HomeMy WebLinkAboutFSD-006-26Staff Report
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Report To: General Government Committee
Date of Meeting: February 2, 2026 Report Number: FSD-006-26
Authored By: Trevor Pinn
Submitted By: Trevor Pinn, Deputy CAO/Treasurer, Finance and Technology
Reviewed By: Mary-Anne Dempster, CAO
By-law Number: Resolution Number:
File Number:
Report Subject: 2026 Annual Investment Policy Review
Recommendations:
1.That Report FSD-006-26, and any related delegations or communication items, be
received;
2.That the Deputy CAO/Treasurer be directed to inform the ONE JIB and other
investment advisors that there are no changes to the investment policies for 2026;
and
3.That all interested parties listed in Report FSD-006-26, be advised of Council’s
decision.
GG-023-26
Municipality of Clarington Page 2
Report FSD-006-26
Report Overview
1. Background
1.1 The Municipality of Clarington is required, under the Municipal Act, 2001 to have an
investment policy adopted and approved by Council.
1.2 Effective January 13, 2025, the Municipality has been investing under S.418.1 “Prudent
Investor” of the Municipal Act. The Municipality’s “Money Not Required Immediately” is
invested through the ONE JIB, which is a joint municipal services board established to
allow municipalities to invest under the prudent investor standard.
1.3 Under O.Reg 438/97, at least annually each council of a joint investment board must
review its investment policy. The changes, if any, must then be adopted as part of the
investment plan for each municipality by the Board.
1.4 In 2024, the Municipality proceeded to adopt the Prudent Investor Standard. Staff
recommended at the time, and continue to recommend, that Council approves two
distinct investment policies. There is an overall policy, which governs the Prudent
Investor Policy (CP-011) and a Legal List policy which governs the short-term (money
required immediately) investment portfolio. The short-term portfolio is not anticipated to
require significant changes going forward.
1.5 In November 2024, the ONE JIB approved the initial investment plan for the Municipality
based on the April 2024 approved investment policy. Funds were moved to ONE JIB in
January 2025 and the annual review of the investment plan was scheduled for the
September 2025 meeting due to the approval of the investment policy in April 2025 and
ensuring that the plan was in line with a policy approved within the past 12 months.
Municipality of Clarington Page 3
Report FSD-006-26
Change to Review Timeline
1.6 Historically, the review of the investment policy has occurred concurrently with the
presentation of the annual investment review. These two events are not required to
occur at the same time.
1.7 The ONE JIB meets on a quarterly basis, once in February, one in May, twice in
September and once in November. The review of the Municipality’s investment plan
must occur annually at one of these meetings.
1.8 To shorten the time between when the policy is approved and when the investment plan
is approved, and to assist ONE JIB manage their meeting capacity, Municipal are
recommending that the investment policy review occur in January/February each year to
facilitate the annual investment plan approval at the May ONE JIB meeting.
1.9 Performing the review earlier will provide staff sufficient time to adjust the policy if
needed, review the implications with ONE staff and meet the reporting deadlines for the
ONE JIB meeting.
2. Review of Investment Policy
Proposed Revised CP-003 Investment Policy (Legal List)
2.1 Staff have reviewed the policy and do not have any recommended changes.
Proposed Revised CP-011 Investment Policy
2.2 In conversation with ONE staff, the ONE JIB does not have any suggested changes to
the investment policy this year, there are also no housekeeping changes.
Review of Specific Investment Decisions
2.3 Restricted Special Assets are listed in Schedule A. This is a definition to provide clarity
on several types of investments that are not intended to be included in MNRI, and
therefore under the control of the ONE JIB. The Municipality’s investments in Elexicon
are listed in Schedule A, there are no proposed changes to this schedule.
2.4 Third-Party Trust Funds and Designated Funds are now listed in Schedule B. The ONE
JIB is not responsible for the investment of these funds. The Municipality’s trust funds
are listed in Schedule B, there are no proposed changes to this schedule.
2.5 Staff have reviewed the section on Prohibited Investments. Consistent with the past two
years, staff are not recommending any specific prohibitions on investments.
Municipality of Clarington Page 4
Report FSD-006-26
3. Financial Considerations
Not Applicable.
4. Strategic Plan
Not Applicable
5. Climate Change
Not Applicable.
6. Concurrence
Not Applicable.
7. Conclusion
It is respectfully recommended that the report be received and that no changes to the
investment policies occur at this time.
Staff Contact: Trevor Pinn, CPA, CA, Deputy CAO/Treasurer, 905-623-3379 x.2602 or
tpinn@clarington.net.
Attachments:
Attachment 1 – CP-003 Investment Policy (Legal List)
Attachment 2 – CP-011 Investment Policy
Interested Parties:
The following interested parties will be notified of Council's decision:
ONE JIB
BMO Nesbitt Burns
CIBC Woodgundy
Council Policy
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Number: CP-003
Title: Investment Policy (Legal List)
Type: Financial Management
Sub-type: Investments
Owner: Financial Services
Financial Planning
Approved By: Council
Approval Date: July 3, 2018
Effective Date: July 3, 2018
Revised Date: May 26, 2025
Applicable to: All Staff
1.Legislative or Administrative Authority:
1.1. Effective November 27, 2024, the Municipality of Clarington officially
met the requirements under Section 418.1 of the Municipal Act to
follow the Prudent Investor Standard. The Municipality has entered into
an agreement with the ONE Joint Investment Board (ONE JIB) to meet
the requirement of having an investment board under Section 418.1.
1.2. This policy was developed in accordance with Section 418 of the
Municipal Act, 2001, which authorizes a municipality to invest in
prescribed securities, in accordance with prescribed rules, money that
it does not require immediately. The policy follows Ontario Regulation
438/97, Eligible Investments, Related Financial Agreements and
Prudent Investment
2.Purpose:
2.1. To provide guidance for the investment of funds deemed “Money
Required Immediately”.
2.2. The Municipality of Clarington strives for the optimum utilization of its
cash resources within statutory limitations and the basic need to
protect and preserve capital, while maintaining solvency and liquidity to
meet ongoing financial requirements.
3. Scope:
3.1.This policy includes all funds that are managed by the Municipality of
Clarington.
Attachment 1 to Report FSD-006-26
Council Policy
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4. Definitions:
4.1. Asset Backed Securities – Fixed income securities (other than a
government security) issued by a Special Purpose Entity, substantially
all of the assets of which consist of Qualifying Assets.
4.2. Basis Point – A unit that is equal to 1/100th of 1% and is used to
denote the change in a financial instrument. The basis point is
commonly used for calculating changes in interest rates, equity
indexes and the yield of a fixed-income security.
4.3. CHUMS Financing Corporation (CHUMS) – A subsidiary of the
Municipal Finance Officers Association of Ontario (MFOA) which in
conjunction with the Local Authority Services Limited (LAS) operates
the ONE Investment Program.
4.4. Credit Risk - The risk to an investor that an issuer will default in the
payment of interest and/or principal of a security.
4.5. Discount – The amount by which the par value of a security exceeds
the price paid for the security.
4.6. Diversification – A process of investing assets among a range of
security types by class, sector, maturity and quality rating.
4.7. Duration – A measure of the timing of the cash flows, such as the
interest payments and the principal repayment, to be received from a
given fixed-income security. This calculation is based on three
variables: term to maturity, coupon rate, and yield to maturity. The
duration of a security is a useful indicator of its price volatility for given
changes in interest rates.
4.8. Environmental, Social and Governance (ESG) Investing –
considering and integrating ESG factors into the investment process,
rather than eliminating investments based on ESG factors alone.
Integrating ESG information can lead to more comprehensive analysis
of a company.
4.9. Holding Period Classification – Classification of investments based
on the intended period the Municipality would hold the asset, as
follows:
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4.9.1. Cash Equivalent: short-term highly liquid investments that are
readily convertible to known amounts of cash and that are
subject to an insignificant risk of changes in value.
4.9.2. Short-term: securities with a holding period of one year or less.
4.9.3. Medium-term: securities with a holding period of one to three
4.9.4. Long-term: securities with a holding period of greater than
three years.
4.10. Liquidity – A measure of an assets’ convertibility to cash
4.11. Local Authority Service Limited (LAS) – A subsidiary of the
Association of Municipalities of Ontario (AMO) which in conjunction
with CHUMS are members of the ONE Investment Inc.
4.12. ONE Investment Inc. – An incorporated not-for-profit organization
which includes investment portfolios available for Ontario
municipalities. Formerly was the ONE Investment Program which is a
professionally managed group of pooled investments that meet
eligibility criteria as defined by regulations under the Municipal Act.
Also includes the High Interest Savings Account (HISA).
4.13. Market Risk – The risk that the value of a security will rise or decline
as a result of changes in market conditions.
4.14. Market Value – The current market price of a security.
4.15. Maturity – The date on which payment of a financial obligation is due.
The final stated maturity is the date on which the issuer must retire a
bond and pay the face value to the bondholder.
4.16. Par – The face value or principal value of a bond.
4.17. Premium – The amount by which the price paid for a security exceeds
the security’s par value.
4.18. Principal – The face or par value of a debt instrument or the amount
of capital investment in a given security.
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4.19. Rate of Return – The yield obtainable on a security based on its
purchase price or its current market price. Yield reflects coupon, term,
liquidity and credit quality.
4.20. Schedule I Bank – Schedule I banks are domestic banks and are
authorized under the Bank Act to accept deposits, which may be
eligible for deposit insurance provided by the Canadian Deposit
Insurance Corporation.
4.21. Schedule II Banks – Schedule II banks are foreign bank subsidiaries
authorized under the Bank Act to accept deposits, which may be
eligible for deposit insurance provided by the Canada Deposit
Insurance Corporation. Foreign bank subsidiaries are controlled by
eligible foreign institutions.
4.22. Sinking Fund – Money accumulated on a regular basis, through
regular contributions and interest earnings, in a separate custodial
account that is used to redeem debt securities by a specified date.
4.23. Weighted Average Maturity (WAM) – The average maturity of all the
securities that comprise a portfolio.
4.24. Yield to Maturity (YTM) – The annual return on a bond held to
maturity when interest payments and price appreciation (if priced
below par) or depreciation (if priced above par) are considered
5. Policy Requirements:
General
5.1. For money-required immediately, the Municipality follows the Eligible
Investment rules outlined in O.Reg.438/97.
5.2. The primary objectives of the short-term investment program, in order
of priority, shall be:
5.3. Adherence to Statutory Requirements
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5.3.2. Investments, unless limited further by Council, will be those
deemed eligible under O.Reg 438/97 as amended.
5.4. Preservation of Capital
5.5. Maintaining Liquidity
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5.5.2. The portfolio shall consist largely of securities with active
secondary or resale markets to ensure liquidity. A portion of
the portfolio may be placed in local government investment
pools which offer liquidity for short-term funds.
5.6. Competitive Rate of Return
5.6.2. Diversification, as well as ensuring safety of principal by
limiting exposure to credit, sector or term risk, provides
opportunities to enhance the investment return on the
Municipality’s portfolio.
Standards of Care
5.7. Prudence
5.7.2. Staff acting in accordance with procedure and this investment
policy and having exercised due diligence, shall be relieved of
personal responsibility for any individual security’s credit risks
or market price changes, provided deviations from
expectations are reported in a timely fashion and the
liquidation or sale of securities are carried out in accordance
with the terms of this policy.
5.8. Ethics and Conflict of Interest
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5.9. Safekeeping and Custody
5.10. Authority
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5.10.2. The authority to enter into arrangements with banks,
investment dealers and brokers, and other financial institutions
for the purchase, sale, redemption, issuance, transfer and
safekeeping of securities shall be done in a manner that
conforms to the Municipal Act, 2001 and the Municipality’s
policies, including the Delegation of Authority By-law.
5.11. Approval Requirements
5.11.1. Signing authority for transactions from the Municipality’s bank
account to an investment account would follow the signing
authorities outlined in the Banking Signing Authorities Policy.
5.12. Council Reporting
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5.12.2. If an investment made by the Municipality is, in the Treasurer
or designate’s opinion, not consistent with the investment
policies and goals adopted by the Municipality, the Treasurer
shall create a work-out plan in accordance with O.Reg 438/97
within 30 days after becoming aware of it.
5.13. Eligible Investments and Statutory Requirements
5.13.1. The Municipality maintains the following funds:
horizon of 5 years, within
this fund there will be
withdrawals and deposits
annually.
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investment horizon of over
5 years.
The key investment driver
is to earn a return which
can be used to fund other
activities while preserving
capital.
the perpetual care of
cemeteries under the
control of the Municipality.
investment horizon of 5
years.
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5.13.2. The above categories are funds which manage similar
accounts. For example the Development Charge Reserve
Fund invests for all individual DC Reserve Funds, individual
accounts are not required to be established. An individual
investment security may be made utilizing funds from different
sources (i.e. a GIC in the DC Reserve Fund may relate to
general government, parks and road DC reserve funds).
5.14. Eligible Securities
5.15. Investment Limitations
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5.16. Environmental, Social and Governance (ESG) Investing
5.16.1. The Municipality supports incorporating ESG investing into the
Portfolio. The Municipality believes that well-managed
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companies are those that demonstrate high ethical and
environmental standards and respect for their employees,
human rights, and the communities in which they do business
and that these actions contribute to long-term financial
performance.
5.17. Policy Review
5.17.1. This policy shall be reviewed annually and updated as
necessary.
6. Roles and Responsibilities:
6.1. Council is responsible for:
6.1.1. Setting the investment policy for the Municipality.
6.1.2. Determining the risk tolerance of the Municipality.
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6.2. Deputy CAO/Treasurer is responsible for:
6.2.1. Establishing internal controls around the investment and
banking process.
6.2.2. Determining an investment plan in compliance with the
Investment Policy.
6.2.3. Ensuring the Municipality’s investment plan is in compliance
with legislation.
6.2.4. Reporting to Council investment information in compliance
with the Policy and the legislation.
6.3. Directors / Managers are responsible for the following within their
scope of authority:
6.3.1. Making investment decisions in compliance with the
Investment Policy.
6.4. All Staff are responsible for:
6.4.1. Following the Investment Policy.
7. Related Documents:
7.1. O.Reg.438/97: Eligible Investments, Related Financial Agreements
and Prudent Investment
7.2. Delegation of Authority By-law
8. Inquiries:
8.1. Manager, Financial Planning/Deputy Treasurer
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9. Revision History:
June 12, 2023 Update format to new policy
template
Add definition and section on
Environment, Social and
Governance (ESG) Investing
additional Investment Policy added
(CP-011)
longer required as a result of
moving to Prudent, including term
limits beyond 5 years (removed).
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Number: CP-011
Title: Investment Policy
Type: Financial Management
Sub-type: Investments
Owner: Finance and Technology
Financial Planning
Approved By: Council
Approval Date: April 22, 2024
Effective Date: April 22, 2024
Revised Date: May 26, 2025
Applicable to: Finance and Technology
1.Legislative or Administrative Authority:
1.1. This policy was developed in accordance with Section 418.1 of the Municipal
Act, 2001, which authorizes a municipality to invest money that it does not
require immediately in accordance with the prudent investor standard. The
policy follows the Ontario Regulation 438/97, Eligible Investments, Related
Financial Agreements and Prudent Investment.
2.Purpose:
2.1. This Investment Policy Statement (IPS) governs the investment of the
Municipality's Money Not Required Immediately (MNRI) and Money Required
Immediately (MRI). lt is intended, among other things, to direct the Deputy
CAO/Treasurer, Finance and Technology in the investment of MRI and to
direct ONE Joint Investment Board (ONE JIB) in the investment of MNRI by
implementing the Authorizing By-law 2024-016 pursuant to which the
Municipality authorized the establishment of guidelines for the prudent
management of the Municipality's MNRI pursuant to section 418.1 of the Act.
2.2. ln addition to the Municipality's MRI and MNRI, the Municipality is from time to
time entrusted with the management of money and investments for a third-
party beneficiary ("third-party trust funds"). The Municipality’s Third-Party Trust
Funds are listed in Schedule B of this Policy.
2.3. There are also sources of money in which the Municipality may have an
indirect interest but which the Municipality currently has no authority to invest.
Such sources of money, referred to in this IPS as "designated funds", are listed
in Schedule A attached hereto. The designated funds are identified in this IPS
Attachment 2 to Report FSD-006-26
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for the sole purpose of enabling the Municipality to better see, on an
aggregated basis, the various financial assets in which the Municipality has an
interest. The Municipality is not responsible for the investment activities or
performance of designated funds.
2.4. The goals of this IPS are to:
a) Define and assign responsibilities for investment of MRI and MNRI;
b) Describe the Municipality’s responsibilities with respect to third-party trust
funds and designated funds;
c) Ensure compliance with the applicable legislation;
d) Direct ONE JIB as to the Municipality’s investment goals and risk
tolerance;
e) Provide guidance and limitations regarding the investments and their
underlying risks;
f) Establish a basis of evaluating investment performance and the
underlying risks; and,
g) Establish a reporting standard to Council.
2.5. This IPS applies to employees of the Municipality, to ONE JIB and to the
employees of ONE Investment. ONE JIB, the Deputy CAO, Finance and
Technology/Treasurer, and any agent or advisor providing services to ONE JIB
in connection with the investment of the portfolio shall accept and strictly
adhere to this IPS.
3. Scope:
3.1. This policy includes all funds that are managed by the Municipality of
Clarington.
4. Definitions:
4.1. Act – means the Municipal Act, 2001, S.O. 2001, c. 25, as amended from time
to time.
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4.2. Agent – means any administrator, Custodian, payment servicer, portfolio
manager, investment counsel, consultant, banker, broker, dealer or other
service provider engaged or appointed by ONE JIB and authorized by ONE JIB
to exercise any of the functions of ONE JIB pursuant to a written agreement, in
the manner and to the extent provided in the Regulation and without limiting
the generality of the foregoing, Agent includes ONE Investment.
4.3. Alternative Assets – means investments outside traditional investments such
as equities, fixed income, and cash which may include, hedge funds, private
equity, natural resources, real estate and infrastructure. Alternative
investments are typically less liquid than traditional investments, are
appropriate only for allocations with a long investment horizon.
4.4. Asset Class – An asset class is a specific category of assets or investments,
such as cash, fixed income, equities, alternative investments, real estate etc.
4.5. Asset Mix (or Asset Allocation) – means the proportion of each asset class
in a portfolio. Asset classes include bank deposits, money market securities,
bonds and equities, among other things.
4.6. Authorizing By-law – means a by-law of a Founding Municipality which
authorizes: (i) the entering into of the Initial Formation Agreement; (ii) the
establishment of ONE JIB; (iii) the approval of the Client Questionnaire and the
adoption of the IPS; and (iv) the entering into of the ONE JIB Agreement.
4.7. Benchmark – means an index that is representative of a specific securities
market (e.g. the S&P/TSX Composite Index, the FTSE/TMX 91 Day T-bill
Index, etc.) against which investment performance can be compared.
Performance benchmarks refer to total return indices in Canadian dollar terms.
4.8. CHUMS Financing Corporation (CHUMS) – means a subsidiary of Municipal
Finance Offcers’ Association of Ontario (MFOA) which, in conjunction with
LAS, established ONE Investment.
4.9. CFA Institute – refers to the global, not-for-profit professional association that
administers the Chartered Financial Analyst (CFA) and the Certificate in
Investment Performance Measurement (CIPM) curricula and examination
programs worldwide, publishes research, conducts professional development
programs, and sets voluntary, ethics-based professional and performance
reporting standards for the investment industry.
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4.10. Custodian – means a specialized financial institution that is responsible for
safeguarding a municipality’s investments and is not engaged in “traditional”
commercial or consumer/retail banking. Global custodians hold investments
for their clients in multiple jurisdictions around the world, using their own local
branches or other local custodian banks (“sub-custodians” or “agent banks”).
4.11. Designated Funds – means source(s) of money in which the Municipality may
have an indirect interest but which the Municipality currently has no authority to
invest. Designated Funds are listed in Schedule B of this Policy.
4.12. Derivative – A derivative is a contract between two or more parties whose
value is based on an agreed-upon underlying financial asset (like a security) or
set of assets (like an index). Common underlying instruments include bonds,
commodities, currencies, interest rates, market indexes, and stocks.
4.13. Diversification – means a risk management technique that mixes a variety of
investment types within a portfolio to help mitigate portfolio risk. A diversified
portfolio holds different kinds of investments to improve the risk adjusted
returns.
4.14. Environmental, Social and Governance (ESG) Investing – means
considering and integrating ESG factors into the investment process, rather
than eliminating investments based on ESG factors alone. Integrating ESG
information can lead to more comprehensive analysis of a company.
4.15. Internal Controls – means a system of controls that may include authorities,
policies, procedures, separation and segregation of duties, compliance checks,
performance measurement and attribution, reporting protocols, measures for
safekeeping of property and data, and the audit process.
4.16. Investment Plan – means the investment plan applicable to the MNRI and
adopted by ONE JIB under the Regulation, as it may be amended from time to
time.
4.17. Investment Policy Statement (IPS) – means the investment policy applicable
to the Municipality’s investments adopted and maintained by the Council of the
Municipality for MNRI under the Regulation, and for MRI, as the same may be
amended from time to time. The IPS may also apply to the money and
investments held by the Municipality for the benefit of persons other than the
Municipality itself and may make reference to source(s) of money in which the
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Municipality may have an indirect interest but which the Municipality has no
authority to invest.
4.18. JIB – is short for Joint Investment Board and means a joint municipal service
board that is established under section 202 of the Act by two or more
municipalities for the purposes of Part II of the Regulation.
4.19. Legal List Securities – means the securities and other investments and
financial instruments that are included from time to time in Part I of the
Regulation.
4.20. Leverage – means an investment strategy of using borrowed money—
specifically, the use of various financial instruments or borrowed capital—to
increase the potential return of an investment. Typically leverage also tends to
increase investment risks.
4.21. Liquidity – means the ability to turn an investment into cash relatively quickly,
without a substantial loss in value. For example, a savings account is more
liquid than real estate.
4.22. Local Authority Services (LAS) – means an entity which, in conjunction with
MFOA/CHUMS, established ONE Investment.
4.23. Local Distribution Corporation or LDC – means a corporation incorporated
under section 142 of the Electricity Act, 1998.
4.24. Market Value – means the price at which a security is trading and could
presumably be sold. Also known as Fair Value it represents the current value
of the investment.
4.25. Maturity – means the date upon which the principal or stated value of an
investment becomes due.
4.26. Money Required Immediately (MRI) – municipal funds not included in the
Money Not Required (MNRI) definition included in this policy, funds are
governed in accordance with Section 418 of the Act.
4.27. Money Not Required Immediately (MNRI) – long term municipal funds
defined in this policy, that are governed by the Prudent Investor Standard in
accordance with Section 418.1 of the Act.
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4.28. Municipal Services Corporation (MSC) – means a corporation established
under section 203 of the Act in accordance with the applicable regulation
(Ontario Regulation 599/06).
4.29. Municipality – means the Municipality of Clarington.
4.30. OCIO Offering - means the comprehensive investment program made
available through ONE Investment as agent for ONE JIB, where a qualified
investment manager is engaged to advise a Participating Municipality with
regard to the investment of the Participating Municipality’s MNRI and to invest
and manage such MNRI in accordance with the terms and conditions set out in
the ONE JIB Agreement.
4.31. ONE Investment – means the not-for-profit corporation established by
CHUMS and LAS which provides certain management, administrative and
other services to ONE JIB as its agent.
4.32. ONE JIB - means ONE Joint Investment Board, established by certain
founding municipalities under section 202 of the Act as a JIB for purposes of
Part II of the Regulation, which is the duly appointed JIB for the Municipality, as
constituted from time to time and which acts in accordance with the Act, the
Regulation, the ONE JIB Agreement, including the Terms of Reference, this
IPS and the Investment Plan.
4.33. ONE JIB Agreement – means the agreement effective as of January 13, 2025
entered into in accordance with the requirements of the Regulation, pursuant to
which ONE JIB has control and management of the Municipality’s MNRI.
4.34. Participating Municipality - means from time to time each of the
municipalities for whom ONE JIB acts as the JIB under the terms of the ONE
JIB Agreement.
4.35. Pooled Fund - means a unit trust established under a trust instrument,
generally not available to the public, in which institutional, sophisticated or high
net worth investors contribute monies that are invested and managed by an
External Portfolio Manager. Monies are pooled or combined with monies of
other investors.
4.36. Portfolio - means any collection of funds that are grouped together and
required for specific purposes.
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4.37. Proxy Voting - means a legal transfer to another party of a shareholder’s right
to vote thereby allowing shareholders who cannot attend meetings to
participate. External Portfolio Managers usually vote proxies on behalf of their
clients.
4.38. Prudent Effective Date - means the date on which the prudent investor
regime applies to the Municipality.
4.39. Prudent Effective Date Agreement – means an agreement entered into by
the Municipality and ONE Investment that sets out the day on which the
prudent investor regime starts to apply to the Municipality.
4.40. Prudent Investor Standard - means the standard that applies when the
Municipality invests money that it does not require immediately under section
418.1 of the Act. It requires the Municipality to exercise the care, skill, diligence
and judgment that a prudent investor would exercise in making such an
investment and the standard does not restrict the securities in which the
Municipality can invest. The Prudent Investor Standard makes use of Modern
Portfolio Theory and applies the standard of prudence to the entire portfolio in
respect of the Municipality’s MNRI rather than to individual securities. It
identifies the fiduciary’s central consideration as the trade-off between risk and
return as found in the CFA Institute Standards of Practice Handbook.
4.41. Rebalancing – means the process of realigning the weightings of a portfolio of
assets. Rebalancing involves periodically buying or selling securities in a
portfolio to maintain an original or desired level of asset allocation or risk.
4.42. Regulation – means Ontario Regulation 438/97.
4.43. Restricted Special Assets – means investments specified by this Policy and
held by the Municipality as of the Prudent Effective Date, where ONE JIB is not
able to exercise control. Restricted Special Assets are listed in Schedule A of
this Policy and are not considered to be MNRI.
4.44. Risk – means the uncertainty of future investment returns or chance of loss of
capital.
4.45. Risk Tolerance – means the financial ability and willingness to absorb a loss
in return for greater potential for gains.
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4.46. Safekeeping – means the holding of assets (e.g. securities) by a financial
institution.
4.47. Securities Lending – means loaning a security to another market participant.
The borrower is required to deliver to the lender, as security for the loan,
acceptable collateral with value greater than the value of the securities loaned.
The Securities Lending program is managed by the Custodian or another
appointed agent on behalf of investors. A Securities Lending program is widely
used by institutional investors to generate additional marginal returns on the
total portfolio.
4.48. Sinking Fund – means a fund established to fulfil the requirements to make
annual contributions in respect of various debenture issues wherein money is
to be regularly set aside for the payment of the principal of the debentures at
maturity.
4.49. Sinking Fund Required Contributions (Annual Sinking Fund
Requirement) – means the amount of money to be set aside each year for
deposit into a sinking fund or a retirement fund, as applicable, for each sinking
fund and term debenture issue in accordance with the Municipality’s debenture
by-laws.
4.50. Sinking Fund Required Earnings – means the investment earnings needed
for the Sinking Fund Contributions to continue to grow to a value sufficient to
repay the principal at maturity for each issue of sinking fund and term
debentures.
4.51. Sinking Fund Excess Earnings – means the investment earnings in excess
of the required earnings.
4.52. Sub-Investment Manager - means an asset management firm or investment
consultant, acting as a sub-investment manager for ONE JIB that provides
investment advice and professional services and is involved in the
implementation and operational aspects of the OCIO Offering, and that has full
responsibility for the investment and management of a Participating
Municipality’s MNRI through ONE Investment, based on an IPS approved by
the Council of the municipality.
4.53. Third-Party Trust Funds – means money over which the Municipality
exercises both management and policy control but whose assets are not
owned by the Municipality. These funds are governed by a variety of
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agreements and, in some cases, by legislation. Some funds may have
externally mandated investment policies, and some may have investment
policies that are determined by the Municipality. Third-Party Trust Funds are
listed in Schedule B of this IPS.
4.54. Trust Fund – means a fund which consists of assets that have been conveyed
or assigned to a trustee to be administered as directed by agreement or
statute. As a result, a trustee holds title to the assets for the purpose of
providing benefits, and being accountable, to a beneficiary. The Municipality is
the trustee of funds that are to be used for specific purposes by the
Municipality or any related parties.
4.55. Treasurer – means the Deputy CAO, Finance and Technology/Treasurer, or
other individual appointed by Council to fill role of Treasurer as required by the
Municipal Act, 2001
5. Policy Requirements:
General Statements
5.1. Investments of Money Required Immediately (MRI) will, in accordance with this
IPS and Section 418 of the Act, only be made in Legal List Securities.
5.2. Investments of Money Not Required Immediately (MNRI) are governed by the
Prudent Investor Standard in accordance with Section 418.1 of the Act. This
standard is similar to that which governs trustees and pension fund
administrators and creates a fiduciary responsibility. Prudent investment in
compliance with the Act and the Regulation enhances the potential for the
Municipality to earn improved risk-adjusted rates of return.
5.3. The Act provides that the Municipality, and therefore ONE JIB, must consider
the following criteria in planning investments of MNRI, in addition to other
criteria relevant to the circumstances:
a) General economic conditions;
b) The possible effect of inflation or deflation;
c) The role that each investment plays within the Municipality’s total portfolio
of investments;
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d) The expected total return from income and the appreciation of capital;
and
e) Needs for liquidity, regularity of income and preservation or appreciation
of capital.
5.4. Money and investments that the Municipality holds as Restricted Special
Assets, Third-Party Trust Funds or has an interest in as Designated Funds will
be subject to applicable legislation and any related agreements or instruments.
5.5. Use of Prudent Investor Standard
5.5.1. For MNRI, the standard to be used by the Municipality and ONE JIB shall be
the Prudent Investor Standard as required by section 418.1 of the Act and Part
II of the Regulation in the context of managing the Municipality’s MNRI and
investments thereof. Investments shall be made with the care, skill, diligence,
and judgment, taking into account the prevailing circumstances, that persons of
prudence, discretion and integrity would exercise in the management of
investments, considering the necessity of preserving capital as well as the
need for income and appreciation of capital. The Act includes a duty to obtain
the advice that a prudent investor would obtain under comparable
circumstances.
5.5.2. Officers, employees and investment agents acting in accordance with written
procedures and the IPS and exercising due diligence shall take all necessary
actions to optimize performance of investments on a portfolio basis, taking into
account the prescribed risk and other parameters set out in this IPS and
market factors. The Municipality’s staff acting in accordance with written
procedures and this IPS, shall be relieved of personal responsibility for an
investment’s performance, provided underperformance relative to expectations
is reported to Council and the liquidation or sale of investments is carried out in
accordance with this IPS.
Determination of Money Required Immediately and Money Not Required
Immediately
5.6. Determination of the Municipality’s MNRI is the responsibility of Council. In
making the determination, Council may consider:
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5.6.1. the time horizon within which the monies are needed to meet financial
obligations;
5.6.2. the purpose for which the monies have been collected or set aside and are to
be used;
5.6.3. the source of the money; or
5.6.4. any combination of the foregoing
5.7. There is no legislated definition of MRI or MNRI and no guidance is provided.
The municipality has the responsibility to define the basis of MNRI in a way
that is most appropriate for their circumstances.
5.8. The Municipality defines MNRI as funds that are, in the opinion of the
Treasurer, not required within the next 36 month period.
5.9. For certainty, all money and investments of the Municipality that have not been
identified as MNRI (other than Restricted Special Assets, Third-party Trusts
Funds and any Designated Funds referenced in Section 5.3) shall be deemed
for purposes of this IPS to be MRI.
5.10. Determination of the Municipality’s MNRI and MRI may be modified at any time
and from time to time by action of Council and with respect to specific money
by the Treasurer in accordance with the provisions of Section 5.37.
5.11. Any changes in this IPS regarding the Municipality’s MNRI and MRI must be
communicated immediately in writing to ONE JIB.
5.12. The Municipality’s portfolios represent funds required for specific purposes. A
high-level description of each of these portfolios and their objectives is
provided in Section 5.17 below. This IPS applies to the following money of the
Municipality, its agencies, boards and commissions including:
5.12.1. MRI which is invested in Legal List Securities; and/or,
5.12.2. MNRI which is invested under the Prudent Investor Standard.
Investment
5.13. The Municipality’s MRI is described in this IPS consists of money that is
needed to meet the short-term financial obligations of the Municipality and are
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controlled and managed by the Deputy CAO/Treasurer, Finance and
Technology or designate.
5.14. Money Required Immediately: Investment Objectives
5.14.1. The main focus of the investment of MRI is cash management, and the interest
income generated by the investment of these monies contribute to municipal
revenues. To the extent possible, the Municipality shall attempt to match its
investments with anticipated obligations.
5.14.2. Capital preservation is the paramount objective for MRI investments, and these
investments need to be highly liquid. Consequently, only high-quality, short-
term investments that are also Legal List Securities will be held in this portfolio.
The Municipality may invest in fully liquid money market securities and deposit
accounts. The Municipality aims to maximize returns subject to the constraints
set out in Part I of the Regulation, as amended from time to time, with a view to
preserving capital and to further manage risk through diversification by issuer
and credit quality.
5.14.3. The investment objectives for MRI, ranked in priority, are as follows:
a) Security of Principal
The primary objective for MRI is to ensure the security of principal. To minimize
the risk of loss, investments shall be subject to minimum credit ratings and
shall be diversified by maturity, type of investment and issuer. Investing
activities will be reviewed on a regular basis as actual, revised and forecasted
operating and capital plans are completed. Maturity dates should be structured
so that investment cash inflows occur when needed.
b) Liquidity Requirements
Liquidity is measured by the ease with which securities can be converted to
cash to meet forecast spending. The investments that are eligible under
Ontario’s Eligible Investments and Related Financial Agreements Regulation
possess different features and thus market prices will vary depending on
market conditions, as well as the particular features of the type of investment.
To ensure adequate liquidity, the Municipality’s investments shall be diversified
by holding securities of various terms to maturity and by various types of
investments and issuers and to the extent possible, the term of such
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investments shall match the forecasted requirements for such monies to meet
expenditures.
c) Rate of Return
The Municipality’s money shall be invested to maximize the rate of return
within acceptable risk levels while respecting the security of principal, legal
constraints and the liquidity needs of each investment portfolio.
The composition of each portfolio, including its term to maturity and type of
investments, shall be adjusted within the guidelines of this Policy to take
advantage of market opportunities. Such changes shall be made with the
periodic interest rate outlook and target portfolio structure approved by the
Treasurer.
5.15. MRI: Eligible Investments
5.15.1. MRI may be invested in high quality, short-term investments that are also Legal
List Securities available from banks, dealers and other financial institutions.
Investments issued or guaranteed by approved institutions will be permitted by
this Policy, as deemed eligible by Ontario Regulation 438/97 or as authorized
by subsequent provincial regulations. Investments will be limited to securities
issues maintaining a minimum credit rating by an appropriate credit rating
agency.
5.15.2. The Municipality’s existing Investment Policy CP-003, which is referred to in
Part I of the Regulation as a statement of investment policies and goals, is
attached as Appendix III and will apply to its MRI. Necessary modifications will
apply and in the event of a conflict between this IPS and the attached
investment policy in respect of the MRI, the provisions of the CP-003
Investment Policy (Legal List) will prevail.
5.16. MNRI
5.16.1. The Municipality’s MNRI is described in Section 5.8. In accordance with the
ONE JIB Agreement and this IPS, ONE JIB has exclusive control and
management of the MNRI and the investments made therewith.
5.16.2. From time to time, the Municipality may require money immediately to meet
financial obligations and may require ONE JIB to liquidate one or more
investments in order to generate money to meet those obligations. ONE JIB
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will select the investment(s) to be liquidated. The timing of such liquidation will
be determined by ONE JIB in consultation with the Treasurer.
5.17. MNRI: Investment Objectives
5.17.1. In setting the objectives noted below, the Municipality has taken into account
the following considerations:
a) Preservation of capital;
b) Adequate liquidity that takes into account the needs of financial
obligations and reasonably anticipated budgetary requirements;
c) Diversification by asset class, market, sector, issuer, credit quality and
term to maturity;
d) Income and capital appreciation; and,
e) Macro risks, such as inflation, economic growth and interest rates.
5.17.2. Investment of MNRI is to be managed by ONE JIB in a way that balances the
investment objectives, expected returns and risk, to develop asset allocations
that achieve the Municipality’s financial needs with stated risk tolerances.
5.17.3. The investment objectives for MNRI are as follows:
MNRI Horizon Objective Risk Tolerance Horizon
Preservation of
Capital
Medium Term
towards capital
projects, mitigating
inflation impacts
and meeting target
funding
requirements
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MNRI Horizon Objective Risk Tolerance Horizon
Contributions
towards capital
projects, mitigating
and meeting target
funding
requirements.
Emphasis on long
term inflation
adjusted growth
Moderate High
Risk
5.17.4. The MNRI invested with ONE JIB will be broadly diversified to help reduce the
volatility of investment returns. Returns have an impact on revenues, as well
as a longer-term impact on future years’ budgets and should, at a minimum,
keep pace with inflation. To the extent possible, the MNRI horizons are aligned
with the Municipality’s obligations and cash flow requirements and may consist
of liquid and non-liquid securities based on future cash flow requirements.
5.18. MNRI: Eligible Investments
5.18.1. Eligible investments for MNRI include any Pooled Fund or other collective
investment vehicle or institutional investment management product approved
or selected by ONE Investment for the Prudent Investment Program (OCIO
Offering), provided always that the products and the selection of products
comply in all material respects with the IPS.
5.18.2. Additionally, nothing in this IPS prevents MNRI from being held in cash, short-
term money market instruments, or overnight deposits.
5.19. MNRI: Sinking Funds
5.19.1. Sinking Funds are currently not applicable to the Municipality, however, should
any sinking funds be established in the future, they are to be classified as
MNRI and will be managed separately by ONE JIB.
5.20. Local Distribution Corporation (LDC) Securities
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5.20.1. The direct investment in LDC shares and promissory notes, as listed in
Schedule A, shall be considered Restricted Special Assets and shall not be
held by ONE JIB as MNRI.
5.20.2. The investment in Elexicon Corporation is considered to be an investment in
an LDC for the purposes of this policy as it is the sole shareholder of Elexicon
Energy which is an LDC.
5.21. Restricted Special Assets
5.21.1. For certainty, Restricted Special Assets are not MNRI of the Municipality, and
such assets are not under the control or management of ONE JIB.
5.22. Third-Party Trust Funds and Designated Funds
5.22.1. ln addition to the Municipality's own money, the Municipality is from time to
time entrusted with third-party trust funds, and the Municipality's
responsibilities and obligations with respect thereto may be subject to other
legislation and governed by other agreements and instruments. To the extent
that there is any conflict or inconsistency between the provisions of this IPS
and the terms and conditions contained in such other legislation, agreements
or instruments applicable to third-party trust funds, the latter shall prevail.
5.22.2. The Municipality's third-party trust funds and the designated funds are listed in
Schedule B.
5.22.3. For certainty, the third-party trust funds and the designated funds are not MNRI
of the Municipality, and such monies are not under the control or management
of ONE JIB.
Investment Management
5.23. Investment Management of MRI
5.23.1. The investment of MRI shall be controlled and managed by the Treasurer.
5.24. Investment Management of MNRI
5.24.1. The investment of MNRI shall be controlled and managed by ONE JIB in
accordance with this IPS and the ONE JIB Agreement.
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5.24.2. The selected Sub-Investment Manager shall enter into agreement with ONE
Investment related to the OCIO Offering, that complies with this IPS and Part II of
the Regulation and will provide compliance and performance reports to ONE JIB
and ONE Investment. ONE JIB shall make any investment management changes
deemed in the best interest of the Municipality.
5.25. Transition to Prudent Investor Regime
5.25.1. Until the Prudent Effective Date, the Municipality will continue to control and
manage its MRI, MNRI and investments in Legal List Securities. Some Legal
List investments were made with MRI and some with MNRI.
5.25.2. Upon and after the Prudent Effective Date, the control and management of
money and investments that are determined to be not required immediately
shall be given to ONE JIB. Nothing in this IPS requires that such investments
need be liquidated or disposed of. It is not contrary to this IPS for investments
that the Municipality does not require immediately to be held, and to continue
to be held by, ONE JIB in instruments such as term deposits, guaranteed
investment certificates or principal protected notes issued by a financial
institution. They can be held to maturity and invested upon receipt of cash
proceeds.
5.25.3. During the transition to the OCIO Offering the Chair and Vice-Chair of ONE JIB
have discretionary power to approve temporary investments recommended by
the Sub-Investment Manager that may not be expressly described in this IPS
but are, in the opinion of the Chair and Vice-Chair, in the best interests of the
Municipality and are entirely consistent with their fiduciary obligations to the
Municipality.
5.25.4. All MNRI that is not Third-Party Trust Funds, Designated Funds or Restricted
Special Assets shall be provided to the ONE JIB on the Prudent Effective Date.
Investment Constraints
5.26. Environmental, Social and Governance (ESG) Investing
5.26.1. The Municipality supports ESG investing for MRI and MNRI. The Municipality
believes that well-managed companies are those that demonstrate high ethical
and environmental standards and respect for their employees, human rights,
and the communities in which they do business, and that these actions
contribute to long term financial performance.
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5.26.2. The Municipality has chosen to monitor the developments of ESG factors and
will reconsider its approach to ESG investing for the MRI Investment Portfolio
as and when appropriate to do so.
5.26.3. For the Investment of MNRI, ONE JIB is required to explore and consider how
the OCIO is implementing responsible investing principles at the time of hiring
and during periodic reviews. It may report on results periodically, if requested.
5.27. Securities Lending
5.27.1. For the investment of MRI, Securities Lending is not permitted.
5.27.2. For the investment of MNRI, the Municipality may invest in pooled funds, and
other investment funds that are managed by the Sub Investment Manager who
may engage in Securities Lending if the policies of the OCIO permit such an
action.
5.28. Derivatives
5.28.1. For the investment of MNRI, futures and forwards contracts, options and other
derivative instruments may only be used to:
a) create an asset mix position that does not leverage the portfolio,
b) replicate the performance of a capital market index, or
c) reduce risk as part of a hedging strategy
5.29. Use of Leverage
5.29.1. Nothing in this IPS prevents the use of leverage, provided it is prudent to do
so. Leverage is inherent in the use of certain types of investment strategies
and instruments. Where leverage is employed, ONE JIB (for MNRI) and the
Treasurer (for MRI) shall have in place monitoring procedures to manage
overall exposure to any counterparty Leverage should not be exercised for
speculative purposes but may be used as a hedging tool.
5.30. Pooled Funds
5.30.1. Investments in open-ended pooled funds, closed-ended pooled funds, limited
partnerships and other specialist corporate structures (e.g. LLCs), are
permitted provided that the assets of such funds are permissible investments
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under this IPS or provided that any non-permitted investments are disclosed by
the Sub-Investment Manager. Within pooled funds, the External Portfolio
Manager’s policies will take precedence over this IPS.
5.31. Currency Hedging
5.31.1. The MRI Investment Portfolio may consider the utilization of currency hedging
only in cases where the Municipality can allocate the hedge to a specific capital
purchase denominated in a foreign currency.
5.31.2. The Municipality’s funding requirements are in Canadian dollars. However,
some exposure to foreign currencies in the MNRI Investment Portfolio may be
advantageous to provide diversification and potentially enhance returns.
Therefore, it shall not be a violation of this IPS for investments in global
mandates to be unhedged, in whole or in part, where the diversification
benefits embedded in the currency exposure are considered to be beneficial or
desirable by ONE JIB.
5.32. Alternative Asset Classes
5.32.1. The applicable legislation does not prevent the direct or indirect placement of
the MNRI in Alternative Assets Classes, this IPS permits investments in
alternative investments for the purpose of management of MNRI under ONE
JIB.
5.32.2. Alternative Asset Classes, such as infrastructure or real estate, may have
uncorrelated return characteristics with traditional Asset Classes that may
improve diversification within the portfolio, which may lead to better risk
adjusted returns. Typically investment may not be fully liquid, and are only
appropriate for inclusion in portfolios with long investment horizons.
5.33. Prohibited Investments
5.33.1. There are no investments specifically listed as prohibited.
5.34. Performance Monitoring, Rebalancing and Management
5.34.1. MRI
5.34.2. Reporting of MRI shall be in accordance with policy CP-003 Investment Policy
(Legal List).
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5.34.3. MNRI
5.34.4. For the investment of MNRI, ONE JIB shall establish parameters for monitoring
investments and rebalancing through policy or directly within the Investment
Plan.
5.34.5. Investments are expected to achieve returns at least equal to their benchmarks
measured over a rolling five-year period. At minimum, ONE JIB shall provide
reporting described in Section 5.42 that shows the Municipality’s holdings,
declares compliance with this IPS, and reports on the Sub-Investment
Manager’s performance.
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Administrative Policies
5.35. Flow of Money and Annual Municipal Budget
5.35.1. On an annual basis, as part of the Municipality’s Annual Review process, the
Municipality shall identify the amount, if any, of MNRI that it holds. Any MNRI
not already under the control and management of ONE JIB shall be transferred
to ONE JIB as soon as practicable.
5.35.2. On an annual basis, ONE JIB shall be notified by the Treasurer as to the
amount, if any, required by the Municipality from the MNRI then under the
control and management of ONE JIB for the Municipality’s operational
purposes. Such amount shall be deemed to be MRI and shall be returned to
the Municipality in a lump sum or by way of periodic payments, as directed by
the Treasurer.
5.36. Flow of Money Otherwise than through the Budget Process
5.36.1. The MRI captures revenues received by the Municipality during each year after
the approval of the Municipality’s budget for the year. Any amounts deemed
to be MNRI by the Treasurer at any such time during the year shall be
transferred to ONE JIB to be under its management and control as MNRI.
Amounts so transferred will be recorded annually in the Investment Plan and
allocated by ONE JIB in accordance with the Investment Plan.
5.36.2. The Treasurer is authorized to direct ONE JIB to return any amounts
determined by the Treasurer to be required to meet expenditures for
unexpected contingencies not anticipated by the Municipality’s budget in force
for that year, provided however that the aggregate of the amounts to be
returned to the Municipality under this Section 6.2.2 during the year shall not
exceed 25% of the MNRI under the control and management of ONE JIB as at
the date that the Municipality approved its budget for the year (the Budgeted
MNRI). In determining the Budgeted MNRI for purposes of calculating the 25%
limit, any MNRI to be transferred to the control and management of ONE JIB in
accordance with that year’s Annual Review pursuant to Section 5.41.2 shall be
included and any amount to be returned by ONE JIB to the Municipality
pursuant to Section 6.1.2 shall be excluded.
5.37. Valuation of Investments
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5.37.1. Investments shall be valued according to the values provided by the
Custodian(s). For the investment of MNRI, values of unitized vehicles shall be
valued according to the unit values published by the Custodian. Other
investments shall be valued at their market value when that is available from
regular public trading. If a market valuation of an investment is not available,
then a fair value shall be supplied by the Sub-Investment Manager to ONE
Investment no less frequently than quarterly.
5.38. Voting Rights
5.38.1. The Sub-Investment Manager shall assume the responsibility of exercising
voting rights in respect of the Municipality’s MNRI and will report its voting
policies to the ONE JIB annually. The Municipality may access these policies
at any time.
5.39. Internal Controls
5.39.1. The Treasurer shall establish an annual process of review of all investments
made under this IPS. This review will provide internal control by assuring
compliance with governing legislation and with policies and procedures
established by the Treasurer. To the extent ONE JIB’s input is needed, these
requirements will be communicated in advance to ONE JIB.
5.40. Custodians
5.40.1. All investments and assets of the investment portfolios shall be held by a
Custodian and any of the Custodian's sub-custodians or nominees. For MNRI,
the Custodian shall be acceptable to ONE Investment. For MRI the Custodian
shall be acceptable to ONE Investment if ONE Investment products are being
used for the investment of the Municipality’s MRI, otherwise the Custodian
shall be acceptable to the Municipality.
5.41. Reporting
5.41.1. For the investment of MRI, the Treasurer shall report at least annually to
Council, the report to be in a form and contain such content as Council may
request. Subject to any reporting obligations contained in the Municipality’s
Investment Policy (Legal List) the report to Council shall include investment
performance during the period covered and any other information required
under the Regulation and that the Treasurer may consider to be pertinent.
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5.41.2. The Regulation provides that ONE JIB shall submit an investment report to
Council in respect of the investment of MNRI at least annually. This report shall
include the following.
a) Investment performance during the period covered by the report;
b) Asset mix of the total portfolio;
c) A listing of individual investments held at the fund level at the end of the
reporting period showing, where appropriate, book value, market value,
realized/unrealized gains/losses and actual income received;
d) A list of all transactions including the security name, trade date, and the
purchase and/or sale price;
e) A statement by the Treasurer as to whether all investments were made in
accordance with the IPS and as to whether all investments were made in
accordance with the Investment Plan; and
f) Any other pertinent information in the opinion of the Treasurer.
5.41.3. All securities invested on behalf of the Municipality by ONE JIB or with the
assistance of ONE Investment shall be held for safekeeping in the name of the
Municipality by a Custodian.
5.42. Approval, Subsequent Modifications and Effective Date
5.42.1. Policy CP-003 Investment Policy shall be renamed CP-003 Investment Policy
(Legal List) and will be reviewed on an annual basis.
5.42.2. At least annually, Council shall review the IPS and update it, if required. In the
course of reviewing the IPS, Council may request comments from the
Treasurer with respect to the investment of MRI and from ONE JIB with
respect to the investment of MNRI.
5.42.3. Following the Council’s review of the IPS, ONE JIB shall review the Investment
Plan and update it, if required.
5.42.4. At a minimum, the annual IPS review will consider:
a) the adequacy of funding for capital works;
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b) the Municipality’s ability to reduce other spending;
c) flexibility of the timeframe to payout; and
d) sensitivity to loss.
5.43. Effective Date
5.43.1. This IPS is adopted by Council of the Municipality, and will come into force
effective the date of the Prudent Effective Date Agreement as signed by ONE
JIB and the Municipality. The Treasurer is directed to sign a copy of this IPS to
evidence approval and to deliver a copy of this IPS to ONE JIB.
6. Roles and Responsibilities:
6.1. Council is responsible for:
6.1.1. Approving the Municipality’s Investment Policy and reviewing the policy on an
annual basis.
6.2. Chief Administrative Officer (CAO) is responsible for:
6.2.1. Ensuring compliance with this policy
6.3. Deputy CAO, Finance and Technology/Treasurer is responsible for:
6.3.1. This IPS is approved and adopted by Council with input from the Treasurer,
and from ONE JIB with respect to MNRI. MRI of the Municipality, in addition to
any Third-Party Trust Funds, Designated Funds and Restricted Special Assets
referenced in Section 5.3, remain under the control and management of the
Treasurer.
6.3.2. Consistent with this IPS, the Treasurer is responsible for the implementation of
the investment program and the establishment of investment procedures which
shall include:
a) Investment management of MRI and any Third-Party Trust Funds,
Designated Funds, and Restricted Special Assets referenced in Section
5.9 by, or under the direction of, the Treasurer;
b) The deposit or withdrawal of MNRI, under the explicit delegation of
authority regarding MNRI, and the investment thereof, to ONE JIB, which
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is responsible for the control and management of such funds and
investments; and,
c) A system of controls exercised by the Treasurer to regulate the activities
of employees.
6.3.3. No person including, without limitation, ONE JIB, may engage in an investment
transaction except as provided under the terms of this IPS.
6.3.4. In the management of MRI of the Municipality, and any Third-Party Trust
Funds, Designated Funds and Restricted Special Assets referenced in Section
2.1, the Treasurer may engage one or more agents and service providers.
ONE Investment can assist with the investment of the Municipality’s MRI, in
Legal List Securities, and with the investment of third-party trust funds, in
accordance with the terms of the applicable trust, if permitted, at the request of
the Municipality.
6.4. ONE JIB is responsible for:
6.4.1. ONE JIB has been appointed by the Municipality in accordance with the
requirements of the Act and the Regulation and on the terms and conditions
set out in the ONE JIB Agreement (Appendix I).
6.4.2. ONE JIB exercises control and management of the Municipality’s MNRI and
the investments made by it in accordance with the objectives and risk tolerance
established in this IPS.
6.4.3. Among the responsibilities of ONE JIB are the following:
a) Reviewing this IPS;
b) Adopting and maintaining an Investment Plan that complies with this IPS;
c) Engaging Custodians, administrators and other investment professionals
(Agents);
d) Allocating the money and investments under its control and management
in compliance with this IPS;
e) Monitoring the performance of the OCIO Offering and Agents; and,
f) Reporting to the Municipality.
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6.4.4. The foregoing is subject to the more detailed terms and conditions contained in
the ONE JIB Agreement.
6.4.5. ONE JIB, in its capacity as a joint municipal service board, in addition to being
a local board of each member Municipality is subject to a Code of Conduct as
required by the Municipal Act, 2001 (the “Act”). This Code of Conduct applies
to the Chair and the other Members of ONE JIB acting in their capacity as
Members of ONE JIB.
6.5. All Staff are responsible for:
6.5.1. Individuals who are responsible for the Municipality’s MRI Investment Portfolio
shall comply with the Municipality’s Conflict of Interest guidelines and any
relevant professional codes of conduct (e.g., the CPA Code of Professional
Conduct).
7. Related Documents:
7.1. CP-003 Investment Policy (Legal List)
7.2. O.Reg.438/97: Eligible Investments, Related Financial Agreements and
Prudent Investment
8. Inquiries:
8.1. Manager, Financial Planning/Deputy Treasurer
8.2. Deputy CAO, Finance and Technology/Treasurer
9. Revision History:
April 22, 2024 Updated Policy name Council
April 22, 2024 Prudent Investment adoption Council
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policy.
• References to portfolio
manager have been
changed to Sub-Investment
Manager to reflect change
to OCIO.
• References to short-term or
long-term money changed
to MRI or MNRI
• Definitions added or
removed.
• New section on restricted
special assets and
corresponding amendments
to LDC investment.
• Added Appendix 1 and 2
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Schedule A
Restricted Special Assets
Debt Securities
None
Own-Debt Securities
Not applicable
LDC or other MSC Securities
Investments in Elexicon Corporation, Elexicon Energy or Elexicon Group
Other
None
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Schedule B
Third-Party Trust Funds and Designated Funds
Third-Party Trust Funds
Care and Maintenance trust funds under the Funeral, Burial and Cremation Services
Act, 2002.
Designated Funds
Not Applicable