Energy Prices and Alberta Government Revenue Volatility

Alberta government needs a revamped resource revenue stabilization fund to overcome the effects of wild swings in resource revenue and spending.Energy prices change substantially and unpredictably, causing revenue planning trouble for the Alberta government. Adjusting to these movements typically involves economic, social, and political costs that need to be factored into the government’s fiscal outlook. The best option for handling this is a resource revenue stabilization fund that collects a fixed proportion of resource revenue each year, and funds the provincial budget each year with a fixed share of the fund’s assets.