rabble blogs are the personal pages of some of Canada's most insightful progressive activists and commentators. All opinions belong to the writer; however, writers are expected to adhere to our guidelines. We welcome new bloggers -- contact us for details.

Debating the uses of resource royalties

Please chip in to support rabble's election 2019 coverage. Support rabble.ca today for as little as $1 per month!

Aerial shot of Athabasca tar sands. Photo: Shell/Flickr

In an interesting and well-argued column in the Calgary Herald recently, Mark Milke from the Fraser Institute took issue with my last post here. I can't resist replying to one of his points.

Mr. Milke paraphrases me this way: "Brian Topp wants sovereign resource funds to invest in uneconomic projects too expensive for the private sector -- this instead of shipping 'raw unprocessed resources to Texas and to China.' Topp mentions Norway's resource fund as an example."

I don't know about "uneconomic" but otherwise so far, so good. Mr. Milke then argues this is a "bad suggestion." Why?

"Topp may be unaware that Alberta's Heritage fund was once used to support uneconomic projects. The result was a costly misallocation of money belonging to Albertans. Back in the 1980s (and this started under Lougheed), the Heritage Fund and government itself began to loan and to guarantee loans to all sorts of risky business ventures, all in the name of diversification and job creation. When many companies went belly up by the early 1990s, Alberta lost $2.3 billion in financial fiascos on everything from high-tech startups to meat-packing plants. No government should repeat that corporate welfare boondoggle."

Actually, I'm quite aware of that. And I'm also aware of the approximately $1 billion in other regrettable investments, some to Conservative party insiders, that were simultaneously made by the neighbouring government of Grant Devine in Saskatchewan at the same time. It took the succeeding Romanow NDP government many years to work out of those deals -- I remember them well.

Does this really mean that no publicly owned fund must ever again be allowed to invest capital?

If so, Mr. Milke presumably wants to dismantle the Canada Pension Plan. That publicly-owned fund has been built up to $161.6 billion (check out the results here) but presumably the fund must have invested in some dogs at some point -- so its investment work, good and bad, must never been repeated. And this must also be true of the Caisse in Quebec -- about the same size. And the Teachers' Fund in Ontario.

But let's not stop there.

If it is true that having any history of any kind of "financial fiascos" means that an economic player must never, ever be permitted to repeat its sins again, then we have a much bigger wrong-doer to deal with. Consider the trillions of public dollars spent to bail out private-sector banks throughout the industrialized world in recent years. Should the financial services industry itself be abolished, never to be permitted to operate again?

Perhaps that is Mr. Milke's view. Personally, I'm a more forgiving sort.

I hold to my view that pretending we have low taxes while spending the family silver is irresponsible. One-time resource royalty revenue is capital, and should be invested, not used to pay for real corporate welfare boondoggles -- like corporate tax cuts for the Fraser Institute's funders.

This article was first published in the Globe and Mail.

Thank you for reading this story…

More people are reading rabble.ca than ever and unlike many news organizations, we have never put up a paywall – at rabble we’ve always believed in making our reporting and analysis free to all, while striving to make it sustainable as well. Media isn’t free to produce. rabble’s total budget is likely less than what big corporate media spend on photocopying (we kid you not!) and we do not have any major foundation, sponsor or angel investor. Our main supporters are people and organizations -- like you. This is why we need your help. You are what keep us sustainable.

rabble.ca has staked its existence on you. We live or die on community support -- your support! We get hundreds of thousands of visitors and we believe in them. We believe in you. We believe people will put in what they can for the greater good. We call that sustainable.

So what is the easy answer for us? Depend on a community of visitors who care passionately about media that amplifies the voices of people struggling for change and justice. It really is that simple. When the people who visit rabble care enough to contribute a bit then it works for everyone.

And so we’re asking you if you could make a donation, right now, to help us carry forward on our mission. Make a donation today.


We welcome your comments! rabble.ca embraces a pro-human rights, pro-feminist, anti-racist, queer-positive, anti-imperialist and pro-labour stance, and encourages discussions which develop progressive thought. Our full comment policy can be found here. Learn more about Disqus on rabble.ca and your privacy here. Please keep in mind:


  • Tell the truth and avoid rumours.
  • Add context and background.
  • Report typos and logical fallacies.
  • Be respectful.
  • Respect copyright - link to articles.
  • Stay focused. Bring in-depth commentary to our discussion forum, babble.


  • Use oppressive/offensive language.
  • Libel or defame.
  • Bully or troll.
  • Post spam.
  • Engage trolls. Flag suspect activity instead.