REGINA – A report for the Saskatchewan government calls for the creation of a permanent fund for future development using non-renewable resource revenues.
The report by former University of Saskatchewan president Peter MacKinnon makes 10 recommendations on how to develop the fund.
It says that starting next year the province should put a cap on how much resource revenue it uses for all purposes other than deposits to the fund.
“Our current dependence on non-renewable resource revenue averages over 20 per cent of our annual budgets, a fact which presents both a risk and a restraint,” MacKinnon writes in the report.
“The risk lies in the utilization of revenues from depleting natural resource wealth for core spending requirements that will continue: health, education and other programs and activities for which we look to our government for continuing funding.”
The report suggests the “futures fund” be set up as soon as possible. MacKinnon outlines three options.
One scenario has non-renewable resource revenues in excess of the cap going to pay off the provincial debt and, once that is done, funnelling to the futures fund. A second would see 50 per cent of revenues above the cap go to debt and 50 per cent to the fund. The third option could be a 2014 budget allocation of $100 million to launch the fund.
“Whatever option is chosen, high priority should be given to the early establishment of the fund.”
Premier Brad Wall has said the province should look at saving money from non-renewable resources such as oil and gas – but not until after the debt is paid off. Alberta, Alaska and Norway have similar funds.
The Saskatchewan NDP Opposition has also pitched the idea of a heritage fund, but has said it should be established now.
“It’s something that we really see the way that families operate in the province. Families, while they’re paying down the mortgage, start saving for their kids’ education and it’s a similar notion,” NDP Leader Cam Broten said Thursday.
“It’s important to get started and have the right structures put in place.”
The report was not scheduled to be released until next week, but was accidentally emailed to media Thursday.
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