Norway is officially a country of millionaires, even if they can’t necessarily spend that money.

On Wednesday, the country’s massive pension fund surpassed 5.11 trillion kroner which is just slightly more than one million for each of Norway’s 5.1 million citizens.

How Norway got here is through a kind of Scandinavian self-denial that is unfathomable in most other places.

After discovering off-shore oil in 1969, the country’s leadership has resisted spending the windfall in irresponsible ways and, in 1990, began amassing a fortune in the public pension fund that now comprises about one per cent of all the world’s stocks.

The reason is simple: to provide future generations the same high standards of living as current Norwegians, especially when/if the oil runs out.

More money gets added to the piggy bank each year, with oil company profits taxed at over 70 per cent. This might seem high, but as Norway is the world’s seventh largest oil exporter, there’s enough money for Shell, BP and other energy giants to happily play along.

Compare that to the amounts collected from the booming Alberta oilsands, where lower royalties and generous subsidies to the industry means the final take is a lot smaller than it could be.

Sure, things are rosy right now, but when the oil runs out in Alberta there will only be a relatively small rainy-day fund to fall back on. The Alberta Heritage Fund, established in the mid-1970s with a similar purpose as the Norwegian pension fund, stopped saving royalties about a decade later, giving the provincial government free rein to spend the province’s resource wealth without much care. Hell, they’ve even dipped into the savings some years in order to make ends meet, something the government has only recently decided to stop doing.

Today, the Alberta Heritage Fund holds less than $17 billion while Norway’s Oil Fund is worth about $900 billion. The oil will one day dry up, and when it does, Norway will be fine. Will Alberta? Will Canada?

[Reuters][image: lemsipmatt/Flickr]