Danielle Smith wants to save Alberta's oil wealth, but history shows it's a pledge that's hard to deliver

After spending big in a pre-election budget 12 months ago, Alberta Premier Danielle Smith is now pulling a 180-degree turn to focus on saving as the theme of Thursday's budget, which was centred on penny-pinching and the need to stash away the province's oil and gas wealth for future generations.

There is a long history of governments in Alberta pledging to save the bounty of oil cash, but with a crash in oil prices seemingly always around the corner, every previous commitment to saving has failed.

It's why the province's long-term oilpatch savings account, the Alberta Heritage Savings Trust Fund, has barely grown since the mid-1980s. Since then, ruling governments have often withdrawn money from it, instead of making deposits.

Considering how low the fund's balance remains after decades of pumping oil and natural gas from the ground, Smith's promise will no doubt find some level of support as a worthwhile cause. 

Her biggest challenge will be ensuring the pledge actually sticks. When oil prices inevitably sink will there still be the political will to keep setting aside billions of dollars? 

Based on Thursday's budget, experts say there is little reason to think so.

In fact, Smith's own government isn't making any commitment beyond the upcoming year. There are no details about how much will go into the Heritage fund beyond the next 12 months.

"There's nothing in there that says we are committing to saving," said Ron Kneebone, an economics professor at the University of Calgary and a member of its School of Public Policy.

Any investment income will stay in the Heritage fund, the government said, but Kneebone was expecting a pledge of committing a minimum amount of oil and gas revenue per year into the fund.

"I would have liked to have seen for next year they're going to put in $2 billion, in the year after that they're going to put in $2 billion, et cetera, and I'm disappointed they haven't done that," said Kneebone, who has studied decades of Alberta budgets.

Several other governments around the world have created trust funds to save oil and natural gas revenue. Norway's sovereign wealth fund, the world's largest, is worth $1.6 trillion US. 

"Regimes like Norway and others make a commitment and there is no commitment here," said  Kneebone. "You need to be upfront and clearly state, I am committing as a government.'"

After Smith's televised address last week, which focused on saving money for future generations and getting off the oil and gas roller coaster, Kneebone was hoping the government might even introduce a policy to incentivize future governments to continue contributions to the Heritage fund. It didn't happen.

The Heritage fund began in 1976 with an initial payment of $1.5 billion and a commitment to deposit 30 per cent of resource revenue.