Alberta Politics
Alberta Finance Minister Travis Toews speaks to the media in 2019 (Photo: David J. Climenhaga).

Teachers are bound to be furious about UCP’s Christmas coup to consolidate control over their pensions

Posted on January 13, 2021, 2:19 am
8 mins

If the Kenney Government’s Christmas Eve coup to consolidate control over $18 billion in Alberta Teachers Retirement Fund assets shows anything, it’s that the United Conservative Party’s investment strategy is as good as its political strategy!

Or maybe we should put that the other way: that the government’s political strategy is as good as its investment strategy. 

Alberta Teachers Association President Jason Schilling (Photo: David J. Climenhaga).

Either way it’s not a compliment. 

Alberta’s 83,000 teachers and retired teachers had just gotten over the shock of learning their pension fund was going to be managed by the Alberta Investment Management Corp., the under-performing Crown corporation better known as AIMCo, whether they liked it or not. 

That change was part of the Reform of Agencies, Boards and Commissions and Government Enterprises Act passed in November 2019, which required ATRF to use AIMCo as its sole investment manager. 

Many called that a hijacking and pointed out that the ATRF historically got better results than much larger AIMCo, which manages government pension plans. However, lots of teachers were reassured by the government’s promise the ATRF would retain control over its own investment decisions. 

As Finance Minister Travis Toews once put it, telling teachers and retirees not to stress themselves, “AIMCo will invest according to the policies set by the ATRF board.”

But on Dec. 23 – not quite Christmas Eve, but close enough for alliteration – Mr. Toews signed a Ministerial Order giving AIMCo a veto over anything the ATRF Board instructs it to do. Apparently AIMCo and the ATRF Board tried to negotiate a management agreement last year, but AIMCo didn’t like the ATRF’s terms, so, voila, the minister intervened. 

No doubt Mr. Toews will now tell teachers and retirees still not to worry, AIMCo won’t do anything crazy – that $2.1 billion it lost gambling on market volatility last year was just a “very unfortunate” one-off – but it can’t be very reassuring to teachers to know just how economical the minister has turned out to be with the truth. 

Alberta Premier Jason Kenney (Photo: David J. Climenhaga).

The ATRF wasn’t told about the order, which appears not to be available anywhere on the government’s website, until Jan. 4. 

The day before yesterday, the ATRF Board posted a news release saying the order will remain in effect until it’s replaced by an investment management agreement “that is the product of mutual negotiations.”

Now that’s negotiating UCP style: You can bargain all you like, but at the end of the day, you’ll have to do whatever the government says. 

So this should wind up Alberta’s 46,000 unionized teachers about their retirement security just as the government is asking them to risk their lives teaching packed classrooms full of runny-nosed kids in the middle of a global COVID-19 pandemic that just won’t quit. 

But, hey, don’t worry, we’ll schedule a vaccine for you one of these days ….

In a news release yesterday, Alberta Teachers Association President Jason Schilling said that in 2019, “the government was adamant that ATRF would retain control over investment decisions. Officials and MLAs told teachers they were overreacting and that they were being lied to. Now we have an investment agreement with loopholes big enough to fit a bad $2.1 billion volatility bet.”

More to the point, one might argue, the ATRF has sufficient assets to cover any such bad bet, and a few more like it!

The ATA news release said Mr. Schilling was “incensed” by the government’s manoeuvre. But don’t worry, many individual teachers will be furious. 

There are those who suspect this is part of a sinister UCP plot to manipulate a public service union into a strike the government can win. But that seems to credit the UCP with too much strategic foresight.

More likely, before they went on holiday, the strategic brainiacs Premier Jason Kenney has surrounded himself with listened to the flim-flam from AIMCo’s sales people and decided to put all their financial eggs in AIMCo’s basket, which was surely an objectively stupid idea. 

They will never admit this was a terrible idea, of course, so if you’re a teacher or an ATRF pensioner and you can’t persuade them they’ll pay at the ballot box, you’re just going to have to live with the results.

When it suffered that huge loss in the spring of 2020, AIMCo had a trading strategy described as “amateurish” in Institutional Investor Magazine. That strategy “blew up spectacularly.” 

AIMCo “had great appetite for effectively selling extreme crash insurance, protecting banks from infinite downside in an unprecedented crash,” the publication noted in another story.

Protecting banks in eastern Canada is an interesting look for Mr. Kenney, with his faux sovereignty association talk and tolerance of Wexit nuttery on the right fringe of the UCP’s base. 

“Infinite downside.” That could be the UCP’s 2023 campaign slogan!

Former Wildrose press secretary rips manipulative UCP press conferences

Politics makes strange bedfellows,* as the old saying goes, so it doesn’t come as a complete surprise progressive types have been tweeting around a newspaper op-ed about the Kenney Government’s manipulative COVID-19 news conferences by Vitor Marciano, who once upon a time was press secretary to Wildrose leaders Danielle Smith and Brian Jean. 

Former Wildrose Party press secretary Vitor Marciano (Photo: David J. Climenhaga).

Impeccable though Mr. Marciano’s conservative credentials may be, he’s certainly right that the “weird deferential presidential-style press conferences” organized by the UCP to update us about the latest coronavirus horrors are failing Albertans badly.  

“This has resulted in the media having limited opportunities to ask questions,” he wrote yesterday, “while the politicians and decision-makers have complete control of the narrative and unlimited ability to spin their way out of hard questions.”

Mr. Marciano’s piece is well worth reading. 

“Alberta is a wealthy province,” he observed. “We can afford a socially distanced second podium on the stage so that we don’t have to waste precious question time on the theatre of hand sanitizing” while the premier runs out the clock answering softball questions from his media allies. 

*For the literal-minded in the Conservative base, it is important to note that this is a metaphor, not to be taken literally. You know, like “defenestration.” 

15 Comments to: Teachers are bound to be furious about UCP’s Christmas coup to consolidate control over their pensions

  1. Dave

    January 13th, 2021

    Well another UCP promise not kept, I suppose just add it to the list. They are not doing well on jobs and the economy either and only so so on pipelines. I suspect there will be a lot of disappointed and upset voters to answer to in the next election.

    It is getting very bumpy so I am beginning to wonder if Kenney will be even be around that long. I get the sense Kenney also needs to watch his right flank, as well as for angry teachers and well just about everyone else is upset with him too. However, there sure seems to be a stirring on the right recently, previously loyal friends in the media calling him out, Danielle Smith mysteriously quiting her day job, MLA Barnes speaking up a bit again and now Mr. Marciano too. Coincidences? Hmm.

    Perhaps Kenney should avoid rotundas for a while, especially at least until after the Ides of March, considering what happened to our past Premier Redford in that month.

    Reply
  2. Anonymous

    January 13th, 2021

    I would trust the UCP as far as I could throw them, in relation to handling teacher’s pensions, or even creating an Alberta Pension Plan. Here is all the proof people need as to why it’s a very bad idea. Remember where the premier of Alberta was before he became involved with provincial politics? Look at what happened when he was in the UCP.
    https://www.cbc.ca/news/business/income-trust-investors-still-angry-one-year-later-1.636907

    https://www.theglobeandmail.com/business/article-alberta-pension-manager-loses-4-billion-on-investment-bet-gone-wrong/

    https://www.theglobeandmail.com/business/article-aimco-reveals-massive-losses-for-albertas-heritage-savings-trust-fund/
    I think the teacher’s pensions will disappear under the negligence of the UCP.

    Reply
  3. tom

    January 13th, 2021

    “Alberta is a wealthy province”: save this quote and put it somewhere safe for the next time Mr. Marciano or any of his fellow-travellers on the austerity train to Kansas starts talking about belt-tightening.

    Reply
  4. Public Servant

    January 13th, 2021

    Jason Kenney despises public sector workers and teachers in particular.

    As usual Mr. Kenney plumbs the depths of hypocrisy. He has been paid handsomely by taxpayers for almost his entire working life and will collect an obscene six figure pension at age 55.

    Reply
  5. Abs

    January 13th, 2021

    The theatre of hand sanitizing at Alberta pressers has been spoofed by an Edmonton comedy troupe on YouTube, and indeed by one former baseball player at one of the conferences, in real time. I have looked forward to it ever since. It is the only reason I would ever watch those things any more. (What’s that…Alberta getting its own vaccine supply from manufacturers…you don’t say.)

    Reply
  6. Bob Raynard

    January 13th, 2021

    “the strategic brainiacs Premier Jason Kenney has surrounded himself with listened to the flim-flam from AIMCo’s sales people”

    You are more optimistic than I am David. My fear (since this is my livelihood we are talking about here) is that Jason Kenney is being influenced by the corporations that paid for his full paid ads during the election.

    The corporate world has succeeded in building a public opinion that they can do things better, and more efficiently, than government, and then convinced conservative governments to adopt the 3P formula for large public projects. Everyday I see the result when I go past Edmonton’s new LRT project which was supposed to begin operation last month. Apparently an unanticipated underground slab of concrete in the river valley has caused work to be delayed the length of the project.

    Flushed with their success in getting governments to adopt the P3 model, I am afraid the corporate world has looked at other large pools of cash the government has that they could tap into and, voila!, discovered $18 billion dollars doing nothing, and have set their hearts on having it for themselves.

    Reply
  7. Lars

    January 13th, 2021

    Is there any reason the Alberta Teachers Federation couldn’t resort to the courts to prevent the UCP government from doing this with their pensions? Seems to me that they’d have a good case.

    Reply
    • anon

      January 13th, 2021

      Resort to the Courts? Ha Ha. The Teachers’ pension will be long gone, along with any teacher 65 and older before the Courts even consider such a case. Besides, Mr. Harper said “parliament is supreme” which means Kenney and Co. can do whatever they want because they were elected.
      Is it even possible to win a majority in Alberta without most of the teachers being on side? Don’t think so. Too bad, so sad.

      Reply
      • jerrymacgp

        January 17th, 2021

        I think it’s past time that the ATA, in its role as the union for Alberta K-12 school teachers, give up its long history of non-partisanship and unaffiliation with the rest of the labour movement, and formally affiliate with the Alberta Federation of Labour & Canadian Labour Congress, and formally endorse the party of labour: the NDP.

        The UCP is not just unfriendly to workers, as the old PCs were. It’s openly hostile to workers and their representatives. Non-partisanship is no longer tenable when you have a governing party that is so openly hostile to a union and its members.

        Reply
    • Comment

      January 16th, 2021

      Unfortunately, there were no viable avenues for challenging this bill. That’s how this government works – strong arm tactics.

      Reply
  8. Jim

    January 13th, 2021

    The teachers pension can’t afford to be gambled with like AIMCO’s management style seems to be. After years of government mismanagement the Teachers pension was finally getting its head above water, as a taxpayer who is now on the hook for more AIMCO losses I’m pissed off. If it were my pension I would demand a competent board not the unqualified lot they currently have at AIMCO, clearly they no idea how to manage a pension or any comprehension of risk.

    Reply
    • Comment

      January 16th, 2021

      The teacher pension fund is doing very well – better than AIMCo. It has out-performed AIMCo for the last six years. In fact, contribution rates have decreased three times in the last three years. This is solely due to high rates of return based on highly competent investment team. And no costly blunders like AIMCo’s billion dollar fiasco earlier this year.

      I know who I would want investing my pension money…and it wouldn’t be AIMCo.

      Reply
  9. Just Me

    January 13th, 2021

    Since there isn’t enough money in the pension funds to financially sustain the O & G industry, the next step will be the province nationalizing that industry, just like they do in Venezuelan socialism.

    Wait…what?

    Reply
  10. Hammer

    January 13th, 2021

    The theme for all of those public service employees like myself is ” I will remember.”
    One and done.

    Reply
  11. David Colley

    January 13th, 2021

    Ah defenestration, those wild Bohemians certainly knew how to deal with corrupt, lying politicians didn’t they?

    Reply

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