A report to the Saskatchewan government by former University of Saskatchewan President Peter MacKinnon is calling for the creation of a sovereign wealth fund from one-time resource revenues.
The so called “Saskatchewan Futures Fund” would help ensure future generations benefit from the revenue generated from non-renewable resources. It’s a completely sensible proposal (read the full report), but the idea is far from groundbreaking. Alberta, Alaska and Norway already have similar funds. In fact, the Saskatchewan Liberal Party was the first political party in the province to call for the creation of a sovereign wealth fund in 2008, curiously called the “Saskatchewan Future Fund“.
The Saskatchewan Liberal Party has long maintained that it is unwise for the government to fund ongoing expenditures such as health care with volatile, one-time dollars that come from resource extraction. This has lead to problems like the unexpected budget gap of 2009-10 due to miscalculated potash royalty revenue.
The Saskatchewan Liberal Party supports the creation of a sovereign wealth fund. Once the provincial debt is eliminated, 50% of future one-time non-renewable resource dollars should be committed to the fund for the benefit of Saskatchewan residents today and for generations to come.
What are non-renewable resource revenues?
Every year, the Government of Saskatchewan collects billions of dollars in royalties from resources like potash, oil, natural gas and sales of Crown land. These are one-time revenues for the province. Once a barrel of oil is sold or a train-car of potash is shipped away, it is gone for good.