Heritage fund under microscope

A government committee dedicated to Alberta’s Heritage Savings Trust Fund faced some tough questions during a public meeting last week.

The eight MLAs on the standing committee on the fund heard public concerns on the fund’s ability to help during disasters like the spring flooding, debt sustained because of the fund, when heritage fund dollars can be used and the ethical decisions surrounding Alberta’s global investments.

St. Albert MLA Stephen Khan. (Photo supplied)

St. Albert MLA Stephen Khan. (Photo supplied)

“We had very intelligent questions from the public, both in the room and online, and I think we were able to give them some substantive answers,” committee chairman and St. Albert MLA Stephen Khan said. “This $16.8 billion is not the government’s money, it’s for all Albertans.”

The government is touting the fund’s gross income of $1.5 billion for the 2012-2013 fiscal year with net assets totalling $16.8 billion, which is $700 million higher that in 2012. The fund achieved a return rate of 11.6 per cent.

As it sits now, the investment breakdown of the fund managed by the Alberta Investment Management Corporation is 53 per cent in equities, 20.2 per cent in fixed-income assets and 26.5 per cent in inflation-sensitive and alternative assets.

The Fiscal Management Act introduced in the 2013 budget started the mandatory savings of a portion of Alberta’s non-renewable resource revenues that Finance Minister Doug Horner says will result in a total savings of $24 billion over the next three years.

The government will retain greater portions of the fund’s net income every year until 100 per cent of the fund’s net income is retained annually in 2017-2018.

While the committee is generally positive on how the fund will move forward, NDP MLA David Eggen said the government needs to start taking it’s fair share of resource revenues to help offset the debt accrued by beefing up the fund.

“We had a windfall of decent royalty rates of 25 per cent and now it’s considerably less,” he said. “All the restructuring of the fund has great potential but it’s not worth the paper it’s printed on unless you have the money to throw in there.”

The Alberta Heritage Trust Fund was started in 1976 by the Peter Lougheed government. An Economic Summit held in Edmonton this Saturday will explore options for how to use Alberta’s savings to fund infrastructure projects such as new schools, roads and hospitals.

— MATT DYKSTRA, Sun Media News Services