The release of the provincial government’s budget last week has resulted in the predictable flurry of critique. On the revenue side, the opposition has rightly noted the reliance on projected revenue from liquefied natural gas that has not yet been brought from the ground.
But that gas is clearly coming, and one of the most useful ideas shared by Premier Christy Clark was the formation of a “Prosperity Fund” that will ostensibly provide future revenue for B.C. by depositing resource funds now and letting them grow.
Examples of how and how not to handle such a fund are close at hand. In 1976, both Alberta and Alaska set up their own funds to provide future benefit from a resource boom.
Alberta’s Heritage Savings Trust Fund was transferred to the province’s budget in the 1980s and was used to fill budget shortfalls and help fund capital projects.
Alaska’s Permanent Fund, meanwhile, was placed under the control of a corporation outside the political arena. While its principle remains untouched, the fund pays a dividend to every full-time resident of the state each year.
With that simple stroke, the fund was placed in the hands of every voter in the state, rather than elected officials who would commit instant political suicide by trying to raid it for a favored bit of pork.
The NDP can rail against Clark and the budget; after all, that’s its job. But whichever party runs government following the provincial elections in May, this Prosperity Fund deserves consideration.