Canada urged to amass oil wealth

12 posts / 0 new
Last post
Canada urged to amass oil wealth




OTTAWA — The Organization for Economic Co-operation and Development is pushing Canada to adopt Norway's model for managing oil wealth, an approach Alberta has rejected.

The Paris-based OECD, which represents 30 of the world's richest countries, yesterday urged Ottawa and Alberta to create asset funds with stringent rules to direct energy wealth into foreign investment.


Until now, governments have preferred to keep their energy windfalls close at hand, increasing spending or paying down debt. At the federal level, officials have resisted the Norway-style proposal, saying they can't really calculate how much Ottawa earns from energy due to so many spinoffs.

That's not an insurmountable problem, said Peter Jarrett, an OECD economist who wrote the assessment of Canada. It's just a matter of creating a model to estimate revenue flow, publishing it, and setting up the fund from there.

“I think there is scope for doing so,” he said.

A Norway-type fund is more suitable for Alberta than Ottawa, since the province owns the natural resources in question, said energy economist Andrй Plourde, head of the University of Alberta's economics department.

“In Alberta there is more and more pressure for people to think of this more seriously,” he said. “Don't be surprised if that kind of messaging comes out from the Alberta government in the next while,” especially tied to messages about climate change, he added.


The solution to Canada's education,infrastructure and R+D deficit.


While provinces own their resources, the resources of the 3 Territories and offshore belong to the federal government. In the case of offshore resources,I believe some sort of revenue sharing exists.

These federal jurisdictions in future will generate huge returns for the federal government. A petrofund along the lines of the norwegian model is an excellent method to preserve petrowealth for future generations.


Excellent article, jester. I really do hope Albertans take charge of the oil profits. They can't lose.

We need investments for productivity growth and infrastructure, and investments in people. There will come a day when Canadians will no longer rely on exporting finite resources for other countries's workers to add value to. We have to begin to assume that we will run out some day.



Originally posted by Fidel:
[b]There will come a day when Canadians will no longer rely on exporting finite resources for other countries's workers to add value to.[/b]

That won't happen in your life time nor your great great grand children's life time.



“We have no plans to have a sovereign wealth fund federally,” Mr. Flaherty said in a brief interview before joining Group of Eight finance ministers for a working dinner. “The approach we've taken to intergenerational equity is to reduce the public debt dramatically, to eliminate net public debts of governments by 2021, and, as you know, we are well on track to do that.”

Flaherty is saying 'Canada first' which I agree with. The OECD report is suggesting Canada use its wealth to invest in foreign countries to balance currency fluctuations in part while Flaherty is saying that we will use our wealth internally first.

I agree with paying down the debt [i]to a certain level[/i] and then using government debt levels to ensure that citizens have safe investment vehicles for their savings. This debt can be used to fund infrastructure or other improvements.[url=

Oops, forgot link

[ 13 June 2008: Message edited by: jester ]


Yes, they need to pay down the humungous debt which Mulrony's conservatives racked up after putting the kibosh to Canada's economy in the 1980's-90's. Keep the economy on IV drip while banks and foreign-based energy companies cart away and siphon-off billions in oil and gas profits. Sounds good to me.

Conservatives wouldn't know what to do with a surplus oil fund anyway. It's against their religion. Same with the Liberals.



Originally posted by scooter:
That won't happen in your life time nor your great great grand children's life time.[/b]

actually it's happening now, if the finite resource is crude oil. Canada's crude oil production is decreasing year over year, in 10 years the only reason to transfer it to the US will be to have it refined. i.e., Canada will need all her own oil, for domestic consumption.

if you're talking about oil-sands, yes, with the proper energy source, those exports could go on for a long time. the 2 choices there are -
* use Canadian natural gas to provide the energy for the process. is Canada going to use up all her natural gas and not cooperate with global CO2 agreements, and destroy a part of one province' environment, just to provide the US with 2 or 3 million barrels per day of oil ? that's for Canadians to decide. Canada being a democracy, they could very well say, "Nyet."
* Nuclear, e.g. a French company has had contract negotiations about building a plant to help process oil sands.


And "peak natural gas" in Canada is said to have occurred in 2001. We export 60% of NG to the U.S. A couple of decades from now we'll be importing NG while at the same time exporting it to the U.S. because our then stooges signed the stupidest trade deal in the history of the planet in 1994. They had to be on the take. Had to be.

remind remind's picture

Here is a lonk to what Fidel was speaking baout:




Originally posted by wwSwimming:
[b]actually it's happening now, if the finite resource is crude oil.[/b]

Yes, but Fidel was talking about resources. Alberta has at least a 350 year supply of coal. It ain't clean, it ain't pretty but it is a hell of a supply of energy. As for natural gas, there are still numerous areas in Canada that have not been fully explored or exploited.

There are tidal and wind energy sources that we are only just beginning to harness. And don't forget the nuclear power that we can generate from our uranium mines.


from the Edmonton Sun:


The report also urges Stelmach to review royalty rates some more to "ensure that pure economic rents are being captured." Also good.

But Alberta isn't the only government that should get into the heritage fund business to siphon off the billions from energy exports.

[b]"The federal government should consider[/b] doing likewise," the document noted.

"It's an interesting idea," federal Finance Minister Jim Flaherty beamed. [b]"We can look at it."[/b]

[url=][b]Just like Pierre Trudeau did with his National Energy Program.[/b][/url]

But there's more. The OECD apparently has a problem with our oilsands . . .

[ 15 June 2008: Message edited by: Fidel ]