Suspension of Future Fund contributions more than a short-term concern

Dear Editor:
I read with interest Roger Bill’s July 9th Shoreline article regarding the provincial government’s decision to suspend contributions to the Newfoundland and Labrador Future Fund, including the omission of the planned 2025 contribution.
I was appointed to the Fund’s Board of Trustees through the Independent Appointments Commission’s merit-based process when the Fund was established. As the only trustee from outside the provincial public service, and as a former senior federal public servant with a career in financial management, I appreciated both the opportunity to serve and the confidence placed in me.
As both a father and grandfather, my motivation for joining the Board stemmed from the Fund’s intergenerational purpose: setting aside a portion of the wealth generated from our province’s non-renewable resources for the benefit of future generations. The principle is straightforward. Once these resources are extracted, they are gone forever. It is only reasonable that some of the benefits derived from them should extend beyond the current generation to our children and grandchildren.
The Fund’s investment mandate emphasized prudence, directing investments toward high-quality assets such as government bonds and established Canadian and U.S. companies. This approach was designed to protect the Fund while generating reasonable long-term returns. In my view, the Board fulfilled its fiduciary responsibilities effectively and, despite its conservative investment strategy, the Fund achieved returns that exceeded the Province’s cost of borrowing, as noted in Mr. Bill’s article.
It is also inaccurate to suggest that the Province was borrowing money to invest in the Fund. Contributions were made from non-renewable resource royalty revenues—not from borrowed funds used to finance government operations. That distinction is important.
To say I was disappointed by the government’s recent changes to the Fund would be an understatement. I shared my concerns with both the Board Chair and my fellow trustees.
Like many others, I am also concerned that, in addition to suspending future contributions, the government may ultimately draw down the Fund’s existing balance to support current spending.
After considerable reflection, I decided several weeks ago to resign from the Board. I regret seeing contributions to what I believe is a thoughtful and forward-looking initiative—one carefully designed to benefit future generations—halted for what I consider to be short-term reasons.
As many economists and public finance experts have observed, Newfoundland and Labrador has long faced a spending challenge more than a revenue challenge. Suspending contributions to the Future Fund does nothing to address that underlying issue. Instead, it weakens an important mechanism for ensuring that some of the wealth generated from our finite natural resources is preserved for those who come after us.
I sincerely hope the Fund’s existing balance is not used to finance recurring budget deficits and that the government reconsiders its decision to suspend contributions. Our children and grandchildren deserve to share in the lasting benefits of the province’s non-renewable resource wealth.
Regards,
Ken Martin, St. John’s