Between 1996 and 2005, world oil prices more than doubled and production of the oilsands, spurred on by federal subsidies and low provincial royalty rates, increased by 123%. Amazingly, during the same time period, Albertans, the owners of the oilsand resource, saw their share of this economic boom in the form of royalty revenue decline for each barrel of oil from the oilsands. Albertans received $3.39 in royalties for each barrel of oilsands oil in 1996 and only $2.29 in 2005. At the same time, a federal tax break resulted in up to billions in deferred tax revenue. This report demonstrates that the current tax and royalty treatment of the oilsands is a bad deal for Albertans - the owners of the resource, and Canadians.
Thinking Like an Owner
Overhauling the Royalty and Tax Treatment of Alberta's Oilsands
November 29, 2006
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