Freehold mineral tax

Important notices

Postal strike and TRA requirements

Regardless of a postal delay, taxpayers and other entities required to make filings and payments with Tax and Revenue Administration (TRA) are still responsible to ensure those obligations are met. All applicable penalties and interest will continue to apply.

For more information about your obligations when a mail disruption occurs including electronic filing and payments, refunds, mail, and courier options, read: Special Notice Vol.8 No.7 – Mail Disruption Contingency Plan for all Programs

Overview

Freehold Mineral Tax (FMT) is:

• An annual tax on petroleum and natural gas mineral rights in Alberta, not owned by the Government of Alberta, the Government of Canada or located on an Indian Reserve.
• Assessed on revenue derived from production from freehold oil and gas properties.
• Calculated annually on calendar year production with tax statements issued in March of the following calendar year and payment is due April 25.
• Levied on each owner of a petroleum or natural gas mineral right as shown on the estate fee simple Certificate of Title.

The Freehold Mineral Tax Act allows the collection of the Freehold Mineral Tax (FMT) for the Province’s general revenue fund, the Freehold Mineral Tax Regulation provides additional information.

Yearly FMT cycle

Data is gathered on producing oil and gas wells on freehold lands from January to December.

Industry calculates and reports unit values on freehold properties with producing wells. If there are no industry submitted values, Crown calculated default values are used in the tax calculation.

Illustration of the Yearly FMT cycle legislated dates are noted by * in the file.

History

FMT has applied in Alberta since 1938. The tax was introduced to provide freehold monies for the province’s regulatory body, the Alberta Energy Regulator. From 1938 to 1972 the tax was an acreage tax, assessed on petroleum, natural gas, coal and salt. Since 1973 coal and salt are no longer taxed. From 1973 to 1982 the tax was assessed based on reserves. The current FMT legislation was introduced in 1983.

Freehold owners

Your family may own freehold mineral rights if they settled in Alberta in the late 1800’s or early 1900’s, about 8% of Alberta’s mineral rights are privately owned. To learn how freehold owners obtained their mineral rights see mineral ownership.

Owners looking for more information can contact the Freehold Owners Association a federally-incorporated, non-profit corporation registered to operate in Alberta, Saskatchewan and Manitoba that acts as a common voice in the interests of freehold owners.

FMT calculations and payments

Who pays FMT

The payor is the entity that has agreed to be responsible for remitting FMT payments. See the Freehold mineral tax (FMT) enquiries guide for more information.

Payments are due on or before April 25. See How to pay for more information.

How FMT is calculated

The amount owing is calculated using: production volumes from the previous calendar year, unit value, tax rate, percentage the title and well(s) hold in the production entities being taxed, and owner title percentages.

Each title receives a $1600 exemption, one for oil and one for gas production.

How to pay

Payments can be made by cheque or wire transfer. See Freehold Mineral Tax (FMT) Enquiries Guide PDF for more information.

Annual tax statement

Each year, a tax statement is generated no later than March 25 and issued to all freehold title owners, payors, and lessees. A tax statement is only generated if the amount owing is greater than $100.

The tax statement is available in ETS or mailed. For instructions on how to access ETS see Accounts administration. See Request Status and Tax Statement Retrieval for more information about retrieving a tax statement in ETS.

Default unit values

Default unit values for gas are calculated at 80% of the weighted average of the Crown gas reference prices. Oil and bitumen are calculated on a weighted average of the Crown oil par prices.

See the Freehold Mineral Tax Unit Value Guide and the FMT enquiries guide for more information about how the unit values are calculated and an overview of the FMT program.

Estimated default unit values as of December 2023:

Statistics

The data below is for the last 5 years for wells and production in freehold mineral rights. For complete historical statistics see Freehold Mineral Tax Statistics.

Table 1. Net Tax Levied (Calendar Year)

Table 2. Freehold Wells (as of December 31); and Production (Calendar Year)

Publications

• Yearly FMT cycle
• Request Status and Tax Statement Retrieval
• Freehold Mineral Tax (FMT) enquiries guide
• Freehold Mineral Tax Unit Value Guide

Legislation

• Freehold Mineral Tax Act
• Freehold Mineral Tax Regulation

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Contact

Connect with the FMT help desk:

Hours: 8:15 am to 4:30 pm (open Monday to Friday, closed statutory holidays)
Phone: 780-427-6000
Toll free: 310-0000 before the phone number (in Alberta)
Email: [email protected]

Related

• Land Titles Office
• ETS Accounts administration