City coffers received a $21.1 million boost last year, courtesy of municipal investments and rising interest rates.
That’s how much was generated by the City of Guelph’s $597.6 million investment portfolio, shows a staff report released on Friday.
“Investment income reduces the amount needed from property tax and user fees to fund City services and increases the value of reserve funds used to fund future capital expenditures,” the report states. “The main driver of increased investment earnings compared with 2022 returns was the increasing interest rate environment throughout 2023.”
The return on investment was 3.44 per cent last year, which is up from 2.14 per cent in 2022. That’s due to a larger portfolio – it was $586.8 million in 2022 – as well as three Bank of Canada interest rate increases, taking it from 4.25 per cent at the start of last year to five per cent at the end.
“Total investment revenue was $8.4 million higher than the same period in 2022,” the report notes. “Higher than expected investment income will also provide a boost for the City’s reserve funds at year-end.”
