Ontario should look to socialist Norway if it wants to capitalize on the rich mineral deposits of the far north's Ring of Fire.

Like Canada, Norway has a resource-based economy, exploiting extensive reserves of oil, natural gas minerals and lumber. Half its export revenues come from oil and gas.

Unlike Canada, Norway is not in hock up to its eyeballs. In fact, it's the second-wealthiest country in the world.

Every Norwegian is, theoretically, a millionaire. That's a million kroner, which translates to about $177,000 US apiece.

That's because, unlike many other resource-rich countries and provinces, Norway put its oil revenues, from taxes, fees and ownership stakes, into a fund where politicians couldn't get their spendthrift hands on them.

The money was invested in financial markets outside Norway. It grew. Their sovereign wealth fund, created a mere 20 years ago, now controls about one per cent of all publicly traded shares in the world.

It's a rainy-day fund, set up because oil won't flow forever. And Norway's oil production has dropped to one-half of what it was in 2001, according to Huffington Post business editor Daniel Tencer in a recent article.

Meanwhile in Alberta, where oil production generally keeps increasing, the debt per capita is at least $1,925 per person, according to Canadian Taxpayers Federation calculations.

Alberta established a Heritage Trust Fund in 1976, but stopped contributing to it. According to a report last month by the Macdonald-Laurier Institute, the total topped out a $17 billion, about one-tenth what it could have grown to with a strategy like Norway's.

Moreover Alberta keeps drawing on that to pay government expenses. Only about 8.6% of resource revenues from 1997 to 2005 were saved, according to the Canada West Foundation. And that was in the oil boom days.

Saskatchewan also launched a Heritage Fund in 1978 to "provide a perpetual source of development and social capital for the people of Saskatchewan," according to a government report proposing its revival.

But perpetuity didn't last long. The government tapped into the fund and assets flowed into general revenues The fund was abolished in 1992.

British Columbia announced last year it was creating a wealth fund with profits from a proposed liquified natural gas industry. The results remain to be seen.

The Harper government, however, wants nothing to do with a sovereign wealth fund, according to Huffington Post.

The Post quotes the co-author of a report favouring oil wealth funds as saying they insulate the economy from sagging prices and prompt governments to save for future generations.

"It would keep government spending within their means," said Melanie Drohan of Canadian International Council. "We wouldn't have these huge surpluses going into huge deficits."

Few Canadians know more about huge deficits than the people of Ontario.

Exploiting the Ring of Fire, a massive mineral-rich area between James Bay and Thunder Bay, has long been touted as one way to lift the province out of its financial morass.

But wouldn't it be nice if at least a portion of the province's profits weren't siphoned off into general revenues, there to be squandered in ways this government seems to have fine-tuned?

Wouldn't it be great if, a couple of decades after someone finally mines and smelts those vast deposits of chromium, copper, zinc, nickel, platinum, vanadium and gold, each Ontarian's share of the Ring of Fire Heritage Fund would be worth a couple of hundred thousand dollars?

One problem with the Norway model, in western government eyes, is that a lot of the money for its wealth fund came from high taxes. Oil profits have been taxed at up to 78%.

We all know that slashing corporate taxes is what has led us to the current promised land of prosperity and jobs, jobs, jobs. The Harper government, for one, has attached the adjective "job-killing" to the noun "taxes" with Crazy Glue.

Strangely, high taxes haven't worked their evil job destruction in Norway, where the unemployment rate is 2.6%.

Canada's unemployment rate, on the other hand, stands at 9% if the many discouraged job-seekers who have left the labour market are counted, according to a recent column by the National Post's John Ivison.

And according to Huffington Post's Tencer, "Norwegians take home a much larger chunk of the economy's wealth than Albertans do."

So while developing the Ring of Fire, Ontario would be well-advised to consider a heritage fund, learning from Norway's successes and Alberta's failures.

Email tom.mills@sunmedia.ca to contact

Tom Mills. Comment at saultstar.com.

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  Sudbury Yahoo • an hour ago

  The Soo should have been in the running for a ferrochrome refinery. You already have the railways and access to water. My hometown was totally out to lunch on this one.

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