CALGARY – The C.D. Howe Institute has some advice for Alberta’s royalty review panel: focus on the design of the system rather than the rates oil and gas producers have to pay.
A new report from the think-tank argues Alberta’s current regime for conventional oil and natural gas royalties in Alberta leaves a lot to be desired.
READ MORE: No royalty changes until end of 2016: Alberta government
Right now, those royalties are calculated based on gross revenues, but the report says a cash-flow tax would be a better way to increase the government’s take without discouraging investment.
It says a cash-flow tax would better account for the cost of doing business than a gross revenue royalty and would require more profitable companies to pay a higher share.
READ MORE: Survey says Albertans support royalty review; split on carbon tax
The report cites Norway and Australia as having regimes that work well.
Report co-author Benjamin Dachis says the paper has been submitted to the royalty review panel chaired by ATB Financial boss Dave Mowat.