Investing for Longer-Term Outcomes: Thoughts at Budget Time

Ontario municipalities are juggling more than usual this budget season as global uncertainty and potential trade impacts pile on to existing financial stressors. Plus, it’s likely to be a political budget cycle as councils vote on financial plans for the 2026 municipal election year. 

Amidst the noise and confusion, it can be easy to overlook tools that can make these year-to-year gyrations easier, such as strategic, long-term investment planning.

ONE Investment is marking five years of investing under the Prudent Investor Standard and more than 30 years on Legal List portfolios. In all, ONE Investment serves 40% of Ontario’s municipalities and manages $5.5 billion. 

While there are different approaches to longer term investing, all should start with an Investment Policy, an understanding of cash flow and reserves, and a forecast of the timing of expenditures. These items will all change over time, so it need not be a perfect science.

Through our ongoing support for municipalities, and to support your planning, ONE Investment has identified three approaches for long-term municipal investment planning: 

1. Contingency: long-term savings that grow steadily and serve as insurance to cover unexpected cash needs. Timing of the draws on the funds is unknown and likely large, after which the growth process begins again. 
2. Stability: principal is invested to grow at about the rate of inflation while also generating a consistent return that can be taken out each year to fund regular asset needs, such as maintenance.
3. Project-based (Targeted): saving for large expenditures at a specific date, such as the building of a recreation facility or the municipal share of a hospital expected to be due in 10 years, or a bridge replacement in 15 years.

ONE Investment regularly works with municipalities to determine the nature and types of their investments to help identify the best investment paths, like the contingency, stability or project-based approaches noted above.  Depending on your current experience, we can also help with a crawl / walk / run approach to help ease you into the world of investing, and to guide you through the benefits of Legal List and Prudent Investment.

Reach out to us anytime at one@oneinvestment.ca to learn more, or for help with an investment approach that make sense for your longer-term reserves and reserve funds.