Alberta Heritage Savings Trust Fund stable, worth $12.1 billion

EDMONTON, June 25, 2001 - The Alberta Heritage Savings Trust Fund, celebrating its 25th anniversary this year, is still a vital part of Alberta's fiscal advantage and is worth $12.1 billion as of March 31, 2001. Investment income from the Fund contributed $706.2 million to Alberta's General Revenue Fund.

Greg Melchin, Minister of Revenue, released the Alberta Heritage Savings Trust Fund Annual Report 2001 today.

"We did derive another $700 million to support priorities like tax cuts and program spending in health care, education, infrastructure, and debt retirement," Melchin said. "The Heritage Fund performed well despite a weak year in world equity markets."

"The key to sustainable performance is a diverse portfolio with a long-term focus, prudence, and investment discipline," Melchin added. "That's the philosophy we're endeared to and that's why the Fund has met performance benchmarks this year."

Earlier this year, both Moody's Investor Services and Standard and Poor's announced they were boosting Alberta's credit rating to triple A. Both bond-rating agencies cited the Heritage Fund's long-term stability as a key consideration.

"Our credit rating is higher than any other Canadian province," Melchin said. "It means we pay less to service our debt and it frees money for our priorities."

In 1997, investments were re-structured to reflect the wishes of Albertans. The Fund was divided into two distinct portfolios: The Transition Portfolio to support immediate fiscal needs; and the Endowment Portfolio to optimize long-term returns. By the plan, all assets would be shifted to the Endowment Portfolio by 2005. Last year, $2.4 billion was transferred and a total transition will be complete by 2003 – two years ahead of schedule.

"The Heritage Fund is an important part of Alberta's past, present, and future. It will undoubtedly be discussed at the Future Summit which begins this fall – where people from across the province will gather to develop a plan for Alberta's post-debt future," Melchin said.

- 30 -

Minister Melchin will be available to the media Monday, June 25, 2001, at 2:00 p.m., in the first floor Media Room of Alberta Legislature Building.

To view the Heritage Savings Trust Fund Annual Report, click here.

Media enquiries may be directed to: