Today the market is overreacting to news about a report recommending the oil sands industry pay higher royalties and taxes.  Every oil sands stock is down.  UTS Energy (UTS.TO), one of my holdings, is down 9%.

An expert panel appointed by Conservative Premier Ed Stelmach has urged the government to change the fiscal regime, arguing residents are not getting their fair share from booming energy activity, including oil sands development.

However, I do not believe this is a big deal.  Almost every other month, it seems, there is someone recommending to tax the oil sands for one reason or another such as environmental concerns or today's call for citizen greed.  However, let's read the fine print:

The panel's report recommended higher royalties for oil sands projects once their development costs are paid out, as well as a new tax on oil sands production that is based on benchmark oil prices.

After development costs are paid out - which will take years - oil will be significantly higher and I suspect most of these companies will have been acquired.  Furthermore, the costs for oil sands is already so high and I doubt the government will want to make things worse.  After all, we've already seen Synenco publicly admit that costs are already too high to be profitable.