I hope you were able to enjoy some sunshine this past weekend without the threat of huge hail stones raining down, or tornado clouds gathering as has been the norm these past few weeks. I wanted to comment quickly on the article written by Mayor Marshall with respect to the beaches in Chestermere, and the need to regulate the amount of folks that were there. To be very clear, the municipalities have all the authority they need to respond to these concerns with respect to COVID-19 and how they want to enforce those rules in our area. The provincial government is helping in this regard by providing information and data through our Chief Medical Officer of Health, the amazing Dr. Deena Hinshaw and supplying another 20 million masks through Tim Hortons, A&W and McDonald’s as well as other locations in remote areas to help distribute PPE to as many of you as possible to help prevent the spread of this terrible virus. We have provided more PPE in this province than anywhere else in Canada, and are proud to be able to do so.
I would also like to chat with you regarding your concerns with the Alberta Investment Management Corporation (AIMCo). I have consulted with my colleague the Honourable Travis Toews, President of Treasury Board and Minister of Finance, and I felt it was very important that I communicate the realities of what is happening versus the misinformation that is being perpetuated by the opposition. We, as your government, respect the independence of AIMCo’s investments which reflect normal benchmark percentages for the pension fund and endowment sector. We have no say as to how the fund invests, as it will invest based on expected financial return. It is a diversified fund, and although they have investments in oil and gas, AIMCo is independent of our government and makes those decisions based on the investment opportunities that will produce the best returns possible for Albertans. AIMCo is required to meet with the Alberta Teachers’ Retirement Fund Board (ATRF) regularly, and the trustees and pension boards are the ones making the decisions on their investments policies. AIMCo must follow these decisions. They must also report publicly and regularly to their clients. AIMCo is also concerned about environmental, social and governance policies that are built into their investment decisions; they are stronger and more robust than industry and regulatory standards.
Any decisions made by AIMCo to invest in Alberta are made on the expected financial return of those investments. AIMCo has a great record of outperforming their benchmarks, and are a responsible organization. They want success for their clients, and are committed to that. This volatility will not affect teachers’ pensions, since the transfer of the pensions will not be completed until 2021. There are many other public pensions that are managed by AIMCo such as the Local Authorities Pension Plan and you may know that they reduced their contribution rates in the last few years due to strong investment returns. Finally, let me share some numbers with you of other investment pension funds, just to provide some clarity. The opposition keeps saying that AIMCo has lost $4 billion in investments during these unprecedented times. The truth is that the number is closer to $2.1 billion. By comparison, Japan’s Government Pension Fund (GPIF), the world’s largest pension fund, reported a quarterly loss of $164.74 billion in losses in January-March (Reuters Business News, July 3, 2020). This is a negative return of 10.71%. Closer to home, WorkSafeBC – which is responsible in helping businesses reopen safely – lost $3 billion due to markets collapsing and are now unable to assist any businesses with PPE as they reopen. Their investments shrunk to zero due to huge amounts of business closures and layoffs (Times Colonist, May 24, 2020). The Canadian Pension Plan lost $700 million on their investment side due to stocks crashing globally. It is important to understand that investments, no matter how they are made, come with a risk. However, our teachers’ pensions are protected from liability, and will continue to be protected. As always, we love to hear from you. –Leela