Alberta Premier Ed Stelmach never had much use for the Heritage Fund. He said as much upon taking the leadership of the Alberta Progressive Conservatives.
Ralph Klein before him saw the fund mostly as a piggy bank to pad annual budget surpluses.
Before Klein, Don Getty inherited the downside of an economy based on cyclical energy prices and had no money to put into the bank.
Even the last term of Peter Lougheed saw investments into the fund frozen.
It is a shame that 33 years after the fund was formed to help our province move past its dependence on cyclical energy prices, no movement can be noted. In all those years, there’s been very little heritage in the Heritage Fund.
Maybe the name is part of the problem. The Heritage Fund is Lougheed’s heritage, not Getty’s, Klein’s and certainly not Stelmach’s.
No premier since Lougheed has had a personal stake in providing returns for future Albertans from a fund somebody else started.
Originally, 20 per cent of the fund’s returns were supposed to be used for capital projects to help diversify the province’s roller-coaster economy. The early research into the oilsands was funded by the Heritage Fund. As soon as the synthetic crude threatened to return substantial profits, the government got out of the business.
Alberta has a world-class medical research capacity, thanks to early investments from the fund. But that’s hardly enough to create a diversified economy.
Through every cycle of the energy industry since Leduc No. 1 discovery well, Alberta’s economy has become less diversified, not more. That’s because the province’s other economic engine — agriculture — has seen its clout fade, with nothing other than oil and gas to fill the gap.
Last weekend, Lougheed finally expressed his distress on the lack of progress that Alberta has made during the last three decades in creating a diversified economy.
Especially seeing that we could have had a large investment fund to soften the risks of building new industries that don’t rely on the activity of drilling rigs.
Lougheed said he was shocked when he heard that the Heritage Fund had lost $3 billion in the markets, reducing its value to just $14 billion.
“That number is distressing to me because when I left government in 1985, the fund was of a similar value,” he told The Canadian Press in an interview. Factored for inflation, the fund is worth just a bit more than half the value it had when Lougheed left office.
After 30 years at the helm, we can conclude the governing party has no plans for anything other than cycling through periods of crazy boom times, to crashes. In between, profits leave the province to foreign-owned corporations.
In fact, we don’t need to conclude that at all. Doing nothing to diversify our economy is an outright policy of the current leadership.
“I’m not looking to invest in any particular business using Alberta Heritage Savings Trust Fund money,” Stelmach said, commenting on Lougheed’s interview. “That’s for future generations.”
“I’m looking at how the private sector can invest in Alberta to diversify our economy,” he says.
Two questions: If the value of the Heritage Fund has shown no growth, what will be left for future generations to invest from the returns on our finite resources? Also: When will the current leadership step aside to make room for the new generations of Albertans who want a more stable economy than we’ve had under the Tories all these years?
Greg Neiman is an Advocate editor.