Report on Investments


Investments are centralized in the General Investment Fund (“the Fund”), which holds in trust the surplus operating funds, endowments, and long-term donor restricted funds of all units. Interest is paid to units based on prevailing market rates for similar financial instruments. Net profits from the Fund are used to offset costs of administration, as well as to make allocations to programs and services.


Allocations from investment income are based on a spending policy tied to long-term average rates of return, which helps mitigate volatility in the capital markets. In the year ended March 31, 2014, the Fund earned $118.4 million, incurred expenses of $3.6 million and paid interest on constituent accounts of $7.8 million, for a net income of $107.0 million. In accordance with the spending policy, $12.9 million was allocated to the operations of territorial and divisional headquarters, meaning funds have been transferred to the reserve to be used to fund future operations.


The Fund is managed by external investment managers in accordance with statements of investment beliefs and policy, which establish quality constraints, as well as prohibiting investment in companies whose primary business is the manufacture, distribution or promotion of alcohol, tobacco, pornography, gaming, gaming facilities, or armaments, as well as companies who are known to disregard environmental concerns. An investment advisory committee assists the Army by regularly reviewing both the investment policy, as well as individual manager’s performance compared to market benchmarks. Copies of the statements of investment policy and beliefs are available on the Army’s website,


Investments performed very well in the current year experiencing a one year return of 15.8%, which was 2.6% above the benchmark.


The target, operating ranges and actual asset mix of the Fund as at March 31, 2014 was as follows:


Asset Class Target Range Actual
Cash 0 0–10% 3%
Fixed Income 20% 15-45% 36%
Canadian Equities 30% 25–35% 30%
Foreign Equities 30% 25–35% 30%
Real Estate 10% 0–15% 1%
Infrastructure 10% 0–10% 0%
Total 100% 100% 100%


In August 2013, approval was received to further diversify the investment portfolio by investing in the real estate and infrastructure markets. The transition to these markets will be phased in over the next couple of years, which is the reason funds have remained invested in the fixed income markets. As a result, the allocation to fixed income, formerly targeted at 40%, will be gradually drawn down to fund the new asset classes.


Banking services are provided by Bank of Nova Scotia, Canadian Imperial Bank of Commerce and Royal Bank of Canada. Custodial and trust services are provided by CIBC Mellon. Investment management services are provided by BlackRock Asset Management Canada Limited, Fiera Capital Corporation, Sprucegrove Investment Management Limited, CIBC Asset Management, Baillie Gifford Overseas Limited, Phillips, Hager and North Investment Management Ltd., QV Investors, and Bentall Kennedy.


Investment Advisory Committee

Mr. William Chinery, Chair
Mr. William J. Stafford, Secretary
Lieut.-Colonel Lee Graves
Mr. Kevin Fahey
Mr. Michael Gallimore
Mr. R. Paul Goodyear
Mr. Yannick Menard