Alberta’s government is introducing an oilsands growth program.
The province announced the program Friday, promising “a guaranteed 10-year royalty framework” for approved projects.
The province said projects would pay “a two per cent royalty rate for the first five years.”
After that, projects’ pay-ins would climb “one percentage point annually until reaching six per cent in years nine and 10.”
Premier Danielle Smith said Friday in a release the program “will make the province even more attractive for investment, help get new oilsands projects moving and grow production for the long term.”
Energy and Minerals Minister Brian Jean said it “will help companies turn investment decisions into a new windfall for Albertans.”
At a media availability, Smith called the announcement “an important moment for our energy sector.”
Smith also said in introducing the program, her government is “taking a page out of Ralph Klein’s playbook.”
Jean said the program is “voluntary, targeted and application-based.”
He also said after, a company “would return to the regular framework.”
A spring 2027 launch is planned.
The province said eligible projects announced after Nov. 15 “will be grandfathered into the program.”
The province also said projects will still face regulatory approval, environmental requirements and project-specific Indigenous consultation where appropriate.
Friday’s release noted the province’s goal of “doubling oil production to eight million barrels per day.”
It said this could generate “approximately $205 billion in cumulative additional revenues by 2040 and over $1.3 trillion by 2060.”
Friday’s release also included a round-up of pleased energy execs.
Cenovus president and CEO Jon McKenzie called the program “a material step in the right direction to encourage investment in Alberta by making our fiscal and regulatory systems globally competitive.”
Suncor CEO Rich Kruger said it “will benefit Albertans and Canadians, for decades to come.”
Canadian Natural Resources president Scott Stauth said it, with Ottawa’s Productivity Mega Deduction, “enhances Canada’s competitiveness for capital investment on a global scale.”
Strathcona Resources executive chairman Adam Waterous said his company is planning a big push.
He said that includes “growing from 125,000 barrels per day to 300,000 barrels a day by 2036,” and that the program “gives us the confidence to invest in new projects now.”
Calgary Chamber of Commerce president and CEO Deborah Yedlin called a stable, predictable policy environment “critical” while Alberta “is competing globally for investment capital.”
In a statement, she said the program “will give industry greater certainty to make significant, long-term capital investments.”
The Pembina Institute’s Janetta McKenzie said it seems “like it may be too much.”
She said, “Too much public financial support, too many royalties that we’re leaving on the table to try and get what are ultimately very profitable companies, particularly in the last couple years, to invest in their own expansion and their own production.”
University of Calgary energy expert Richard Masson said it “matters a lot to get it right.”
He said, “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?”
The province says its plan is to review the program by Dec. 31, 2029.
