Alberta’s Savings Management Act creates three new notional accounts within the Alberta Heritage Savings Trust Fund: two innovation endowments and the Alberta Future Fund. It allocates $1 billion to social innovation, $200 million to agriculture and food innovation, and $2 billion to the Future Fund over 10 years.
It also directs $200 million to the Alberta Heritage Scholarship Fund.
The Act does not simply move cash into standalone entities. It earmarks portions of the Heritage Fund, applies the Fund’s rate of return to those balances, and permits transfers into the General Revenue Fund for specified purposes.
Most withdrawals require legislative authorization, making the framework both a savings-allocation system and a set of spending controls.
At a Glance
What It Does
The Act establishes the Social Innovation Endowment Account, the Agriculture and Food Innovation Endowment Account and the Alberta Future Fund as notional accounts within the Heritage Fund. It allocates money to those accounts, credits them with the Heritage Fund’s annual rate of return, and permits limited transfers to the General Revenue Fund for authorized purposes.
Who It Affects
The framework directly affects Alberta’s Treasury Board and Finance minister, the Heritage Fund’s administration, agencies seeking support for social or cultural innovation, agricultural researchers and businesses, and organizations pursuing long-term economic initiatives. It also changes the funding structure for the Alberta Heritage Scholarship Fund and the Access to the Future Fund.
Why It Matters
The Act converts part of Alberta’s general savings pool into purpose-specific capital while preserving the money within the Heritage Fund’s investment structure. Its 4.5% withdrawal formula and legislative-approval requirements create a rules-based alternative to unrestricted withdrawals, but they also determine how much future spending capacity the province can access.
More articles like this one.
A weekly email with all the latest developments on this topic.
What This Bill Actually Does
The Act treats the Heritage Fund as the investment base for several earmarked purposes. The Social Innovation Endowment Account supports research, knowledge sharing, new interventions and funding partnerships in the social-service and cultural sectors.
The Agriculture and Food Innovation Endowment Account supports agricultural research, knowledge dissemination, product development and commercialization in agriculture and related industries. Both are notional accounts, meaning the legislation assigns balances within the Heritage Fund without creating separate investment pools described in the Act.
The Act also creates the Alberta Future Fund and schedules annual allocations of $200 million on April 1 of 2014 and each of the next nine fiscal years. Unlike the two innovation accounts, the Future Fund has a broad mandate: initiatives must provide long-term benefits to Albertans and the Alberta economy.
The Act does not specify a project list or eligibility process, leaving the practical selection of initiatives to later decisions and spending authorization.Withdrawals from the innovation accounts follow staged rules. The Minister may transfer specified maximum amounts during the first years, then may transfer up to 4.5% of each account’s average closing balance over the preceding three fiscal years.
The Act uses audited Heritage Fund financial statements for that calculation. Innovation-account transfers must serve the account’s statutory purpose and require a vote of the Legislative Assembly before expenditure.
Future Fund withdrawals likewise cannot exceed the account balance, must serve its statutory purpose and require Assembly approval.Each account’s balance receives an annual adjustment based on its opening balance multiplied by the Heritage Fund’s rate of return for that fiscal year, then decreases by amounts transferred out. The Act also directs a $200 million transfer to the Alberta Heritage Scholarship Fund for 2014-15.
Related amendments replace the Access to the Future Fund’s previous funding and adjustment model with a similar three-year-average and 4.5% transfer limit, while allowing unused permitted transfer capacity to be carried forward.
The Five Things You Need to Know
The Social Innovation Endowment Account receives $500 million effective April 1, 2014 and another $500 million effective April 1, 2015, for a total statutory allocation of $1 billion.
The Agriculture and Food Innovation Endowment Account can support both basic and applied research and the commercialization of agricultural products and related technologies.
For 2014-15 through 2016-17, the Minister may transfer up to $9 million per year from the agriculture account to the General Revenue Fund; the social account has limits of $22.5 million in 2015-16 and $45 million in 2016-17.
For 2017-18 onward, each innovation account’s ordinary annual transfer limit is 4.5% of its average closing balance over the prior three fiscal years. The Act uses a deemed $1 billion 2014-15 social-account balance when calculating the first average.
The Access to the Future Fund may carry forward unused transfer capacity, but the Act does not give the Alberta Future Fund the same 4.5% formula; its withdrawals instead depend on Assembly-approved transfers up to the account balance.
Section-by-Section Breakdown
Every bill we cover gets an analysis of its key sections.
Definitions and three Heritage Fund accounts
These provisions define the Heritage Fund, the two Innovation Endowment Accounts and the Alberta Future Fund, then establish each as a notional account within the Heritage Fund. The structure separates policy purposes while keeping the accounts inside the province’s existing investment framework.
The initial allocations are substantial but serve different functions: $1 billion for social innovation, $200 million for agriculture and food innovation, and $200 million annually for 10 fiscal years for the Alberta Future Fund. The Future Fund’s broad mandate gives it more discretion than the two innovation accounts.
Rules for innovation-account withdrawals
Section 4 sets temporary dollar limits for transfers from the innovation accounts and replaces them with a recurring 4.5% formula beginning in 2017-18. The formula uses the average closing balance over the prior three fiscal years, which dampens the effect of a single year’s investment performance or withdrawal.
The provision also imposes a spending lock: money transferred to the General Revenue Fund must be used only for the purpose of the relevant account and only after a vote of the Legislative Assembly. The special deemed balance for the Social Innovation Endowment Account prevents the first three-year calculation from reflecting only its shorter funding history.
Assembly-approved Future Fund transfers
The Minister may transfer money from the Alberta Future Fund to the General Revenue Fund only with a resolution of the Legislative Assembly. The transfer cannot exceed the Fund’s balance and must support an initiative providing long-term benefits to Albertans and the Alberta economy.
Unlike the innovation accounts, this section does not establish a recurring percentage-based draw. That leaves the Assembly with greater control over the timing and size of Future Fund withdrawals, but provides less automatic predictability for potential recipients.
Investment-return adjustments
Section 6 applies the Heritage Fund’s annual rate of return to each new account and then subtracts transfers made during the fiscal year. The calculation uses the account’s opening balance, so the statutory mechanism credits or debits the earmarked balance in line with the Fund’s reported annual performance.
Because the accounts are notional, this provision is primarily an accounting and allocation rule. It determines how much purchasing and spending capacity each purpose retains without requiring the province to operate a separate investment portfolio for every account.
Heritage Scholarship Fund allocation
The Minister must transfer $200 million from the Heritage Fund to the Alberta Heritage Scholarship Fund during 2014-15. The amendment to the Alberta Heritage Scholarship Act provides the statutory channel for receiving that transfer.
This is a direct allocation rather than an endowment-account withdrawal formula. The scholarship legislation continues to govern the Fund’s administration, investments and reporting, while the Savings Management Act supplies the source and amount of the new capital.
Changes to existing future and scholarship funds
Section 8 revises the Access to the Future Act. It removes the former fixed allocation and annual payment structure, applies the Heritage Fund’s rate of return to the account, caps ordinary transfers at 4.5% of the preceding three-year average, and allows unused permitted amounts to be transferred later.
Section 9 updates the Alberta Heritage Scholarship Act so the scholarship fund can receive the amount directed by section 7 from the Heritage Fund. Together, these amendments align existing funds with the Act’s broader approach of linking account balances and distributions to Heritage Fund performance.
Retroactive commencement date
The Act is deemed to have come into force on April 1, 2014. That date aligns the allocations, account balances and return calculations with the beginning of Alberta’s fiscal year, allowing the statutory accounting treatment to apply from the outset rather than from the date of a later formal step.
This bill is one of many.
Codify tracks hundreds of bills on this topic across all five countries.
Explore this topic in Codify Search →Who Benefits and Who Bears the Cost
Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- Social-service and cultural organizations seeking multi-year support for research, new interventions or partnership-based funding models gain access to a dedicated $1 billion capital base.
- Agricultural researchers, food innovators and related businesses can pursue research, product development and commercialization through a designated $200 million account.
- Alberta students and scholarship administrators benefit from the $200 million transfer to the Alberta Heritage Scholarship Fund, which increases the Fund’s capital available for scholarship purposes.
- Future-oriented economic initiatives may draw on a $2 billion allocation scheduled over 10 years, subject to the Fund’s broad statutory purpose and Assembly approval.
- The Legislative Assembly gains a formal approval role over withdrawals from the innovation accounts and the Alberta Future Fund, rather than leaving those expenditures solely to ministerial discretion.
Who Bears the Cost
- The Heritage Fund bears the opportunity cost of earmarking up to $3.4 billion for specified purposes, reducing the portion of provincial savings available for other uses or unrestricted growth.
- Treasury Board and Finance officials must maintain additional account-level calculations, audited-balance references and compliance controls for the return adjustments and transfer limits.
- Organizations seeking Future Fund support face uncertainty because the Act does not establish detailed eligibility criteria, application procedures or a fixed distribution schedule.
- The General Revenue Fund receives transfers only for purposes tied to the relevant account, limiting fiscal flexibility compared with unrestricted Heritage Fund withdrawals.
- The Legislative Assembly and government must manage the practical tension between timely funding decisions and the required votes or resolutions for withdrawals.
Key Issues
The Core Tension
The Act tries to make provincial savings serve current policy priorities without turning the Heritage Fund into an ordinary spending account. Dedicated balances and withdrawal limits protect long-term capital and give the Legislature a formal gatekeeping role, but those same constraints can slow responses to emerging needs and leave recipients dependent on future political and investment decisions. The bill’s fundamental trade-off is between disciplined preservation of savings and the flexibility to deploy them where the province believes the next major opportunity lies.
The central design choice is accounting separation without full institutional separation. The new accounts remain inside the Heritage Fund, so their balances participate in the same investment performance, but the statutory labels constrain how the province may spend the resulting withdrawals.
That can protect long-term purposes while making it harder to redirect capital when priorities change.
The 4.5% formula creates a smoothing mechanism, but it is not a guarantee of stable funding. Investment losses, earlier withdrawals and changes in the three-year average can affect available amounts.
The special first-year treatment for the Social Innovation Endowment Account also shows that the formula depends on statutory assumptions when a new account lacks three years of financial history.
The Act leaves several operational questions outside the statute. It does not specify how projects will be selected, how outcomes will be measured, or what governance and reporting standards will apply to innovation spending.
The Future Fund is especially open-ended: its broad purpose and Assembly-approval requirement provide flexibility and oversight, but not a predictable entitlement for organizations planning around the money.
There's more to this law than the bill.
Codify Laws traces every connection across the legislative lifecycle.