Ministry Vision, Mission and Core Businesses

Our vision of the future

“A province where government revenue policy and administration reflect the values of Albertans, balance present and future needs, and contribute to a stable environment for the generation of wealth for all Albertans.”

Our mission

“To provide prudent and innovative revenue, investment and risk management and to regulate and foster capital markets in Alberta.”

Revenue's core businesses

1. Manage tax and revenue programs.

2. Manage and invest financial assets.

3. Manage risk associated with the loss of public assets.

4. Regulate and foster Alberta’s capital market.

Relationship of Revenue Department and Reporting Entities to Core Businesses

Operational Overview

 

Department of Revenue 9515 - 107 Street Edmonton, Alberta T5K 2C3

Tax and Revenue Administration Haultain Building, 9811 - 109 Street Edmonton, Alberta T5K 2L5

1100 - 715 - 5th Avenue SW Calgary, Alberta T2P 2X6

Alberta Investment Management

Together the Investment Management Division and the Investment Administration Division comprise Alberta Investment Management. 

Investment Management Division

The Investment Management Division (IMD) was established to act as the investment manager for pools of capital assigned by statute to the Minister of Revenue and for investments of other provincial public sector bodies, where specific agreements have been made. With approximately $41.7 billion under management, Alberta Revenue is one of the largest fund managers in the country. Assets under management include:

• Endowment funds (totaling $14.2 billion) including the Alberta Heritage Savings Trust Fund (Heritage Fund), the Alberta Heritage Foundation for Medical Research Endowment Fund (Medical Research Fund), the Alberta Heritage Scholarship Fund (Scholarship Fund) and the Alberta Heritage Science and Engineering Research Endowment Fund (Ingenuity Fund). 
• Public sector pension funds (totaling $18.9 billion). 
• Other Government portfolios including the General Revenue Investment Account, the General Revenue Fund, the General Revenue Capital Account and the General Revenue Sustainability Fund (totaling $6.1 billion).
• Specialty funds including the Balancing Pool Corporation and funds managed on behalf of the Workers' Compensation Board (totaling $2.5 billion).

Investment objectives vary for the funds, reflecting different financial requirements and risk tolerances for each fund and its respective stakeholders. To meet these investment policies and goals, IMD has developed a wide range of investment products, which can be combined to meet specific financial goals and risk tolerances. This multi-product approach is implemented on a pooled basis. Each product is defined in terms of its return objective and risk profile. Clients buy into the pools by purchasing units based on the current market value of the pools' investments. This approach is important to managing the funds efficiently and to ensuring that each client is treated fairly.

Considering the volatility of the financial markets, it is expected that the majority of the funds' returns will come from the long-term asset allocation decisions. Generally, fixed income securities are less volatile and provide a steady stream of interest income, while equities are more volatile and produce capital gains or losses. Over the long term, equities produce higher rates of return than fixed income securities. The diversification effect of combining fixed income with equities and other asset classes reduces overall risk to the fund. An incremental return is added through tactical asset allocation and security selection decisions. These decisions reflect the shorter-term market expectations with consideration of both the risk and return. Both internal and third party external manager expertise are used, ensuring the necessary specialized investment knowledge and skills are utilized in the most cost effective manner. External managers are used primarily for investing in foreign equity and certain domestic equity markets. Managers are chosen through a rigorous selection process and their performance is reviewed on a quarterly basis.

The Investment Administration Division (IAD) has three branches: Securities Administration, Investment and Debt Information Systems, and Valuation and Fund Accounting. IAD provides support for investment operations including: 

• trade transaction monitoring and processing, 
• fund and portfolio valuation and performance measurement,
• investment systems oversight,
• support systems development and maintenance, and
• custodial interface and oversight.

Securities Administration works with IMD to ensure investment data is captured appropriately in the systems and that the financial transactions are settled with the corresponding brokers and financial institutions. Investment and Debt Information Systems is responsible for all of the software and system development and support required within IAD and IMD. Valuation and Fund Accounting prepares the weekly valuation of investment portfolios, measures investment performance, and processes pool unit transactions.

Tax and Revenue Administration (TRA) is responsible for the collection of revenue and the administration of Alberta Revenue's tax, revenue and related benefit programs. TRA also works with Policy and Strategic Planning on the development of tax policy within the Province. The focus is a fair, competitive, simple and efficient provincial tax and revenue system.

The Division has four branches: Revenue Operations, Audit, Tax Services and Business Technology Management. Each branch is responsible for specific business processes. TRA's branches are designed so that business processes that are similar in nature and require similar knowledge and skills are grouped into one area.

Revenue Operations is responsible for registering corporations, individuals, trusts, fuel tax clients, tobacco tax and other clients under the applicable acts or programs, maintaining client accounts, validating and processing returns and claims and processing remittances and providing refunds to TRA's clients.

Audit is responsible for ensuring the compliance of TRA's clients with the tax acts by auditing the clients' books and records. Audit also works with other tax administrations and other Government of Alberta ministries on initiatives to develop policies, improve compliance and implement educational strategies required for the proper administration of tax and revenue programs. 

Tax Services is responsible for providing information and technical ruling services to TRA's clients and staff and the administration of dispute resolution mechanisms with respect to TRA actions. Tax Services works with the Policy and Strategic Planning group, as well as the Tax Policy group in Finance, to develop tax policies and legislation. Tax Services also provides central services to other ministries and their agencies with respect to the federal GST.

Business Technology Management provides planning, business systems and quality improvement services to TRA. This Branch has the lead responsibility for managing TRA's product development (e.g. electronic commerce, forms, etc.), change management, budgeting/forecasting and management reporting functions.

Risk Management and Insurance Division

The Risk Management and Insurance Division (RMI) administers a program to protect, secure and preserve public assets against risk of significant accidental loss. RMI provides services to client ministries and agencies throughout government to help identify, measure, control and finance risk. The program is responsible for all "participants" subject to the Financial Administration Act.

There are two branches within this division, Risk Management Operations and Claims. Risk Management Operations assists the Crown to identify, minimize and, where appropriate, finance adverse effects of accidental loss. The Claims Branch administers all claims covered under the government's Risk Management Fund and makes recommendations aimed at reducing risk.

Policy and Strategic Planning Division

Policy and Strategic Planning (PSP) is a new division in Alberta Revenue established in July 2003 to centralize the policy functions within Alberta Revenue. Staff from the policy group responsible for developing tax and revenue policy in Tax and Revenue Administration Division and policy staff from Alberta Finance's Pensions, Insurance and Financial Institutions Division who had been providing support to Alberta Revenue with respect to capital markets policy were combined to form PSP. 

The division is responsible for short and long-term revenue analysis, and for policy development to support the Ministry's core businesses and goals. In 2003-04, significant policy support was provided by PSP for a number of issues related to the goal of fair and competitive provincial tax and revenue systems and a savings policy that contributes to a stable fiscal environment. PSP's activities also focused on supporting the core business of regulating and fostering Alberta's capital market, particularly in supporting the Minister's role as Chair of the Inter-Provincial Steering Committee of Ministers responsible for securities regulation. Finally, the division provided support to the Endowment Fund Policy Committee, which was established in August 2003 to provide advice on appropriate investment policies for Alberta's endowment funds.

The Alberta Securities Commission (ASC) is an industry-funded provincial corporation responsible for maintaining the efficiency and integrity of the capital market in Alberta through the administration of the Alberta Securities Act, the Securities Regulation and the Alberta Securities Commission Rules. As a member of the Canadian Securities Administrators (CSA), an organization consisting of the 13 provincial and territorial securities regulators, the ASC plays a vital role in developing and operating a national system of harmonized securities regulation, policy and practice.

The ASC is an administrative tribunal with quasi-judicial powers. Panels of members hear enforcement proceedings and consider applications for discretionary exemptions from the requirements of the securities legislation. The ASC also sits as an appeal body to hear appeals from decisions of the Executive Director, TSX Venture Exchange and the Alberta District Council of the Investment Dealers Association of Canada.

Revenue Management Framework

Revenue continues to work on developing a Revenue Management Framework that considers broad characteristics, trends and issues in the province's revenue structure. This framework will enable this government to make decisions that will benefit all Albertans over the long term. Revenue is working with all departments with significant revenues to develop recommendations that will ensure a consistent provincial approach to revenue management.

Endowment Funds

One of Revenue's strategic priorities is to address and enhance the governance, objectives and investment policies, risk management and investment opportunities for the endowment funds. The funds include: The Alberta Heritage Savings Trust Fund, the Alberta Heritage Foundation for Medical Research Endowment Fund, the Alberta Heritage Scholarship Fund and the Alberta Heritage Science and Engineering Research Endowment Fund. Revenue has committed to focus on strengthening the Funds as endowments and preserving their value over the long-term. 

To improve the governance structure supporting this priority, the policy and administrative oversight functions previously performed by a single advisory committee were split into two advisory committees - the Endowment Fund Policy Committee (EFPC) and the Investment Operations Committee (IOC). The Minister of Revenue chairs the EFPC and the Deputy Minister of Revenue chairs the IOC. Members on both committees are chosen from outside government to provide independent, expert advice to the Ministry on appropriate investment policies, and on the operations of Alberta Investment Management as it carries out its mandate to invest assets under management.

Alberta Investment Management

The Investment Management Division's major initiatives over the 2003-04 fiscal year included the material enhancement to the investment operation's governance structure. 

Also created during the year was an Internal Audit and Compliance group, providing additional resources and focus on the internal audit function. Several other important initiatives were completed. The Fund Management Group was developed and staffed to work in conjunction with clients on fund-specific policy setting and issue resolution. With the assistance of an external consultant, a full review of investment policy of the provincial endowments was undertaken.

The Investment Administration Division coordinated several investment information technology initiatives during the 2003-04 fiscal year. The implementation of an enterprise wide trade order management system occurred in July 2003. This was followed by the completion of an enterprise wide data hub implementation in April 2004. The implementation of a new performance measurement system and a risk measurement system are in progress. These systems contribute to the Straight Through Processing (STP) infrastructure and capability of Alberta Investment Management.

Securities Regulation

Alberta is strongly committed to efforts to increase efficiency in securities regulation and promote the Alberta capital market. Revenue is leading and participating in a number of initiatives that will streamline regulation nationally while meeting regional needs.

Effective March 1, 2004, the 1.5 cents per litre Alberta aviation fuel tax was eliminated on eligible international passenger and cargo flights, including flights to the United States. A competitive tax environment is vital to Alberta's economy and eliminating the Alberta aviation fuel tax on international air traffic at Alberta's two international airports will allow them to compete on a more level playing field with similar jurisdictions. This change will result in the provision of approximately $3 million annually in fuel tax rebates.

Revenue hosted a roundtable event at which participants shared their views on issues related to entrepreneurs' ability to commercialize ideas, access capital and build businesses, with a particular focus on knowledge-based industries. A broad range of representatives attended, including tax and economic policy experts, business leaders, entrepreneurs, venture financing professionals and technology commercialization experts. Revenue, in collaboration with other ministries, is assessing ideas that came out of the roundtable that are consistent with Alberta's Long Term Strategic Plan "Today's Opportunities, Tomorrow's Promise" and its Economic Strategy "Securing Tomorrow's Prosperity".

Effective April 1, 2003, the general corporate income tax rate was reduced from 13 per cent to 12.5 per cent, and the small business rate was reduced from 4.5 per cent to 4 per cent. The small business income threshold was increased from $350,000 to $400,000. These measures were undertaken to ensure that Alberta continues to have among the lowest business taxes in Canada. This resulted in an overall saving of $94 million in taxes for Alberta businesses in 2003-04.

Effective December 1, 2003, an Internet payment service was made available. To provide Albertans with more flexibility and convenience, Internet payments can be made for the following: Corporate Income Tax, Insurance Corporations Tax, International Fuel Tax, Fuel Taxes, Propane Tax, Health Cost Recovery Levy, Hotel Room Tax, and Tobacco Tax.