A one-time windfall can deliver long-term community value
In 2024, the Municipality of Kincardine made the significant decision to sell Bruce Telecom, its municipally owned telecommunications company and one of the last of its kind in Canada. Council saw the $32.65 million sale as an opportunity to invest in the community’s future while honouring the asset’s legacy.
With guidance from ONE Investment, Kincardine established a Legacy Fund to ensure that the financial benefits of the sale would continue for generations. The goal was to create a long-term, sustainable funding source for capital and infrastructure priorities.
“We wanted to make sure the sale resulted in lasting benefits for our community,” says Roxana Baumann, Kincardine’s Treasurer and Director of Corporate Services. “This fund recognizes Bruce Telecom’s historical contributions to Kincardine, while helping to relieve pressure on the property tax base. It’s a responsible and forward-looking way to support infrastructure needs.”
A Legacy Fund, also called an endowment or perpetual fund, is designed to preserve the original investment while generating annual income. Municipalities can typically withdraw up to 3% cent per year to support long-term needs while still preserving the principal.
Creating a sustainable municipal legacy fund requires a well-planned investment strategy that complies with Ontario’s highly regulated regime for municipal investors. ONE Investment helped Kincardine develop a Legacy Fund policy with guiding principals on how the investments would be managed and how investment earnings could be used.
“We have leveraged all of ONE Investment Legal List products within our legacy fund to ensure a diversified approach” says Baumann. “The Legacy Fund provides our Municipality with an ongoing source of revenue to contribute to our capital and infrastructure projects.”
ONE Investment is the only not-for-profit for municipal investors. Its investment products are fully compliant with the Municipal Act, whether through the Legal List or through its robust Prudent Investment Program.
Today, ONE Investment oversees a total $4.7 billion in municipal investments, including Legacy Funds for seven municipalities. Each invested funds from the sale of a major asset or other one-time revenue. Kincardine’s experience demonstrates how municipalities can deliver long-term community value from a one-time decision.