The Alberta Heritage Savings Trust Fund (AHSTF) is a sub-sovereign wealth fund established in 1976 by the Government of Alberta under 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. During those years, the AHSTF used oil revenues to invest for the long term in Alberta, 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 changed through successive provincial governments, drawing criticism as the value of the fund failed to grow for decades; despite provincial non-renewable natural resource revenues, from 1980 to 2014, bringing in almost $190 billion, 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 then completely eliminated in 1987. Late in the 1982-83 fiscal year, the government had started transferring the AHSTF's annual investment income to general revenues, preventing any compound growth within the fund. The combination of no new deposits from non-renewable resource revenues and the withdrawal of all annual investment income, caused the AHSTF to stagnate for over two decades. Furthermore, the stagnant balance in the fund was not immune to market forces, gaining and losing value according to general market trends, such as a $3 billion loss during the 2009 Great Recession. Collectively, this slashed the inflation-adjusted value of the AHSTF, from $billion (in real dollars) at the end of fiscal 1986-87, down to $billion (in real dollars) at the end of fiscal 2021-22.
In fiscal 2022–23, the government finally allowed the AHSTF to retain its annual investment income, and even deposited some non-renewable resource revenues into the fund that year, adding a second deposit in fiscal 2024-25. On December 31, 2025, the AHSTF's fair market value was listed at $31.9 billion.
In 2025, half a century after the AHSTF was conceived, the Government of Alberta made changes to focus on stewardship, independence, protecting capital, and maximizing returns with a capital appreciation–focused growth strategy, with a plan to grow the fund to $250 billion by 2050. The intent is for the AHSTF to finally meet the original goal, from the early 1970s, of reducing Alberta's reliance on volatile non-renewable resource revenues.
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 Line 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, with the decision to move forward announced in February 1975, as part of the 1975-1976 budget tabled by the Progressive Conservative government led by Premier Peter Lougheed in the 17th Legislature. 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 legislationwhile knowing the legislature would be dissolved before enactmentwas intentional to allow widespread public review, transparency, and accountability.
The proposed Alberta Heritage Savings Trust Fund became a central issue during 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 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 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 Alberta Heritage Savings Trust Fund Act, SA 1976, c 2, retrieved from CanLII on December 24, 2020 The bill legislated the transfer of $1.5 billion () in assets from the Province's General Revenue Fund and committed 30 per cent of the province's annual non-renewable resource revenue into 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 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 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 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 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 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 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.
1980s