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)
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.
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.
With files from The Canadian Press
Tuesday, September 24, 2024
Poilievre makes case for taking down the government to restore 'promise of Canada'
Laura Osman Tue, September 24, 2024
OTTAWA — Conservative Leader Pierre Poilievre urged MPs to defeat the Liberal government on Tuesday, but opposition parties are turning the debate on his non-confidence motion into a referendum on the Conservative party's policies instead.
Poilievre introduced a non-confidence motion in the opening minutes of the House of Commons sitting Tuesday, delivering a campaign-style speech laying out his vision for Canada under a Conservative government.
He said his plan is "to bring home the promise of Canada, of a powerful paycheque that earns affordable food, gas and homes and safe neighbourhoods where anyone from anywhere can do anything. The biggest and most open land of opportunity the world has ever seen: that is our vision."
Polls have favoured the Conservatives for more than a year now, and if they were to hold true in the next election it could result in a Conservative majority government.
Poilievre told the House if that happens he would lower taxes and eliminate the price on carbon, instead fighting climate change by approving large-scale green projects and using the revenues to reduce government debt.
"We will cap government spending with a dollar-for-dollar law that requires we find $1 of savings for every new dollar of spending," Poilievre said.
"We will cut bureaucracy, waste and consulting contracts."
Poilievre and his party have not been specific about where exactly those cuts will come from. The NDP's Jagmeet Singh asked Poilievre if his government would dismantle the dental-care program the Liberals instituted in co-ordination with the NDP, but the Conservative leader wouldn't say one way or another.
Those unidentified cuts are the very reason Singh said his party wouldn't vote to bring down the government.
"We are going to fight today against Conservative cuts and against the Conservative motion," Singh told the House.
Debate on the motion will conclude Tuesday with the vote scheduled to take place Wednesday afternoon.
Both the NDP and the Bloc Québécois indicated last week they would not support the non-confidence motion because they don't support the Conservatives. If they vote no, the motion will be defeated and the Liberal government will survive its first test since its supply-and-confidence deal with the NDP ended earlier this month.
If the motion were to pass, the government would be defeated and Canadians very likely would see an immediate election.
The Bloc Québécois said they'd rather use the opportunity presented by the minority Parliament to negotiate with the Liberals, rather than trigger an election that would likely install Poilievre as prime minister.
"We listen to the Conservatives and are not sure that we're so eager to see them take power," the Bloc's House leader Alain Therrien told the House in French on Tuesday.
He said Poilievre has no plan to address the challenges of Quebec's distinct society.
"There are situations in Quebec that are quite different from the rest of Canada," he said.
The Bloc has asked the Liberals to green-light the funding for their private member's bill to raise pension payments for seniors under the age of 75.
The government hasn't committed to doing that. The parliamentary budget officer has estimated the proposed change would cost about $16 billion over five years.
The debate in the House more closely resembled a debate over the Conservative vision for Canada than the government's, Liberal House leader Karina Gould said during question period.
"Today what we are doing is demonstrating that this House doesn't have confidence in the Conservative Party of Canada," she said.
The prime minister was not in Ottawa for the debate, and is instead representing Canada at the United Nations General Assembly in New York.
He was asked about the non-confidence motion after U.S. President Joe Biden used his speech at the UN to reflect on his decision to withdraw from his party's ticket in the upcoming election, saying that he chose to think about the people he serves rather than his own power.
"The Conservatives are very much thinking about power right now," Trudeau said in response.
"I'm thinking about how we can best help Canadians. I'm thinking about how to put the best balance sheet in the G7 in service of Canadians, to invest in Canadians. Confident countries invest in their citizens. Right now, Pierre Poilievre is offering cuts."
The Conservatives have another chance to introduce a non-confidence motion on Thursday during a second opposition day in the House of Commons. There are a total of seven opposition days required this fall, of which five will go to the Conservatives.
This report by The Canadian Press was first published Sept. 24, 2024.
Laura Osman, The Canadian Press
Canada’s Tories target Trudeau as they seek seismic shift in political landscape
Leyland Cecco in Toronto Tue, September 24, 2024 at 9:00 a.m. MDT·5 min read
Justin Trudeau at a summit at the United Nations headquarters in New York City, on Sunday.Photograph: Caitlin Ochs/Reuters
Canada’s Conservative party will make its first bid to unseat prime minister Justin Trudeau this week, the latest attempt in its decade-long aim of restoring the Tories to power.
Buoyed by favourable polls, a cost of living crisis and an increasingly unpopular prime minister, the Conservative leader, Pierre Poilievre, will introduce a motion of non-confidence in the minority government: a long-shot bid to force the government to call an election.
The move, which lawmakers will debate on Wednesday, is doomed to fail, with smaller parties agreeing to temporarily support the incumbent Liberal party.
But the attack underscores the fragile state of Canada’s governing party and the raw political calculation leaders are making as they jockey for position before the next federal election, which must occur before the fall of 2025.
One polling aggregator has the Conservatives winning a strong majority, relegating all other parties to “also-ran” status. Another has Poilievre’s Tories at 42% support, with the Liberals at 24%.
When Trudeau eked out an electoral victory in 2021, his party was forced into its second consecutive minority government, meaning the Liberals lacked sufficient representation in parliament to pass legislation on their own. In order to implement their agenda, the Liberals were forced to make a “confidence and supply” pact with the leftwing New Democrats (NDP).
But earlier this month, the NDP withdrew from the agreement, saying the Liberals “don’t deserve another chance”. The move cast the country in political uncertainty and reflected a political landscape that has changed dramatically since the agreement was first made.
In his ninth year as prime minister, Trudeau is deeply unpopular and facing calls within his party to step down to avoid a deeply embarrassing electoral loss that could push the party to a distant third-place finish.
“I think you are only here for another year,” a steelworker told Trudeau in a recent exchange that captured the fatigue and frustration many Canadians feel towards the prime minister.
Jagmeet Singh, the NDP leader, has failed to convert his own political popularity into electoral success and also faces evergreen questions over the relevance of a party whose legislative aims seem indistinguishable from those of the Liberals.
“They don’t want to run to election anytime soon,” said Lori Turnbull, director of Dalhousie University’s school of public administration. “They still have to prove that they got something out of this deal and he needs to show that party has its own agenda, apart from what they’ve done for the Liberals for the past two and a half years.”
Poilievre, the combative Conservative leader, has found immense success in his laser-focused attack on Trudeau’s handling of a protracted cost-of-living crisis.
The chief target of Poilievre’s attacks has been Canada’s nationwide carbon tax, a levy once heralded as a global model that is now all but doomed by national politics.
Poilievre’s attacks on the tax have landed him unlikely allies: Singh recently backed away from the carbon levy, after supporting it for years, incorrectly suggesting the revenue-neutral tax put an unfair burden on “working people’s shoulders”. Economists and political scientists agree that lower-income Canadians come out ahead under the scheme, with nearly 80% of residents receiving more in quarterly payments than they pay in tax. Poilievre has also targeted Singh for propping up a Liberal government which Singh himself has suggested is captive to corporate interests.
“He is a fake, a phony and a fraud. How can anyone ever believe what this sellout NDP leader says in the future?” Poilievre said to Singh during a sitting of parliament last week.
Singh’s withdrawal of support for the Liberals might have harmed his own electoral prospects, but inadvertently benefited another leader: Yves-François Blanchet of the sovereigntist Bloc Québécois.
Blanchet has stepped in to fill the void left by the NDP’s exit from the confidence and supply agreement, but he has been open about the hardheaded political calculus behind the move.
“It’s not [about] supporting the government. It’s [about] not having them fall, soon,” Blanchet told CBC News. “First, I will let this vote instigated by the Conservatives go through. They will lose it, and by the way lose face, and this is what they deserve presently because they are not doing politics in a clean way … I ask for things and if I don’t get it, [the government] will fall. And that’s the end to it.”
In a surprise byelection defeat last week, Trudeau’s party lost the riding of LaSalle–Émard–Verdun, a district that had been held almost exclusively by Liberals for more than 50 years. It followed another defeat in June, when the Liberals lost a safe seat in downtown Toronto.
The two losses reflect a souring public opinion of Trudeau’s government: the cost of living has surged alongside a housing shortage and policy failures and mismanagement have eroded strong support for immigration.
Despite such setbacks, Turnbull said that the Liberals were still in a position of comparative strength.
“As much as the Liberals look to be in a very weak position – because of the polling, because of the byelection losses, because ministers are leaving and staffers are leaving – even though it’s a complete mess, they still have a really significant minority in the House of Commons,” she said. “In order for there to be a loss of confidence, all three opposition parties would have to agree. And I don’t think we’re there yet.”
In the news today: MPs set to debate Tory non-confidence motion
The Canadian Press Tue, September 24, 2024
Here is a roundup of stories from The Canadian Press designed to bring you up to speed...
MPs set to debate Tory non-confidence motion
The House of Commons is set to debate a Conservative non-confidence motion today, as the Tories try to take down Prime Minister Justin Trudeau's government.
It's the first test for the minority government since the NDP ended its supply-and-confidence deal with the Liberals earlier this month.
The Bloc Québécois and NDP have already said they will not support the motion, which will be voted on Wednesday.
Conservative Leader Pierre Poilievre has been criticizing NDP Leader Jagmeet Singh for his refusal to bring down the Liberals.
That all but eliminates the possibility of a snap election this week.
Here's what else we're watching...
Inquiry to hear parliamentary security officials
A federal inquiry into foreign interference is slated to hear today from parliamentary security officials including House of Commons sergeant-at-arms Patrick McDonell.
The testimony could shed new light on efforts by hostile countries to target parliamentarians via cyberspace and what officials are doing to counter the threats.
The inquiry's latest public hearings are focusing on the capacity of federal agencies to detect, deter and counter foreign meddling.
Chief electoral officer Stéphane Perrault, whose agency has floated several proposals to tighten the security of candidate nominations, is also slated to testify.
Elections Canada has suggested barring non-citizens from helping choose candidates, requiring parties to publish contest rules and explicitly outlawing behaviour such as voting more than once.
Opening arguments expected in Hoggard trial
Opening arguments are expected to get underway today in the sexual assault trial of Canadian musician Jacob Hoggard.
Hoggard is facing a sexual assault charge for an incident alleged to have happened on June 25, 2016, in Kirkland Lake, Ont.
The former Hedley frontman pleaded not guilty to that charge on Monday.
His trial is taking place in nearby Haileybury, a community within Temiskaming Shores in the northeastern part of the province.
Hoggard had elected at the end of last year to be tried by a jury in the Superior Court of Justice.
Schools figuring out new world of cellphone bans
From cellphone "hotels" to patchwork policies to recalibrating lesson plans, teachers and schools across Canada are learning to navigate a classroom without cellphones.
But some say that despite recent bans and restrictions on the phones, little has changed.
A number of provinces, including Saskatchewan, Ontario, Manitoba and Alberta, introduced plans to limit cellphone usage beginning this school year. There is a mix of restrictions along with outright bans.
The changes come as educators try to get students to log off and stay focused, noting online squabbles have forced their way into classrooms and social interactions among youth have dwindled.
It’s early days, with policies still being crafted, leading to some schools finding creative ways to curb students' itchy cellphone fingers.
Home renovations rising in major markets: report
A new report says a boost in spending on home renovations during the pandemic has helped contribute to higher prices for single-family homes despite downward market pressure.
The report by Re/Max Canada looked at the evolution of housing stock and trends affecting home values in the Toronto and Vancouver areas, Canada's two largest real estate markets.
The report, released Tuesday, said national renovation spending increased by an estimated $300 billion between 2019 and 2023, led by home renewal and revitalization projects in the Toronto and Vancouver markets.
That marked an eight per cent jump from the previous five-year period.
The report said revitalization "remains one of the most underestimated factors behind escalating housing values."
This report by The Canadian Press was first published Sept. 24, 2024.
Minority governments, major stakes: a look at their role in federal politics
Jim Bronskill Tue, September 24, 2024 at 2:00 a.m. MDT·4 min read
OTTAWA — Prime Minister Justin Trudeau's minority government is expected to face its first serious test this week since the NDP withdrew from an agreement to support the Liberals.
Conservative Leader Pierre Poilievre has put forward a motion stating the House of Commons has no confidence in the prime minister or the government. Members will debate the motion on Tuesday and vote on it Wednesday.
The New Democrats and Bloc Québécois have said they intend to vote against the motion, avoiding a general election.
What is a minority government?
A minority government lacks a majority of the members of the House of Commons, meaning it depends on support from members of other parties to pass legislation, including budgetary measures.
Are minority governments a rarity?
They're actually quite common. Thirteen minority governments have emerged from federal elections. Two others were a result of governments being replaced between elections. (However, Parliament did not meet during one of the two, the government of Alexander Mackenzie, who soon went on to win a majority.)
Justin Trudeau has presided over two minorities, as did his predecessor, Stephen Harper.
How do they work?
There have been no coalition governments arising from a minority scenario at the federal level.
However, until recently the Liberals and NDP had a supply-and-confidence deal that would keep the minority government led by Trudeau in power and ensure progress on some mutually agreeable policies.
In addition, between 1972 and 1974, the NDP had an informal understanding with the Liberals that kept the government of Pierre Trudeau, Justin's father, in place.
More common are minority governments that secure support for key votes on an ad hoc basis.
Minority governments have also been known to act as if they held a majority, notably the Progressive Conservative governments of John Diefenbaker in the 1950s and '60s and Joe Clark in 1979, as well as the early period of Lester B. Pearson's Liberal government in the '60s.
Do minority governments last as long as majority ones?
Generally, no. A minority government could make it to the end of a traditional four-year mandate. However, they are often defeated on an important vote in the House or pull the plug themselves with the aim of securing a stronger mandate at the ballot box.
The length of minority governments varies dramatically, from the brief tenure of Arthur Meighen's Conservatives in 1926 to the stint of more than three years and seven months of William Lyon Mackenzie King's Liberals from 1921-25.
How do minority governments end?
Parliamentary practice and tradition dictate that if the government is defeated in the House on a question of confidence, voters head to the polls.
"What constitutes a question of confidence in the government varies with the circumstances," says the authoritative volume "House of Commons Procedure and Practice."
"Confidence is not a matter of parliamentary procedure, nor is it something on which the Speaker can be asked to rule."
Does that mean losing a vote in the House spells the end of a minority government?
No. Minority governments of Pearson and Pierre Trudeau each lost a number of votes in House without resigning.
A confidence motion may be clearly worded like the one the Conservatives have proposed this week. It could be a motion on a matter the government declares a question of confidence, or it might be related to government budgetary policy or the reply to the Speech from the Throne.
Even so, Pearson lost a vote on a budget matter but survived upon seeking, and winning, on a clear vote of confidence.
Has there been a particularly memorable defeat for a minority government?
Papers were tossed into the air in the House after Clark's government fell in 1979 in a 139-133 vote on its budget.
"Only six months ago, Canadians voted to change the government of Canada because they wanted to change the direction of this country," Clark told a news conference after the vote. "By their action tonight, the opposition parties are saying that Canadians were wrong to make that decision."
However, the defeat set the stage for the early 1980 return of the Liberals led by Pierre Trudeau with a majority mandate.
(Sources: Transition to the 44th Parliament: Questions and Answers by Andre Barnes and Laurence Brosseau of the Library of Parliament; House of Commons Procedure and Practice, third edition; The Canadian Encyclopedia.)
This report by The Canadian Press was first published Sept. 24, 2024.
Jim Bronskill, The Canadian Press
Tuesday, June 11, 2024
National Bank to buy Western Canada rival for US$3.6 billion
THAT MAKES IT A REAL NATIONAL BANK; NOT JUST IN NAME ONLY
Christine Dobby, Derek Decloet and Paula Sambo, Bloomberg News
National Bank of Canada agreed to buy Canadian Western Bank for about $5 billion (US$3.6 billion) in stock in a tie-up of two of the country’s regional lenders.
Montreal-based National will pay the equivalent of $52.24 a share for CWB, a premium of 110 per cent over the target’s closing price on Tuesday. The deal requires the approval of two-thirds of CWB’s shareholders and the Canadian government and is expected to close by the end of 2025.
For National Bank, Canada’s sixth-largest lender, the deal represents an opportunity to diversify its earnings away from Quebec, where it’s one of the most dominant financial institutions. Its stability has made it one of Canada’s top-performing banks over the past 12 months, with its stock rising about 21 per cent during that time.
Now National Bank is using the strong valuation on its shares to acquire a weaker rival.
“This transaction is about growth and brings together two great banks with a complementary footprint in personal and commercial banking, and supports our objectives in Western Canada and across the country,” National CEO Laurent Ferreira said in a statement.
National said it has identified $270 million in pretax cost and funding synergies.
Canadian Western has 39 branches and 65,000 clients, mostly in the provinces of Alberta and British Columbia. The bank has worked to diversify from its home province of Alberta, which is prone to the boom-and-bust cycles of the oil business. The firm opened its first branch in Ontario in 2020 and has also bulked up in other areas including equipment-leasing and wealth management.
But shares of the Edmonton-based lender have been trading at a very low valuation — less than 70 per cent of book value. Rising loan losses are a concern for Canadian Western — the key reason the bank missed analyst expectations for earnings in the fiscal second quarter.
National plans to issue $1 billion in new equity. Quebec’s largest pension fund, the Caisse de Depot et Placement du Quebec, said it will help finance the deal by investing $500 million in National Bank via subscription receipts, which will make it the bank’s second largest shareholder.
“CDPQ is proud to continue its long-standing commitment to National Bank by taking part in this transformative acquisition that will enable it to execute a new facet of its expansion plan,” Vincent Delisle, the fund’s head of liquid markets, said in a statement.
We’re passing along information to you about a rally being organized in Edmonton by a grassroots group to send a message to the provincial government that Albertans don’t want their premier politicizing their pension savings.
We will also help to promote any groups or individuals in other parts of the province who want to set up similar opportunities to advocate for the Alberta government to leave our Canada Pension Plan (CPP) savings alone.
The rally in Edmonton is scheduled for this Sunday at 2:00 p.m.
HANDS OFF OUR CPP protest rally 2:00 PM, Sunday, June 9th, 2024 Violet King Henry Plaza 10801 - 99 Avenue, Edmonton
