An important event happens in British Columbia, Canada. They are using royalty revenues to set up a BC Prosperity Fund.
The crucial concern is whether the BC Prosperity Fund will be squandered away as in Alberta's Heritage Fund or it will be protected and distributed to residents as in Alaska's Permanent Fund.
The Prosperity Fund is expected to get $100 billion over the next 30 years. British Columbia has a population of about 4 million. If the Prosperity Fund's investment return is distributed to residents, the amount can be quite substantial. Assuming a return of 5%, the amount could be about $1000 annually for each resident. This is close to what Alaskans have been receiving every year over the last 3 decades.
Extracts from "Speech from the Throne" are shown below.
Speech from the Throne | 5th Session | 39th Parliament | Legislative Assembly of British Columbia: (Feb 2013)
The second stream of revenue comes from new royalty revenues directly for the province – British Columbia's share of resource profits. This could exceed one hundred billion dollars over the next 30 years.
This resource belongs to the people of British Columbia, both here today and those to follow. It must be spent wisely – not just for the benefit of today's citizens but also for our children and grandchildren.
To protect this second stream of revenue for generations to come, your government is establishing the British Columbia Prosperity Fund.
Future royalties will be designated to this fund, ensuring British Columbia families can benefit from the prosperity created by natural gas in our province.
This will be a transformational change for our province and we cannot afford to be short-sighted.
Protecting the British Columbia Prosperity Fund
Your government will stand up for British Columbia for generations to come.
Earlier I spoke about the British Columbia Prosperity Fund. Your government is committed to ensuring the B.C. Prosperity Fund remains an endowment for future generations.
Your government is resolute that the Prosperity Fund cannot become a backstop or excuse for poor fiscal management of government.
The B.C. Prosperity Fund belongs to the people of this province, and it will be protected for them.