The Freehold Tax Grab

Informed Albertan: The "Fair Share" royalty review is nothing but a tax grab.

Misinformed Albertan: What? The document is simply stating that Albertans should get a fair share of the energy reserves which belong to all Albertans!

Informed Albertan: That's what they say. But they are misinforming you. For example, if it was merely about getting a better cut on resources owned by all Albertans, why are they increasing taxes on freehold resources?"

Misinformed Albertan: What is freehold?

Informed Albertan: Freehold is oil and gas the government doesn't own! The report deceives its readers by being not transparent in declaring what it owns. It creates the impression that ALL the oil and gas resources in the province are owned by the government. This is not true. The fact is that Alberta Crown owned rights cover approximately 81 percent of the land area of Alberta. The remaining 19% are freehold minerals rights owned by private individuals and companies or minerals owned by the federal government (National Parks, Indian Reserves)

Misinformed Albertan: Really? That's a significant chunk. Odd they didn't mention that in the royalty review. Why should the Alberta government be trying to get more money from lands it doesn't own? That isn't fair!

Informed Albertan: Exactly. The "old reason" for taxing freehold energy production was: "to help with the costs of infrastructure and the Alberta Energy and Utilities Board regulatory services." However, with the price increases these revenues have been going up anyways. They have no justification in the royalty review for the increase on freehold lands; they just say they want it. This tax grab betrays the intentions of the royalty review, which is a naked tax grab! Like the Alberta Government needs more money!

Misinformed Albertan: What is the tax grab they are proposing on freehold?

Informed Albertan: They are proposing a flat Freehold Mineral Tax of 6% on all production. This is a dramatic increase from the current tax. Note this is a TAX, not a royalty. This is a tax grab, not getting a fair share because they have no ownership in it. An informed examination of the royalty review makes clear that is what the entire review is; a tax grab.

Misinformed Albertan: This is really interesting. If they've misled me on this, I wonder what else they've misled me on?

Informed Albertan: Pretty much everything. Do some reading on the topic. There's a good blog call www.wtfjournal.blogspot.com that has links to the resources you need to read to understand the royalty review. Learn about it, and after you understand how bad the royalty review recommendations are be sure to let Stelmach and your MLA know that you won't be voting Tory if they don't soundly refute the report and not implement its recommendations.

Source: http://www.energy.gov.ab.ca/Tenure/1089.asp#whopays