Invoking the brainchild of former premier Peter Lougheed, Wildrose Party Leader Danielle Smith promised to pump up the value of Alberta’s neglected rainy day fund to $200-billion in the next two decades.
The Heritage Savings Trust Fund, which was established by Mr. Lougheed in 1976 during the early days of the Progressive Conservative dynasty, was meant to be a piggy bank for future generations that could insulate the province if oil and gas royalties wane. But under successive Tory governments, cash injections ceased, investment markets hit the skids and earnings were spent.
Speaking on Tuesday to supporters at an art gallery in Okotoks, her riding south of Calgary, Ms. Smith pledged to sock away 50 per cent of surplus cash each year to fulfill Mr. Lougheed’s vision of long-term sustainable prosperity.
“He never envisioned that it would be a slush fund politicians could skim the interest off of just to be able to enable some extra spending every year,” Ms. Smith said.
“It’s time to rescue the Heritage Fund from the prying fingers of this PC government and start building it back up again so it can fulfill its intended purpose, which is ending Alberta’s oil and gas revenues,” she added.
On the second day of provincial election campaigning, Ms. Smith also promised balanced budgeting, bringing back no-deficit legislation and keeping spending to inflation plus population growth levels. She contrasted her party’s fiscally conservative policies to the Tory government’s recent big-spending budget.
In an interview with The Globe and Mail to commemorate 40 years of Tory party rule, Mr. Lougheed said the establishment of the Heritage Fund was one of his greatest achievements as premier. However, he lamented the current state of the fund, which most recently was pegged at $15.4-billion fair value as of Dec. 31, 2011.
“I’m disappointed,” Mr. Lougheed said, “... If they had continued putting in 30 per cent of resource revenues, it would have now been up to almost $100-billion.”
As far as Mr. Lougheed is concerned, the fund connected with the public and is a tangible piggy bank for future generations.
PC Leader Premier Alison Redford, who was campaigning in Turner Valley, south of Calgary in a riding Ms. Smith hopes to win, called the $200-billion Heritage Fund pledge a “highly ambitious number” based on an “arbitrary” math that doesn’t account for projected growth in the province.
“I don't think you can be arbitrary with respect to formulas,” Ms. Redford said, “You have to think about that growth to make sure we don't end up with either social deficits or infrastructure deficits. It is important for us to reinvest in the Heritage Fund and we've said that, [but]$200-billion is an awfully big number and I don't know how you do that without really pulling back on spending, and I think that has long-term impacts on the community that Albertans aren't going to want to see.”
Ms. Redford dismissed accusations of government treating the money pot like a slush fund. She also questioned Wildrose’s ability to stick with a no-deficit law.
“I think it's fine to say it,” Ms. Redford said. “The question is are you going to be committed to it? ... I know that we will be just fine in terms of balancing budgets in the future, and I think anything else, any other speculation about what we may do, is nothing more than politicking.”
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