Notes to the Consolidated Financial Statements
77
15. Lease Liability Leases are recognized as right-of-use assets and corresponding liabilities at the date at which a leased asset is available for use. Payments for short-term leases and leases of low-value assets are expensed on a straight-line basis and excluded from the lease liability. (millions) 2026 2025 Total future minimum lease payments $ 19 $ 14 Less: Future finance charges on leases (1) (1) Present value of lease liability 18 13 Less: Current portion of lease liability (6) (5) $ 12 $ 8
(millions)
2026
2025
$
13 $
Lease liabilities, beginning of year
13
11
Net additions
5
(6)
Principal repayment of lease liability
(5)
$
18 $
Lease liabilities, end of year
13
The weighted average discount rate applied to computer leases and vehicle leases is 4.0 per cent based on the rates implicit in the agreements. The weighted average discount rate applied to building leases is 4.0 per cent based on the Corporation’s incremental borrowing rate. As at March 31, 2026, scheduled future minimum lease payments and the present value of the finance lease obligation are as follows for the next five fiscal years: (millions) 2027 2028 2029 2030 2031 Future minimum lease payments $ 7 $ 5 $ 4 $ 2 $ 1 Present value of lease liability $ 6 $ 5 $ 3 $ 2 $ 2
16. Provisions (millions)
2026
2025
$
174 $
Balance, beginning of year
158
1
Provisions made Provisions settled
1
(11)
(19)
(6)
Change in assumptions Unwinding of discount Balance, end of year
27
7
7
165
174
(7)
Less: Current portion of provisions
(9)
$
158 $
165
The Corporation has estimated the future cost of decommissioning certain natural gas facilities. Revised estimates for decommissioning storage facilities are based on internal information from current projects and insights from internal geological and storage engineering professionals, which have led to changes in the assumptions regarding future retirement costs. For the purposes of estimating the fair value of these decommissioning obligations, it is assumed that the costs will be incurred between April 1, 2026 and March 31, 2114. The undiscounted cash flows required to settle the obligations total $812 million (2025 - $791 million). Discount rates between nil per cent and 4.7 per cent were used to calculate the carrying amount of the obligation (2025 - nil per cent and 4.3 per cent). No funds have been set aside by the Corporation to settle these obligations.
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