Social Policy in Ontario

Norway using oil money wisely

Posted on May 10, 2012 in Governance Policy Context

Source: Toronto Star — Authors: Larry French

TheStar.com – opinion/letters – Re: Quebec students send a message, Opinion May 8
Published On Wed May 09 2012.   Larry French, Toronto

Linda McQuaig makes an important point in her column that high tuition fees for university students are a question of dogma, and not a necessity imposed by the global economy. She cites the example of Norway where tuition is free and students receive a stipend to cover living expenses. She mentions the good fortune of Norway to have “ample oil reserves — almost as blessed as Canada.”

The paradox is that Norway does not use the benefits of its oil reserves to fund the costs of government and of social programs, including education. Norway, like Alberta, has created a Heritage Fund to benefit future generations when the oil dries up, but the comparison ends there.

Norway’s fund, created in 1990 with a contribution of $400 million, is now valued at $573 billion. Alberta’s, created in 1976 with an initial contribution of $1.5 billion, has a puny $15.4 billion. Norway, unlike Alberta, invests its oil profits off shore to avoid the “Dutch disease”: short-term boom, high wage pressure and over-valued currency. Thanks to Alberta, it has become a Canadian disease.

The Norwegian government, with citizen support, has decided to fund its social programs with high levels of taxation. At the same time, as McQuaig indicates, Norway manages “to compete effectively in the global economy.”

Norway, using proportional representation and electing large numbers of women, has good forward-looking government. Canada does not. Norwegian students and citizens benefit, Canadians do not.

Larry French, Toronto

< http://www.thestar.com/opinion/letters/article/1175845–norway-using-oil-money-wisely >

Tags: economy, ideology, standard of living, tax

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