To the editor,
Recently I wrote regarding our province’s $13.9 billion debt. Hopefully here is one solution to address our massive debt.
Under Canada’s Constitution, it gives the provinces authority over natural resources, including the right to retain any royalties or taxes they levy on their exploration.
The Economist magazine says provinces spend the revenues from royalties and taxes as fast as they come in, with little thought of the future.
Alberta set up a Wealth Fund in 1976 which to date has only $16.6 billion. They admit they did not structure the fund very well and are now changing it to the Alberta Investment Management Corporation. The Alberta government passed a law requiring the government to deposit a certain share of revenue from oil, gas and mining into the fund.
Norway started their Sovereign Wealth Fund 20 years after Alberta and has $800 billion in the fund according to the Economist.
Quebec now has its Generation Fund. Next year they will deposit running royalties in addition from Hydro Quebec, a province-owned utility. Their fund is worth $5.2 billion so far.
The Northwest Territories is designing a fund with rules barring withdrawals for 20 years.
Saskatchewan is about to establish a Sovereign Wealth Fund.
I suggest we in Nova Scotia set up our own Wealth Fund and put our natural resources under better management.
As a taxpayer in Nova Scotia I would like to see natural resources be supervised by a private board of directors instead of by our government, as it can be managed in much better with the government not using it for gifts for private corporations. A private board could handle it better and ensure government members are hands off.
The province must be serious about our $13.9 billion debt. Let’s get out of debt and be serious about it. Far too often companies do a forecast for the year and if they don’t reach their forecast they go to the government for help when really they still have made a healthy profit, just not what they bravely forecasted. Governments must not fall for such traps.
If Norway can do it then we must really try much harder. Our government will have to pass laws like Alberta, Quebec and the Northwest Territories have if they are serious. Even the youth and universities can help and someday maybe free university education will be possible like Norway.
Government would have to agree what to put aside from resource royalties per year by legislation, plus gas exploration, but think what Norway has done!