The opposition NDP has been asking the governing Saskatchewan Party where all the money has gone from the good fiscal times we’ve had in recent years. Given how Alberta has gone from boom to bust and is now in a provincial election as a result, that’s a good question, not just for our province, but also for our neighbours to the west.
Brad Wall said the money’s gone to health care and infrastructure and all sorts of other things. That may very well be the case. But looking at how provincial oil revenues are expected to flatline in this province this year, our so-called “balanced budget” is reliant on borrowing a big chunk of money. That’s not balanced. Instead we find ourselves looking back longingly and wondering, “What if?”
Specifically, what if Saskatchewan had, at some point in recent years, established a sovereign wealth fund? This was a key election platform plank of former provincial NDP Leader Dwain Lingenfelter, who lost in spectacular fashion to Brad Wall’s second campaign for government. Wall had argued one pays off the mortgage (provincial debt) before socking money away in the bank.
What if Alberta, once Ralph Klein declared it debt-free and in the black, poured money back into its sovereign wealth fund instead of spending willy-nilly (Ralph Bucks, anyone?) Where would that province be today? If ever there has been an example of profligate spending, Alberta would be it. How helpful would the $1.4 million in Ralph Bucks doled out in 2006 be today, given the fiscal disaster Alberta is facing now?
The example often used is that Norway’s sovereign wealth fund, arguably the most successful on the planet. It’s on its way to a trillion dollars. It was modelled on Alberta’s, so the story goes. CBC quoted Rolf Wiborg, a petroleum engineer who recently retired from Norway’s public service, on March 23, saying, “For the last 10 years, when nothing went into the Alberta fund, and we put a lot of money aside, the profit went out of Canada.”
Saskatchewan has had some surpluses in recent years, the most notable being in 2008. And that big year, a large portion of which came from Crown land sales. The newly elected Saskatchewan Party did pay down the mortgage instead of putting the money in the bank, or mattress. Maybe it was the right thing to do at the time.
But one can’t help but wonder where Alberta and Saskatchewan would be if we had taken a more disciplined stance and put a substantial portion of non-renewable resource revenue away over the past several decades. It would have meant having to say “no” a lot more at budget time. But maybe we’d be in a better place now.
You can bet that Alberta is going to be shifting gears in that direction very soon after this election is done.