AB Pol Econ

Auditor General ‘qualifies’ his unqualified opinion

5Feb

By Bob AscahNo Comments

Agencies, Credit Ratings, Energy, Environment, Government Finances, Opinion/Research

Auditor General ‘qualifies’ his unqualified opinion

In December 2023 Alberta’s Auditor General, Doug Wylie produced a report on his opinion on the Government of Alberta’s Consolidated Financial Statements, The report identifies in the matters which, in the professional judgment of the Auditor General and his staff (OAG), were the most significant matters raised during their audit work. These matters were the Accounting for environmental liabilities Implementation of the new public sector accounting standards related to asset retirement obligations, financial instruments, and foreign currency. (OAG, December 2023, p. 15). This post focusses on environmental liabilities. Background Alberta’s financial statements are released by the end of June each year by the Finance Minister and the OAG’s audit objective is “to provi...

3Feb

By Bob AscahNo Comments

Credit Ratings, Government Finances, Investment, Politics

AIMCo’s Portfolio and Performance (Part 2)

This series has been informed by the public meeting of the Standing Committee of Alberta Heritage Savings Trust Fund. An overview of the meeting can be found on Abpolecon.ca here. Part 1 investigated information the Alberta Investment Management Corporation (AIMCo) supplies to the Securities and Exchange Commission on their quarterly Form 13F filing. Some unusual findings were cited about AIMCo's U.S. holdings, that to my knowledge have not been publicized before. The 13F filing is the most current disclosure of AIMCo's assets to 30 September 2023. In Part 2, I examine AIMCo's total portfolio and performance metrics which are disclosed in its 2022 annual report, the latest available. At the Heritage Fund public meeting on 30 November 2023 (Hansard record), one of the problems ide...

Now is the time to establish a Legislative Assembly Budget Office in Alberta says Lennie Kaplan

28Jan

By Bob AscahNo Comments

Credit Ratings, Government Finances, Opinion/Research, Politics

Now is the time to establish a Legislative Assembly Budget Office in Alberta says Lennie Kaplan

In a second of a series of essays recommending more fiscal accountability, Lennie Kaplan proposes a new legislative office. The office would assist legislators outside in provincial cabinet in holding government accountable for their fiscal plan. The new office would provide analysis of the cost of government programs. Alberta needs a legislative budget office Provincial governments across Canada, including Alberta, have seen their credibility decline over the past two decades due to inaccurate budget forecasts and a lack of comprehensive assessment of the costs of policy measures and programs, particularly policy measures and programs with significant medium- to long-term fiscal implications. Weakness in legislative oversight over spending and the lack of legislative scrutiny ov...

23Jan

By Bob AscahNo Comments

Energy, Environment, Politics

Alberta needs an Alberta Climate Change Accountability Act contributor Lennie Kaplan argues

I have known our new contributor Lennie Kaplan since a meeting with then Treasurer Jim Dinning, Alberta Liberal party finance critic Mike Percy and other Treasury officials about 1994. Lennie was then Percy's legislative assistant and I was part of a briefing crew on amendments to the Financial Administration Act. Dinning, in a somewhat unorthodox procedure, shared legislative briefings with the like-minded opposition critic before tabling in the Assembly. Lennie and my paths crossed episodically over the years. I was therefore very pleased when he contacted me about writing some pieces based on his budgetary experience as a practitioner and a researcher. I might not always agree with Mr. Kaplan but I deeply believe, like Lennie, that accountability, transparency, and better f...

14Jan

By Bob AscahNo Comments

Agencies, Government Finances, Opinion/Research

AIMCo’s investments -Part 1- U.S. equities

In my recent post describing events at the public meeting of the Standing Committee of the Alberta Heritage Fund I provided an overview of AIMCo's investments in the United States. In this post, the first of a three part series, I take a deeper look at AIMCo's U.S. portfolio.The next part addresses AIMCo's overall portfolio of about $150 billion and part 3 examines the volatility of Heritage Fund income. Background As an institutional investor with over $100-million in U.S. registered securities AIMCo is required to file a monthly Form 13F. The filing was utilized by members of the public questioning the wisdom and ethics of certain investments. This externally required disclosure by the U.S. Securities and Exchange Commission only shows a small proportion of AIMCo's total assets un...

Heritage Fund annual public meeting- Gaza, transparency, and many unanswered questions

13Jan

By Bob AscahNo Comments

Agencies, Investment, Opinion/Research, Politics

Heritage Fund annual public meeting- Gaza, transparency, and many unanswered questions

At the end of November, I attended the public meeting of the Standing Committee of the Alberta Heritage Savings Trust Fund. Go here to access the transcript of the meeting on 30 November 2023. The previous year I attended the public meeting on 27 October 2022- transcript here. In 2022, I was the only member of the public personally in attendance with others accessing the meeting via phone or social media. This year, there were nine citizens who spent two hours of their time watching the committee and asking Alberta Investment Management Corporation (AIMCo) and Treasury Board and Finance (TGF) officials questions. In previous years, there was greater public interest with venues as large as the Italian Community Centre booked for larger numbers. I sincerely hope that we will see more inte...

Spotlight on Year-end Orders -in-Council

1Jan

By Bob AscahNo Comments

Health, Opinion/Research, Politics

Spotlight on Year-end Orders -in-Council

Background Government is a complex business and assemblies of elected politicians can not make every decision a modern government must make. So besides passing legislation which sets out very general policies, prescriptions on behaviour, and offences for breaking the law, they delegate the details and decisions to the provincial cabinet. There is also a very practical reason for doing this since the legislative body is not continuously sitting. Examples of such details or decisions include the Alberta cabinet choosing who sits on the boards of governors of Alberta’s universities and colleges, appointments based on the recommendation and advice of the Minister of Advanced Education. In addition to Orders, legislative assemblies delegate to cabinets the fleshing out the details of ho...

Broken promises heap up & possible UCP frictions

29Dec

By Bob AscahNo Comments

Uncategorized

Broken promises heap up & possible UCP frictions

Danielle Smith actions since becoming duly elected Premier of the Province of Alberta back in May 2023, have not always conformed to what was presented during the last election. One broken promise, the tax cut was called by Bob Breakenridge of Post Media on 26 December. Breakenridge’s column was preceded by a remarkably prescient column in early June. The early call was about the insincerity of the law to prevent taxes going up subject to referendum legislation. As so many political pundits have said over the years, governments can go back against their promises by ignoring them after an election of a majority government or by bringing in legislation that can be revoked at any successive legislative session. Breakenridge observes the tax cut promise was rolled out with the endorsement o...

Northwest Upgrader- more surprises ahead for Alberta taxpayers?

18Dec

By Bob AscahNo Comments

Agencies, Credit Ratings, Energy, Government Finances, Politics

Northwest Upgrader- more surprises ahead for Alberta taxpayers?

Soon after the Legislative Assembly was recessed on 6 December, Alberta’ Executive Council (provincial cabinet) passed Order in Council 219/2023 to authorize the Alberta Petroleum Marketing Commission (APMC) to borrow money to finance the operations of the North West Redwater (Sturgeon) refinery. The maximum amount to be borrowed "shall not exceed $2.9-billion"- hardly a relief for Alberta taxpayers. The O.C. also authorizes the President of Treasury Board and Minister of Finance to “make advances to or purchase securities of the Alberta Petroleum Marketing Commission” not to exceed the same $2.9-billion limit. It will be the Crown in Right of Alberta who will be raising this money by issuing securities and the Crown will become the debtor. Under section 7, the terms and conditions ...

Alberta government could be on hook for $1.3-billion

17Dec

By Bob AscahNo Comments

Agencies, Government Finances, Opinion/Research, Politics

Alberta government could be on hook for $1.3-billion

Background In March 2020 the Alberta government’s investment manager the Alberta Investment Management Corporation (AIMCo) lost approximately $2-billion due to trading losses. AIMCo had established an investment strategy based on, in effect, insuring counter-parties against volatility trading losses. This strategy was called VOLTs for volatility trading strategy. The losses occur occurred suddenly due to dramatic financial market volatility caused by the declaration of the global COVID pandemic. The impact of these losses was felt most particularly by Alberta’s public sector plans including the Local Authorities Pension Plan (LAPP), the Public Service Pension Plan (PSPP) and the Special Forces Pension Plan (SPFF). Soon after the losses were revealed, AIMCo’s board commissioned a study ...