The Alberta government is giving oil and gas producers a $1-billion break on royalties over the next five years in a bid to attract millions more in investment that it fears is being chased away.
Energy Minister Mel Knight revealed the province has tweaked its new royalty regime to address the "unintended consequences" of a plan announced in October. The energy sector charged that plan made some oil and gas plays uneconomical, while opposition critics contended it shortchanged Albertans.
"These [new] programs will help generate hundreds of millions of dollars in royalties and countless new jobs for decades," Knight said. "I believe this is good news for most of the industry."
However, the Tory government's attempt to calm last fall's criticism has instead ignited new discontent from several quarters.
"We predicted that once the election was out of the way, they would start going through and reducing even the modest royalty increases," Alberta NDP Leader Brian Mason said. "With oil soaring well over $100 a barrel, these breaks should be unnecessary."
Gary Leach, president of the Small Explorers and Producers Association of Canada, said the royalty holidays will benefit only a handful of large oil companies.