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Preamble:
WHEREAS Section 250 of the Municipal Government Act authorizes municipalities to invest surplus funds only in investments permitted by provincial regulation; and
WHEREAS the Municipal Investment Regulation (AR 149/2022) restricts municipal investment opportunities primarily to low-risk, low-yield investments that often fail to preserve the long-term purchasing power of municipal reserves; and
WHEREAS many Alberta municipalities maintain significant long-term reserves for infrastructure replacement, capital planning, and financial sustainability that are well suited to diversified investment strategies; and
WHEREAS other Canadian jurisdictions have modernized municipal investment frameworks using prudent investor principles while maintaining rigorous governance, transparency, and accountability; and
WHEREAS Alberta municipalities have the governance structures, fiduciary responsibilities, financial oversight, and access to professional investment expertise necessary to prudently manage diversified investment portfolios.
Operative Clause:
THEREFORE, BE IT RESOLVED that the Rural Municipalities of Alberta advocate to the Government of Alberta to amend the Investment Regulation (AR 149/2022) under the Municipal Government Act to permit municipalities to pursue balanced and diversified investment portfolios, including equities and professionally managed pooled investment funds, consistent with prudent investor principles and appropriate governance, transparency, reporting, and oversight requirements.
Member Background:
Alberta’s current investment framework prioritizes capital preservation but significantly limits long-term investment performance, even reserve funds that may not be required for decades.
When inflation exceeds the returns available through permitted investments, municipal reserves lose purchasing power, reducing municipalities’ ability to fund future infrastructure and essential services.
Modern public-sector investment practices emphasize a prudent investor approach rather than a prescriptive list of allowable investments. Diversification, professional management, and robust governance have consistently demonstrated stronger long-term, risk-adjusted outcomes.
Saskatchewan’s SUMAlnvest model and similar approaches across Canada demonstrate that municipalities can responsibly achieve improved long-term returns while maintaining public accountability.
Rationale for changes to existing public sector investment practices:
Modernizing Alberta’s Municipal Investment Regulation will align municipal investment authority with contemporary public-sector standards while maintaining prudent governance and accountability. This measured approach will better protect the long-term value of municipal reserves, strengthen financial sustainability, reduce pressure on future property taxation, and enhance municipalities’ ability to responsibly plan for future infrastructure and service needs.
RMA Background:
RMA has no active resolutions directly related to this issue.
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