By-Law 4.08 Investments
Feedback Deadline: November 29, 2018
Report on Consultation
Consultation Period: September 27, 2018 – November 30, 2018
Submissions: 21 submissions
What is the Issue
The Council of the College of Veterinarians of Ontario is proposing to strengthen its existing By-Law 4.08 to ensure the College's investment strategies at all times assure the preservation of its accrued capital accompanied by modest fund growth when the financial sector is stable.
The Council is aware of its fiduciary accountability that the fees paid by licensed members adequately and responsibly support the legislated mandate of the Veterinarians Act. The Council assures funds for annual operations and for a reserve to manage capital and unforeseen expenditures related to its work. Any funds in reserve are invested under the direction of By-Law 4.08. With the advice of RBC Securities, the Council is proposing a change to the By-Law. This change limits any high-risk options of investment strategy and increases safety in the investment options. The approach is conservative and reduces a potential loss that can only be managed by a fee increase. The Council is keen to use its income wisely in the public interest.
Why is it Important
The aim of this amendment is to assist in ensuring that the Council’s investment policy remains in line with its goal - preservation of capital and modest growth.
Overview of the Proposal
The proposed change:
| Current By-Law | Proposed By-Law |
|---|---|
| 4.08 - Investments | 4.08 - Investments |
All monies belonging to the College may only be deposited or invested according to a College policy in place from time to time and in one or more of the following: (i) A major chartered bank or trust company or brokerage house; (ii) Securities of the Government of Canada, the Government of any Province of Canada, or any municipal corporation in any Province of Canada. (iii) Securities, the payment of principal and interest of which is guaranteed by the Government of Canada, or the Government of a Province of Canada. | All monies belonging to the College may only be deposited or invested in fixed income or debt securities with a minimum Dominion Bond Rating System (DBRS) rating of A or higher, and in one or more of the following: (i) A major chartered bank or trust company; (ii) Securities of the Government of Canada, the Government of any Province of Canada, or any municipal corporation in any Province of Canada. |
Consultation Process
At its September 2018 meeting, Council was pleased to approve for consultation the proposed change to By-Law 4.08. The draft By-law was circulated for public consultation for a 65-day period during which members of the College and members of the public were asked to provide their feedback.
What We Heard and How We Responded
Responses received, though limited, were generally positive. Respondents appeared to support the tightening of the College’s investment options to ensure the proper management of funds. Some respondents did suggest further amendments to the proposed change. Some of these suggested amendments were discussed with the College’s financial advisor at RBC securities and were presented to Council at its December 2018 meeting.
Sample Comments
The following quotes, summarized from comments received, reflect suggestions made during the consultation:
- The credit unions have certainly outperformed the major banks in very secure investment products such as GICs over the years. Therefore I suggest under ii) A major chartered bank, trust company or credit union.
- Management expense ratios and advisor fees will have an impact on the rate of return, especially when investing in such low yield investments. It would prudent to limit and avoid those fees as much as possible.
- Looks like a decent revision, but should really include the "..guaranteed by the Government of Canada or province..." provision.
Council December 2018 Decision
Council reviewed the consultation feedback and the proposed change at its December 2018 meeting and approved the amendment to By-Law 4.08 for adoption with the addition of the word “Canadian” in section (i). To review the amended By-law in its entirety, please visit: