Royalties

Royalties

Building our communities

As Canadians, we are the owners of our natural resources. Thanks to the energy sector, the value we receive from our resources enable us to enjoy one of the highest standards of living in the world. Royalties are one important way that Canada’s oil and gas producers help build thriving communities.

In the oil and gas industry, a royalty is a monthly payment that producers must make to the government in order to extract resources. This monthly amount is set by the royalty rate, which is calculated based on three factors: market price of the resource, well -productivity and age of the well. Royalties are an important source of funding for public services, whether it’s a new hockey rink, a renovation at the community centre or a new school.

To ensure we continue to get value from our resources, oil and gas producers need to continue to see Canada as a good place to do business. Royalties can affect a company’s ability to remain competitive in the global market, and have an impact on capital investment decisions in Canada. That’s why it’s so important to get royalties right. A balanced royalty structure helps attract investment, creates jobs, generates government revenue and builds our communities.

  • A royalty is a monthly payment that producers must make to the government in order to extract resources.
  • Royalties are one important way that Canada’s oil and gas producers contribute to the well-being of our communities
  • A balanced royalty structure helps attract investment, creates jobs, generates government revenue and builds our communities.
  • Any changes to Alberta’s royalty structure must take into account the cumulative cost of measures such as higher corporate taxes and the implementation of a carbon tax to ensure the oil and natural gas industry remains competitive.

Sources: CAPP

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