Alberta Royalty Framework
The Alberta royalty review has led to a balanced report that sets the stage for more work between industry and government to ensure Alberta’s oil and natural gas sector is competitive in North America to attract investment and create more jobs and value for Albertans.
What is a royalty?
Alberta’s natural resources belong to Albertans. In exchange for the right to develop these resources, companies pay the government a royalty. This is a percentage of revenues generated from the sale of oil and natural gas products, or in some cases takes the product in-kind for the government to sell.
Royalties are just one way oil and natural gas producers contribute to government revenues. Many different government taxation policies affect exploration and development of Alberta’s natural resources.
What are royalties used for?
Alberta has attracted the people and the capital to develop a world-class economy that is integrated into all Albertans’ lives. Royalties are an important part of the Alberta economy and are used to:
- Fund provincial government operating and capital costs
- Fund healthcare and education, build roads and pay for programs and services for Albertans
- Save for the future (Alberta Heritage Savings Trust Fund)
What is CAPP’s perspective on royalties?
A royalty structure that is appropriate to the jurisdiction helps attract investment, creates jobs, generates government revenue and builds communities.
Alberta’s competitiveness is affected by the cumulative cost of government policies - royalties, climate and other policy changes. The provincial government and the energy industry could create more than 24,000 new jobs for Albertans and grow the province's economy by nearly $5 billion over the next three years by working together to enhance competitiveness of Canada's leading trade sector (Source: CAPP, 2017). Considering all factors that impact this industry helps to keep it healthy and protects the jobs of Albertans.