The Canadian Taxpayers Federation is calling on the Saskatchewan government to mimic Alberta and create a resource-revenue based heritage fund.“The numbers are clear: The Saskatchewan government needs to immediately start a heritage fund to save resource revenues and set the province up for future financial success,” said Gage Haubrich, Prairie Director of the CTF. “Alaska and Norway have built successful heritage funds and it’s time for Saskatchewan to join the club.”In 2013, the provincial government commissioned former University of Saskatchewan president, Peter MacKinnon, to complete a report on managing resource revenues. The report recommended the creation of a heritage fund, where the government would save some resource revenues for future generations. The government did not adopt the recommendation.“A permanent savings account in the form of a [heritage fund] could turn our one-time revenue from these resources into a lasting source of wealth for Saskatchewan people,” MacKinnon said in his report.In an accompanying 2013 press release, MacKinnon commented, "We owe it to our children and grandchildren, and to their children and grandchildren, to take a deliberate and balanced look at how we can secure today’s resource wealth into the future...""A permanent savings account in the form of a Futures Fund could turn our one-time revenue from these resources into a lasting source of wealth for Saskatchewan people.”Non-renewable resource revenues were $2.45 billion in 2023-24 and $4.60B in 2022-23 for the province.Alaska and Norway both have heritage funds. Last year, every Alaskan received a $1,312 dividend from some of the fund’s investment income. Norway’s fund is valued at more than $2.2 trillion.A new CTF report shows if the Saskatchewan had started a heritage fund in 2013, it would now have $3.2 billion, based on a plan outlined in the MacKinnon report. This would generate $162 million in interest income annually.“Saskatchewan taxpayers are losing out on hundreds of millions of dollars every year because politicians refuse to save money,” Haubrich said.“The government needs to stop spending money it doesn’t have, pay down the debt and start a heritage fund now.” Since the MacKinnon report was published in 2013, the Saskatchewan government increased the debt by 264%.The CTF’s heritage fund report is entitled Eleven Years of Nothing and is also 11 pages."Step one is a commitment to using resource revenues to pay down debt," the report explains."Step two is a non-renewable resource heritage fund. A heritage fund is an independent investment fund where the government deposits non-renewable resource revenues and invests them to earn interest income."The CTF estimates were based on certain assumptions."For the sake of comparison, debt repayment is set aside in this projection. However, step one in setting up the province for a prosperous future and creating a successful heritage fund is paying down the debt," the report details."Each plan is calculated at a conservative five per cent return annually. This forecast also assumes the interest income is completely spent each year without reinvestment..The CTF's modified MacKinnon plan would have seen four deposits in to the fund in years where resources revenue made up 18, 19, 16, and 22% of revenue respectively. This plan would have generated $988 million in interest over the last 11 years.The Saskatchewan NDP started a Heritage Fund in 1978 under Premier Allan Blakeney "to invest part of nonrenewable resources revenues into income-producing assets to ensure that future generations can benefit from resource development in Saskatchewan."A study by three University of Regina economists in 2012 also recommended such a savings fund supported by resource revenues."[N]onrenewable resources...will eventually be depleted and will not be available for future generations. Saskatchewan also needs to prudently save for the long-term by continuing its commitment to debt reduction and by establishing a long-term investment fund to benefit future generations," the authors stated."Ignoring these issues would mean placing higher burdens on future generations, especially in light of the ongoing aging phenomenon, the retirement of the baby boom generation, and expected social security support pressures on government."
