Alberta Regulation 275/2025 amends the Oil Sands Royalty Regulation, 2009 under the Mines and Minerals Act and introduces a series of changes to Alberta’s oil sands royalty framework. The amendment primarily aligns the royalty regime with the province’s expanded use of bitumen-in-kind (BIK) mechanisms, clarifies transaction classification rules, and updates valuation and pricing provisions to reflect evolving market realities.

The regulation adds and refines definitions. It incorporates the concept of a “bitumen-in-kind direction,” linking it explicitly to the Bitumen Royalty-in-kind Regulation, and formally defines the Alberta Petroleum Marketing Commission as the “Commission.” These changes integrate the Commission more clearly into the oil sands royalty system as the Crown’s agent for receiving and managing in-kind royalty volumes. The amendment also adjusts the definition of certain oil sands products to exclude products delivered under a bitumen-in-kind direction, ensuring that such volumes are treated distinctly for royalty calculation and valuation purposes.

A central component of the amendment is the overhaul of the rules governing non-arm’s length transactions. The previous subsections are repealed and replaced with a broader, more detailed test. Transactions may now be deemed non-arm’s length where parties are affiliated, where one party can compel another to transact, where consideration is tied to other contractual obligations, or where self-dealing is involved. Importantly, transactions involving only the Crown, or the Commission acting as the Crown’s agent, and another party are explicitly excluded from this classification.

The regulation also modifies pricing provisions to address extreme market conditions. In calculating monthly trading prices, days on which the trading price is at or below zero dollars per barrel are now excluded. In addition, references to the Hardisty Bitumen Price are revised so that the applicable price is the greater of zero dollars and the market price, preventing negative prices from unduly distorting royalty calculations.

The most extensive changes relate to the treatment of in-kind royalties within the royalty calculation formula. New definitions are introduced for “in-kind quantity” and for in-kind percentages calculated on a monthly and periodic basis. These concepts are integrated throughout section 32 so that royalty calculations properly account for volumes delivered to the Commission under a bitumen-in-kind direction. The amendments ensure that production quantities used in royalty formulas are reduced by the in-kind quantities already delivered, preventing double counting. At the same time, a cap is imposed so that, for calculation purposes, the in-kind percentage applied in conjunction with third-party disposition percentages cannot exceed 30 percent, even if actual in-kind deliveries are higher.

Alberta (275/2025) January 6, 2026
Disclaimer: Insights are for informational purposes only and does not reflect RRI’s official position or constitute legal opinion.