Join us as we discuss the Alberta Investment Management Corporation (AIMCO) and the rumours surrounding its new CEO and board chair, and what we should be looking for in a potential replacement. Plus, we take a look at the potential Prime Minister Stephen Harper for the role of AIMCO's next CEO.
00:00:00.000Good evening. Welcome to the pipeline. My name is Corey Morgan. I'm a columnist with
00:00:27.720the western standard i'm usually in the one of the panel spots on the end but derek fildebrand's
00:00:33.120indisposed today so you got me hosting this thing it should be quite fine we got a lot to cover
00:00:38.140great stuff to break down and dissect so i'll start though with who's joining me today to my
00:00:43.340right uh we do have our opinion editor nigel hannaford as always so full of opinions again
00:00:49.020today cory well good it would be a slow show if you were bereft of them well it's been known to
00:00:54.720happen, then I have to fake it. But today's a good one. Okay, well, and joining us remotely,
00:00:59.340we have Erica Barutis. Thank you very much for coming on to talk to us today and add
00:01:04.540a much nicer perspective for our show than we typically offer.
00:01:09.420Yeah, I think it's an upgrade from Derek, I'm pretty sure.
00:01:13.660Well, this is our way to find out if he's actually going to watch this or not.
00:01:16.820There we go. All right. Well, thanks for joining today, guys, and lots to dive into. So I'll kind
00:01:21.820to start giving a little background on a story that's Albertan. We got the Alberta Investment
00:01:26.940Management Corporation. So it's known as AIMCO. It's been kind of a political football for a long
00:01:32.660time. It's the group that manages things like public pension funds. I believe it manages the
00:01:38.400Heritage Fund. Perhaps Erica confirmed that for me. It's a whole whack of money that they are in
00:01:43.540charge of managing. And there's always been a lot of discussion whether it's managed correctly or
00:01:48.360properly. And Premier Smith has just dismissed the entire board of AIMCO, and she's going to
00:01:56.880be replacing them. And well, we're going to discuss whether that's a good thing or whether
00:02:01.420some of her choices are going to come about or not, some of the rumors and what we should be
00:02:05.220looking for. So I'll start with Erica to kind of break down. Erica, there's been a, I'll get the
00:02:12.180background on you as well. Of course, this Erica Baruti is a head of applied politics at
00:02:16.200Macamie College and Senator-elect as well. So Erica, what's going on with AIMCO?
00:02:25.000Yeah, well, I think we use, because it's called Alberta Investment Management Company or Corp,
00:02:32.040and it's been very mismanaged. So I'm glad to see that the government stepped in. One of the
00:02:37.360biggest things that they addressed is this huge increase in salaries. I think that was about 29%.
00:02:42.920you saw about 71 in benefits, a lot of like third party management. So long story short,
00:02:50.460if this was my financial planner, I'd grab my money and run. And I think that that's the
00:02:54.580intention this government is trying to make. It was maybe a little less finesse than they wanted
00:03:00.840it to be with announcing the appointment of interim CEO and the minister of finance taking
00:03:06.060over as the board chair. But I think it's going to go in the right direction. This dates back for
00:03:10.180mismanagement of this fund for, and it does include the Heritage Savings Trust Fund, as you
00:03:15.780mentioned, Corey, for decades. So I think this is a good correction, maybe didn't land as soft,
00:03:22.780but there's a lot of support for this, I think, because at the end of the day, Albertans want
00:03:26.560their management company and the funds to be working for them. The speculations have been,
00:03:34.300And I believe I actually read a Western Standard article about this with the potential of Stephen Harper being named the chair.
00:03:42.860We'll find out in two to three weeks time, as the Minister of Finance said, that it's about 30 days for him to be this interim Treadwater board chair.
00:03:52.340So I don't know. I think Mr. Harper's got a lot of good things going for him right now.
00:03:57.140he would be managing $170 billion, but I'm sure there's lots of things knocking down
00:04:02.500his door for opportunities. So I would actually probably be a little bit surprised just based on
00:04:08.180some recent conversations I've had with him and his team that he takes it, but it's Alberta,
00:04:13.080so we can never be too surprised. Well, Nigel, you're of course quite very familiar with
00:04:18.560Foreign Prime Minister Stephen Harper. I mean, he's certainly well qualified as an economist and
00:04:24.600and knows his stuff when it comes to the finances and numbers but what would he bring to the table
00:04:29.560i mean if he just as an act of masochism and uh interfering on a semi-retirement uh took on the
00:04:35.000head of aimco it would be hard to imagine it uh for all the reasons that erica just offered there
00:04:43.160that um frankly he's uh it seems to me that he's having the time of his life at the moment with
00:04:48.920with the travel and and his uh his consultancy some other business interests that he has
00:04:57.240there is one thing and i'm going back a long way here there is one thing that i recall him saying
00:05:05.720gosh it was over lunch about 20 years ago it was before he uh before he even ran for
00:05:11.080the leadership of the canadian alliance he just in fact announced that he would do so and i
00:05:16.200asked him well why would you do that and he said i just want to see good government and you know
00:05:22.440he is an alberton and by adoption and i know that he and danielle smith know each other
00:05:32.440and it wouldn't be so far out of reality to say you know for the sake of good government i'll put
00:05:39.880this thing on its feet and then we'll see where we go from there so whereas i think erica is
00:05:46.920probably right those who want to uh want to believe it uh that would include every journalist
00:05:55.560who's had his hands on the story uh yeah those who want to believe it could they take some hope from
00:06:01.880that he is a he's a project man he likes to get things done and done right yeah well i mean again
00:06:07.640at least for political intrigue and journalism. I mean, it's a known quantity and it would bring
00:06:12.280about a lot of discussion as opposed to, you know, just another economist whose names aren't
00:06:16.400necessarily household names who would be very, perhaps very competent, but not as known.
00:06:23.120Setting aside then who might be running this, Erica, like what are the risks I see with this
00:06:27.900when you do potentially politicize a fund? And I'm not saying that Prime Minister Harper,
00:06:32.760former Prime Minister Harper would do so, but there's been discussion of, you know,
00:06:36.120we should use those funds for investing within Alberta, or we should use them to shore up this
00:06:40.100project or that. And that's where I start getting concerned. You know, what protections are there
00:06:46.780to ensure that the new board and head are not going to be, you know, using partisan interests
00:06:52.560rather than the Albertan interests when they manage this fund? Yeah, and I think that that,
00:06:56.360you know, should there be a political appointment, that's something that the government's going to
00:06:59.600have to be ready to defend in their resumes. So for example, I mean, you could say that Stephen
00:07:05.560Harper would come in, but I think I would categorize him as an economist first and someone
00:07:10.260that is very understanding of the Canadian international and Alberta market, finding
00:07:16.160the best opportunities. We saw Ray Gilmore, who was the former deputy minister of exec
00:07:22.480council, meaning the premier, and he's kind of the boss of all the deputy ministers move
00:07:26.000over to be interim CEO. I would suspect he'll probably stay. I mean, it would be weird to
00:07:30.860leave and to go to a crown corp for a short period and then come back. The political
00:07:35.420risks, you know, getting the not not the right people in there are something the government's
00:07:41.160going to have to consider because as a crown corp, it is an independent body. But you know
00:07:45.520what? There's a lot of conservatives out there that know how to manage money. They know how to0.93
00:07:50.480look at the market, read what is in the best interest of Albertans while protecting their
00:07:55.400pensions. And so I think, you know, we'll see the left try to politicize whomever, frankly.
00:08:01.700But, you know, when it comes to who can best manage money, I would probably bet on a conservative than I would on a liberal or a dipper.
00:08:14.180I think we'll just see who the government appoints.
00:08:16.920And again, there's a clear mandate of what they're supposed to do.
00:08:19.880And it's act in the best interest and give value add for Albertans money.
00:08:23.560So, you know, there's there's not really, I think, necessarily a strong political lens that you could put on this because math is math and economics is economics.
00:08:34.900I think the danger in the past when Alberta has got into investments, it's usually been to further some political objective.
00:08:43.580And that, of course, is not a good reason to put your money behind any project in particular.
00:08:51.000I think that's just to me, being political is too risky to not put above strong economic, an argument for strong economics.
00:09:01.900So, Nigel, I want to throw you a curveball.
00:09:03.860It just kind of occurred to me, too, though, that the concept of an Alberta pension plan kind of got put onto the back burner for the time being, but I don't think it's disappeared.
00:09:13.100One of the concerns people would have is whether or not Alberta would manage their own pension plan better than the federal entity would.
00:09:20.080But I wonder if this could be laying a little of the groundwork, too, of saying, look, we've got the mechanism, we've got the ability to manage such a plan.
00:09:26.800And restructuring IMCO could be a way of also bringing people in who are more receptive to taking on that as another investment to manage.
00:09:32.840Well, that is not actually a curveball, Corey.
00:09:37.140That has already been run past my ear once before that this is, as you say, laying the groundwork.
00:09:43.860And if that is, in fact, the plan, it would probably require somebody with the moral authority,
00:09:50.640never mind the financial expertise of Stephen Harper, to even get that rolling.
00:09:56.820So that could be where this tantalizing rumor is coming from.
00:10:02.980The problem, and I'd be interested to know what you think about this,
00:10:07.100and how they could stick handle this, Erica, is if the Alberta pension plan
00:10:13.580were ever to be approved by Albertans, the next step would be to go
00:10:20.860to the federal government and say, give us our share of the money.
00:10:27.760And if Alberta actually had the share of the pension fund
00:10:34.060that has been already discussed, it would seriously impair the fund
00:10:40.560It would be a very hard thing for a prime minister to agree to.
00:10:45.800It would be very easy for present prime ministers to say, no, go away.
00:10:51.840But when you have a conservative prime minister,
00:10:55.140the issues are going to remain the same.
00:10:57.560Notice I'm making certain assumptions about the political future of this country.
00:11:02.080um that has always seemed to me the the biggest stumbling block to going ahead with the Alberta
00:11:10.760pension plan how do you think that the government of Alberta would find its way around that problem
00:11:17.840it's interesting this hypothetical that may become reality in a year from now that we do have a
00:11:24.880conservative prime minister uh led under Pierre Polyev and he's actually come out and said you
00:11:31.260You know, this because of how much revenue Alberta generates and if we were to pull out our funds, you know, it's left with very little.
00:11:40.440It would be very hard for a prime minister to side with this.
00:11:45.280Right. I mean, that becomes not in the best interest of entire confederation while still recognizing that the current system doesn't benefit Albertans.
00:11:55.060I think how I would position this, if I was still advising Premier Smith, is I think she's got to build up the education to other provinces.
00:12:04.060We've seen Quebec and Saskatchewan try before, or Quebec was successful.
00:12:11.160And I think she's got to start familiarizing the other province that are actually at a loss with the CPP structure in order to actually get that support from the rest of Confederation, which that's a lot of explaining and a lot of time.
00:12:29.520But I can't see from a political standpoint for Pierre to give a thumbs up and take away that revenue.
00:12:35.180So it's going to be a tricky one, a very hard stick to handle.
00:12:40.520And I do think that, you know, one of the other pieces is it does have to jump through a lot of hoops to get there.
00:12:49.260Like you said, a referendum is what the premier or the government has committed to on pensions or at least, you know, further consultation and education.
00:12:59.280And that we're also looking at if this is how AIMCO is currently managed, we're going to need an entity, either a new version of AIMCO or an entity that could manage it.
00:13:08.640because I don't think the faith of Albertans lies currently in the management system that we see.
00:13:14.180So I think it's a long stick to wrangle, and we're going to see a lot of probably hesitation by our federal counterparts, regardless who's there.
00:13:22.840For all of those reasons, plus the ones we discussed earlier, I'd more or less close the book on this until after the next federal election.
00:13:30.200And that would be to to press hard on this at the moment would be to hand the liberals a very strong hand in combating.
00:13:41.040Yeah, and I think I think Premier Smith's battles with the federal government right now are kind of on point.
00:13:46.220She's talking about an admissions cap and and, you know, the unrealistic 2030 plan by the federal government.
00:13:54.560So I think she's going to win with those fights.0.80
00:13:57.100this might be one that hits a David and Goliath on the pension side of things.
00:14:01.920This could be part of the incentive to put a person with more of a statesman background
00:14:06.020running the fund as opposed to economists, whereas a lot of them, I mean, ideally, if I could dig up
00:14:10.080Hayek and reanimate him and put him in charge of this thing, I would, but he might not be the best
00:14:13.880person to sell it to the other provinces or make Albertans feel confident in the management. So
00:14:18.600it just kind of adds another element to the choice on who you're going to have representing
00:14:22.240the head of this thing yeah the road to surf is not it's not a selling proposition is it
00:14:29.920i do have a question though i know i'm not the the host but do you guys see a challenge for
00:14:36.800the government in if they do go about this new structure that they've announced as part of the
00:14:42.160reforms being the pension because they've kind of tabled it do you see albertans supporting that
00:14:48.560um especially from your listenership or do you think that it would be difficult to kind of pivot
00:14:53.040back to something they haven't even been talking about for months you know erica it's a very strange
00:14:58.880split personality that we display in alberta when it comes to the things you were talking about a
00:15:05.520moment ago about the emissions cap about the general attack on the alberta sovereignty and
00:15:11.760about the destruction of our energy industry.
00:15:16.700It's amazing how quickly you can get people to put up a flagpole
00:16:44.900I think the underlying assumption, and maybe you might challenge us, Erica,
00:16:53.560please do, but I think the underlying assumption is
00:16:56.760that the federal government will never run out of money.
00:16:59.760It will just print some more if it has to.
00:17:02.480Whereas Alberta does not have that sovereign privilege.
00:17:07.340Therefore, if it's a matter of receiving an entitlement, or even something that is not an entitlement but you still expect to get, like OAS, there is that confidence that whatever it's worth, it will come from the federal government.
00:17:24.580I think that's true if we're looking at the government of today, if we look at the government potentially under Pierre Polyev, he's not really likely to necessarily print money in the same fashion in which we've seen.
00:17:37.160He wants to balance a budget, not send our great-great-grandchildren into debt like this current administration.
00:17:44.960Okay, well, a lot of it comes down to waiting and seeing anyways, but lots to watch for at least economically inclined political geeks like ourselves.
00:17:53.600Before I turn the page on to the next issue,
00:17:55.340maybe I'll bring up and just remind folks
00:22:56.120You know, I'll leave it to you, Erica, maybe just a little bit.
00:22:58.640What do you think with the, what's the motivation of the people distracting from this,
00:23:03.860this disrespect for something that's been so long held?
00:23:07.960I mean, you know, they're not, they have their own political chips on their shoulders
00:23:12.420and things they're trying to push, but they must know they certainly aren't gaining any
00:23:16.060popular support in this country by pulling these stunts? Well, frankly, I don't care what their
00:23:19.860motivation is. If you don't want to acknowledge the veterans that fought for us, gave their lives
00:23:26.680for us to ensure we have our freedoms, sit down, shut up, and stay home. That's how I feel about
00:23:32.860it. I fortunately, the Legion I'm a member of, and I won't name it just so that if it gets
00:23:38.100caught wind by the left, that they'll go rad on them. But our chaplain actually, and in our
00:23:44.600program we did have a prayer and i was very thrilled to see that uh we had a very traditional
00:23:49.720remembrance day ceremony exactly what it should be uh again i don't understand why you think that
00:23:55.560this is an opportunity for you to make it about you uh there's very clear individuals in which we
00:24:00.600should be taking the time to thank appreciate remember um on november 11th and if that doesn't
00:24:08.600includes you either shut up or stay home amen to that you know there's one other thing erica that0.85
00:24:17.080perhaps is a little more hopeful and it's this we still have the capacity to be scandalized by
00:24:25.880people who try to adopt the memory and the motif that goes with remembrance day
00:24:31.640uh it obviously still matters that is why groups such as those that support arab terrorism hamas
00:24:40.600terrorism uh jews to do it like nobody tries to hijack st george's day or mayday you know it0.59
00:24:51.720it is they understand that the public sentiment for remembrance day is actually still pretty strong
00:24:58.680and that they this is the one to go after not the not the um the the holidays that nobody
00:25:06.200really cares about or try and invent one of their own which nobody would listen to
00:25:11.320yeah i mean i mean i get what you're saying that it is something that it will get attention again
00:25:18.200i think you're right um under the current administration we don't have harsh penalties
00:25:23.080for individuals not doing peaceful protesting. We don't have harsh penalties on making sure that
00:25:31.480they can say whatever they want, but you don't need to come in and ruin a remember and stay
00:25:35.800ceremony. We don't send a message that terrorism is wrong. We don't support our military to the
00:25:41.080level that we should. And I really hope that that changes under a conservative government.
00:25:47.080Unfortunately, I think you're right. That tone is set from the top and we have a prime minister
00:25:52.120that cowardly won't stand up and say exactly what I said. If you don't like it, sit down, shut up,
00:25:56.980wait till tomorrow and go do your little protest. So going beyond Remembrance Day too though, I mean
00:26:03.100and going beyond the federal government, our municipal leaders just keep dipping into this
00:26:07.420divisive mire. I mean I'm just shocked Regina is going to host the hoist the Palestinian flag on
00:26:13.340November 16th. I mean then we're going to try and hoist it on a Remembrance Day. Okay, that cognizant
00:26:18.020at least but why why are these why is a city in the middle of the prairies dipping into
00:26:23.460a middle eastern conflict with something they know is going to be inflammatory i mean i'm
00:26:28.180pretty partial to the star of david but i don't want to see it raised at city halls it has nothing
00:26:33.300to do with what's going on here we can have our concerns but this is happening across the country
00:26:38.100civic leaders are really pulling us into these conflicts and i think some of that is what's also
00:26:44.180led to the last loss of respect and the things that are overriding into things like
00:26:48.100Remembrance Day. Do you think it's cowardice or do they just not understand?
00:26:55.000I'm mixed with the whole thing. I think some of it's a sissy. Why would you want to hoist that0.68
00:26:59.920unless you asked for it? I'm going to say I think it's intentional. We just saw a Saskatchewan
00:27:05.980election and in Saskatchewan they also do their municipal elections. This is a time where Scott
00:27:12.200Mo just lost a significant amount of seats, especially in urban centers. I think that this
00:27:17.000is that new administration sending a message in the city of Virginia. That's my home city. I'm
00:27:22.120sorry. I cannot believe that that's something that they're doing. And if you're going to put one flag
00:27:28.200up, you better be damn well putting the other up because there are individuals. But to your point,
00:27:33.080Corey, that's not a place of municipal politics. They're not supposed to be partisan even in how
00:27:37.320they are elected, let alone the messaging that they're talking about international terrorism.
00:27:43.380So I think that this is where, and I'm all for small government. I hate nanny stating,
00:27:48.520you know, sometimes I criticize this government of getting involved in municipal politics.
00:27:52.620But I, this is where the provincial government, I know he's not in the most powerful position,
00:27:57.800Scott Moe, but he needs, because they oversee the municipal government, slap their hands,
00:28:01.600do not let this go forward. And I bet you there's a lot of people, whether quiet or loud,
00:28:06.900that would really appreciate not having their municipal government fly that flag next week.
00:28:14.060Well, since we're leaving off on Saskatchewan, maybe we'll kind of move on to the next subject.
00:28:18.260I mean, it's one of the things, as we said, that we can take some confidence into,
00:28:21.100though most Canadians were appalled by seeing any, you know,
00:28:24.220distraction from a ceremony that is so important to them.
00:28:26.920And hopefully it puts them on guard and maybe brings up some of the things
00:28:30.260to stop these things happening down the road,
00:28:32.020because it's just an embarrassment and a distraction from something that's so important.
00:28:35.280You know, one of the problems is the kind of people who tend to run for municipal government are often what we call woke.
00:28:43.300I mean, we have our own Mayor Gondek who chose her Remembrance Day remarks to remind us that we were settlers and, you know, just have this kind of anti-mainstream of history approach to things.
00:28:57.500And obviously, self-evidently, we have people who think that way in Regina.
00:29:32.960But so the response we've seen from Premier Moe is one of the first promises he's backtracked on now is the changing room policy he promised for children in schools.
00:29:45.080Is this, I'll start with you, Eric, since that's your, Erica, this is your original turf.