|Lst year’s budget said that the Prosperity Fund wouldn’t move forward until the LNG tax was finalized, and that happened last fall. This makes now a good time to renew the discussion about a sovereign wealth fund in B.C. First off, let’s revisit what a sovereign wealth fund is and why resource-dependent regions use them. When it was first announced, the B.C. Prosperity Fund was pitched as a way for B.C. to pay off its debt, reduce taxes, and pay for social services.
The new money would be tax revenue from a new LNG industry, and B.C. could conceivably use it to pay off debts or lower taxes or build hospitals without creating a sovereign wealth fund. So why do it? Sovereign wealth funds are generally created for two main reasons: to stabilize government finances when prices for natural resources rise and fall, and to preserve resource wealth for the future...............................................Full Article: Source