Percentage of Exploration Licenses

Res #: 7-10M
Number: 7
Year: 2010
Midterm: Yes
Expired: Yes
Responses Received: No
Departments: Saskatchewan Ministry of Highways and Infrastructure

WHEREAS petroleum and gas exploration and development cause major direct costs to rural municipalities because the increased economic activity results in added costs to build and repair roads and infrastructure; and

WHEREAS the Province of Saskatchewan receives large revenues from the sale of Petroleum and Natural Gas Exploration;

BE IT RESOLVED that SARM lobby the Saskatchewan government for a percentage of the revenue from the sale of exploration licenses to be paid directly to the affected municipalities where the petroleum and natural gas land sales are taking place, for the upkeep and construction of roads and other infrastructure.

Response from Honourable Bill Boyd, Minister of Energy and Resources: 

The Government of Saskatchewan′s revenue sharing policy requires that all revenue collected by the Ministry of Energy and Resources (including revenue from the sale of oil and gas exploration licenses) be allocated to the General Revenue Fund to be used to fund programs and services that benefit all citizens and regions of the province.  

Oil and natural gas revenues play a very important role in funding health, education, and highways in municipalities across the province. As a result, the Government of Saskatchewan remains committed to the sustainable and responsible development of the province′s oil and natural gas resources. In this fiscal year alone, the upstream oil and natural gas industry is expected to generate direct government revenues in excess of $1.6 billion and employment approaching 30,000 direct and indirect jobs.

While the government recognizes there will be additional demands on roads and other infrastructure as a result of increased oil and natural gas activity, the resulting increase in economic development will also provide many benefits. In addition, the Ministry of Municipal Affairs provides a number of tools to help address infrastructure demands. In addition to unconditional revenue sharing grants to rural municipalities from the Ministry of Municipal Affairs, rural municipalities have at their disposal, road haul agreements under The Municipalities Act as well as development levies and servicing agreements under The Planning and Development Act. Further, costs to hire planners and engineers to address these concerns can also be recouped through these fees and development permit fees.