Legislative Assembly of Alberta the 27Th Legislature Second Session Standing Committee on the Alberta Heritage Savings Trust

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Legislative Assembly of Alberta the 27Th Legislature Second Session Standing Committee on the Alberta Heritage Savings Trust Legislative Assembly of Alberta The 27th Legislature Second Session Standing Committee on the Alberta Heritage Savings Trust Fund Monday, March 16, 2009 8:01 a.m. Transcript No. 27-2-1 Legislative Assembly of Alberta The 27th Legislature Second Session Standing Committee on the Alberta Heritage Savings Trust Fund Forsyth, Heather, Calgary-Fish Creek (PC), Chair Elniski, Doug, Edmonton-Calder (PC), Deputy Chair Blakeman, Laurie, Edmonton-Centre (AL) Campbell, Robin, West Yellowhead (PC) DeLong, Alana, Calgary-Bow (PC) Denis, Jonathan, Calgary-Egmont (PC) Johnston, Art, Calgary-Hays (PC) Kang, Darshan S., Calgary-McCall (AL) MacDonald, Hugh, Edmonton-Gold Bar (AL)* * substitution for Laurie Blakeman Department of Finance and Enterprise Participants Hon. Iris Evans Minister Robert Bhatia Deputy Minister Aaron Brown Director, Portfolio Management Sandie Hay Manager, Endowments and Pooled Investments Kari-ann Kuperis Public Affairs Officer Dave Pappas Senior Manager, Investment and Debt Accounting Alberta Investment Management Corporation Participants Leo de Bever Chief Executive Officer Jai Parihar Chief Investment Officer Douglas Stratton Senior Vice-President, Fund Management Group Auditor General’s Office Participants Fred Dunn Auditor General Merwan Saher Assistant Auditor General Support Staff W.J. David McNeil Clerk Louise J. Kamuchik Clerk Assistant/Director of House Services Micheline S. Gravel Clerk of Journals/Table Research Robert H. Reynolds, QC Senior Parliamentary Counsel Shannon Dean Senior Parliamentary Counsel Corinne Dacyshyn Committee Clerk Erin Norton Committee Clerk Jody Rempel Committee Clerk Karen Sawchuk Committee Clerk Rhonda Sorensen Manager of Communications Services Melanie Friesacher Communications Consultant Tracey Sales Communications Consultant Philip Massolin Committee Research Co-ordinator Stephanie LeBlanc Legal Research Officer Diana Staley Research Officer Rachel Stein Research Officer Liz Sim Managing Editor of Alberta Hansard Transcript produced by Alberta Hansard March 16, 2009 Heritage Savings Trust Fund HS-45 8:01 a.m. Monday, March 16, 2009 Savings Trust Fund be adopted as circulated. Jonathan. Okay. Title: Monday, March 16, 2009 HS Good. [Mrs. Forsyth in the chair] The Alberta heritage savings trust fund third-quarter update was distributed to all members on February 26, 2009. The Alberta The Chair: If I may, I’d like to call the meeting to order. We’re Heritage Savings Trust Fund Act indicates that one of the functions very appreciative of the minister and all of her staff being here. As of the committee is to receive, not approve, and review quarterly someone who has been in her position before, I know how busy she reports on the results of the operation of the heritage fund. The is. So thank you, Madam Minister. minister and her departmental officials are in attendance to assist What I’m going to do first is ask the committee members and with the review. Madam Minister. everyone around the table to introduce themselves for the record. I’m going to start, and we’ll go this way. I’m Heather Forsyth, the Ms Evans: Well, thank you, Madam Chair. I’m so grateful that chair and the MLA for Calgary-Fish Creek. you’re so businesslike and prompt. It’s helping us with a very full day today, so I’m really grateful for that. Mrs. Dacyshyn: Corinne Dacyshyn, committee clerk. I’m also grateful at this juncture for the first time to present Leo de Bever, whom I think we were extremely fortunate to attract. Mr. Denis: Jonathan Denis, MLA, Calgary-Egmont. That’s no credit to myself but, rather, the absolutely excellent board, of which our deputy is currently a member and which has many Dr. Massolin: Good morning. I’m Philip Massolin, and I’m the notables from Alberta from the entrepreneurial sector who have committee research co-ordinator, Legislative Assembly Office. really strived since the 1st of last year to ensure that AIMCo is world class and carries on a proud tradition of financial excellence in Mr. Dunn: Fred Dunn, Auditor General. management. There have been many changes that have come into place over the Mr. Saher: Merwan Saher, office of the Auditor General. last couple of years in readiness for this from Finance and Enterprise officials. For this past year, interestingly enough – although I am Mr. Brown: Aaron Brown, Finance and Enterprise. reporting on the heritage fund, I just want to set the context – there have been plans made by the group to locate in different premises, Mr. Parihar: Jai Parihar, chief investment officer, AIMCo. away from the Terrace Building, and last summer staff were taken from being staff members of the Alberta government to the AIMCo Mr. Bhatia: Robert Bhatia, Deputy Minister of Finance and management group, which is quite different. Many of them Enterprise. surrendered their previously held positions in the public service to become part of an organization which we hope will become those Ms Evans: Iris Evans, Minister of Finance and Enterprise. entrepreneurial investment managers that, as one of my predeces- sors, the Hon. Shirley McClellan, stated, will take us to a more Dr. de Bever: Leo de Bever, CEO, AIMCo. entrepreneurial vision of how we do our investment management. Rather than investment management internally in Finance and Mr. Stratton: Doug Stratton, senior vice-president of AIMCo. Enterprise under the dome, in a manner of speaking, and with government, we have an excellent board, who have selected Leo, Ms Hay: Sandie Hay, Finance and Enterprise. who started in the third week of August last year. Challenges other than human resources challenges have related to our computer Mr. Pappas: Dave Pappas, Finance and Enterprise. management systems, our human resources, our payroll. All the kinds of things that practically a new corporation would undertake Ms Kuperis: Kari-ann Kuperis, Finance and Enterprise. have been undertaken during this period of time. Still, when I reported on February 26 about the third-quarter Mr. Kang: Good morning. Darshan Kang, MLA, Calgary-McCall. results in the heritage fund and reported that the funds were down collectively some 15 per cent in the year overall, we matched that Mr. Campbell: Robin Campbell, MLA, West Yellowhead. with Norway and the Norwegian fund, for example, at between 23 and 25 per cent. The Norwegian fund was down $60 billion in Mr. Johnston: Good morning. Art Johnston, Calgary-Hays. September and reported just recently at a $92 billion loss. So our losses in the heritage fund comparably have been extremely good. Mr. Elniski: Good morning. Doug Elniski, deputy chair, MLA for The management in both Finance and Enterprise and in AIMCo Edmonton-Calder. would caution against comparators with other funds because of different mixes of assets and so on. When we get to the business The Chair: Thank you. plan, you’ll see that there is a new schedule that has been agreed to I just want to advise everyone at the table that Ms Notley has by both Finance and AIMCo for the management of the fund, but I withdrawn from the committee as of March 12, and no replacement am very satisfied that the management of the fund for this past year, has been appointed by the Assembly. in the most tumultuous economic climate we’ve seen in decades, has We’re going to move on to the approval of the agenda. Can I have been both responsible and responsive. a motion that the agenda for the March 16, 2009, meeting of the The interesting thing I could tell you as an MLA and a minister is Standing Committee on the Alberta Heritage Savings Trust Fund be that while I get letters about many things and criticisms about many adopted as circulated? Robin. All in favour? Anyone opposed? things, as you can well imagine, it’s only in the House, in fact, from Thanks. a member of Her Majesty’s opposition that we’ve had any criticism If I could have someone move that the minutes of the December of the heritage fund because most people recognize that in both our 1, 2008, meeting of the Standing Committee on the Alberta Heritage heritage fund and in our endowments there is both a long-term HS-46 Heritage Savings Trust Fund March 16, 2009 strategy and savings plan. But there are also funds that are managed sit there and see if they behave themselves. Their job is to add value in the endowments that enable them to be prepared for more rapid and above the benchmark portfolio; in other words, to exceed, to disposal should the need arise for capital projects, et cetera. I’m meet and beat the targets. If you even look at the way that that’s very satisfied with the management that we’ve had in this past year incented within the AIMCo management themselves, if they can do and present this to you for any questions that you might have relative well on the targets, then obviously they will materially benefit. If to the fund management. they don’t do well on the targets, obviously they won’t. So we have defined this asset allocation and present it today in the business plan The Chair: Do we have any questions to the minister? for your perusal and for questions you might ask. Seeing none, then I need someone to move that On the next page, relative to risks to achieving goals and perfor- the Standing Committee on the Alberta Heritage Savings Trust Fund mance measures, of course, it draws to your attention that diversify- receive the 2008-09 third-quarter report on the Alberta heritage ing doesn’t necessarily eliminate the risk of loss. That’s why you savings trust fund as presented. hire bright people and have a bright board in place. There are more Art. Thank you. All in favour? Opposed? It’s carried.
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