Royalty rates will stay the same until the end of 2016

The NDP government offered some certainty to Alberta’s troubled oil and gas industry Friday, announcing that royalty rates paid by companies will not change before 2017 at the earliest.

The panel will include energy economist Peter Tertzakian, former Alberta deputy minister of finance Annette Trimbee, Mayor of Beaverlodge Leona Hanson and panel chair and ATB Financial president Dave Mowat. “If and when changes are made, any incremental revenues will go to the (province’s) heritage fund”, she told a news conference.

McCuaig-Boyd said the panel’s mandate would be to get a better understanding of the current royalty system, its impact on private investment and revenues generated for government, as well as how it compares to other jurisdictions.

The government is scheduled to provide an update at 11 a.m. on its royalty review panel, including details on its members, mandate and public engagement.

Marg McCuaig-Boyd says the panel will be going ahead with its review of whether Albertans are getting a fair slice of the province’s resource wealth, with the work expected to wrap up around year-end. In the past week it fell below $40 US a barrel, although it rebounded above that point on Friday.

While the economic situation is not as dire as the great recession of 2008, the NDP’s royalty review coincides with a massive drop in crude prices that have battered the oilpatch, triggered thousands of layoffs, and likely pushed Alberta into recession.