Harper Now Runs Alberta’s $170-Billion Pension Fund. What Could Go Wrong?

From arm’s-length pension fund to political sock puppet?

You have to wonder if that’s the fate of the $170-billion Crown corporation Alberta Investment Management Corp., after the provincial government announced Wednesday that former prime minister Stephen Harper has been named AIMCo’s new chairman.

Harper’s appointment was the worst-kept secret in Alberta politics when his name was leaked to the news media last week after the government gobsmacked everyone by firing AIMCo’s 10-member board the week before.

Besides handling Alberta’s $24-billion Heritage Savings Trust Fund, AIMCo holds the pensions of almost 500,000 active and retired public sector workers.

The government’s dramatic and unprecedented move against AIMCo’s board immediately ignited speculation that it was somehow linked to Premier Danielle Smith’s proposal for an Alberta pension fund.

Finance Minister Nate Horner has repeatedly denied any connection, saying he took the action against AIMCo for fiscal reasons because it had become top-heavy with overpaid executives while producing disappointing returns on investment (an explanation the fired chairman openly challenged).

But then Horner poured gasoline on what had become a dumpster fire of speculation by naming Harper as chairman.

“I am taking on this role, and doing so on a pro bono basis, because I believe it is a meaningful act of public service to my adopted home province of the last 46 years,” said Harper in a statement released by the government. “I also feel uniquely positioned to help the organization improve its governance.”

“We’re incredibly fortunate that Mr. Harper has agreed to take on this leadership role with AIMCo,” said Smith in the same news release.

But for skeptics, playing in the background to this kumbaya moment was some discordant music.

Not only is Smith herself a longtime proponent of an Alberta pension plan; Harper has been a supporter, too.

In 2001, Harper, as president of the National Citizens Coalition, co-authored the controversial Firewall Letter that, among other things, proposed that Alberta “withdraw from the Canada Pension Plan to create an Alberta Pension Plan offering the same benefits at lower cost while giving Alberta control over the investment fund.”

Speaking to journalists Wednesday, Horner denied any connection between Harper then and Harper now: “I can assure [you] that had no bearing on why we think he's the right choice for this position right now.”

But the government continues to drool over the prospect of an Alberta pension plan — and right now awaits a determination by the federal government’s chief actuary as to how much money the province would be entitled to withdraw from the CPP if an APP became a reality.

Horner also denied any nefarious plans by the government to monkey with the Heritage Fund’s $24 billion, despite Smith’s musing last summer about using the fund as a way to “de-risk” projects in Alberta that were having trouble raising capital.

“You would never want to preclude investments from happening in Alberta,” said Horner. “But that isn't the goal.”

What exactly is the goal of having Harper as chairman? “Risk-adjusted returns, low cost, great relationship,” said Horner.

And according to Smith: “Our ambitious goal of building the Heritage Savings Trust Fund to more than $250 billion in the next 25 years requires strong governance oversight, which he [Harper] will provide.”

But you have to think that if a government did want to more directly control a $170-billion Crown corporation, it might, for example, stage a coup against its board, replace the members with more amenable types and appoint a powerful political friend as chair.

Oh, and also appoint the deputy minister of finance as a permanent member of the board — which, by the way, the Alberta government did Wednesday.

The reaction from unions ranged from deep concern to something approaching horror.

“Appointing prominent political figures raises questions about the board’s autonomy, considering the corporation was meant to function at arm’s length from government,” said Jason Schilling, president of the Alberta Teachers’ Association, whose members had their pensions forcibly moved under AIMCo by the United Conservative Party government in 2020.

“These recent decisions are understandably frustrating teachers, who see their pensions being politicized once again by the UCP government.”

Gil McGowan, the never-shy president of the Alberta Federation of Labour, was characteristically more blunt.

“Premier Danielle Smith has just fired AIMCo’s professional board and replaced it with a political one dominated by people with close ties with the UCP, including Stephen Harper, who has loads of experience in politics, but none with pensions,” said McGowan.

“It’s clear that Danielle Smith has bigger ambitions than just reshuffling the board at AIMCo. We're afraid that she wants to use the retirement savings of 500,000 Albertans to create a political slush fund that she will use to empire-build.”

The leaders of the affected public sector unions have demanded seats on AIMCo’s board, but Horner said they already have seats on their own individual pension boards under the AIMCo umbrella.

Somehow that doesn’t reassure them.