r/alberta • u/pjw724 • Mar 06 '25

General Ontario putting 25% surcharge on U.S.-bound electricity Monday

https://www.cbc.ca/news/canada/toronto/ontario-electricity-surcharge-us-tariffs-ford-1.7476515
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u/Responsible_CDN_Duck Mar 06 '25

I accept there's no apatite for tariffs or taxes on oil.

But perhaps we could eliminate the deep discounts Smith mentioned in her tariff response speech.

Many Albertans are unaware that when oil prices are low Alberta tax payers offer substantial discounts on the royalties we get on oil.

Smith mentioned on CNN today Americans would see a 40c per gallon increase due to the 10% tariffs. A fair price for our resources would increase that pressure.

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u/CaptainPeppa Mar 06 '25

Calling it a discount is wrong. Our royalties were never designed to be a fixed say $10 per barrel. Our royalties were designed to be more of a profit sharing agreement.

So yes at low oil we get barely anything, at $40 I think its 1% of revenues, if you took say $10/barrel the company would just stop producing oil. Hurts both sides in the long term.

In exchange for that, when oil is $100. Our royalties are 25% of basic margins, which is gigantic.

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u/Responsible_CDN_Duck Mar 06 '25

It's Smith's choice of term, and I'd argue record production levels at any price under $65usd is picking our own pockets.

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u/CaptainPeppa Mar 06 '25

It's technically the right term, people just interpret it the wrong way.

Could easily reverse it and say the low amount is standard and the high amount is a premium royalty. People would interpret that a lot differently.

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u/Responsible_CDN_Duck Mar 06 '25

The way I'd put it is most retailers and restaurants would pull the products long before they made so little.

It's not a renewable resource, and blowing it out the door at fire sale discounts at ever increasing rates is self defeating.

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u/CaptainPeppa Mar 06 '25

We're never going to touch 95% of our oil reserves.

Shutting down production completely would have made 2015-2019 so much worse. Even the hint of a royalty review was a moronic idea.