Kudos to Alberta’s royalty review panel-but broad economic reforms still needed – Fraser Forum

February 3, 2016

Last Friday the Government of Alberta released the long-awaited Royalty Review Advisory Panel report on the province’s royalty regime for oil and gas production. The review, a campaign promise by the now NDP government, was the source of some regulatory uncertainty in the province, as we showed in a recent bulletin. A similar fall in investor confidence had been observed in the 2007 Stelmach royalty review, and lingered on due to the increase in royalty rates.

Thankfully, Alberta might dodge that bullet this time. The panel concluded that Alberta’s existing royalty structure was both competitive with other oil-producing jurisdictions, and was delivering a “fair share” of resource revenues to the people of Alberta, who own its natural resources in common.

The panel also recommended simplifying the calculation process and removing outdated aspects of the regime that no longer reflect current technology and market conditions. They also did their best to bolster investor confidence: there’s a 10-year delay in royalty changes to existing projects, and the new regime is designed to match the revenues of the old regime, beginning in 2017.

Read More:http://www.fraserinstitute.org/blogs/kudos-to-alberta-s-royalty-review-panel-but-broad-economic-reforms-still-needed