Latest AIMCo bungle showing us once again that Alberta should keep its hands off our pensions

AIMCo is at it again, and the story is wild. But first, a quick update on last week’s Alberta 2024 budget news.

Our entire team was in the (virtual) lockup last week combing through the budget documents to try and make sense of what the UCP’s plans are for both this year and the rest of their term–well, no surprises there, it turns out. It’s austerity all round. 

Jim Storrie was the first out of the gate to report that the UCP’s health spending isn’t keeping up with population and inflation growth. Jeremy Appel’s piece reveals how, much like in health care, stealth cuts are making our public school system do more with less. And finally I brought up the rear with a story on how the UCP’s most recent budget reveals just how fast and how far and how fast  the UCP are privatizing healthcare and education and how much money of ours they're willing to lose to continue their privatization agenda. 

We’re proud of our budget coverage and will happily stack it up against any other newsroom out there. And I almost forgot our TLDR piece summarizing the important and the odd bits from the budget.

But I’ve got something to tell you not so related to the budget that you have to know about. Razor Energy is back in the news again. 

We’ve covered the tale of the small oil and gas junior Razor Energy and their incredibly cozy relationship with AIMCo extensively over the years. From its first appearance in our extensive 2020 report on how AIMCo was pumping money into shoddy oil and gas juniors with massive environmental liabilities, to how AIMCo loaned Razor $45 million and then they couldn’t make the interest payments despite having a dividend and doing share buybacks, and how after getting millions from several levels of government Razor was planning on opening a crypto mining operation.

The end of Razor Energy now appears close at hand. On January 30, the company entered the insolvency process under the Bankruptcy and Insolvency Act. As a result of that the Alberta Energy Regulator “assessed that Razor poses an unreasonable risk,” and restricted its license eligibility status. Essentially they can’t acquire any new assets or get any new approvals for projects without “additional scrutiny.” Razor’s stock has also been frozen on Toronto Venture Exchange since then as well. 

Razor’s trouble started in December when they announced that due to a financial dispute with the operator of the Judy Creek Gas Plant that their oil and gas would not be processed and that their production would be shut-in indefinitely. Razor entered the insolvency process in late January and then took Conifer Energy, the owner of the gas plant in question, to court in order to get them to process their products. 

Image of Razor Energy facility via Linkedin.

The decision revealed some interesting details, like the fact that Conifer is alleging that Razor owes it $8 million dollars, and that’s why they shut them out. Razor says it only owes them $3.4 million. And while Razor won in bankruptcy court Conifer is appealing the decision and is currently refusing to reconnect them.  

It’s not just Conifer that Razor Energy owes money to, according to court documents Razor owes secured creditors $9.4 million and unsecured creditors $34.6 million.

Razor owes $8.5 million in unpaid property taxes to six different rural counties, the biggest number being $7.2 million to Big Lakes County in the Lesser Slake Area. A cool $1 million is owed to the Alberta Energy Regulator. Another $1.6 million is owed to the federal government and another $120k to the CRA. And the biggest unsecured creditor is oil giant CNRL, who are owed $7.9 million. 

And where is AIMCo in all of this? Back in June of 2023, about 5 months before Conifer Energy threatened to turn off Razor’s ability to make money, AIMCo was taking the $63.9 million that Razor owed it and turning it into the 70 per cent ownership of a subsidiary of Razor called FutEra Power Corp. AIMCo also took the opportunity at that time to sink an additional $4 million of pensioners' money into Razor. When a company reports a $22.6 million dollar loss just a month prior why wouldn’t you double down? 

After it was all said and done AIMCo owned 34 per cent of this obviously doomed company. And where was Razor’s focus after AIMCo dumped another $4 million of cash into it, AIMCo very generously wrote off all of Razor’s debt and had a year where they lost more than $22 million dollars? Stock options! Yes, the board of Razor (on which representatives of AIMCo sit) thought it would be a great idea in July 2023 to issue a bunch of stock options. Thankfully the stock price never got near the value needed to exercise those stock options but look at the priorities on display.

Every pension fund manager is going to have their off days but AIMCo’s continued investment in Razor Energy is inexplicable and worthy of further inquiry by people and agencies with the ability to dig deeper.

Danielle Smith is still plowing ahead with her plans to take Alberta out of the Canada Pension Plan and hand over hundreds of billions of the deferred wages of workers to the geniuses at AIMCo. Is that really a good idea when AIMCo wantonly throws away pensioners’ money on bad oil and gas junior companies?

Before we get to the sundries I have to ask, if you think this reporting is valuable, please become a monthly donor. We need your help. Some of our supporters have recently lost their jobs and we need monthly revenue to increase to keep up with expenses. If you can afford it please become a $5, a $15 or even a $50 a month donor. Jim, Jeremy and I would really appreciate it. 


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