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Monday, November 18, 2024

Parliament gridlock continues amid Canada Post strike

By David Baxter The Canadian Press
Posted November 18, 2024

WATCH: Canada Post strike: Union president addresses public's concerns

Parliament closes in on its eighth week of gridlock over a privilege motion, as Canada Post employees are on strike and calls emerge to exclude Mexico from upcoming trade talks.

While question period has continued, other house business is on hold due to a Conservative privilege motion calling on the government to turn over unredacted documents on a green technology fund.

Prime Minister Justin Trudeau and some members of his cabinet are not in Ottawa for the first half of the week, as they attend the G20 meeting in Rio de Janeiro, Brazil.

2:35

As 2025’s G7 host, Trudeau looks to push climate change initiatives and Ukraine support

At the Asia-Pacific Economic Cooperation meeting in Lima, Peru this weekend, Foreign Affairs Minister Melanie Joly said many nations have been approaching Canada on how to work with the incoming Donald Trump administration in the United States.

The Canada-U.S.-Mexico free trade agreement signed during the first Trump presidency is up for review in 2026, and the premiers of Ontario and Alberta say Canada should oust Mexico from the deal over not matching Canadian and American tariffs on imports like electric vehicles. Trudeau says Mexico is a “solid partner,” but acknowledged the concerns.

Meanwhile back in Canada, Canada Post workers hit the picket line Friday, and Labour Minister Steve MacKinnon says that he is ruling out early intervention for now, though he recently ordered binding arbitration in recent job action at ports in Montreal and British Columbia.

Canada Post says ‘parties remain far apart’ as strike continues

By Saba Aziz

Global News
Posted November 18, 2024

WATCH Strike could be detrimental to Canada Post as a business

Canada Post and its workers’ union are entering a fresh round of mediated negotiations as a nationwide postal strike enters its fourth day

Both sides return to the bargaining table Monday with a special mediator, Peter Simpson, who was appointed by the federal government last week.

“The focus of the special mediator is for the parties to reach a deal,” Matthieu Perrotin, press secretary for Labour Minister Steven MacKinnon, said in a statement to Global News on Monday.

“Canadians are counting on the parties to reach a deal. Negotiated agreements are always the best way forward.”

More than 55,000 Canada Post workers went on strike Friday, halting mail and parcel services across the country. Some post offices have also been shuttered amid the job action.

On Monday, Canada Post said both “parties remain far apart at the table,” but the talks continue and the Crown corporation is committed to reaching new agreements.

“Canada Post supports the appointment of a special mediator by the Minister of Labour as efforts continue to achieve negotiated agreements with the Canadian Union of Postal Workers (CUPW),” Lisa Liu, a Canada Post spokesperson, told Global News in an emailed statement Monday.

“We remain committed to reaching new agreements at the bargaining table, and not through arbitration. Discussions continue.”

5:28 Retail impacts of Canada Post strike

In an interview with Global News on Sunday, Jan Simpson, national president of the CUPW, said she is hopeful that this new round of bargaining this week will lead to the negotiation of two collective agreements for urban operations unit and the rural and suburban mail carriers (RSMC) unit.

“We’re still on the picket lines right now, we’re going to be there, but on Monday, we go back to the table with the new mediator to see what we can do,” she said.

“So hopefully … we’re able to get two collective agreements in place that meet the needs of everyone involved.”

Canada Post has said that no new items will be accepted until the strike ends, but all mail and parcels that are already in the postal network will be secured and delivered on a first-in, first-out basis once the operations resume.

The Crown corporation has also warned that even once the national strike ends, Canadians will continue to experience impact to services.

“Processing and delivery will be challenged going forward due to the impacts of the strike,” Liu said.

1:59 Canada Post strike could mean a difficult holiday season ahead

The disruption comes during the busy holiday shopping season.

Liu said the strike is negatively impacting small businesses, charities and remote communities.

Canada Post’s parcel volumes declined by 42 per cent last week compared to the same week in the previous year.

“With no new parcel volumes in the system over the four days of the national strike, this situation will only worsen,” Liu said.

The federal government has not indicated that it will consider a back-to-work legislation to end the strike, with MacKinnon saying on Friday that he “is not looking at any other solution other than negotiation.”

Sides in Canada Post strike remain far apart on several issues, union says

Federal government says it's making sure both sides have what they need to reach a deal

CBC News · Posted: November 17, 2024

Canada Post strike enters 2nd day, Ottawa says it won’t intervene
2 days ago

Duration3:4

Canada Post stopped delivering mail across the country as of Friday as tens of thousands of postal workers went on strike over wages, working conditions and other issues. On Friday, the federal government said it does not have plans to intervene in the strike.

As the Canada Post strike drags on this weekend, a spokesperson for the federal labour minister says the government is making sure both sides have everything they need to reach a deal.

In a statement sent to CBC News on Saturday, spokesperson Matthieu Perrotin pointed out that Peter Simpson, director general of the federal mediation and conciliation service, had been appointed to support negotiations between Canada Post and the union representing its striking workers

Labour Minister Steven MacKinnon initially announced Simpson's appointment on Thursday, before the workers went on strike the next day.

"Parties must reach a deal, and Canadians are counting on them," Perrotin says in the statement. "Negotiated agreements are always the best way forward."

Canada Post workers went on strike early Friday after failing to reach an agreement with their employer, shutting down the corporation's mail service across the country.What impact is the Canada Post strike having on you? What should be done about it? Leave your story, questions and opinions here and we may read them on the Nov. 17 episode of Cross Country Checkup

The Canadian Union of Postal Workers (CUPW) says about 55,000 workers in its urban, rural and suburban mail carrier bargaining units are off the job, adding that little progress has been made during bargaining.

Striking Canada Post workers walk the picket line outside a Toronto sorting facility on Friday. (Evan Mitsui/CBC)

"Canada Post had the opportunity to prevent this strike, but it has refused to negotiate real solutions to the issues postal workers face every day," the union said in a statement.

"Instead, Canada Post left us no choice when it threatened to change our working conditions and leave our members exposed to layoffs."

Mail and parcels will not be processed or delivered during the strike, and some post offices will be closed, according to the Crown corporation. Service guarantees will be affected for items already in the postal network, and no new items will be accepted.

What you need to know about your mail during the Canada Post strike

With Canada Post strike underway, small business owners scramble to make other arrangements

The two sides began talks toward a new contract on Nov. 15, 2023.

Canada Post's latest contract offer included annual wage increases that amounted to 11.5 per cent over four years. It also offered protection of the defined benefit pension for current employees, as well as job security and health benefits.
WATCH | Is a shift in Canada Post's business model necessary?:

In wake of strike, is a shift in Canada Post’s business model necessary?

| Canada Tonight
3 days ago

Duration5:04

Canada Post workers went on strike early Friday after the Canadian Union of Postal Workers (CUPW) said little progress was made during bargaining. York University labour expert Steven Tufts says CUPW has not built the large-scale public campaign needed to pressure Canada Post into changing its business model, despite knowing that Canada Post is struggling financially.

CUPW said that wasn't enough and that the two parties remain far apart on several issues.

Canada Post says it has lost $490 million in the first half of 2024, part of a total $3 billion lost since 2018. The company says a strike will only further contribute to its already dire financial circumstances and that the union's demands will lead to more fixed costs that Canada Post can't afford.

"Both sides are still working towards achieving negotiated settlements and discussions will continue," Canada Post said in a statement on Saturday.
'Pressure is going to become more and more intense'

Labour Minister Steven MacKinnon signalled that the Liberal government is not currently looking to intervene and end the strike, saying Friday that he is "not looking at any other solution other than negotiation right now."

Ian Lee, an associate professor at Carleton University's Sprott School of Business, said there is "a precedent" for the federal government to legislate striking Canada Post workers back to work and that the likelihood of it happening again rises as the job action drags on and third parties call on Ottawa to act.

"I think day by day by day, the pressures on the minister of labour and the government — [from] mayors, MPs, chambers of commerce, Canadian Federation of Independent Business — the pressure is going to become more and more intense," Lee told CBC News.
WATCH | Prolonged Canada Post strike would be 'devastating' for seniors, advocate says:

Prolonged Canada Post strike would leave seniors ‘vulnerable,’ advocate says
2 days ago
Duration5:47

On the second day of the Canada Post strike, the founder and CEO of CanAge, Laura Tamblyn Watts, warns about the ‘devastating’ effect the strike could have on seniors if it goes on for several days or weeks. Watts says seniors overwhelmingly rely on mail for receiving bills and medical prescriptions.

Dan Kelly, president of the Canadian Federation of Independent Business, said the postal strike is "really bad timing" for small businesses with Christmas and Black Friday around the corner.

The strike has forced Kim Dowds, an Ontario-based small business owner who sells items online from estate sales, to pivot.

Dowds said she'll have to stick to selling smaller items from her online shop, The Red Rooster, because shipping larger orders through private couriers will be too expensive.

"I'm going to have to adjust and not sell the big stuff. And the big stuff is sometimes where the money is, right?"

She said she knows some other small business owners in rural or remote areas who will have to put deliveries on hold entirely.

"Because Canada Post is the only game in town, they're going to have to pause during the most important time of the year for selling."

Friday, November 15, 2024

WORKERS CAPITAL SEIZED BY THE STATE

Braid: Stephen Harper at AIMCo and UCP's pension drive go hand-in-hand

Smith keeps laying down sovereignty building blocks at a furious pace, playing on support still fuelled by public anger at Trudeau

Author of the article:

By Don Braid • Calgary Herald
Published Nov 14, 2024

Former prime minister Stephen Harper delivers the keynote address at a conference on Wednesday, March 22, 2023 in Ottawa. Adrian Wyld/The Canadian Press

Within days, former prime minister Stephen Harper will almost certainly be the new chair of Alberta Investment Management Corp. (AIMCo).

Some people wonder if this has anything to do with the UCP drive for a provincial pension plan.

Ya think?

Five years before he became prime minister, Harper signed the famous Firewall Letter sent to then-premier Ralph Klein on Jan. 24, 2001.
The letter urged the Alberta government to “Withdraw from the Canada Pension Plan to create an Alberta Pension Plan offering the same benefits at lower cost, while giving Alberta control over the investment fund . . . The legislation setting up the Canada Pension Plan permits a province to run its own plan, as Quebec has done from the beginning.

“If Quebec can do it, why not Alberta?”

Premier Danielle Smith obviously wants AIMCo to manage this new pension fund, just as the Caisse de Depot handles Quebec’s stand-alone pension.

To that end, AIMCo has to be a lot more visible — and successful — than it was when she recently fired the entire board.

The Caisse is an investment whale with $434.4 billion under management. AIMCo has a relatively paltry $168 billion.

The UCP wants to top that up with a $334-billion divorce settlement from the CPP — 53 per cent of the national fund.

This is politically impossible, as Harper himself showed when he became PM and did nothing to advance the Firewall pension push.

Ted Morton, a former Alberta minister who also signed that letter, says the best Harper could do was “leave Alberta alone.” And he did; for nine years the federal government was friendly to successive provincial PC regimes.

Province eyes former PM Stephen Harper to be next AIMCo chairman

AIMCo upheaval resurrects questions over future of proposed Alberta pension plan

Morton says hopefully that if Harper now leads AIMCo toward a provincial pension, he would “come full circle.”

Ted Morton speaks at the Value of Alberta conference in Calgary on Jan. 18, 2020. Darren Makowichuk/Postmedia
Article content

Harper would certainly bring stature and profile to AIMCo, at least among conservatives. He was by far the most successful Alberta prime minister (the others being Joe Clark and, far back in the 1930s, R. B. Bennett).

The pension plan is not popular with most Albertans. It’s a scary move with direct impact on everybody’s bank account, sooner or later.

Herald columnist Chris Nelson argues with his usual verve that Smith and the UCP should drop the plan entirely, lest it destroy them

That isn’t about to happen. Smith’s chief of staff, Rob Anderson, is an author of the Free Alberta Strategy, which the premier rode into office. It argues fiercely for the Alberta pension.

Varcoe: Smith heading to Trump's inauguration, but 'not worried' about U.S. tariffs on Canadian energy

'Needs to be resolved': Canada Post workers strike in Calgary, across Canada

Despite widespread fear of the concept, the pension plan probably could be sold to the public, eventually.

Before a referendum, the big incentive would be a promise of lifetime monthly payments higher than the CPP.

The Firewall Letter only referred to “the same benefits at lower cost.” The payoff would have to be much bigger than that.

The government is also pushing hard for other key sovereignty measures, including a provincial police force. The dream of a provincial tax collection agency is still active, although quiet for now.

Soon we’ll see a major provincial claim to new powers, stemming from the federal emissions cap.

But Smith and the UCP are working furiously because they have a problem. His name is Pierre Poilievre.

If the Conservative leader becomes prime minister, much of the local fury at Liberal Ottawa will disappear, along with the hunger for sovereignty measures.

Poilievre will be an ally on many issues, especially in energy.

But like Harper before him, Poilievre would never agree to gutting the CPP. He could hardly endorse the Free Alberta Strategy, which raises the prospect of separation as a last resort.

Conservative L Leader Pierre Poilievre speaks in the House of Commons on Tuesday, Sept. 24, 2024. Adrian Wyld The Canadian Press

The thinkers behind this movement have always said no federal government will ever redress what Morton, in his new book titled Strong and Free, calls the “deeper structural vulnerability to predatory federal policies.”

To them it doesn’t matter what party runs the country. The trouble is baked in. The UCP want Poilievre to get that message.

And so, Smith keeps laying down sovereignty building blocks at a furious pace, playing on support still fuelled by public anger at Trudeau.

Re-enter Stephen Harper, stage right.

Don Braid’s column appears regularly in the Herald
X: @DonBraid

Public ambush sends alert to $169 billion Alberta pension: Government’s in charge

By Layan Odeh, Paula Sambo and Dawn Lim

November 15, 2024 a

(Bloomberg) -- It was supposed to be a bonding experience.

Evan Siddall, then-chief executive officer of Alberta Investment Management Corp., gathered about 170 senior staff at The Westin Edmonton for a meeting and an exercise on “how to lead from a place of joy” taught by The Moth, a nonprofit dedicated to the art of storytelling.

Things quickly turned joyless.

Nate Horner, Alberta’s finance minister, showed up to tell Siddall and three other executives they no longer had jobs. The four left the building after their phones and laptops were confiscated. Horner then broke the news to the remaining Aimco employees. He also dismissed the entire board.

The public purge sent a clear message: The government of Alberta is the boss, and it’s taking back control.

Horner has temporarily become the fund manager’s chairman and sole director, and the conservative regime that rules the Canadian province plans to overhaul the firm and cut costs.

“To restore confidence in the agency, Alberta’s government has decided to reset the investment corporation’s focus with a new CEO and board,” the government of Alberta said in a statement.

Canada’s biggest pension funds — dubbed the Maple Eight – have long been the envy of peers. They’re admired as among the world’s most sophisticated money managers, known for independence from politics, managing most of their assets internally, hiring world-class talent and paying top executives millions of dollars.

Aimco has invested with elite alternative asset shops such as Blackstone Inc. and KKR & Co.

Now Aimco is controlled by a populist government, which has been considering putting an ex-politician, former Prime Minister Stephen Harper, in charge of the board. The Edmonton-based firm manages about C$169 billion ($120 billion) of public pensions plans and government funds, all of which have a stake in who’s running the show.

“No well-run firm replaces all of its executive team and whole board at once,” pension expert Alexander Dyck, a finance professor at the University of Toronto’s Rotman School of Management, said in an interview. “That’s a recipe for disaster.”

Some staffers and government officials didn’t view the ousters as politically motivated, but rather as a responsible move after complaints about churn and cost under Siddall. Others see it as an attack on the Canadian model of independence that has helped the pension funds attract top talent.

Either way, the intervention has stoked panic among staff over their jobs and pay. In recent years, Aimco has lured people from firms such as Carlyle Group Inc., Royal Bank of Canada and Barclays Plc. Employees have already told acquaintances they want new jobs, anticipating the province will begin treating the pension manager like a state agency and slash their pay.

There are few leaders left at the firm who can reassure them.

Aimco has been without a permanent chairman since the end of last year, and its audit committee chair left in April. Even before last week’s deposition, Aimco experienced senior staff turnover under Siddall.

A chief legal officer and a chief corporate officer left during his tenure. Four different people held the title of chief investment officer in a little more than three years. The last, Marlene Puffer, departed in September as the Alberta government intensified pressure on the company.

To politicians, Siddall seemed disconnected from Alberta’s fiscally conservative culture, neglecting complaints about rising costs.

He grew corporate, non-investment functions and made splashy expenditures along the way, including renting an office in high-end tower One Vanderbilt in New York despite the reservations of some staff.

While an internal study showed the fund’s costs were near the bottom of its peer group in 2022, the appearance that it was spending lavishly posed a problem for the provincial government.

(Aimco annual reports)

And it wasn’t the only issue. Siddall’s positive stance on green investing and his globe-trotting irked officials in oil-rich Alberta, who preferred their pension manager to keep a lower profile.

Along with Siddall, the other senior executives dismissed by Horner included the chief legal officer, the chief of staff and the chief people, culture and engagement officer. None of those executives worked on investments directly.

This story is based on conversations with multiple people familiar with Aimco and Alberta’s government. The people asked not to be identified to discuss confidential matters; some cited concerns over retaliation. A spokesperson for Aimco declined to comment.
New offices

Siddall, the former head of Canada’s federal housing agency, became CEO of Aimco in July 2021 after it lost C$2.1 billion on a bet against market volatility that blew up when the pandemic hit.

Fast-talking and blunt, Siddall aimed to elevate Aimco’s profile on Wall Street. Hired with a mandate to revamp the operation, he created new roles such as chief technology officer. While most of staff were in Edmonton, he wanted to attract people beyond Canada, too.

Early this year, Aimco opened the office in New York in One Vanderbilt. The real estate team had suggested at least five cheaper locations for the New York office, but Siddall thought it was important to have an office that attracted staff to work, according to people familiar with the matter.

Several months earlier, Siddall had opened an outpost in Singapore to focus on investments in Asia-Pacific. Aimco’s investments in Asia stood at around 3% of total assets as of last year.

He hired GIC Pte’s Kevin Bong to lead the efforts there. Aimco, which also opened an office in Calgary in 2022, has around 600 people working from seven offices, while giving them the flexibility to work remotely. In London, Siddall caught people’s attention with a renovation to accommodate more staff.

The global expansion suggested to some within the government that the pension fund was shifting priorities away from Edmonton, where its presence has supported the city’s economy. Aimco invests more than 40% of its assets in Canada, with a large chunk of that deployed in its home province.

Alberta Teachers’ Retirement Fund, one of Aimco’s clients, said in the past it has raised issues regarding costs with both the government and the fund. Aimco management has always been transparent about expenses, according to people close to the firm.

Aimco’s clients had asked for an almost doubling of allocations to private assets, driving more costs, according to a letter from former board Vice Chair Ken Kroner to government officials.

“Aimco hired the talent necessary to support this client-led growth, and this should not be misinterpreted as evidence of costs being out of control,” he wrote, adding that fees to outside managers grew at a slower pace than assets.

But as IT and human resources budgets added up, new expenses became a flashpoint.

Staff costs ballooned by 71%, and headcount grew by 29% from 2019 to 2023, according to a statement from Horner’s office. Third-party management fees also increased by 96% during the period.

(Annual reports of the three fund)

Another source of friction: Aimco awarded a contract worth millions of dollars to BlackRock Inc. for its portfolio management software Aladdin.

Some insiders saw this as a necessary expense to replace an inferior risk-management tool. Others viewed it as an unnecessary contract that cost too much. BlackRock declined to comment.

Aimco spent C$276 million on salaries, wages and benefits in its last fiscal year, and awarded Siddall more than C$4.5 million in direct pay.

New York State Teachers’ Retirement System, a US fund that oversees a similar amount of money but relies more heavily on outside managers than Canadian funds, spent $59 million on salaries and benefits, according to its most recent annual report.

Aimco ultimately falls in the lowest third on cost relative to peers, according to a study by CEM Benchmarking for 2022, the latest such study available. Its costs were 23% lower than those of average peers.

As for returns, Aimco beat its benchmarks in two of the three years Siddall was in charge, and recent internal surveys showed employee morale substantially improving. That gave the board few reasons to question his investment judgment.

But for politicians in Alberta’s capital city, it wasn’t quite so simple.

‘First kick’

Alberta produces the vast majority of Canada’s crude oil — close to 4 million barrels a day — and its economy relies on fossil-fuel revenues for creating jobs and boosting growth. In fact, government royalties from oil and gas form a part of the pool of money Aimco manages.

The province is led by Premier Danielle Smith, a conservative and outspoken booster of the oil and gas sector who frequently fights with Prime Minister Justin Trudeau’s left-leaning government in Ottawa. Recently, Smith said she was “pissed” about federal draft rules to cap oil and gas emissions and vowed to challenge them.

Siddall didn’t embody Alberta’s conservatism.

A longtime public servant who has Parkinson’s disease, he increased the focus on human resources at Aimco and boosted diversity and inclusion initiatives — including hiring a chief people officer.

On Instagram, he posted photos from a COP climate conference in Egypt and reflected on Canada’s treatment of indigenous people.

While he rejected fossil-fuel divestment — a political non-starter in Alberta — he also pitched decarbonization as an attractive investment strategy.

In February, Aimco said it was creating a C$1 billion fund dedicated to the energy transition, including “low-carbon renewable energy production,” to be led by then-CIO Puffer.

Some clients complained to the government that the pension fund manager was steering away from Aimco’s principles. Others backed its direction.

Ultimately, Horner sided with the first group. The government has for months been mulling giving the chairman’s role to Harper, according to people familiar with the matter. He’s a longtime politician who led the Conservative Party of Canada to three straight election victories — and he’s deeply trusted by conservatives in Alberta.

The finance minister waited for an opening. Then came last week’s purge at the Westin hotel. More changes are certain, potentially destabilizing Aimco further.

“You’re kicking at the foundation, and the concern is that when you kick at the foundations enough, at some point they’re all gonna fall down,” said Dyck, the pension expert, speaking about Canadian pension funds in general and their history of political non-interference. “It’s just, this is the first kick.”

Fired AIMCo chair disputes Alberta’s narrative on costs in letter to Horner

AIMCo is a low-cost manager compared to similar funds and has 'solidly' exceeded benchmarks over the years, says Kenneth Kroner

Published Nov 14, 2024 •

Alberta Finance Minister Nate Horner at the Alberta Legislature. Photo by Shaughn Butts/Postmedia files

The former interim chair of Alberta Investment Management Corp. has written a letter to the Alberta cabinet minister who fired him last week to dispute what he calls an “incorrect narrative” and “misinformation” about the performance of the asset manager and Crown corporation.

In a letter to Alberta Finance Minister Nate Horner that was viewed by the Financial Post, Kenneth Kroner disputes the data and a number of assertions used to justify the government’s “reset” at AIMCo, which saw the entire board of directors, including Kroner, as well as chief executive Evan Siddall, removed from their posts. The letter goes on to say that while the government is within its rights to replace the board, the faulty narrative that AIMCo’s costs are out of control will make things difficult for the next board and management team.

“Over the last week, there have been numerous public statements made about AIMCo’s performance and costs,” wrote Kroner, who was on the board of AIMCo for eight years and had been acting chair since the beginning of this year. “I have concerns that these are tarnishing AIMCo’s reputation, which will only make it harder for Albertans to have confidence in the public asset manager, and will create unnecessary barriers for AIMCo in its goal to deliver strong investment performance for Albertans.

Contrary to skyrocketing costs and poor performance, he said AIMCo is a low-cost manager compared to similar funds and has “solidly” exceeded benchmarks over the years.

“The data contradicts the very negative narrative that is out there,” Kroner wrote in the letter, which was also sent to the government’s bipartisan standing committee on the Alberta Heritage Savings Trust Fund, which is managed by AIMCo.

“The misinformation will make it unnecessarily difficult for the next management team to be effective,” it said.

In statements to media since the board and Siddall were let go en masse last Thursday, Horner has said he and his team had asked for changes at AIMCo and applied “constant” pressure on costs.

“We asked for change. Weren’t seeing it. Weren’t seeing it. We were seeing the opposite,” he told the Calgary Herald.

“It became evident things were not going to change even with constant pressure from me and the team.”

In a statement announcing the board purge, the government said that AIMCo’s third-party management fees increased by 96 per cent in the 2019 to 2023 period, the number of employees increased by 29 per cent and salary, wage and benefit costs increased by 71 per cent. The government said the cost increases had not come with a commensurate increase in returns.

In Kroner’s response, dated Wednesday, Nov. 13, he said the government’s measure of AIMCo’s total returns ignores the fact that clients, such as operators of pension funds for teachers, judges and police officers, direct how much of each asset class the pension management organization should invest in on their behalf

“AIMCo’s mandate is to outperform the benchmarks that clients given them,” Kroner wrote. “This is why I’ve consistently emphasized that AIMCo’s contribution can only be measured by returns versus their client-directed benchmarks, not total returns.”

He said AIMCo has consistently added value on this metric, the only one it can control. For example, the provincial government’s Heritage Fund has seen an annualized 10-year return that is half a percentage point above its benchmark after all costs through the end of June. Returns outperformed the benchmark in seven of those years, and, after all costs, added $1 billion to the Heritage Fund, according to the letter.

“This is not poor investment performance as the narrative states, but rather is a performance record that Albertans can be proud of,” wrote Kroner, who holds a PhD in economics from the University of California at San Diego and was a senior managing director at Blackrock and predecessor Barclays Global Investments for more than 20 years.

As for the government’s statements about AIMCo’s costs, he said they were indeed rising, but so were assets under management. Moreover, independent firm CEM Benchmarking pegged AIMCo’s costs at 23 per cent below what an average peer would incur to manage AIMCo’s client assets.

“That $258-million (based on 2022 figures) goes straight into Albertan’s pockets,” Kroner wrote. “AIMCo has always been, and remains, a cost-conscious, high value-for-money asset manager.”

The government figures that Kroner says “are being used to tarnish AIMCo’s reputation” include an assessment of third-party management fees. Third-party assets rose by two and half times in the 2019 to 2023 period, so fees naturally went up. “But these fees went up at a much slower pace than assets,” he wrote, “and the data shows that AIMCo’s average third-party management fees dropped by a third … over that window. This is evidence of effective cost management not undisciplined cost management.”

He said AIMCo’s headcount increases have also drawn much public discussion, but that the staffing reflects client request for a near doubling of the illiquid investments such as real estate, private equity and infrastructure in the period between 2019 and 2023. It was well known that this would require expanding investment and legal teams, strengthening risk controls, and building a global presence.

“AIMCo hired the talent necessary to support this client-led growth, and this should not be misinterpreted as evidence of costs being out of control,” Kroner wrote.

Horner stepped in as acting chair following the board and executive purge last week. Alberta’s deputy minister of executive council, Ray Gilmour, the province’s top bureaucrat, was named interim chief executive.

Since then, speculation has emerged that former prime minister Stephen Harper will become AIMCo’s next chair. Sources say his name has been in the mix for nearly a year, since shortly after Mark Wiseman, former CEO of Canada Pension Plan Investment Board, announced plans to step down as chair of the Alberta pension and investment manager.

Stephen Harper's name in mix as potential head of AIMCo

AIMCo's performance before last week's ‘shocking’ purge

Representatives for Harper have not responded a request for comment.

On the day the board was let go, Horner said he expected to have a new board in place within 30 da

Canada Post strike: Ottawa not looking at forced end, minister says

UNLIKE THE LONGSHOREMENS STRIKE

By Sean Previl & Craig Lord

Global News
Posted November 15, 2024

Canada Post workers are on strike after failing to reach a negotiated agreement with their employer. As Troy Charles reports, some BC workers are among the roughly 55,000 that are now off the job.

Canada’s labour minister said the federal government is focused on getting an agreement at the bargaining table as Canada Post workers have walked off the job in a nationwide strike.

“I’m not looking at any other solution other than negotiation,” Labour Minister Steven MacKinnon told reporters in Montreal. “Right now, every day is a new day in collective bargaining and we are going to continue to support the parties in any way we can and make sure they are able to try and get a negotiated agreement.”

Canada Post is warning Canadians will face delays in receiving their mail, and postage already in the system will not be delivered, with a few exceptions after the union said negotiations failed to reach an agreement by Friday.

MacKinnon said that he had directed all resources in his department towards helping the parties reach an agreement, but said he would characterize the negotiations as “extremely difficult.”

“There are many big issues to solve at the table, and not a lot of progress has been made on those big issues,” MacKinnon said.

What does a strike mean for your mail?

The union had delivered a strike notice on Tuesday, warning it would be in a legal position for job action as of 12:01 a.m. Eastern on Friday. When that deadline passed, the union said it had begun strike action.

“Some 55,000 postal workers represented by the Canadian Union of Postal Workers (CUPW) went on a nationwide strike on Friday, November 15 at 12:01am ET,” the CUPW said in a statement on Friday morning.

Canada Post warned in a statement Friday that “customers will experience delays due to the strike activity,” affecting millions of Canadians and businesses. Service to remote and Northern regions that rely on Canada Post deliveries will be shut down.

There will be no delivery of mail or parcels during the strike and some post offices will close, according to the Crown corporation.

Retail analyst Bruce Winder told Global News on Friday that Canadians who need to send letters or packages on a tight turnaround will have to turn to private carriers, but he warned “it’s going to cost a little more.”

“Realistically if you’ve got gifts to send to loved ones, you probably should use alternate methods like the couriers,” he said.

Service guarantees on any items already in the postal system will be affected and no new items will be accepted for mailing until after the strike ends.

However, Canada Post workers will still deliver benefits cheques on Wednesday, Nov. 20, according to a notice posted in the window of a shuttered postal office in Ottawa on Friday.

Nationally, this includes the Canada Pension Plan, Old Age Security, Veteran Affairs Pension Plan and the Canada Child Tax Benefit; in Quebec, the provincial pension plan and child assistance payments will still go out; in Alberta, pension cheques from Alberta Seniors will be delivered as usual.

View image in full screenA Canada Post office on Sparks Street in Ottawa posts a notice informing customers that benefits cheques will still be delivered despite a national strike on Friday, Nov. 15, 2024. Amanda Connolly / Global News

Canada Post warned that any disrupted postage will be delivered on a first-in, first-out basis once operations resume, but warned the impacts will likely be felt in the days after the strike ends.

Why is Canada Post on strike?

CUPW issued a 72-hour notice of strike action on Tuesday, with it entering a legal strike position as of 12:01 a.m. Eastern this morning.

Hours after the union announced its plans earlier this week, Canada Post issued its own notice of lockout to take effect Friday, noting that its collective agreements with both rural and urban workers would no longer apply.

A Canada Post spokesperson told Global News in an email Friday that the shutdown is not considered a lockout.

“This is a work stoppage resulting from CUPW’s decision to launch a nationwide strike. Canada Post was committed to maintaining operations while talks continue,” the statement read.

The CUPW meanwhile said the decision to strike was a “difficult” one that came after a year of bargaining with the employer.

“Canada Post had the opportunity to prevent this strike, but it has refused to negotiate real solutions to the issues postal workers face every day. Instead, Canada Post left us no choice when it threatened to change our working conditions and leave our members exposed to layoffs.”

The statement continued: “Our demands are reasonable: fair wages, safe working conditions, the right to retire with dignity, and the expansion of services at the public post office. Postal workers are proud to serve their communities, and we want to do the job we love. A strike is a last resort. We still believe we can achieve negotiated collective agreements, but Canada Post must be willing to resolve our new and outstanding issues.”

Canada Post said the shutdown comes at a “critical juncture” for the postal service, which has posted losses of more than $3 billion since 2018.

The employer claimed that it has made offers for wage increases of 11.5 per cent over four years in addition to measures protecting defined-benefit pensions and job security.

“To help secure the future of the company and grow our parcel business, Canada Post has put forward proposals to offer seven-day-a-week parcel delivery, more competitive pricing and other important improvements. This new delivery model is essential for the future of the company, and critical to our ability to afford the offers,” the Canada Post statement read.

The union has previously said Canada Post’s offers “fall short.”

CUPW is not convinced that this seven-day delivery plan will protect workers’ regular full-time routes on weekdays.

On short-term disability, CUPW is demanding to include 10 medical days and seven personal days in the collective agreements, but Canada Post refuses to budge from 13 personal days, the union has said.

What could Ottawa do?

This isn’t the first work stoppage at the Crown corporation, with union members having conducted rotating strikes in both 2018 and 2011, and Canada Post locking out employees in the latter case.

In both cases, the federal governments at the time — the Liberals in 2018 and Conservatives in 2011 — passed back-to-work legislation to end the strikes.

Organizations representing businesses have warned of the impact ahead of the holiday season.

Matt Poirier, vice-president of federal government relations for the Retail Council of Canada, told Global News on Wednesday this was the worst time for a work stoppage.

“This is one of the main suppliers for mail delivery for retail,” he said. “It couldn’t come at the worst time during the holiday season.”

The Canadian Federation of Independent Business said Thursday it was disappointed about the potential for another work stoppage impacting small businesses and urged both sides to come to an agreement.

MacKinnon has previously said the federal government is hopeful both sides will achieve a deal at the table, adding that Ottawa is providing mediation support to both parties.

If Ottawa were to consider back-to-work legislation, it would need support from either the Bloc Quebecois or Conservatives to pass as the NDP have said they would not vote for such a bill.

The government could also impose binding arbitration to end the work stoppages, as it did earlier this week to end work stoppages at Canada’s largest ports in British Columbia and Quebec.

— with files from Global News’ Saba Aziz

EDMONTON

Local Canada Post workers hit the picket line as nationwide strike begins

'We've suffered enough': Union president on strike

Canada Post workers strike in Edmonton

Diego Romero
CTVNewsEdmonton.ca

Journalist
Updated Nov. 15, 2024

Edmonton-area Canada Post workers walked off the job Friday as a nationwide strike began.

The Canadian Union of Postal Workers issued a 72-hour strike notice earlier this week, saying it's been asking for fair wages, safer working conditions and other improvements over nearly a year of bargaining.

Approximately 55,000 workers are striking, the Canadian Union of Postal Workers said.

Canada Post workers went on strike early Friday after failing to reach a negotiated agreement with their employer, exactly one year after talks began.

The Canadian Union of Postal Workers (CUPW) says approximately 55,000 workers in its urban, rural and suburban mail carrier (RSMC) bargaining units are striking, claiming little progress has been made in the bargaining process.

"Canada Post had the opportunity to prevent this strike, but it has refused to negotiate real solutions to the issues postal workers face every day," the union said in a statement.

"Instead, Canada Post left us no choice when it threatened to change our working conditions and leave our members exposed to layoffs."

The strike action comes ahead of Black Friday and the beginning of the holiday season, when Canadians rely on the postal service to send and receive gifts, packages and cards.

Canada Post said in a statement Friday morning that its operations will shut down, affecting millions of Canadians and businesses.

Mail and parcels, the Crown corporation said, will not be processed or delivered during the strike, and some post offices will be closed. Service guarantees will be affected for items already in the postal network and no new items will be accepted.

Related video: 55,000 Canada Post workers go on nationwide strike, union says (cbc.ca)

cbc.ca A Canada Post strike is looming. Here's how some N.B. businesses could be impacted
2:52

\cbc.caCanada Post workers go on strike across country
0:53

\cbc.ca Canada Post workers on strike, mail and parcels won't be delivered
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The union and the company have agreed that benefit cheques will still be mailed out during the strike, including for the Canada Child Benefit, Old Age Security and the Canada Pension Plan.

Once operations resume, the corporation said, mail and parcels will be delivered on a first-come, first-serve basis, but "a national strike of any length will impact service to Canadians well after the strike activity ends."
No plans for back-to-work bill right now, says labour minister

Earlier this week, Canada Post said progress in the negotiations had been "slow and lacking on major issues." The two sides began talks toward a new contract on Nov. 15, 2023.

Mark Lubinski, the Toronto local president of CUPW, said that Canada Post workers have fallen behind as the cost of living has gone up, with high rent and inflation leaving employees "unable to survive."

"We're prepared to be out here as long as we need to be," Lubinski told CBC News.

He said Canada Post workers know that they provide an essential service and that they have no other choice after a year of negotiations with the Crown corporation.

"The climate seems to be that Canada Post and other employers are waiting for the government to legislate us back to work," Lubinski said. "We want to negotiate a fair contract for our workers."

A Canada Post employee is pictured in Richmond, B.C, on Thursday. (Ben Nelms/CBC)

During work stoppages in 2011 and 2018, the federal government passed legislation to send Canada Post employees back to work.

So far, government officials say they have no plans to introduce legislation to end the strike.

"I'm not looking at any other solution other than negotiation right now," Labour Minister Steven MacKinnon told reporters in Montreal on Friday morning.

"Every day is a new day in collective bargaining, and we are going to continue to support the parties in any way we can and make sure that they are able to try and get a negotiated agreement."

In a post on social media platform X Thursday evening prior to the strike announcement, MacKinnon said federal mediators have been working with the union and the Crown corporation, and a special mediator has been appointed to support the two sides.

The labour minister or either party in a dispute can request a mediator, per the Canada Labour Code, as has been done in the work disruption at B.C. ports.
No alternative, small business owner says

Workers gave Canada Post 72-hour notice on Tuesday, as the Crown corporation warned that a potential strike would further impact its already dire financial situation.

Canada Post served the union with a lockout notice not long after but said it didn't intend to lock workers out.

CUPW was in a legal strike position as of Nov. 3, after a legally mandated cooling-off period. In a vote last month, more than 95 per cent of both urban and rural workers backed a strike mandate, the union has said.

Canada Post's latest contract offer included annual wage increases that amounted to 11.5 per cent over four years. It also offered protection of the defined benefit pension for current employees, as well as job security and health benefits.

CUPW said that wasn't enough and that the two parties remain far apart on several issues.

"Our demands are reasonable: fair wages, safe working conditions, the right to retire with dignity, and the expansion of services at the public post office," it said in its statement.

A Canada Post mail carrier delivers fliers on their route in Montreal on Wednesday. A strike of urban, suburban and rural postal workers began early Friday, a disruption that comes just ahead of the busy Christmas holiday season. (Christinne Muschi/The Canadian Press)

The Canadian Federation of Independent Business (CFIB) called on the federal government Thursday to use all its powers, including binding arbitration or back-to-work legislation to end the disruption.

The CFIB said in its statement that about 80 per cent of small businesses in Canada rely on Canada Post for shipping goods or for invoicing or receiving payments.

"Letter mail doesn't have an alternative, and that's what most of our shipping is," Rémi Vienneau LeClair, owner of Comic Hunter in Moncton, told CBC News. "It's asking people if they want to pay $20 instead of $2. It's not really an alternative."

Meanwhile, Teamsters Canada has said its members at Purolator won't handle any packages postmarked or identified as originating from Canada Post.

Spokesperson Christopher Monette said in an email ahead of the strike announcement that the CUPW has the Teamsters' full support, and that they believe good union jobs are essential pillars of Canadian society.

Tuesday, November 12, 2024

SAY NO AB PENSION!

Former Canadian prime minister Harper eyed as Alberta pension chairman

By Paula Sambo, Layan Odeh and Dawn LimNovember 12, 2024 at 3:00PM EST

(Bloomberg) -- Alberta’s government has considered hiring former Canadian Prime Minister Stephen Harper to oversee its public pension fund manager, which is without a permanent board after all of its directors were fired last week, according to people familiar with the matter.

Harper’s name has been circulating as a potential chair for Alberta Investment Management Corp. for a number of months, the people said, asking not to be named discussing private matters.

The role would give Harper influence to reshape an organization managing some C$169 billion ($121 billion) of public pension and other government money and with offices from Edmonton to London and New York. The former Conservative politician governed Canada from 2006 to 2015 and lives in the western province.

Alberta Premier Danielle Smith’s government is seeking major changes at Aimco and sacked Chief Executive Officer Evan Siddall and the board last week, saying the firm’s headcount and costs have swelled even as it managed a smaller portion of funds with its own staff. Aimco has more than 200 investment professionals and more than 600 employees in total, according to publicly available information.

Finance Minister Nate Horner is temporarily acting as Aimco’s chairman and sole director, and long-serving bureaucrat Ray Gilmour is interim CEO of the firm, which invests for dozens of pensions and government accounts, including the province’s sovereign wealth fund.

“Alberta’s government will be announcing the new chair of Aimco within the next couple weeks,” Ashley Stevenson, a government spokesperson, said in an emailed statement without commenting further.

Harper now runs Harper & Associates, which provides advice to businesses in the financial services, technology and energy sectors. The firm touts access to Harper’s global network and his experience as a former Group of Seven leader, according to his website. His office did not immediately reply to requests for comment.

Aimco has been through several significant changes in recent years. The firm began a leadership overhaul after a bad bet against market volatility cost it C$2.1 billion when the pandemic roiled markets in 2020. The changes included appointing former BlackRock Inc. executive Mark Wiseman as chair later that year.

Wiseman then led the recruitment of new leadership, including Siddall as CEO. Wiseman stepped down at Aimco at the end of 2023. Chief Investment Officer Marlene Puffer left in September after less than two years in the job.

Under Siddall’s watch, Aimco’s investment team beat its benchmark in the three-year period ended Dec. 31, with its balanced fund returning 6.2% annualized, according to its annual report. The firm outperformed its benchmark in 2021 and 2022 but underperformed last year.

Aimco’s balanced fund earned a 5.6% net return in the first six months of this year.

Harper was first elected to Canada’s House of Commons in 1993, then later left politics to run a conservative organization before returning to seek the leadership of the Canadian Alliance party. That group later merged with another right-leaning party, and Harper ultimately led the Conservative Party of Canada to three straight election victories.

Siddall said on LinkedIn that he is “tying up loose ends, smelling wildflowers, reading, writing, playing guitar (badly), restoring my health and focusing on Sonia, our family and friends.” Siddall is married to Sonia Verma, a prominent Canadian journalist.

Saturday, November 09, 2024

AIMCo upheaval resurrects questions over future of proposed Alberta pension plan

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.”

Author of the article:

By Matt Scace
Published Nov 08, 2024

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.
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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.

Confidence in AIMCo at risk, expert says

The province’s offensive on the issue came to a halt late in 2023, as Premier Smith has said the province needs an agreed-upon estimate on Alberta’s entitlement before forging ahead.

“(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.”
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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.

David Climenhaga

Yesterday Alberta Politics

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.”

But why now?

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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.

Calgary·Analysis

After changes at AIMCo, United Conservatives now own successes and failures of fund giant

Ousting board and CEO a blow to agency's independence: top pension fund analyst

Jason Markusoff · CBC News · Posted: Nov 09, 2024

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."

Alberta government fires AIMCo board, four top executives, in 'reset' for pension fund manager

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.

a mall in the dark — 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."

a men gestures while speaking — 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.

Analysis
Danielle Smith wants to save Alberta's oil wealth, but history shows it's a pledge that's hard to deliver

Analysis
Albertans dread a Canada Pension Plan exit. Will Danielle Smith's $334B claim fix that?

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.”

Author of the article:

Barbara Shecter
Published Nov 08, 2024 •

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.”

AIMCo board firing comes as fund has ‘a lot

of unhappy clients’: columnist

By Jordan Fleguel

BNNBLOOMBERG

November 08, 2024

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.

With files from The Canadian Press

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Monday, November 18, 2024

Friday, November 15, 2024

Canada Post workers went on strike early Friday after failing to reach a negotiated agreement with their employer, exactly one year after talks began.

Tuesday, November 12, 2024

Saturday, November 09, 2024

After changes at AIMCo, United Conservatives now own successes and failures of fund giant

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Social Sharin

Ready, AIMCo, fired