New Study Shows Royalty Panel's Recommendations Would Continue the Giveaway of Alberta’s Resource Wealth

Today the Parkland Institute released its official response to the report and recommendations of the Alberta Royalty Review Panel. The report, entitled "Selling Albertans Short" is available for free download from the Parkland Institute web-site (, or can be purchased in hard-copy from the Parkland Institute office. Read the media release below...

October 17, 2007

New Study Shows Royalty Panel's Recommendations Would Continue the Giveaway of Alberta’s Resource Wealth

Edmonton — A new report released today by the U of A's Parkland Institute says that the recommendations of the Alberta Royalty Review Panel are far too timid, and fall far short of what Albertans have said they wanted.

"Selling Albertans Short: Alberta’s Royalty Review Panel fails the public interest," makes the case that there is room to go much further on royalties than what has been recommended by the Panel — without impacting jobs or investment.

The report analyzes some of the panel's key recommendations in the context of the current realities of the international energy market and the energy industry’s own numbers and projections. The Institute takes issue with the recommendation that the 1% royalty rate be maintained, that the rate for projects that have paid off their start-up costs be pegged at 33%, and that Coal Bed Methane be given special treatment.

"Even with full implementation of the Panel’s recommendations, royalty revenues would decline by $2 billion between now and 2016. This makes no sense when production, demand, prices and profits are high and rising," says Diana Gibson, Parkland’s research director and author of the report.

Parkland's Director, political economist Gordon Laxer, points out that "Panel chair Bill Hunter has articulated quite clearly that Albertans own 100% and deserve 100% of the revenue from the resource. Unfortunately, the recommendations in his report are a compromise and do not even come close to that figure."

The Parkland Institute report concludes by making a number of recommendations of its own which would ensure that Albertans receive maximum benefit from their own resources. Some of the key ones include:

  • that the 1% royalty holiday be eliminated;
  • that the base royalty rate should be increased to the point where Alberta is capturing at least 90% of available economic rent;
  • that a windfall profits tax be implemented with the goal of capturing close to 100% of any significant increase in energy prices;
  • that instead of the proposed royalty credit for companies that upgrade in Alberta, which would cost Albertans $3.2 billion, the government ensure value-added processing through strong regulations; and
  • that, in recognition of the fact that 80% of global oil is controlled by National Oil Companies, Alberta seriously study public ownership as a way of maximizing revenues and playing a leadership role in the energy industry.

"Alberta has a significant advantage over most other places in the world in that we are more politically stable than most, and our resource is relatively easy to find — there is no need for us to sell ourselves short in order to be competitive," says Gibson. "These same people would tell us that the marketplace is about maximizing your revenue and selling at the highest price possible, not about negotiating for a 'fair share'".

Copies of the report are available on the web at or can be requested by phone at (780)492-8558.

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