Business · Energy & Commodities · 1 hr ago
Alberta offers lower royalties to encourage new oilsands projects
Alberta Premier Danielle Smith announced a royalty incentive for new and expanding oilsands projects on Friday.
The program offers approved projects a 2 per cent royalty rate for their first five years, then raises the rate by one percentage point each year until it reaches 6 per cent in years nine and 10.
After 10 years, projects return to Alberta’s regular royalty system, where rates depend on oil prices and whether companies have recovered their investment.
The province says the lower early rates could attract investment and help it reach a goal of doubling oilsands output to eight million barrels a day.
Supporters say predictable costs could help companies commit to projects, while critics argue Alberta could give up revenue to an already profitable industry.
The program is planned to launch in spring 2027, and the province says qualifying projects announced after Nov.
15 can still be included.
Projects must still meet regulatory and environmental rules, and the province plans to review the program by Dec.
31, 2029.
Alberta announced the Oil Sands Growth Program to encourage investment in new and expanding oilsands projects.
Approved projects will pay a 2 per cent royalty for their first five years, with the rate rising annually to 6 per cent in years nine and 10.
The province says the program is intended to support its goal of doubling oilsands production to eight million barrels per day.
The program is planned to launch in spring 2027, and Alberta will review it by December 2029.
Supporters say the framework could attract investment, while the Pembina Institute says it offers too much public financial support to a profitable industry.
- Who
- Alberta’s government, led by Premier Danielle Smith, announced the program.
- What
- The Oil Sands Growth Program offers a lower, guaranteed royalty framework for eligible new and expanding oilsands projects.
- When
- Announced Friday, Nov. 13, 2026; launch is planned for spring 2027.
- Where
- Alberta, Canada.
- Why
- The province says it aims to attract investment, encourage new oilsands development and help double production to eight million barrels per day.
Alberta government and industry supporters
Pembina Institute
Purpose of the lower rates
Alberta government and industry supporters
The program is intended to encourage new development and investment by lowering upfront financial barriers.
Pembina Institute
Lower rates leave potential provincial revenues on the table and provide public financial support to an already profitable industry.
Expected benefit
Alberta government and industry supporters
Premier Danielle Smith said new projects could generate additional revenues for Alberta later.
Pembina Institute
Janetta McKenzie said the policy gives up royalties to encourage companies to invest in their own expansion.
Alberta announced the Oil Sands Growth Program.
The province said qualifying projects announced after this date would still be eligible for the program.
The province plans to launch the program.
Alberta plans to review the program.
- Initial royalty rate
- 2 per cent for the first five years
- Royalty rate in years nine and 10
- 6 per cent
- Program launch
- Planned for spring 2027
- Production goal
- Eight million barrels per day
- Program review
- By Dec. 31, 2029
3 sources
What people are saying
If it doesn’t exist, we’re getting $0 off of it. If it does exist, then we delay our share so that the companies can pay their investment back so that we can benefit later.
We’ve built a royalty system that balances economic needs and the needs of firms with the need to ensure Albertans get fair return for their oil
The reason I’m standing here today is because I believe in what’s going on here, and I think it will make a material difference.
Is changing the royalty system to incentivize new production something that needs to be done? and if we do it, will we end up with too much happening at the same time and hyperinflation and all those things—all the problems we ran across last time?