• About
    • Which Energy Mix is this?
  • Climate News Network Archive
  • Contact
Celebrating our 1,000th edition. The climate news you need
No Result
View All Result
The Energy Mix
  • Canada
  • UK & Europe
  • Fossil Fuels
  • Ending Emissions
  • Community Climate Finance
  • Clean Electricity Grid
  • Cities & Communities
SUBSCRIBE
DONATE
  • Canada
  • UK & Europe
  • Fossil Fuels
  • Ending Emissions
  • Community Climate Finance
  • Clean Electricity Grid
  • Cities & Communities
SUBSCRIBE
DONATE
No Result
View All Result
The Energy Mix
No Result
View All Result
  FEATURED
BREAKING: U.S. Senate Passes Historic $369B Climate Package August 7, 2022
Researchers Point To ‘Dangerously Unexplored’ Risk of Global Climate Catastrophe August 2, 2022
Koch Network Pressures Manchin, Sinema as Advocates Praise ‘Game Changing’ Climate Deal August 2, 2022
Coastal GasLink Cost Skyrockets 70% to $11.2B August 2, 2022
Ottawa Releases Regulatory ‘Frame’ for Net-Zero Grid by 2035 August 2, 2022
Next
Prev

Alberta Mismanages Heritage Fund, Misses Out on $575B in Revenue Over 44 Years

August 9, 2020
Reading time: 3 minutes

Sergio Russo/Flickr

Sergio Russo/Flickr

71
SHARES
 

Successive Alberta governments over the last 44 years have mismanaged their way out of C$575 billion in revenue that should have been available to help cushion the province from a brutal oil price crash and chart a course to a more diverse, less fossil-dependent economy, according to a University of Calgary economics professor.

“Back in 1976, Alberta’s government established a special fund to save some of its oil and gas revenue for leaner times when prices dropped or resources ran dry,” Bloomberg News recalls, in a post republished by fossil industry newsletter JWN Energy. “For decades, royalties poured into Alberta’s coffers, with the gusher accelerating in the boom of the early 2000s as the province developed its vast oil sands reserves, the world’s third-largest oil resource.”

But unfortunately, “successive governments failed to stick to the savings plan. Today, as weak oil prices upend economies around the world, Alberta is confronting its own painful regrets. Had it set aside more during oil’s boom, Alberta could have had a C$575 billion ($433 billion) wealth fund to cushion the blows of COVID-19,” vastly more than the C$16.3 it currently has on hand.

“Many people in Alberta might not even realize that the Heritage Fund still exists,” economist Trevor Tombe told the news agency. “The fact that there is such a large missed opportunity, that had we been saving royalties we could have had a fund in the hundreds of billions, is not widely appreciated.”

Tombe said he based his calculation on the fund’s actual investment returns, “but assumes that the province had followed practices similar to those that helped Norway amass its US$1.12 trillion Government Pension Fund Global. Those guidelines include contributing all of its resource revenue to the fund and withdrawing only 4% a year,” Bloomberg explains. “Norway plans to exceed that cap this year, withdrawing about 4.2% of the fund, or roughly US$37 billion, to shore up its budget.”

The Norwegian fund began moving to dump its own fossil fuel investments in November 2017.

By contrast, Bloomberg says, “Alberta has no similar piggy bank to crack,” leaving Premier Jason Kenney to predict a C$20-billion deficit this year—about the same size as Ontario’s, with three times the population.

Citing Colleen Collins, a Canada West Foundation vice president who worked in the office of then-premier Peter Lougheed when he set up the Heritage Fund in the 1970s, Bloomberg says the transfers initially amounted to 30% of the province’s non-renewable resource revenue. But that all ended in 1987, when low oil prices led to rising government deficits. “The fund has limped along since, contributing investment income to the province’s general revenue pool while receiving occasional, ad hoc infusions during better times.”

“There was this sense of ‘Well, it’s a rainy day fund, and man, is it rainy,’” Collins told the news agency. Even though the Heritage Fund was originally supposed to hold wealth for future generations, “nobody wants to see services cut. Nobody wants to see public servants’ salaries cut. How do you say no to people when you have all that money in the bank?”

There were also concerns the federal government might move to reduce transfers to Alberta if the Heritage Fund got too big—a problem that Norway, as a unitary state, hasn’t faced.

“Still, Alberta’s politicians may have been lulled into a false sense of financial security by a long stretch of good times and bullish projections that the U.S. and China would be ready buyers for the province’s crude for decades to come,” Bloomberg writes. Now, times are very tough, and Tombe is hoping some lessons have been learned.

“The scale of the economic disruptions and the fiscal disruptions are so big that I think it is genuinely leading people to think we need to do something differently,” he said. “And if an event like this does not cause us to change how we’re doing things, I don’t know what will.”



in Canada, Community Climate Finance, Culture, Fossil Fuels, Jurisdictions, Oil & Gas, Sub-National Governments, Tar Sands / Oil Sands

The latest climate news and analysis, direct to your inbox

Subscribe

Related Posts

Bernard Spragg/flickr
Energy Politics

$12.3B in Profit over 3 Months as Big Fossils Reject Federal Emissions Cap

August 11, 2022
245
Σ64/Wikimedia Commons
Hydrogen

Global Push for Hydrogen Sidesteps Knowledge Gaps on Climate Impacts

August 11, 2022
287
Protect The Planet
Pipelines / Rail Transport

Trans Mountain Work Site Blocks Early Salmon Run on Coquihalla River, Local Observers Say

August 11, 2022
375

Comments 2

  1. Anonymous says:
    2 years ago

    This is not surprising in the least bit. The Alberta PCs were the absolute worst, since 1986. Cue the UCP, who are no better.

    Reply

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

I agree to the Terms & Conditions and Privacy Policy.

Trending Stories

Bernard Spragg/flickr

$12.3B in Profit over 3 Months as Big Fossils Reject Federal Emissions Cap

August 11, 2022
245
Σ64/Wikimedia Commons

Global Push for Hydrogen Sidesteps Knowledge Gaps on Climate Impacts

August 11, 2022
287
Protect The Planet

Trans Mountain Work Site Blocks Early Salmon Run on Coquihalla River, Local Observers Say

August 11, 2022
375
François GOGLINS/wikimedia commons

Corrosion Problem Shutters Half of France’s Nuclear Reactors

August 2, 2022
1.5k
Joseph Brent/Flickr

Green Hydrogen Will Cost Less than Fossil-Fuelled ‘Blue’, Shell CEO Admits

August 7, 2022
746
Early stages of construction on the Flamanville 3 nuclear reactor in France

Failing French Nuclear Plants Drive Up Electricity Costs as Heat Waves Cut Production

August 8, 2022
451

Recent Posts

Focus Blame for Climate Change on Fossils and Governments, Ecoanalytics Advises

August 11, 2022
125
TheKurgan/Wikipedia

Ontario Pension Giant May Be Getting the Memo on Fossil Divestment, Members Say

August 11, 2022
33
@stan_sdcollins/Twitter

Stranded Communities Hope for Emergency Food Supplies as Newfoundland Wildfires Rage

August 11, 2022
14
Maurizio Pesce/Wikimedia Commons

Tesla Lobbying Points to Ontario as Possible EV Manufacturing Site

August 11, 2022
34
MENA/Flickr

Ontario Gains from U.S. EV Tax Credit, But Plans No Incentives for Local Drivers

August 11, 2022
37
Twitter

Shelling of Ukraine’s Zaporizhzhia Plant Raises Fears for Nuclear Safety

August 11, 2022
32
Next Post
Courtesy of Sen. Rosa Galvez

In Conversation: Canadians Must Keep Up the Pressure for Green Recovery, Sen. Rosa Galvez Says

The Energy Mix

Copyright 2022 © Smarter Shift Inc. and Energy Mix Productions Inc. All rights reserved.

Navigate Site

  • About
  • Contact
  • Privacy Policy and Copyright
  • Cookie Policy

Follow Us

No Result
View All Result
  • Canada
  • UK & Europe
  • Fossil Fuels
  • Ending Emissions
  • Community Climate Finance
  • Clean Electricity Grid
  • Cities & Communities

Copyright 2022 © Smarter Shift Inc. and Energy Mix Productions Inc. All rights reserved.

Manage Cookie Consent
To provide the best experiences, we use technologies like cookies to store and/or access device information. Consenting to these technologies will allow us to process data such as browsing behaviour or unique IDs on this site. Not consenting or withdrawing consent, may adversely affect certain features and functions.
Functional Always active
The technical storage or access is strictly necessary for the legitimate purpose of enabling the use of a specific service explicitly requested by the subscriber or user, or for the sole purpose of carrying out the transmission of a communication over an electronic communications network.
Preferences
The technical storage or access is necessary for the legitimate purpose of storing preferences that are not requested by the subscriber or user.
Statistics
The technical storage or access that is used exclusively for statistical purposes. The technical storage or access that is used exclusively for anonymous statistical purposes. Without a subpoena, voluntary compliance on the part of your Internet Service Provider, or additional records from a third party, information stored or retrieved for this purpose alone cannot usually be used to identify you.
Marketing
The technical storage or access is required to create user profiles to send advertising, or to track the user on a website or across several websites for similar marketing purposes.
Manage options Manage services Manage vendors Read more about these purposes
View preferences
{title} {title} {title}