Remember the old adage from the writer and philosopher George Santayana that “those who cannot remember the past are condemned to repeat it.”

At a recent Calgary Chamber of Commerce event, Premier Danielle Smith indicated the Alberta government is looking at using Heritage Fund assets “to assist in de-risking projects that were finding it difficult to get financing.” This signals a return to the Alberta government’s industrial policy of the 1970s and 1980s of being in the business of being in business and government picking “winners and losers” as Premier Klein famously said.

A remembrance of the past is in order, so we aren’t condemned to repeat it. Between 1973 and 1992, the Alberta government took a very active role in cultivating economic development. The approach was highly interventionist and involved direct financial assistance through direct loans (even ones issued though the Heritage Fund), loan guarantees and share purchases. The risks attached to these transactions, particularly in a highly cyclical and volatile economy such as Alberta, were significant, generally unknown at the outset, and largely open-ended.

Sure, there were some notable exceptions, but the high degree of risk of direct intervention in the private sector was illustrated by the fact that during the mid- to late-1990s, Alberta taxpayers lost more than $2 billion from these failed loans, guarantees and share purchases in major business projects.

Most notable were losses incurred on such high-profile business projects as Novatel Communications ($556.0 million), the Lloydminster Bi-provincial Upgrader ($392.5 million), the Millar Western Pulp Mill ($244.2 million), Gainers ($208.3 million), the Magnesium Company of Canada ($164.0 million) and the Alberta-Pacific Pulp Mills ($155.0 million).

The premier makes a valid point that financial markets may be averse to financing large business projects because of the risks associated with intrusive federal climate change policies and regulations. Thus, the argument is there’s a need for the provincial government to get involved in financing market failures in the capital markets.

However, from our remembrance of the past practises, raiding the Heritage Fund to pick “winners and losers” is the wrong prescription to solving this problem. Let’s use the tried and true policies of cutting taxes and streamlining regulations to attract more investment capital to Alberta to support business projects. And let’s focus on building a Heritage Fund of $250 billion to $400 billion that will help secure our province’s fiscal and economic future and the future for our children and grandchildren.