Frequently Asked Questions
What is the Future Fund?
The purpose of the Future Fund is to invest revenue from one-time sources and non-renewable resources to strengthen finances, pay down debt and lower the cost of borrowing.
When was the Future Fund created?
The Future Fund Act came in force March 30, 2023.
Who manages the Future Fund?
The Future Fund is managed by the Department of Finance, with a Board of Trustees to provide oversight.
What is the source of contributions to the Future Fund?
Contributions to the Future Fund include:
- Net proceeds of tangible and intangible assets sold for greater than $5 million;
- A portion of non-renewable resource royalties received in the previous fiscal year; and,
- Additional amounts at the discretion of the Treasury Board.
Contributions to the fund are reported annually in the Report on the Program Expenditures and Revenues of the Consolidated Revenue Fund.
How can we spend the money from the Future Fund?
There are strict rules on withdrawing any money from the Future Fund. Any withdrawals from the fund must adhere to the current budgetary and decision-making processes and controls over public money as with any government spending of public dollars.
Permitted withdrawals from the Future Fund include the following purposes, which also require Treasury Board approval prior to withdrawal except for the last two items noted which require the approval of the Lieutenant-Governor in Council:
- Servicing the public debt;
- Paying expenses associated with the sale of Crown assets;
- Paying amounts related to abandonment and decommissioning activities associated with an oil project (lease or license);
- Funding government’s strategic priorities as recommended by the Minister of Finance; and,
- Paying an amount required due to an extraordinary circumstance.
An extraordinary circumstance means a circumstance that, in the opinion of the Lieutenant-Governor in Council, has materially impacted or is projected to materially impact the province’s fiscal position.
Other than transfers of funds to the Newfoundland and Labrador Government Sinking Fund for the purpose of paying down public debt, any other use of money withdrawn from the Future Fund is subject to an appropriation being provided in accordance with the Financial Administration Act. An appropriation represents money voted/approved by the House of Assembly which allows for the payment of public money for a specific purpose.
Money shall not be withdrawn from the fund until:
- at least 10 years has elapsed since the coming into force of the Future Fund Act (which was March 30, 2023); or,
- the balance of the fund is at least equal to government's financial obligations relating to the unfunded long-term debt maturities for the subsequent 10-year period.
Why are we putting money in a Future Fund and not using it to pay for debt now?
The money that we are investing is intended to service the public debt. We are making responsible investments, so that we have money in the future to help us pay down our debt as it matures and to lower the cost of borrowing.
How does the Future Fund grow?
The Future Fund grows as we save more and invest long-term. A conservative investment policy guides the investment of funds in accordance with the Future Fund Act. Types of investments include federal and provincial bonds, municipal and corporate bonds, high quality Canadian and US equities.