Navigating Today’s Economic and Budget Challenges

December 14, 2022

It is a tricky time to manage municipal finances. Bill 23 has created uncertainty around who will pay for growth. Inflation is increasing costs across the board. And newly elected Councils are facing their first big budget decisions.

Key tips for municipal investors during these challenging times: 

  1. Time and diversification are the antidote to volatility. 
    The lengthy time horizon on municipal reserves and capital investments allows municipalities to remain calm in stormy markets. History has proven that markets will grow, despite short-term fluctuations.

    To truly manage risk, a diversified portfolio is critical. In a diversified portfolio, holdings respond differently to market changes. Staying the course with a solid investment plan is the best bet. As the saying goes, it’s not timing the market, it’s time in the market
  2. Strength in numbers – and expertise.
    It’s a wide gap between Main Street and Bay Street. With limited staff capacity, finding investment expertise that is tailored to municipal context is key. 

    Help is available. ONE Investment is a non-profit that provides advisory services and investment solutions tailored to Ontario’s municipal governments, so that they can better manage and grow their long-term reserves and savings. 

    ONE Investment’s $2.58 billion in holdings provides even small municipalities with scale to access better rates of return and lower fees. Professional management provides added peace of mind.
  3. Be open to new options and opportunities.
    There are more ways for municipalities to invest than ever before. ONE’s offerings from the Legal List provide a combination of Canadian equities, corporate and government bonds. Further diversification through global exposure is available through the Prudent Investment Program. The ONE Joint Investment Board (ONE JIB) is comprised of investment experts and municipal finance professionals who oversee these investments. They continue to explore investment strategies to improve the risk and return opportunities available to municipalities, including strategies that are expected to perform well in inflationary environments. 

    The new term of council provides a good opportunity to educate finance staff and councillors on ONE’s Prudent Investment Program. All it takes is a call to ONE staff to access support and resources that explain how it works and potential benefits. 
Investment Planning
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