Alberta implementing new oil royalty payment system to encourage production
Alberta's government is introducing a new royalty payment program that it says is aimed at incentivizing development in the oil industry.
The framework would give companies a guaranteed 10-year royalty schedule for new projects or expansions.
They would pay two per cent of revenues for the first five years, then see one per cent annual hikes until reaching a maximum six per cent.
Premier Danielle Smith says it will stimulate investment and boost oil production in the long-term to fill the Pacific Link pipeline, which the province is trying to build to the West Coast.
The government says that after the 10-year period expires, each project would fall back under the existing royalty payment system.
Oil companies currently pay rates on a sliding scale, depending on the benchmark price of oil and whether a company has recouped the capital it puts into building each project.
If a company is still in what's called the pre-payout phase, it pays rates between one per cent and nine per cent of gross revenue depending on the price of West Texas Intermediate, with the maximum taking affect when oil hits US$120 per barrel.
As of Friday afternoon, West Texas Intermediate was trading at about US$88 per barrel.
This report by The Canadian Press was first published Nov. 13, 2026.
— By Jack Farrell in Edmonton
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