Premier Brad Wall has tapped former University of Saskatchewan president Peter MacKinnon to lead an initiative to explore potential ways to spend the province’s excess natural resource wealth.
Wall made the announcement Oct. 16 during his state of the province address in Saskatoon, during which he laid out his party’s blueprint for Saskatchewan’s resource-driven era of expansion.
MacKinnon will study options and provide advice on how the government should handle non-renewable resource revenue once the province has come close to retiring debt.
“It is certainly possible to imagine a Saskatchewan that is debt-free or approaching debt-free status within years,” MacKinnon said.
“An initiative like this is not simply undertaken on a whim or on a spur of the moment. It requires careful and advanced thought.”
But NDP Interim Leader John Nilson, head of the official opposition, pointed out after the announcement that — at the current rate — the province will not clear its debt until about 2060.
Saskatchewan is now $3.8 billion in debt and Wall’s new growth plan commits to balancing the budget while paying off $400-million within the next five years.
Nilson also said the idea to squirrel away the province’s resource surplus was first pitched by his party.
“The proposed heritage fund — an idea the NDP raised and is in support of — wouldn’t begin for another 48 years,” he said in a press release.
During last year’s provincial election campaign Dwain Lingenfelter, the former leader of the NDP, touted a plan to set aside large chunks of potash, oil and gas royalties.
MacKinnon said the idea has been floated by others in the province before. He will look at those plans as well as examples of similar funds elsewhere in the world to come up with a strategy for how Saskatchewan could go forward with a comparable initiative.
In Norway, for example, a heritage fund fed by the country’s growing surplus of oil revenue was set up during the 1990s. The fund is now the largest sovereign nest egg in the world, with a face-value of more than $600-billion.
MacKinnon said he intends to examine closely how to model the fund and stressed the provincial government has not made it a requirement for Saskatchewan to be completely debt-free before the fund starts saving.
He will begin meeting with government officials soon to develop a working plan.
Murray Mandryk is a veteran political writer for the Regina Leader-Post. In his Oct. 20 column, he called the heritage fund plan a “pipe dream.”
“We’re basically squeaking by with our budgets,” Mandryk said in an interview with the Sheaf.
“I keep hearing and writing stories about how great Saskatchewan is doing. And at the absolute best of times, we are only getting by on $10-million a year surpluses. That’s not very encouraging in terms of being able to put away money for the future.”
Mandryk believes the government should come to the realization that the province can pay down debt and put savings together for the future at the same time.
“In the same way people pay down their mortgage and actually put some money towards RRSPs and their retirement,” he said.
“I think without some early arrival at instituting this heritage fund in whatever form it takes, it’s just paying so much lip service to the issue unless they get it going a hell of a lot earlier,” Mandryk said.
Photo: Raisa Pezderic/The Sheaf