Smith announces new Crown corporation to oversee Alberta’s reserve fund

Smith announces new Crown corporation to oversee Alberta's  reserve fund.
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The provincial government has a new plan to significantly  increase the Alberta Heritage  Fund, increasing it by 10 times its current  size. Alberta Premier Danielle Smith announced  Wednesday the creation of a new Crown corporation to oversee the province's  reserve fund.
The Heritage Fund Opportunities Corp. is to direct policy for the Heritage Fund, which will be managed  primarily by Alberta Investment Management Corp., or  AIMCo.
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The new  state-owned corporation is also  responsible for independently  managing investments in new  deposits.
Smith said  he aims to  increase the fund to at least $250 billion by 2050 to  lift the province off the resource revenue  roller coaster. "No matter how  much time we have left, there will come a time  when we can no longer count on that  income, and we  can't escape that reality now," the premier said in  Calgary.
The fund's assets were valued at $23.4 billion  in September and the government  has pledged  an additional $2 billion that is now earmarked for  investment by the new  company.
Finance Minister Nate Horner said  his board  could invest  the seed  funds differently from AIMCo, the province's public pension fund  manager.
"This is beyond  the mandate of AIMCo, more in  the vein of a sovereign wealth  fund," Horner said.
The new  state-owned company will operate  independently and  publish its results, Smith  said. Horner told The Canadian Press in  a previous interview  that the goal is not to  "disappear" animal projects that have difficulty  securing funding, as Smith has previously  suggested.
"It will be  performance-driven," he  said.
The finance minister said the new  company would create global investment opportunities that  would not be available to a manager like  AIMCo.
Asked Wednesday  if the new  company's goal  of supporting "areas that matter to Albertans"  would mean investing in more Alberta-based assets, Horner said "not necessarily."
"It's about  taking advantage of opportunities where those partnerships  can provide great  opportunities for the province  in the  future, but  that's not necessarily the goal," he said,  noting the province's  assets, such as its knowledge base in artificial intelligence and water  infrastructure. .
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He said the plan represents a return to the original vision of the  legacy fund.
It was created in 1976 by former  Prime Minister Peter Lougheed to set aside a portion of resource revenues, but  successive governments have dipped into the  fund as  necessary, particularly when the price of oil  has fallen. The Heritage Fund Opportunities Corp. will be chaired by Lougheed's  son, Joe,  chairman of the board  of directors of Calgary Economic Development and a partner at  Calgary law firm  Dentons.
Smith's United Conservative government has  pledged not to  divert interest  income from the fund to  support the province's general  revenue.
He estimates that if all  of the Heritage Fund's income had been reinvested from the  beginning, it would be worth  more than $250 million today, generating more than $20 billion  annually.
Opposition finance critic Court Ellingson told reporters in Calgary  that he supports the government's efforts to  boost the long-neglected savings fund, but the province already has  an organization to do  the job. "We don't need a new  company," he  said.
Wednesday's announcement comes after Horner  fired the chief executive and entire board of AIMCo in  November.
Less than two weeks later, the province hired former  Prime Minister Stephen Harper as  AIMCo's new  president.
In addition to the Heritage Fund, AIMCo also  manages about $118 billion in investments for public sector pension plans representing thousands of Albertans, including teachers, police officers and municipal  employees.

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