Rumours that Danielle Smith wanted Stephen Harper at AIMCo have been swirling for more than a year. And apparently, the former prime minister was keen to be recruited for Alberta’s public-sector pension fund manager. “It was his desire to contribute,” Alberta Finance Minister Nate Horner told reporters.
Of all the moves of this disrupter Alberta Premier, Ms. Smith’s jettisoning of senior leaders at AIMCo, and appointing Mr. Harper as the hands-on chairman of the board, could be her most consequential – if only because the figures involved are so huge.
The commanding former prime minister will set the tone – and do the senior executive hiring and firing – for the $169-billion investment manager that oversees nine public-sector pensions and other provincial funds. Alberta’s Heritage Savings Trust Fund is under the umbrella of AIMCo too, as is Ms. Smith’s plan to grow the often-neglected provincial nest egg at least tenfold, to $250-billion, by 2050.
The next decade will be especially consequential in getting to that goal. For AIMCo as a whole, Bay Street types have been ushered out to bring in more Alberta-focused and friendly money men. The province cited bloated costs and middling returns for its decision to dismiss chief executive Evan Siddall and his lieutenants, along with the entire board (some of whom were later reinstated), earlier this month.
But supporting this move was disquiet with what a senior government source (who wasn’t authorized to speak on the record) described “woke and arbitrary” environmental, social, and governance (ESG) standards and diversity, equity, and inclusion (DEI) targets. This conservative concern fits into a wider, U.S.-grown backlash against these measures, with a number of Republican-controlled states creating anti-ESG rules, and the push to dismantle DEI measures becoming a part of the recent campaign against Democrat Kamala Harris.
Mr. Harper is apparently wealthy enough that he can do this board work on an unpaid basis, he said as “a meaningful act of public service.“ Amongst the hats he wears, he’s chairman and CEO of Harper & Associates, his consultancy, and chairman of Miami-based investment fund Vision One.
His supporters believe he has the clout and credibility to get into rooms and make deals with powerful financial players in a way no one else can. They also say he will not be swayed by political pressure, because any attempt to try to move Mr. Harper from a well-established position is an exercise in futility. Even Alberta NDP Leader Naheed Nenshi said in an interview the former prime minister “has a lot of experience in governance, and I’m sure he will be a great chair of the board.”
And in a bit of financial services industry re-branding, the 1976-created Heritage Fund is increasingly to be referred to as a sovereign wealth fund.
But the way this went down was ugly. Right up to the terminations, Mr. Siddall and his team had support from the board of directors. Globe reporting found they were dismissed in dramatic fashion after being pulled out of a meeting at an Edmonton hotel.
With this history, staffing up could be a challenge. “Who would want to be working on the board of an organization that is treated so cavalierly by a government?” Mr. Nenshi said.
This also will be far too much in the way of conservative coziness for some people. Mr. Harper is a trusted voice for many Albertans, and Mr. Horner has said AIMCo’s independence will remain intact. But critics worry this dramatic government intervention establishes a system where cronyism and fossil fuel investments rule the day.
Mr. Harper was also an author of the Firewall Letter, a 2001 call to action on provincial autonomy, which amongst other things recommended Alberta establish its own pension plan. Some see this as the start to AIMCo managing all of the province’s pension dollars. But Mr. Horner is adamant the changes at AIMCo have nothing to do with a separate process where the province is now controversially exploring exiting CPP.
“It has nothing to do with any idea of an Alberta pension plan,” the exasperated minister told reporters.
Ms. Smith is currently tearing apart Alberta’s health care system with an eye to rebuilding it, and her government is in the process of wading into the culture war head-on with sweeping policies on pronouns and transgender youth. Now, she’s opened a new front with the massive remaking of AIMCo.
The Alberta NDP promises it would reverse what it believes is her most damaging policies. But here is the beauty of Ms. Smith’s AIMCo plan for those who support it: There’s a permanency to the former prime minister’s appointment that wouldn’t be the same for anyone else. Even if Mr. Nenshi eventually becomes premier, he will find it politically difficult to move such a venerated Albertan from that top job.