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September 14, 2011

When provinces raise royalties charged on oil and gas production, the result can be less, not more tax revenues, according to a report from the C.D. Howe Institute. In  Rethinking Royalty Rates: Why There Is a Better Way to Tax Oil and Gas Development, authors Colin Busby, Benjamin Dachis and Bev Dahlby show how resource-rich provinces would be better off relying more on auctions for exploration and development rights and relying less on royalties levied on output.