Norway's Generational Contract and its Fiscal Rules

August 18, 2011 | TYLER SUTTON, PSD RESEARCH

PSD sat down with Norway's Finance Minister, Sigbjørn Johnsen, to discuss the financial crisis in Europe and how Norway has sailed through the recent recession on a wave of oil and gas revenues. Like Alberta, Norway earns substantial royalties from the development of oil and gas resources. But while Norway continues to put money away for the future, Alberta is dipping into its Sustainability Fund to offset its forecasted deficits for the fiscal years 2011-2012 and 2012-2013. After a transfer of $4.8 billion from Alberta's savings, the Sustainability Fund was valued at $11.2 billion as of March 2011i, compared to Norway's Government Pension Fund valued at USD 526 billion at the end of 2010. Canada and its provinces can learn a thing or two from a small wealthy country like Norway, facing the same looming concerns of an aging population and an economy that's intricately tied to a large, fiscally unstable neighbour.