Lack of diversification is a risky invitation to investment disaster. Very few institutional, corporate or individual investors would put their total net worth into one sector. Yet that’s just what Alberta, Newfoundland and Labrador, and Saskatchewan have done.
The economies of these provinces are heavily dependent on the fortunes of the petroleum industry. Corporate and personal income taxes generated by the industry are key to the treasuries all three provincial governments.
In addition, provincial ownership of subsurface mineral rights and the right to sell drilling leases, means they’re further lashed to a notoriously volatile industry that appears to be on its way out.