Alberta unveils 10-year oilsands royalty plan

Alberta is introducing a new 10-year royalty regime designed to boost investment in oilsands developments and expansions, offering companies a reduced and predictable fee structure on new production. The Oil Sands Growth Program will apply only to approved projects that create new output, starting from early 2027, with the aim of getting new oilsands projects moving and growing production for the long term.

Under the program, participating projects will pay a 2% royalty rate based on gross revenues for the first five years. From year six, the rate will increase by one percentage point each year until it reaches 6% in years nine and 10, after which projects revert to Alberta’s regular royalty framework.

The incentive is voluntary and application-based, requiring project approval before participation. Eligible developments include new greenfield oilsands projects and brownfield expansions meeting a minimum threshold of 5,000 barrels per day of capacity, with existing production excluded from the incentive.

Projects announced after November 15 will be grandfathered into the program, subject to meeting requirements. The government intends to encourage companies to begin construction before the end of 2029, and the program itself is planned for a spring 2027 launch, pending necessary program and regulatory steps.

Approved projects will still need to satisfy regulatory approvals, environmental requirements and project-specific Indigenous consultation where appropriate. Participating developments will return to the regular royalty regime after 10 years or if they fail to meet production, environmental or regulatory conditions.

The program is a central plank in Alberta’s plan to expand oilsands output, with a stated goal of doubling production to eight million barrels per day by 2035. A provincial statement projects that doubling output could generate approximately $205 billion in cumulative additional revenues by 2040 and more than $1.3 trillion by 2060.

The government links this potential growth to broader fiscal benefits, highlighting the role of resource revenues in funding healthcare, education, infrastructure and maintaining a low-tax structure. Officials argue that providing royalty certainty during the capital-intensive early years of projects can help attract the large-scale investment required for this expansion.

Major industry leaders have publicly welcomed the Oil Sands Growth Program, describing it as a material step toward making Alberta’s fiscal and regulatory systems more globally competitive. Executives say the stable 10-year framework will help turn investment decisions into new economic returns for the province.

Strathcona Resources signalled its own growth ambitions under the new regime, outlining plans to increase production from 125,000 barrels per day to 300,000 barrels per day by 2036. The province has committed to reviewing the program by December 31, 2029, as its long-term impact on investment, production and provincial revenues becomes clearer.