Premier Ed Stelmach and Energy Minister Ron Liepert have announced an entirely new royalty framework for Alberta's oil and gas sector.
The Competiveness review was released along with the government's response; which is to chop royalties to essentially what they were before the changes were implemented in 2009.
It will mean hundreds of millions in lost revenue for the province, but the government believes it will also create thousands of jobs.
The maximum royalty rates for conventional oil will be cut from 50 per cent to 40 per cent, while the top rate for natural gas will be 36 per cent, down from 50 per cent.
The changes will take effect next year.
A transitional five per cent royalty rate for new wells introduced last year will also become a permanent feature.
The net result of the cuts will be a $363 million reduction in revenue in 2012 and 2013. The province also said it wanted to streamline its regulatory regime by avoiding duplication with various departments involved in the approval process.
The Canadian Association of Petroleum Producers is also giving the government's changes a thumbs up. CAPP President David Collyer says there are positive changes which will make Alberta competitive once again in the unconventional oil and gas sector.
He says investors need to know that our province is back in the game.
Meanwhile, the leader of the Wildrose Alliance says the Tories need to acknowledge their mistake.
Danielle Smith says she'd like to hear the Stelmach government admit they were wrong about the higher royalty rates and she would like them to also apologize.