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Jason Kenney's coup to consolidate control over teachers' pensions

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Alberta Finance Minister Travis Toews speaks to the media in 2019. Image credit: David J. Climenhaga

If the Kenney government's Christmas Eve coup to consolidate control over $18 billion in Alberta Teachers Retirement Fund (ATRF) 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.

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 the 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 December 23 -- not quite Christmas Eve, but close enough for alliteration -- 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 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.

The ATRF wasn't told about the order, which appears not to be available anywhere on the government's website, until January 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 (ATA) 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 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 salespeople 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 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.

Impeccable though 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."

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."

David Climenhaga, author of the Alberta Diary blog, is a journalist, author, journalism teacher, poet and trade union communicator who has worked in senior writing and editing positions at The Globe and Mail and the Calgary Herald.

Image credit: David J. Climenhaga

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