A last, Alberta may be coming to its senses

Alberta has been told to start saving, seriously, for a rainy day. Finally more attention is paid to the fact that the Heritage fund is nothing more that a bad joke, a dismal performance by the Alberta government to plan wisely for the future.

In essence, the fund accumulates surpluses, mostly from oil and gas revenues, as an investment fund. Other oil rich countries do the same, operating their own sovereign investment funds. The best at this game is Norway, no contest. Its fund has grown to over US$400 billion. Assuming the fund manages to yield only 3% on its investments, that is still US$12 billion in additional cash for the government coffers every year. By comparison, the Heritage fund has manage to amass, so far, only CAD$15 billion.

You might say I am too harsh in this simple comparison. After all, Alberta is a province of only 3.5 million. Norway, on the other hand, is home to 4.5 million people. Oops, so population is not a factor.

But Norway has been running its fund longer, right? The Norwegian Petroleum Fund was established in 1990. The Heritage Savings Trust Fund was created in 1976. Ooops again.