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)
Canada is the biggest supplier of heavy crude oil to U.S. refiners.
Alberta’s government is in talks with energy infrastructure majors to construct more oil pipelines to the United States.
The Canadian oil industry is not particularly worried about the prospect of tariffs
When the expanded Trans Mountain pipeline came online earlier this year, some media reported U.S. refiners should start worrying about the supply of Canadian crude. With a bigger TMX, Canada could now export overseas. Yet now, with a pro-oil administration coming in, Canada’s top oil-producing province is looking south again.
Alberta’s government is in talks with energy infrastructure majors to construct more oil pipelines to the United States, the premier of the province told Bloomberg in a recent interview.
“I know the Americans have increased production pretty dramatically in the last 10 years, but it might not always be that way,” Smith told the publication, adding, “They need to know that if they’re looking for additional supply, they shouldn’t be looking to Iran or Venezuela. They should be looking to their friend up north.”
Indeed, Canada is the biggest supplier of heavy crude oil to U.S. refiners who need to blend it with local light crude to produce fuels. U.S. crude is predominantly light and sweet, which refiners cannot process on its own—and it’s getting lighter and sweeter, which might become a problem down the road. The solution to that problem would be more Canadian heavy.
Canada’s energy exports to the United States two years ago were worth close to $160 billion—most of that in the form of crude oil, refined products, and natural gas. A year later, crude oil exports alone hit a record of some 4 million barrels daily. Of those, 97% went to the U.S., the Canada Energy Regulator reported earlier this year. Speaking of this year, Canadian crude oil exports south of the border broke last year’s record to reach 4.3 million barrels daily in July, the most recent month, for which the Energy Information Administration has factual numbers.
“Since TMX came online in May, early data indicate that refiners on the U.S. West Coast have been key buyers of the new export volumes,” the EIA said in its report on Canadian oil imports. “Between June and September, the U.S. West Coast accounted for just over half of all maritime crude oil exports out of Western Canada, with the rest going to destinations in Asia, according to data from Vortexa Analytics,” the EIA also said.
So, it appears U.S. refiners had nothing to worry about really because even with the Trans Mountain pipeline with tripled capacity, most of Alberta’s heavy crude is going to them as the closest destination for the crude—and as alternative supply options remain challenging due to factors such as distance and sanctions. No wonder, then, that Alberta’s government wants to increase the flow of oil south.
Some observers point out Trump's tariff promise as a potential problem in this respect. “The one thing that's the big cloud that's hanging over in terms of uncertainty is Trump's proposed tax on all imports, anything between 10 to 20 per cent,” Al Salazar, head of macro oil and gas research at Enverus, told CBC. “It kind of doesn't make sense to tax crude imports into the U.S. because that's going to push up gasoline prices and be inflationary for U.S. citizens. But on the other hand … in terms of supply chain, that is really concerning.”
Reuters, however, reported last week that the Canadian oil industry is not particularly worried about the prospect of tariffs—because it is the biggest supplier of heavy crude to the U.S. and because of those abovementioned problems with potential alternative suppliers.
"If you were to slap on a bunch of tariffs for Canadian oil, it's not like there's an alternative readily available,” BMP Capital Markets analyst Jeremy McCrea told the publication. Other analysts agree that the chances of Trump taking his tariff promise literally and imposing import levies on every single commodity entering the U.S. were rather limited.
On the other hand, Trump may take action on a pipeline project that President Biden killed as soon as he entered office in 2020: Keystone XL. Dubbed unnecessary by the pro-transition Democratic federal government, whose term ends in January, the pipeline could significantly increase Canadian crude flows to the U.S. if built. And with Trump in the White House, it might get built.
“I think Keystone XL might be back on the table. It’s all about providing cost-effective energy,” the president of oil producer Ensign Energy Services told the Calgary Herald’s Chris Varcoe. “I don’t think they will hit Canadian oil and gas (with a tariff) … He won’t want to increase the cost of energy coming into the U.S,” Bob Geddes added.
So, it seems there is a will to boost the flow of Canadian crude oil to U.S. refiners on both sides of the border. There is a way as well, with an industry-friendly administration in office. Now, the big problem that remains for Albertan oil producers is how to respond to the planned 35% emission cut mandate that the Trudeau government announced earlier this month.
By Irina Slav for Oilprice.com
Newfoundland wind-to-hydrogen company eyes data centre as international market lags
ST. JOHN’S, N.L. — A company hoping to build a multi-billion-dollar wind-to-hydrogen project in western Newfoundland is eyeing other options as Canada’s plans to supply Europe with green energy have not yet materialized.
Led by seafood mogul John Risley, World Energy GH2 is developing a concept for what it calls a “renewable energy campus,” which would use fuel produced from its operations, a company spokesperson confirmed in a recent email.
As first reported by news outlet allNewfoundlandLabrador.com, the campus would harness power from the planned wind turbines to power a data centre aimed at artificial intelligence companies.
“As the commercial-scale green ammonia market is taking longer to develop than expected, there are other opportunities for renewable energy that can combat climate change on a larger scale,” company spokesperson Laura Barron said in a recent email.
World Energy GH2 is angling to become Canada’s first commercial green hydrogen operation, but it has competition. Its Project Nujio’qonik includes plans for a plant in Stephenville, N.L., that would produce hydrogen and convert it to ammonia for shipping. Several onshore wind farms would power the plant.
It is one of at least four wind-to-hydrogen proposals registered with the Newfoundland and Labrador government for consideration, though it is the only one approved so far. The project has met with opposition from some western Newfoundland residents concerned about their region’s delicate ecosystem.
German officials flew to Stephenville in 2022 to sign a commitment with Canada to create an alliance that would see Canadian-produced green hydrogen shipped to German buyers by next year.
That goal may be too ambitious, said Amit Kumar, an engineering professor at the University of Alberta.
It’s still too expensive to produce green hydrogen in Canada and convert it to ammonia for shipment to Europe, where it would be converted back into hydrogen, Kumar explained in a recent interview. Each step in that process adds cost.
It will likely be at least another decade before the technology improves enough — and the proper infrastructure is built — to make green hydrogen produced in Canada cheap enough for German buyers, he said.
“We have not developed the infrastructure to export it, to convert it, to liquefy it — either we liquefy it or convert it to ammonia — and to export it to Germany,” Kumar said. “I think it’s going to happen, but it will take time.”
He agreed that a data centre powered by wind would likely make economic sense in the meantime.
In a recent email, the Newfoundland and Labrador government said it had not been formally advised of any data centre plans by World Energy GH2. Any such plans would need government approval, said a spokesperson for the Department of Industry, Energy and Technology.
Tom Rose, the mayor of Stephenville, said he, too, has not been informed of any data centre plans. However, he said he has met with companies interested in data centre opportunities in the region, given that World Energy GH2’s plans to develop renewable energy there.
“The economic footprint of where (artificial intelligence) is going, and its impact on on the globe, it’s just growing and growing and growing,” Rose said in a recent interview. “And here we are with an opportunity to have that data being driven by the best, greenest energy hub region in North America.”
Stephenville is home to roughly 7,300 people and a local College of the North Atlantic campus. Rose said he has no concerns that World Energy GH2 may not be able to find enough skilled workers for a data centre.
“I think it’ll be no problem to attract expatriate Newfoundlanders, people who want to immigrate into Canada and work in Stephenville, from all parts of the world,” he said.
This report by The Canadian Press was first published Nov. 19, 2024.
Monday, November 18, 2024
TRUMP SOCK PUPPET
Danielle Smith '1,000 per cent' in favour of ousting Mexico from trilateral trade deal with U.S. and Canada
HOPES TO GET KEYSTONE PIPELINE BUILT
Alberta Premier Danielle Smith speaks at a news conference regarding a new Indigenous energy project with TC Energy in Calgary, Alta., July 30, 2024.
Alberta Premier Danielle Smith says she agrees it could be time to cut Mexico out of the trilateral free trade agreement with Canada and the United States.
"Mexico has gone in a different direction, and it's pretty clear that the Americans have indicated that they want to have a fair trade relationship," Smith told CTV's Question Period host Vassy Kapelos, in an interview airing Sunday. "Mexico is not in a position to be able to offer that, especially with the investment that they have from China."
The trilateral deal was first inked in 1994, at the time called NAFTA, before being renegotiated during former president and now-president-elect Donald Trump's first term.
Trump in this last election campaign vowed to reopen the agreement when it comes up for review in 2026.
Ontario Premier Doug Ford, meanwhile, floated the idea earlier this week of ousting Mexico from the trilateral deal in favour of a bilateral one between just Canada and the U.S., a proposal of which Smith said she is "a thousand per cent" in support.
The majority of what Alberta sends to the U.S. is energy exports. According to Smith, Alberta has a $188-billion trade relationship with the United States, compared to the $2.9-billion trade relationship with Mexico.
"It's important, but our absolute number one priority is maintaining those strong trade ties with (the) United States, and if that requires us to do a bilateral agreement, then that's what we should do," she said.
On Tuesday, Ford accused Mexico of being a "back door" for China to get its products, namely vehicles, into North America, "undercutting" Canadian and American workers.
On Saturday, at the end of the APEC summit in Lima, Peru, Prime Minister Justin Trudeau called Mexico a “solid trading partner,” but acknowledged concerns around Chinese investment in its economy that “need to be addressed.”
“I am hopeful that we’re going to be able to work constructively over the coming months and perhaps years to ensure that North America remains an advantageous place for North Americans, for our workers, for our middle class, and creates real growth,” Trudeau said.
Meanwhile, Deputy Prime Minister Chrystia Freeland told reporters on Wednesday that she's heard concerns from both the outgoing Biden administration and people connected to the incoming Trump administration that "Mexico is not acting the way that Canada and the U.S. are when it comes to its economic relationship with China."
"I think those are legitimate concerns for our American partners and neighbours to have," Freeland said. "Those are concerns that I share."
Derek Burney, who was former prime minister Brian Mulroney's chief of staff when the original NAFTA was negotiated, said a Canadian push to exclude Mexico from the agreement would be "childish."
Burney — who later served as the Canadian ambassador to the U.S. — told Kapelos, also in an interview airing Sunday, that Canada should focus on its own relationship with the U.S., instead of concerning itself with Mexico.
"I don't think we need to be provocative," he said. "I think the Mexicans are doing things that are going to give them enough difficulty with the Americans without our help."
"So no, I wouldn't recommend that we take that action," he added.
Burney said the Canadian focus should be on areas of alignment and potential collaboration with the U.S., namely when it comes to energy, liquified natural gas and critical minerals.
"The Mexicans are going to have a boatload of problems to deal with, with the Americans," Burney also said. "They don't need our help, and they won't seek our help, so let them deal with their own problems with the Americans."
Burney in his interview also discussed the need for Canada to spend more on defence, and faster than it currently plans to, if it wants to be taken seriously on other issues when negotiating with the United States.
And Smith in her interview also discussed the federal government's oil and gas sector emissions cap — a policy she's vehemently opposed — and her efforts to work with the people Trump has announced he plans to bring into his administration.
Friday, November 15, 2024
Canada Post strike: Ottawa not looking at forced end, minister says
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.
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
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.
In the Alberta capital region, CUPW 730 asked workers not to report to work as of Friday morning and to hit the picket line instead.
There are three picket lines in Edmonton, one in St. Albert and one in Sherwood Park.
"It's very disappointing for everyone involved, we'd rather not be doing this," CUPW 730 interim president James Ball told CTV News Edmonton. "We would rather have come to a negotiated solution six months ago but we're not meeting anywhere. The sacrifices that are going to be made by our members are not small. They're big issues…and it's unfortunate that it's going to affect the public."
Mail and parcels will not be delivered during the strike and some post offices will be closed, Canada Post said.
A number of City of Edmonton services will be impacted during the strike.
With files from The Canadian Press
Canada Post workers hit the picket line in Edmonton on Friday, Nov. 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.
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.
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.
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.
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.
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.
