What Ottawa can learn from Alberta’s sovereign wealth fund

As the federal government considers a new Canada Strong Fund, experts say Alberta’s longrunning Heritage Savings Trust Fund offers a useful cautionary example. Alberta created its fund in 1976 to save part of its resource revenue for future generations, but frequent withdrawals over the years limited its growth. Analysts say the main lesson for Ottawa is to protect the fund from shortterm political demands and keep its management transparent and independent. The federal proposal would start with $25 billion in government funding and allow Canadians to contribute as well. Ottawa says the money would support major projects in areas such as energy, infrastructure, mining, agriculture and technology, but many details about how the fund would operate have not yet been released. Experts quoted in the article say established sovereign wealth funds usually grow from budget surpluses or dedicated revenue sources, not borrowed money. They also note that the Canada Strong Fund would be more narrowly focused on domestic projects than many global sovereign wealth funds, which often invest internationally to maximize longterm returns.