of revenue in those years.

The province will receive the court-approved compensation from multiple tobacco companies over the next 20 years, recovering a portion of smoking-related health-care costs.

Finance Minister Brenda Bailey’s financial update last month showed $2.7 billion of the settlement as revenue this fiscal year, when the province reported a record deficit of almost $11.6 billion.

Ministry staff told reporters during a technical briefing that adding the money as revenue this fiscal year represented standard accounting practice.

Bailey told reporters that counting the settlement money now, while it is still coming in, was a staff decision, and not made around the cabinet table, but opposition critics have said the move was being used to hide the size of the deficit.

This report by The Canadian Press was first published Oct. 28, 2025.