Under the Oil Sands Growth Program, qualifying projects would pay royalties of two per cent of gross revenue for the first five years, before gradually rising to six per cent by the end of a 10-year period. Producers currently pay between one and nine per cent—depending on oil prices—until they recover their project costs, a milestone known as “payout,” when significantly higher rates kick in. The new program, announced Friday, offers qualifying projects reduced royalty rates for 10 years, even after reaching payout, while also shielding producers from rate increases tied to higher oil prices. (The Logic)

Talking point: The royalty breaks are a key part of a broader deal between Ottawa, Alberta and Canada’s oil majors to expand production and advance the Pathways carbon capture project. They would apply to qualifying oilsands projects adding at least 5,000 barrels a day. Alberta is aiming to double oil production to eight million barrels a day by 2035. The additional supply is also key to advancing Pacific Link, the proposed West Coast pipeline.

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