The Alberta government said it was concerned about overspending when it suddenly fired the board and top executives of its public pension plan, Alberta Investment Management Corp. (AIMCo), last week. But onlookers suggest political differences played a part.
“The knives were out. There was a purge. No need to sugarcoat the facts,” wrote Calgary Herald columnist Rick Bell in a recent opinion piece.
AIMCo, a Crown corporation the province established in 2008, handles funds for things like government programs, pensions, and retirement plans, and is meant to operate without political interference. Since 2021, the fund has been headed by Evan Siddall, who was viewed by some Alberta politicians as “disconnected from Alberta’s fiscally conservative culture,” writes BNN Bloomberg. This image presented problems for the Alberta government, though internal studies showed the fund’s costs were lower than peer corporations.
The perception of splashy spending was created at least in part because of Siddall’s expenditure on global offices and, according to Alberta finance minister Nate Horner’s office, a 71% rise in staff costs as personnel grew 29%. There was also a 96% increase in third-party management fees. Siddall’s openness to green investing also put him at odds with the province’s fossil-fuel-reliant economy and the policies of Alberta Premier Danielle Smith, though he also opposed divesting from fossil fuels. During his tenure, AIMCo announced that it was creating a billion-dollar energy transition fund.
Siddall was fired by Horner last week, along with three other top executives and the entire board. “The public purge sent a clear message,” writes BNN Bloomberg. “The government of Alberta is the boss, and it’s taking back control.”
“To restore confidence in the agency, Alberta’s government has decided to reset the investment corporation’s focus with a new CEO and board,” the province said in a statement. Horner is acting temporarily as the fund manager’s chair and sole director, while senior public servant Ray Gilmour was appointed interim CEO.
Horner told the Calgary Herald the government had been applying pressure on AIMCo to cut costs but wasn’t seeing change. It was time to “tear off the band-aid,” he said.
“We need to be diligent and play it by the book,” he added. “We have real accelerating costs in health, education, and social services. We have a population surge without a real economic boom.”
AIMCo’s fired interim vice chair Kenneth Kroner wrote in a letter to Horner that the narrative about out-of-control costs is inaccurate, and that the fund’s overall performance was sound, reported the Financial Post. Kroner added that this narrative will tarnish the firm’s reputation and “create unnecessary barriers for AIMCo in its goal to deliver strong investment performance for Albertans.”
Sources are speculating that former prime minister Stephen Harper is being considered as the next AIMCo chair, reports The Tyee.
In addition to politics and expenses, some have criticized Siddal’s leadership—blamed for a high turnover among executives—as justifiable grounds for his firing. But others see the move as a blatant act of government intervention in what should be an independent fund, writes BNN Bloomberg.
The broad-stroke firing has raised concerns about its future. “No well-run firm replaces all of its executive team and whole board at once,” said Alexander Dyck, a finance professor at the University of Toronto’s Rotman School of Management. “That’s a recipe for disaster.”
