by Andy Wu, Mukund Sundar, Frank Xiong, Hao Jing, Mingyu He (University of British Columbia)
Savings Funds and Rainy Day Funds are proposed by governments as method to save funds which are to be used for various purposes. In a similar vein to the Alberta Heritage Trust Fund (AHTF), the Alaska Permanent Fund (APF), the British Columbia Liberal Party has established a savings fund called the Prosperity Fund. Since the Prosperity Fund is fairly recent, not much academic research or discussion regarding its structure or value has occurred.
We will discuss why the Prosperity Fund does not make fiscal sense. We will look at the rules that are set up to govern the Prosperity Fund and show why these rules will not ensure the long term success of the Prosperity Fund. In doing so, this paper hopes to contribute to the discussion on setting up responsible savings funds by pointing out the flaws in the current implementation of the Prosperity Fund.