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Putting Alberta’s growing savings to work for our future

Bill 1 creates the largest social innovation endowment in Canada, supports agriculture innovation and apprentices, and saves for future strategic opportunities.  

The Alberta government is creating two new endowments to provide funding for social and cultural innovation, and agricultural innovation. Bill 1 enhances the Alberta Heritage Scholarship Fund to support Alberta’s apprentices and also establishes the Alberta Future Fund, which will provide the government with the financial resources to take full advantage of new opportunities in the future. 

“Growing our savings accounts for the first time in 25 years was a promise I made to the people of Alberta. We have a legislated plan to do that and it’s working. Under the next phase of the Building Alberta Plan, we will put our savings to work to support a stronger, more diverse economy in the future, ensuring Alberta remains Canada’s economic engine for decades to come.”

- Alison Redford, Premier  

“Albertans have told me they would like to do more with our savings. Bill 1 allows us to take a portion of our savings, which we are committed to growing each and every year, and do something meaningful for Albertans today and future generations.”

- Doug Horner, President of Treasury Board and Minister of Finance

“Alberta needs to challenge our traditional thinking when it comes to making sure Albertans have every opportunity to succeed. The $1 billion Social Innovation Endowment is Canada’s largest and will drive the creation of the new ideas we need to address issues like reducing poverty and family violence.”

- Dave Hancock, Deputy Premier and Minister of Innovation and Advanced Education

“Innovation and diversification in all of our sectors are key to Alberta’s long-term success. Nowhere is that more true than in agriculture, already Alberta’s second-largest industry. The Agriculture and Food Innovation Endowment will help us get made-in-Alberta agriculture solutions to market around the world.”

- Verlyn Olson, Minister of Agriculture and Rural Development

The endowments and the Alberta Future Fund will be allocated funds from within the Alberta Heritage Savings Trust Fund. The total combined allocation for 2014-15 is $1.1 billion.

Under the Building Alberta Plan, our government is investing in families and communities, living within our means, and opening new markets for Alberta's resources to ensure we're able to fund the services Albertans told us matter most to them. We will continue to deliver the responsible change Albertans voted for.

Related information

Bill 1: Savings Management Act

Backgrounder

About Bill 1: Savings Management Act

Additional Quotes:
Social Innovation Endowment

“By being able to make strategic investments across our cultural sectors, Albertans will benefit from healthier and more resilient communities; and our province, in turn, becomes even more attractive to those looking to work and make a life here. The Social Innovation Endowment will mean greater sustainability and collaboration among our many cultural industries. What better return on investment could we hope for than an enhanced quality of life for all Albertans, now and for generations to come.”

- Heather Klimchuk, Minister of Culture

“I applaud the Government of Alberta for showing such critical leadership today—not only for creating the Social Innovation Fund but also for funding it at a level commensurate with the importance of the work it will promote and support. I have no doubt that many in Canada and beyond will be taking notice of what’s happened today in Alberta. The Social Innovation Fund will support excellence in research and application across fields that lead to the education of leaders and global citizens, the production of innovative creative works and transformational thought, the advancement of understanding and social solutions to many of Alberta’s and the world’s most pressing problems and to the inspiration of the human spirit.”

- Dr. Indira Samarasekera, President and Vice Chancellor, University of Alberta

“Calgary Homeless Foundation is excited about today’s announcement and the commitment the Alberta government has made to social innovation.  The CHF is currently working on a project that will greatly benefit from this support. Our project will allow more homeless people to receive care faster, government to achieve savings sooner, and gives investors and communities a way to take ownership of social issues.  If we are successful, our project will enhance the 10 year plan to end homelessness in Alberta and provide learnings for the rest of the country.”

- Gerrad Oishi, interim President and CEO, Calgary Homeless Foundation

“As an endowment-based foundation, we know that endowment is a powerful tool for doing great good for a long time. As the pace of change accelerates in the twenty-first century, social innovation is more important than ever.  Social problems are increasingly challenging the province's best future.  The Social Innovation Endowment can focus investment on innovative thinking and new models that have the potential to be game-changing in the social and cultural sectors.  Identifying, designing and growing social innovation can help vulnerable Albertans reach their potential and enhance quality of life for all.”

- Martin Garber-Conrad (Edmonton Community Foundation)

Agriculture and Food Innovation Endowment

“If Alberta is to remain a global leader in agriculture, we must look toward the future. Applied research allows us to test new crop varieties and techniques to ensure we are meeting the needs of producers across the province.”

- Dr. Ty Faechner, Executive Director of the Agricultural Research and Extension Council of Alberta

Alberta Heritage Scholarship Fund

“If we want our province to continue to grow and prosper, we need to make wise investments for the future. By providing additional funding for trades scholarships, this endowment will encourage more people to pursue and complete a fulfilling career in the trades, and at the same time, help address Alberta’s chronic skilled labour shortages.”

- Dave Hancock, Deputy Premier and Minister of Innovation and Advanced Education

“Clark Builders has been a strong supporter of apprenticeship and the apprentice scholarship program and we are very excited with this announcement.  We believe an endowment is the proper vehicle to provide sustainable support and encouragement for apprentices.  Bursaries and scholarships directed at apprentices will ease the financial hurdles particularly for first period apprentices and we are really pleased to see the government introducing more direct support.  There is strong growth in the construction industry and demand for certified tradespeople continues and this endowment will go a long way to ensure we get the tradespeople we require.”

- Paul Verhesen, President & CEO of Clark Builders

About the Endowments

Social Innovation Endowment

Resolving complex social issues like poverty or family violence requires new thinking, new approaches, and risk-taking that can be more effectively implemented outside of traditional government approaches. From human services to our culture community, we need to identify, design, nurture and grow innovation.    

Last year, over 31,000 Albertans created Alberta’s Social Policy Framework. The Framework created a vision for social policy that reflected Albertans’ aspirations for a province that offers all Albertans the opportunity to reach their potential and to benefit from the highest possible quality of life.

The $1 billion Social Innovation Endowment will deliver on the goals, vision and principles, defined by the Framework and will strengthen and renew Alberta’s social and cultural sector. The earnings from this endowment will be put towards creating new knowledge and deliver models that will translate learning into action.

The Social Innovation Endowment will help pilot and expand the use of promising social innovations. The endowment will support:

  • New Knowledge: Funding world-class research on transformative approaches through knowledge dissemination initiatives;
  • Prototyping: Funding the design and testing of innovative approaches and interventions that offer potential to demonstrate improved social outcomes; and 
  • Social Finance: Identifying and testing new funding models.  This could include supports for social enterprises and social entrepreneurs.

The Social Innovation Endowment will be established with an immediate capitalization of $500 million. An additional capitalization of $500 million will be provided in 2015-16.   

Agriculture and Food Innovation Endowment

Agriculture is the province’s largest renewable industry, and innovation and diversification are essential to ensuring the long-term sustainability and competitiveness of our agriculture industry. The $200 million Agriculture and Food Innovation Endowment will provide enhanced funding for basic and applied agricultural research in Alberta while supporting value-added product development and commercialization activities.

Alberta Heritage Scholarship Fund

$200 million will be added to the Alberta Heritage Scholarship Fund to help apprentices complete their programs, engage industry, and support excellence across the apprenticeship, trades and technology system.  Endowment earnings will go towards filling gaps in our apprenticeship system to ensure our apprentices are getting the support they need to finish their education and that our economy is getting the skilled workers needed for continued success.

We know that part of the support apprentices need is financial, and the funds could include bursaries for first-year apprentices and industry-matched scholarships. This endowment will encourage greater partnership with industry and support innovation in the delivery of training programs. It will enable more people to pursue and complete a fulfilling career in the trades and at the same time help address Alberta’s chronic skilled labour shortages.

Alberta Future Fund

The Alberta Future Fund will enable government to respond to emerging opportunities of a strategic nature that could benefit all Albertans. These are opportunities, yet to be determined, that may require a large, one-time investment from the province.

Disbursements

The endowments will provide annual disbursements up to 4.5 per cent of their market value, based on a three-year rolling average. This will ensure more stable and predictable funding. The government may withdraw any amount from the Alberta Future Fund. Spending of the disbursements from the endowments and the Alberta Future Fund must be approved by a vote in the Legislature.

 

2014-15

2015-16

2016-17

Social Innovation Endowment

 

$22.5 million

$45 million

Agriculture and Food Innovation Endowment

$9 million

$9 million

$9 million

Trades-focused education

 

$9 million

$9 million

Funding Details

The new innovation endowments, the enhancement to the Alberta Heritage Scholarship Fund and the new Alberta Future Fund will be capitalized by reallocating a portion of the existing assets of the Alberta Heritage Savings Trust Fund. The new endowments and the Alberta Future Fund will exist as accounts within the Heritage Fund and will be managed according to the Heritage Fund’s investment policy.

The new endowments and accounts will be allocated funds as follows:

  • Social Innovation Endowment: $500 million (2014-15) and $500 million (2015-16)
  • Agriculture and Food Innovation Endowment: $200 million (2014-15)
  • Alberta Heritage Scholarship Fund: $200 million (2014-15)
  • Alberta Future Fund: $200 million (2014) and $200 million in each of the following nine years, for a total of $2 billion.

Savings will continue to grow

  • Apart from the legislatively authorized disbursements from the new accounts, the net income of the Alberta Heritage Savings Trust Fund will remain subject to the provisions of the Fiscal Management Act and will be fully retained in the fund by 2017-18.

Additional information about the proposed Savings Management Act can be found in the legislation and once released, the Budget 2014 Fiscal Plan.

What is an endowment?

An endowment is an investment fund, in which regular withdrawals from the fund’s invested capital are used for either ongoing operations or other identified purposes. Endowments typically have three components.

  • An investment policy which governs the endowment’s investments; for example, the types of investments allowed or the risk profile of assets to be held by the endowment;
  • A withdrawal policy, which determines the amount of funds that may be disbursed from the endowment each year.
  • A fund usage policy which indicates the purposes for which disbursements from the endowment can be used.

Existing Alberta government endowment funds

Alberta Heritage Foundation for Medical Research Endowment Fund (AHFMR)

The AHFMR’s mandate is to nurture and develop a first-class community of health researchers for the benefit of Albertans and people worldwide. Over a period of 30 years, the AHFMR has invested more than $850 million in medical research, creating a community of health researchers in Alberta who have undertaken world-class research to improve the health care of Albertans and others.

Alberta Heritage Science and Engineering Research Endowment Fund (AHSER)

The mandate of the AHSER is to develop internationally recognized science and engineering expertise through support of Alberta’s research facilities; facilitate programs directed to discovery of new knowledge and the commercial application of that knowledge; encourage young Albertans to pursue careers in science and engineering; and attract top graduate students and researchers to Alberta.

Alberta Heritage Scholarship Fund

The Scholarship Fund is designed to stimulate the pursuit of excellence by rewarding outstanding academic achievement and by encouraging and assisting Albertans to achieve their fullest potential. The fund provides funding for a number of scholarships.

Alberta Cancer Prevention Legacy Fund

The mandate of the fund is to facilitate cancer screening programs in Alberta through a virtual cancer research institute; to coordinate cancer research; and to promote public, private, national, and international research and screening programs.

Advanced Education Endowment/Access to the Future Fund

The Advanced Education Endowment is an account within the Alberta Heritage Savings Trust Fund. Funding for the Access to the Future Fund is derived from this endowment. The mandate of the Access to the Future fund is to support innovation and excellence by enhancing and expanding opportunities for Albertans to participate in accessible, affordable and high quality advanced education opportunities. The Fund provides matching payments to stimulate donations for postsecondary institutions and apprenticeship scholarships. Transfers from the Access to the Future Fund were suspended in Budget 2011. Programs are under review to ensure alignment with government and ministry priorities, and to ensure programs meet the needs of Albertans. 


Media inquiries

  • Craig Loewen
    780-722-9033

    Press Secretary, Innovation & Advanced Education

  • Jessica Jacobs-Mino
    780-935-8570

    Acting Press Secretary, Treasury Board & Finance

  • Julie Crilly
    780-782-5866

    Press Secretary, Agriculture & Rural Development