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 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 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 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 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 through, and has gained and lost value according to general market trends including 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.
History
Formation and early history
The Progressive Conservative government under Premier Peter Lougheed swept into power after 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 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 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 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.