Norway, the Heritage Fund, and Ralph Bucks

Why, in Edmonton, the heart of Canadian resource wealth, is the University of Alberta $40-million in the hole? Why is the president of the University of British Columbia – in a province bragging that its natural gas wealth will make it the next Alberta – saying it will have to shut down programs because of budget cuts?

I hate to bring up the old Norway analogy, but Norway should be the energy-rich economy our energy-richest provinces should want to compare themselves to. General social welfare aside (because that wouldn’t even be fair), Norwegian students are actually paid generous grants to study at any of its universities, rather than graduating with crippling debt.
We say Norway is expensive, because it’s expensive to eat out, get drunk, and buy things we don’t need. But in Canada, students can’t even afford to get an education.

Former Alberta Premier Ralph Klein was praised last week in the National Post for his work in reducing the province’s deficit. What wasn’t mentioned is that in the process, he raided the province’s rainy-day piggy bank, the Heritage Fund. This fund was established in 1976 with the understanding that oil wealth doesn’t last forever. Then, as Klein led Alberta through the 2000s, with talk of the province as an “energy superpower” never far from his lips, the fund flatlined. Today, it stands at $16.4-billion, just a year’s worth of royalties higher than in 1987, according to an industry promotional website.

And back to Norway – its fossil fuel royalties go straight into its own fund. The value of that fund should enrage every Albertan who has been told again and again that oil wealth is providing for the next generation and not just buying trucks and iPads for the province’s young men and women who could afford to pay for their engineering degrees. Norway’s $710-billion fund (43 times that of “superpower” Alberta) is one of the world’s largest investors. It’s a safety blanket for the entire Norwegian economy, whose GDP is just $485-billion. That’s a year and a half of the country’s entire economic output in one giant bank account.

My point is this: if Alberta is an energy superpower, why can’t it afford to educate the next generation of engineers to exploit its resource wealth? Across the fence, we British Columbians should ask ourselves the same thing before we buy into the LNG boom.