A new report from the Canadian Taxpayers Federation (CTF) indicates Saskatchewan could have had $4.2 billion in savings if it had established a heritage fund for natural resource revenues starting in 2013.

“The report is clear: Saskatchewan needs to start a heritage fund now to save resource revenues and set the province up for the long haul,” said Gage Haubrich, CTF Prairie Director. “Alaska and Norway have built up successful heritage funds and are reaping the benefits.

“Saskatchewan taxpayers are losing out on hundreds of millions of dollars every year because provincial politicians keep procrastinating on saving money for the future.”

In 2013, a commissioned report recommended that Saskatchewan establish a heritage fund to save resource revenue booms and convert them into future wealth for the province.

“When you get a bonus, you don’t count on that windfall every month. So, you use it to pay down your credit card or top up savings,” Haubrich said. “That’s exactly why Saskatchewan needs to set up a resource revenue heritage fund.”

A heritage fund saves a portion of increased non-renewable resource revenues (like oil and potash) to generate long-term interest and limit spending. The CTF suggests budgeting resource revenues to the 10-year average (13%) to encourage prudent spending, saving surpluses for future needs.

Had the province set up a hypothetical heritage fund, it would have been worth roughly $4.2 billion, yielding $210 million in annual interest, according to the Taxpayers Federation.

The fund's annual income would reduce the 15-cent per litre fuel tax by six cents without revenue loss, saving residents $230 annually.

Before that, the government must first eliminate the provincial debt, projected to reach $23.5 billion by year-end, according to the taxpayer advocates. Responsible spending and utilizing 2013 deposit funds for debt reduction could have limited today's debt to $1.6 billion. “The time to act is now,” Haubrich said.

On January 29, Alberta Premier Danielle Smith announced plans to grow Alberta's heritage fund to at least $250 billion by 2050 to reduce the province's reliance on natural resource revenues.

Saskatchewan projected a $1-billion surplus in Budget 2023, but it fell to $182 million by year-end, illustrating the volatility of resource revenue.

“The amount budgeted might not actually be the same by the end of the year,” clarified Haubrich. “And it’s a problem when the government writes budgets on the back of these predictions.”

Other heritage funds have provided significant benefits to their respective people. Last year, Alaska distributed $1,704 per eligible resident, while Norway's $2.5 trillion fund annually covers about 20% of its national budget.

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