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LEGAL REPORT: BUSINESS/CORPORATE LAW Adjusting the risk-reward balance New oil-and-gas royalty regime in Alberta should offer a more level playing field for companies in that risky business. BY DIANE L .M. COOK C onsidered too complex and out- dated, revisions to Alberta's oil- and-gas royalty regime were neces- sary to reflect changes in the indus- try. In October 2007, the government announced its New Royalty Framework that would give Albertans a "fair share" of profits from fossil fuel production. The New Royalty Framework proclaimed "[g]overnment analysts project royalties will increase approximately $1.4 billion in 2010, an increase of 20 per cent over revenues forecast for that year under the current regime." However, the review panel charged with evaluating the old regime was fun- damentally flawed and the figures it used were inaccurate. "During the per- iod when the government reviewed the old regime, there was lots of disbelief by government with regard to the numbers and figures that industry provided to them. They just didn't believe they were correct. The government now knows 50 JUNE 2010 www. C ANADIAN Law ye rmag.com different," says Ross Freeman, a tax part- ner with Borden Ladner Gervais LLP in Calgary. The New Royalty Framework, announced 14 months before it took effect on Jan. 1, 2009, sent shockwaves through the industry. During this per- iod, many major oil and gas producers left Alberta for other jurisdictions where royalty rates were competitive. Many industry services companies followed the producers; others folded in the wake. VICTOR GAD