It’s possible that I shall make an ass of myself. But in that case one can always get out of it with a little dialectic. I have, of course, so worded my proposition as to be right either way (K.Marx, Letter to F.Engels on the Indian Mutiny)
EDMONTON — The Speaker of the Alberta legislature is resigning his seat in the assembly to become the province's representative to the United States.
"Serving this assembly has been one of the greatest honours of my lifetime," Nathan Cooper said Wednesday in a speech to the house announcing his resignation.
"Working as the assembly's chief diplomat has equipped me in, and to be ready for, my next role serving Albertans in a new and meaningful way."
Cooper will replace former Edmonton-area member of Parliament James Rajotte as Alberta's U.S. representative. He held the role for nearly five years.
A government news release says Rajotte will now serve as a senior adviser to Premier Danielle Smith.
"In this evolving landscape, Alberta must maintain and build on our ties with U.S. officials, and Nathan Cooper is the right choice to fill this important role," Smith said in the release.
"I look forward to continuing to work closely with Nathan as we advocate for Albertans and for our province’s interests in Washington and across the U.S.”
The government says Cooper will be based in Washington and will look to attract investment, expand trade opportunities and maintain relationships to keep Alberta connected to decision-makers south of the border.
Cooper told the house that he will officially resign as Speaker on Monday, and an election of legislature members for a new Speaker will take place Tuesday.
The Speaker's role is to preside over debates and proceedings in the house in a non-partisan manner. The Speaker also doesn't vote on legislation.
In his speech Wednesday, Cooper said his nearly six years in the role made him the eighth-longest-serving Speaker in Alberta's history.
"I've sat through 345 question periods, totalling 287 hours or 12 full days of question periods," Cooper said.
"I presided over 2,195 hours of debate or 91 full 24-hour periods, and a whopping 17.9 million words have been spilled on the floor of the assembly."
He was first elected in Olds-Didsbury-Three Hills as a member of the Wildrose Party in 2015.
When the party merged with the Progressive Conservatives two years later, Cooper became the United Conservative Party's first leader on an interim basis before it held a formal leadership race and former premier Jason Kenney was given the reins.
Cooper was elected Speaker by fellow MLAs following the 2019 provincial election and was re-elected to the role in 2023.
He found himself in hot water in 2021 after he was one of 16 United Conservative caucus members who signed a letter speaking against COVID-19 public health restrictions imposed by Kenney's government.
The following week he apologized for not remaining neutral on government matters, as is expected from the Speaker.
On Wednesday, Cooper received a standing ovation from both sides of the house as he rang in the last question period under his watch.
"Honourable members we will have order!" he yelled sarcastically while the clapping and cheering continued.
House leaders from both parties also gave speeches thanking Cooper for his time as Speaker.
"Mr. Speaker we all know we will miss the chamber time with you, with a well-timed joke to break the tension, with your careful and steady hand in managing this chamber," said government house leader Joseph Schow.
Opposition house leader Christina Gray said the job of the Speaker "is not for the faint of heart" but it's a job that Cooper handled admirably.
"Your fairness, humanity, knowledge and deep respect of parliamentary tradition has absolutely made this legislature more thoughtful and more respectful," Gray said.
Individual members from both parties shared the same sentiment with reporters earlier Wednesday, with Parks Minister Todd Loewen saying Cooper kept shenanigans to a minimum.
"He provides good balance in there and is able to keep rein on some of the people that are — and of course I may have been in that place myself a couple times — creating ruckus in the legislature," he said.
Opposition NDP education critic Amanda Chapman said Cooper was well regarded and fair.
When asked if she'd want to fill the shoes he leaves behind, Chapman said she wasn't "the right kind of nerd" to be Speaker.
"You have to be really into all of the parliamentary wonkiness, although it would be cool because I think that you get a portrait in one of the galleries," she said.
Cooper said he will officially resign his seat in the assembly next month, which will leave Alberta with three vacant ridings that the premier will need to call byelections for.
With Cooper's seat empty, the United Conservative Party will hold 46 seats in the 87-seat house. The Opposition NDP currently has 36 seats and there are two Independent members.
This report by The Canadian Press was first published May 7, 2025.
Jamie Sarkonak: Alberta's separation threats weaken hand against Liberals
Opinion by Jamie Sarkonak • 1d • National Post
A rally and counterprotest for the Alberta separatist movement drew hundreds of people to the Alberta Legislature on Saturday, May 3, 2025.
In a livestreamed address Monday, Premier Danielle Smith indicated that, though she doesn’t support Alberta’s separatist movement, she will certainly use it as leverage in negotiating a new deal for the province. It’s a bold strategy, but it’s hard to see it playing out.
What the premier wants is not independence, but a new “binding agreement” between the feds and the province that makes a number of guarantees — land corridor and seaport access for energy exports, an end to net-zero constraints (including plastics regulations, EV mandates and corporate climate disclosure requirements), the repeal of the Impact Assessment Act, and boosted per-capita equalization payments equivalent to those received by B.C, Ontario and Quebec.
She also demanded that the feds promise to never place export taxes on Alberta resources without the province’s consent — a demand no doubt in response to the trade war. In January, polling showed that 82 per cent of Canadians supported slapping export taxes onto oil exports to the U.S., and 72 per cent support in the Prairies; Smith has strongly opposed export taxes on oil throughout the trade war.
That’s all fine and good; provinces demand things all the time. But in Alberta’s case, the premier is inflating the expectations of her followers by making a few unmeetable demands, and preparing to channel the resulting anger and disappointment into doomed dealmaking efforts that, at worst, will harm the country’s conservative movement overall.
Take the first insurmountable obstacle: equalization reform. Since 1957 , the federal government has used the taxes it’s constitutionally empowered to collect to support the budgets of less-prosperous provinces. Currently, the formula is designed to excuse Quebec’s refusal to be a team player in Canada’s broader energy economy (Quebec’s hydro revenues don’t count towards the province’s revenues, which results in the province receiving far more federal welfare than it should). With a federal Liberal minority government, we shouldn’t expect that to change.
Albertans make more money, pay more in federal taxes and thus contribute more per head to the federal pool of funds than the rest of the country. The provincial government can’t do anything about it any more than the feds can direct the province’s funding of individual school boards within its borders. That’s why Alberta’s first run at changing equalization by former Alberta premier Jason Kenney didn’t go anywhere, and why subsequent province-level chest-thumping won’t help; for reform to work, it will take a reform-friendly government in Ottawa — say, a Conservative majority willing to wean anti-energy Quebec from the federal welfare teat.
Smith runs into similar jurisdictional hiccups in demanding port access and cross-country corridors. These are ultimately matters of federal jurisdiction. Now, if this country had competent people running it, it would be aggressively working to get more interior products out to the coast, ideally opening new ports in the process. But alas, that’s not what Canadians voted for. Asking for it is one thing, but Canada’s highest “binding agreement,” the Constitution, says that ports and interjurisdictional transport are the federal government’s business.
It’s not all bad — the premier is absolutely right to fight potentially unconstitutional laws, which she has done vigorously. The challenges to the Impact Assessment Act and Clean Electricity Regulations are underway, and the fight on federal plastics regulation has already been won. Threatening more challenges and then backing those words up with court filings is what should be done. But there are other fronts on which she has no chance in winning — and that’s where separatist flirtation comes in.
It was an obvious tactic by Smith to advance legislation that eases the way of citizen-driven referendums onto the ballot. Doing so transfers the thorny decision of whether to put independence on the ballot from the premier to a political process over which she has no direct control but which she designed knowing full well that a certain group would be using it. Responsibility is diffused, and “democracy” can always be invoked to defend it.
The best a referendum can do is start up the Alberta independence process, which, if successful — and that’s unlikely — would be a disaster for the ensuing nation. Any qualms about tidewater access would be dwarfed in the post-separation scenario (separatists would point to a United Nations treaty that in theory opens the way to port access for landlocked states, but that’s no guarantee for favourable port access). Threatening to secede when independence gets you even farther from your current demands is simply unserious.
The same goes for arguments for U.S. statehood, by the way. Alberta’s frustrations with its confederation deal — too few MPs in the House of Commons; too few senators — trace back to its late addition to the federation and the lesser leverage that came with. It’s delusional to expect that the U.S. in 2025 would offer a better entrance bonus to this majority-Democrat-leaning province.
Alberta should be treated better, but Quebec-style fight-picking with Ottawa isn’t a winning route. Yes, Quebec throws separatist-tinged tantrums to get what it wants, but it comes across as bratty and spoiled. Yes, the federal government, in turn, comes across as a bad parent, giving the province the equivalent of candy for its bad behaviour. But the separatist movement doesn’t offer a fix; that’s going to take electing a federal Conservative government with the guts to put Quebec in its place. Alberta’s tantrums, led by its minority of secessionists, will only cultivate an eyeroll-inducing victim complex that sours the entire country towards our province. Taken further, it will potentially threaten both the United Conservative Party’s unity in Alberta and the prospects of a Tory victory in a future federal election.
Tasha Kheiriddin: Carney has no choice but to listen to Danielle Smith
Opinion by Tasha Kheiriddin
Alberta Premier Danielle Smith on Monday May 5, 2025. Gavin Young/Postmedia
On the eve of Prime Minister Mark Carney’s critical trip to Washington to meet U.S. President Donald Trump, Alberta Premier Danielle Smith stole the spotlight and turned it firmly on herself. In a twenty-minute “address to Albertans,” she aired grievances against the federal Liberal government, from carbon taxes to Justin Trudeau’s infamous “no more pipelines bill,” C-69. Smith also presented a list of demands, from resource corridor development to greater provincial control over energy and immigration. And she pledged to hold a referendum on Alberta independence should “enough” citizens demand one — while insisting multiple times that she doesn’t support secession herself
The timing was no accident. Smith wanted to be a topic of conversation in the White House. Perhaps she’s angling for another interview on Fox News. Or perhaps she is trying to stay in power, pacifying the same angry base that ousted her predecessor, Jason Kenney, in 2022 after he won only 51.4 per cent in a leadership review.
Whatever the reason, Smith is seizing the moment to make Alberta’s case, to the detriment of Canada’s. If Carney has trouble at home, it will be harder for him to stand strong abroad. And it’s hard to see how that helps Alberta — unless Smith has another agenda in mind. And for that, she has a model: Quebec.
Albertans often point to the success of Quebec in dominating the national conversation — and extracting concessions from Ottawa — by threatening separation. But Quebec’s grievance is cultural, not economic — rooted in preserving a French-speaking enclave in an English continent. Alberta’s complaint by contrast, is financial. The province sees itself as the country’s cash cow, milked for equalization payments and dismissed by Laurentian elites for decades — and on this, Smith is not wrong.
Alberta was created as a province in 1905, but the federal government retained Crown lands until the Natural Resources Transfer Agreement and directly controlled its resources until 1930. The province has a particularly bitter history with Liberal governments: Pierre Elliott Trudeau enacted the National Energy Policy in the 1980’s, while son Justin brought in carbon taxes, emissions caps, and the aforementioned Bill C-69 in the 2010’s.
So what could satisfy Alberta? Smith has a list: an LNG corridor, approval of new oil pipelines, and repeal or serious amendment of C-69, also known as the Impact Assessment Act. Carney has already said he would amend — but not repeal — the law, and during the campaign , he promised to cut wait times for the approval of major resource projects from five years to two. He also pledged to create trade and energy corridors for transport, energy, critical minerals and digital connectivity.
But will that be enough in the current climate? Protesters who took to the legislature on the weekend are disappointed in the election result – and don’t trust Liberals to have their back. Polls show that 15 per cent of the province would vote to join the US, while 29 per cent would vote for independence.
Smith may indeed be playing with fire. While Trump denies interest in a military invasion of Canada, Trump’s interest in making us the “51 st State” is not idle conversation. He has mused about annexing the west first: could he twist history to make it Canada’s “Donbas”? Americans played a key role in Alberta’s early development: by 1916, nearly 19 per cent of its population hailed from the US, though it has been diluted by waves of immigration since then.
Carney must tread carefully — and act quickly. A referendum in 2026, as Smith threatens to hold, would weaken Canada’s position during crucial negotiations with the United States. To stave this off, Carney will have to shed some of his green mantle and expedite resource development projects that benefit the west — projects that will also benefit the rest of the country through job creation and economic activity. A fair deal for Alberta is now essential for Canada, in more ways than one.
Postmedia News IS A CONSERVATIVE NEWS PAPER
Tasha Kheiriddin is Postmedia’s national politics columnist.
Parti Québécois leader stands with Alberta Premier Danielle Smith and her ‘strong hand’
LES SEPERATISTE; BIRDS OF A FEATHER
Story by Antoine Trépanier
Parti Quebecois Leader Paul St-Pierre Plamondon during question period Tuesday, November 19, 2024 at the legislature in Quebec City.
OTTAWA — Alberta Premier Danielle Smith has an ally in Quebec and his name is Paul St-Pierre Plamondon, the Parti Québécois leader.
A day after Smith threatened the federal government of including a referendum question on separation in 2026 if her province didn’t have the Accord, she thinks it deserves with Ottawa, St-Pierre Plamondon said Smith made a “striking gesture” for the “autonomy and defence of her own province.”
“It doesn’t matter what referendum they hold, because obviously it’s under construction. But I totally agree with provinces that stand up, that are loyal to their own Parliament, that are capable of showing a strong hand. And that’s the key word, strong hand,” said St-Pierre Plamondon, who is often called PSPP in Quebec.
In a in a livestreamed address Monday , Premier Smith called on Prime Minister Mark Carney to negotiate a new deal between Ottawa and Alberta guaranteeing more pipelines and changes to equalization.
“We hope this will result in a binding agreement that Albertans can have confidence in. Call it an ‘Alberta accord’,” said Smith who then called Alberta’s separation “the elephant in the room.”
“The vast majority of (separatists) are not fringe voices… They are loyal Albertans,” she said. “They’re … our friends and neighbours who’ve just had enough of having their livelihoods and prosperity attacked by a hostile federal government.”
At a press conference at Quebec’s National Assembly, St-Pierre Plamondon said it was a “good thing” if other provinces are able to “stand up to the federal government”.
He added that “other provinces are showing” that Canada has issues that affect all provinces in terms of “abuse of power”.
St-Pierre Plamondon then went on the offensive against the province’s journalists for not covering the rebound in support of Quebec secession . A recent Postmedia-Leger poll revealed that support for Quebec independence, which had fallen below 30 per cent in recent month, sits back at nearly 40 per cent.
Even though Canada is engaged in a tariff war with its closest ally, support for Quebec independence has reached 36 per cent according to new data.
“The most recent and most precise information is the independence of Quebec at 40 per cent, it is the increase in independence in Alberta,” he said.
Léger also polled Canadians from all provinces about their opinion about their province’s independence. The result was that 29 per cent of Albertans supported Alberta sovereignty while an overwhelming majority of the 2,309 respondents (71 per cent) were opposed.
'Hockey and nostalgia' won't keep us together: SOME Albertans say they're serious about separation after Liberal win
THE MAJORITY OF ALBERTANS OPPOSE THE SMITH/MANNING SEPARATISTS
Polls show as many as three in 10 Albertans would vote to leave the federation if the Liberals continue to hold power in Ottawa.
Alberta Premier Danielle Smith takes part in a panel on Canada-U.S. relations at a Calgary Chamber of Commerce luncheon on Thursday April 3, 2025.
'BETTER TOETHER' IS NOT NATIONAL UNITY
BUT AS THE 51ST STATE, SMITHS WET DREAM
OTTAWA — Alberta Premier Danielle Smith didn’t immediately issue a statement when the networks called the federal election for Mark Carney’s Liberals at 10:15 PM EST, but it’s safe to say that not all is calm on the western front.
The Liberals’ fourth straight federal election win keeps Alberta and Ottawa on a collision course, raising the once unthinkable prospect of a referendum on the Prairie province’s separation from Canada
Cameron Davies, an ex-UCP organizer who supports Alberta independence, said he was disgusted by the Liberal campaign’s use of tired national cliches, which he said made light of the serious issues facing the federation.
“Hockey and nostalgia doesn’t pay the bills… that hockey and nostalgia, it’s not going to keep Canada together,” said Davies.
“Without a reimagined confederation, there will be a strong separatist movement in Alberta,” said Davies.
Davies, who tendered his resignation to the UCP on Thursday, says he plans to spend the next few weeks having “honest, difficult conversations” with likeminded Albertans.
Smith had warned heading into the election that a Liberal win could lead to an “unprecedented national unity crisis,” if Carney didn’t, within his first six months, undo a handful of Liberal policies that she said unfairly hampered Alberta’s oil and gas sector.
“ Albertans will no longer tolerate the way we’ve been treated by the federal Liberals over the past 10 years,” Smith said in a social media post.
Reform Party founder Preston Manning soon upped the ante, calling Carney himself a “ threat to national unity ” in a widely circulated op-ed.
Manning wrote that “large numbers of Westerners simply will not stand for another four years of Liberal government, no matter who leads it.”
He predicted that, if Carney were to emerge victorious from Monday’s election, he “would then be identified in the history books, tragically and needlessly, as the last prime minister of a united Canada.”
Smith has already announced she’ll launch a post-mortem election panel to give Albertans the chance to weigh in on issues they might want put to a referendum.
Polls show as many as three in 10 Albertans would vote to leave the federation if the Liberals continue to hold power in Ottawa.
Carney needs to seize the chance to reset relations with Alberta, said Martha Hall Findlay, the director of the University of Calgary’s School of Public Policy.
“I think the opportunity to move forward is absolutely there… I have every confidence that the prime minister of Canada and premier of Alberta will realize they can accomplish a lot more working together than by being at each other’s throats,” said Findlay.
Hall Findlay said that Carney could build immediate goodwill by dropping the existing targets for the federal emissions cap, set by Trudeau-era environment minister Steven Guilbeault.
“My hope is that (Carney) shows a pragmatism with respect to the West. Perfect example: he stops being coy about an emissions cap, even if he says we still believe in a cap on emissions but the time frames need to be revisited,” said Hall Findlay.
Hall Findlay was a Liberal MP from 2008 to 2011, holding a Toronto-area seat, before moving to Alberta to work in the oil and gas sector.
Rachel Parker, an independent journalist who travels in independentist circles, said she wasn’t as sanguine about the election’s outcome.
“You know, frustrations in Western Canada have grown quite high. They’ve always sort of been there bubbling underneath the surface, this put things into overdrive,” said Parker.
Parker said that Alberta’s independence movement had been organizing in the weeks leading up to Monday’s federal election and she expected to see this activity pick up in the weeks to come.
She added she doesn’t think much will come out of Smith’s post-election panel.
“Panels are really a government’s way of saying ‘we’re doing something, we’re doing something,’ when it’s really just kicking an issue down the road.”
Smith’s predecessor Jason Kenney launched the Alberta Fair Deal Panel shortly after becoming premier in 2019, citing the province’s growing frustration with Ottawa.
The panel generated 25 recommendations, paving the way for a fall 2021 referendum on Alberta’s participation in the federal equalization program .
Jack Jedwab, the head of the Association for Canadian Studies, says that Alberta sovereigntism differs from the more well-known Quebec variant in several important ways.
“I’d describe it as a form of economic nationalism which is driven by a sense of grievance wherein many Albertans feel they give more than they receive from the federal government,” said Jedwab.
“Albertans strongly identify as Canadian and do not feel emotionally detached from Canada which is something that more likely characterizes Quebec’s expression of nationalism,” he said.
A Canadian soldier takes part in an announcement regarding the arrival of new ambulance variants to the armoured combat support vehicle fleet at Garrison Petawawa in Petawawa, Ont., on Thursday, Oct. 19, 2023. THE CANADIAN PRESS/Sean Kilpatrick
Three decades ago, Canada published a report about its future military plans. “The Cold War is over,” its first chapter began, before outlining the government’s massive budget pressures and proposing cuts to personnel and defense spending.
Then came a warning: “Canada should never find itself in a position where the defence of its national territory has become the responsibility of others.”
Surrounded by three oceans, with an allied superpower on its southern border, Canada took its peace dividend — and let its military atrophy. It has recently been absent from patrols and war games with allies.
A hostile U.S. President Donald Trump is changing that. He has imposed tariffs and reproached Canada for being too dependent on the U.S. for security, and his repeated talk of making it the 51st state has spark both fury and alarm in the nation of more than 41 million people. Further shocking Europe and Canada into planning for self-reliance, Trump has threatened U.S. support for Ukraine’s fight against Russia.
With a snap election call just days away, Canadian politicians are now jockeying to explain how they’d ramp up defense spending — and disentangle themselves from the U.S. at the same time. Two days after he was sworn in as prime minister, Mark Carney flew to Paris and London to talk with allies and make the pitch for more defense industry cooperation with Europe. His government is reviewing an earlier deal signed with the US’s Lockheed Martin Corp. for F-35 jets.
With melting Arctic ice drawing interest in the far north from Russia and China, Canada had already acknowledged it needed to do better. But it’s well short of its North Atlantic Treaty Organization commitment to spend 2% of gross domestic product on defense: In 2024, it was on track to spend 1.37%, one of nine laggards in the 32-member alliance.
“Trump isn’t wrong on everything,” Eric Martel, chief executive officer of Canadian jet-maker Bombardier Inc., said this week. “We’ve been hiding behind our big brother for a while.”
Former Prime Minister Justin Trudeau tried to allay criticism at last year’s NATO summit by committing to hit 2% by 2032. But he didn’t allocate the funds needed, and to get there, current spending would almost need to double, Canada’s budget watchdog said.
Anyway, 2032 looks far too slow. Trump’s administration has said NATO members should hit 2% as soon as June, NATO Secretary General Mark Rutte has talked about a 3% goal, and Trump has talked about a 5% target, and darkly suggested the U.S. wouldn’t come to NATO allies’ defense if they are “delinquent.”
In January, Defence Minister Bill Blair said it’s “absolutely achievable” for Canada to hit 2% as soon as 2027, five years faster than the current plan and which, depending on economic growth, could work out out to between C$10 billion ($7 billion) and C$13 billion in additional annual spending.
Canada hasn’t explained how it’ll do that, but experts interviewed by Bloomberg News say there are plenty of options.
Canada’s military is in dire need of replenishment. Its fighter jets and frigates are several decades old. It’s 6,800 people short of its full “authorized force” of 71,500 due to recruitment and retention problems that the defense minister warned could start a “death spiral,” so it’s opened entry to permanent residents as well as citizens.
The government could green-light or accelerate purchases it’s currently exploring, like upgraded missile defense, tanks, artillery and drones. But procurement is slow — it can take “too long,” a defense ministry spokesman acknowledged by email. The system is “broken,” a union representing procurement personnel told a parliamentary committee last year.
For example, the process to choose new warplanes took more than a decade. The White House is setting ultimatums that will force NATO allies to move much faster.
A direct route to 2% would be opening the spigot for existing lines of spending, according to David Perry, president of the Canadian Global Affairs Institute think tank, and former Defense Minister Jason Kenney, who served under Conservative Prime Minister Stephen Harper. That could mean boosting salaries for soldiers, spending more on airbases, buildings, ports and infrastructure, military housing, upping maintenance and support for existing equipment like ships, and reversing cuts to things like travel.
The armed forces are underpaid, former Vice Chief of Defense Staff Mark Norman said by phone, and its infrastructure needs are huge, with some “literally crumbling.”
“The backlog and everything associated with it would well exceed the 2%,” he said, warning against too much focus on “the big shiny objects” of new procurement. “We hang on to things way too long, which then creates a whole bunch of problems.”
At a February event in Washington, the premiers of Canada’s northern territories spoke about the benefits defense-related investments could bring their regions. A NATO official in the audience called their remarks “music to my ears.”
“We have a lot of zombie capabilities” as a consequence of perennially low spending, Macdonald-Laurier senior fellow Richard Shimooka said by phone. “We’ve just maintained the overhead and the minuscule amount of capability — not great.”
Canada is slowly building up its navy, which has to guard the world’s largest coastline, with manufacturers including Irving Shipbuilding Inc. and Chantier Davie Inc. A planned fleet of as many as 12 submarines would increase defense spending, and may come from suppliers in Europe or Asia. Germany’s Thyssenkrupp GmbH and South Korea’s Hanwha Ocean Co Ltd. have registered lobbyists for that contract. But the first submarine is many years away.
Canada has promised to acquire a global military satellite communications system. Dan Goldberg, CEO of Ottawa-based Telesat Corp., says his company wants that work and says it’s “pivotal” for air defense modernization, too. Lobbyist filings indicate Brampton, Ontario’s MDA Space Ltd. is also interested in defense programs.
“They should be looking at any current project that’s within the pipeline, that they’ve already identified, that has a Canadian sovereign component, or any unsolicited proposals — perhaps for goods, services where Canadian industry has seen a gap in our sovereign capabilities,” said Christyn Cianfarani, president of the Canadian Association of Defence and Security Industries. Officials should expedite those projects with the urgency seen during the COVID-19 pandemic, she said.
Canada is also the world’s second-largest uranium producer, but it mostly exports the metal, and both Canada and the U.S. have relied on Russia for enrichment. Canada should start enriching the nuclear fuel itself, according to Erin O’Toole, a former captain in the Royal Canadian Air Force who led the Conservative Party during the 2021 election. U.S. reliant
The awkward part is how many of Canada’s plans depend on U.S. contractors — like a C$19 billion deal signed in 2023 for 88 F-35 fighter jets from Lockheed Martin, or a C$10.4 billion deal for P-8A Poseidon aircraft from the Boeing Co. Armored vehicle manufacturing happens in Canada, but one of the top players is Reston, Virginia-based General Dynamics Corp.
During the Cold War in 1959, Canada canceled a project to make its own fighter jet, the Avro Arrow. Today, Quebec’s Bombardier Inc. makes surveillance jets, but not fighting ones. Now the country is seamlessly integrated with the U.S.: It supplied 40% of the Allies’ aluminum and 95% of the nickel in the Second World War, and in 1956 struck a special deal that means the U.S. Department of Defense treats Canadian suppliers as equivalent to American ones.
CADSI’s Cianfarani said it’s not clear what protection that pact, called the DPSA, offers businesses facing 25% tariffs, including steel and aluminum products, which might balloon costs.
To be sure, while Canada has grown too reliant on the U.S. for security, its troops also supported American solidiers in Afghanistan, Korea and other U.S.-led missions. Trudeau made this point while pushing back on Trump’s tariffs on Feb. 1, saying: “We have fought and died alongside you during your darkest hours.”
The U.S. is increasingly being treated as hostile by Canadian politicians, a dynamic evoking Canada’s 19th-century origins, when three British colonies joined forces to form a new nation partly out of a fear of U.S. invasion.
Canada must “protect our Arctic, which is under threat not just now from the Russians and the Chinese, but from potential U.S. incursions,” Carney said last month, before he was prime minister. “I will spend defense dollars in Canada, not the 80% that this government has spent in the United States up until now.” His decision to ask for a review of the F-35 contract on his very first day in office was deliberate.
But calls to replace the F-35 with an alternative like the runner-up Saab AB Gripen from Sweden, whose makers promised to bring more manufacturing to Canada, could entail big sunk costs and delays, especially given the technological complexity of modern militaries, said Andrea Charron, director of the University of Manitoba’s Centre for Defence and Security Studies. Canadian pilots and technicians are already training in the U.S. for the F-35, she said.
Although the U.S. itself has also cooled on collaboration — Trump has questioned a pact to collaborate with Canada and Finland on icebreaker production — the president’s plans look ungainly without Canadian involvement.
On Jan. 27, he issued an executive order to build “the Iron Dome for America,” invoking the name of Israel’s missile defense system, to neutralize aerial attacks amid fears that new hypersonic missiles could slip through current defenses.
“We can’t think of this Iron Dome system like what the Israelis have, because we’re talking about a huge area,” Charron said. “We know the missiles are going to come over us,” she added, referring to Canada.
Trump’s order doesn’t mention the North American Aerospace Defense Command — the world’s only bi-national military command, run by the U.S. and Canada, responsible for scanning and guarding North America’s airspace. But it does refer to working with “allies” and to the U.S. unit responsible for their part in NORAD.
NORAD leaders recently met “for meaningful discussions on joint priorities.” The unit’s official social media hashtags include #StrongerTogether. One of Carney’s first visits as prime minister was to Iqaluit, capital of the Arctic territory Nunavut, to share more detail about investments in the region, including over-the-horizon radar for NORAD.
Carney is expected to call an election in days, and the question of how Canada can assert its sovereignty against an aggressive U.S. seems certain to be a central issue.
Carney has promised to meet 2% NATO target by 2030 at the latest, without saying how. Pierre Poilievre, leader of the Conservative Party, has said he’d redirect money to the armed forces from Canada’s foreign aid budget — which was about $8 billion in 2023, according to the OECD. He has pledged a new base and more rangers for the Arctic, and two more icebreakers. He has said meeting the NATO commitment is a goal attainable if the U.S. deepens trade ties. Trade offs
Whoever wins faces choices to meet these pledges: redirecting money from other programs, borrowing more or raising taxes. And that’s as the government already expects to run a C$48 billion deficit in the coming fiscal year and has numerous other spending demands, including buffering citizens against the trade war with the US, addressing a housing crisis and boosting productivity.
Canadians are divided on the best way to increase defense spending, according to new polling by Nanos Research for Bloomberg. But the proportion who said Canada shouldn’t increase it at all has dropped to 15% in 2025 from 26% last year.
Canadians may even be willing to pay a special “Canadian military tax,” former Bank of Canada Governor Stephen Poloz said in February, suggesting 3% on purchases, offset for low-income residents by sales tax relief.
“People pay that tax knowing it’s going straight to the people in uniform and they’ll be proud to pay it. And I think Donald Trump would say: ‘Now that’s a teammate.’”
Kenney, the former defense minister, said Trudeau’s government “put their fiscal firepower on new domestic entitlement programs like pharmacare and dental” to secure an alliance with the New Democratic Party that kept them in power for longer. “National security was subordinated to short-term domestic political interests.”
For now, Canada is trying to show it’s a good partner, as it tries to avert punishing tariffs. On Feb. 23, it announced it would conduct its biggest in a series of armed operations in the Arctic territories since 2007, called “Nunalivut,” meaning “Land that is ours.”
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Thomas Seal, Bloomberg News
--With assistance from Erik Hertzberg, Brian Platt and Laura Dhillon Kane.
The British monarch, who is Canada's head of state, has been criticised for his silence on the issue.
Canadian Prime Minister Justin Trudeau is expected to bring up US President Donald Trump’s recent threats to annex Canada when he meets King Charles III on Monday.
Their meeting comes after some Canadians criticised the British monarch, who is Canada's head of state, for failing to publicly respond to Trump's comments.
Speaking in London on Sunday, Trudeau said the pair would discuss topics that Canadians deem important.
“Nothing seems more important to Canadians right now than standing up for our sovereignty and our independence as a nation,” he said.
Former Alberta Premier Jason Kenney defended the king over his public silence, noting that the monarch acts solely on the advice of Canada’s prime minister.
“The government of Canada should ask the head of state to underscore Canadian sovereignty,” he wrote on X.
Meanwhile, constitutional lawyer Lyle Skinner expressed his hope that Monday's discussion would lead to "the king making a statement regarding his Canadian realm".
However, experts remain divided on whether Trudeau will formally ask Charles to make a public statement.
Daniel Béland, a political scientist at McGill University, warned that it was a "highly delicate diplomatic matter".
Not only could Trump be angered but a mistake could also "hurt the image and political legitimacy of the monarchy", he added.
Béland suggested that Trudeau should speak with UK Prime Minister Keir Starmer first about Trump’s threats to make Canada the US' 51st state.
Some have questioned the king's role in Canada as a result of the issue.
“Canadians will need to decide what purpose King Charles III serves as King of Canada if he can’t even speak up for our sovereignty," former Canadian public servant Artur Wilczynski said.
Abolishing the monarchy would require a constitutional amendment, a process fraught with challenges.
Monday, February 03, 2025
Donald Trump’s tariff wallop demonstrates the brute power of an imperial presidency
The pessimistic view is that if Canada doesn’t give Trump everything he wants, he will bulldoze the country with more tariffs, sanctions on banks, enhanced border inspections and even a travel ban — everything he recently threatened to do to Colombia.
Canada’s political class is scrambling because the U.S. has long been a cultural sibling and an economic partner. But now it is toxic, threatening and untrustworthy. Will Canada sign another trade deal with Trump in office? The chances recede the longer the tariffs remain in place. Iron-fisted
It’s never been more clear that Trump is obsessive, seldom a bluffer and always iron-fisted. He seems to have planned and executed this tariff bomb to cause maximum pain and chaos. Now he says the European Union is next on his list.
Trump is counting on his new majorities in U.S. Congress to ram through his radical right populist agenda, forcing other countries to play a role in his melodrama.
In response to Trump’s charge that the U.S. subsidizes Canadian trade, former Conservative prime minister Stephen Harper pointed out that half of America’s imported oil comes from Canada, and its price is significantly discounted due to a lack of pipeline capacity. “It’s actually Canada that subsidizes the United States in this regard,” Harper said.
Nevertheless, Trump’s preferred foreign policy tactic is to hit first with economic sanctions and negotiate later. With his near total grip on U.S. government, he can now achieve all his aims through tariffs. The imperial presidency
For example, America’s 19th-century navy of wooden sailing ships was purchased with tariffs. But it would be impossible to fund modern-day health care, student loans and $13 billion aircraft carriers with tariff revenues.
A recent study by the Peterson Institute for International Economics shows the math doesn’t add up. Tariffs are levied on imported goods and are worth about US$3 trillion. American income tax is levied on incomes and are worth more than US$20 trillion. Government would have to be much smaller, and tariffs would have to be so high they would choke American trade, for tariffs to make economic sense.
And yet Trump has a broad mandate. In the summer of 2024, the U.S. Supreme Court ruled in Trump v. United States that presidents require a broadly defined “presumptive immunity from prosecution for … official acts.”
This decision has given Trump the legal clout to force the entire federal government to answer to the president himself. War against democracy
Trump is using his vast new mandate to wage multiple wars simultaneously. These wars against the guardrails of liberal democracy require the punishment of his enemies inside his own party.
Republicans who have voted against Trump legislation during his first term faced high-profile challenges in the primaries as he funded their opponents. Today, the war is waged against those who are insufficiently loyal, including the highest ranks of the Coast Guard and the FBI.
The war against the administrative state involves the mass firing of independent inspectors, federal lawyers and thousands of civil servants to be replaced by foot soldiers personally loyal to the leader.
The Trump administration has sent out “deferred resignation” notices that invite the entire civil service to resign. This is the tactic Trump’s key adviser, Elon Musk, implemented at X, and it suggests a wave of firings will soon begin. Nonsensical trade war
The trade war against Canada and Mexico is peculiar because neither country has expressed any willingness to abolish the United States-Mexico-Canada Agreement, which is among the achievements of Trump’s first administration.
Nevertheless, the paranoid Trump seems to be convinced that he got a raw deal in 2018, and so he wants to scrap the whole treaty and negotiate something tougher that brings more jobs home.
In 2024, the cars that were ranked most “American” in terms of their content and final assembly were made by Tesla, Honda and Volkswagen. By comparison, the best-selling the Dodge Ram 1500 pickup truck ranked No. 43 on the list. What Trump considers American and non-American isn’t clear, even to voters.
A new Bank of Canada forecast predicts that American tariffs may reduce Canadian GDP by six per cent. The federal government is planning an enormous bailout package to compensate for widespread job losses like the one offered to businesses and individuals during the pandemic.
Unsurprisingly, Trump divides Canada’s leadership. Alberta and Saskatchewan have publicly criticized the Team Canada approach. Alberta Premier Danielle Smith refused to sign the joint federal/provincial statement and played to her secessionist base.
Even so, former Alberta premier Jason Kenney recognizes the peril, arguing that Alberta needs to “be prepared to retaliate … we can’t be wusses about this; we have to have a spine.” What’s next?
Canada is an export-led economy based on natural resources. Its strength lies not in refusing to buy California wine or Florida orange juice. Its main sources of leverage are oil and gas, potash and uranium, rare earth minerals, timber products and hydroelectric power. But of all these, oil, uranium, and hydro-electric power are Canada’s biggest guns.
It’s not yet clear how effective the Canadian government’s strategy will be. Previous rounds of retaliation after the steel and aluminum tariffs in Trump’s first term did not drive him to the negotiating table. It’s also unclear what the CEOs of Canada’s branch-plant multinational corporations will do when their loyalties are divided between Trump and Canada.
Furthermore, it’s anyone’s guess how much the dissent of western Canadian premiers has hurt Canada’s case with Trump. Certainly, his preferred tactic is to divide and conquer.
Finally, it’s unclear if Ontario Premier Doug Ford’s “Captain Canada” approach will earn the respect or disdain of Republicans — although, ultimately, it doesn’t matter what the rest of the American political class thinks because Trump and his inner circle are calling all the shots.
AIMCo's 11-person board, CEO and three executives were dismissed over the Government of Alberta's frustration with increasingly high costs and over-reliance on third-party money managers
“To suddenly dismiss all these people, I can’t explain it , the current reasons just don’t hold water, they’re just not credible.”
Alberta Finance Minister Nate Horner revealed Thursday the entire leadership of the Alberta Investment Management Corp. was dismissed. The move is unrelated to the proposed Alberta Pension Plan, he said Friday
HE LIES, THEY NEED AIMCO FOR THEIR ALBERTA PENSION SCHEME
. David Bloom/Postmedia file
The mass overhaul of leadership at the Alberta Investment Management Corp. will likely raise new questions about the provincial government’s proposal to implement an Alberta pension plan which, if approved by Albertans and the province, would likely be managed by the Crown investment corporation. Article content
The Alberta government on Thursday dismissed the $169-billion public pension fund’s 11-person board, its CEO and three executives, citing frustration with increasingly high costs and AIMCo’s over-reliance on third-party money managers. On Friday it appointed Ray Gilmour, a longtime government bureaucrat, as interim CEO.
The province’s extraordinary intervention into the arms-length pension fund manager resurrected questions around potential plans to put a provincial pension to a referendum — an idea that has gone dormant after receiving wide disapproval in late 2023. Finance Minister Nate Horner said Friday the upheaval at AIMCo has “nothing to do” with it being the potential manager.
“This move surely does not come across as something that creates a lot of confidence in the Alberta government. If anything, this is just another nail in the coffin if that’s what they’re trying to do — I don’t know. It’s all very strange,” Keith Ambachtsheer, director emeritus of the International Centre for Pension Management at the University of Toronto’s Rotman School of Management, said of the potential Alberta Pension Plan. Article content
AIMCo, the sixth-largest pension fund in Canada, is responsible for overseeing the nearly $24 billion Alberta Heritage Savings Trust Fund and has a mandate to operate independently from the government — though the law defining its mandate allows for greater government involvement than is available to the federal government in relation to the Canada Pension Plan Investment Board. The now-dismissed board members were all appointed by the governments of former premier Jason Kenney and current Premier Danielle Smith.
AIMCo has been presented as one of top potential investment managers for a provincial pension plan in the event it was approved via referendum, as outlined in a 2023 report prepared by Lifeworks analyzing the considerations involving a potential provincial pension plan. That report argued Alberta was entitled to 53 per cent of the national retirement plan’s assets, worth about $334 billion, a number that’s been rebuffed by the CPPIB and others.
Keeping assets in the Canada Pension Plan Investment Board — the least-expensive option available — was also considered in the report, however that option presents serious challenges because it would require approval from several provincial governments.
The Lifeworks report suggested amending legislation to assert AIMCo’s operational independence in the event it became responsible for an Alberta Pension Plan’s assets.
“(The Alberta Pension Plan) has completely dropped off the political agenda,” said Duane Bratt, a political science professor at Mount Royal University. “Now it’s going to go right back on the agenda.”
Thursday’s decision will undermine confidence in AIMCo over the short-term and thus its ability to manage an in-province pension plan, Bratt said, but public sentiment could change over the long run if the corporation stabilizes.
“Maybe they think by the time that they put this to a referendum, let’s say in a year’s time, maybe AIMCo’s ship will have righted itself because of the actions that were taken … I don’t know. But AIMCo is connected to the APP,” Bratt said.
Ambachtsheer said he’s perplexed by the overhaul, adding the government has left numerous questions unanswered.
“To suddenly dismiss all these people, I can’t explain it,” he said. “The current reasons just don’t hold water, they’re just not credible.”
Alberta NDP Leader Naheed Nenshi said the mass dismissals “leads to a real drop in public confidence in the work they’re doing.
“This action should mean that any talk of the vastly unpopular Alberta pension plan should be dead now. It should be done, because it’s very clear that the government has admitted that they have no idea how to manage people’s pensions,” Nenshi said in an interview.
Nenshi said the issues at AIMCo, as outlined by the province, do not come as a surprise, but he takes issue with the government’s approach to making changes at the corporation. “We’ve known all this is going on for some time, so how did the government take its eye off the ball so much that they have to take this kind of drastic action instead of managing the process as any normal, sane shareholder would do?”
Money manager’s interim CEO a longtime public servant
AIMCo’s interim CEO, Gilmour, was touted as a dedicated public servant. He has commissioner of corporate services for the City of Medicine Hat and has a background in the banking and financial services industry, according to a profile on the C.D. Howe Institute’s website. (Horner will serve as director and chair of AIMCo for the next month until a new chair is appointed.)
Gilmour has served in executive councils under ex-premiers Rachel Notley and Kenney, and currently under Smith, spanning several ministries including finance, intergovernmental relations, infrastructure and municipal affairs.
Horner’s office declined an interview request on Friday. Meanwhile, Alberta’s lieutenant governor also approved on Thursday the incorporation of a provincial corporation “for the purpose of managing and investing all or a portion of Crown assets.”
This move is not related to the government’s decision to axe AIMCo’s board and CEO, Justin Brattinga, press secretary for Horner, wrote in an email to Postmedia. “The corporation is a preliminary step in our work to grow the Heritage Savings Trust Fund, and as Minister Horner said we will have more to say on that before the end of the year,” Brattinga wrote. “The establishment of the corporation is not related to the actions taken in regards to AIMCo.” Article content
Teachers’ Retirement Fund says pensions ‘remain secure’
The Alberta Teachers’ Retirement Fund on Friday told members in a statement that “their pensions remain secure” and that nothing at AIMCo to date has concerned it about the status of its investments — though it has raised issued with regards to costs at AIMCo with the investment manager and the province.
“We look forward to working with Treasury Board and Finance and being part of determining the appropriate path forward,” it wrote The Alberta Federation of Labour said Albertans “deserve answers” on the government’s decision.
“Precipitous actions like this do not inspire confidence that the UCP can be trusted with the retirement savings of hundreds of thousands of Albertans, or that they can be trusted to successfully and safely run an Alberta-only alternative to the CPP,” wrote Gil McGowan, AFL president and former Alberta NDP leadership hopeful.
In Ottawa, federal NDP MP Heather McPherson called the move “another step to pull Alberta out of the Canada Pension Plan” while federal Minister of Labour and Seniors Steve MacKinnon called the province’s moves “harebrained schemes coming out of Alberta” and said the CPP has a “sterling” reputation.
— With files from Matthew Black
UCP Fires Board and Top Executives Managing Public Pensions
Shock announcement raises questions about what Danielle Smith plans for workers’ retirement savings.
Finance Minister Nate Horner will replace the AIMCo board until a new slate of directors can be found. Photo by Jeff McIntosh, the Canadian Press.
With its surprise decision to cashier the entire board and the top executive of the supposedly independent Alberta Investment Management Corp., we see once again that the United Conservative Party government is determined to control everything, everywhere, all at once.
And if you’re an Albertan, that includes your retirement savings in the Canada Pension Plan Investment Fund.
Indeed, we can be certain this shocking announcement has something to do with that scheme, because chronic underperformance by AIMCo, as the provincial Crown investment corporation is commonly known, has been a frequent target of critics of the UCP’s planned pension grab.
Under the headline “Restoring confidence in AIMCo,” the government said in a terse and unexpected news release Thursday that “after years of AIMCo consistently failing to meet its mandated benchmark returns, the minister of finance will be making changes to restore confidence in Alberta’s investment agency.”
The release complained about a 96-per-cent increase in management fees at AIMCo between 2019 and 2023 and a 29-per-cent increase in the number of employees while the Crown corporation managed a smaller percentage of funds internally — although the news release made no effort to explain exactly what that last point meant.
“Alberta’s government has decided to reset the investment corporation’s focus,” the news release said mildly. “All board appointments have been rescinded and a new board will be established after a permanent chair is named.” That, according to the release, is supposed to take place within 30 days.
“In the interim, president of treasury board and Minister of Finance Nate Horner has been appointed the sole director and chair for AIMCo, effective immediately” — which is not really reassuring for a supposedly arm’s length company managing $169 billion in pension investments.
Notwithstanding the 30-day promise, a cabinet order set Horner’s term as chair of the AIMCo Board to run until the end of September 2025.
Accusing the UCP of wanting to control everything, everywhere, all at once was a clever tribute to the 2022 comedy-drama movie of the same name first used by NDP justice critic Irfan Sabir last spring to describe the UCP fiddling with its own fixed election date law to give itself a little extra time in office.
“Danielle Smith said during the election that Albertans were her bosses,” added Rachel Notley, who was leader of the Opposition at the time, “but it is clear now that she intends to be the boss of everyone.”
Those lines could certainly be applied with similar effect to Thursday’s bombshell.
A comprehensive article in the Globe and Mail revealed that in addition to the 10 board members referred to but not named in the news release, CEO Evan Siddall and three other unnamed executives had been canned.
Siddall, who was appointed CEO on July 1, 2021, with a mandate to turn the company around after its big trading losses during the pandemic, had been the long-time president and CEO of the Canada Mortgage and Housing Corp. Judging from his Wikipedia biography he seems to have attended meetings of the World Economic Forum and the Bilderberg Group, which must have made certain MAGA-minded members of the UCP caucus feel as if they had ants in their pants.
Or maybe it was Siddall’s decision to let Alberta’s teachers have a limited role in the management of their pension fund, which had been grabbed by the UCP in 2019 and handed over to AIMCo amid great controversy. Indeed, some of those additional pension employees the government was complaining about likely came from the management arm of the teachers’ pension fund.
Whatever happened, NDP finance critic Court Ellingson told the Globe that Siddall and some of his colleagues showed up at a public meeting of the standing committee on the Alberta Heritage Savings Trust Fund on Wednesday and there was no hint anything was afoot.
Ellingson said in a statement sent to media Thursday afternoon that firing the entire board and the CEO is too drastic a measure for this just to be about AIMCo salaries “when this government passed legislation to remove the caps on salaries for board members.”
“The premier herself appointed some of these AIMCo directors,” he said. “The finance minister himself said this spring that AIMCo was doing a good job.”
He also argued that even in a temporary role, having a partisan politician at the helm of a supposedly arm’s length agency investing 375,000 Albertans’ retirement savings is troubling.
It certainly seems to have unsettled some in investment circles. The Globe quoted the director emeritus of the International Centre for Pension Management at the University of Toronto’s Rotman School of Management, Keith Ambachtsheer, saying the move “should be construed as a government takeover of [an] asset pool that belongs to the people of Alberta.”
Will Danielle Smith Use Albertans’ Pensions to Bail Out Big Oil?read more
Ellingson argued “AIMCo’s poor returns are a clear reflection of the UCP’s incompetence.”
“We have raised concerns about their poor returns for years, and we’ve noted AIMCo’s returns have been below that of the Canada Pension Plan,” he said. “Until now, the UCP even proposed using AIMCo to manage the proposed Alberta Pension Plan. Any such APP scheme should now be completely off the table.”
Count on it, though, the opposite is true. If this indicates anything, it’s that the UCP still covets the CPP’s investment funds and saw AIMCo’s returns as an impediment to that ambition. Nor does the party value independent minds in positions of oversight.
Interestingly, another Order in Council published Thursday “approves the incorporation of a provincial corporation for the purpose of managing and investing all or a portion of Crown assets.”
David J. Climenhaga is an award-winning journalist, author, post-secondary teacher, poet and trade union communicator. He blogs at AlbertaPolitics.ca. Follow him on X @djclimenhaga.
Alberta Finance Minister Nate Horner became the one-man board of Alberta Investment Management Corp. this week, and promptly fired its chief executive. (Jeff McIntosh/The Canadian Press)
When Alberta's public pension manager lost $2.1 billion in a risky bet on market volatility in 2020, little of the scorn or blame fell at the feet of then-premier Jason Kenney or his government.
Why? The investment decisions at the Alberta Investment Management Corporation (AIMCo) are independent of the government. Cabinet's lone role is to appoint directors to the fund manager's board and let the experts invest, trade and (ideally) grow the funds.
The teachers group whose pension funds the Kenney government transferred to AIMCo's control was understandably frustrated their savings' destiny was tied to the downs and ups of the wealth giant in that moment, but the teachers' union wasn't lobbing rhetorical grenades at the premier for the loss itself.
That distance between the politicians and the pension investors shrank substantially this week, when Finance Minister Nate Horner took the unprecedented step to remove the entire independent board of AIMCo, name himself the temporary one-man board and fire CEO Evan Siddall.
All future rhetorical grenades (and bouquets) can be addressed to the finance minister and Premier Danielle Smith.
Ready, AIMCo, fired
Horner has pledged to appoint a new board within a month, but in the meantime he appointed as interim CEO Ray Gilmour, a veteran senior provincial bureaucrat who lacks experience in the world of big-fund management, but did work in Alberta banks more than two decades ago.
The Smith government pitched the move as "restoring confidence in AIMCo" after underperforming financial results and rising costs. Sebastien Betermier, a leading analyst of pension funds, doesn't see this as confidence-building in the agency's ability to make the sophisticated, long-term investment decisions they need to.
"To me it goes the exact opposite way," Betermier, the executive director of the International Centre for Pension Management, told CBC News. "That goes against the whole independence, the ability of the funds to work at an arm's length from government."
When the province created AIMCo in 2007, the then-Tory government specifically barred MLAs from serving on the fund manager's board, to ensure independence. A cabinet order this week temporarily undid that rule.
Betermier, a finance professor at McGill University, said this seemingly abrupt turmoil could also give pause to other major investors or firms AIMCo partners with on large-scale investments. The fund currently co-owns Yorkdale Mall in Toronto with a major property developer (itself owned by an Ontario pension manager), and has been building thousands of U.K. rental apartments in a joint venture with a British firm.
The two-million-square-foot Yorkdale mall in Toronto, one of Canada's largest, is co-owned by AIMCo as part of the fund's diversified portfolio of assets. (Frank Gunn/The Canadian Press)
"When you see moves like this, where the government can come in any day and dismiss the whole board, that sends shivers in your ability to implement such projects going forward," Betermier said.
Horner expressed some disappointment in recent failures by AIMCo to meet growth benchmarks, but said cost growth was the main reason behind the move. In announcing the board's sacking, his office noted that over the last four years, AIMCo has hiked its staff expenses by 71 per cent and its employee numbers by 29 per cent.
"We want them to be a low-cost provider," Horner told reporters.
Unmentioned in that news release is that, thanks in part to the shift of teachers' pension funds to AIMCo's portfolio, the agency's total managed assets rose over that stretch to $166 billion from $115 billion, a 44 per cent increase. (Instead, the release noted that more funds are being managed by external groups than previously.)
Does an investment firm guarantee itself better returns by slashing its workforce and hiring lower-paid executives?
Short-term frustration with costs can overlook the time it takes to develop an international investment strategy over a longer term, Betermier said.
Of the country's major public-sector pension managers known as the Maple 8 — including the Canadian Pension Plan Investment Board and the independent investment arms of the British Columbia and Quebec governments — it's the youngest, only launching in 2008.
It's lately been playing catch-up to its peers to establish more international offices, including New York this year, its first Asian office in Singapore last year, and a recent plan by Siddall to more than double its presence in London.
"It's a project where you can generate a lot of value for pensioners, but you need to give it time," said Betermier. "One of the big risk factors is precisely government interference, when you come right in the middle of an initiative and you undo it."
Evan Siddall led AIMCo for three years before being terminated. The former investment banking executive and head of the Canada Mortgage and Housing Corporation arrived at AIMCo after major investment losses tarnished the agency's reputation. (Jeff McIntosh/The Canadian Press)
Horner isn't alone in his frustration with the costs. Deb Gerow, president of the Alberta Retired Teachers Association, said expenses and management fees "have been a concern for us," compared to the educator retirement fund's smaller previous operations.
But is the wholesale sacking of a board the solution to a minister's balance-sheet frustrations?
"It struck me as a rather extreme reaction given the problems the government identified," said Bob Baldwin, a veteran pension consultant who has chaired the C.D. Howe Institute's pension policy council.
It makes him wonder what other considerations were behind the Smith government's takeover of AIMCo leadership.
Horner and his office have said this decision has nothing to do with the UCP's consideration of removing Alberta from the Canadian Pension Plan (and possibly putting AIMCo in charge of an Alberta pension mega-fund). Nor, they say, does this have anything to do with the premier's ambition, reiterated at last weekend's UCP convention, to balloon the $23-billion Heritage Savings Trust Fund into a $250-billion fund by mid-century.
There is certainly a desire by Horner and the premier to change the focus and approach of the Crown corporation that currently stewards Alberta's long-term savings account and the retirement funds of thousands of residents. It's not clear how they want that approach to change, aside from producing wealth management on a leaner budget.
And what happens to AIMCo's investments in the coming years will depend on the quality of the leaders Smith's cabinet selects to run the agency, who will undoubtedly be more aligned with the desired directions of Horner and the premier than a group appointed over several years by both UCP and NDP premiers.
Success will be attributed to this government's actions. So will future losses and failures.
It's the same way that the Smith government has tied Alberta Health Services' outcomes to their own decisions, by ousting the entire board in 2022 and then redesigning the entire system's structure.
They dismantled and remade it, and will politically own whatever comes next.
AIMCo expansion, Alberta's investment
focus were sources of tension before purge,
sources say
Pension veterans say there was more going on behind the scenes than scrutiny of costs
A longtime pension executive described the blanket dismissals as a “shock.”
Alberta Investment Management Corp. chief executive Evan Siddall in Calgary, Alta., 2022. Alberta has relieved Siddall of his duties. Photo by Jeff McIntosh/The Canadian Press files
The decision by Alberta Investment Management Corp. (AIMCo) to launch operations abroad as it chased higher returns and the extent to which the investment manager should invest in Alberta were sources of tension with the provincial government in the months leading up to Alberta’s stunning decision this week to remove AIMCo’s entire board of directors and chief executive, according to several people familiar with what transpired.
In a news release Thursday, the Alberta government said the “reset” at AIMCo was driven by rising costs at the Crown corporation, including third-party management fees and salaries and benefits that were not matched by a corresponding return on investment.
But three pension veterans familiar with events said there was more going on behind the scenes than scrutiny of costs.
One of them described the stated rationale of costs as “smoke and mirrors” for a deeper agenda to reshape AIMCo.
“Cost-cutting is not a big issue here,” said the source, who asked not be identified because of sensitivities around recent events. “This is a deeply political situation.”
This is a deeply political situation
Another of the sources, all of whom spoke on condition of anonymity, pointed to efforts to expand investment capabilities by hiring expensive investment managers and opening offices in New York and Singapore this year and last as a point of tension.
But others said that was just one piece of the puzzle, and suggested the government is focused on driving investments in Alberta.
The shakeup at AIMCo comes as Alberta Premier Danielle Smith prepares to unveil her government’s plan to boost the size of the AIMCo-managed Heritage Savings Trust Fund, which, according to its website, “produces income to support government programs In February, Smith said she envisioned the fund, which was established in 1976 to collect a portion of Alberta’s non-renewable resource revenue to invest in projects that would improve life in Alberta and diversify the Alberta economy, to grow much larger by 2050 than the nearly $24 billion value it had June 30.
The Alberta government also announced plans last year to pull out of the Canada Pension Plan, and take its share of the giant fund with it, but that effort appears to have moved to the back burner.
“We’ll be releasing our plan to grow the Heritage Savings Trust Fund to $250 billion by the end of the year, with a focus solely on getting the best returns for Albertans,” Justin Brattinga, senior press secretary at Alberta’s Ministry of Treasury Board and Finance, said Friday.
Asked whether the government had concerns about AIMCo’s direction and wanted more investments, operations and jobs in Alberta, Brattinga did not directly address the question.
“AIMCo’s mandate is to be a low-cost investor,” he said. “Our concern was with the rapid and unacceptable increases to their operating costs without a corresponding increase in returns for their clients.”
On Friday, the Alberta government announced that its most senior public servant, deputy minister of executive council Ray Gilmour, would be interim CEO, put in place to “stabilize operations and ensure smooth operations during the transition period.”
That followed Thursday afternoon’s bombshell announcement that the government had rescinded all board directorships at AIMCo. Nate Horner, Treasury Board President and Finance Minister, said he had also relieved AIMCo CEO Evan Siddall of his duties.
Horner has been installed as chair and sole director for the next 30 days until a replacement can be found.
One source said they believed the government has found some support for its approach in a client group still reeling from a loss of trust following AIMCo’s stunning $2.1 billion loss in 2020 on a volatility trading strategy, when the COVID-19 pandemic was declared.
The Alberta Teachers’ Retirement Fund, one of the investment manager’s 30 or so clients, told members that the issue of costs had been raised with both the government and AIMCo prior to this week’s purge.
“Nothing that has happened with regard to the changes at AIMCo thus far has caused us concern about the status of our investments,” the ATRF said in a note to members posted on its website Thursday. “At the same time, we have in the past raised issues regarding costs at AIMCo with both the Government of Alberta and with AIMCo.”
The retirement fund for Alberta’s teachers was forced through legislation to turn management of its funds over to AIMCO in 2019. It was a contentious start for the relationship. Unable to reach an agreement on terms of the new arrangement, the outcome was imposed through a government order
Despite the assertions of the teachers’ retirement fund and the government, industry sources say AIMCo’s costs are in line with industry standards, and that returns slightly below benchmarks reflected the risk profile of the investment managers clients rather than performance issues relative to peers.
AIMCo posted an overall return of 6.9 per cent in 2023, despite challenges in its real estate portfolio. The asset manager, which invests on behalf of pension, endowment, insurance and government clients in Alberta, ended the year with $160.6 billion in assets under management. The return, though positive, fell below AIMCo’s benchmark return of 8.7 per cent. A longtime pension executive described the blanket dismissals as a “shock.”
Jim Leech, who ran the Ontario Teachers’ Pension Plan Board for six years, said Friday he doesn’t believe the wholesale clear-out of the boardroom and the dismissal of senior executives including the CEO can be solely about “a few basis points of performance or costs.”
The Alberta government’s sudden decision to dismiss the entire board and CEO of the Alberta Investment Management Corp. (AIMCo) comes at a time when a number of the pension fund’s clients are “unhappy,” according to a business columnist with The Globe and Mail.
“I’m not actually completely surprised by this,” Andrew Willis told BNN Bloomberg’s Amber Kanwar in an interview Friday morning.
“AIMCo has been controversial for a couple of years and their performance hasn’t been that great… there is an underlying reason for this rather abrupt action from the government and it’s to do with the ability to keep these clients happy – there is a lot of unhappy clients at AIMCo.”
Willis said that what makes AIMCo unique as a fund is its structure as a crown corporation that manages capital for more than a dozen different groups in Alberta.
“That includes the heritage fund, but it also includes a number of different public sector pension plans,” he explained.
“The university professors in Alberta, for example, AIMCo runs their money, and over the last few years, those professors have been complaining about performance and they’ve been withdrawing their funds from AIMCo and giving them to other outside managers.”
In a statement on Thursday, the province’s Finance Minister Nate Horner said the decision to fire the fund’s board came down to management fees that were too high and a consistent failure to meet benchmark returns.
The Canadian Press reported on Thursday that Horner told reporters following the announcement that he had been watching AIMCo’s performance closely for some time and determined that necessary changes to the fund weren’t going to happen without a “major reset.”
Willis said that despite the government’s suggestion that the fund has been underperforming, their recent returns, though not outstanding, have been on par with most other large Canadian pension plans.
“There wasn’t a complete outlier in performance, they weren’t ahead of anybody else… but they certainly weren’t laggers,” he said.
AIMCo had encountered some setbacks in recent years related to volatility during the pandemic, Willis noted, but he said the fund’s management, led by chief executive officer Evan Siddall, had created a “credible turnaround plan” to resolve those issues.
“Their costs have been rising, they’re staffing up, they want to do more global investing, they want to get into more alternatives – that takes people, so that’s why the headcount was rising, and that’s one of the things that’s upset the government,” he said. Ray Gilmour named interim CEO
Horner will act as AIMCo’s sole director and chair for the time being until a new chair is appointed, which the Alberta government says will happen within 30 days. The province has also appointed an interim CEO: Deputy Minister of Executive Council Ray Gilmour.
Willis said that Gilmour has “no investment management experience,” but is “clearly a trusted pair of hands” within the Alberta government.
He added that aside from who will ultimately run the fund, the biggest question AIMCo faces going forward relates to its mandate.
“Danielle Smith, the premier of Alberta has made it clear she wants to see more investment in Alberta from public money. She made the bid to get Alberta’s share of the Canada Pension Plan (CPP) managed in Alberta too,” Willis said.
“So, Danielle Smith I think looks at AIMCo as a bit of a cookie jar. The mandate that I think they might go to is something like what you’ve got in Quebec with the (Caisse de dépôt et placement), where there’s a mandate to primarily invest in Alberta, and I think that would be really dangerous.”
Alberta is Canada’s largest oil and gas producer, and while the province has made inroads in diversifying its economy in recent years, Willis said “there’s only one big industry, and it’s fossil fuels.”
“So, if you’re overweighting towards that industry, that’s a dangerous thing for Alberta pensioners,” he said.
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