In the Matter of Caribbean Utilities Company, ltd., FortisAlberta Inc. and Newfoundland Power Inc., 2026 CanLII 48347

Ontario Commission des 22^nd Floor 22e étage

Securities valeurs mobilières 20 Queen Street West 20, rue Queen ouest

Commission de l’Ontario Toronto ON M5H 3S8 Toronto ON M5H 3S8

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 Caribbean Utilities Company, ltd., FortisAlberta Inc. and Newfoundland Power Inc.

(collectively, the Ontario Filers)

Decision

Background

The principal regulator in the Jurisdiction (the Principal Regulator) has received an application (the Application) from the Ontario Filers 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 the financial statements of the Ontario Filers (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 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 filed in connection with other applications for exemptive relief on the same terms filed with the British Columbia Securities Commission, as the principal regulator of FortisBC Energy Inc. and FortisBC Inc. The Ontario Filers, together with FortisBC Energy Inc. and FortisBC Inc., are referred to collectively as the Filers. The Exemption Sought is similar to: (i) the exemption granted by the British Columbia Securities Commission and the Ontario Securities Commission (OSC) to FortisBC Energy Inc. and FortisBC Inc. on May 31, 2022 in Re: FortisBC Energy Inc. and FortisBC Inc. (the B.C. U.S. GAAP Relief), (ii) the exemption granted by the Alberta Securities Commission and the OSC on May 31, 2022 in Re: FortisAlberta Inc. (the Alberta U.S. GAAP Relief), and (iii) the exemption granted by the OSC to Newfoundland Power Inc. and Caribbean Utilities Company, Ltd. on May 31, 2022 in Re: Newfoundland Power Inc. and Caribbean Utilities Company, Ltd. (the Ontario U.S. GAAP Relief, and together with the B.C. U.S. GAAP Relief and the Alberta U.S. GAAP Relief, the U.S. GAAP Relief).

The Ontario U.S. GAAP Relief will be revoked by the granting of the Exemption Sought under the Application.

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 Ontario Filers have provided notice that section 4.7(1) of Multilateral Instrument 11-102 – Passport System (MI 11-102) is intended to be relied upon by them in each of 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; and

(b) “rate-regulated activities” has the meaning ascribed thereto in the Chartered Professional Accountants of Canada Handbook (Handbook).

Representations

This decision is based on the following facts represented by the Ontario Filers:

Fortis

1. Fortis Inc. (Fortis) is a leader in the North American regulated electric and gas utility industry.

2. Fortis is a reporting issuer or equivalent in the Jurisdiction and each of the Passport Jurisdictions and is not in default of securities legislation in any jurisdiction in Canada.

3. Fortis is a registrant with the Securities and Exchange Commission subject to the United States Securities Exchange Act of 1934, as amended.

4. Fortis is a SEC issuer and relies on section 3.7 of NI 52-107 to file its financial statements prepared in accordance with U.S. GAAP.

Caribbean Utilities Company, Ltd.

5. Caribbean Utilities Company, Ltd. (CUC) is an integrated electric utility incorporated under the laws of the Cayman Islands. The head office of CUC is located in Grand Cayman, Cayman Islands.

6. CUC is a reporting issuer or equivalent in the Jurisdiction and each of the Passport Jurisdictions and is not in default of securities legislation in any jurisdiction in Canada.

FortisAlberta Inc.

7. FortisAlberta Inc. (FortisAlberta) is an electricity distribution company incorporated under the laws of Alberta. The head office of FortisAlberta is located in Calgary, Alberta.

8. FortisAlberta is a reporting issuer or equivalent in the Jurisdiction and each of the Passport Jurisdictions and is not in default of securities legislation in any jurisdiction in Canada.

Newfoundland Power Inc.

9. Newfoundland Power Inc. (Newfoundland Power) is an integrated electric utility incorporated under the laws of Newfoundland and Labrador. The head office of Newfoundland Power is located in St. John’s, Newfoundland and Labrador.

10. Newfoundland Power is a reporting issuer or equivalent in the Jurisdiction and each of the Passport Jurisdictions and is not in default of securities legislation in any jurisdiction in Canada.

General

11. Each of the Ontario Filers is a subsidiary of Fortis and the financial results of each such subsidiary are reflected in the consolidated financial statements prepared and filed by Fortis.

12. Each of the Ontario Filers currently prepares and files its financial statements for annual and interim periods in accordance with U.S. GAAP, in reliance on the U.S. GAAP Relief, and commenced reporting pursuant to U.S. GAAP on January 1, 2012.

13. Each of the Ontario Filers has rate-regulated activities.

14. None of the Ontario Filers are currently SEC issuers.

15. Were any of the Ontario Filers SEC issuers, they would be permitted by section 3.7 of NI 52-107 to file their financial statements prepared in accordance with U.S. GAAP.

16. The U.S. GAAP Relief provided that it would cease to apply to the Ontario Filers on the earliest of: (a) January 1, 2027; (b) if such Ontario Filer ceases to have rate-regulated activities, the first day of the Ontario Filer’s financial year that commences after the Ontario Filer ceases to have rate-regulated activities; and (c) the first day of such Ontario Filer's financial year that commences on or following the later of: (i) the effective date prescribed by the International Accounting Standards Board (IASB) for a standard within IFRS for entities with rate-regulated activities (the Mandatory Rate-regulated Standard), and (ii) two years after the IASB publishes the final version of a Mandatory Rate-regulated Standard. Accordingly, in the absence of further relief provided by Canadian securities regulators, the Ontario Filers would become subject to Canadian GAAP no later than January 1, 2027. Canadian GAAP includes IFRS as incorporated into the Handbook.

17. 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 Ontario Filers to commence financial statement preparation and reporting in accordance with IFRS pursuant to NI 52-107.

18. 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 re-deliberations and confirmed readiness to move forward with the Mandatory Rate-regulated 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.

19. 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 Ontario Filers 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.

20. The decision of the Principal Regulator under the Legislation is that:

(a) the Ontario U.S. GAAP Relief is revoked;

(b) the Exemption Sought is granted to each Ontario Filer in respect of such Ontario Filer’s financial statements required to be filed on or after the date of this order, provided that the Ontario Filer prepares such financial statements in accordance with U.S. GAAP; and

(c) the Exemption Sought will terminate in respect of an Ontario Filer on the earliest of the following:

(i) January 1, 2032;

(ii) if such Ontario Filer ceases to have rate-regulated activities, the first day of the Ontario Filer’s financial year that commences after the Ontario Filer ceases to have rate-regulated activities; and

(iii) the first day of such Ontario Filer’s financial year that commences on or following the later of:

(A) the effective date prescribed by the IASB for a Mandatory Rate-regulated Standard; and

(B) four years after the IASB publishes the final version of a Mandatory Rate-regulated Standard.

DATED this 22^nd day of May 2026.

“Mark Pinch”

Mark Pinch

Associate Chief Accountant

Ontario Securities Commission

OSC File#: 2026-128