Norfolk directs county investments away from U.S.

Councillor Chris Van Paassen, Ward 4

Luke Edwards

Advocate Correspondent

In a trade war where the effects are measured in the hundreds of billions of dollars, the $67 million legacy fund for Norfolk County is a drop in the bucket. But even so, councillors have directed staff to look at pulling any investment from their legacy fund out of American markets.

“For the time being we don’t give the U.S. anything at the cost of 40 million people in this country,” said Coun. Chris Van Paassen, calling it a matter of principle.

The call to remove themselves from American investments for the time being came as staff and the county’s financial advisors presented a plan to rejig their investment plan to maximize returns and protect the principal investment. The recommendations included shifts in how they allocate the money in the fund as well as a move towards principal protected notes, a form of investment that - as the name suggests - helps ensure the principal investment remains intact should markets experience a downturn.

Responding to Van Paassen’s request, staff said it would be fairly easy to shift investments out of American markets and they’ll return to council with an update once they’ve had a chance to review options internally and with their CIBC advisors.

CIBC’s Paul Van Lith said they’ve been hearing similar questions and requests since U.S. President Donald Trump started his tariff war.

“If there is not an appetite to invest within U.S. markets at this time that is completely within our ability to change,” he said.

Treasurer Amy Fanning also said this was on their minds following the recent escalations.

“Our recommendations were put together before the tariff war erupted. Had we been doing it right now we probably wouldn’t have placed that within our recommendations,” she said.

The Legacy Fund was created in 2014 following the sale of Norfolk Power Inc. Since that time, the county has used the returns of the fund’s investments to pay for road work to the tune of just under $20 million, as well as $5 million set aside for Norfolk General Hospital.

Average annual returns have been 4.8 per cent. A staff report predicts the changes will increase yearly investment returns by $550,000 to $650,000, largely due to reduced management fees. Other benefits the report outlines include “reduced principal risk, lower variation of returns, increased diversification by reducing concentration risk for equity investments, and increased diversification for fixed income assets,” the report said.

“Any decisions you make that lower your risk and enhance your returns are the best decisions to make,” said CIBC’s Ian Murray.