Abstract
The Alberta Heritage Savings Trust Fund is Canada’s first and largest sovereign wealth fund. Like Norway’s oil fund, the Heritage Fund is fuelled by oil wealth. As one of the first funds of its kind, in 1976 it inspired many other countries to start funds of their own but unfortunately, it has experienced persistent challenges from the start. It has had different, and often conflicting objectives, low public buy-in, and inconsistent and discretionary deposit and withdrawal rules. With the current balance of the Heritage Fund standing at a mere $17.5 billion (CBC News 2004) (CDN), many argue that the Heritage Fund has largely failed to achieve its savings mandate, especially when compared to other funds around the world in countries with similar populations and resource profiles. However, while the Heritage Fund is much smaller than its Alaskan and Norwegian peers, Alberta has made key policy decisions that have set it on a unique path. It has chosen to maintain historically low tax rates (with no provincial value added tax), a competitive royalty framework, and historically has spent the most dollars per capita on public services for its citizens. This chapter explores the history, governance, oversight, investment policy, operational and deposit/withdrawal rules of the Heritage Fund. It also discusses how wealth is transferred from Alberta to other parts of Canada and offers some critical observations about the Fund’s successes and failures.
Published Version
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