THE RURBAN FRINGE

Alberta Heritage Fund: Another Lost Opportunity

Posted on | April 8, 2009 | 1 Comment

albertaOuch.  The Government of Alberta just released their 2009 budget … with a $4.7 billion deficit.  This one’s gonna hurt, folks.

Released simultaneously (albeit, with much less fanfare) was the Alberta Heritage Savings Trust Fund 2009 – 2012 Business Plan.  Created by Peter Lougheed in the 1970s, the fund seeks to hold and invest the provincial government’s revenue take, theoretically to help manage the domestic economy during boom times and to spread economic wealth over generations.

Sounds great, right?  Unfortunately, this fund has been left to languish and successive governments have freely “borrowed” from it to pay down previous deficits.  It’s growth has lagged behind similar funds, most notably Quebec’s giant Caisse de depot pension fund or Alaska’s Permanent Fund.  It also doesn’t help that falling stock prices have sliced at least $1 billion from the value of the fund, reducing its value ten-fold on paper, if not in immediate loss.

It’s somewhat ironic … at this time last year, a provincially appointed advisory committee was calling on the Government to regularly invest resource revenue, rather than making ad-hoc deposits.  And even when the official committee report was released - including recommendations such as implementing strong legislation to reinforce Alberta’s commitment to saving and setting clear criteria for disbursing income from the Heritage Fund - the committee felt the need to further state:

“If we do not save today, it is entirely possible that, unless they significantly increase taxes, future governments will not have the necessary revenues to pay for core services that Albertans require and expect, particularly education and health care.”

And so we arrive at the 2009 budget.  A deficit budget.  With cancelled allocated savings to this very fund that was touted as a ‘Rainy Day Fund’ for the masses. 

The Heritage Fund needs to be protected.  It needs to be bolstered.  Alberta cannot live forever off of its natural resources.

The Heritage Fund’s Business Plan can be found here.

 

WHAT MIGHT HAVE BEEN?

robmag_bubble_whatmighthavebeen4

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Comments

One Response to “Alberta Heritage Fund: Another Lost Opportunity”

  1. Alberta Heritage Fund: An Embarrassment of Riches : The Rurban Fringe
    June 16th, 2009 @ 8:02 am

    [...] If I’ve said it once, I’ll say it again … Alberta can and should do better. [...]

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