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Scott Vaughan is president of the International Institute for Sustainable Development. Robert Smith is a Senior Associate with the Institute and Principal of Midsummer Analytics.

The federal government's decision to approve two pipelines last week raises a number of issues, but there is one we haven't really heard in the debate so far: How should revenues earned from resource extraction be used? For us, this is a central question and one that touches directly on Canada's well-being.

We believe a greater portion of resource revenues needs to be re-invested in creating the new economy Canada will need going forward. There are several ways we could do this, all of them well-tested.

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Canada could start by following Norway's lead and using a portion of resource revenues to create national or provincial wealth funds. Such funds could then be used to invest in the innovative Canadian companies that will create the jobs of the future. Norway's wealth fund is worth about $860-billion (U.S.). That money will come in handy when its North Sea resources are depleted.

If wealth funds aren't seen as desirable, governments could use increased resource revenues to give them the fiscal room to provide incentives for companies to expand in new areas, or to fund universities to improve education and undertake new research.

One way or another, the country needs to think hard about how it manages resource revenues in the future. Pumping oil out of the ground is like taking money out of the national savings account. It's fine so long as the account is flush. But if we don't keep an eye on the bottom line, we might find we're in for a surprise one day. And the reality is that governments aren't keeping as close an eye on the bottom line as they should. We know this from new research released last week.

In one of the first reports of its type ever, the International Institute for Sustainable Development took a close look at Canada's "comprehensive wealth." The findings offer a sobering assessment of how well we're managing our wealth.

Put simply, comprehensive wealth is the value of all the assets Canadians rely on to make the economy work. This includes obvious things such as factories and roads. But it also includes our natural resources and ecosystems, our skilled and educated work force and the value of the trust and co-operation that are the foundations of our economy and society. Taken together, this portfolio of assets is what allows Canadians to enjoy their high level of well-being. If the value of the portfolio is allowed to decline, well-being will inevitably follow suit. Just like spending an inheritance faster than it grows will eventually end the party.

Our findings suggest Canada is not managing its comprehensive wealth portfolio as well as it should. Looking at the data from 1980 to 2013, long enough so that the normal swings of the economy wouldn't obscure the trends, we found that comprehensive wealth has barely grown. Real per capita comprehensive wealth grew by less than 0.2 per cent a year over the period. Human capital, the biggest component of wealth, didn't grow at all. Natural capital declined by a startling 25 per cent. Produced capital was the bright spot, growing by about 73 per cent, though most of this was in housing and oil and gas infrastructure.

At the same time, real per capita consumption has been growing quickly. This is a circle that's hard to square. The country can't go on consuming at a rapidly growing rate with the other side of the ledger looking as shaky as it does. Especially when the future holds so much risk. Climate change, oil prices, new sources of fossil fuels and renewable energy, the push toward a low-carbon economy, growing protectionism. All of these are reason for long-term concern.

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Canada will be best poised to take on these risks with a solid comprehensive wealth balance sheet in hand. Right now, we think the country's account is out of balance. Investing more of our resource revenues to help build up our human, natural and produced capital would be a move in the right direction. Of course, that's not all that needs to be done to bolster the balance sheet. But given that the government has decided to approve pipelines, now seems to us like the right time to be talking about it.

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