CALGARY – In its 2013 budget, the Government of Alberta prioritized savings with the newly created Contingency Account and a plan to rebuild the Heritage Fund. While these efforts are a step in the right direction, a new report from the Canada West Foundation argues that the province needs to commit to a more aggressive savings plan – and more importantly – get Albertans on board.

“Our resource wealth has enabled Alberta to eliminate debt and create the lowest-tax province in Canada,” notes Dylan Jones, President & CEO. “With a disciplined approach to saving, Alberta can achieve seemingly impossible goals, such as the complete elimination of income tax. This is achievable if we have an aggressive savings plan, endorsed by Albertans, and we stick to it.”

Although recoverable oil will last for generations, Hedging our Bets: Making the Case for Saving Alberta’s Natural Resource Revenues, outlines political, social and economic factors that could undercut the long-term viability of the industry and cause the flow of resource revenues to dry up. These include:

  • high production costs and a vulnerability to sustained lower oil prices;
  • failure to achieve or maintain social licence;
  • undermined access to the US market if shale oil production booms; and
  • technological innovations that could replace oil as a transportation fuel.

“It may not seem like a good time to start a savings plan considering the province’s large deficit and the looming costs of flood recovery, but we need to stop fixating on short-term concerns at the expense of the future,” states Michael Holden, author and Senior Economist. “The government’s current savings plan is a good start, but it’s still too small. Last year, the province received $11.2 billion in resource income. Had the savings plan been in place, only $800 million of that total would have been saved.”

The Canada West Foundation is the only think tank with an exclusive focus on the policies that shape the West’s quality of life. Through our evidence-based research and commentary, we provide the objective, practical solutions that governments need. For over 40 years, we have been a passionate advocate for western Canada.