According to license plate collector Christopher Garrish:
In the 1960s, the stamps used by employees of the MVB for compiling licensing documents only had enough space for ten character positions. Consequently, all license plates had to be numbered in a series with no more than ten different characters in each position… The first ten useable letters in the alphabet proved to be A, B, C, D, E, F, G, H, J, and K (“I” was excluded as it too closely resembled the number one, and it would be joined in latter series by O, Q, U, Y, and Z)
I would have guessed that I and O would need to be excluded, but I did not expect that they’d have to exclude more letters due to the manufacturing process! I assume they chose to exclude Q since it also kind of looks like zero and U to minimize the number of unusable plate numbers containing rude words, but it looks like Y and Z missed out just because they’re at the end of the alphabet.
BC has issued several different plate series since the ’70s and the manufacturing process has presumably changed since then, but I believe the letters have remained the same. To this day, I have still never seen an I, O, Q, U, Y, or Z on a BC passenger car.
Keep an eye out for other types of vehicles, though. Motorcycle plates starting with U, Y, and Z were issued in 2012–14, 2017–18, and 2019–20 respectively, and the letters can also be spotted on plates assigned to commercial trucks.