Alberta looks to Alaska Permanent Fund as model

But governor’s press secretary, Bob King, tells Edmonton Journal that fund’s dividend comes with a down side

Gary Park

PNA Canadian Correspondent

Awash in oil and gas revenues and within two years of wiping out its remaining debt, Alberta is eyeing Alaska as a model of how to spend its riches.

The only hitch is that some in Alaska apparently don’t see the Permanent Fund as the model of anything.

Bob King, press secretary to Gov. Tony Knowles, told the Edmonton Journal the Alaska dividend comes with a cost, including a downside he described as “dividend mania.”

“We can’t put a cap on people’s expectations,” he said in an interview. “The cheap and easy way to try to win votes here is for a politician to say we should cut spending and put the money back into increased dividends.”

The result, he said, is that a fund originally set up to help Alaska grow and develop and offer a backstop in times of financial need is now the object of demands for ever larger payouts.

“I’m not sure I’d want to be quoted saying this, not even in Edmonton, but our sense of community has changed,” said King. “We used to have a more cooperative spirit here. And in changing that, the dividend has certainly played a part.”

But Premier Ralph Klein, facing an election that is likely to be called for March, said his government is open to the idea of creating a separate fund to dole out annual dividends to its three million residents.

Tax experts, academics and consumer advocacy groups are pointing him to the Alaska fund as the answer.

“It’s something we’ll have to look at,” said Klein. “But I will only look at that or other options when the debt is gone.”

Alberta heading for big surplus

Since September, the government has announced almost C$3 billion worth of rebate programs to shield residential, commercial and institutional consumers from soaring natural gas and electricity costs.

Klein’s political opponents argue a better idea would be to follow Alaska’s lead and place a percentage of resource royalties into a permanent fund, then send Albertans a check every three months to coincide with quarterly financial reports.

In the meantime, the province operates a Heritage Savings Trust Fund, which was created in 1976 from surplus energy revenues and is now valued at about C$13 billion, although the money is primarily tied up in capital investments and low-interest loans to other provincial governments.

Faced with its windfall returns, the government has canvassed residents for their preferences to handle surplus funds once the debt is gone.

A survey was mailed out to every home in November and results will be made public in February.