Ultimately, I think the best "diversification" is not to diversify, but to better manage the swings. A dose of Keynsian economics if you will. Get the oil out of the ground ASAP. We have it, people want it, its our competitive advantage. Get the Heritage Trust Fund as big as possible as fast as possible. Deposit into it during the boom and draw from it during the bust.
The single worst thing the Conservatives did while in power was to get away from that and fund general operations with too much royalty revenue. (as an aside and not to get into Provincial Election thread type talk, but I'm not against a royalty increase in the way. I am an Albertan first and an employee of O&G second. As an O&G employee, I just want Notley to reduce the uncertainty around her vague promises. Similarly, as an Albertan though I am also conscious of increasing royalties at the wrong time and doing more harm than good.)
Note that I am referring to provincial finances, i.e. the government's business. There's absolutely nothing the government should be doing with respect to personal or corporate behaviour. If you want to be someone who buys a bunch of toys or be a company who leverages themselves to the tits during the boom then have at 'er.
|