Authors of a new report are urging the Northwest Territories government to avoid the same mistakes Alberta made when managing a fund established to set aside resource revenues.
"Their fund contributions were haphazard," says Action Canada fellow Julia Fan Li, referring to Alberta's Heritage Fund. "In 1987 they actually stopped contributions all together. And it wasn't until the mid-2000s that they restarted contributing into the fund."
Fan Li co-wrote the report on the Northwest Territories fund for Action Canada, a leadership and public policy program that brings together young Canadian leaders.
The Northwest Territories set up its fund in 2012 to save money for future generations. With million in resource royalties from devolution expected to start rolling in next year, the authors say planing is key.
In the budget it released this week, the Northwest Territories government proposes depositing five percent of all future resource royalties into the fund.
The report notes it is important to define what the fund will be used for early on, and that both government and independent financial experts act as trustees.
"The intent is to set it up and make it as tamper proof as possible," says Finance Minister Michael Miltenberger.
He says money in the heritage fund will be locked in for 20 years with the principal off limits.
But future governments will be able to change just how much money is set aside.
MLAs still have to pass the budget before any of these plans are set into motion.