SOMBA K'E/YELLOWKNIFE - The territory's finance minister hopes his government's parting gift to the NWT will be a rainy day fund, albeit one that contains no specific amount and will be a project for his successor to manage following the territorial election in October.

Michael Miltenberger is counting on the Northwest Territories Heritage Fund Act, or Bill 10, to pass third reading during the 16th legislative assembly's last session in August.

Heritage funds, as they are often called, are nothing new. Alberta created one in 1976 with an initial investment of $1.5 billion with the fund receiving 30 per cent of all the province's non-renewable resource royalties. It's worth $15 billion today. The territorial government aims to ink a devolution and resource royalty agreement with Ottawa in the not too distant future, but the GNWT doesn't expect the flow of cash from oil, gas and mining to last forever. That's why the government has to get started now, said Miltenberger.

"We have the bill here, we have time to sort out specific issues. We should look at getting started. We're creating a box and the tools to start saving money," he said.

He said the GNWT is preparing to develop a small endowment fund that will grow at a modest level and produce a small stream of additional revenue for government operations in years to come.

The bill currently calls for money to be invested for a minimum of 10 years before it can be used.

Yellowknife MLAs are mainly positive in their assessment of the bill, but Frame Lake MLA Wendy Bisaro said she has some reservations about how the money would be spent.

"The act seems to leave it open that all the funds could go into our operations and maintenance budget and I don't support that," Bisaro told Yellowknifer last week.

She said she was also concerned the fund would be managed by the GNWT's financial management board, made up of cabinet members. She said the fund should be managed by an arms-length body from government.

"Certainly there should be representation from government on it but I think there ought to be public participation there and arms-length removal from the government," she said.

Kam Lake MLA Dave Ramsay said Alaskan residents are given a yearly dividend between $900 and $2,500 through its own version of a heritage fund and thinks something similar should be set up in the NWT.

"I think the money rightfully belongs to the people of the NWT and should go to the people of the NWT," he said.

Great Slave MLA Glen Abernethy didn't think that was a good idea.

"I think giving everybody a cheque isn't going to help us save and protect the future programs for future generations. It's not a model I support," he said.

Richard Truscott, the Alberta and NWT director for the Canadian Federation of Independent Business, told the standing committee of government operations last week about the history of Alberta's heritage fund, and gave advice about how the NWT could best implement its fund.

"Alberta has a long history of its own Heritage Savings Fund and there are definitely a few lessons to learn and pitfalls to avoid from Alberta's experience," Truscott said Friday.

Incremental changes in the policy, like transferring investment income to general revenues and lowering annual contributions to 15 from 30 percent, has stalled the fund's growth to $15 billion - about the same as it was 20 years ago, according to Truscott.

He also said the maturation term for the fund should be longer than 10 years longer to help build up a larger investment, to which many MLAs attending the committee meeting agreed.

Miltenberger said there still needs to be discussions on many aspects of how the fund will work.

"The next legislature will have to decide how much, if any, they want to start putting in there to get it to start growing. We're setting up the instrument to allow us to do this. Right now we don't have the capacity to do this, and this will give us that capacity.

"We are mainly a non-renewable, resource-based economy. It's not going to last forever, so we've got to take steps today to plan for the future and that's a forced savings account, a pension plan for our children and their children."

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