Yes, there is something deeply unattractive about the scold who smugly wallows in others’ debacles because he warned that the worst might happen. On the other hand, sometimes the scold is right and disaster today should be a warning to stop self-destructive behaviour that is still continuing in spite of catastrophe. That is exactly the case in the resource-rich provinces’ (step forward Alberta and Newfoundland, with a few others not far behind) dependence on resource royalties to balance their budgets. Tanking oil and gas prices have revealed just how shaky their budgetary assumptions have been.
Not only is dependence on such revenues ill -advised from a budgetary point of view (former Alta Treasurer Jim Dinning rightly notes “non-renewable natural resource revenues are non-reliable revenues”), it is deeply suspect from a moral point of view. Royalties are not income. They are the revenue from sales of an asset, and are therefore capital to be invested, not income to be spent, not least because the resources belong to generations yet unborn as well as the totday’s population. I lay out the argument in today’s column for the ROB’s Economy Lab feature in the Globe and Mail.
