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Part of Land

Regional plans and agreement compensation

Land-use planning has changed how certain Crown mineral rights are managed, including the compensation and cancellation of some agreements.

Land-use Framework

The Land-use Framework (LUF) developed in 2008 was designed to manage our province's land and natural resources to achieve Alberta’s long-term economic, environmental and social goals. The LUF establishes seven new land-use regions and calls for the development of a regional plan for each. The Lower Athabasca Regional Plan and South Saskatchewan Regional Plan came into effect in 2012 and 2014, respectively.

Sub-regional plans

The Government of Alberta has developed sub-regional plans for areas of the province with special land use considerations. The Moose Lake Access Management Plan came into effect in February 2021 and provides land-use resource development direction for the Moose Lake 10 km zone, an area located approximately 100 km northwest of Fort McMurray in the Lower Athabasca Planning Region. The Cold Lake and Bistcho sub-regional plans are the first of several sub-regional plans that aim to support multiple land use priorities while achieving and maintaining naturally self-sustaining woodland caribou populations.

The Government of Alberta released information letters as guidance for energy stakeholders in these sub-regions:

Caribou Range Planning

The Government of Alberta’s caribou range planning policies aim to stabilize the province’s population of woodland caribou, which is listed as threatened. Recognizing that the resulting uncertainty from impending changes to land use policy may have an impact on industry stakeholders, the Department of Energy and Minerals has introduced measures to reduce that impact while caribou range planning is underway.

Sales Restriction

In September 2016, the Department of Energy and Minerals restricted sales of Crown mineral rights for all commodities within all caribou ranges, covering approximately 23 per cent of the province. This measure remains in place to allow time and space for caribou range plans to be developed. The sales restriction has not impacted the ability of agreement holders to explore for or develop minerals related to existing agreements on caribou ranges.

Extensions to agreements in Caribou Ranges

Because of the time required to complete caribou range plans, the Department of Energy and Minerals has offered holders of mineral agreements located within caribou ranges the opportunity to apply for extensions to their agreements. This means that agreement holders may retain their agreements for an extended period without the normal requirements to perform work. The most recent extension was detailed in the following information letter:

Crown mineral rights cancellation and compensation

When the Minister of Energy and Minerals makes the determination that any or any further development of Crown minerals is no longer in the public interest, or corrects a misdescription of a subsurface zone, Alberta Energy and Minerals sends a Notice of Intent to Cancel letter to the designated representative/lessee on record indicating which agreement(s), or portion thereof, are subject to  cancellation.

Compensation is determined under the Mineral Rights Compensation Regulation (MRCR). The compensation payable under the MRCR is calculated as the sum of three types of incurred costs plus interest, making up the MRCR’s four compensation categories:

  1. Land acquisition costs:
    1. For an original lessee (MRCR section 3) – the amounts that have been paid to the Crown as bonus, fees and rental over the lifetime of the agreement and any predecessor agreements.
    2. For a transferee (MRCR section 4) – the third-party acquisition costs (limited to the sum of: pre-transfer bonus, rental, fees, and the exploration and development costs of prior lessees), plus post-transfer rental and fees paid to the Crown by the current lessee.
  2. Development allowance (MRCR section 6) – costs incurred by the current lessee to explore for and/or develop Crown minerals in the location subject to cancellation;
  3. Reclamation allowance (MRCR section 7) – costs incurred by the current lessee to meet reclamation obligations in the location subject to cancellation after the notice of intent to cancel has been issued;
  4. Interest allowance (MRCR section 8) – calculated at the Alberta Treasury Branch prime rate plus 1%, not compounded. It is applied to all applicable amounts for a maximum 10-year period preceding the close-off date (typically the date notice of intent t cancel is issued).

Section 5 of the MRCR describes the compensation payable as a result of the need to correct a misdescribed zone. Specific subsections describe what costs apply depending on the nature of the cancellation: if the lessee of record is an original lessee or a transferee and whether the misdescription requires cancellation of a portion or the full extent of the agreement, and/or a specific or specific zones. All misdescriptions qualify for land acquisition costs, development and interest allowances. Full and partial cancellations may also claim a reclamation allowance.

Lessees who receive a notice of intent to cancel and are claiming a third-party acquisition cost and/or development allowance and/or reclamation allowance are expected to submit a completed MRCR application form in the prescribed format. The application form and associated instructions are provided to the lessee of record when notice of intent to cancel is issued.

In addition to the application form, the lessee of record must submit a Statutory Declaration in hard copy in accordance with section 10 of the MRCR. The statutory declaration provides affirmation that the information in the application is accurate and directly associated with the agreement, or portion of the agreement, that is subject to cancellation.

Completed applications, along with all supporting information, are to be submitted prior to the deadline indicated in the notice to: [email protected].

Contact

Connect with Alberta Energy and Minerals about compensation:

Hours: 8:15 am to 4:30 pm (open Monday to Friday, closed statutory holidays)
Email: [email protected] (or review your agreements through the Electronic Transfer System)