CALGARY — An analysis of three oil-producing heavy hitters suggests Alberta isn’t socking away enough money from oil royalties.
The Calgary Chamber of Commerce says there would be an extra $150 billion in the Heritage Savings Trust Fund if Alberta put aside resource taxes the way Norway does. The study also looked at the royalties approach taken by Alaska.
Norway puts 100 per cent of its royalties into savings and Alaska saves 25 per cent.
Unlike Alberta, Norway does not use its oil revenue to fund operating and capital spending.
Justin Smith, the chamber’s director of policy, says it’s something that needs to be considered as the government works on a 10-year financial plan to get off the boom-bust roller coaster.
He says reworking the province’s finances provides a chance to develop a “rigorous savings policy that will help us accrue well for future generations, but also be able to fund year-to-year services in a more sustainable way.”
The Heritage Savings Trust Fund was created in the 1970s by premier Peter Lougheed’s government with a goal to set aside 30 per cent of oil royalties.
“But over the years it’s been dipped into time and again … and that’s why we’re sitting at such a paltry balance,” Smith said.
Alberta’s most recent fiscal update indicated the fund is expected to reach $19 billion by the end of the fiscal year.
With files from CHQR