79-555: The Alberta Heritage Savings Trust Fund (HSTF) is a sovereign wealth fund established in 1976 by the Government of Alberta under then- Premier Peter Lougheed . The Heritage Savings Trust Fund was created with three objectives: "to save for the future, to strengthen or diversify the economy, and to improve the quality of life of Albertans." The operations of the Heritage Savings Trust Fund are subject to
158-420: A 10 per cent coupon . Alberta amended the policy on Canada Investment Division loans in the 1979-80 fiscal year to allow all provincial governments to borrow at the interest rate of the province with the strongest creditworthiness , a benefit for provinces who would otherwise be required to borrow at higher interest rates on the open market. The highest credit rating and default benchmark for all other provinces
237-530: A 2014 study, SWFs are not created for reasons related to reserve accumulation and commodity-export specialization. Rather, the diffusion of SWF can best be understood as a fad whereby certain governments consider it fashionable to create SWFs and are influenced by what their peers are doing. As market participants, SWFs influence other institutional investors, who may see investments made alongside SWFs as inherently safer. This effect can be seen with increasing frequency, especially with regard to investments made by
316-642: A billion-dollar umbrella over mortgage holders, small businesses, and farmers. In the announcement to address the recession , Lougheed stressed the diversion of funds from the Heritage Trust Fund would only be temporary, and the concept of the fund would remain intact. The Legislature passed the Alberta Heritage Savings Trust Fund Amendment Act, 1983 (Bill 18) which repealed the diversion of 30 per cent of non-renewable resource revenue and provided for
395-734: A central bank, which accumulates the funds in the course of its management of a nation's banking system; this type of fund is usually of major economic and fiscal importance. Other sovereign wealth funds are simply the state savings that are invested by various entities for investment return, and that may not have a significant role in fiscal management. The accumulated funds may have their origin in, or may represent, foreign currency deposits, gold, special drawing rights (SDRs) and International Monetary Fund (IMF) reserve positions held by central banks and monetary authorities, along with other national assets such as pension investments, oil funds, or other industrial and financial holdings. These are assets of
474-567: A deposit of $ 500-million in the Heritage Savings Trust Fund over that period. In October 2020, the Government of Alberta announced a review of the investment policy for the Heritage Savings Trust Fund. The Trust Fund faced significant losses from a volatility-based investment strategy during the COVID-19 recession . The volatility-based strategy resulted in direct losses of $ 411-million, which were compounded by other global market losses from
553-507: A notable exception to this more typical model. Stabilization SWFs are created to reduce the volatility of government revenues, to counter the boom-bust cycles' adverse effect on government spending and the national economy. Savings SWFs build up savings for future generations. One such fund is the Government Pension Fund of Norway . It is believed that SWFs in resource-rich countries can help avoid resource curse , but
632-472: A number of investments which brought negative attention to the fund and government. The 1987 loan of $ 120-million to Millar Western for a Whitecourt pulp mill which the government never received interest or principle payments on despite the province awarding the company several contracts. The province lost $ 244.2-million on the loan and in 1994 took a 60 per cent ownership stake in Millar Western which
711-463: A source of criticism for Alberta governments, as the value of the fund has failed to grow at the pace of provincial non-renewable natural resource revenues, which between 1980 and 2014 accounted totaled almost $ 190 billion, while the value of the Heritage Fund in 2014 was only $ 17.3 billion. The fund was established in 1976 accruing 30 per cent of provincial non-renewable resource revenues, which
790-419: Is a state-owned investment fund that invests in real and financial assets such as stocks , bonds , real estate, precious metals , or in alternative investments such as private equity funds or hedge funds . Sovereign wealth funds invest globally. Most SWFs are funded by revenues from commodity exports or from foreign exchange reserves held by the central bank . Some sovereign wealth funds may be held by
869-650: Is due to political instability, while economic determinants generally play a less important role. SWFs in unstable countries may provoke risks for recipient states of SWF investments, given that the instability in SWF-sponsor countries makes those investments uncertain and likely to be disinvested to weather political risk in the short-term. Highly stable countries, such as Denmark, Qatar, China, or Australia are less likely to experience SWF depletion precisely because of their political stability. Economy of Alberta Too Many Requests If you report this error to
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#1732783239166948-538: Is not always possible or desirable to hold this excess liquidity as money or to channel it into immediate consumption. This is especially the case when a nation depends on raw material exports like oil, copper or diamonds. In such countries, the main reason for creating a SWF is because of the properties of resource revenue: high volatility of resource prices, unpredictability of extraction, and exhaustibility of resources. SWFs are primarily commodity-based and many have been established by oil-rich states. SWFs of China are
1027-704: Is now worth $ 853 billion. Another early registered SWFs is the Revenue Equalization Reserve Fund of Kiribati . Created in 1956, when the British administration of the Gilbert Islands in Micronesia put a levy on the export of phosphates used in fertilizer , the fund has since then grown to $ 520 million. SWFs are typically created when governments have budgetary surpluses and have little or no international debt. It
1106-564: Is widely believed most have diversified hugely into assets other than short-term, highly liquid monetary ones, though almost no data is publicly available to back up this assertion. The term "sovereign wealth fund" was first used in 2005 by Andrew Rozanov in an article entitled, "Who holds the wealth of nations?" in the Central Banking Journal . The previous edition of the journal described the shift from traditional reserve management to sovereign wealth management; subsequently
1185-520: The Alberta Heritage Savings Trust Fund Act and with the goal of providing "prudent stewardship of the savings from Alberta's non-renewable resources by providing the greatest financial returns on those savings for current and future generations of Albertans." Between 1976 and 1983 the Government of Alberta deposited a portion of oil revenue into the fund. The Heritage Savings Trust Fund used oil revenues to invest for
1264-781: The 1971 election ending the 36-year Social Credit government. The Progressive Conservatives promised change and began quickly with public consultations on energy policy. The previous Social Credit government limited royalties on oil and gas at 16.6 per cent, which was written into each mineral lease. The result of the consultation and government analysis concluded public ownership share of energy resources should be higher, oil and natural gas were priced below value, resource upgrading and employment in Alberta must be increased, and Albertans deserved greater investment opportunity for public-owned resources. The government of Alberta made efforts to increase export prices of oil and natural gas in 1972, which
1343-538: The Fiscal Management Act requiring the Government of Alberta to deposit to the Trust Fund five per cent of the first $ 10-billion of non-renewable resource revenue, 25 per cent of the next $ 5-billion and 50 per cent of all non-renewable resource revenue in excess of $ 15-billion. Based on a look back at non-renewable resource revenue between 2000 and 2013, on average, the proposal would have resulted in
1422-478: The Fraser Institute concluded that Alberta should be saving more of its non-renewable resource revenues. The report noted that since 1980, the non-renewable resource revenues in Alberta has generated almost $ 190-billion, but the value of the Heritage Fund was only $ 17.3-billion in 2014. After 1987, non-renewable resource revenue was no longer added to the Heritage Fund. The Fraser Institute report compared
1501-470: The Great Recession , reducing the fund's value to $ 14-billion. Peter Lougheed – whose government created the fund in 1976 – spoke critically of the fund's management and failure to diversify the Alberta economy, noting the fund was valued at $ 14-billion in 1985 when he retired from provincial politics. The fund did not recover these 2009 losses for another five years when
1580-743: The Kuwait Investment Authority during the Gulf War managed excess reserves above the level needed for currency reserves (although many central banks do that now). The Government of Singapore Investment Corporation , Temasek Holdings , or Mubadala are partially the expression of a desire to bolster their countries' standing as an international financial centre. The Korea Investment Corporation has since been similarly managed. Sovereign wealth funds invest in all types of companies and assets, including startups like Xiaomi and renewable energy companies like Bloom Energy. According to
1659-606: The US$ 1.2-trillion sovereign wealth fund established in 1990 to invest surplus revenues of the Norwegian petroleum sector . Norway's fund has grown significantly, increasing in value by 13 times between 2002 and 2017, furthermore the Norwegian government is only able to withdraw up to 3 per cent of the fund's value each year, with the first withdrawal taking place in 2016. In their August 2015 contrast for The Globe and Mail between
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#17327832391661738-752: The "political temptation" to "raid" the Fund and offered the Canadian Pension Plan Investment Board (CPPIB), a Crown corporation, the largest pension fund in Canada, as a model. By March 2015 the CPPIB fund had grown to $ 219-billion and made a 16.5 per cent rate-of-return in 2013. Max Fawcett, the editor of Alberta Oil magazine, warned that the newly proposed Alberta Future Fund from the Premier's Council for Economic Strategy, which
1817-941: The Alaskan formula, by 2011 the Heritage Savings Trust Fund would have had a value of $ 42.4-billion instead of $ 9.1-billion. Under the Norway fund deposit requirements, Alberta's Heritage Savings Trust Fund would have reached $ 121.9-billion by 2011. In its annual report on the Canadian economy in February 2013, the Washington-based International Monetary Fund (IMF) urged Canada, and resource-rich provinces like Alberta and Quebec to "better manage boom-and-bust commodities cycles by stashing away more tax revenue in good times". IMF mission chief for Canada, Roberto Cardarelli, suggested that Norway, with
1896-503: The Alberta Heritage Fund to Norway's pension fund and Alaska's Alaska Permanent Fund and argued that Alberta's was significantly "smaller than others because of its relative under-funding and chronic withdrawals of most income from the fund." Alaska for example continued to deposit 25 per cent of its non-renewable resource revenue from 1982 to 2011 and Norway contributed 100 percent. The report noted if Alberta had followed
1975-687: The Alberta Heritage Savings Trust Fund and the Norwegian Government Pension Fund Global , Brian Milner and Jeff Lewis wrote that Norway parks 100 per cent of its non-renewable resource revenue from royalties and dividends in a fund that is barred from investing a krone in the domestic economy, while the Heritage Savings Trust Fund has invested heavily in Alberta. Reports by the Canadian Centre for Policy Alternatives and
2054-741: The Commercial Investment Division to hold a portfolio of securities, and the Energy Investment Division to make investments in energy capacity across Canada, which was closed shortly afterward owing to the National Energy Program. Eventually, Provincial Treasurer Lou Hyndman announced the province would indefinitely suspend the Canada Investment Division and the possibility of future inter-provincial loans issued by
2133-465: The Fund provided loans to provincial governments and Crown Corporations in the provinces of Newfoundland and Labrador, Nova Scotia , Manitoba , New Brunswick , Prince Edward Island , and Quebec through Hydro Quebec . Loans under the Canada Investment Division grew to $ 1.9-billion by the time the program was suspended in May 1984. In certain circumstances loans to other Canadian provinces failed to support
2212-568: The Fund's $ 11.8-billion assets placed in the Transition Portfolio. The Transition Portfolio invested primarily in interest-bearing securities for a steady stream of income, while the Endowment Portfolio was split between fixed-income securities and equities both between 35 and 65 per cent of the fund. The Alberta economy's recovery from the early 1990s recession was jumpstarted by the 2000s energy crisis , which saw
2291-535: The Government Pension Fund of Norway, Abu Dhabi Investment Authority , and Temasek Holdings, and China Investment Corporation. SLFs help facilitate a state's ability to use its selective equity investments to promote its industrial policies and strategic interests. The growth of sovereign wealth funds is attracting close attention because: The governments of SWFs commit to follow certain rules: A number of transparency indices sprang up before
2370-505: The Heritage Savings Trust Fund and the remaining $ 273-million applied to the provincial debt. Calls to amend the Alberta Heritage Savings Trust Fund legislation to make the fund "inflation-proof" dated back to the 1990s as successive governments withdrew large portions of the Fund's investment interest. The Alberta Heritage Savings Trust Fund Act (Bill 32) was introduced by the Progressive Conservative government during
2449-421: The Heritage Savings Trust Fund and withdrew all interest income from the fund into general revenues. The decision to suspend non-renewable natural resource deposits provided an estimated additional $ 216-million to the treasury, and an additional $ 1.4-billion in investment income transfers. The decision in effect capped the fund at $ 12.7-billion. The $ 1.4-billion investment income transfer amounted to 19.7 per cent of
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2528-410: The Heritage Trust Fund. Funds would instead be used on investments in Alberta. The 1982-83 fiscal year marked the first occasion when income generated in the fund was utilized for general government purposes with the transfer of $ 866-million to Alberta's General Revenue Fund while retaining $ 1,986-million. Lougheed announced to Albertans that the " rainy day " had arrived and the government intended to put
2607-478: The IMF call for "stabilization funds" arguing that every province in Canada should consider establishing a sovereign wealth fund, as global peers have done, and treat non-renewable resource revenue as "capital to be saved and invested, rather than income to be spent." She added that in provinces like Alberta where the Fund already exists, it "should be implemented with a great deal more rigour." Drohan warned in 2013 against
2686-472: The Legislature further refined the purpose of the fund, stating it was not to transform Alberta into an "industrial state", stating he did not want smoke-stacks, but instead the "best jobs" and "brain power". Lougheed and the Progressive Conservative campaign was successful, and he returned to power with a strong majority government controlling 69 of 75 seats in the Legislature. The fund was created with
2765-604: The Lloydminster Bi-Provincial Upgrader for heavy oil with Husky Oil and the Government of Saskatchewan, and the Alberta-Pacific Forest Industries pulp mill. By 1993 the government's decisions to reduce and eventually eliminate non-renewable natural resource revenue in 1983 and 1987 combined with the diversion of interest revenue from the fund to general revenue had reached $ 15.4-billion in diversion, more than double
2844-498: The Lloydminster upgrader to Husky Oil only four years later in 1998 for $ 310-million, fully recovering Saskatchewan's investment in the project. The Heritage Savings Trust Fund has proven to be a target of criticism from a wide spectrum of authors and organizations representing many positions on social and economic scales. The Alberta Heritage Savings Trust Fund often draws comparisons to the Government Pension Fund of Norway ,
2923-873: The Principles, representing collectively 80% of the assets managed by sovereign funds globally or US$ 5.5 trillion. Assets under management of SWFs amounted to $ 7.94 trillion as of 24 December 2020. Countries with SWFs funded by oil and gas exports, totaled $ 5.4 trillion as of 2020. Non-commodity SWFs are typically funded by transfer of assets from official foreign exchange reserves, and in some cases from government budget surpluses and privatization revenues. Middle Eastern and Asian countries account for 77% of all SWFs. Numerous SWFs have gone bust throughout history. The most notable ones have been Algeria's FRR, Brazil's FSB , Ecuador's numerous SWF arrangements, Papua New Guinea's MRSF, and Venezuela's FIEM and FONDEN. The main reason why these funds have been exhausted
3002-658: The Santiago Principles, some more stringent than others. To address these concerns, some of the world's main SWFs came together in a summit in Santiago , Chile, on 2–3 September 2008. Under the leadership of the IMF, they formed a temporary International Working Group of Sovereign Wealth Funds. This working group then drafted the 24 Santiago Principles , to set out a common global set of international standards regarding transparency, independence, and accountability in
3081-671: The United States. While the PSF was first funded by an appropriation from the state legislature, it also received public lands at the same time that the PUF was created. The first SWF established for a sovereign state is the Kuwait Investment Authority , a commodity SWF created in 1953 from oil revenues before Kuwait gained independence from the United Kingdom. As of July 2023, Kuwait's Sovereign Wealth Fund, or locally known as Ajyal Fund,
3160-569: The absence of Legislature control over investments noting matters concerning investment are traditionally the prerogative of the government. The Alberta Heritage Savings Trust Fund's first year of operations saw the legislated deposit of $ 1,500-million in assets from the Government of Alberta, $ 620-million in deposits resulting from 30 per cent of the Province's non-renewable resource revenue, and $ 88-million in investment earnings. The initial $ 1,500-million transfer included $ 254.5-million in cash, with
3239-556: The absence of public consultation in the development of overarching legislation, Cabinet's control over 80 per cent of the fund's investments, leaving the Legislature with control over 20 per cent of the fund's assets. The Progressive Conservative government made concessions to give the Legislature power to vote on deposits made into the fund each year, but Premier Lougheed called giving the Legislature additional control over investments impractical, naïve and ridiculous. Progressive Conservative Government House Leader Lou Hyndman rationalized
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3318-482: The allocation of all non-renewable resource royalties to make investments in firms, projects, and infrastructure that would encourage economic activity – without necessarily providing a financial return on investment. Despite the recommendations of the report, the Government did not create the Future Fund. Under Premier Alison Redford and Finance Minister Doug Horner , the 28th Legislature passed
3397-483: The asset management firm for the province of Alberta. AIMCo transferred control of the province's various financial assets, which had previously been managed by a division of the Alberta Ministry of Finance. AIMCo's mandate included managing the Heritage Savings Trust Fund from that point onward. Public criticism reignited in 2009 when it was announced the Heritage Savings Trust Fund had lost $ 3-billion during
3476-588: The election, and Premier Lougheed used the opportunity to outline the policy behind the fund. The fund would be used to diversify and strengthen the Alberta economy , improve the capacity and quality of life for future Albertans, stimulate the economy and continue to accumulate interest on the principal. Furthermore, Lougheed stated the funds would not be invested in a way as to interfere with private sector activity, or disrupt existing financial institutions, and primarily be invested inside Alberta. Lougheed in debates in
3555-511: The final payment was made. The growing provincial treasury led to three years of deposits in the Heritage Savings Trust Fund in 2005-06 ($ 1.75-billion), 2006-07 ($ 1.25-billion), and 2007-08 ($ 918-million); the first deposits to the Fund in 19 years. In 2008, the Government of Alberta created the Alberta Investment Management Corporation (AIMCo), a Crown corporation owned by the provincial government as
3634-407: The fourth session of the 23rd Alberta Legislature and received Royal Assent on May 23, 1996. The Act reorganized the fund, focusing on a period of temporary short-term investments for the benefit of the provincial treasury while transitioning the Fund to long-term investments by 2005. This change was facilitated through a separate "Transition Portfolio" and "Endowment Portfolio", with $ 10.6-billion of
3713-466: The fund claimed $ 2.8-billion on "deemed assets" which could not be liquidated or in any way recovered by the province. Furthermore, opposition MLAs Nicholas Taylor, and Sheldon Chumir claimed the fund created a needless backlash against Albertans in Toronto and Ottawa. As Alberta's economy continued to falter in the late 1980s, calls from both inside and outside Alberta were made to use the Fund to reduce
3792-445: The fund's 1993 value of $ 15.3-billion. The Alberta Heritage Savings Trust Fund underwent several changes with Ralph Klein 's successful leadership campaign for the Progressive Conservative party and subsequent success in the 1993 Alberta general election . Klein was a staunch believer that private enterprise should dictate market activity and government "should not be in the business of business". The Alberta Heritage Savings Trust Fund
3871-404: The fund's assets invested in projects with long-term economic or social benefits to Albertans. The Canada Investment Division with up to 15 per cent of the fund's assets made loans to other governments or government agencies in Canada. The Alberta Investment Division sought opportunities in Alberta where investments would strengthen and diversify the economy . The fund was initially criticized for
3950-531: The fund. Non-renewable resource revenue included any revenue received by the Alberta government related to agreements or bonuses under the Mines and Minerals Act , including royalty or in lieu of royalty for bituminous sands leases. The Act also created the 15-person Legislature Committee to review the operations of the fund, but not manage any of the investments. The fund was divided into three investment divisions. The Capital Projects Division with up to 20 per cent of
4029-554: The goals of the Heritage Savings Trust Fund, as the Province of Quebec used loans to subsidize agricultural development in the early 1980s, leadings to a reduction in Alberta livestock exports to Quebec. Under Peter Lougheed, $ 25.5-million from the Heritage Savings Trust Fund was used for the construction of the Kananaskis Country Golf Course as a measure to promote the diversification of the province's economy. The Alberta Heritage Savings Trust Fund has had
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#17327832391664108-472: The inflation-adjusted price of a barrel of crude oil on NYMEX rise above US$ 30 in 2003, reached US$ 60 by 11 August 2005, and peaked at US$ 147.30 in July 2008. Provincial government revenues from oil and gas royalties grew leading Premier Klein to declare the province "debt free" in July 2004; this included the province having set aside enough money to make payments on outstanding locked-in debts until 2013 when
4187-524: The largest sovereign wealth fund, is an example Canada should follow; the suggestion to Canada missed that, unlike Norway, resource royalties are a provincial level revenue stream, not a federal level revenue stream In 2013 Madelaine Drohan , author of the Canadian International Council report entitled The 9 Habits of Highly Effective Resource Economies: Lessons for Canada ,and a Canadian correspondent for The Economist , echoed
4266-488: The last half of 2012. In the first half of 2014, global sovereign wealth fund direct deals amounted to $ 50.02 billion according to the SWFI. Sovereign wealth funds have existed for more than a century, but since 2000, the number of sovereign wealth funds has increased dramatically. The first SWFs were non-federal U.S. state funds established in the mid-19th century to fund specific public services. The U.S. state of Texas
4345-484: The literature on this question is controversial. Governments may be able to spend the money immediately, but risk causing the economy to overheat, e.g., in Hugo Chávez 's Venezuela or Shah -era Iran. In such circumstances, saving money to spend during a period of low inflation is often desirable. Other reasons for creating SWFs may be economic, or strategic, such as war chests for uncertain times. For example,
4424-460: The long term in such areas as health care, education and research and as a way of ensuring that the development of non-renewable resources would be of long-term benefit to Alberta. The strategy and goals of the fund have changed through successive provincial governments which moved away from direct investments in Alberta to a diversified approach, which now includes stocks, bonds, real estate and other ventures. The Heritage Savings Trust Fund has been
4503-452: The market value returned to $ 17-billion in 2014. Premier Ed Stelmach formed the Premier's Council for Economic Strategy in 2011. The council's report, Shaping Alberta's Future , proposed several government programs and policies for Alberta to remain competitive into the 2040s. Among the suggested programs was the creation of a Shaping the Future Fund, similar to the Heritage Savings Trust Fund. The proposed Future Fund would be funded through
4582-645: The market. SWFs grew rapidly between 2008 and 2021, with global assets under management by these funds increasing from approximately $ 4 trillion to more than $ 10 trillion. SWFs invest in a variety of asset classes such as stocks, bonds, real estate, private equity and hedge funds. Many sovereign funds are directly investing in institutional real estate. According to the Sovereign Wealth Fund Institute's transaction database around US$ 9.26 billion in direct sovereign wealth fund transactions were recorded in institutional real estate for
4661-408: The optics of a balanced budget before a snap election. Only a month after the announcement the 19th Alberta Legislature was dissolved and an election was called for November 2, 1982 . The Don Getty -led Progressive Conservative government facing deteriorating economic conditions and low oil prices tabled a 1987-88 budget that terminated the 15 per cent non-renewable natural resource deposits into
4740-407: The passage of The Alberta Heritage Savings Trust Fund Act (Bill 35) during the second session of the 18th Alberta Legislature , receiving Royal Assent on May 19, 1976. The bill legislated the transfer of $ 1.5-billion (equivalent to $ 7,577,000,000 in 2023) in assets from the Province's General Revenue Fund and committed 30 per cent of the province's annual non-renewable resource revenue into
4819-531: The project for a commitment of $ 404-million. The Lloydminster upgrader came in 28 per cent above budget at $ 1.63-billion well above budget, and the book value of the plant was listed at $ 148-million. The Alberta government decided to sell the remaining ownership of the plant in 1994 to be absolved of any more liabilities with the project, selling its share in the plant to the Government of Saskatchewan and Husky Oil for $ 32 million. The Government of Saskatchewan under Premier Roy Romanow sold their 50 per cent interest in
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#17327832391664898-600: The province of Alberta received $ 101.3-billion in resource revenues. The authors argued that $ 49.2-billion on programs above inflation and population growth—a deposit of 25 per cent of resource revenues equaling $ 25.3-billion, into the Heritage Fund would not have been unreasonable had program spending been more carefully controlled. The Frasier Institute criticized the province's deposited of $ 4.5-billion during that period which equaled 4.5 per cent of all resource revenues during that period. Sovereign wealth fund A sovereign wealth fund ( SWF ), or sovereign investment fund
4977-487: The province's revenue in 1987, exceeding personal income tax by approximately $ 230-million. The opposition to the Alberta Heritage Savings Trust Fund grew in Alberta in the 1980s. A green paper on the fund produced by the opposition Liberal Party claimed the value of the fund was half of what the government claimed as many of the assets could not be reasonably sold or liquidated, such as infrastructure upgrades in provincial parks. The Auditor General raised similar concerns as
5056-523: The provincial deficit or pay off provincial debt, however, the Progressive Conservative government was unwilling to reduce the principle of the fund. The Don Getty government faced continued criticism over the handling of the Heritage Savings Trust Fund, particularly the dwindling principal which had seen four consecutive years of reduction by 1991. The funds continued reductions were in part a result of transfers of interest to general revenue and lower earnings from non-interest-bearing investments, in particular
5135-402: The recession, resulting in a total loss in book value of approximately 10 per cent, with a September 2020 month-end value of $ 17.2 billion. As of year-end 2021, the market value of the Trust Fund had risen to $ 18.9 billion. The Alberta Heritage Savings Trust Fund has made a number of different investments in Alberta and Canada since its incorporation in 1976. Under the Canada Investment Division,
5214-672: The remaining assets including debentures from the Alberta Housing Corporation, Alberta Home Mortgage Corporation, Alberta Government Telephones , and Alberta Municipal Financing Corporation; as well as shares from Alberta Energy Company , Syncrude Canada Limited , and Canada-Cities Service Limited. The first investment of the Canada Division was the March 8, 1977, private placement loan to the province of Newfoundland and Labrador for $ 50-million for 21 years at
5293-735: The sovereign nations that are typically held in domestic and different reserve currencies (such as the dollar , euro , pound , and yen ). Such investment management entities may be set up as official investment companies, state pension funds, or sovereign funds, among others. There have been attempts to distinguish funds held by sovereign entities from foreign-exchange reserves held by central banks. Sovereign wealth funds can be characterized as maximizing long-term return , with foreign exchange reserves serving short-term "currency stabilization", and liquidity management. Many central banks in recent years possess reserves massively in excess of needs for liquidity or foreign exchange management. Moreover, it
5372-510: The term gained widespread use as the spending power of global officialdom has rocketed upward. China's sovereign wealth funds entered global markets in 2007. Since then, their scale and scope have expanded significantly. SWFs were the first institutions to use sovereign capital in an effort to contain the financial damage in the early stages of the 2007-2008 global financial crisis . SWFs are able to react quickly in such circumstances because unlike regulators, SWFs actively participate in
5451-491: The transfer in place for a rate of 15 per cent. The following year, the Fund transferred $ 1,469-million to general revenue and retained $ 720-million. Criticism mounted on Peter Lougheed and the Progressive Conservative government from the opposition, with Western Canada Concept leader Gordon Kesler calling the decision "disastrous" and an example of the government's poor financial planning, while Liberal leader Nicholas Taylor called attention to bloated government programs and
5530-622: The way that SWFs operate. These were published after being presented to the IMF International Monetary Financial Committee on 11 October 2008. They also considered a standing committee to represent them, and so a new organisation, the International Forum of Sovereign Wealth Funds was set up to maintain the new standards going forward and represent them in international policy debates. As of 2016, 30 funds have formally signed up to
5609-486: Was Ontario Hydro , although neither Ontario Hydro nor the Government of Ontario borrowed from the Fund. The Lougheed government also lifted the ban on loans to the Province of Quebec in September 1979. The Alberta Heritage Savings Trust Fund would go through several changes in the early 1980s under Premier Peter Lougheed's Progressive Conservative government. The provincial government created two new investment divisions,
5688-579: Was accelerated due to the 1973 energy crisis , and legislated royalty increases into existing mineral lease contracts. Other major policy changes included expanding the mandate of the government-owned pipeline Alberta Gas Trunk Lines to include upgrading activities. Finally, the government created the Alberta Energy Company with $ 150-million, half of which was provided by the Legislature and the other half came from Albertans who could purchase $ 10 shares. The Alberta Heritage Savings Trust Fund
5767-420: Was dissolved only days later and the 1975 Alberta general election was scheduled for March 26. Former Progressive Conservative Cabinet Minister Allan Warrack claims the decision to introduce the legislation knowing the legislature would be dissolved was intentional to allow widespread public review, transparency, and accountability. The proposed Alberta Heritage Savings Trust Fund became a central issue during
5846-473: Was proposed in 1974 legislation was decided to include the first announced in the 1975-1976 election budget tabled by the Progressive Conservative government led by Premier Peter Lougheed in the 17th Legislature in February 1975. The fund would be established to hold $ 1.5-billion, and scarce details were provided by Provincial Treasurer Gordon Miniely , noting that the fund would be for the betterment of current and future Albertans. The 17th Legislative Assembly
5925-477: Was set to receive $ 200-million a year to "support big-picture projects" and the two "new innovation endowments" announced by Finance Minister Doug Horner in the 2014 budget, would be funded by raiding the Alberta Heritage Savings Trust Fund. There were no new savings. The 2015 Fraser Institute report titled Fumbling the Alberta Advantage , noted that between 2005 and 2014, and adjusted for inflation,
6004-568: Was shifted away from strategic business investments to become a savings tool investing for financial return. Klein began the sell-off of the province's 15 per cent ownership in Syncrude in 1993, selling 5 per cent of the enterprise to Murphy Oil for $ 150-million. Alberta sold its 36 per cent stake in the Alberta Energy Company Ltd. (which eventually became Ovintiv ) for $ 476-million in May 1993, with $ 183-million returned to
6083-536: Was sold in 1996 for $ 28-million. The Alberta-Pacific pulp mill in Athabasca was provided a $ 260-million loan in 1991, and following low pulp prices, the Klein government wrote off $ 155-million in interest and sold the loan in 1998. The governments of Alberta, Saskatchewan and Canada took severe losses on the Lloydminster Bi-Provincial Upgrader during the early 1990s, the Heritage Savings Trust Fund held 24.17 per cent of
6162-560: Was subsequently lowered to 15 per cent in 1983 and eliminated in 1987. The Heritage Savings Trust Fund has not been immune to market forces, gaining and losing value according to general market trends. This includes a $ 3-billion loss during the 2009 Great Recession resulting in the fund dropping to its 1985 value of $ 14 billion. The Alberta's Heritage Savings Trust Fund's fair market value was listed at $ 17.5 billion in 2014, and $ 16.3-billion as of 2020. The Progressive Conservative government under Premier Peter Lougheed swept into power after
6241-543: Was thus the first to establish such a scheme, to fund public education. The Permanent School Fund (PSF) was created in 1854 to benefit primary and secondary schools, with the Permanent University Fund (PUF) following in 1876 to benefit universities. The PUF was endowed with public lands, the ownership of which the state retained by terms of the 1845 annexation treaty between the Republic of Texas and
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