December 15, 2025
IN THE MATTER OF THE SECURITIES LEGISLATION OF ONTARIO (the Jurisdiction)
AND
IN THE MATTER OF
THE PROCESS FOR EXEMPTIVE RELIEF APPLICATIONS
IN MULTIPLE JURISDICTIONS
AND
IN THE MATTER OF
ONTARIO POWER GENERATION INC. (the Filer)
DECISION
Background
The principal regulator in the Jurisdiction (the Principal Regulator) has received an application from the Filer for a decision under the securities legislation of the Jurisdiction (the Legislation) for an exemption (the Exemption Sought) from the requirements of section 3.2 of National Instrument 52-107 – Acceptable Accounting Principles and Auditing Standards (NI 52-107) that financial statements of the Filer (a) be prepared in accordance with Canadian generally accepted accounting principles (Canadian GAAP) applicable to publicly accountable enterprises and (b) disclose an unreserved statement of compliance with International Financial Reporting Standards (IFRS) in the case of annual financial statements and an unreserved statement of compliance with IAS 34 in the case of an interim financial report. The Exemption Sought is similar to the exemption granted by the Ontario Securities Commission (OSC) to the Filer on September 30, 2022, in Re Ontario Power Generation Inc. (the U.S. GAAP Relief). This decision document of the OSC will revoke the U.S. GAAP Relief.
Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a passport application):
(a) the OSC is the Principal Regulator for this application;
(b) the Filer has provided notice that section 4.7(1) of Multilateral Instrument 11-102 – Passport System (MI 11-102) is intended to be relied upon in British Columbia, Alberta, Saskatchewan, Manitoba, Québec, New Brunswick, Nova Scotia, Prince Edward Island and Newfoundland and Labrador (the Passport Jurisdictions); and
(c) the decision is the decision of the Principal Regulator and automatically results in an equivalent decision in the Passport Jurisdictions.
Interpretation
In this decision:
(a) unless otherwise defined herein, terms defined in National Instrument 14-101 Definitions, MI 11-102 and NI 52-107 have the same meaning if used herein; and
(b) “rate-regulated activities” has the meaning ascribed thereto in the Chartered Professional Accountants of Canada Handbook (the Handbook).
Representations
This decision is based on the following facts represented by the Filer.
The Filer is incorporated under the Business Corporations Act (Ontario). The head office of the Filer is located at 1908 Colonel Sam Drive, Oshawa, ON L1H 8W8.
The Filer is a reporting issuer or equivalent in the Jurisdiction and each Passport Jurisdiction and is not in default of securities legislation in any jurisdiction in Canada.
The Filer currently prepares its financial statements for annual and interim periods in accordance with U.S. GAAP as permitted by the U.S. GAAP Relief.
The Filer is not an SEC issuer.
The Filer carries on rate-regulated activities.
Were the Filer an SEC issuer, it would be permitted by section 3.7 of NI 52-107 to file financial statements prepared in accordance with U.S. GAAP.
The U.S. GAAP Relief provided that it would cease to apply to the Filer on the earliest of: (a) January 1, 2027; (b) if the Filer ceased to have activities subject to rate regulation, the first day of the Filer's financial year that commenced after the Filer ceased to have activities subject to rate regulation; and (c) the effective date prescribed by the International Accounting Standards Board (IASB) for the mandatory application of a standard within IFRS specific to entities with activities subject to rate regulation. Accordingly, in the absence of further relief provided by Canadian securities regulators, the Filer would become subject to Canadian GAAP no later than January 1, 2027. Canadian GAAP includes IFRS as incorporated into the Handbook.
The issuance by the IASB of a standard within IFRS for entities with rate-regulated activities (a Mandatory Rate-regulated Standard) would result in the expiry of the U.S. GAAP Relief, giving rise to the obligation of the Filer to commence financial statement preparation and reporting in accordance with IFRS pursuant to NI 52-107.
In January 2021, the IASB published the Exposure Draft – Regulatory Assets and Regulatory Liabilities, which introduces a proposed standard of accounting for regulatory assets and liabilities, applicable to entities with rate-regulated activities. In July 2024, the IASB concluded its redeliberations and confirmed readiness to move forward with new IFRS Accounting Standard to supersede IFRS 14. In October 2025, the IASB published an update on the review and comment process on the proposed standard, including the staff analysis and recommendations on certain issues, and indicated that the drafting and balloting process was continuing.
The IASB has publicly stated that it expects to publish the new standard in the second quarter of 2026, although the effective date (now expected to be January 1, 2029) has not been confirmed. The Filer will require sufficient time to: (a) interpret and implement such standard and transition from financial statement preparation and reporting in accordance with U.S. GAAP to IFRS; and (b) interpret and reconcile the implications on the customer rate setting process resulting from the implementation.
Decision
The Principal Regulator is satisfied that the decision meets the test set out in the Legislation for the Principal Regulator to make the decision.
The decision of the Principal Regulator under the Legislation is that:
(a) the U.S. GAAP Relief is revoked;
(b) the Exemption Sought is granted to the Filer in respect of the Filer’s financial statements required to be filed on or after the date of this order, provided that the Filer prepares such financial statements in accordance with U.S. GAAP; and
(c) the Exemption Sought will terminate in respect of the Filer on the earliest of the following:
(i) January 1, 2032;
(ii) if the Filer ceases to have rate-regulated activities, the first day of the Filer’s financial year that commences after the Filer ceases to have rate-regulated activities; and
(iii) the first day of the Filer’s financial year that commences on or following the later of:
the effective date prescribed by the IASB for the Mandatory Rate-regulated Standard; and
four years after the IASB publishes the final version of a Mandatory Rate-regulated Standard.
“Cameron McInnis”
Cameron McInnis
Chief Accountant
Ontario Securities Commission
OSC File#: 2025/0651