Tag Archives: deficit

Dutch Disease: Alberta Canada vs. Norway

The term ‘Dutch Disease‘ refers to an increase in natural resource based economy crowding out manufacturing and other sectors. It’s also a stand in descriptor for taking all your winnings in a booming market and re-investing them in the same market.

When Oil prices were high, both the province of Alberta and the country of Norway benefited from a petroleum based economy, but they approached the future in different ways.

Brian Ripley over at CHPC summarizes Bruce Campbells take-away of the differences between these two economies approach to oil wealth:

Alberta’s so called “progressive” conservative governments; 7 consecutive iterations since 1971, have squandered their provincial energy resources leaving their treasury with a CAD 12 billion dollar debt and a 500 million dollar deficit.

Norway, a county of 5.2 million people (Alberta’s population is similar at 4.2 million), began their first successful North Sea oil drilling in 1971 and by maintaining sovereign control and creating partnerships with the private sector “… now sits on top of a CAD ONE TRILLION DOLLAR pension fund established in 1990 to invest the returns of oil and gas. The capital has been invested in over 9,000 companies worldwide including over 200 in Canada. IT IS NOW THE LARGEST SOVEREIGN WEALTH FUND IN THE WORLD”

Read the full article over at CHPC.