Policy - Investment - 20250527Docusign Envelope ID: 21CC9EC3-5525-4766-8E7E-F457B6B50E55
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INVESTMENT POLICY STATEMENT
FOR
THE CORPORATION OF THE TOWN OF AURORA (the “Municipality”)
MAY 2025
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Investment Policy July 2025
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TABLE OF CONTENTS
OVERVIEW ................................................................................................................................. 1
1. GLOSSARY AND DEFINITIONS ......................................................................................... 2
2. PURPOSE AND LEGISLATIVE FRAMEWORK ................................................................... 7
2.1 Purpose of Policy ......................................................................................................... 7
2.2 Governing Legislation................................................................................................... 8
2.3 Prudent Investor Standard ........................................................................................... 8
3. MONEY REQUIRED IMMEDIATELY AND MONEY NOT REQUIRED IMMEDIATELY ........ 9
3.1 Determination of MNRI and MRI................................................................................... 9
3.2 Overview of Portfolios .................................................................................................. 9
4. ROLES AND RESPONSIBILITIES ..................................................................................... 10
4.1 Role of ONE JIB ......................................................................................................... 10
4.2 Role of Municipal Staff ............................................................................................... 10
4.3 Ethics and Conflicts of Interest ................................................................................... 11
5. INVESTMENT ................................................................................................................... 11
5.1 MRI ............................................................................................................................ 11
5.1.1 MRI: Investment Objectives ................................................................................... 11
5.1.2 MRI: Eligible Investments ...................................................................................... 12
5.2 MNRI: Long-Term Money ........................................................................................... 13
5.2.1 MNRI: Investment Objectives ................................................................................. 13
5.2.2 MNRI: Eligible Investments .................................................................................... 13
5.2.3 MNRI: Sinking Funds ............................................................................................. 14
5.2.4 Local Distribution Corporation (LDC) Securities ...................................................... 14
5.2.5 Restricted Special Assets ....................................................................................... 14
5.3 Third Party Trust Funds and Designated Funds ......................................................... 14
5.4 Investment Management ............................................................................................ 14
5.4.1 Investment Management of MRI ............................................................................. 14
5.4.2 Investment Management of MNRI .......................................................................... 14
5.5 Transition to Prudent Investor Regime/ OCIO Offering ............................................... 15
5.6 Investment Constraints............................................................................................... 15
5.6.1 Environmental, Social and Governance (ESG) Investing ........................................ 15
5.6.2 Securities Lending .................................................................................................. 15
5.6.3 Derivatives ............................................................................................................. 15
5.6.4 Use of Leverage ..................................................................................................... 16
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5.6.5 Pooled Funds ......................................................................................................... 16
5.6.6 Currency Hedging .................................................................................................. 16
5.6.7 Alternative Asset Classes ....................................................................................... 16
5.6.8 Prohibited Investments ........................................................................................... 16
5.7 Performance Monitoring, Rebalancing and Management ........................................... 17
5.7.1 MRI ........................................................................................................................ 17
5.7.2 MNRI ..................................................................................................................... 17
6. ADMINISTRATIVE POLICIES ........................................................................................... 17
6.1 Flow of Money and Annual Municipal Budget ............................................................. 17
6.1.1 Transfer to ONE JIB as Part of Annual Review Process ......................................... 17
6.1.2 Transfer to Municipality as Part of the Annual Review Process............................... 17
6.2 Flow of Money Otherwise than through the Budget Process ....................................... 17
6.2.1 Surplus Funds ........................................................................................................ 17
6.2.2 Contingencies ........................................................................................................ 17
6.3 Valuation of Investments ............................................................................................ 18
6.4 Voting Rights ............................................................................................................. 18
6.5 Internal Controls ......................................................................................................... 18
6.6 Custodians ................................................................................................................. 18
6.7 Reporting ................................................................................................................... 19
6.7.1 MRI ........................................................................................................................ 19
6.7.2 MNRI ..................................................................................................................... 19
7. APPROVAL, SUBSEQUENT MODIFICATIONS AND EFFECTIVE DATE ......................... 19
7.1 Revocation / Amendment of Previous Investment Policy ............................................ 19
7.2 Modifications to the IPS.............................................................................................. 20
7.3 Effective Date............................................................................................................. 20
Schedule A Restricted Special Assets .................................................................................................... 21
Schedule B Third-Party Trust Funds and Designated Funds ................................................................... 22
Appendix I: ONE JIB Agreement .............................................................................................. 23
Appendix II: ONE External Portfolio Manager Mandates ........................................................... 24
Schedule A Third Party Trust Funds and Designated Funds ..................................................... 25
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Town of Aurora
Investment Policy Statement
OVERVIEW
Municipalities that are subject to the Municipal Act, 2001 (the “Act”) have no general power
to invest money. Such powers must be found either in express provisions of the Act or by
necessary implication.
Historically, municipalities that are subject to the Act had very limited express investment
powers under section 418 of the Act. Section 418 continues to apply to all municipalities that
are subject to the Act unless they elect to pass a by-law pursuant to the new section 418.1.
Section 418 of the Act provides that “money that is not required immediately” (MNRI) can
only be invested in securities prescribed by the Province in O. Reg. 438/97 (the
“Regulation”). These prescribed securities are generally referred to as the “Legal List
Securities” and are included in Part I of the Regulation.
Effective January 1, 2019, the new section 418.1 of the Act came into force. Section 418.1
provides that MNRI can be invested under that section in any security, provided that in
making the investment the municipality exercises the care, skill, diligence and judgment that
a prudent investor would exercise in making the investment. If a municipality elects to pass
a by-law under section 418.1, the effect will be that its MNRI must be invested in
accordance with the prudent investor regime. The rules, conditions and procedures that
apply to investments under section 418.1 are set out in Part II of the Regulation.
Investing MNRI in Legal List Securities or in accordance with the prudent investor regime
are mutually exclusive alternatives. That is to say, section 418 does not apply to a
municipality that has adopted the prudent investor regime under section 418.1.
Every municipality, regardless of whether section 418 or 418.1 applies to it, has MNRI and
also money that is required immediately (MRI). Municipalities retain the management and
control of their MRI. The Act does not include any express provisions that deal with the
investment of MRI. However, it is consistent with prudent practice to invest such money
until it is actually spent, in order to preserve the capital value of that money. Accordingly, it
is necessarily implied that a municipality has the power to invest such money on a short
term basis. Because the Act is silent as to how municipalities are to deal with MRI and
because of the historical investment powers under the Act, a conservative approach is to
invest MRI in appropriate Legal List Securities.
Municipalities that elect to pass a by-law pursuant to the new section 418.1 include in their
investment policy:
(i) the basis upon which they distinguish between MNRI and MRI,
(ii) principles governing the investment of each category of money, and
(iii) This Investment Policy Statement (IPS) is intended to respond to the foregoing
requirements.
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Town of Aurora staff and Council understand that the funds being invested belong to the
residents of Aurora. This investment and procedures documentation will ensure that all
funds are invested with care, diligence and judgement of a prudent investor with a primary
objective of principal preservation while maximizing returns.
1. GLOSSARY AND DEFINITIONS
The following capitalized terms are defined terms which have the meanings set out below:
Act: means the Municipal Act, 2001, S.O. 2001, c. 25, as amended from time to time.
Agent: means any administrator, Custodian, payment servicer, 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, and the Sub-
Investment Manager.
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 that traditional
investments and are appropriate only for allocations with a long investment horizon.
Asset Class: An asset class is a specific category of assets or investments, such as cash,
fixed income, equities, alternative investments, real estate etc.
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.
Authorizing By-law: means a by-law of the Municipality that authorizes it to invest its
money and investments that it does not require immediately in the OCIO offering of ONE
JIB pursuant to section 418.1 of the Act, to approve various documents, the entering into of
agreements including a Prudent Effective Date Agreement and the delegation of certain
powers and duties to ONE JIB/ONE Investment.
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.
CHUMS Financing Corporation (CHUMS): means a subsidiary of Municipal Finance
Officers’ Association of Ontario (MFOA) which, in conjunction with LAS, established ONE
Investment.
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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Credit Risk: means the possibility of a loss resulting from a borrower's failure to repay a
loan or meet contractual obligations. That is, the risk that a lender may not receive the owed
principal and interest.
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").
Designation 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 IPS.
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.
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.
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.
External Portfolio Managers: means external third-party investment management firms
whose investment offerings are accessed by ONE JIB directly or through services provided
to a Pooled Fund. External Portfolio Managers are agents authorized by ONE JIB in
accordance with Part II of the Regulation.
Interest Rate Risk: refers to the possibility that the value of a bond or other fixed- income
investment will suffer as the result of a change in interest rates. Interest rate risk can be
managed to help improve investment outcomes.
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.
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.
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
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money in which the Municipality may have an indirect interest but which the Municipality has
no authority to invest.
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.
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.
Leverage: means an instrument 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.
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.
Local Authority Services (LAS): means an entity which, in conjunction with
MFOA/CHUMS, established ONE Investment.
Local Distribution Corporation or LDC: means a corporation incorporated under section
142 of the Electricity Act, 1998.
Market Value: means the price at which a security is trading and could presumably be sold.
Also known as Fair Market Value it represents the current value of the investment.
Maturity: means the date upon which the principal or stated value of an investment
becomes due.
Modern Portfolio Theory: means a theory of portfolio management that looks towards the
portfolio as a whole, rather than towards the prudence of each investment in the portfolio.
This is found in the CFA Institute Standards of Practice Handbook.
Money not Required Immediately (MNRI): means the money that is not required
immediately by the Municipality that will be under the control and management of ONE JIB
and as defined in this IPS that will be invested in accordance with the Prudent Investor
Standard.
Money Required Immediately (MRI): means the money that is required immediately by the
Municipality that remains under the control and management of the Municipality and, that
can be invested in accordance with the Legal List Securities or other applicable legislation.
Municipal Services Corporation (MSC): means a corporation established under section
203 of the Act in accordance with the applicable regulation (Ontario Regulation 599/06).
Municipality: means The Corporation of the Town of Aurora.
OCIO Offering: means the comprehensive investment program made available through
ONE Investment as an agent for ONE JIB, where a qualified investment manager is
engaged to advise a Participating Municipality with regard to the investment of the
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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.
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
agents.
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.
ONE JIB Agreement: means the agreement effective as of the Prudent Effective Date,
entered into in accordance with the requirements of the Regulation, pursuant to which ONE
JIB has control and management of the Municipality’s MNRI.
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.
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.
Portfolio: means any collection of funds that are grouped together and required for specific
purposes.
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.
Prudent Effective Date: means the mutually agreed-upon date by the Municipality and
ONE Investment on which the prudent investor regime applies to the municipality as a
participating municipality.
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.
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 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.
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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.
Regulation: means Ontario Regulation 438/97.
Restricted Special Assets: means investments specified by this IPS 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 the IPS and are not considered to be
MNRI.
Risk: means the uncertainty of future investment returns or chance of loss of capital.
Risk Tolerance: means the financial ability and willingness to absorb a loss in return for
greater potential for gains.
Safekeeping: means the holding of assets (e.g. securities) by a financial institution.
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.
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.
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 when such debentures are issued.
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.
Sinking Fund Excess Earnings: means the investment earnings in excess of the required
earnings.
Sub-Investment Manager: means and 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.
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 agreements and, in some cases, by legislation. Some
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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.
Trust Fund: means a fund which consists of assets that have been converted or assigned
to a trustee to be administered as directed by agreement or statue. As a result, a trustee
holds title to the assets for the purposes of providing benefits, and being accountable, to the
beneficiary. The Municipality is the trustee of funds that are to be used for specific purposes
by the Municipality or any related parties.
2. PURPOSE AND LEGISLATIVE FRAMEWORK
2.1 Purpose of Policy
This IPS governs the investment of the Municipality's MNRI and MRl. It is intended,
among other things, to direct the Treasurer 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 6502-23 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.
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"), or Third-Party trust Funds. The Municipality’s
Third-Party Trust Funds are listed in Schedule B of this IPS.
There are also source(s) of money in which the Municipality may have an indirect
interest but which the Municipality currently has no authority to invest. Such
source(s) of money, referred to in this IPS as "Designated Funds", are listed in
Schedule B of this IPS. The Designated Funds and the Restricted Special Assets,
listed in Schedule A of this IPS, are identified in this IPS 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.
ONE JIB is not responsible for the investment activities or performance of Third-
Party Trust Funds, Designated Funds or Restricted Special Assets.
The goals of this IPS are to:
● Define and assign responsibilities for investment of MRI and MNRI;
● Describe the Municipality’s responsibilities with respect to Restricted Special
Assets, Third-Party Trust Funds and Designated Funds;
● Ensure compliance with the applicable legislation;
● Direct ONE JIB as to the Municipality’s investment goals and risk tolerance;
● Provide guidance and limitations regarding the investments and their
underlying risks;
● Establish a basis of evaluating investment performance and the underlying
risks; and,
● Establish a reporting standard to Council.
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This IPS applies to employees of the Municipality, to ONE JIB and to the employees
of ONE Investment. ONE JIB, the Treasurer, and any agent, sub-investment
manager or advisor providing services to ONE JIB in connection with the investment
of the portfolio shall accept and strictly adhere to this IPS.
2.2 Governing Legislation
Investments of MRI will, in accordance with this IPS, only be made in Legal List
Securities.
Investments of 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.
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.
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:
● General economic conditions;
● The possible effect of inflation or deflation;
● The role that each investment plays within the Municipality’s total portfolio of
investments;
● The expected total return from income and the appreciation of capital; and
● Needs for liquidity, regularity of income and preservation or appreciation of
capital.
2.3 Prudent Investor Standard
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.
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,
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provided underperformance relative to expectations is reported to Council and the
liquidation or sale of investments is carried out in accordance with this IPS.
3. MONEY REQUIRED IMMEDIATELY AND MONEY NOT REQUIRED IMMEDIATELY
3.1 Determination of MNRI and MRI
Determination of the Municipality’s MNRI is the responsibility of Council. In making
the determination, Council may consider:
● the time horizon within which the monies are needed to meet financial
obligations
● the purpose for which the monies have been collected or set aside and are
to be used
● the source of the money
● any combination of the foregoing
The Municipality has defined MNRI as money from the municipality’s own reserves,
reserve funds, sinking funds and current ONE Investments that will not be required
to meet financial obligations that become due more than 2 years from the receipt of
such money. The purpose of the money is to fund the municipality’s future capital,
operational and contingency needs.
For certainty, all money and investments of the Municipality that have not been
identified as MNRI (other than Restricted Special Assets, Third -Party Trust Funds
and any Designated Funds referenced in Section 2.1) shall be deemed for purposes
of this IPS to be MRI.
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 6.2.
Any changes in this IPS regarding the Municipality’s MNRI and MRI must be
communicated immediately in writing to ONE JIB.
3.2 Overview of Portfolios
The Municipality’s portfolios represent funds available to support Municipal needs.
A high -level description of each of these portfolios and their objectives is provided in
Section 5 below. This IPS applies to the following money of the Municipality, its
agencies, boards and commissions including:
● MRI which is invested in Legal List Securities; and/or
● MNRI which is invested under the Prudent Investor Standard.
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4. ROLES AND RESPONSIBILITIES
4.1 Role of ONE JIB
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).
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.
Among the responsibilities of ONE JIB are the following:
● Reviewing this IPS;
● Adopting and maintaining an Investment Plan that complies with this IPS;
● Engaging Custodians, administrators and other investment professionals
(Agents);
● Allocating the money and investments under its control and management in
compliance with this IPS;
● Monitoring the performance of the OCIO Offering and Agents; and,
● Reporting to the Municipality.
The foregoing is subject to the more detailed terms and conditions contained in the
ONE JIB Agreement.
4.2 Role of Municipal Staff
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 2.1, remain under the control and management of the
Treasurer.
Consistent with this IPS, the Treasurer is responsible for the implementation of the
investment program and the establishment of investment procedures which shall
include:
● Investment management of MRI and any Third-Party Trust Funds,
Designated Funds and Restricted Special Assets referenced in Section 2.1
by, or under the direction of, the Treasurer;
● The deposit or withdrawal of MNRI, under the explicit delegation of authority
regarding MNRI, and the investment thereof, to ONE JIB, which is
responsible for the control and management of such funds and investments;
and,
● A system of controls exercised by the Treasurer to regulate the activities of
Deputy Treasurers and Financial Management Advisors.
No person including, without limitation, ONE JIB, may engage in an investment
transaction except as provided under the terms of this IPS.
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In the management of MRI of the Municipality, and any Third-Party Trust Funds,
Designated Assets 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.
4.3 Ethics and Conflicts of Interest
Individuals who are responsible for the Municipality’s Short-Term 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).
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.
5. INVESTMENT
5.1 MRI
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 controlled and
managed by the Treasurer.
5.1.1 MRI: Investment Objectives
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 extend possible, the Municipality shall attempt to match its
investments with anticipated obligations.
Capital Preservation is the paramount objective for MRI investments, and these
investments need to be highly liquid. Consequently, only high-quality investments
that are also Legal List Securities will be held in this portfolio. The Municipality may
invest in full 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 preservice capital and to
further manage risk through diversification by issuer and credit quality.
The investment objectives, in the order of priority, for the Municipality for Short-Term
Money are:
● Compliance with Portfolio Restrictions: The legal authority to invest funds
comes from the Act. All investments acquired shall be in conformity with
portfolio restrictions and permissions set out in O. Reg. 438/97 – Eligible
Investments and Related Financial Agreements, as amended from time to
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time. The Municipality shall not invest in a security that is expressed or
payable in any currency other than Canadian dollars.
● Preservation of Principal: Investments shall be undertaken in a manner
that seeks to ensure the preservation of principal in the overall portfolio.
Investments shall be made with judgement and care, not for speculation, but
for investment, considering the probable safety of the principal invested as
well as the probable income derived. Staff shall also endeavor to mitigate
credit and interest rate risk by: pre-qualifying the financial institutions,
brokers/dealers and advisors with which the Municipality does business;
diversifying the investment portfolio; structuring the investment portfolio so
that maturing securities meet ongoing cash flow requirements; and investing
operating funds primarily in shorter-term securities or approved liquid
investment pools.
● Maintenance of Liquidity: The investment portfolio shall remain sufficiently
liquid to meet all operating requirements that may be reasonably anticipated.
All non-equity investments shall be interest bearing in nature and equity
exposure will be limited to investments in the ONE Investment Program
equity funds. The Municipalities portfolio should be well staggered, using a
ladder approach which allows investments to mature at various times and
provides the Municipality the opportunity to build up the portfolio based on
market conditions/opportunities. A portion of the portfolio may be placed in
the ONE Investment Program, which offers compliance and liquidity.
● Maximization of the Rate of Return: The Investment Portfolio shall be
designed with the goal of maximizing the rate of return through budgetary
and economic cycles, considering the investment risk constraints and
liquidity needs. Staff will explore and utilize any eligible investment vehicles
in building the Municipality’s investment portfolio. The investment portfolio
will be managed with prudent investor principles, to maximize returns within
established risk parameters. To take advantage of short-term fluctuations in
interest rates, securities may be sold prior to maturity. Investments shall be
purchased once multiple bids are received and analysed. The highest
yielding bid, which meets the Municipality’s cash flow requirements, will be
accepted. If the highest yielding bid is not selected, an explanation
describing the rationale shall be provided. Staff involved will retain written
records of each transaction, including the name of the financial institutions,
rates quoted, description of the security, investment selected, and any
special considerations that had an impact on the decision. With the goal of
maximizing the rate of return on its investments, staff may utilize eligible
investment vehicles for which there is a sole available supplier, such as the
ONE Investment Program products. In instances such as this, multiple bids
will not be solicited.
5.1.2 MRI: Eligible Investments
MRI may be invested in high quality 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 IPS, as deemed eligible
by the Regulation or as authorized by subsequent provincial regulations.
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5.2 MNRI: Long-Term Money
The Municipality’s MNRI is described in Section 3.1. In accordance with the ONE
JIB Agreement and this IPS, ONE JIB has exclusive control and management of the
2MNRI and the investments made therewith.
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 will select the investment(s)
to be liquidated. The timing of such liquidation will be determined by ONE JIB in
consultation with the Treasurer.
5.2.1 MNRI: Investment Objectives
In setting the objectives noted below, the Municipality has taken into account the
following considerations:
• Preservation of capital;
• Adequate liquidity that takes into account the needs of financial obligations
and reasonably anticipated budgetary requirements;
• Diversification by asset class, market, sector, issuer, credit quality and term
to maturity;
• Income and capital appreciation; and,
• Macro risks, such as inflation, economic growth and interest rates.
Investment of MNRI is managed by ONE JIB in a way that balances investment
objectives, expected returns, and risk to develop asset allocations that achieve the
Municipality’s financial objectives within stated risk tolerances.
Investment of MNRI is to be managed by ONE JIB, in a way that balances the
investment objectives, with a level of risk that is appropriate for the municipality. The
MNRI invested with ONE JIB will be broadly diversified to help reduce the volatility
of 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 Long-Term Money’s investment 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.
5.2.2 MNRI: Eligible Investments
Eligible investments for Long-Term Money 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.
Additionally, nothing in this IPS prevents MNRI from being held in cash, short term
money market instruments, or overnight deposits.
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5.2.3 MNRI: Sinking Funds
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.
5.2.4 Local Distribution Corporation (LDC) Securities
Not applicable to this Municipality.
5.2.5 Restricted Special Assets
With the exception of the Municipality’s investments held in the ONE Investment
Legal List Portfolios specified below, all existing assets, listed in Schedule A of this
IPS and held by the Municipality on the Prudent Effective Date, shall be considered
to be Restricted Special Assets, and shall not be held by ONE JIB as MNRI. The
Treasurer may choose to liquidate these investments and determine that the
proceeds are MNRI, to be invested as per this IPS and the approved ONE JIB
Investment Plan.
For certainty, Restricted Special Assets are not MNRI of the Municipality, and such
assets are not under the control or management of ONE JIB.
The ONE Investment Legal List Portfolio Investments, held by the Municipality, shall
be considered to be MNRI and transferred to ONE JIB to be invested as MNRI,
unless deemed by the Municipality to be MRI.
5.3 Third Party Trust Funds and Designated Funds
Not applicable to this Municipality.
5.4 Investment Management
5.4.1 Investment Management of MRI
The investment of Short-Term Funds shall be controlled and managed by the
Treasurer and his/her designate as documented in By-law #6212-19, Schedule “C”.
5.4.2 Investment Management of MNRI
The investment of MNRI shall be controlled and managed by ONE JIB in
accordance with this IPS and the ONE JIB Agreement.
The selected Sub-Investment Manager shall enter into an 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.
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5.5 Transition to Prudent Investor Regime/ OCIO Offering
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.
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.
All MNRI that is not Third-Party Trust Funds, Designated Funds or Restricted
Special Assets shall be provide to ONE JIB on the Prudent Effective Date.
5.6 Investment Constraints
5.6.1 Environmental, Social and Governance (ESG) Investing
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.
For the investment of MRI will be done in compliance with the investment objectives
identified in section 5.1.1. Accommodating specific ESG considerations may not be
possible due to conflicts with the investment objectives. The Municipality has chosen
to monitor the developments of ESG factors and will reconsider its approach to ESG
investing for the Short-Term Portfolio as and when appropriate to do so.
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.
5.6.2 Securities Lending
For the investment of MRI Securities Lending is not permitted.
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.
5.6.3 Derivatives
Derivatives may not be used for the investment of MRI. For the investment of MNRI,
futures and forward 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.
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5.6.4 Use of Leverage
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. Leverages should not be exercised for speculative purposes but
may be used as a hedging tool.
5.6.5 Pooled Funds
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 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.
5.6.6 Currency Hedging
The MRI Investment Portfolio will not utilize currency hedging.
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.
5.6.7 Alternative Asset Classes
The applicable legislation does not prevent the direct/indirect placement of the MNRI
in Alternative Asset Classes; this IPS restricts investments in alternative investments
for the purposes of management of MNRI under One JIB.
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, these investments may not be fully liquid and are only appropriate for
inclusion in portfolios with long investment horizons.
5.6.8 Prohibited Investments
Not applicable for this Municipality.
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5.7 Performance Monitoring, Rebalancing and Management
5.7.1 MRI
For the investment of MRI, Municipality staff will monitor the cash flow needs of the
Municipality on a periodic basis. Should the needs on the Municipality no longer be
met by the asset mix, staff will make changes, at the discretion of the Treasurer,
taking into consideration the MRI Investment objectives.
5.7.2 MNRI
For the investment of MNRI, ONE JIB shall establish parameters for monitoring
investments and rebalancing through policy or directly within the investment plan.
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 6.7 that shows the Municipality’s holdings, confirms
compliance with this IPS and reports on the Sub-Investment Manager’s
performance.
6. ADMINISTRATIVE POLICIES
6.1 Flow of Money and Annual Municipal Budget
6.1.1 Transfer to ONE JIB as Part of Annual Review Process
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.
6.1.2 Transfer to Municipality as Part of the Annual Review Process
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.
6.2 Flow of Money Otherwise than through the Budget Process
6.2.1 Surplus Funds
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.
6.2.2 Contingencies
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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 6.1.1 shall be included and any amount to be returned by ONE JIB to the
Municipality pursuant to Section 6.1.2 shall be excluded. ONE Investment should be
made aware of material transactions in advance to ensure the orderly sale of
securities to fund withdrawals.
6.3 Valuation of Investments
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.
6.4 Voting Rights
The Sub -Investment Manager shall assume the responsibility of exercising voting
rights in respect of the Municipality’s MNRI and will report their voting policies to
ONE JIB annually. The Municipality may access these policies at any time.
6.5 Internal Controls
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.
6.6 Custodians
All municipal 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 following is a list of financial institutions authorized to provide
investment services to the Municipality. This list will be maintained and updated as
the business environment changes:
● TD Canada Trust
● CIBC Wood Gundy
● BMO Nesbitt Burns Inc.
● RBC Dominion Securities Inc.
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● Raymond James Ltd.
● Canaccord Genuity
● ONE Investment
6.7 Reporting
6.7.1 MRI
For the investment of MRI, the Treasurer shall provide an annual investment report
to Council. The Investment report shall contain:
● A statement about the performance of the investments during the period
covered by the report;
● A statement by the Treasurer as to whether or not, in their opinion, all
investments are consistent with the investments policies and goals of the
Municipality;
● Listing of all investments by maturity date;
● Percentage of total portfolio that each type of investment represents; and
● Such other information that Council may request, or that the Treasurer may
consider pertinent.
6.7.2 MNRI
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.
● Investment performance during the period covered by the report;
● Asset mix of the total portfolio;
● 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;
● A list of all transactions including the security name, trade date, and the
purchase and/or sale price;
● 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
● Any other pertinent information in the opinion of the Treasurer.
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.
7. APPROVAL, SUBSEQUENT MODIFICATIONS AND EFFECTIVE DATE
7.1 Revocation / Amendment of Previous Investment Policy
This policy replaces any existing investment policy of the Municipality, in its entirety,
and all previous investment policies are revoked and repealed.
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7.2 Modifications to the IPS
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.
Following the Council’s review of the IPS, ONE JIB shall review the Investment Plan
and update it, if required.
At a minimum, the annual review will consider:
● the adequacy of funding for capital works;
● the Municipality’s ability to reduce other spending;
● flexibility of the timeframe to payout; and
● sensitivity to loss.
7.3 Effective Date
This IPS is adopted by Council of the Municipality effective May 27, 2025. 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.
Signature
Rachel Wainwright-van Kessel
Name
Director, Finance
Title
17-Jul-2025
Date
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Schedule A
Restricted Special Assets
Other
• Guaranteed Investment Certificates $1,000,000
• Bonds $2,527,974.12
• Protected Principal Notes $8,247,000
• Accrual Notes $7,134,000
• Step-up Notes $7,500,000
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Schedule B
Third-Party Trust Funds and Designated Funds
Third-Party Trust Funds
None
Designated Funds
None
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Appendix I: ONE JIB Agreement
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Appendix II: ONE External Portfolio Manager Mandates
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Schedule A
Third Party Trust Funds and Designated Funds
Third Party Trust Funds
1. None
Designated Funds
2. None