Alberta Appoints Former PM Stephen Harper as AIMCo's New Chair

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James Bradshaw of the Globe and Mail reports Alberta appoints former prime minister Stephen Harper to chair AIMCo board:

Alberta’s government appointed former prime minister Stephen Harper as chairman of the province’s $169-billion public-sector pension fund manager and added a senior government official to its board, signalling a shift in governance at Alberta Investment Management Corp. and raising questions about its independence.

Mr. Harper is taking the chairman’s role unpaid as part of a revamped board of directors after Alberta’s government dismissed AIMCo’s entire 10-member board and four senior leaders, including its chief executive officer, two weeks ago.

The province also added the deputy minister of Treasury Board and Finance – a high-ranking public servant – as a permanent member of the board, also without pay. That restores a board seat the deputy minister held at AIMCo’s inception in 2008, which was removed a year later

Three other former AIMCo directors, who were dismissed on Nov. 7 as part of the government’s sweeping leadership changes, are returning to the board: Former private-equity executive Jason Montemurro, real estate investor Bob Dhillon and former Healthcare of Ontario Pension Plan CEO Jim Keohane.

Alberta’s government said in an news release the changes are aimed at “restoring confidence” in AIMCo, controlling costs and improving performance. But the new leadership will have to show it can rebuild an experienced and capable executive team to stabilize AIMCo and repair a corporate culture shaken by the sudden dismissals, while maintaining trust with clients and investment partners.

The decision to put a senior government official on the board of the arm’s-length pension fund manager raises questions about AIMCo’s continued independence, and whether the move opens the door to the government to exert greater political influence or to steer the pension fund manager toward government priorities. Current deputy minister of finance Kate White was named to the role in October, 2022, the same month Ms. Smith became Premier.

Provincial Finance Minister Nate Horner said the decision to restore the deputy minister to the board was “more about having a clear line of communication” between AIMCo and the government, and that Mr. Harper agrees.

“There definitely won’t be any political pressure,” Mr. Horner said in an interview.

But opposition politicians raised concerns about whether the change makes AIMCo less arm’s-length.

“The appointment of Stephen Harper calls into question the political independence of AIMCo, and having a deputy minister of finance on the board reinforces that,” Court Ellingson, the opposition New Democratic Party finance critic, said in an interview. “We need to be able to instill confidence with those pensioners that their pensions are not going to be a political pawn in how the Premier wants to use AIMCo.”

Mr. Harper could not be reached for comment on Wednedsay. Ms. White referred a request to Mr. Horner’s office; Mr. Montemurro and Mr. Keohane did not respond to requests for comment. Mr. Dhillon expressed his “full support” for Mr. Harper in an e-mail.

AIMCo is Canada’s sixth-largest pension fund manager, investing money on behalf of 17 clients. The pension plans that account for the bulk of its assets have hundreds of thousands of members in Alberta including municipal and health workers, public servants, teachers, university professors, police officers and judges.

Its mandate says it operates “independently and at arm’s length” from Alberta’s government, though there is “broad cooperation” between them. That mandate includes “full discretion to make investment decisions” for funds entrusted by clients, “free from any influence or direction” by the government.

On Wednesday, Mr. Horner said there could be “minor tweaks” to AIMCo’s mandate document, but its major provisions – including those protecting independence – will remain intact.

Mr. Harper was widely expected to be Premier Danielle Smith’s choice for the chair’s job as the province searched for a permanent replacement for Mark Wiseman who stepped down late last year.

“I couldn’t think of a more well-known and trusted Albertan,” Mr. Horner said, citing the former prime minister’s experience steering Canada through the global financial crisis in 2008 and his more recent work in the investment sector.

Mr. Harper said in a news release that he agreed to be AIMCo’s chair “because I believe it is a meaningful act of public service to my adopted home province of the last 46 years.” He added, “I also feel uniquely positioned to help the organization improve its governance.”

The former prime minister is “a capable guy and will be a very good appointment,” said Ed Waitzer, a lawyer and a senior fellow at the C.D. Howe Institute who serves on a corporate board with Mr. Harper. And Keith Ambachtsheer, director emeritus of the International Centre for Pension Management, said in an e-mail the return of three board members provides “some continuity in the governance of the organization.”

But the various business roles Mr. Harper has taken on since he left government have raised questions about potential conflicts of interest.

He is chairman and CEO of Harper & Associates, his consulting and advisory business, and chairman and co-founder of Miami-based investment fund Vision One, as well as a “working equity partner” at private-equity firm Azimuth Capital, which invests in energy and the energy transition. In addition, he is a director on the boards of Alimentation Couche-Tard Inc. ATD-T – the Quebec-based convenience store giant currently seeking to acquire the Japanese parent company of 7-Eleven – as well as professional services company Colliers International Group Inc CIGI-T.

One of the returning board members, Mr. Montemurro, was previously a partner at Azimuth Capital and is an acquaintance of Mr. Harper’s.

Last year, Alberta’s then-ethics commissioner, Marguerite Trussler, was asked to review Mr. Harper as AIMCo’s potential board chair, and the opinion flagged potential conflicts, according to three sources with knowledge of the advice. And two sources said Mr. Harper attempted to pitch AIMCo on investing in a fund with which he was affiliated.

The Globe and Mail is not identifying the sources because they were not authorized to discuss the confidential process.

“I think that those conflicts need to be resolved,” the NDP’s Mr. Ellingson said.

Mr. Horner said it is “not my role” to manage Mr. Harper’s potential conflicts and that “there’s no special treatment” for the new chair, who he expects will meet the requirements.

One of the most important tasks facing Mr. Harper and the new board will be choosing a permanent CEO to lead AIMCo. On Nov. 8, Mr. Horner appointed the province’s most senior public servant, Ray Gilmour, as AIMCo’s interim CEO – another move that raised questions about how arm’s-length the pension fund manager will be from government.

AIMCo’s chief people, culture and engagement officer, chief legal officer and chief of staff were also dismissed on Nov. 7, and its chief investment officer left in September after less than two years in the role.

“The real challenge is going to be staffing up,” Mr. Waitzer said. “Who is CEO will affect not only their ability to recruit people of caliber, but their ability to engage in meaningful partnerships with other major pension plans and wealth funds. That’s a select group and AIMCo should want to remain part of that club.”

The CEO selection process “will be watched with great interest by both Albertans and by those of us outside its borders,” Mr. Ambachtsheer said.

AIMCo welcomed the appointment of Mr. Harper and the other directors, saying, “their proven expertise will provide important continuity for AIMCo,” in a written statement. “The reestablished board is an important step forward as we continue to work to restore stability to our organization.”

Mr. Horner said rising costs were the main reason the government opted for a reset of AIMCo’s leadership, and he will be “making that clear” to the new board. “There’s an expectation that they continue to be a low-cost provider.

Last week, AIMCo’s former interim board chair, Kenneth F. Kroner, pushed back in a letter to Mr. Horner, saying the government’s claims about costs and performance “are tarnishing AIMCo’s reputation.” He said that third-party data shows AIMCo’s costs “are in the lowest third of the industry,” while the fund manager mostly beat its internal benchmarks for investment performance in recent years.

Ms. Smith has floated the idea of a “hybrid investment approach” in recent media interviews that could allow for the province’s $23.4-billion Heritage Savings Trust Fund – money that AIMCo manages – to chase faster growth, aiming to reach at least $250-billion over the next 25 years. At the same time, she suggested pension plan savings would be invested conservatively.

Ms. Smith said that reaching that goal for the Heritage Fund “requires strong oversight, which [Mr. Harper] will provide.”

The board led by Mr. Harper could also play a key role in a continuing debate about whether the province should withdraw from the Canada Pension Plan and create an Alberta-run alternative. The government contended last year that it is entitled to more than half of CPP assets, and is awaiting an estimate from Ottawa’s Office of the Chief Actuary to estimate Alberta’s rightful share – a figure that some experts predict could be substantially lower than Alberta’s claim.

In 2001, when Mr. Harper was president of the National Citizens’ Coalition and had yet to step into federal politics, he was a co-author of a letter advocating to “build firewalls around Alberta” against encroachments from Ottawa on provincial jurisdiction. The letter proposed that Alberta withdraw from CPP and create “an Alberta Pension Plan offering the same benefits at lower cost while giving Alberta control over the investment fund.”

Barbara Shecter of the National Post also reports Stephen Harper named chair of AIMCo, three directors reappointed:

Former prime minister Stephen Harper has been appointed chair of Alberta Investment Management Corp., a move that has been widely anticipated since the province fired AIMCo’s board of directors and relieved chief executive Evan Siddall of his duties less than two weeks ago.

Three of those board members fired from the province’s $169-billion pension and endowment fund manager were reappointed Wednesday: Jason Montemurro, Jim Keohane and Bob Dhillon. But the Alberta government has also established a permanent board seat, unpaid, for the deputy minister of treasury board and finance, in order “to ensure more consistent communications between AIMCo and Alberta’s government.”

Janet French of CBC News also reports Stephen Harper appointed chairman of Alberta Investment Management Corporation:

Former prime minister Stephen Harper has been appointed chairman of the board of the Alberta Investment Management Corporation (AIMCo), the provincial government said Wednesday.

The Alberta government installed Harper, Canada's 22nd prime minister, as board chair for a three-year term, nearly two weeks after firing all of the provincial investment manager's previous 10 board members, its CEO and three other executives.

The government said at the time the drastic move was a necessary "reset" of the organization.

"Albertans should be grateful and thankful that he would consider doing this," Alberta Finance Minister Nate Horner told reporters in the legislature on Wednesday.

AIMCo manages more than $160 billion in funds, including pension funds and the Heritage Savings Trust Fund. The bulk of the money under AIMCo's control belongs to several public sector pension plans that hold the retirement savings of around 500,000 Albertans.

Premier Danielle Smith has said she wants to transform the Heritage fund into a sovereign wealth fund, and build the $25-billion nest egg into a $250-billion behemoth by 2050.

Harper's appointment prompted critics to question whether investment decisions will be driven by politics, rather than maximizing returns and minimizing risk.

Horner, who temporarily replaced the board chair on Nov. 7, has now stepped out of that role and appointed Alberta's deputy minister of finance a permanent role on the AIMCo board.

Cabinet also brought back three board members who were let go in the Nov. 7 purge: Jason Montemurro, Navjeet Singh Dhillon and James Keohane.

Harper will help guide the asset manager to improve investment returns while keeping overhead costs under control, and develop good relationships with the public sector pension plans AIMCo manages, Horner said.

Harper approached Horner about six months ago, expressing interest in the role, the minister said. Horner previously said he had been worried for some time about AIMCo, as its operating costs rose and returns fell short of benchmarks.

Harper's appointment has nothing to do with the government's musings about pulling out of the Canada Pension Plan to create an Alberta pension plan, Horner said.

In a government news release, Harper said he would do the board work for free, as a "meaningful act of public service" to the province.

"I also feel uniquely positioned to help the organization improve its governance," Harper said .

Critics question Harper's fund-management expertise

Harper was a Conservative prime minister from 2006 to 2015, after leading a united coalition of former Reform Party and Progressive Conservatives members to electoral victory.

Post-politics, he founded Harper and Associates, a consulting firm, and served on the boards of property management, investment and technology companies.

CBC News sent emails Wednesday to Harper and Associates, requesting an interview with the former prime minister. No responses have been received.

Horner said Harper will abide by conflict of interest law and AIMCo's code of conduct, but did not specify how that would affect his other affairs.

Opposition NDP Leader Naheed Nenshi said Wednesday that fund management experience is a specialized skill set, which Harper may lack.

"A board needs to have people who really understand the industry and you need to be able to hire people who can do the job well," said Nenshi, a former business professor.

Nenshi worries the government will direct AIMCo to make investments that meet its political goals, such as bolstering Alberta's oil and gas industry, he said.

Gil McGowan, president of the Alberta Federation of Labour, echoed that concern, saying money in the pension funds belongs to workers and retirees.

"We don't think that any board should be playing politics with the retirement savings of so many Albertans," McGowan told CBC News. "It's not their money and it should not be turned into a political slush fund."

In 2019, the UCP government removed the ability for large public sector pension funds to fire AIMCo as the investment manager, and forced the Alberta Teachers' Retirement Fund to transfer investment control of its assets to AIMCo.

McGowan wants those decisions reversed, he said, adding that unions should be given a seat on the AIMCo board, given how many of their members' pensions are affected by the corporation's activities.

Horner said Wednesday he won't grant either of those requests.

Sebastien Betemeier, an associate professor of finance at McGill University who researches pensions, was reassured to see the government return three AIMCo board members to their roles, as it helps retain institutional memory, he said on CBC Radio's Alberta At Noon.

But he also questioned whether Harper, a partisan figure, is a political appointee acting on behalf of the government, or an independent chair whose sole focus is AIMCo's mission.

In a statement, Alberta Teachers' Association president Jason Schilling said the appointments of Harper and the deputy minister of finance raise questions about the AIMCo board's autonomy. AIMCo manages investment of the pensions of 85,000 current and former teachers.

"These recent decisions are understandably frustrating teachers, who see their pensions being politicized once again by the UCP government," Schilling's statement said.

And Rick Bell of the Calgary Herald reports Harper new AIMCo chair, UCP says it's not about Alberta pension:

First things first. Hot off the press.

As the smart money wagered, former prime minister Stephen Harper has been appointed chair of AIMCo.

AIMCo is the Alberta Investment Management Corp.

AIMCo manages public sector pension funds and the province’s Heritage Savings Trust Fund and the Alberta Pension Plan if ever there was one.

The UCP government says it should get more than $300 billion if the province pulls out of the Canada Pension plan.

In Ottawa, the federal chief actuary has not provided a number of billions they think Alberta would receive.

But Nate Horner, the Alberta government’s finance minister, has got an indication that number is coming soon. He is hoping before Christmas.

‘We are hearing rumblings we’ll have something relatively soon,” says Horner.

“We have heard a few things back about how we can expect an interpretation fairly soon.”

So where does the Harper appointment fit in with the Alberta pension plan, an idea the former prime minister supported a generation ago?

Horner says it doesn’t. Not at all.

“There is no connection between this appointment, the changes we made at AIMCo and a potential Alberta pension plan.

“To be super-clear, we are waiting on the number from the Office of the Chief Actuary. We made it clear to Albertans we wouldn’t move a finger until we get that back and are able to consult with Albertans on what this could look like.

“I never spoke to Prime Minister Harper about it. It has nothing to do with this decision and why we think he’s the right choice.”

Horner reminds us a provincial pension plan would go to a referendum vote.

Just so you know, three members of the old AIMCo board are returning.

The old board was punted along with the AIMCo CEO and three other executives.

Horner is now leaving the board but his deputy minister will be joining the board.

“Prime Minister Harper agrees and thinks this will lead to better governance,” says the Alberta budget boss, Premier Danielle Smith’s point man on the AIMCo file.

Horner is asked another question from the critics who believe Harper will just do the Smith government’s bidding.

“I don’t know if there’s a person in the country who would be more impossible to control and manipulate than Prime Minister Harper.

“I don’t know how anyone could think we could steer him or, even frankly, have the nerve to try. He’s probably the most powerful person willing to take on a role like this.

“His reputation is incredible. I think he’s got a stellar reputation internationally. He is someone viewed as a leader.”

Horner says he’s already heard from many folks who want the opportunity to work with Harper on what the finance minister says will be “a mindset change” at AIMCo.

The province wants a better rate of return on investment and, much more importantly, they want AIMCo to become a low-cost provider.

AIMCo had middling returns, hired more people and were up to 650 employees, paying more in pay and perks while they were farming out more of their work to third parties.

It didn’t add up.

Horner says when AIMCo was asked to explain what was what and why, the explanation was far from satisfactory, and the purge was on.

“He knows why he’s the right guy. He’s got a clean slate to bring in the people he needs,” Horner says, of the former prime minister.

The Alberta budget boss was surprised Harper was willing to consider the job but is grateful he did.

Horner says, “the fit was just natural.”

“I think if you ask him, he sees this as a very noble endeavour, he’s very proud of Alberta, he wants AIMCo to be successful and he wants to see the financial sector grow in Alberta.”

“I think it’s going to be a real point of pride for him.”

What is it about Harper that makes him the go-to pick to oversee the management of investments on behalf of Albertans?

“First and foremost, he’s a proud Albertan. He wasn’t born here but he’s certainly proud to call Alberta home now.”

“I think it’s very different when you go in knowing who you work for and know why this is important and why it’s important to grow the financial sector in this province and diversify the economy.”

“It’s a lot easier when you come in having that, as opposed to trying to learn to understand it. Say you’re coming from down east trying to understand the Alberta culture and identity.”

And Horner thinks investors will come to Alberta with their money and not necessarily insist on hanging out in the most expensive rental real estate in Manhattan.

“You don’t always have to go to them and set up shop in their backyard,” says the Alberta budget boss.

“We can grow the sector here and people are happy to come here, work here and travel to us to invest here.”

So in the end, Horner hands off to Harper, knowing there will be questions.

“He’ll demand the respect of the entire workforce. Alberta will be in a good place for this reset.”

Lastly, Matthew Black of the Edmonton Journal reports Alberta hires former prime minister Stephen Harper as new AIMCo board chair:

The Alberta government has hired former prime minister Stephen Harper as the chairman of the Alberta Investment Management Corporation (AIMCo) board of directors less than two weeks after it sacked all 10 prior board members.

Harper’s hiring was announced via a news release on Wednesday morning in which Harper said he would not be paid for his new role, describing it as a “meaningful act of public service to my adopted home province of the last 46 years.”

“Over several decades, Canadian pensions have earned a global reputation thanks to professional operations, upstanding ethics and prudent risk management. I have accepted the role of board chair because I want to see AIMCo further embody these values and to positively contribute to this culture.”

Harper was born in Ontario but is a longtime Calgary area resident. He served as Canada’s 22nd prime minister between 2006 and 2015.

In announcing Harper’s hiring, Premier Danielle Smith cited her government’s goal of building the Heritage Savings Trust Fund to more than $250 billion in the next 25 years, with more details on how the government plans to make that happen to come before year’s end.

“His appointment … (is) a strong step forward in giving all Albertans confidence in the long-term sustainability and success of AIMCo.”

Finance Minister Nate Horner said he first spoke to Harper about the role “maybe half a year ago.”

“He said that if you would consider me, he would work his channels and see if he thought it was appropriate,” he said, noting Harper’s experience.

“Albertans should be grateful and thankful that he would consider doing this.”

Sudden sackings

AIMCo manages more than $160 billion in investments for 375,000 public-sector employees, with the majority of that money coming from public sector pension plans.

The Financial Post reported last week that the former prime minister was among those being considered to chair the board, and that AIMCo had previously attempted to set up a meeting between Harper and now-former CEO Evan Siddall though the two never met.

Siddall was suddenly removed from his duties by Horner while at an offsite gathering of AIMCo staff at the Westin Hotel in Edmonton after Horner had fired the entire board and installed himself as interim chair.

Siddall had not been accused of any wrongdoing and was not being pushed out by board members since taking on the role in 2021, four sources told the Financial Post.

Horner cited low investment returns and rising operating costs, management fees, and staffing when announcing the firings on Nov. 7, saying, “it was my determination it wasn’t going to change without a major reset.”

Former interim board chair Kenneth Kroner wrote a letter to Horner disputing what he termed an “incorrect narrative” and “misinformation” around AIMCo’s performance that he said will make the next board’s job more difficult.

“The data contradicts the very negative narrative that is out there.”

AIMCo ended 2023 with an investment return of 6.9 per cent, which fell below its benchmark return of 8.7 per cent.

The province’s most senior civil servant, executive council deputy minister Ray Gilmour, was appointed as interim CEO on Nov. 8.

Finance deputy minister appointed to board

The deputy minister of treasury board and finance will now also be a permanent AIMCo board member with the government citing the need “to ensure more consistent communications” between the investment agency and the provincial government.

Opposition finance critic Court Ellingson accused the government of turning AIMCo into a political entity rather than the arm’s-length organization it’s designed to be, adding the appointments send a “horrific message” to investors.

“Albertans don’t want politicians managing their hard-earned assets,” he said. “They expect leaders with proven expertise in managing global pension funds to oversee their future livelihoods.”

Horner defended the appointment as being “imperative” to oversight of AIMCo.

Three of the prior board members were also reappointed to their jobs on Wednesday, with Horner citing their prior work and desire to return — Mainstreet Equity CEO Navjeet Singh Dhillon, former pension plan CEO James Keohane, and tax lawyer Jason Montemurro.

Elections Alberta financial disclosure data shows Montemurro — who was appointed to the board last March — contributed $2,500 to Smith’s successful United Conservative Party leadership bid in 2022 as well as $4,300 to the party in 2023 and another $4,375 as of Sept. 30 this year.

Those appointments also end Horner’s time as interim board chair.

He said no other appointments will be made until they are discussed with Harper.

Alright, there are more articles on AIMCo but I went over the main ones above and highlighted important passages.

What are my thoughts and what is some of the feedback I received?

First, my thoughts. 

I have nothing against Stephen Harper. I voted for him twice before I made the unwise and regretful decision to vote for the Liberals back in 2015 and will never make that mistake ever gain as long as I live.

Harper was an excellent prime minister but toward the end he did become arrogant and it cost him a third term.

In 2010, after two years at the BDC when my contract was up, I did a short stint at Industry Canada where I stayed for a year.

The job wasn't particularly enthralling but there were some good economists there and it was a learning experience (definitely not for someone with a passion for markets).

I did see firsthand Harper's administration micromanaging government departments and can tell you in most cases, it wasn't good or needed.

Is he well respected, does he have an excellent reputation? No doubt. Is he the best choice to chair AIMCo at this time? 

There I have some concerns and will be fair and balanced with my comments.

He's an economist by training and like me, has a Masters in Economics and was definitely a hustler:

Harper attended Northlea Public School and, later, John G. Althouse Middle School and Richview Collegiate Institute, both in Etobicoke, Toronto. He graduated from high school in 1978, and was a member of Richview Collegiate's team on Reach for the Top, a televised academic quiz show for high school students.[5] Harper studied at the University of Toronto's Trinity College before moving to Alberta.[6] In an attempt to establish independence from his parents, Harper dropped out of the University of Toronto and then moved to Edmonton, Alberta, where he found work in the mail room at Imperial Oil.[6] Later, he advanced to work on the company's computer systems. He took up post-secondary studies again at the University of Calgary, where he completed a bachelor's degree in economics in 1985. He later returned there to earn a master's degree in economics, completed in 1991.[7] Throughout his career, Harper has kept strong links to the University of Calgary. Trained as an economist, Harper was the first prime minister with an economics degree since Pierre Trudeau and the first prime minister without a law degree since Joe Clark.[8]

So, unlike our current prime minister, Harper understands basic economics and the primacy of the private sector and that is reassuring.

But it's true that unlike former chairs Mark Wiseman and Kenneth Kroner, he lacks investment experience across public and private markets.

"So what? The guy wasn't appointed chair of AIMCo because of his investment acumen, he can lean on Jim Keohane and others for that. He was appointed chair to clean house, restore governance and improve communications with the UCP.”

Moreover, one can argue Harper gained important market experience after leaving office:

He is chairman and CEO of Harper & Associates, his consulting and advisory business, and chairman and co-founder of Miami-based investment fund Vision One, as well as a “working equity partner” at private-equity firm Azimuth Capital, which invests in energy and the energy transition. In addition, he is a director on the boards of Alimentation Couche-Tard Inc. ATD-T – the Quebec-based convenience store giant currently seeking to acquire the Japanese parent company of 7-Eleven – as well as professional services company Colliers International Group Inc CIGI-T.

All fair points and I have no doubt he will manage any potential conflicts of interest appropriately (he'd be very foolish not to).

The concerns I have are political in nature.

It's unclear from reading the articles above whether he approached Nate Horner or whether the latter approached him six months ago (timeline is important), but clearly the unions/ AIMCo clients are right to be concerned that the UCP is politicizing their pension fund.

And while I'm a conservative and fully support Premier Smith's policies (except for the Alberta Pension Plan blunder which will never see the light of day), I don't think it sends the right message to appoint our former prime minister to be the chair of what is supposed to be an apolitical investment organization.

My fears are justified because apart from Harper, the Finance Minister Nate Horner said the decision to restore the deputy minister to the board was “more about having a clear line of communication” between AIMCo and the government.

What does that mean exactly? Restore a clear line of communication between AIMCo and government?

Now, I could be wrong, Stephen Harper might set the right tone from the getgo that while government has a seat at the board, there is no government interference whatsoever with the day-to-day activities at AIMCo.

But call me "highly skeptical" on this front and since we know they want to lower costs (which were already low by industry/ peer standards as the former chair and others explained in detail), there will surely be intense debates at the board level on compensation and other activities at AIMCo and the government will have a seat at the table.

In other words, sooner or later, we will know if there is another agenda behind the purging at AIMCo. 

The fact that Nate Horner was thinking about this for months, approached Stephen Harper six months ago, made some accusations that don't stack up to justify the purge, all suggests there is a wider political agenda behind this move.

I also find it highly suspect that the UCP is denying unions seats at the board. 

If the government isn't trying to politicize anything, it should provide members two seats at AIMCo's board of directors just like PSP will soon be doing at its board (it's coming).

We can argue about the pros and cons about giving unions representation on the boards of these large global pensions funds but at the end of the day, it is their pension money and they have a right to have a seat at the table.

Again, I could be wrong and do hope AIMCo survives and thrives after all this but everything that has taken place so far leads me to believe there will be more, not less government interference at AIMCo.

It was reassuring the government reappointed three board members including Jim Keohane who I know and trust but it's a bit unclear to me as to what their role will be and truth be told, I found it strange that Jim and other previous board members accepted to come back after they were abruptly dismissed.

I reached out to Jim for a comment but he said given the media frenzy, he will abstain from making public comments at this time (fair enough). 

He's definitely not a dumb guy, doesn't need this board gig at AIMCo (they need him), so I'm sure something reassured him for making this decision to come back to sit on that board. 

That's a positive and there aren't too many positives in this story as far as I'm concerned. 

Harper and the board's first job will be finding a new CEO, someone who will instill trust and shore up morale at the organization.

I note David Scudellari, Senior Executive Managing Director, Global Head of Private Assets & Strategic Partnerships, is still part of the senior executive and he'd be a great choice at this time.

I also have someone in mind and will share with Jim if the person allows me but he'd be another top candidate because he's fresh, smart and experienced. 

He even shared this with me:

I honestly don’t think it is as dire of a situation as the press is making out. Sure, the abrupt termination of the board and the CEO was dramatic, but Stephen Harper is an extremely smart, accomplished, and thoughtful person and reinstating some of the prior board members shows that the Government is not tribal and is open to bringing back experts like Jim K. and others who can add significant value. 

I expect the Government terminated the board on mass to simplify and expedite the management change - not because they thought there weren’t qualified people serving on it. If they called me and offered me the top job, I would take it. 

They are looking to pivot away from an internationally focused and high cost direct investment model, which is their prerogative and not without global precedents, as there are several successful investors following this ‘endowment fund’ approach. 

Furthermore, it is not as if everyone following the ‘Canadian model’ is hitting it out of the park anymore. The investment landscape has evolved significantly since these funds first adopted this model, so the Canadian funds themselves need to continue to evolve to ensure they have a winning formula. 

Perhaps at this early stage, the changes at AIMCo feel more like revolution than evolution, but I think it is premature to conclude this. If the Government plays its cards correctly, we could have a very happy ending.

Again, this person is highly experienced/ accomplished and he is seeing the positive light here (but admittedly, he also expressed an interest in the top job at AIMCo so he won't criticize the government). 

We shall see how long the process of finding and replacing Evan Siddall will take but in my humble opinion, the sooner they get this done, the better. 

What else? Not all comments were favourable on AIMCo's former execs and the Maple Eight's governance model in general.

One person working at a federal Crown corp shared this with me on the purging at AIMCo:

This is what happens when your "independent" board members stop listening to their key stakeholder.

Let’s also be clear, Board members are never truly independent. The Chair is appointed at the pleasure of the Crown and nominates his/her own directors. What this says to me is AIMCo failed miserably in managing their shareholder.

You look at the Maple 8 boards, it's the who’s who of Canadian cronies. Many have no business being on the Board of a financial institution, let alone a global pension fund making investments all over the world.

This person added:

I told you a long time ago, the compensation party at the Maple 8 is going to come to an abrupt end, their independent governance model will be removed and once the government steps in, it's never leaving. Don't be surprised if other purges happen at other major Canadian pension funds. They pushed the limits on cost/ compensation and should now brace for what comes next.

Now, I don't agree with his criticism on boards being stacked up with "cronies" (most of them are highly qualified individuals) but he might be right that in the future, there may be more government interference at Canada's Maple Eight.

I certainly hope not but he makes a good point, the chair serves at the pleasure of the Crown and the CEOs serve at the pleasure of the Board.

All I know is there is increased scrutiny at all our major pension funds and everyone is nervous of what comes next.

Lastly, some friendly advice to Stephen Harper and AIMCo's new/old board.

If I was sitting on that board, I'd push hard for a full, thorough independent performance audit of all investment activities which goes way above and beyond the simple audits Alberta's Auditor General conducts and I'd make that report public.

The tricky part is finding qualified, independent consultants to undertake such a mammoth performance audit but it can and should be done and the report must be made public.

Alright, let me wrap it up as there are other developments that I need to focus my attention on (when it rains, it pours). 

Below, former prime minister Stephen Harper has been tapped as the new AIMCo chair after the Alberta government ousted four of the board's top executives. BNN and CBC report on this.

Lastly, Nate Horner, Alberta’s finance minister and Treasury Board president, held a news conference in Edmonton to share the province’s 2024-25 second quarter fiscal update and economic statement earlier today.You can view that news conference here.

As always, if you have anything to add on this topic, feel free to reach out to me at LKolivakis@gmail.com.

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