Editing ATB Financial (section)

== History ==
=== Background ===

[[File:William Aberhart2.jpg|thumb|right|Premier [[William Aberhart]]]]
The Alberta Treasury Branches were created by the [[Social Credit Party of Alberta|Social Credit]] government of Premier [[William Aberhart]] in 1938, with its roots dating back to political unrest in 1917 arising from the unmet credit demands of the [[Western Canada|West]].<ref name="Post">{{Cite news |last=Post |first=John Turley-Ewart, Special to Financial |date=2019-12-20 |title=John Turley-Ewart: Banking in Alberta takes an historic turn as province pushes ATB to mimic Toronto banks |language=en |work=Financial Post |url=https://financialpost.com/opinion/john-turley-ewart-banking-in-alberta-takes-an-historic-turn-as-province-pushes-atb-to-mimic-toronto-banks |access-date=2022-11-12}}</ref> Prior to ATB Financial's formation, Aberhart and Social Credit swept into power in the [[1935 Alberta general election|1935 Alberta election]] in a wave of unrest following [[John Edward Brownlee sex scandal|scandals]] surrounding the [[United Farmers of Alberta|United Farmers]] Premier [[John Edward Brownlee]]. Aberhart's government sought radical monetary reform in a province which was devastated by the [[Great Depression]], as well as greater economic autonomy from both the federal government and financial institutions based largely in Toronto and Montréal.<ref name="Post"/>

However, in two years Aberhart's government failed to bring forward promised reforms, which resulted in a [[1937 Social Credit backbenchers' revolt|backbencher revolt]] forcing the government to pass three pieces of controversial financial reform acts. ''Credit of Alberta Regulation Act'' required all bankers to obtain a licence from the Social Credit Commission, ''Bank Employees Civil Rights Act'' prevented unlicensed banks and their employees from initiating [[civil actions]], and ''Judicature Act Amendment Act'' prevented any person from challenging the constitutionality of Alberta's laws in court without receiving the approval of the [[Lieutenant-Governor in Council]].{{sfn|MacPherson|1953|p=177}} In August 1937, the federal government [[Disallowance and reservation in Canada|disallowed]] all three acts. The [[Supreme Court of Canada]], in answering [[reference question]]s posed by the federal government, unanimously ruled that such disallowance was valid.<ref>{{cite CanLII|litigants=Reference re The Power of the Governor General in Council to Disallow Provincial Legislation and the Power of Reservation of a Lieutenant-Governor of a Province|link=|year=1938|court=scc|num=34|format=canlii|pinpoint=|parallelcite=[1938] SCR 71|date=March 4, 1938|courtname=auto|juris=}}</ref>

Aberhart returned with three new bills, ''Bank Taxation Act'' (Bill 1) levying provincial taxes on banks' paid-up capital and reserve funds at punitive rates, ''Credit of Alberta Regulation Act, 1937'' (Bill 8) similar to the previous disallowed act, but covering all "credit institutions", and ''[[Accurate News and Information Act]]'' (Bill 9) requiring newspapers to print "clarifications" of stories considered inaccurate by the Social Credit Board, and to reveal their sources on demand, and also authorizing the provincial government to prohibit the publication of any newspaper, any article by a given writer, or any article making use of a given source. All three bills were [[Disallowance and reservation in Canada|reserved]] by Lieutenant Governor [[John C. Bowen]], and the federal government posed the [[reference question]]s to the Supreme Court. In ''[[Reference Re Alberta Statutes]]'' the Supreme Court ruled all three bills as ''[[ultra vires]]''.{{sfn|Elliott|2004|p=141}}

=== Formation ===

Aberhart sought to create a State Credit House which facilitated some banking services in small communities where larger banks had previously closed. Subsequently, the Aberhart government created the Alberta Treasury Branches through a series of Orders in Council in late-August and early-September 1938,{{sfn|Powe|1951|p=73}} following the judicial defeat of the Social Credit monetary reforms at the Supreme Court. The Aberhart government authorized the Treasury Department to establish "branches of the provincial treasury" and with $200,000 of provincial funds as capital the first Alberta Treasury Branch was opened in [[Rocky Mountain House]] on September 29, 1938, followed by branches in [[Edmonton]], [[Andrew, Alberta|Andrew]], [[Grande Prairie]], [[Killam, Alberta|Killam]], and [[St. Paul, Alberta|St. Paul]] which opened the next day.{{sfn|Alberta Treasury Branches|1999|p=12}}{{sfn|Ascah|Anielski|2018|p=9}}{{sfn|Powe|1951|p=81}} The first employees of the Treasury Branches were provincial civil servants with previous banking experience, many of whom were transferred from the Treasury Department's Sales Tax Branch following the abolishment of the [[Sales taxes in Canada|provincial sales tax]].{{sfn|Powe|1951|p=82}} Besides banking, the Treasury Branches served as government offices and propaganda centres.{{sfn|Elliott|2004|p=141}}

The Aberhart government was able to utilize the Treasury Branches to operate the "Interim Program", which was an attempt to provide the [[citizen's dividend]] promised by the Social Credit government in 1935. The Interim Program's name indicated the temporary nature of the program, which would remain in place until a complete system of Social Credit could be established in Alberta.{{sfn|Powe|1951|p=68}} Under the interim program, the Treasury Branches issued non-negotiable transfer vouchers in place of regular [[Canadian dollar|currency]] that could be redeemed at participating merchants in the province. Consumers who purchased goods from participating merchants that were partially produced in Alberta would earn a "bonus" in their account of up to three per cent, the full bonus (in the form of transfer vouchers) being earned if one-third of a consumers aggregate monthly purchases were "Alberta-made".{{sfn|Ascah|Anielski|2018|p=9}}{{sfn|Powe|1951|p=79}}{{sfn|Powe|1951|p=72}} The one-third Alberta-made program was generally ineffective in increasing domestic market demand as it was easy for consumers to meet the low threshold over the period of one month. {{sfn|Powe|1951|p=107}} In response, the threshold on Alberta-made products was raised to one-half in February 1941.{{sfn|Powe|1951|p=108}}

Transfer vouchers could also be used for payments to the provincial government, including taxes, licence fees, and other provincial debts.{{sfn|Powe|1951|p=75}} The transfer voucher system worked considerably better than the previous attempt to issue a citizen's dividend in the form of [[prosperity certificate]]s in 1936.{{sfn|Powe|1951|p=71}}

The Treasury Branches proved popular amongst Albertans, resulting in the government establishing 22 branches and 270 branch agencies by June 1939.{{sfn|Alberta Treasury Branches|1999|p=15}} The Treasury Branches were first authorized to provide loans in 1941 to be approved under a centralized "loan committee" overseen by the Treasury Branches Superintendent.{{sfn|Ascah|Anielski|2018|p=10}} Expanding into lending services was necessary to gain a stronger presence in retail areas, as many merchants who operate with the Treasury Branches also maintained a separate account at another bank to ensure access to credit.{{sfn|Powe|1951|p=124}}

The only services provided up to 1943 were term [[savings account]]s at 1.5 to 3 per cent interest, and the sale of automobile, hunting and fishing licences. Furthermore, the government charged consumers a two per cent penalty on cash withdrawals to continue to incentivize Albertans to use non-negotiable transfer vouchers to ensure capital did not flow out of the branches.{{sfn|Powe|1951|p=91}} Merchants were provided a means to withdraw a certain amount of cash without being charged a penalty in order to replace goods sold for vouchers. A formula was developed to determine the "basic rate", the amount of cash the merchant could withdraw without penalty by taking the merchant's annual profit margin as a percentage and subtracting it from 100 per cent (i.e. 10% margin less 100% means 90% of the balance is available to be withdrawn without penalty).{{sfn|Powe|1951|pp=92–93}} The calculation basic rate system was deemed cumbersome and replaced in February 1941 with a centralized list compiled by the Department of Industries and Labour, based on the type of products and services sold and the location of the business.{{sfn|Powe|1951|p=94}} By early 1942 there were over 7,125 merchants enrolled under the interim program.{{sfn|Powe|1951|p=123}}

Government employees were partially paid with Treasury Branch vouchers, with single employees, widows and widowers receiving 15 per cent of their salary in voucher form. Married employees were paid between 15 and 25 per cent of their salary in vouchers, and the calculation was made after all deductions. This policy encouraged employees to use the service instead of other banks.{{sfn|Powe|1951|p=98}}{{sfn|Alberta Treasury Branches|1999|p=16}} The bonus system ceased in April 1945 and a contingency of $480,738 was paid out of the province's general revenue fund to a reserve fund for the purpose of covering the cumulative earned bonuses during the program.{{sfn|Powe|1951|p=106}}

The Treasury Branches proved to be successful as deposits grew to $24-million by 1946,{{sfn|Alberta Treasury Branches|1999|p=17}} and by 1950 there were 45 Treasury Branches, six sub-branches, and 110 agencies employing 331 staff.{{sfn|Powe|1951|pp=82–83}}

===Changes in 1950s and 1960s===

During the [[1955 Alberta general election|1955 Alberta election]] the Treasury Branches came under scrutiny for allegations of preferential treatment for loans to members of the Legislative Assembly (MLAs), as well as preferential contracts awarded to firms indebted to the provincial government.{{sfn|Ascah|Anielski|2018|p=11}} The Treasury Branches provided significant loans to a handful of road construction companies, with the firm Sparling-Davis provided $4.5-million in loans, which was more than 20 per cent of the Treasury Branches overall loans.{{sfn|Ascah|Anielski|2018|p=12}}  Premier [[Ernest Manning]] reluctantly approved a Royal Commission to look into the lending practices of the Treasury Branches the day before the 1955 election, the commission was led by [[Hugh John Macdonald (Edmonton politician)|Hugh John Macdonald]] and [[James Mahaffy]].{{sfn|Ascah|Anielski|2018|p=11}} The commission was provided with narrow terms of reference and found there was no evidence of maladministration or wrongdoing by the government or the Treasury Branches.{{sfn|Ascah|Anielski|2018|p=12}} <ref>{{cite news |title=Commission Clears Alberta Government |work=[[Edmonton Journal]] |date=June 9, 1956 |page=1 |id={{ProQuest|2397103867}}}}</ref><ref>{{cite news |last1=Drever |first1=Bill |title=Maladministration Charges Dismissed By Commission |url=https://news.google.com/newspapers?id=EzBkAAAAIBAJ&sjid=6nsNAAAAIBAJ&pg=6088%2C1773219 |access-date=March 25, 2021 |work=[[Calgary Herald]] |date=June 9, 1956 |page=1}}</ref><ref>{{cite book |last1=Mahaffy |first1=James C. |last2=Macdonald |first2=Hugh John |author1-link=James Mahaffy |author2-link=Hugh John Macdonald (Edmonton politician) |title=Report of the Alberta Royal Commission Appointed Under the Public Inquiries Act, Chapter 139, Revised Statutes of Alberta, 1942. |date=June 6, 1956 |location=Edmonton, Alta. |url=https://archive.org/details/reportofalbertar00maha |access-date=March 25, 2021}}</ref> Prior to the formation of the commission the government responded to the allegations by introducing a bill in 1955 which prevented MLAs from borrowing from the Treasury Branches.<ref>{{cite news |title=Premier Says Findings Are 'Most Gratifying' |url=https://news.google.com/newspapers?id=EzBkAAAAIBAJ&sjid=6nsNAAAAIBAJ&pg=7200%2C1787956 |access-date=March 25, 2021 |work=[[Calgary Herald]] |date=June 9, 1956 |page=3}}</ref>

The 1967 Royal Commission on Banking and Finance led by Justice [[Dana Porter]] recommended that a deposit insurance scheme be implemented for Canadian banks. Subsequently, in 1969 the [[16th Alberta Legislature]] passed ''The Treasury Branch Deposits Guarantee Act'' which provided a provincial guarantee for the deposits of the Treasury Branches.{{sfn|Ascah|Anielski|2018|p=13}}

===Oil and gas boom and bust===

The Alberta economy grew significantly in the 1970s and early 1980s due to the rising price of oil. Total loans issued by the Treasury Branches grew from $10.6-million in 1950 to $1.9-billion by 1981.{{sfn|Ascah|Anielski|2018|p=13}}

However, despite significant growth, prosperity would not last forever. All Alberta industries suffered in the early 1980s owing to high interest rates, low world commodity prices, and the [[National Energy Program]]. The Treasury Branches were no exception, posting the first of six consecutive years of losses in 1983.{{sfn|Alberta Treasury Branches|1999|p=54}} Other regional financial institutions suffered at this time with the collapse of the [[Canadian Commercial Bank]] and the [[Northland Bank]] in 1985.<ref>{{cite news |title=Bank failure blamed on 'triple whammy' |url=https://news.google.com/newspapers?id=LnlkAAAAIBAJ&sjid=MX8NAAAAIBAJ&pg=1172%2C3433736 |access-date=March 28, 2021 |work=[[Calgary Herald]] |agency=The Canadian Press |date=November 26, 1985 |location=Edmonton |page=E2}}</ref><ref>{{cite journal |last1=Clark |first1=Marc |title=Anatomy of a failure |journal=[[Maclean's]] |date=November 3, 1986 |page=41 |url=https://archive.macleans.ca/article/1986/11/3/anatomy-of-a-failure |access-date=March 28, 2021}}</ref> By 1989 the Treasury Branches had an accumulated deficit of CA$150 million.{{sfn|Alberta Treasury Branches|1999|p=54}}

ATB was the subject of scandal in the late 1980s after clients such as [[Peter Pocklington]]'s Gainers Foods<ref>{{cite press release |url=http://www.atb.com/dev/news/details.asp?id=57| archive-url= https://web.archive.org/web/20031217002803/http://www.atb.com/dev/news/details.asp?id=57 |archive-date= December 17, 2003 |title=Alberta Treasury Branches and the Edmonton Oilers sale|work=atb.com |date= October 2, 1997 | access-date= April 4, 2015}}</ref><ref>{{cite news |url=https://www.theglobeandmail.com/report-on-business/article728538.ece |title=Peter Puck's last stand |url-status=dead |archive-url=https://web.archive.org/web/20091105050024/http://www.theglobeandmail.com/report-on-business/article728538.ece |archive-date=November 5, 2009 |access-date=June 29, 2013 |last=Jang |first=Brent |work=[[Globe and Mail]] |date=December 23, 2008}}</ref> and the Ghermezian Brothers' [[West Edmonton Mall]] defaulted on loans.

The Treasury Branches did begin to innovate in the early 1980s as well, joining the [[Canadian Payments Association]] in 1983 allowed the institution to clear cheques, and the Branches developed an interest rate shielding policy for agricultural customers and delivered special payments on behalf of the government's residential mortgage loan program.{{sfn|Alberta Treasury Branches|1999|p=56}} In 1984 the Treasury Branches offered [[Foreign currency account|US dollar savings accounts]] in partnership with [[Citibank]].{{sfn|Alberta Treasury Branches|1999|p=56}} [[Automated teller machine]]s were introduced in 1989 and in 1990 the Treasury Branches became the first Canadian financial institution to offer telephone banking services.{{sfn|Alberta Treasury Branches|1999|p=56}}<ref>{{cite news |title=Any Time Banking offered |work=[[Calgary Herald]] |date=March 31, 1990 |page=F16}}</ref>

=== 1990s===

[[File:Alberta 2016-06-18 (27800957482).jpg|thumb|ATB Financial Branch in [[Big Valley, Alberta|Big Valley]].]]

In the 1990s, the government reformed Alberta Treasury Branches with the intention of transforming it into a financial institution that could compete with Canadian chartered banks. Public trust was eroded during the 1980s and 1990s as high-risk loans with political motivations eroded the Treasury Branches financial footing, including a $100-million loss in 1996.<ref name="EdmJrl1997">{{cite news |last1=Arnold |first1=Tom |title=New role for Treasury Branches |work=[[Edmonton Journal]] |date=June 11, 1997 |location=Edmonton |page=1 |id={{ProQuest|2402436208}}}}</ref>

By 1994, there were 142 Treasury Branches, 125 agencies, 3,000 staff and 80 automated teller machines in Alberta. The Klein government appointed Gordon Flynn to review the Treasury Branches operations, Flynn recommended a number of changes including greater autonomy, financial accountability measures and the appointment of a [[Board of Directors]].{{sfn|Alberta Treasury Branches|1999|p=66}} Flynn's recommendations were reviewed by a working group chaired by former federal finance minister [[Don Mazankowski]], which provided nine further recommendations for the operations of ATB. Mazankowski recommended the government articulate the public policy goals and benchmarks for the institution, ATB must operate at an arms-length from the government, operate under a board of directors, be provided equal treatment against other [[private sector]] banks, modernized to allow ATB to compete with modern banks, offer new and in demand financial services and products, deliver programs with a for profit emphasis, remain cost conscious and profit motivated, and be subject to an accountability regime similar to the private sector.{{sfn|Ascah|Anielski|2018|p=16}}

Provincial Treasurer [[Jim Dinning]] quickly introduced legislation to create an independent [[board of directors]] made up of government appointees was established in 1996 and ATB formally became an autonomous provincial [[Crown corporation]] on October 8, 1997.<ref name="EdmJrl1997"/>{{sfn|Ascah|Anielski|2018|p=16}} The government also appointed former Metropolitan Life CEO Paul Haggis as the new superintendent of ATB in 1996.{{sfn|Ascah|Anielski|2018|p=17}}

=== 2000s to present ===

The Alberta Treasury Branches rebranded in January 2002 as ''ATB Financial'' in an effort to gain stronger brand recognition in urban areas such as Calgary and Edmonton. By 2002 ATB Financial controlled 15 per cent of the province's retail banking, but lagged in the cities with seven per cent in Calgary and eight per cent in Edmonton.<ref>{{cite news |last1=Teel |first1=Gina |title=Renamed Treasury Branches going urban |work=[[Calgary Herald]] |date=January 22, 2002 |page=E3 |id={{ProQuest|2263454578}}}}</ref> The official change of name for the crown corporation did not occur until 2017.<ref name="2017 name change">{{cite web |title=Miscellaneous Statutes Amendment Act, 2017 |url=https://www.canlii.org/en/ab/laws/astat/sa-2017-c-22/latest/sa-2017-c-22.html |website=CanLII |access-date=July 9, 2020 |language=en}}</ref>

ATB was not immune to the [[Financial crisis of 2007–2008|2008 financial crisis]], when over $1.2-billion of non-bank sponsored [[asset-backed commercial paper]] became [[illiquid]]. The financial crisis resulted in special provisions for credit loss of $253-million and $225-million in 2008 and 2009. Alberta's [[Auditor-General]] noted that inappropriate incentives may have been to blame for insufficient due diligence on for the losing securities.{{sfn|Ascah|Anielski|2018|p=19}} The [[Progressive Conservative Association of Alberta|Progressive Conservative]] government responded in July 2009 when Finance Minister [[Iris Evans]] announced a number of government programs to strengthen ATB's balance sheet including providing $600-million in notational capital, and changes to requirements for [[Capital adequacy ratio|capital adequacy test]].{{sfn|Ascah|Anielski|2018|p=19}}

In 2015, the [[New Democratic Party of Alberta|New Democratic]] government capitalized ATB Financial with an additional $1.5-billion to promote lending access to small and medium-sized businesses.{{sfn|Ascah|Anielski|2018|p=20}} In 2021 ''[[Fast Company]]'' named ATB Financial one its 100 Best Workplaces for Innovators<ref>{{Cite web |title=Best Workplaces for Innovators 2021 |url=https://www.fastcompany.com/best-workplaces-for-innovators/2021?view=1 |website=www.fastcompany.com}}</ref> in the International category. Based in Calgary, it had a three-year-old incubator, ATB Ventures.<ref>{{Cite web |date=August 4, 2021 |title=Five additional outstanding international Best Workplaces for Innovators |url=https://www.fastcompany.com/90659111/best-workplaces-innovators-2021-international |access-date=November 10, 2024 |website=www.fastcompany.com}}</ref>