Alberta Politics
NDP Opposition Finance Critic Shannon Phillips (Photo: David J. Climenhaga).

Definitive answers about AIMCo’s investment strategy weren’t forthcoming at Heritage Savings Trust Fund Committee meeting

Posted on June 28, 2021, 1:53 am
9 mins

If anyone expected definitive answers about the Alberta Investment Management Corp.’s underperformance compared to that of the Canada Pension Plan Investment Board at Friday’s meeting of the Legislature’s Standing Committee on the Alberta Heritage Savings Trust Fund, they were disappointed.

Unlike the previous 26 of the committee’s quarterly meetings over the past seven years, AIMCo, as the provincial Crown corporation that manages the Heritage fund is better known, didn’t bother sending either its chief executive officer or chief investment officer to answer MLAs’ questions. 

AIMCo Stakeholder Relations Officer Mark Prefontaine (Photo: AIMCo).

What answers were provided by Stakeholder Relations Officer Mark Prefontaine and recently hired Investment Strategy Officer Amit Prakash sounded, as is typical of such affairs, like scripted talking points prepared in advance to address anticipated queries.

NDP Finance Critic Shannon Phillips took AIMCo to task for that absence. 

“This year we’ve seen AIMCo significantly underperform its peers yet again,” she told the committee. “This has cost Albertans billions of dollars. We’ve seen over the past year reports omit key financial return information for Albertans.”

“So this committee comes together to discuss the management of the Heritage fund by AIMCo, but we have no CEO, we have no acting CEO, we have no Chief Investment Officer, we have no board chair here to answer our questions,” she said. 

“I believe that shows a pretty serious oversight and disrespect,” she continued. “So I guess my first question is this: Where are your bosses? Where is the acting CEO? Where’s the chief investment officer? Where’s the board chair? Why aren’t they here today to answer questions about the annual report that we received less than 24 hours ago?”

Mr. Prefontaine’s answer was about what you’d expect under the circumstances, smoothly assuring committee members at the in-person and virtual public meeting that AIMCo’s commitment “is to be accountable and transparent.”

As for Ms. Phillips’ displeasure at the absence of AIMCo’s top executives, he went on, “with all humility and due respect, I do take exception that it’s viewed as any level of disrespect. That’s not our intention. We always intend to have senior leadership in front of this committee to respond to questions.”

Opposition Labour Critic Christina Gray (Photo: David J. Climenhaga).

Top managers missing in action would have been irksome even if the Kenney Government were not openly trying to figure out how to grab Albertans’ portion of the Canada Pension Plan’s investment fund and hand it to AIMCo – to which Section 19 of the Alberta Investment Management Corporation Act says the government can “issue directives that must be followed by the Corporation, the board, or both …”

But given Premier Jason Kenney’s recent assertion he’s “personally become increasingly bullish and supportive of the prospects of an Alberta Pension Plan” – meaning he thinks he has a way to make it happen – the missing managers and the delivery of AIMCo’s annual report to committee members hours before the meeting smack of an attempt to limit the effectiveness of Opposition questions, and their interest to news media.

In the event, notwithstanding the importance of the topic to large numbers of Albertans, no mainstream media outfit seems to have seen fit to write a story on the meeting, at which UCP MLAs pitched softballs and left the heavy lifting to the three NDP committee members.

Opposition Advanced Education Critic David Eggen (Photo: David J. Climenhaga).

In fairness to media, the committee, nowadays chaired by Lacombe-Ponoka MLA Ron Orr, meets four times a year and rarely produces much discussion of interest to reporters. 

On the other hand, never since the Lougheed Government set up the committee in the 1970s has an Alberta Government been eyeing a takeover of the CPP with plans to hand the vast amounts of cash it invests on behalf of ordinary working Albertans to the same underperforming Crown corporation that manages the Heritage fund.

Ms. Phillips asked why committee members were given so little time to examine AIMCo’s report before the quarterly meeting – “so we have five business hours before this committee meeting to actually review an annual report for some, oh, I don’t know, 17, 18 billion dollars in assets!”

“This just undermines Albertans’ trust in your ability to manage billions of dollars on our behalf,” she observed. 

Government staff blamed the delay on the time the Auditor General took looking over the report. 

Standing Committee on the Alberta Heritage Savings Trust Fund Chair Ron Orr (Photo: David J. Climenhaga).

AIMCo’s 2.5 per cent return on assets under management in 2020 compares unfavourably to the CPPIB’s 12.1 per cent. But NDP Labour Critic Christina Gray pointed out that AIMCo’s long-term performance is also worse than the CCPIB’s. 

Mr. Prefontaine suggested at one point it’s because the CCPIB, generally considered one of the world’s top investment management agencies, takes bigger risks.

NDP Advanced Education Critic David Eggen asked about the higher performance bonuses paid by AIMCo to executives and contract investors. 

“We’re not gonna be apologetic for the increased fees that indicate increased performance,” Mr. Prefontaine responded. 

But if you were looking for a coherent explanation of why AIMCo underperforms the CCPIB at Friday’s meeting, you looked in vain. Readers can watch the committee meeting for themselves if they are willing to invest the time.

Mr. Prefontaine’s name will be familiar to Albertans who pay attention  to public sector pension issues. A former assistant deputy minister of finance in the Alberta government, he played a key role in 2014 in the Redford Government’s unsuccessful effort to reduce Alberta public service pension benefits. 

AIMCo Investment Strategy Officer Amit Prakash (Photo: AIMCo).

Those dramatic changes, which then-finance-minister Doug Horner said the Progressive Conservative government intended to unilaterally impose, resulted in large public demonstrations by public sector employees that ultimately played a role in the defeat of the PC government by the NDP in 2015. 

After the 2015 election, Albertans learned from the Finance Department’s 2014-15 annual report that the claims made the year before by Mr. Horner and premier Alison Redford about public service pensions being unsustainable were untrue. 

“The next time right-wing fear mongers try to panic Albertans into making unjustified concessions and swallowing unnecessary cuts, I hope we all remember how wrong they were when they claimed our pensions were insolvent,” Alberta Federation of Labour President Gil McGowan said at the time. 

That’s something to keep in mind if Mr. Kenney, as expected, puts a referendum on the ballot during October’s province-wide municipal elections to try to get Albertans to agree to pulling out of the CPP and creating an Alberta pension plan managed by AIMCo.

16 Comments to: Definitive answers about AIMCo’s investment strategy weren’t forthcoming at Heritage Savings Trust Fund Committee meeting

  1. Just Me

    June 28th, 2021

    “It’s a very difficult job and the only way to get through it is we all work together as a team. And that means you do everything I say.”

    Charlie Croker (Michael Caine)
    The Italian Job

    What we are seeing is a caper in motion, where Kenney has ordered various loyal minions, partisan hacks, and wannabe power players to pull a heist of billions in public pension funds in broad light.

    At this point, Kenney is planning (Hoping? Praying?) that this especially dubious action will not be noticed because of the hoped for mass euphoria of “Alberta Freedom Day”. (formerly Canada Day) While Kenney hopes the ignorant masses will be caught in the drunken indulgence of patio drinking at tens of thousands of establishments, this heist will be set in motion, and with zero transparency, accountability, and absolutely no information for the millions of Alberta stakeholders. Kenney, always a gambler, is a rolling the dice on a bet that is so massive, so boldfaced in its audacity, it’s failure will destroy generations of savings and cause the complete collapse of the fund.

    Losing $1.3 billion on a ill fated pipeline bet is bad enough. But wiping out tens of billions more on similar ill fated bets is just carpet-bombing Albertan’s financial security into oblivion.

    While there are many, many Albertans who voted for Kenney will declare that they didn’t vote for this — well, yes you did.

    Reply
  2. Anonymous

    June 28th, 2021

    I would conclude, based on sound evidence, that an Alberta Pension Plan is an absurd and foolish idea. It was never proposed before the UCP craftily and cunningly got into power, in 2019. The UCP are basically gambling with people’s pension money, through AIMCo, and it hasn’t ended well, nor will it end well. There is a very sour history of the way these pretend conservatives managed Alberta’s money, as well as people’s own pensions and life savings. Once the Alberta PCs stopped collecting the type of oil royalty rates Peter Lougheed was getting, this lost Alberta $575 billion. For the longest time, the Alberta PCs stopped putting money into the Heritage Savings Trust Fund, like Peter Lougheed was doing. The shady premier of Alberta was once in the CPC cabinet. People never saw their life savings again, after the $35 billion income trust fund mistake happened. More recently, the UCP made $4 billion in people’s pension money go into the void, through AIMCo. Teachers in the province of Alberta were never even consulted when the UCP grabbed their pensions, and put them into AIMCo. Their retirements are now at risk. The UCP then made nearly $2 billion of Alberta’s sacred Heritage Savings Trust Fund disappear, also through AIMCo. In 2008, the Alberta PCs let AIMCo manage the Heritage Savings Trust Fund, which was a very dumb move. Postmedia is never going to bring these serious issues to the forefront, or expose them in a proper way, because they are aligned with the UCP, and anything conservative. The other sickening thing is that when these pretend conservatives do not look after Alberta’s finances in a responsible and sound manner, they make the excuses that cuts have to be made, or they claim that Ottawa and Quebec took Alberta’s money. Ralph Klein did this, and the UCP are doing it too. Or, they blame Rachel Notley and the NDP for this. The sad thing is that there are Albertans who fall for this. There is no one else to vote for in Alberta, other than the conservatives, even though the conservatives have shafted Albertans. The older generations tell the younger generations to vote for the conservatives, and can’t give any proper reasons as to why they should. They even make the claim that Ralph Klein got Alberta out of debt, when he didn’t. This is as dumb and as foolish as you can get.

    Reply
  3. tom

    June 28th, 2021

    Kenney should run on it in an election if it’s such a great idea.

    Reply
  4. Political Ranger

    June 28th, 2021

    When are Albertans going to realise that these carpetbaggers are out to fleece the taxpayer public for their own benefit? Cui bono?

    It appears that Kenney, Nixon et al are going to get away scott-free from the absolute corruption of offering pristine Alberta park land to irresponsible foreign coal miners for their own benefit. There also is an amazing silence from the Alberta media on this. Kenney and Nixon seem to have lost out on whatever compensation they were expecting from the Australian Gina Rinehart, owner of the Benga Mining and Riversdale Resources ventures, only because permitting has been suspended for the time being. Who knows what legal and financial remedies these corporations will be seeking from the Alberta gov’t and Alberta tax-payers.

    More importantly, Kenney and Nixon and it seems the whole cabinet were secretly plotting to remove public Crown lands from the control of the public and handed over to privately owned corporations. Again, Cui bono?
    Certainly no Albertans. Some few jobs, unlikely to be filled by Albertans, but no others alive today or into the future. Tiny, tiny, vanishingly small royalties wouldn’t make any positive difference to the Alberta economy but the waste and pollution and toxic legacy left behind by these operations will cost Albertans dearly for many, many generations to come.

    Why would Kenney and Nixon pursue such a deal so cloaked in secrecy? Why are we not asking questions about what happened and who was benefiting? What is the exact nature of this corruption and who exactly should be held accountable?

    Just letting these shifty greaseballs slide on this means they will continue their corrupt efforts to fleece the rubes and red-necks out here on the flats while filling their pockets and lining their nests. Are we really so slow-witted and naive to allow these crooks to freely walk the streets? This CPP fiasco and theft of pension savings is just another, just the latest attempt by this corrupt gang of miscreants.

    Reply
  5. jerrymacgp

    June 28th, 2021

    Hypocrisy, they name is Conservative. While Jason Kennedy’s UCP stonewalls a legislature committee over transparency of AIMCo, his federal ally Erin O’Toole is lighting what little hair he has left on fire over transparency from PHAC over what is, essentially, a Human Resources matter in the firing of two scientists from the Level IV microbiology lab in Winnipeg. If O’Toole can demand the head of PHAC appear before the bar of the House of Commons and produce documents related to that firing, the Alberta Heritage Savings Trust Fund Committee can demand the CEO of AIMCo appear before it.

    Reply
  6. David in Sask

    June 28th, 2021

    Luckily, Lloydminster teachers are in the Sask teachers pension system. Public sector services are governed by Saskatchewan’s system. The hospital being located on the Sask side of the border.

    Other private sector is governed by Alberta rules.

    Reply
  7. brett

    June 28th, 2021

    From my perspective this is a very straightforward issue.

    IF this was your decision and you were about to choose one of two investment firms to manage your entire retirement life savings who or how would you select?

    Would you select the firm that had a record, over ten years, of consistently delivering above average returns? A firm that was internationally recognized as a consistently top performer.

    Would you select the firm that had a record, over ten years, of inconsistent below average returns plus some significant fails. A firm with a junior, to say the least, management team in terms of skill and reputation in the industry.

    I wonder where Kenney, Nixon, et al would place their personal investment portfolio if they had to choose between these two firms?

    Would you base your decision on these hard facts…..or would you rely on the advice of a politician????

    Reply
  8. Dave

    June 28th, 2021

    We’re not performing very well and by the way we’re not going to bother to explain why or have the person in charge show up to answer questions.

    The tone is set at the top and it is one of arrogance and disregard by the UCP leadership. AIMCO would have been more responsive, if our political leaders held them accountable, but they are probably too busy having drinks on the Sky Palace deck or picking out their Stampede hats to bother.

    I don’t know if they will dare hold a referendum on getting rid of CPP and having AIMCO take over everything, but I wouldn’t put it past them. They are not very bright and like creating faux populist distractions from their self created messes. Unfortunately, some of these distractions may focus attention on other areas where they are not performing well.

    Reply
  9. St Albertan

    June 28th, 2021

    As an angry old one, I think it’s maybe a duty to underscore the self serving malfeasance that my dear Alberta is about to experience. For the sake of context? I came to FMM at the behest of Sun Oil in 1964. Then the job was to prove a way forward to benefit from the mining of what was then ordinarily referred to as “tar sand”. The directive at that time was that the difference between this challenging source and other soft strip-mining technology had to be over-come. Refining options had to be considered. I’ll leave the intervening to partisans and those more interested in the details, and fast forward to a guy that deserves a slap in the face! Don Getty. So with that name spoken but hardly known, I’ll post what I think about AIMCO! What is about to happen if people here don’t stop it, is the flushing of the last savings we earned down the toilet! Pass the Metoprolol!

    Reply
  10. Bruce Turton

    June 28th, 2021

    Every lawn and every vehicle back or side window should have signs showing the incredible difference between the nitwits of AiMCo and the CPP group’s results!

    Reply
  11. Neil Lore

    June 28th, 2021

    I definitely know what it is like to be embarrassed by your government, but these clowns are so far beyond the pale that it beggars the imagination. They don’t even bother coming up with halfway credible lies. One can’t help but wonder if Jason Kenney’s primary purpose in life is to make Albertans look as stupid and irresponsible as possible (that was not intended as a dig at Albertans, who are having a tough enough time without me piling on).

    Reply
  12. Just Me

    June 29th, 2021

    Well, once again today I encountered so many UCP voters who are flummoxed by the actions of Kenney, and the apparent rolling over of UCP minions, to run amok and destroy anything and everything. “Has Kenney gone nuts?!” was the usual exclamation. My reply was, “Well, he’s always been this way, but it was right in front of you and you never saw it.”

    Premier Crying & Screaming Midget learned all his tricks from the GOP, while on the knee of Newt Gingrich. His methods are from the legacies of Lee (Willy Horton) Atwater, Roger Stone, and and a host of instructors at all those GOP-sponsored leadership seminars he attended in his budding partisan youth.

    One of the well-known complaints from Presto Manning about the likes of Stephen Harpo, Kenney, and his ilk is that words mean nothing to them. Obfuscation is their stock and trade. Words are just a means of giving cover for your real intentions, whatever they may be.

    Kenney is a confident man. He believes that he has been personally blessed with extraordinary providence and will succeed in every endeavour. I’m not sure if his mindset is the result of extreme malignant narcissism, believing he has been blessed by the ‘Blood of Christ’, or some combination of both. In any case, he lives in a delusional state and this state drives his actions.

    So, what does this mean? Judging by Kenney’s recent PR disasters (Patio-gate and others) he comes across as arrogant. It’s a matter of I’m-the-Premier-and-I-can-do-what-I-want that guides his actions. Kenney’s world-view is a hardcore binary one, where you’re either with him or against him. And if you are against him, it’s war. As for questions of morality, it’s also a binary world. Kenney is always on the right side of the ledger, and everyone against him is not only wrong, but also evil, immoral, and beyond redemption.

    This sort of mindset makes Kenney easy prey for grifters, of one form or another, who are looking to profit from his patronage. Of course, Kenney sees this relationship with his patrons as purely transactional, so they must provide him tribute to enjoy his influence. He will commit any injustice to serve his patrons, and they must pay him enormous tribute.

    Kenney frequently attacks Vladimir Putin, but the reality is that he aspires to be like Putin, enormously powerful and beyond questioning.

    In a modest way, Albertans are learning what it’s like to live under the thumb of a strongman. We’ll have to see how far Kenney is willing to push this, and how much of this nonsense is Alberta prepared to endure.

    Reply
  13. Dave

    June 30th, 2021

    Conservative Albertans have blinders on. Not only did the PCs try to flummox us about sustainability of public pensions, 20 + years ago Klein did us in by privatizing our electrical system so we Albertans now have the highest or 2nd highest Electricity rates in Canada, mainly because of high transmission and distribution rates. I have lived and paid for Electricity in BC and Manitoba. Manitoba was about 9 cents per KWH delivered while BC is about 12 cents delivered. Alberta!!!. 32 cents here in Cold Lake and 24 cents in Leduc. Isn’t choice wonderful when you do not know when you are be fleeced! My small Alberta Local Authorities pension is now at risk for what? Ideology.

    Reply
  14. Bret Larson

    July 1st, 2021

    Dippers ran on it and so did the ucp. It’s called diversification. And this is what it actually looks like.

    Reply
    • Athabascan

      July 6th, 2021

      You’re wrong again Bret – as usual.

      Reply
  15. VIC SEDO

    July 1st, 2021

    We HAVE to get Kenny out of Alberta. Period, before he destroys every thing we work for.

    Reply

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