Norfolk stays the course on investment decisions

Doug Brunton, Ward 5 Councillor

Luke Edwards

Advocate Correspondent

Norfolk County could be foregoing some added revenue, but in the face of uncertainty and as a matter of principle, councillors are opting to stay the course.

Staff provided an update to councillors at the March 25 meeting regarding changes to their investment plans for the $67 million legacy fund. Councillors had previously directed staff and their financial advisors to take out any investments in American markets as a way to show their displeasure with U.S. President Donald Trump’s tariff war and annexation threats.

However, when the update came back to council, some wondered if the statement was worth the potential loss of revenue.

“My concern is there’s quite a loss in revenue. As much as I appreciated Coun. (Chris) Van Paassen’s motion to throw out the U.S. portion, there is a great potential for investment in the U.S.,” Coun. Doug Brunton said.

“Are we doing the taxpayer any benefits by eliminating that?”

In the initial report - which included changes such as a move to using a financial instrument called principal protected notes - suggested the new investment plan could increase the return by as much as $650,000 a year. However, by avoiding the American markets where possible staff believe the increase in return will only be $140,000 to $160,000 a year.

Treasurer Amy Fanning pointed out that while it’s not the bounty they were predicting earlier, this still marks an increase in revenue coming into the county’s coffers.

“The fact our returns are still increasing, it’s still a benefit to the county and to the residents,” she said.

“Our returns will not increase as much as we had originally forecasted, but I’m also hopeful that our current economic and political climate is short lived and this is a temporary shift and when the tariff wars are over and when things have changed, we’ll be able to shift those investments back into that higher growth market. That would be our goal.”

Coun. Tom Masschaele said it’s a decision municipalities in Canada have to make.

“That’s the rub you get when you’re trying to make a political statement against perhaps a prudent financial strategy. We have to weigh that against the fact that every municipality, every form of government in Canada is trying to send a message to Mr. Trump that this tariff situation is not acceptable,” he said.

Van Paassen, who brought the original motion forward to direct staff to move the investments out of American markets, said not only is it a stance on principle, but it may very well end up being a smart financial decision, as the U.S. economy is facing significant uncertainty. He acknowledged that historically U.S. markets have been moneymakers but pointed out things have changed.

“I don’t think you can take anything historically of what’s going on in the financial markets in the United States of America right now,” he said.

The legacy fund is money the county received from the sale of Norfolk Power Inc. in 2014. 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.