BC residents not likely to get their citizen dividend.

Residents in British Columbia, Canada, are unlikely to see a citizen dividend.

The BC Liberals who propose the prosperity fund have not been very clear on what to do with it. There is no indication it will be a citizen dividend fund, like the Alaska Permanent Fund.

Instead, the prosperity fund will be used to pay government debt. As more debt will definitely be created by future politicians, this could empty the prosperity fund, just like what happened to the Heritage Fund.

There is some unspecified guarantee for future residents.

"Create the BC Prosperity Fund to capture LNG and proposed Kitimat Clean refinery royalty revenues, and dedicate all revenues to debt reduction until provincial debt is eliminated.

Enact legislation to protect the BC Prosperity Fund from becoming a 'cash-cow' for wasterful and desperate government spending."

The description is more like the Singapore reserve instead of the Alaska Permanent Fund. The Singapore reserve is also kept perpetually for a future Singapore.

For BC residents, the prosperity fund may not even be created if the BC Liberals lose the election this month.

Jason Clemens: B.C. Prosperity Fund Good Idea If Properly Designed

Jason Clemens: B.C. Prosperity Fund Good Idea If Properly Designed.


British Columbia is between Alaska on the west and Alberta on the right. All three have funds that are linked to royalties from natural resources. In the words of Jason Clemens,

Thankfully there are lessons to be learned, and avoided, from our neighbours. Specifically, Alberta provides stark lessons on what not to do when establishing such a fund while our other neighbour, Alaska, provides an equally plain positive lesson.

In short,

1. Contributions to the fund must be mandatory by law (Constitution, no less). Politicians given discretionary power will always find something else that is more urgent.
2. Withdrawal from the fund must be restricted by law to dividend payments, as in the Alaska Permanent Fund. Politicians given discretionary power to dip into the fund will soon empty it.

Speech from the Throne. Will British Columbians get annual citizen dividends?

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.