Alberta changing royalty system to encourage oilsands production, new investment

The Alberta government is introducing a new royalty payment program it says will encourage new oilsands investment and increase production as the province pushes for a new pipeline to the West Coast.

The Oilsands Growth Program would offer companies a guaranteed 10-year royalty schedule for eligible new projects and expansions, beginning with a two per cent royalty rate for the first five years.

The rate would then increase by one percentage point annually until reaching six per cent. After the 10-year period, projects would return to Alberta’s existing royalty framework.

“It’s likely to grow more investment,” said Richard Masson, a former chief executive of the Alberta Petroleum Marketing Commission who was also director of oilsands policy at Alberta Energy in the mid-1990s.