[Enoch Root]

Originally Posted by Mr.Coffee

No, royalties are based on a contract. Lessor royalties, or Crown Sliding Scale royalties like in Alberta, are derived from leases purchased at landsales. They are not a tax.

For example, an oil company can make a profit (such as receiving a royalty from a separate 3rd party contract), and not have to pay the Crown a royalty based on that income. Royalties are based on production, the right to produce which can't be granted without mineral rights, which can't be granted without a lease (which is an assumed contractual relationship).

Therefore if the government changes royalties, they're unilaterally changing what's in a contract (leasing arrangement). Think of it like you lease a truck from the dealer, and in your lease you agree to pay a small royalty if you profit off the use of the truck. Then arbitrarily the dealership changes the royalty rate on you, and says pay us more.

regardless, they don't negate the fact that clauses like that being discussed exist and make sense