The municipality’s latest investment report shows its portfolios saw modest increases during the second quarter of 2020, although both have been in negative territory during the past year.
The investment committee submitted the report — which reviewed how investments performed from April to June — during the Sept. 8 regular council meeting. There was no discussion on the document, so council voted 6-1 to receive and file the report.
Coun. Brian Swanson was opposed.
The long-term portfolio began the second quarter with a market value of $64.9 million, and by the end of June, had earned $5.1 million, to bring the total value to $70 million, the document showed. This represented an increase of 7.88 per cent.
One table shows the long-term portfolio started March with $72.2 million, but contracted 8.83 per cent in one month and started April at $64.9 million.
Year-to-date, the portfolio has lost 1.65 per cent, although it has increased by 1.53 per cent since its inception in 2019.
The moderate-term portfolio began the second quarter with a market value of $28.3 million, and by the end of June, it had earned $1.2 million, to bring the total value to $29.6 million, the report said. This represents an increase of 4.44 per cent.
One table shows the moderate-term portfolio started March with $30.5 million, but contracted 4.75 per cent in one month and started April at $28.3 million.
Year-to-date, the portfolio has lost 0.52 per cent, although it has increased by 1.77 per cent since its inception in 2019.
Global investment outlook
RBC Dominion Securities manages the City of Moose Jaw’s investment portfolios. As part of its report on how well the investments have done, RBC also provides a summary of the global investment outlook.
While the initial deaths and illnesses related to the coronavirus pandemic were unfortunate, the biggest effect on global economies came from government-imposed lockdowns that shuttered businesses and curtailed consumer activity, the report said. This led RBC to slash its growth forecasts — they are now mostly below-consensus — while its base outlook for the United States is a 7.1-per-cent decline in that country’s GDP.
The U.S. government delivered nearly $3 trillion in financial aid to citizens and businesses, almost double the $1.6 trillion that the government handed out during the financial crisis of 2008-09. Together, the U.S. fiscal and monetary programs have so far amounted to more than 35 per cent of GDP.
As countries ease lockdown measures, there is the risk that the virus could regain traction and force economies to close again. However, the pandemic’s long-term repercussions include elevated debt levels worldwide that could hinder growth and affect lifestyle changes that could lower productivity, the report continued.
“Inflation could also emerge as a concern once economies eventually recover. While the virus has dominated our thinking, there are other risks that are worth keeping in mind. The U.S. election in November, an important Brexit deadline (in December) and the deterioration of U.S.-China relations, could all serve as sources of volatility for economies and financial markets,” the document added.
The next regular council meeting is Monday, Sept. 21.
Over the next year, 20 new schools will be built across Ontario and eight existing schools will see state-of-the-art permanent additions.
That’s according to the provincial government, who are investing $550-million in the project, which is expected to add nearly 16,000 new learning spaces and 870 new licensed child care spaces over the 2020-2021 school year.
“Our government is doing everything possible to ensure our students can achieve lifelong success,” said Premier Doug Ford. “That’s why we made a significant commitment to fix our schools and ensure students and staff have access to the best classrooms, with features like modern ventilation systems and high-speed Internet access. During construction, these projects will create hundreds of jobs and contribute significantly to our economic recovery.”
Some schools will also be getting upgrades to enhance their facilities and add more student spaces.
“This government firmly believes that all children deserve to learn in state-of-the-art, modern, technologically connected and accessible schools,” said Education Minister Stephen Lecce. “We will continue to take action to ensure students are safe today and well into the future by approving more new school buildings and permanent additions, and increasing access to child care for working parents.”
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Israel, the United Arab Emirates (UAE) and US announced on Tuesday the establishment of a development fund during the first-ever visit of an Emirati delegation to Tel Aviv.
The Abraham Fund, derived from the Abraham Accords, the official name of the normalization deal between Israel and the UAE, will be launched with an initial investment of $3 billion, said US International Development Finance Corporation CEO Adam Boehler.
He said the Jerusalem-based fund aims to promote economic cooperation and prosperity in the Middle East and North Africa.
In a statement, the US Embassy in Israel said the fund is “a manifestation of the new spirit of friendship and cooperation between the three countries, as well as their common will to advance the region”.
On Sept. 15, the UAE and Bahrain agreed to establish full diplomatic, cultural and commercial relations with Israel after signing controversial agreements at the White House.
The deals have drawn widespread condemnation from Palestinians, who say the accords ignore their rights and do not serve the Palestinian cause.
* Ahmed Asmar contributed to this report from Ankara
Climate change is important to the Canada Pension Plan Investment Board, but it’s not ready to divest of its holdings in conventional oil and gas.
Although a segment of the Canadian population may want the CPPIB to drop conventional energy, the board’s top spokesman says its investment decisions are not necessarily motivated by politics or a change in public policy.
Michel Leduc, CPPIB senior managing director and global head of public affairs and communications, said in a phone interview on Monday that conventional energy sources are not going away as quickly as some people may believe, and oil and gas will have a role in the global economy for some time to come.
It is the investment board’s view that conventional oil and gas is still a good investment, providing a good return for years to come, said Leduc, and the board will maintain such investments.
The conventional oil and gas companies are making the switch to unconventional wind and solar energy themselves, Leduc argued, so if the CPPIB was to cut its investment in such companies it would actually help slow the transition from conventional to renewable energy.
The subject of energy may come up again Tuesday when Leduc hosts a CPPIB virtual town hall for Nova Scotians, during which he will explain what the investment board is doing with its $430-billion fund.
Every second year, the CPPIB holds public meetings individually for each province and the northern territories throughout October. Nova Scotia is the second last of year’s presentations.
There are a total of 20 million CPP contributors and beneficiaries in Canada and, of that, there are 461,799 contributors and 220,693 retirement beneficiaries in Nova Scotia.
Leduc said that despite the economic concern brought about by the COVID-19 pandemic, the solvency and sustainability of the Canada Pension Plan is on solid footing for at least the next 75 years.
Before the creation of the CPPIB in 1997, the Canada Pension Plan was 100 per cent invested in government debt, Leduc said. To better prepare for so-called black swan events, such as a pandemic, the investment board has diversified the fund.
The fund is invested in three broad categories: 20 per cent in fixed income, which is mainly sovereign bonds and provincial bonds; 53 per cent in equities, both publicly traded stocks and private companies wholly controlled by the CPPIB; and the remainder would be in real assets, which includes toll roads, commercial real estate and ports, which provide steady income for a long period.
Geographically, only about 15 per cent of the CPPIB’s investments are in Canada, Leduc said, and about 85 per cent is invested across the developed economies of the world.
Considering that Canada represents only about three per cent of global markets, most of the CPPIB investments are outside of the country to be fully diversified and protect the fund from downturns in the Canadian economy.
The largest portion of the outside investments are in the United States, followed by Europe, Japan, South Korea and then developing countries, which includes China, India, Brazil, Mexico, Chile and Colombia.
In Canada, the fund is invested in both conventional and renewable energy, the financial sector and technology, including Ottawa-based tech darling Shopify, Leduc said.
The CPPIB has a 50 per cent holding in the 407 toll highway in Ontario, which has proven to be the investment board’s largest investment so far.
In Nova Scotia, the fund has investments in Empire Co. Ltd., parent of the Sobeys grocery chain, and Crombie REIT, both of which are controlled by the founding Sobey family of Pictou County.
Internationally, the CPPIB owns 23 ports in the United Kingdom, which also provide steady income over a long period.
CPPIB VIRTUAL TOWN HALL
The virtual Canada Pension Plan Investment Board town halls are accessed at cppinvestments.com/publicmeetings. The Nova Scotia session is scheduled for today from noon to 1 p.m.
To join, click the link for the meeting and register with an email address. Registrants will get a response and can submit a question in advance.
In Nova Scotia, 461,799 residents are CPP contributors (47.9 per cent of the provincial population) and 220,693 are CPP retirement beneficiaries (22.9 per cent of the population).
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