'Major reset': Province sacks AIMCo board, finance minister takes over

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The Alberta government has sacked all 10 board members of the Alberta Investment Management Corporation (AIMCo) as well as its chief executive officer, citing low investment returns and rising operating costs, management fees, and staffing.

The province made the announcement Thursday, saying it decided to “reset” AIMCo’s focus, adding that Finance Minister Nate Horner has been temporarily appointed as the Crown corporation’s sole director and chair, effective immediately.

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“It’s something we’ve been monitoring with concern for a while,” Horner told reporters inside the legislature Thursday.

“We’ve been watching this closely and it was my determination it wasn’t going to change without a major reset.”

Horner said his major concern was expenses, including salaries that can exceed one million dollars, that he noted were “borne by all (AIMCo’s) clients, Albertans in general and the pensions (AIMCo) represents.

“They’re going to have to look at their cost trajectory and structure,” he said, adding the decision was made after a meeting Wednesday night.

“I am going to offer a challenge to the new board chair around costs, and I would expect that challenge would be applied on the executive level as well.”

He said AIMCo’s clients were not informed in advance of the changes, citing legal considerations.

Opposition finance critic Court Ellingson told reporters inside the legislature that the shake-up is evidence of government incompetence.

“If they’ve been monitoring this for a while, they had many opportunities to do something that was not so drastic and earth-shattering as today’s move,” he said warning of the wider implication, including for 375,000 public-sector employees whose pension assets are managed by AIMCo.

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“Investors will now question what other decisions will this government make.”

Rising fees

The province said AIMCo’s third-party management fees had nearly doubled between 2019 and 2023 while the number of employees grew by 29 per cent and salary, wage and benefits costs grew by 71 per cent.

Those increases came while AIMCo also managed a smaller percentage of funds internally, down by 18 per cent over the four years, according to figures provided by the finance ministry.

Horner said he relieved CEO Evan Siddall from his duties earlier Thursday and said he expects an interim CEO to be appointed in a matter of days.

A new board chair is also set to be appointed within 30 days after which new board members will be named, with all current appointments now having been rescinded.

“I would like the new board chair that comes in to have a clean slate,” Horner said of the firings.

While he is in charge in the interim, Horner will not make investment decisions or be compensated for the job, the province says.

Ellingson said he was skeptical of that, calling it “an unprecedented move” to have the minister take over.

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“It’s very difficult for us to believe that even in a 30-day time span there will not be decisions that are made in the category of tens or hundreds of millions of dollars.”

Horner said the move is unrelated to the province’s push for a provincial pension plan. He told reporters last week he had written to the office of the chief actuary to see when its estimate on Alberta’s potential withdrawal from the CPP would be published. His office said Thursday it has yet to receive a reply.

Mixed returns

From 2019 to 2023, AIMCo’s total fund return averaged 7.62 per cent annually, according to the province’s figures.

In 2023, it posted an overall return of 6.9 per cent, less than its benchmark return of 8.7 per cent.

The agency noted challenges in its real estate portfolio, which was down 8.4 per cent at the end of last year, while ending 2023 with $160.6 billion in assets under management.

The AIMCo board is responsible for overseeing how the corporation handles its business affairs.

Among those removed are former UCP leadership candidate Jon Horsman who was appointed in April of last year. The board most recently appointed two members in March of this year.

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It’s the third board the government has removed in the last two years along with that of Alberta Health Services in November 2022 and the board of the Banff Centre for Arts and Creativity in October of last year.

— with files from Barbara Shecter

mblack@postmedia.com

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