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District School Board of Niagara
Policy Business

B-04 Investment of Board Funds

Date Nov 2022
Review Nov 2027

An effective framework for the investment and management of District School Board of Niagara (DSBN) funds ensures the security of principal, and optimizes investment returns while conforming to the Education Act and applicable regulations.

This policy applies to the investment of centrally managed operating and reserve funds. The amount of investments is to be maintained at levels which will maximize the interest income earned by the DSBN (net of any short-term borrowing costs).

Authority to Make Investments

The Board of Trustees delegates the authority to make investments in compliance with the DSBN’s Investment Policy to the Superintendent of Business Services and the Controller of Finance.

All investment activity requires the written approval by any two of the following:

  • Superintendent of Business Services & Treasurer
  • Controller of Finance
  • Director of Education

Investment Objectives

The investment objectives of the DSBN shall, in order of priority, be as follows:

  1. Adherence to statutory requirements;
  2. Preservation of principal;
  3. Ensuring availability of cash to meet disbursements and other obligations;
  4. Maintenance of liquidity;
  5. Diversification of investment portfolio;
  6. Competitive rate of return on investments commensurate with constraints in (a) to (e).

Authorized Investments

The Education Act, R.S.O. 1990, section 241 provides the legislative authority for the DSBN to invest funds in accordance with certain prescribed rules. The prescribed rules which limit permitted investments to high quality fixed income type investments are contained in Ontario Regulation 41/10, Part IV, Eligible Investments.

In order to ensure maximum security and proper diversification in the DSBN’s portfolio, the maximum exposure for each category of investment allowed under Ontario Regulation 41/10 and each individual investment within the category as a percentage of the total portfolio which is locked in for terms of one year or greater, is as follows:

Category Type Investment Quality Limit (Minimum) Category Limit Maximum Individual Organization Limit (Maximum)
Federal and Federal Guaranteed AA 100% 100%
Provincial and Provincial Guaranteed A 50% 25%
Municipal and Municipal Guaranteed AA (low) 25% 10%
Corporate (Banks listed in Schedule I and II of the Bank Act (Canada), Loan or Trust Corporations registered under the Loan and Trust Corporations Act, Credit Unions to which the Credit Unions and Caisses Populaires Act, 1994 applies) AA (low) 100% 20%(1)

1For the corporate investment category, the individual organizational limit of 20% can be increased to 40% provided the investment is one of the six largest Canadian chartered banks with a minimum investment quality rating of AA or greater.

Investment Quality Restrictions

The DSBN shall not invest in any security locked in for terms of one year or greater which does not meet the long-term minimum credit ratings as provided in the above table, as rated by the Dominion Bond Rating Service Limited or comparable ratings from other rating agencies.

Should the credit rating of any security be downgraded below the minimum credit rating required by this policy, it shall be sold within 90 days after the day the investment rating was downgraded.

Investment Term Restrictions

All long-term fixed income investments (i.e. investments with a remaining term to maturity equal to or greater than 1 year) shall have a remaining term to maturity not greater than 5 years from the date of purchase. The amount to be invested in long-term investments shall be spread over a period not to exceed 5 years as part of a fixed income ladder portfolio.

Short-Term Investment Quality and Organizational Limit Restrictions

The DSBN shall not invest in any security locked in for terms less than one year which does not meet the short-term minimum credit rating of R-1 (Middle), as rated by the Dominion Bond Rating Service (DBRS) Limited or comparable ratings from other rating agencies, or the investment is fully guaranteed by a Provincial government whose short-term DBRS credit rating is R-1 (Middle) or greater. All short-term investments which are not cashable within the next business day cannot exceed $10,000,000 with any one individual financial institution.

Investment Brokers

Investments will be made through the services of brokers or investment services offered by financial institutions that have been selected through the DSBN’s Investment Services Request for Supplier Qualifications (RFSQ) process.


The Superintendent of Business Services shall submit to the Board of Trustees a report on the performance of the DSBN’s portfolio of investments as part of the annual financial report to the Board. The report shall include the following:

  • a listing of individual investments held at the end of the fiscal year;
  • percentage of the total portfolio by institutional category and by individual organization;
  • a statement about the performance of the investment portfolio during the fiscal year;
  • a statement by the Superintendent of Business Services as to whether or not, in his or her opinion, all investments were made in accordance with the investment policy and objectives adopted by the Board.