Alberta’s teachers received a not-so-welcome holiday gift this year: a ministerial order hijacking their hard earned pension funds. The money will now be funnelled into the controversial Alberta Investment Management Corporation (AIMCo). This last minute move by United Conservative Party (UCP) Finance Minister Travis Toews quietly skipped the news cycle, as it was executed only two days before Christmas. Eighteen billion dollars in teachers’ pensions have now switched hands from the Alberta Teachers Retirement Fund (ATRF) to AIMco. Teachers are up in arms over this decision, and their union, the Alberta Teachers Association (ATA) have responded with a lawsuit against the government.
The UCP promised ATRF, which has managed teachers’ pensions since 1939, would ultimately maintain control of the pension fund. This has been the story coming from the UCP since November 2019, when Bill 22 first passed. Bill 22 transfers funds and decision making power from the ATRF to AIMCo, a crown corporation. Countless MLAs in constituency emails and social media posts claimed this would not happen, including an email from Miranda Rosin, UCP MLA for Banff-Kananaskis on Dec. 23—the very day the ministerial order was signed.
The UCP sees this move as a cost-saving measure, worth approximately $41 million in administration costs. According to the opponents of the change, these savings are questionable at best. In a recent interview, ATRF chair Greg Meeker stated: “When the minister did this, they had a business case that was written by AIMCo. That’s a massive conflict of interest, right? Every asset manager under the sun wants more assets.”
Right now, Alberta teachers’ pensions are invested in stocks, bonds, and other equities which yield returns, or losses, as the case may be. The returns pay administration costs, and no costs are paid for by deductions on teachers’ paychecks. The only way this could result in a cost reduction that would benefit teachers is if returns on investments increased. That would mean teachers could pay less into the fund. But with AIMCo in the driver’s seat, the prospect of higher returns seems unlikely.
While considered an “arm’s length” organization, the Alberta Investment Management Corporation (AIMCo) is somehow invested heavily in the same industries the UCP government is: oil and gas. This does not bode well for the teacher’s pension fund. A report on AIMCo by Progress Alberta showed “[e]very single publicly traded oil and gas company that AIMCo has invested in under the Alberta Growth Mandate has seen its share price go down since AIMCo’s investment, even before the COVID-19 pandemic.”
AIMCo also continues to use pension funds to invest in risky ventures, and has lost more than $2.1 billion in a single bad deal. The corporation has an overall poor track record with investment. In fact, the ATRF has outperformed AIMCo for the past six years. Teachers are now set to get less for more!
For an arm’s length organization, Premier Jason Kenney and the UCP sure get a good deal in AIMCo. Calfrac Well Services, which has several ties to Jason Kenney and the UCP, received more than $228 million in investment from AIMCo. Ron Mathison, founder and chair of the company, donated $235,000 to the UCP, Kenney’s leadership campaign, and pro-Kenney PACs in 2016 and 2019. The company is set to gain an estimated $9.8 million in profit from Kenney’s corporate tax cuts over five years. A similar venture, Perpetual Energy received $49 million in investment. The CEO, Sue Riddell Rose, now holds a seat on the Red Tape Reduction panel, and all it cost was $41,000 in donations to various provincial and conservative leadership campaigns. Whitecap Resources CEO Grant Fagerheim is vocally pro-UCP and his company received $45 million in investment from AIMCo and is set to gain an additional $12.5 million by 2023 thanks to Kenney’s tax cuts.
Poor investments go further than AIMCo. Kenney lost at least $1.5 billion of public money in the Keystone XL pipeline debacle, with more potential losses up to $6 billion on the way already. Neither he, or the “arm’s length” AIMCo can be given access to workers’ pensions. With teachers’ money in their coffers, AIMCo continues to invest in Kenney’s corporate friends and failing industries. If returns are much lower than expected, or AIMCo’s average, who will be on the hook? Teachers, naturally. They will be forced to deduct more from checks every month. They will have to work more, earn less, and have no guaranteed pension when they retire.
Jason Kenney complained about Joe Biden’s cancellation of the Keystone Pipeline, citing a lack of consultation. The move to shift control of teachers’ pension to AIMCo, which puts decades of hard earned pension money on the line was done with no consultation.
Jason Schilling, President of the ATA is “incensed” and has been speaking out against this decision, calling it “an investment agreement with loopholes big enough to fit a bad $2.1 billion volatility bet.” An email campaign was launched and teachers are receiving responses from the UCP with fictitious information about the pension take over. UCP MLAs are claiming the pension is 100 per cent funded by taxpayers, such as Lac Ste Anne – Parkland UCP MLA Shane Getson in an email to a constituent. They claim that once an Investment Management Agreement between AIMCo and ATRF is reached, the ministerial order will no longer be in effect.
Teachers are fed up with being pushed aside and seen as expendable, whether being forced to work in unsafe, overcrowded classrooms or having their pension fund hijacked. On Jan. 26, 2021, the ATA filed a lawsuit against the government. The teacher’s association should do everything it can to stop or block the UCP’s order. Teachers should be able to decide themselves how to use their pensions. However, a lawsuit is unlikely to bring the desired results. At this time, teachers need to fight against the UCP’s hijacking of their pensions and disastrous handling of the pandemic in the streets and in the schools. If Kenney is not stopped in his tracks, he will continue to attack teachers’ wages, pensions, and education funding in general.
What’s more is that any job action teachers take against the UCP will be considered illegal. The teachers find themselves in a situation similar to healthcare workers. By criminalizing strikes, pickets, and protests generally with Bill 1 and 32, the UCP has highlighted the methods the labour movement can use to win. Legal challenges filed by unions against the UCP can buy some time, but they have had no effect on Kenney’s attacks. Teachers at the Centre-Nord School Council have recently voted massively in favour of a strike against the school board. Facing the pandemic on the front lines, facing poor and unsafe working conditions, and now seeing their pension hijacked, educators are willing to fight. The nurses and healthcare workers are willing to fight. The trade unions must use this momentum to galvanize a strong, united movement against the UCP government to stop these attacks. Strike to bring down Kenney!
