Oil and natural gas royalties are part of a larger fiscal system that drives investment, creates jobs, generates government revenue and builds Alberta communities. The royalty review is an opportunity to re-establish Alberta’s overall competitiveness and to pursue access to new markets.The royalty structure must take into account the entire lifecycle of oil, natural gas and oil sands extraction projects – including investment and cost-recovery, profit sharing, extended recovery of resources, shut-down, closure and reclamation – in addition to all costs, taxes and fees paid by Alberta producers.
Alberta’s current royalty structure, put in place five years ago, has helped achieve these goals in a manner that is responsive to the evolving nature of the industry. That said, some changes are recommended to make the system more transparent, stable, effective and competitive.
CAPP’s recommendations are aligned with the royalty review principles that were set by the Alberta government:
- Continue to encourage industry investment
- Provide optimal returns to Albertans as owners of the resource
- Support responsible development of the resource
- Assessment of near-term diversification opportunities