►
Description
Legislative Assembly of Alberta
A
A
A
A
A
B
Okay,
good
morning,
folks
welcome
here
on
this
slippery
Blustery
Day
glad
you
all
made
it
I'd
like
to
call
the
meeting
of
the
standing
committee
on
the
Alberta
Heritage
savings
trust
fund
to
order
and
welcome
you
all.
My
name
is
Ron
Orr,
the
MLA
for
lecompanoca
and
chair
of
today's
committee
meeting
so
I'd
like
to
ask
members
and
guests
at
the
table
to
introduce
themselves
for
the
record
and
I'll
call
on
those
on
my
right
to
begin
and
then
after
we've
done
the
table
here,
I'll
go
online
so.
G
Good
morning,
Brittany
Jones
senior
or
senior
manager
of
portfolio
analytics
and
research
in
capital
markets
at
treasury
board
and
finance.
B
B
Pardon
me
and
I
think:
that's
it
online.
So
wonderful
welcome
everybody
and
congratulations
everybody
for
attending.
We
don't
have
any
substitution
today,
so
good
for
all
of
you.
A
few
housekeeping
items
to
address.
Excuse
me
before
we
begin
our
business.
Please
note:
the
microphones
are
operated
by
Hansard
staff.
You
don't
have
to
touch
them.
Committee
proceedings
are
live
streamed
on
the
internet
and
broadcast
on
Alberta
assembly
TV.
The
audio
and
video
stream
and
transcripts
of
meetings
can
be
accessed
via
the
Legislative
Assembly
website.
B
Those
participating
by
video
conference
are
encouraged
to
please
turn
on
your
camera.
While
speaking
and
mute
your
microphone
when
not
speaking,
members
participating
virtually
who
wish
to
be
placed
on
a
speaker's
list
are
asked
to
message.
The
committee
Clerk
you
can
do
that
on
on
the
team's
app
there
either
raise
your
hand
or
messaging
and
members
in
the
room.
Please
just
signal
myself
or
the
clerk
and
we'll
get
you
on
the
list
make
sure
your
phones
are
off.
Other
devices
are
silent
and
we'll.
D
B
None
in.
B
Any
opposed
none
so
that
is
carried.
Thank
you
very
much
and
we
can
move
forward
approval
of
the
minutes
from
the
last
meeting.
September
26
2022,
any
members
have
errors
or
omissions
to
note,
and
if
not,
would
someone
move
that
the
minutes
of
the
September
26
22
meeting
of
the
standing
committee
on
the
Alberta
Heritage
savings
trust
fund
be
approved
as
distributed?
Mr
Egan
has
so
moved
comments
or
questions,
seeing
none
in
the
room
all
in
favor
any
opposed,
none
online,
all
in
favor,
and
anyone
opposed
seeing.
B
None
that
is
approved
so
I
think
I
will
take
just
one
moment
and
allow
our
latest
participant
to
introduce
himself.
Thank
you
don't
want
just
for
the
record.
Thank
you.
B
Thank
you
and
welcome
glad
you
could
make
it
and
we'll
proceed
so.
B
The
second
quarter
report
is
the
business
at
hand
at
murder,
Heritage
savings
trust
fund.
Second
quarter
report
for
2223
was
released
on
November
24th
of
this
past
year,
November
of
22.
members
were
notified
when
the
report
was
posted
on
the
committee's
internal
website.
As
committee
members
will
be
aware
of
the
Alberta
Heritage
saving
trust
fund
act
mandates
that
one
of
the
functions
of
this
committee
is
to
receive
and
review
the
quarterly
reports
and
the
operational
results
of
the
Heritage
fund.
B
So
we're
pleased
to
have
the
representatives
from
aimco
and
treasury
board
and
finance
here,
they've
introduced
themselves
already
to
provide
us
with
an
overview
of
the
report
and
answer
any
questions
that
you
as
members
may
have
so
I'll
turn
the
floor
over
to
Amco
and
TBF,
and
please
begin
when
you're
ready.
Whoever
is
going
to
start.
F
Thank
you
Mr
chair,
as
stated
I'm
Steve
Thompson,
the
executive
director
of
capital
markets
with
me
in
the
room
today
is
Brittany
Jones,
our
senior
manager
of
portfolio
analytics
and
research,
we're
here
on
behalf
of
Lowell
app,
the
assistant
Deputy
minister
of
Treasury,
and
risk
management,
who
is
with
the
minister
today
and
unable
to
attend.
F
Thank
you
for
having
me
here
and
happy
to
present
the
second
quarter
results
of
fiscal
2223
and
it's
September.
30Th
2022.
F
F
F
The
fund
experienced
a
challenging
second
fiscal
quarter.
High
levels
of
inflation
continue
to
be
of
concern
or
the
potential
for
a
global
recession.
Cloud
at
investor
optimism
and
performance.
A
war
in
Ukraine
also
continued
to
disrupt
and
negatively
impact
global
trade
and
commodity
prices
over
the
quarter.
A
returns
for
the
fund
were
negative.
0.1
percent
almost
zero,
but
not
quite
although
this
was
better
than
the
negative
4.1
percent
recorded
in
the
first
quarter.
F
F
returns
and
assets
under
management
may
have
been
flat,
but
the
quarter
was
by
no
means
dull.
The
msci
all
country
World
index
is
a
measure
used
to
monitor
the
performance
of
a
broad
set
of
global
Equity
returns,
which
is
often
used
as
a
rough
proxy
for
Global
investment
performance
between
June
and
mid-august
of
2022.
This
return
Rose
10.6
percent
only
to
Fall
by
10.3
percent
by
the
end
of
September.
B
F
End,
the
long-term
asset
mix
of
the
fund
was
comprised
of
19.7
fixed
income
securities,
34.1
percent
inflation,
sensitive
and
alternative
assets
and
45.8
in
equities.
The
remaining
0.4
percent
of
the
Holdings
was
comprised
of
strategic
opportunities
of
the
fund.
This
asset
mix
is
in
line
with
our
expectations.
F
These
asset
classes
include
real
estate
infrastructure
and
renewable
resources.
These
types
of
Investments
are
able
to
add
value
during
inflationary
periods
because
they
generate
cash
flows
that
adapt
to
the
changing
inflationary
environment.
This
is
important
to
the
Heritage
fund
as
its
annual
growth
Target
is
inflation-based.
F
This
target
is
for
the
funds
who
are
in
the
Canadian,
Consumer
Price,
Index,
plus
four
and
a
half
percent,
as
inflation
continues
to
creep
up,
it
does
push
this
Benchmark
higher,
but
at
a
relatively
slow
pace,
due
to
the
fact
that
the
target
is
measured
on
a
five-year
rolling
average
basis
which
captures
changes
in
the
level
of
inflation
gradually
by
Design
prior
to
the
pandemic.
This
five-year
CPI
plus
Benchmark,
as
we
refer
to
it
with
6.1
percent.
F
Since
then,
the
target
has
increased
by
40
basis,
points
or
0.4
percent
to
end
the
second
quarter
at
6.5
percent,
as
described
the
portfolio
is
designed
to
work
in
many
differing
economic
environments,
including
periods
of
inflation.
However,
there
are
times
when
performance
will
fluctuate,
both
above
and
below
the
return
Target.
F
Over
five
years,
the
Heritage
fund
has
returned
6.2
percent
annually,
which
is
slightly
below
the
current
real
return.
Target
that
I've
just
referenced
investment
income
has
been
slightly
negative
to
quarter
end
with
a
loss
of
two
two
million
dollars,
but
the
losses
reported
for
the
first
quarter
of
64
million
dollars
have
been
almost
fully
recued
over
the
second
quarter.
F
This
means
it
as
it's
September
30th
2022.
There
was
no
income
to
be
retained
within
the
fund
for
inflation
proofing
or
other
purposes.
However,
income
is
accumulated
throughout
the
fiscal
year
with
the
final
results
calculated
as
of
March
31st,
and
it
is
possible
that
the
fund's
positive
transfer
of
the
second
quarter
will
continue.
F
Thank
you,
Mr
chair
and
the
members
of
the
community.
I
will
conclude
my
prepared
remarks.
We're
happy
to
take
questions
when
appropriate.
O
O
You
will
have
questions,
therefore,
about
our
performance,
we're
much
more
oriented
towards
thinking
about
the
future,
of
course,
in
aimco,
and
how
we
position
ourselves
for
the
long
term.
As
Stephen
said,
we
we
think
of
ourselves
over
five
to
four
year
four
five
year
period
and
that's
how
we
really
look
at
our
performance,
although
we
will
of
course
respond
to
your
questions
as
we
think
about
the
long
term
of
the
organization
we
have.
You
know
from
last
time.
K
O
Building
a
leadership
team
and
a
culture
that
is
United
and
in
service
of
our
clients.
We've
made
some
good
progress
in
that
respect.
We
have
a
leadership
team.
Now,
that's
fully
in
place
with
a
new
Chief
investment
officer,
Marlene
puffer
from
cnrail
pension
and
another
senior
executive
from
PSP
joined
us
recently,
as
well
as
we
position
ourselves
for
the
future.
O
We've
also
we're
sharing
now
with
our
clients,
a
new
investment
strategy,
one
that
is
based
on
our
true
sources
of
edge,
including
the
scale
of
the
organization,
the
fact
that
we
think
we
can
be
a
preferred
partner
and
and
we're
also
looking
at
diversifying
for
the
benefit
of
our
clients
by
having
new
international
offices
in
Singapore,
New
York,
which
will
open
this
year.
O
That's
sort
of
the
path
we're
on
the
organization
is
much
much
stronger
than
it
was
two
years
ago,
much
much
more
united,
we're
operating
from
a
client
perspective
looking
at
their
portfolios,
as
opposed
to
from
an
aimco
organization.
Looking
at
things
as
a
collection
of
products
that
actually
is
quite
important.
How
we
invest
on
on
our
clients,
behalf,
you
know
from
when
I
first
started,
that
making
clients
our
first
priority
has
been,
has
been
something
that's
strategic
and
important,
and
that
of
course,
of
course
includes
the
Heritage
fund.
So
we
are
happy.
O
Ahmed
and
I
are
happy
to
respond
to
your
questions.
I'll
take
any
of
those
that
are
strategic
and
and
probably
forward-looking,
and
it
has
the
detail
from
Looking
Backward
from
September.
B
Okay,
well,
thank
you
very
much,
sir.
Can
I
assume
from
both
of
you
that
you've
spoken
on
behalf
of
the
others
at
the
table.
That's
we
can
go
to
questions
directly
as
far
as
I'm
concerned,
yeah,
okay,.
E
No,
no
yeah,
we'll
we'll
address
them
through
the
Q.
A
thank.
B
You
perfect,
thank
you,
okay,
so
members,
it's
time
for
your
your
and
thank
you
folks
for
your
presentations.
It's
it's
time
for
questions.
B
I
would
just
remind
us,
as
kind
of
already
been
alluded
to
a
little
bit
that
we're
we're
looking
at
a
quarterly
report
that
was
been
in
the
past,
and
yet
here
we
are
in
a
new
year,
and
so
but
the
focus
is
the
quarterly
report
before
us
and
of
course
that
includes
the
presentation
that
you've
heard
so
questions
with
regards
to
any
of
this
before
us,
I'm
I'm,
ready
to
receive
and
I
understand
that
Ms
Phillips
has
her
name
on
the
list
first
and
then,
after
that,
I'll
go
to
Ms
Isaac.
K
Thank
you
Mr
chair,
so
we
had
a
bit
of
back
and
forth.
I
K
The
last
quarter,
the
government's
second
quarter-
fiscal
update,
the
Minister
of
Finance,
said
the
government
would
be
depositing
money
into
the
Heritage
fund
and
it
was
set
to
be
roughly
20
billion
after
those
deposits.
And
then
we
got
a
new
premier.
That
decision
was
reversed
and
there
was
no
deposit
into
the
fund.
So
can
the
the
ministry
then
share
some
additional
insight
into
that
decision,
making?
What
a
q1
was
the
forecasted
incremental
new
Revenue
from
the
Alberta
Heritage
fund,
and
can
you
share
any
of
the
analysis
that
went
into
reversing
that
decision?.
G
Shannon
Miss
Phillips
the
so
this
has
been
an
interesting
decision.
This
has
been
something
that
has
been
on
our
plate
for
a
long
time
and
something
that
we
have
done.
A
lot
of
analysis
around
the
legislation
has
not
yet
been
changed.
So
the
assumptions
that
we're
working
with
right
now
are
are
those
that
are
stated
in
the
ACT.
We
have
put
out
a
new
investment
income
forecast
that
you
will
see
in
the
upcoming
fiscal
art
that
has
been
published
as
well
too
in
in
the
plan.
G
The
decision
has
not
yet
been
put
down
on
paper
formally
as
far
as
the
legislation
goes,
but
it
is
in
the
works
when
we
talk
about
the
market
value
of
Investments
and
then
when
we
talk
about
the
net
assets
as
well.
So
that's
actually
in
the
financial
statements
right
at
the
beginning.
There
is
a
receivable
that's
in
there
and
so
that
talks
about
what
we're
going
to
do
with
that
investment
income.
G
F
And
the
the
department
in
terms
of
managing
the
fund
and
in
terms
of
what
is
retained
versus
what
is
withdrawn
from
the
fund,
is
constrained
by
the
current
legislation.
So
we
will
be
guided
by
any
changes
made
to
the
ACT
in
the
coming
legislative
sessions.
B
Okay,
thank
you,
follow-up,
Miss,
Phillips
or
no.
K
Yes,
please,
so
let
me
try
again
a
little
bit
what
analysis
did
TBF
provide
to
the
government
at
q1
that
changed
at
Q2
to
reverse
that
decision?
How
did
what
was
the
underlying
professional
Public
Service
analysis
on
either
the
return
on
investment
or
the
foregone
Revenue
that
was
provided
to
treasury
board
in
order
to
reverse
itself
in
a
matter
of
months
on
that
multi-billion
dollar
decision.
F
Nothing
specific
that
I'm
aware
of
was
done
in
terms
of
analysis.
The
the
analysis
is
basically
whether
you
earn
a
higher
return
by
leaving
funds
in
the
fund
in
the
Heritage
fund
or
by
withdrawing
them
that
that
analysis
hasn't
changed
in
the
entirety
of
the
fund's
existence.
I'm
unaware
of
anything
that
specifically,
is
guiding
those
decisions.
B
Okay,
thank
you,
sir
Miss
Isaac.
M
Good
morning,
you
spoke
a
little
bit
earlier
about
inflation
and
its
effects
on
the
fund,
but
more
specifically
sort
of
spoke
about
different
assets
and
how
they
react.
With
respect
to
inflation.
M
On
the
first
page
of
the
report,
you
talk
about
the
annual
growth
Target
being
CPI
plus
four
and
a
half
percent,
with
inflation
being
what
it
is
now,
which
is
from
my
recollection,
is
the
highest.
It's
been
in,
probably
I,
don't
know
at
least
20
plus
years,
maybe
30
years.
M
So
could
you
talk
a
little
bit
about
the
Investments
or
the
the
funds
Investments
that
let's
call
it
that
are
inflation
hedged
and
then
can
you
also
just
speak
a
little
bit
about
the
performance
of
the
sort
of
inflation
hedged
assets
you
mentioned
earlier,
like
real
estate
and
some
others?
How
do
those
assets
compare
to
the
sort
of
non-hedged
assets
in
this
year
and
in
the
Years
where
inflation
was
within
the
two
percent
of
Bank
of
Canada
Target
rate.
E
Thank
you.
Thank
you
very
much
for
the
question
inflation's
at
least
been
front
and
center
for
us,
as
we
think
about
the
strategy
on
behalf
of
the
Heritage
fund,
and
certainly
certainly
across
across
the
market.
So
let
me
preface
it
by
saying
that
our
our
Outlook
looking
forward
is
for
mild
stagflation,
I.E,
lower
growth
with
elevated
levels
of
inflation.
E
Within
that
context,
the
first
line
of
defense
and
you've
heard
us
say
that
before
is
the
design
or
the
asset
allocation
of
the
of
the
Heritage
fund,
so
to
the
extent
that
it
has
about
a
third
of
the
allocation
to
inflation,
sensitive
exposures-
that's
that's
been
very
impactful,
particularly
for
the
recent
over
the
recent
past,
but
even
as
we
as
we
look
forward
more
specifically,
you
know
as
we
as
we
break,
that
down
the
infrastructure
and
renewable
exposures
have
done
really
really
well
and
both
are
up
over
the
recent
past
in
double
digits,
significantly
ahead
of
public
markets
and
so
the
last
12
months,
both
Renewables
and
infrastructure,
up
between
19
to
30
percent,
so
really
attractive
returns
and
likewise
real
estate
up
almost
12
for
the
12-month
period
under
September
30th.
E
A
few
few
other
things,
and
particularly
I,
think
as
Evan
mentioned,
what
we're
focused
on
is
the
future
and
and
using
certainly
past
as
a
as
a
roadmap
in
terms
of
learning
learning
about
the
markets
as
we
go
along.
So
one
of
the
areas
that
the
Heritage
fund
and
we've
built
capabilities
on
is
our
renewable
resources
and
to
just
you
know,
give
you
a
bit
of
color.
You
know
why
this
is
attractive
under
Renewables
on
your
behalf.
E
We
invest
in
in
agriculture
in
Timberland,
and
what
it
does
is
that
these
types
of
exposures
have
commodity-like
aspects
to
it
and
some
of
the
recent
ones
that
we've
made,
for
example,
in
Australia
in
Lawson
grains,
the
impact
on
the
crop
prices,
the
impact
on
the
real
estate
on
the
land
underlying
land,
both
of
those
exposures
have
come
in,
have
become
quite
attractive.
The
other
one
more
example.
E
Within
a
real
estate
portfolio,
we
are
we've
been
adding
exposure
to
Industrial
opportunities
across
Canada,
we're
at
a
multi-decade
low
in
terms
of
the
availability
of
that
type
of
those
types
of
facilities
and
again
that's
quite
attractive.
As
we
look
forward
relative
to
where
we've.
E
The
last
bit
I'll
say,
is
in
in
addition
to
all
of
these
positioning
and
how
we're
how
we
are
positioning
the
portfolio
as
we
look
forward,
is
the
work
that
we've
also
become
quite
intentional
and
focused
on
which
is
providing
a
research
framework
where
these
decisions
and
these
trade-offs
can
be
made
in
a
sensible
and
optimal
manner.
Thank
you.
B
Thank
you
very
much.
Mr
prakash
follow-up.
M
Can
you
talk
a
little
bit
about
you
know
going
forward
how
the
fund
plans
to
sort
of
or
if
the
plan
funds
to
rebalance
the
portfolio
at
all
between
you
know:
sort
of
inflation,
sensitive
or
inflation,
successful,
let's
call
it
assets
and
and
and
other
assets
that
either
don't
react
to
inflation
or
react
less
well
to
inflation.
Can
you
I
I,
guess
my
my
thought
pattern
here
is
what
goes
up
at
some
point
will
come
down?
How
are
you
planning,
how
is
the
fund
sort
of
planning
to
react
to
to
that.
F
Part
of
our
responsibility
when
we,
when
we
talk
about
management
of
the
fund,
we
are
actually
in
the
midst
of
conducting
an
asset,
mixed
review
of
the
plans
asset
allocation,
which
involves
doing
Financial
modeling
of
expected
returns
in
various
scenarios,
including
you
know,
the
current
inflationary
environment.
It
has
been
quite
some
time
since
an
extensive
allocation
study
of
this
type
has
been
done
for
the
fund.
We
have
reviewed
it
internally,
we
have
built
some
models,
is
using
aimco's
capabilities
and
in
in
conjunction
with
aimcool.
F
We
are
in
the
process
of
potentially
Contracting
with
an
external
service
provider
to
do
an
extensive
asset
allocation
review
of
the
fund
to
provide
us
with
an
independent
opinion
and
advice
on
the
appropriate
asset
allocation
for
the
fund
going
into
the
future.
G
G
So
there
are
times
where
aimco
does
come
to
us
with
some
tactical
decisions
that
could
benefit
the
fund
in
our
favor,
for
either
the
long
run
or
the
short
run,
and
over
the
years
so
2011
was
the
first
top
or
was
the
last
time
the
an
external
service
provider
had
really
done
the
Deep
dive,
independent
analysis.
Since
then,
we've
done
multiple
small
little
adjustments
to
the
portfolio.
So
just
recently
we
updated
a
new
statement
of
policies
and
goals
on
the
website
and
what
you'll
see
there
is.
G
There
has
been
an
adjustment
to
the
upper
bound
with
private
debt
and
Loan.
So
there's
not
necessarily
been
a
change
right
now,
but
what
we've
done
is
we've
we've
amended
those
ranges
so
that
when
aimco
sees
the
tactic,
tactical
ability
to
take
advantage
of
some
of
those
opportunities,
they're
able
to
you
so
hopefully
that
helps
your
question.
H
Well,
thank
you
chair
and
my
question
is
to
TBF.
Please.
We
already
heard
that
one
of
the
targets
of
the
Heritage
Trust
Fund
is
to
deliver
returns
of
CPI
plus
4.5
percent
right
on
at
the
Q2
update.
As
we
already
know,
the
premier
decided
to
reverse
the
decision
to
deposit
quite
a
lot
of
billions
of
dollars
into
the
fund,
so
I
guess
conventional
wisdom
and
I'll.
H
Ask
the
question,
respect
that
my
question
will
be
better
off
paying
down
the
debt
with
the
Surplus
or
whether
we're
better
off
saving
that
amount
in
the
Heritage
Trust
Fund
and
earning
a
return.
Obviously,
the
former
Premier
and
the
current
Premier
had
different
views
on
this,
but
I'm
curious
to
know
as
professional
civil
Civil,
Service
I'm.
Looking
for
more
clarity
to
your
previous
answer
of
to
the
member
from
Lethbridge
West
was
the
decision
to
reverse
saving
a
portion
of
the
Surplus
really
made
without
any
analysis
given
by
TBF
officials.
F
Question
and
and
fair
question
and
to
clarify
my
answer
and
our
our
division.
Our
group
is
responsible
for
the
oversight
of
the
investment
policy
of
the
Heritage
fund.
Your
question
is
broader
in
scope
and
speaks
to
overall
fiscal
policy
decisions
on
debt
repayment
versus
contributions
to
the
investment
portfolio.
F
Obviously
we
do
have
input
into
what
the
potential
Returns
on
the
Investment
Portfolio
would
look
like,
and
we
would
be
the
ones
tasked
with
calculating
the
impact
of
reducing
the
debt
on
debt
servicing
costs
and
therefore,
the
fiscal
balance
going
forward.
So
those
calculations,
those
are
done
constantly
at
the
department
level
and
that
information
is
constantly
provided
to
the
minister
and
cabinet
treasury
board
and
appropriate
decision
makers.
What
I'm
not
aware
of
is,
is
what
is
then
done
with
that
analysis.
F
I
am
not
privy
to
treasury
board
decisions,
I
am
not
involved
in
cabinet
decisions,
and
I
cannot
speak
to
those
decisions
having
been
absent
from
the
room.
But
yes,
we
do
provide
calculations
on
what
the
impact
of
reducing
outstanding
debt
on
the
province
will
be,
and
we
will
provide
forecasts
on
what
investment
income
would
be
based
on
the
levels
of
the
fund
and
expected
returns.
G
And
and
the
returns
from
the
Heritage
fund
right
now
have
been
higher
than
the
debt
servicing
costs.
B
Thank
you
both
and
the
follow-up
Mr
Eden.
Yes
thank.
H
You
Mr
chair
and
to
Mr
suno
I
just
wanted
to
ask
you
I
mean
you
know
that
you
see
those
Bond
rates
out
there
and
you
see
the
government
of
Alberta
shifting
positions
dramatically
in
the
last
few
months,
a
big
deposit
into
the
Heritage,
Trust
Fund
and
then
the
deposit
at
all,
and
so,
at
the
end
of
the
day,
the
government
makes
the
decision.
I
understand
that,
of
course,
but
you
put
your
technical
analysis
perhaps
to
to
use
what
would
be
the
return
of
the
investment
for
the
last
quarter.
H
Had
we
made
a
deposit
into
the
fund?
Can
you
provide
analysis?
Surely
there
was
some
provided
to
the
government
as
traditional
important
Finance
just
said
they
did
was
prevent.
You
know
presented
at
least
internally
when
the
government
initially
announced
that
they
would
be
making
a
deposit
in
into
the
fund.
So
regardless
of
the
government
chose
to
act
on
that
analysis,
I
mean
which
would
it
be
better
to
do
to
pay
on
the
debts
or
to
make
an
investment
into
the
Heritage
Trust
Fund?
That
are
an
interest
on
that
same
money.
O
O
Math,
but
you
know
it's
more
complicated
than
that,
of
course
through
the
chair,
because
the
job
is
to
forecast
what
the
Outlook
is
forward
as
opposed
to
a
look
of
what
has
happened
in
the
past.
So
we're
now
looking
at
that
with
benefit
of
perfect
hindsight,
which
is
not
a
fair
assessment.
H
No
I
I
understand
that
it's
certainly
I
I
just
want
to
confirm
what
seems
obvious
to
me,
which
is
that
making
an
investment
into
the
Heritage
Trust
Fund
with
that
same
money
actually
serves
the
public
interest
better
than
the
choice
that
this
government
made
to
not
invest
in
the
Heritage
Trust
Fund.
With
that
same
money,.
G
G
Steve
also
mentioned
it
in
his
opening
comments
that
the
the
income
is
calculated
over
the
year
so
really,
as
far
as
this
year
goes,
March
31
is
really
the
date
we're
looking
for
at
this
for
this
investment
income
anyway.
So
as
so,
we
have
some
time
for
the
this
decision
to
work
itself
out
and
it's
not
actually
impacting
the
fund
or
the
Investments
of
the
fund
at
this
at
this
moment
in
time.
G
So
the
market
value
of
the
fund,
the
asset
base,
is
still
generating
additional
returns
and
and
that
type
of
thing
to
our
expectations
at
this
moment.
So
as
this
decision
to
contribute
or
not
contribute
is
on
the
table,
the
Heritage
fund
is
not
impacted
negatively.
Does
that
help.
B
Yeah
look.
Thank
you.
Thank
you
very
much
for
your
answers.
I
understand
who
do
we
have
oh
Mr
Hunter
you're
next,
please
thank
you.
D
My
first
question
is
just
maybe
some
clarity
on
Mr
Egan's
line
of
questioning.
This
is
the
treasury
board.
So
when
decisions
are
made,
the
policy
is
not
made
by
you.
It's
made
by
obviously
the
government,
but
the
question
that
that
I
have
for
you
is,
and
I
and
I,
think
that
this
was
all
already
alluded
to
by
Evan.
D
Is
that
it's
it's
a
lot
more
complicated
than
that
the
the
cost
of
of
the
new
debentures
would
be
higher
than
the
than
the
last
obviously
because
of
of
the
cost
of
of
capital.
Now
so
in
in
your
analysis,
then,
did
you
provide
that
to
treasury
board
that
that
there
would
be
a
higher
cost?
Thus,
the
carrying
cost
of
debt
to
albertans
would
be
higher.
F
That's
a
fair
point
and
I
would
say
it
is:
there
is
a
danger
in
oversimplifying
the
analysis
of
deciding
to
pay
down
debt
versus
deciding
to
contribute
to
the
Heritage
fund
and
that's
twofold
as
you
allude
to
borrowing
costs
are
significantly
higher
in
the
current
fiscal
environment
or
than
in
the
current
global
environment
in
terms
of
bond
yields
than
they
have
been
for
over
a
decade.
F
And
so
yes,
the
analysis
on
the
cost
of
debt
would
imply
that
the
cost
of
issuing
new
debt
is
expensive.
The
cost
of
refinancing
Alberta's
existing
debt
stock
could
hire
interest
rate
costs
is
significant
and
then
likewise
it's
it's
dangerous
to
assume
that
we
can
simply
make
a
contribution
into
the
Heritage
fund
and
instantly
return
instantly
earn.
The
return
that
the
Heritage
fund
has
been
earning
to
date,
deploying
large
amounts
of
capital
into
a
fund
such
as
the
Heritage
fund,
requires
a
fairly
significant
process
and
takes
time.
F
So
anything
significantly
large
is
not
going
to
immediately
begin
earning
the
returns
of
the
overall
fund.
So
that
does
all
complicate
the
analysis.
F
But
yes,
when
we
are
doing
projections
on
what
we
expect
our
cost
of
borrowing
to
be
going
into
the
future,
we
look
at
the
current
and
projected
environments.
You
know
our
our
economics
and
fiscal
policy
team
provides
forecasts
of
interest
rates
in
global
economic
conditions
that
role
into
our
own
analysis
of
debt,
servicing
costs
and
the
cost
of
debt.
Likewise,
we
would
look
at
investment
income
forecasts
based
on
our
current
asset
mix,
based
on
our
current
expectations,
based
on
aimco's,
long-term
forecasts
of
asset
classes
based
on
our
own
forecasts
of
those
same
asset
classes.
F
So,
yes,
the
the
calculations
are,
are
not
simplistic.
We
can't
just
say:
oh
there,
it
is
fund
has
earned
six
percent
over
five
years.
We
would
expect
to
earn
that
going
forward.
We
would
not,
and
likewise
on
the
debt
servicing
costs.
F
Borrowing
costs
for
provinces
have
been
historically
low
for
a
very
long
period
of
time,
and
that
is
no
longer
the
case,
and
not
only
are
they
high
they're
now
very
volatile.
So
it's
it's
not
a
simplistic
analysis
in
that
regard.
D
F
In
the
relatively
near
term,
in
the
in
the
current
in
the
current
year,
certainly
yes
and
the
the
middle
middle
median
medium
range
in
terms
of
my
expectations
on
global
interest
rates
and
provincial
borrowing,
costs
I
would
say.
Yes,
it
will
be
higher
than
we
have
seen
historically.
B
Wonderful,
thank
you
for
the
answers
and
I
believe
I
have
member
Phillips
on
the
list.
Next,
please
proceed.
K
Thank
you,
Mr,
chair,
so
quick
question
to
TBF
officials.
So
when
the
premier
was
campaigning,
she
repeatedly
to
albertans
told
albertans
that
she
wanted
the
Heritage
fund
to
change
substantially
and
she
set
in
fact
her
monetary
goal.
For
that
the
quote
is:
let's
put
it
out
there
that
we
want
to
have
a
sovereign
wealth
fund-
that's
500
billion
generating
25
billion
a
year
so
that
we
can
eliminate
income
tax
and
eliminate
corporate
income
tax.
K
So
to
treasury
board
then
has
any
work
been
done
on
this
goal?
Any
analysis
on
what
it
would
take
to
meet
it
at
all
and
pro,
and
can
you
provide
that
to
the
public.
F
K
The
second
quarter
update
government
projected
28
billion
in
non-renewable
resource
Revenue,
that's
increase
of
103
on
nrr,
from
budget
and
and
we've
seen
big
policy
shifts
in
terms
of
Heritage
fund
management
from
the
former
Premier
to
the
current
Premier.
K
So
I
I
just
want,
then
a
clarification
that
there
is
no
government
strategy
when
it
comes
to
the
Heritage
fund
right
now
or
not
yet,
and
that
a
record
28
billion
in
rev
in
nrr
has
not
precipitated
the
government
to
make
give
any
policy
Direction
in
terms
of
windfall
revenues
and
how
that
Surplus
should
be
either
invested
or
used
to
pay
down
debt.
F
B
Okay,
thank
you
very
much.
I
think
we
go
to
Mr
Godfrey
next
I
understand.
N
I
believe
Emily
Hunter
still
has
some
questions.
D
Well,
I
actually
do
Mr
chair.
If
that's
okay,
yeah
fine
I
I,
have
a
question
in
2008
the
financial
crisis,
every
most
Canadians.
Remember
that
I'm
sure
you
do
as
well
it
it
caused.
It
was
caused
by
overexposure
to
risky
mortgage-backed,
Securities
and
collateralized
that
collateralized
debt
obligations
that
were
were
branded
as
AAA
debt.
E
Thank
you.
So
let
me
start
by
saying
in
terms
of
how
we,
you
know
how
we
approach
Investments
and
investment
strategy
on
your
behalf,
so,
firstly,
we're
focused
on
on
on
looking
forward,
rather
than
looking
back
but
again,
as
I
said
earlier.
Looking
at
history
to
learn,
learn
lessons
so
one
of
the
things
with
respect
to
the
credit
exposures
within
within
the
Heritage
portfolio
we
use,
we
have
a
in-house
credit
team
that
does
credit
research
to
the
extent
we
have
any
of
those
types
of
exposures
within
our
portfolios.
E
We
do
not
use
external
off-the-shelf
ratings
and
one
of
the
one
of
the
things,
as
you
accurately
referred
to
is
AAA
rating
many
of
the
cdos
at
that
time
and
securitize
paper
ahead.
So
we
we
just
as
a
design
principle.
We
don't
do
that.
We
apply
our
own
internal
notional
ratings.
One
of
the
benefits
of
using
this
approach,
other
than
being
quite
Hands-On
with
each
of
the
issuer
name,
is
also
the
ability
to
be
forward-looking.
E
Lastly-
and
this
is
something
we've
been
focused
on
over
the
last
two
or
three
years-
is
integrating
our
the
work
that
the
credit
portfolio
management
team
does,
with
our
product
risk
teams
and
there's
a
great
amount
of
work
and
a
list
of
attributes
that
the
risk
team
also
tracks
to
ensure
that
that
the
the
credit
portfolios
are
suitable
and
remain
suitable
as
part
of
the
portfolio.
E
I'll
give
you.
Lastly,
one
example
in
one
one
sort
of
area
where
the
Heritage
fund
gets
exposure
to
to
credit,
and
that
is
a
private
debt
and
Loan
component
of
the
Heritage
portfolio.
E
This
is
a
this
is
an
area
that's
developed
over
the
last
roughly
10
10
areas,
10
years
and
the
reason
why
it's
been
quite
attractive
for
investors
such
as
such
as
yourselves,
is
the
fact
that,
as
the
bank
balance
sheets
have
shrunk
over
the
years,
the
ability
for
investors
to
step
in
and
capture
those
economics
has
been
quite
profound.
So
at
the
moment,
the
private
debt
and
Loan
portfolio
roughly
has
a
yield
of
nine
nine
percent,
which
is
quite
attractive,
notwithstanding
even
the
current
elevated
rates
of
of
inflation.
E
Secondly,
we
get
our
origination
fees,
which
could
be
two
to
four
percent
on
those
transactions.
And
thirdly,
just
from
a
more
from
a
near-term
perspective,
we
are
looking
at
the
lower
risk
factor,
even
within
the
private
credit
space.
So
most
the
first
lean
type
of
exposures
rather
than
the
riskier
exposures.
E
So
all
of
that
to
say,
as
a
there's
a
wide
range
of
things,
we
do
both
from
research
both
for
from
organizational
sort
of
structure
in
terms
of
integration,
with
with
risk,
as
well
as
the
new
opportunities
that
allow
us
to
be
quite
careful
and
thoughtful
in
managing
credit
within
the
portfolio.
O
B
O
You
follow
up.
B
No
follow-up,
I
believe
Miss
Phillips
again,
please
thank
you.
K
Sir,
we
just
heard
from
TBF
officials
that
returns
from
the
Heritage
front
have
been
higher
than
debt
servicing
costs
in
the
past,
but
I'm
wondering
if
we
can
follow
up
either
in
writing
with
the
analysis
or
just
or
or
now,
if
it
is
at
your
fingertips,
because
what
the
forecast
for
this
comparisons
are
now
given
that
officials
just
said
that
debt
servicing
has
gone
up
and
expected
to
remain
elevated
in
the
medium
term,
and
so
the
reason
I'm
asking
the
background
is,
of
course,
with
28
billion
in
natural
resource
Revenue
windfall.
F
Well,
certainly,
those
numbers
are
all
available
in
our
quarterly
updates,
both
for
the
province
and
for
the
the
Heritage
fund
and
in
terms
of
debt.
Servicing
costs
going
up.
I
would
isolate
that
to
say
the
cost
of
borrowing
is
going
up.
There's
there's
a
few
other
elements
to
that
servicing
costs
that
make
him
not
directly
correlate
to
Simply
Rising
interest
rates.
There
are
amortization
expenses
and
and
various
other
costs
associated
with
borrowing
that
go
into
debt
servicing
costs
that
will
make
it
fluctuate
a
bit,
but
certainly
we
can.
K
Should
be
clear,
the
the
forecast
for
returns
on
the
over
to
Heritage
fund
and
the
forecast
for
debt
servicing
costs.
Those
are
available
in
the
fiscal
plan,
I'm,
not
sure
that
they
are
those.
F
Would
be
in
the
budget
they
will
be
in
the
budget.
We
can
point
to
those.
We
can
only
provide
things
that
are
publicly
available
at
this
point.
G
And
and
I
think
that
the
debt
servicing
costs
component
of
everything
is
very
difficult
to
explain,
based
on
the
timing
of
our
borrowing
as
well
too,
the
government
was
in
a
deficit
position
before
so
the
need
to
borrow
was
there.
Therefore,
we
were
borrowing
at
those
current
rates.
G
The
it
depends
on
if
we're
actually
borrowing
when
the
costs
are
high,
which
impacts
Debt
Service
ratio
is
also
the
debt
service
costs
are
pursuant
to
what
we've
also
financed
in
the
past,
so
we've
have
some
30-year
debt
on
the
books
at
at
very
low
low
rates,
and
so
that
also
brings
the
average
debt
servicing
costs
down.
G
So
there's
a
lot
of
components
that
we
have
to
look
at
when
we,
when
we
look
at
that
number
and
again,
these
are
numbers
that
you
will
find
in
the
fiscal
and
budget
updates
as
far
as
what's
what
sort
of
transpired,
but
the
forecasting
of
it
has
a
lot
of
different
components.
That
I
mean
that's
a
difficult
one.
B
Okay,
thank
you
very
much
interesting
questions.
I
believe
we're
going
now
to
Mr
Gottfried
on
the
list.
Thank
you.
N
Yes,
thank
you
chair
and
thank
you
to
the
fund
managers
here
for
presenting
and
giving
us
some
very
detailed
information.
Just
on
page
14,
the
report
discusses
some
of
the
foreign
denominated
Assets
in
the
portfolio
I'm,
just
wondering
obviously,
there's
a
lot
of
volatility.
Geopolitical
influences
these
days
a
lot
of
focus
on
energy
security,
food
security.
How
have
the
Canadian
assets
performed
compared?
N
Sorry,
the
foreign
assets
performed
compared
to
Canadian
assets
and
maybe
more
broadly,
are
there
any
variables
that
you
look
at
in
expected
performance
of
the
assets
of
foreign
assets
that
you
consider
before
deciding
to
invest
domestically
versus
internationally
and
I
may
have
a
follow-up
to
that
as
well.
Thank
you.
E
Thank
you
for
the
question,
so
we
we,
let
me
start
with
the
second
question
first
and
come
back
to
the
impact
of
the
performance
of
the
foreign
denominated
assets.
So.
I
E
Look
at
Investments
where
the
foreign
domestic,
but
certainly
certainly
those
outside
Canada,
were
looking
at
what
the
expected
returns
might
think.
So,
the
attractiveness
of
the
investment
itself,
their
risk,
the
cost
the
to
get
into
the
transaction
or
get
away
from
sell
out
of
the
exposure.
Beyond
that,
we
go
through
the
usual
due
diligence
filters
off
depending
on
the
country
depending
on
the
geography
and
then
lastly,
you
know
the
pricing
Etc
in
the
Market
at
the
at
the
point
in
time.
E
So
all
of
that
to
say
it's,
it's
a
it's
a
wide
set
of
considerations
when
we
look
at
look
at
investment
opportunities
outside
Canada
and
just
to
give
you
a
bit
a
bit
of
bit
of
color
in
the
flavor
in
terms
of
what
those
types
of
things
may
look
like.
E
So
when
we
look
at
mortgage
opportunities
within
North
America,
so
there
are
certainly
aspects
or
parts
of
the
Canadian
mortgage
markets
that
are
attractive,
but
it
is
a
relatively
small
market
and
given
the
size
of
the
institutional
investors
such
as
yourselves
within
Canada,
so
we
would
look
at
areas
within
the
us
where
we
invest
in
but
ensure
that
the
cost
of
currency
hedging
net
of
that
the
opportunities
are
still
attractive.
So
that's
number
one
number
two
in
terms
of
your
question
around.
E
You
know
how
the
international
Investments
done
so,
if
just
from
a
currency
perspective
the
the
general
the
settled
so
the
conventional
wisdom
on
the
academic,
research
and
practitioners
is
that
over
long
periods
of
time,
currency
impacts
are
are
Net.
Zero.
E
Of
even
out
or,
however,
over
shorter
periods
of
time,
that
impact
can,
you
know,
can
be,
can
be
material
or
certainly
noticeable
within
a
portfolio.
I
E
Over
over
the
12-month
period
ending
end
of
September
2022,
the
Canadian
dollar
had
weakened
by
nine
percent
relative
to
the
US
dollars.
So,
to
the
extent
that
you
had
exposure,
the
Heritage
fund
had
exposure
to
US
Dollars
and
foreign
currencies.
Those
exposures
did
well
just
in
Canadian
dollar
terms,.
N
You
a
follow-up
supplemental
if
I
could
sure.
So.
Thank
you
for
that
answer
and
that
kind
of
explains,
obviously
the
approach,
but
moving
back
to
page
12,
the
report
discusses
some
of
the
use
of
the
forward
contracts.
Obviously
there
are
geopolitical
influences
that
can
arise
and
we
want
to
make
sure
that
we're
protected
so
I
know
that
you
have
contracts
that
were
referenced
on
page
12
with
regard
to
protecting
against
exchange
rate
fluctuations.
N
So
what
percentage
of
the
foreign
denominated
assets
and-
and
how
do
you
protect
that
I
know?
You
said
in
the
long
term
it
is
a
a
net
zero
impact,
but
in
the
short
term,
if
you
are
investing
in
in
perhaps
more
volatile
markets,
how
much
do
you
use
those
contracts
to
protect
from
currency
fluctuations.
E
Yes,
so
as
of
end
of
September
last
year,
the
foreign
denominated
assets
at
the
Heritage
fund
were
roughly
12
and
a
half
billion
dollars
about
67
out
and
roughly
half
of
those
were
hatched,
so
currency
hedged.
Excuse
me
so
I
said
another
way
of
the
overall
portfolio
about
a
third
of
the
portfolio
is
exposed
to
Foreign
Exchange
impact,
as
I
mentioned
in
my
previous
response
near
term,
that's
been
positive,
but
over
time
you
know,
the
impact
is
not
muted,
just
moving
over
to
foreign
exchange
markets.
E
They
noted
that
seven
and
a
half
trillion
dollars
of
activity
happens
in
the
Foreign
Exchange
Market
every
day,
every
day,
seven
and
a
half
trillion.
So
it's
a
it's
a
deep
rich
market
and
the
way
we
engage
on
on
your
behalf
and
other
clients
in
this
market
is
to
utilize
pretty
well
defined.
Processes
use
electronic
platforms,
which
is
how
a
lot
of
that
activity
happens
now,
certainly
for
smaller
transactions
use
10
to
12
counterparties
in
engaging
in
that
and
then
the
last
bit
where
we've
started.
E
You
know
we're
doing
research
at
the
moment
and
we'll
be
engaging
with.
Clients
is
also
thinking
deeply
about
the
implication
that
the
usage
of
forwards
have
on
the
overall
liquidity
of
the
portfolio.
So
that's
something
that
we're
focused
on
again
thinking
about.
You
know
where
you
know
thinking
from
a
lens
where
the
markets
are
going
and
what
liquidity
needs
might
be
relative
to
where
we've
been
in
the
past.
I.
O
Can
just
elaborate
on
that
because
it's
an
important
point
I
was
making
about.
You
probably
think
we
should
be
hedged
all
the
time,
because
we
want
to
eliminate
risk
well,
if,
if
over
the
long
term,
there
is
no
risk,
if,
over
the
long
term,
foreign
currencies
tend
to
mean
revert
or
just
behave
in
a
way
that
that
is
that
there's
no
risk,
then
we're
spending
your
money
on
necessarily
hedging
that
risk
and
better.
We
keep
that
liquidity
to
take
advantage
of
Market
opportunities,
so
we're
doing
some
researchers
on
that
said.
O
H
This
is
the
floor.
Well,
thank
you.
Thank
you.
Mr
chair
and
I
I
just
want
to
go
back
to
this
discussion
around
whether
to
choose
to
invest
in
the
Heritage
Trust
Fund
or
to
pay
down
the
debt.
I
mean
I.
H
Think
it
goes
to
the
heart
of
the
responsibility
that
we
have
here
in
this
committee
and
indeed
the
heart
of
of
of
William
Co
and
at
TBF
in
many
ways,
I
didn't
get
a
clear
answer,
but
I'll
I'll
just
try
it
again,
and
are
you
suggesting
that
it's
more
prudent
at
this
moment
to
not
be
investing
in
the
Heritage
Trust
Fund,
but
rather
to
be
paying
down
Investments
or
they're
paying
down
debt?
Is
that
what
I'm
hearing
here
in
this
morning.
F
F
H
Well,
I
mean
given
that
part
of
building
the
budget
for
this
province
involves
dividends
or
Investments
or
returns
from
the
Heritage
Trust
Fund
I
mean
that's
part
of
how
you
build
a
budget,
I
mean
I,
know
and
having
built
several
budgets
together
in
the
cabinets
government
that
you
depend
on
those
Investments
and
you
depend
on
the
security
of
the
Heritage
Trust
Fund
I'm.
H
I
think
that
we
need
to
rely
on
Expert
advice
to.
Let
us
know
whether
we
should
be
investing
in
paying
down
debt,
or
we
should
be
paying
a
portion
of
you
know
considerable
Surplus
that
we
have
right
now
into
the
Heritage
Trust
Fund
I
mean
that's
where
the
Heritage
Trust
Fund
came
from
in
the
first
place
and
was
generally
considered
to
be
a
prudent
move
right
to
put
a
non-renewable
fossil
fuel
royalty
money
into
a
long-term
fund.
H
And
so
here
we
are,
and
you
know,
I
take
the
responsibility
of
being
in
this
committee
is
overseeing
the
Heritage
Trust
Fund
and
activities.
You
know
we
rely
on
Expert
advice
to
tell
us
whether
which
which
is
the
best
way
to
go.
You
know
and
I
think
albertans
want
to
know
that
too,
and
so
are
you
saying
that
it's
it's
a
political
decision
and
it's
not
a
decision
based
on
the
expert
advice
that
we
get
from
people
like
you.
F
No,
no,
what
I
am
saying
is
that
it
currently
is
a
decision
outside
of
this
committee.
This
committee
is
tasked
under
the
ACT
in
its
current
form,
to
consider
the
best
interest
of
the
fund.
What
you're
asking
about
is
changes
to
Future
fiscal
policy
with
respect
to
debt,
repayment
or
contributions
into
savings
which
have
broader
ramifications
across
the
board
from
a
fiscal
policy
perspective
and
are
beyond
the
the
advice
that
we
provide.
We
will
provide
the
best
professional
advice
to
the
government
on
the
difference
between.
E
F
Different
costs
and
benefits
expected
between
paying
down
Albert
is
debt
stock
versus
putting
money
into
the
Heritage
fund,
but
there
are
broader
fiscal
implications
with
respect
to
Surplus
and
deficit
management
that
are
beyond
the
Mandate
of
this
committee
and
and
of
my
division.
My
Branch
with
respect
to
management
of
the
fund.
B
Thank
you
very
much
missile
art.
Please.
C
Thank
you,
Mr
chair
I
wanted
to
talk
a
little
bit
about
liquidity
risk
since
we've
been
talking
about
risk
management
and
given
the
climate
that
we've
been
in
the
last
few
years
with
war
in
Europe
and
pandemic
and
supply
chain
issues,
I
think
Market,
Corrections
are
potentially
still
coming
and
so
I
just
wanted
to
ask
on
page
15.
It
discusses
the
liquidity
risk
associated
with
the
fund's
financial
liabilities.
E
Fund
delizes
leverage
in
certain
certain
areas,
similar
to
again
institutional
peers
and
other
Maple
Aid
pension
plans
in
a
prudent
manner.
E
The
Leverage
used
within
the
Heritage
portfolio
in
a
portfolios
of
other
clients,
are
equally
or
or
are
utilized
both
to
manage
risk,
as
well
as
to
add
value,
add
excess
return
in
both
of
those
categories.
And
thirdly,
and
perhaps
most
importantly
outside
you
know
how
we
utilize
utilize
Leverage-
is
the
monitoring
and
reporting
of
that
leverage
to
all
of
our
clients.
That
is.
That
is
something
that
is
a
big
focus
of
ourselves.
E
The
metric,
in
particular
that
we
report
for
our
clients
is
the
slcr
or
the
strategy,
liquidity
credit
ratio
and,
at
the
the
the
at
the
last
report,
that
number
was
153
earlier.
This
week
it
was
170
percent
and
just
to
add
a
bit
of
context
around
that.
That's
a
conservative
measure
of
what
a
portfolio
such
as
the
Heritage
Trust
Fund
portfolio,
how
it
would
be
impacted
under
a
pretty
severe
Market
scenarios,
and
particularly
the
ones
we
use
that
take
a
leaf
from
the
GFC.
E
The
great
financial
crisis
in
2008
and
assumes
Equity
markets
are
down.
30
percent
the
credit
spreads,
widen
the
Canadian
dollar
weakens
and
to
so.
In
summary,
we
look
at
the
the
the
liquidity
of
the
portfolio
and,
to
the
extent
those
liquidity
needs
are
driven
driven
by
by
leverage
very,
very
carefully,
very,
very
thoughtfully
and
and
to
allude
to
our
previous
response.
Part
of
our
research
and
and
plan
engagement.
The
first
half
of
the
year,
around
foreign
exchange,
for
example,
is
focused
with
an
eye
with
an
eye
on
liquidity
as
well.
C
I
follow
up
Mr,
chair
I,
just
wanted
to
say
some
of
the
questions
this
morning,
although
important
questions
to
ask
of
government
I
believe
are
outside
the
scope
of
this
committee,
and
so
part
of
the
reason
I
wanted
to
ask
about
risk
management.
Is
that
that's
within
the
scope
of
what
this
committee
is
looking
at
in
terms
of
managing
the
fund
versus
the
policy
decisions
of
government?
So
I
just
wanted
to
ask
I
guess
a
more
pointed
question
in
response
to
your
your
answer.
E
So
no
we
don't.
We
don't
believe
that
the
the
Heritage
Trust
Fund
is
under
risk
of
not
being
able
to
meet
its
obligations.
B
K
Yes,
thank
you
Mr
chair
thanks
for
your
patience
there.
At
this
meeting
it
was
an
annual
meeting
of
the
Heritage
fund.
There
was
a
review
of
the
investment
strategy
of
the
fund,
announced
I,
believe
that
was
in
December
of
2020
or
perhaps
2019..
K
We
have
heard
then,
as
we
followed
up
on
this
matter,
that
changing
circumstances
have
caused
that
review
to
restart,
and
now
it's
been
a
few
more
months
so
I'm
wondering
if
treasure
board
and
finance
officials
can
update
us
on
the
status
of
that
review,
whether
it
has
restarted,
what
are
its
anticipated
timelines
and
any
other
updates
on
the
direction
that
have
been
given
around
that
review.
F
Yeah
happy
to
respond
to
that
I
believe
I
mentioned
earlier
that
the
review
is
currently
underway.
We
have
review
the
asset
mixed
and
investment
policies
over
the
past
year
and
a
half
or
since
originally
mandated.
We
have
conducted
some
modeling
and
stress
testing,
using
amco's
staff
and
aimco
systems.
F
We
are
currently
in
the
process
of
constructing
an
RFP
to
engage
with
an
external
service
provider
to
further
test
and
stress
test
and
make
recommendations
around
a
future
asset
allocation
for
the
fund,
all
within
the
current
Mandate
of
the
fund
and
encompassing
any
changes
that
may
come
to
that
mandate.
F
That
RFP
should
be
posted
in
the
coming
months.
It
will
be
on
the
public
site
and
more
details
will
be
available
when
that
is
is
out.
But
the
the
review
is
currently
underway
internally
at
treasury
risk
management,
assisted
by
aimco's
staff
and
systems.
K
Yeah
sure,
thank
you,
so
is
it
anticipated
that
that
review
will
be
complete
prior
to
the
annual
report
being
available
to
the
public
in
June,
or
are
we
looking
more
into
the
at
2324
fiscal
year
for
completion
of
that
review
and
when
I
will
be?
When
will
the
elements
of
it?
Will
there
be
any
interim
elements
shared
with
the
public
or
with
this
committee.
F
F
B
D
You
Mr
chair,
so
this
question
is
to
aim
cool.
I
had
asked
a
earlier
question
about
some
of
the
problems
we
saw
back
in
2008
with
the
AAA
debt
while
supposedly
what
was
branded
is
AAA
debt
didn't
turn
out
to
be
sold.
So
my
question
to
you
is
is
found
on
page
13
of
your
report.
It
discusses
the
credit
risk
of
debt
Securities
in
your
portfolio,
I
see
the
percentage
of
investment
grade.
D
Debt
in
your
portfolio
has
decreased,
while
the
unrated
debt
has
increased
since
the
last
quarter,
so
I
I
get
that
part,
possibly
that
that
could
increase
that
rebalance
it
could
increase
returns,
but
is
that
going
to
put
us
in
at
risk
in
the
near
future?.
E
The
increase
in
the
or
the
decrease
in
the
investment
grade
and
the
increase
in
the
unrated
is
primarily
driven
by
the
higher
allocation
higher
investments
in
the
private
debt
and
Loan
Market
that
are
alluded
to
earlier
and
given
the
nature
of
those
markets,
they
tend
to
be
unrated
externally,
but
we
do
have
an
internal
process
as
I
mentioned
earlier.
E
Secondly,
from
the
from
the
overall
portfolio
perspective,
one
of
the
things
you
know
we
discussed
with
with
clients,
as
we
were
looking
to
as
we
saw
opportunities
in
that
space,
was
to
be
also
careful
and
thoughtful
about
how
we
would
fund
that
trade.
E
If
you
will
so,
if
you
were
putting
in
a
dollar
here,
where
does
the
Dollar
if
you
will
comes
from,
and
so
as
we
were
looking
at
that,
so
part
of
the
part
of
the
the
funding
side
of
the
trade
for
many
of
our
client
portfolios
was
from
the
equity
side.
E
So
what
that
does
is
what
it
does
in
the
portfolio
is
certainly
expose
the
portfolio
to
slightly
more
credit
risk,
but
takes
away
if
you
will
a
more
riskier
asset
class
to
put
that
trade
together
and
what
that
does
at
the
overall
level
portfolio
level
is
you're
able
to
manage
the
overall
risk.
In
addition
to
all
the
controls,
one
has
around
the
specific
credit
transaction.
D
Just
one
follow-up
Mr
chair,
if
I
might
so,
are
you
going
to
increase
the
that
low-grade
debt
percentage
in
the
future,
or
is
that
going
to
stay
what
it
is
right
now
so.
E
At
the
moment
we
are
looking
at
at
opportunities
in
that
area
and,
as
was
mentioned
earlier,
and
now
we
have
to
the
extent
we
have
a
wider
range.
We
do
think
that's
an
attractive
Place
for
for
investors
such
as
the
Heritage
fund,
to
be
to
be
exposed.
O
To
but
it
would
be
an
erroneous
comparison
to
call
Private
debt
that
we
underwrite
to
credit
worthiness
of
the
same
as
something
represented
by
collateralized
mortgage
obligations
that
people
didn't
understand
and
that
was
not
did
not
have
proper
credit
support.
We
understand
these
credits.
D
Mr
chair,
if
I
could
just
clarify
that
point,
I
ate
once
okay,
I
I
did
want
to
say
that
look,
I
wasn't
making
a
comparison,
but
I
was
saying
that
a
good
General
doesn't
isn't
a
good
General
because
of
what
he
learned
from
the
past,
but
predicting
what's
going
to
happen
in
the
future.
So
I
just
wanted
to
make
sure
that
we're
not
tripping,
as
we
saw
in
2008
yeah.
O
D
O
Fact
described
in
the
shift
from
Equity
Investments
to
private
debt.
Investments
is
actually
a
de-risking
move
right
because
we're
moving
from
something
that's
more
risky
Equity
to
something:
that's
not
less
risky
debt,
even
if
it
has
a
higher
higher
risk
than
investment
grade,
and
these
are
unrated
not
not
necessarily
low-rated
Securities.
It's
it's
just
not
they're,
just
not
rated.
H
Well,
thank
you
and
just
further
to
that
talking
about
forecasting
to
the
future,
if
there's
an
example
of
a
asset
class
that
might
be
mispriced
at
this
juncture,
I'm
just
curious
to
know.
If
there's
you
know
one
something
that
an
asset
class
that
might
be
showing
us
overvalued
and
a
an
asset
class
that
might
be
showing
us
undervalued,.
O
You
know:
that's
that's
a
tricky
you'll
get
10
opinions
from
10,
smart
people
on
that
and
I'm
not
going
to
volunteer
my
own
subjective
opinion
and
I'm
gonna
encourage
to
not
do
the
same
so
yeah
I
mean
you
know
we
have.
We
have
this
debate
among
ourselves,
but
but
it's
really
important
for
me
to
emphasize
this,
that
when
we
have
these
discussions,
we're
thinking
10
years
like
we're
thinking
over
10
or
20
year
period,
you
know
versus
a
government
funding
decision
that
may
be
over
a
year.
O
H
H
And
has
existed,
for
you
know
almost
50
years,
I,
suppose
right,
and
so
so
you
build
your
investment
structures
on
a
on
a
longer
time
frame.
H
Is
that
what
you're
trying
to
say
to
me
yeah
yeah,
but
then
yeah
I
mean
it
just
seems
really
volatile
right
now
right,
so
you
know
you
have
to
look
at
asset
classes
categorically
I
suppose,
but
you
also
just
aim
for
something
specific
like
like,
for
example,
I,
think
about
the
the
London
Airport
right,
you
know,
and
so
it's
undergone
a
a
temporal
restructuring
of
covid
right.
Then
it's
bouncing
back
like
maybe
can
you
use
that
one
as
an
example
like
what's
happening
with
that
investment.
O
Okay,
chair
with
respect
to
the
gentleman
I'm
that
bait
I'm
not
going
to
take
it's
just
like
it
would
be
so
speculative
yeah,
it's
speculative
yeah.
Now
we
did,
we
did
reinvest
a
little
bit
of
money
in
the
London
City
Airport
last
year.
E
But
if
I
can
add
to
what
Evan
was
saying-
and
it's
a
theme
that
you
you
know
here
is
coming
back
to
again
and
again
sort
of
focused
focused
ahead
of
us.
We've
talked
enough.
You
know
about
private
credit
and
Loan.
Partly
that
is
the
economy.
Is
the
economy,
slow
economies
slow
down?
Typically,
what
that
we've
seen
that
in
2008
we
saw
that
in
Europe
last.
M
E
No
forecast
here
what
what
you
see
is
that
the
credit
and
the
liquidity
sort
of
shrinks
and
then
there's
an
opportunity
yeah.
How
well
you
know
one
does
you
know?
The
forecasting
is,
is
very
hard
very
difficult
and
a
mugs
game
more
often
than
not,
but
the
ability
to
be
thinking
about
you
know
where
the
where
the
economy
and
the
broader
Trends
are
transition.
Finance,
we
think
longer
term
is
quite
attractive.
It's
not
a
trade!
That's
here,
and
now
that's
the
next
three
months
or
next
six
months.
E
These
are
long-term
changes
which
give
rise
to
risk
but
give
rise
to
opportunity.
And
that's
that's
where
we're
focused
on
energy.
On
your
behalf.
O
In
an
effort
to
be
not
non-responsive,
you
know
we
had
a
conversation
yesterday
that
had
a
real
estate
about
the
U.S
market
could
be
very
distressed
and
therefore
for
us
as
a
long-term
investor.
This
is
where
we
play
to
our
Edge
right,
we're
a
long-term
investor.
We
can
stick
through
markets
that
are
choppy
and
take
advantage
of
distress
such
as
in
private
debt
and
in
the
U.S
real
estate
market.
If
we.
B
Well,
thank
you
so
I
think
we'll
we'll
return
online
here.
Member
Pawn
I
think
you're
next
on
the
list.
L
This
is
my
first
meeting
in
this,
the
committee
and,
and
we
talk
about
laws
to
manage
how
to
manage
the
rest,
to
talk
about
how
it's
going
to
impact
the
credit
rating-
and
this
is
questions
it's
just
about
that
recently-
that
we
watching
news
the
collapses
of
the
FTX
that
crypto
crypto
exchanges,
which
is
a
highly
the
rising
the
associated
with
the
Investments
in
this,
is
a
highly
monitored
asset
and
one
of
the
investors
in
the
FTX
that
was
the
Ontario
teachers
pensions
fund
and
who
lost
nearly
about
100
million
dollars
in
the
collapse.
L
O
Now
other
high-risk
Investments
is,
you
said,
a
mouthful
there.
The
question
of
what
some
people
have
some
people
think
Equity
is
high
risk.
Some
people
think
private
debt
is
high
risk,
but
I'll
just
answer
the
narrow
question:
we
don't
have
any
investments
in.
I
L
Thank
you
so
the
as
an
investment
you're,
always
looking
for
the
better,
the
ROI
for
sure
and
my
question
since
I
added
some
time.
It
says
we
are
more
aggress
aggressive,
active,
persuasive
funding
management.
We
chooses
to
offer
a
better
result
after
what
we
also
looking
for
and
and
continuously
that,
the
debate
in
investment
Cycles.
L
So
can
you
expand
on
the
what
percentage
of
your
portfolio
is
actively
and
managed
and
why
this
is
the
correct
approach
and
also
has
this
approach
allow
you
to
beat
the
average
Market
against,
as
we
always
want
to
have
have
a
high
investment
High
return
on
in
array
of
a
return,
but
a
lower
risk?
Thank
you.
E
So
thank
you
for
the
question.
Dupont
answer
so
currently,
almost
all
of
the
portfolio
is
actively
managed
I,
preface
that,
with
with
a
big
part
portion
of
the
portfolio's,
I,
think
private
Equity
think
private
debt
and
Loan
infrastructure
Etc
none
of
them.
E
None
of
these
asset
classes
have
industry-wide
benchmarks
and
therefore
the
notion
of
passive
investing
is
is
a
little
fuzzy
at
best
and
unclear
for
the
most
part,
so
those
those
types
of
Investments
are
inherently
active
in
nature
given
given
given
those
asset
classes
on
the
on
the
on
the
public
asset
side,
so
primarily
in
public
bonds,
public
equities,
we
utilize
active
and
active
approach,
but
have
introduced
indexed
Equity
vehicles
on
the
platform
over
the
last
12
months
or
so.
E
The
last
part
is
in
terms
of
the
approach
that
our
clients
will
take
in
future
in
in
being
able
to
utilize.
Those
types
of
exposures
is
always
a
function
of
return,
risk
cost
liquidity
Etc,
but
for
the
for
the
moment,
the
Heritage
fund
is
managed
in
active
manner.
B
Okay,
thank
you
very
much
now
I'm
getting
signals
we
may
be
coming
close
to
the
end
of
our
question,
but
for
the
record,
Mr
Egan,
anything
more
from
your
site,
no
alert
anything
more
from
your
site.
No
well!
Thank
you!
That's
even
questions!
So,
gentlemen.
Lady,
sorry,
ladies,
thank
you
both
all
of
you
for
your
attendance
for
being
here,
you're
free
to
leave
at
this
stage
or
you
may
stay.
B
If
you
would
prefer
to
listen
to
the
rest
of
the
committee
meeting,
it
is
public,
so
you're
welcome
to
stay.
If.
B
Sure,
yes,
I.
Thank
you
very
much,
visual
response,
but
thank
you
all
for
being
here
appreciate
it,
and
this
is
good
because
we
do
have
a
couple
of
more
agenda
items
that
may
go
quickly
or
may
have
some
questions
so
yeah.
B
So
I
will
look
for
a
member
to
move
a
motion
that
the
standing
committee
on
Alberta
Heritage
savings
trust
fund
received
the
2022-23
second
quarter
report
on
the
Alberta
Heritage
savings
trust
fund.
Anybody
like
to
move
that
member
alert
has
moved
that
motion
where
we
had
questions
or
comments,
none
in
the
room,
all
those
in
favor
any
opposed,
none
and
online.
All
those
in
favor.
A
B
B
So
now
we
need
to
talk
briefly
about
the
review
of
the
past
public
meeting
from
2022
the
Alberta
Heritage
savings
trust
fund
act.
The
ACT
requires
that
the
committee
hold
an
annual
meeting
I'm
sure
you're,
all
aware
of
that,
with
a
public
to
inform
albertans
about
the
status
of
the
fund
and
respond
to
questions
that
meeting
was
held
here
in
the
building
on
October
27th
of
2022..
B
The
2022
public
meeting
was
the
first
since
2019.
Actually
that
was
able
to
be
held
without
any
heightened
Health
restrictions.
The
public
was
invited
to
attend
in
person,
and
the
meeting
was
broadcast
on
Alberta
assembly.
Tv
live
streamed
on
the
assembly
website
on
Twitter
on
Facebook
and
YouTube.
A
document
document
from
La
Communications
was
posted
on
the
internet
website,
which
provides
a
breakdown
of
the
public
interaction
with
the
committee
that
occurred
during
the
public
meeting,
as
well
as
the
advertising
summary
I
trust.
You've
all
had
a
good
look
at
it.
B
At
this
time,
I
like
to
call
on
Rhonda
Sorensen
to
with
Lau
to
provide
an
overview
of
that
report
and
some
additional
information
regarding
the
broadcast
and
public
response
to
the
meeting.
I
Thank
you
very
much
Mr
chair
for
that
overview
of
the
2022
annual
meeting.
I
would
just
like
to
add
a
few
comments,
a
bit
more
specific
to
the
communication
summary
document
that
that
was
sent
to
you.
The
committee
members
well
note
that
we
were
ever
so
slightly
over
the
estimated
costs
for
the
entire
campaign,
largely
due
to
an
adjustment
made
to
the
advertising
plan
that
included
a
significant
province-wide
print
campaign.
I
We
did
make
some
revisions,
without
or
within
that
campaign
to
mitigate
some
of
the
cost
increases
we
were
seeing,
but
we
still
weren't
able
to
quite
make
that
Target
I
won't
go
into
detail
in
each
of
the
various
components
within
within
the
plan,
because
you
do
have
the
report
in
front
of
you,
but
I
do
want
to
highlight
some
of
our
successes,
including
a
thank
you
to
the
former
chair
of
the
chair
at
the
time
of
the
public
meeting,
who
had
done
some
media
French
translation
interviews.
I
So,
in
addition
to
some
of
the
media
that
we
were
able
to
Garner
before
the
meeting,
he
did
a
post
interview
that
was
translated
into
French.
That
spoke
about
the
public
meeting.
This
committee
and
all
of
its
hard
work
in
addition
to
the
media
coverage,
we
were
also
able
to
attribute
nearly
half
of
the
2680
visits
to
the
Committee
website
directly
from
the
social
media
and
digital
advertising.
I
We
continue
to
see
solid
efforts
or
solid
engagement
through
those
efforts.
So
because
of
that,
we
will
be
recommending
to
the
next
committee
that
we
increase
that
and
put
most
of
our
Focus
towards
heavy
digital
engagement
for
next
year's
public
meeting
beyond
that
I'm
happy
to
take
any
questions
from
the
committee
and
hopefully
can
provide
some
more
in-depth
insights
if
you
require
them
wonderful,.
B
B
Must
do
a
good
job
so,
as
noted
there
is
a
recommendation
in
there,
but
I
think
it
can
wait
until
until
the
appropriate
next
meeting
and
planning,
which
will
happen
not
too
far
distance
in
the
future.
B
So
no
comments,
no
questions.
I
think
that
we
can
proceed
then
to
talk
about
the
committee's
annual
report
to
the
Legislative
Assembly.
So
members,
section
64c
of
the
Heritage
savings
trust
fund
act,
requires
the
committee
report
to
the
legislative
assembly
on
whether
the
mission
of
the
fund
is
being
fulfilled.
The
last
report
to
the
assembly
was
made
on
June,
8th
of
2022,
which
covers
the
activities
of
the
committee
in
the
2021
calendar
year.
B
Please
note
that
I
said
calendar
year,
okay,
but
the
ACT
states
that
the
fund's
performance
is
to
be
reported
following
each
fiscal
year,
not
each
calendar
year,
and
that
was
the
practice
until
the
end
of
of
the
20th
legislature,
beginning
in
or
or,
and
then
the
transition
to
2015.
so
an
election
year
at
that
time
as
well.
At
that
time
the
two
reports
were
produced
or
pardon
me
at
that
time.
B
Two
reports,
instead
of
one,
were
produced
One
covering
the
period
before
the
election
and
another
covering
the
committee's
2015
activities
after
the
election.
Since
then,
the
committee's
reports
to
the
assembly
have
covered
the
calendar
year.
B
I
I
know
that
some
have
looked
back
to
try
and
figure
out.
If
there
was
any
discussion
about
why
that
switch
was
made,
nothing
has
been
uncovered.
Thank
you.
I
think
it
is
to
our
legal
team
that
that
noted
that
that
it,
the
ACT
actually
States
fiscal
year,
but
we've
been
acting
on
the
calendar
year
for
the
last
few
years,
so
to
write
the
ship
on
this
right,
the
ship
on
this.
B
This
year's
report
will
cover
the
committee's
activities
for
the
2023
fiscal
year
and
will
also
include
the
quarter
between
January
and
March
of
2022.
So
actually
five
quarters
will
be
covered
so
that
there
are
no
gaps
in
our
reporting.
The
committee
clerk
will
prepare
a
draft
report
which
will
be
distributed
for
the
committee's
consideration
at
next
meeting.
So
first
of
all,
I
I,
don't
know
if,
if
either
the
clerk
or
or
Mr
Robert.
B
If
you
have
any
further
comments,
you
want
to
add
to
that
whole
little
bit
of
chaos
there
or
not,
no
I,
think
yeah,
okay,
so
questions
about
that
discussion.
Any
concerns
any
issues,
any
questions
to
our
to
our
officials.
Here
the
intent
is
to
go
back
to
what
the
ACT
States
as
as
a
fiscal
annual
reporting,
rather
than
the
calendar
annual
reporting,
okay.
Well,
that
makes
this
fairly
simple.
So.
B
M
Just
a
question:
when
the
ACT
states
that
the
fiscal
year
are
they
talking
about
the
government
fiscal
year,
does
the
fund
have
a
fiscal
year
that
is
actually
Jan
1
to
December
31st
by
any
chance?
No.
B
Any
further
questions
or
concerns
raised,
if
not,
we
will
proceed
as
I
have
outlined.
B
Hearing
none
I
think
that,
then
that
is
in
the
record
and
that's
the
way
we
will
proceed.
So
thank
you,
Cleveland
clerk,
so
the
report
will
be
prepared
accordingly
for
our
next
meeting,
so
that
was
fairly
simple.
I
didn't
know
if
there
would
be
questions
or
not
so
other
business
I'd
like
to
note
that
the
committee
received
follow-up
responses
from
treasury
board
and
finance
and
aim
code
to
questions
that
were
asked
in
September
of
2022.
They
were
made
available
to
members
on
the
committee's
internal
website.
B
Are
there
any
other
issues
for
discussion
before
we
wrap
up
today's
meeting?
Anyone
sorry.
J
Sorry,
Mr
chairman
I,
think
the
reason
they
did
it
was
they
wanted,
because
there
was
an
election.
They
wanted
the
current
committee
to
only
to
to
tie
up
their
work
and
finish
it,
and
then
the
new
committee
then
did
that
like
did
their
reporting
on
their
work.
I
think
that
that
would
it
wasn't
really
explained
well
in
the
in
the
transcript
when
I
look
back
but
yeah,
like
the
chair,
said
it
always
was
done
fiscal
on
the
fiscal
year
prior
to
that,
so
I
think
this
is.
B
B
The
estimate
review
process
is
complete,
but
before
we
find
ourselves
in
another
election,
so
expect
a
meeting
somewhere
in
toward
the
end
of
March
and
if
there's
nothing
else
for
the
committee's
consideration,
I
would
call
for
a
motion
to
during
the
meeting
Mr
Hunter,
all
in
favor
in
the
room
online.