This is the exact embedded text of the captured official document.
Snapshot e3259698c28f · verified 2026-06-05 ·
original document ·
archived snapshot ·
unofficial consolidation, the official version is held by the municipal clerk.
Purpose
1. To provide general investment principles, rules and delegated authority for
managing and monitoring the investments of the Town of Bridgewater ("Town").
Adherence to the Investment Policy will ensure compliant and effective investment
management and assist in achieving the strategic goals and growth objectives of
the Town.
Policy Statement
2. It is the policy of the Town to invest excess, reserve and trust funds in a prudent
manner that will provide optimum investment returns with the maximum security,
while meeting any cash flow requirements of the Town. Our investments must
conform to the policies and guidelines set forth below, as well as operate within
the language and spirit of legislative requirements of the Province of Nova Scotia
and including, but not limited to section 100 of the Municipal Government Act.
3. The policy will also:
a. Ensure integrity and transparency of the investment management
process when investing public funds;
b. Establish a structure to govern the investment activities for the Town of
Bridgewater (the "Town").
c. Direct the composition of the investment portfolio for:
i. Excess operating and capital cash flow
ii. Reserve Accounts and Reserve Funds
iii. Trust Funds
iv. Sinking Funds
v. Utility Depreciation Fund
TOWN OF BRIDGEWATER
POLICY
INVESTMENT
Policy No.
108
Approved:
January 24, 2022
Resolution #:
22-024
Revised:
December 12, 2022
(Res. # 22-290)
Scope/Application
4. All those involved with the management of the Town investments are required to
comply with the contents of this policy.
Authority
5. Section 100 of the Municipal Government Act provides the Town of Bridgewater
with the authority to invest funds in a Reserve Fund, Trust Fund, Sinking Fund,
utility depreciation fund or other fund of the Town. The Investment Policy has been
adopted by the Town of Bridgewater pursuant to Section 100(1)(b) of the Municipal
Government Act.
Objectives
6. The primary objectives of the investment policy, in priority order, are as follows:
a. Legality
Section 100 of the Municipal Government Act provides the Town of
Bridgewater with the authority to invest funds held in a sinking fund,
operating reserve, capital reserve, utility depreciation fund or other fund
of the Town. The investment Policy has been adopted by the Town of
Bridgewater pursuant to Section 100(1)(b) of the Municipal Government
Act and the Investment Policy shall govern all of the Town of
Bridgewater investments.
Investment activity will be conducted in accordance with all Provincial
legislation and regulations and in accordance with the Investment
Policy.
b. Preservation of Capital
The Town recognizes its fiduciary responsibility for the stewardship of funds
it has been entrusted. Therefore, the prime objective of this policy is to
ensure that the principal amount of each investment is insulated from losses
due to market conditions and issuer default. To accomplish this objective,
the Town will maintain minimum quality standards for all individual
investments held, and mandate sufficient diversification within the portfolio
itself.
c. Liquidity
i. The investment portfolio will be sufficiently liquid in order to enable
the Town to meet any projected or sudden cash flow requirement
which might reasonably be expected to occur.
ii. For the purpose of this policy, the Town defines liquidity as the ability
to convert an investment into cash with minimal risk associated with
loss of principal or accrued interest, taking into consideration any
costs associated with converting investments into cash.
d. Competitive Return on Investments
The investment portfolio shall be designed with the objective of attaining
a competitive and reasonable market rate of return in the context of
financial market conditions prevailing in Canada. Maintaining a return
on investment is secondary in importance to legality, preservation of
capital, and liquidity requirements.
Standard of Care
7. Investments are to be made with judgment and care, under prevailing
circumstances, which persons of discretion and intelligence exercise in the
management of their own affairs, not for speculation, but for investment,
considering the probable safety of capital and income to be derived.
8. Town of Bridgewater staff exercising due diligence and acting in accordance
with procedure and this investment policy, 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 the sale of securities are carried out in accordance with the terms
of this policy.
9. Delegation of Authority - the Director of Finance has overall responsibility for
prudent investment of the Town's portfolio. The Director of Finance (or
designate) is responsible for the implementation of the investment program
and the establishment of investment procedures consistent with this policy.
Such procedures include explicit delegation of authority to persons responsible
for investment transactions. No person may engage in an investment
transaction except as provided under the terms of this Policy.
Conflict of Interest / Ethics
10. Officers, employees, and persons involved in the investment process shall refrain
from personal business activity that could reasonably conflict with the proper
execution of their responsibilities, or which could reasonably impair their ability to
make impartial investment decisions. Officers and employees shall disclose to their
manager any material interests in financial institutions that conduct business with
the Town, and they shall subordinate their personal investment transactions to
those of the Town, particularly with regard to the timing of purchases and sales.
11. This guideline also extends to any external investment management firms utilized
by the Town to manage its portfolio.
12. External investment management firms will strictly adhere to the CFA Institute
Code of Ethics and Standards of Professional Conduct and the CFA Institute Asset
Manager Code of Professional Conduct (https://www.cfainstitute.org/en/ethics-
standards/ethics/code-of-ethics-standards-of-conduct-guidance).
Credit Quality
13. Investments in the portfolio will ensure preservation of capital and adhere to the
following credit quality restrictions:
Debt Rating Category
Minimum
Maximum
"BBB" or lower
0 %
0 %
"A"
0 %
75 %
"AA" or higher
25 %
100 %
14. Investments rated below "A (low)" or equivalent at time of purchase are not
permitted. If a security's credit rating falls below "A (low)" after time of purchase, it
shall be removed from the portfolio as soon as practical.
15. The only eligible investments for surplus funds of the Town are bonds, bills,
Guaranteed Investment certificates, deposit accounts, or other money market,
fixed income or debt instruments of the following institutions or corporations:
a. Government of Canada;
b. Province of Nova Scotia;
c. other Provincial Governments of Canada;
d. chartered banks, trust companies and credit unions having a rating of "R1
Medium" or better;
e. credit unions covered by the Nova Scotia Stabilization Fund;
f. institutions covered by the Canadian Deposit Insurance Corporation, but only
up to the extent of the insured limit;
g. for medium or long-term surplus funds only, Canadian companies having a
Bond rating of "A" and a Commercial Paper rating of "R1 Medium" or better
from the Dominion Bond Rating Service; and/or
h. investment pools approved by the Minister of Housing and Municipal Affairs.
16. All ratings refer to the ratings of the Dominion Bond Rating Service Ltd. (DBRS).
17. In the event that DBRS does not rate a security, ratings from any of the other
agencies allowed by the Municipal Government Act.
18. Securities with a maturity date of less than one year (i.e. money market) must have
a minimum rating of R-1 (low) from the date of issue.
Portfolio Diversification and Restraints
19. The following constraints shall apply to the portfolio. All percentages used below
are based on market value.
a. All investments shall be denominated in Canadian dollars.
b. Not more than 20% of the portfolio shall be invested in any single security.
c. Not more than 35% of Long Term Investments (maturities greater than one
year) shall be invested in any single issuer, except for securities of or fully
guaranteed by the government of Canada or a province of Canada.
Duration (Interest Rate Anticipation)
20. The duration of the portfolio will at all times be maintained in accordance with
maximum term to maturity in accordance with Schedules A and B.
21. The Town shall take advantage of trading opportunities presented by fluctuations
in the yield curve.
Short Term Investments - Return and Performance Standards
22. The FTSE/TMX 91 day T-Bill index will be used as the benchmark to determine
whether acceptable short-term market yields are being achieved. Investments will
be reviewed in the event of under-performance and adjusted if necessary.
Safekeeping and Custody
23. All investment certificates shall be issued in the name of the Town.
24. Investment certificates may be held for safekeeping by the relevant financial
institution.
25. Responsibility for the safekeeping of assets, income collection, settlement of
investment transactions, and accounting for investment transactions is delegated
to a trust company custodian duly registered in Canada.
26. Adherence to reporting requirements in accordance with Public Sector Accounting
Board (PSAB) and International Financial Reporting Standards (IFRS), depending
on entity (ie Town vs. Public Service Commission).
Monitoring and Compliance
27. The CAO or appointed delegate will review and reassess the Policy and
investment guidelines outlined in the schedules, at least every two years and more
frequently if required.
28. If, at any time, the policy cannot be met or may restrict performance, the policy
may then be changed provided that the policy changes are approved by Council.
29. Should the CAO or Director of Finance or appointed delegate find that investments
were not made in compliance with this Policy, that individual shall report the
inconsistency to Council within 30 days after becoming aware of it.
30. If at any time a security and/or allocation within the portfolio(s), in the CAO or
Director of Finance or appointed delegate's opinion, is not in adherence with the
Town of Bridgewater's Investment Policy and/or subsection 100 (1) (b) of the
Municipal Government Act, then the security and/or allocation must be liquidated
and/or brought into compliance within 180 days.
Investment Income
31. For investment purposes, funds available for investment may include money held
in an operating or capital fund, reserve fund, trust fund or sinking fund. The
allocation of earnings from combined investments shall be credited to each
separate fund the income pertains to or in accordance with the appropriate policy,
such as Policy 21 - Reserve Funds, Policy 106 - Operating Reserve and Policy
107 - Capital Reserve.
Application
32. This policy applies to the investment of all funds made by or on behalf of the Town,
its commissions, agencies and boards. This includes, but is not limited to,
operating and capital funds, reserve funds, trust funds, sinking funds and excludes
investments covered under Policy 55 - Statement of Pension Plan & Group RRSP
Investment.
References and Resources
33. This policy should be read and applied in conjunction with the following references
and resources as updated from time to time.
a. Municipal Government Act
b. CFA Institute Code of Ethics and Standards of Professional Conduct
c. CFA Institute Asset Manager Coder of Professional Conduct
Schedule A: Short-Term Investment Portfolio
Short-Term Investment Portfolio
Sector/Securities:
Limit Per
Issuer
Total
Portfolio
Limit
Minimum DBRS
Credit Rating
Maximum
Term of
Maturity
Government of Canada or Agencies
Unlimited
Unlimited
N/A
18 Months
Provincials
Unlimited
Unlimited
N/A
18 Months
Municipals
35%
Unlimited
N/A
18 Months
Schedule I Banks
35%
Unlimited
R-1 (low) / A (low)
18 Months
Schedule B: Long-Term Investment Portfolio
Long-Term Investment Portfolio
Sector/Securities:
Limit Per
Issuer
Total
Portfolio
Limit
Minimum
DBRS Credit
Rating
Maximum
Term of
Maturity
Government of Canada or Agencies
Unlimited
Unlimited
N/A
15 Years
Provincials
Unlimited
Unlimited
N/A
15 Years
Municipals
35%
Unlimited
N/A
15 Years
Schedule I Banks
35%
Unlimited
A (low)
15 Years
Schedule C: Dominion Bond Ratings Service Credit Quality
Symbol
Credit Quality
Symbol
Credit Quality
R-1 (high)
Highest
AAA
Highest
R-1 (middle)
Superior
AA
Superior
R-1 (low)
Satisfactory
A
Satisfactory
R-2 (high)
Adequate
BBB
Adequate
R-2 (middle)
Adequate
BB
Speculative
R-2 (low)
Adequate
B
Highly Speculative
R-3 (high)
Speculative
CCC
Very Highly Speculative
R-3 (middle)
Speculative
CC
Very Highly Speculative
R-3 (low)
Speculative
C
Very Highly Speculative
D
In Arrears
D
In Arrears
R
Not Rated
Commercial Paper and Short Term Debt
Bond and Long Term Debt