Royalty changes boost Alberta’s competitiveness, study says

Tax and royalty rate for conventional oil projects falls from 35% to 26.7% Jan. 1.

CALGARY — A new report says changes to the Alberta royalty regime will help make Alberta more competitive than its neighbouring provinces for conventional oil investment.

The paper from the University of Calgary School of Public Policy found that changes to the royalty system will bring the marginal effective tax and royalty rate for conventional oil projects in Alberta from 35% to 26.7% when it goes into effect Jan. 1.

Study authors Jack Mintz and Daria Crisan found the change will switch Alberta from having one of the highest to one of the lowest rates among its peers, including ahead of British Columbia and Saskatchewan.

The study, which pegged BC’s rate at 28.7% and Saskatchewan at 32.6%, did not take into account other regulatory and carbon policies that affect competitiveness.

In July, the Alberta government announced that companies could immediately apply for well projects under the new royalty regime that weren’t already planned.

The new royalty framework left oilsands royalties unchanged and simplified the system for conventional oil and gas wells.

News from © Canadian Press Enterprises Inc. 2016

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