Notes to financial statements

March 31, 2024 and March 31, 2023

1. Reporting entity

The Office of the Public Guardian and Trustee for the Province of Ontario, Canada (“The Public Guardian and Trustee” or “PGT”) is part of the Province of Ontario's Ministry of the Attorney General. The Public Guardian and Trustee is appointed under The Public Guardian and Trustee Act and performs duties under a number of statutes with the following main responsibilities

• the guardianship of property of incapable adults
• the administration of estates of persons who have died in Ontario intestate and without next-of-kin
• the gathering of assets reverting to the Crown under the Escheats Act
• the management of funds, mortgages and securities paid into or lodged with the Accountant of the Superior Court of Justice on behalf of minors and litigants
• a general supervisory role over charitable property

The Public Guardian and Trustee has perpetual succession and an official seal and may sue and be sued in his or her corporate name. The Office of The Public Guardian and Trustee has close to 400 staff located in six regional offices throughout the Province of Ontario with the main office located in Toronto at 595 Bay Street, Suite 800, Toronto, ON, M5G 2M6.

The monetary amounts in the notes are in thousands of dollars.

These financial statements comprise the following:

Estates and trusts

This represents accounts administered by the Public Guardian and Trustee acting as guardian or trustee under:

• the Substitute Decisions Act
• the Public Guardian and Trustee Act
• the Crown Administration of Estates Act
• the Estates Act
• various other statutes

Administration fund

This represents the operating account of the Public Guardian and Trustee. The administration fund is used to accumulate fees charged to each estate and trust for services as prescribed by the Fee Schedule created pursuant to the Public Guardian and Trustee Act. Operating grants are received as required from the Ministry of the Attorney General to fund the operations of OPGT.

Cash balances in the administration fund which are not required for operating purposes are invested along with the cash funds of estates and trusts. The administration fund receives the net investment income of these investment activities, after interest is distributed on the funds of estates and trusts in accordance with the interest rates prescribed by the Public Guardian and Trustee Act.

In its capacity as Accountant of the Superior Court of Justice, the OPGT acts as custodian of:

• securities
• documents
• mortgages
• letters of credit
• lien bonds

These custodied assets and instruments are not reflected in OPGT’s financial statements.

The Public Guardian and Trustee is exempt from federal and provincial income taxes under the Income Tax Act (Canada).

2. Basis of preparation

(a) Statement of compliance

The financial statements have been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (IFRS).

These financial statements were authorized for issue by the Audit Committee of The Public Guardian and Trustee on June 19, 2024.

(b) Basis of measurement

These financial statements have been prepared on the historical cost basis except for the investments at fair value through profit or loss in the statement of financial position which are measured at fair value.

(c) Functional and presentation currency

These financial statements are presented in Canadian dollars, which is the functional currency for OPGT. Except as otherwise indicated, all financial information presented in Canadian dollars has been rounded to the nearest thousand dollars.

(d) Use of estimates and judgements

The preparation of the financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from those estimates.

The OPGT’s management has made significant judgments when determining the classification and measurement of financial instruments under IFRS 9, Financial Instruments (IFRS 9). These judgments centre upon a cash flow characteristic and business model analysis. This analysis results in OPGT’s financial assets being measured at fair value through profit or loss due to factors including management of the financial assets on a fair value basis or, based on the OPGT’s intent to collect cash flows until maturity, measuring the financial assets at amortized cost.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the year in which the estimates are revised and in any future periods affected.

Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment within the next financial year relates to the carrying amount of real estate assets.

(e) New accounting standards and amendments to existing standards

The following amendments to existing standards are effective April 1, 2023.

Amendments to IAS1 and IFRS1 Practice Statement 2

The amendments provide guidance and examples to assist entities applying materiality judgments to accounting policy disclosures. The amendments to IAS 1 aid to help entities improve the usefulness of its accounting policy disclosures by replacing the requirement for entities to disclose their ‘significant’ accounting policies with a requirement to disclose their ‘material’ accounting policies. The amendments to IFRS Practice Statement 2 provide guidance on how entities apply the concept of materiality in making decisions about accounting policy disclosures. The OPGT adopted the amendments as of April 1, 2023 and have reflected the material accounting policies in the disclosures.

3. Material accounting policies

The material accounting policies set out below have been applied consistently to all periods presented in these financial statements.

a. Foreign currency

Transactions in foreign currencies are translated into Canadian dollars using exchange rates prevailing at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies are converted to Canadian dollars at the exchange rate at the reporting period end date. The foreign currency gain or loss on monetary items is the difference between the amortized cost in Canadian dollars at the beginning of the period, adjusted for effective interest and payments during the period, and the amortized cost in foreign currency translated at the exchange rate at the reporting period end date.

Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated to Canadian dollars at the exchange rate on the reporting period end date. Foreign currency differences arising on translation are recognized in profit or loss on a net basis.

(b) Net investment income/(loss)

Net investment income/(loss) comprises interest income on fixed income funds invested, other interest and dividend income and change in fair value on investments at fair value through profit and loss comprising gains (losses) on the disposal of investment securities, other realized and unrealized fair value changes and impairment losses recognized on financial assets.

Interest income and expense is recognized on an accrual basis in profit or loss, using the effective interest method. The effective interest rate is the rate that exactly discounts the estimated future cash payments and receipts through the expected life of the financial instrument (or, when appropriate, a shorter period) to the carrying amount of the financial instrument. When calculating the effective interest rate, estimates are made of future cash flows considering all contractual terms of the financial instrument, but not future credit losses.

(c) Financial assets and liabilities

(i) Financial assets

OPGT classifies its financial assets based on both OPGT’s business model for managing those financial assets and the contractual cash flow characteristics of the financial assets.

OPGT classifies its financial assets in the following measurement categories:

• those to be measured subsequently at fair value (either through other comprehensive income or through profit or loss), and
• those to be measured at amortized cost.

The classification depends on the entity’s business model for managing the financial assets and the contractual terms of the cash flows.

For assets measured at fair value, gains and losses are either recorded in profit or loss or other comprehensive income. For investments in equity instruments that are not held for trading, this will depend on whether OPGT has made an irrevocable election at the time of initial recognition to account for the equity investment at fair value through other comprehensive income (FVOCI). OPGT reclassifies debt investments when and only when its business model for managing those assets changes.

The Public Guardian and Trustee does not enter into derivative financial contracts. The OPGT may have indirect exposure to derivatives through investments held within its funds.

Initial recognition

At initial recognition, the Public Guardian and Trustee measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss (FVPL), transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at FVPL are expensed in profit or loss.

Debt instruments

Subsequent measurement of debt instruments depends on OPGT’s business model for managing the asset and the cash flow characteristics of the asset. There are three measurement categories into which OPGT classifies its debt instruments:

• Amortized cost (includes investments held in fixed income funds and accounts receivable): Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortized cost. Interest income from these financial assets is included in Interest income from fixed income funds using the effective interest rate method. Any gain or loss arising on derecognition is recognized directly in profit or loss and presented in change in fair value on investments at fair value through profit and loss. Impairment losses are presented as a separate line item in the statement of income and comprehensive income (if applicable).
• FVOCI: OPGT does not hold any debt or any equity securities as FVOCI.
• FVPL: Assets that do not meet the criteria for amortized cost or FVOCI are measured at FVPL. A gain or loss on a debt investment that is subsequently measured at FVPL is recognized in profit or loss and presented in change in fair value on investments at fair value through profit and loss in the period in which it arises.

All of OPGT’s accounts receivable and debt instruments at amortized cost are considered to have low credit risk, and the loss allowance recognized during the period was therefore limited to 12 months expected losses. Management considers ‘low credit risk’ for listed bonds to be an investment grade credit rating with at least one major rating agency. Other instruments are considered to be low credit risk when they have a low risk of default and the issuer has a strong capacity to meet its contractual cash flow obligations in the near term.

OPGT has classified its fixed income fund investments as amortized cost.

Equity instruments

OPGT subsequently measures all equity investments at fair value. Dividends from such investments continue to be recognized in profit or loss when OPGT’s right to receive payments is established. Changes in the fair value of financial assets at FVPL are recognized in changes in fair value of financial assets at FVPL in the statement of income and comprehensive income as applicable.

Financial assets at fair value through profit or loss comprise investments in client-owned bonds and other debt securities, the Canadian Core Fixed Income Fund, the Canadian Core Equity Fund, the Global Equity Fund, the Canadian Income and Dividend Fund and client-owned equity securities.

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand, current bank balances and short-term deposits with banks. All cash equivalents are highly liquid financial assets with original maturities of three months or less from the acquisition date that are subject to an insignificant risk of changes in their fair value.

(ii) Financial liabilities

Financial liabilities are recognized initially on the date at which the Public Guardian and Trustee on behalf of estates and trusts and the administration fund become a party to the contractual provisions of the instrument. The Public Guardian and Trustee on behalf of the estates and trusts and the administration fund derecognizes a financial liability when its contractual obligations are discharged or cancelled or expire.

Financial liabilities comprise accounts payable and accrued liabilities. These financial liabilities are recognized initially at fair value plus any directly attributable transaction costs and subsequently at amortized cost.

(iii) Fair value measurement

Fair value is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm’s-length transaction on the measurement date. Fair value does not take into consideration transaction costs expected to be incurred on transfer or disposal of a financial instrument.

The Public Guardian and Trustee on behalf of estates and trusts and the administration fund measures the fair value of an instrument using quoted prices in an active market for that instrument. A market is regarded as active if quoted prices are readily and regularly available and represent actual and regularly occurring market transactions on an arm’s length basis.

The best evidence of the fair value of a financial instrument at initial recognition is the transaction price, for example, the fair value of the consideration given or received, unless the fair value of that instrument is evidenced by comparison with other observable current market transactions in the same instrument (for example, without modification or repackaging) or based on a valuation technique whose variables include only data from observable markets. When transaction price provides the best evidence of fair value at initial recognition, the financial instrument is initially measured at the transaction price and any difference between this price and the value initially obtained from a valuation model is subsequently recognized in profit or loss on an appropriate basis over the life of the instrument but not later than when the valuation is supported wholly by observable market data or the transaction is closed out.

Equity and fixed income securities publicly traded are measured at the exchange traded close price and mid price, respectively. Fair values reflect the credit risk of the instrument and include adjustments to take account of the credit risk of the counter party where appropriate.

(d) Real estate and other assets

Real estate included within the statement of financial position primarily represents residential properties currently owned by clients of The Public Guardian and Trustee. Real estate is recognized when the OPGT obtains authority for the client and ownership interest in the asset is confirmed. Other assets comprise jewellery, art, collectibles, nominal assets, vehicles, cash value of insurance policies, prepaid funeral costs and similar items.

Real estate and other assets, except for life insurance policies, are measured at cost less accumulated impairment losses. Cost is determined as the fair value when the asset is initially recognized, using appropriate valuation methodologies and valuator’s best assessment of unobservable inputs. Life insurance is measured at cash surrender value.

(e) Employee benefits

(i) Short-term employee benefits

Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided.

A liability is recognized for the amount expected to be paid under short-term employee benefit plans if the administration fund has a present legal or constructive obligation to pay the amount as a result of past service provided by the employee, and the obligation can be estimated reliably and is included in accounts payable and accrued liabilities of the administration fund.

(ii) Post-employment benefits

Staff of The Public Guardian and Trustee are employees of the Ontario Public Service which provides pension benefits to its employees through participation in the Public Service Pension Plan and the Ontario Public Service Employees’ Union Pension Plan. The province funds the employer’s contribution to the pension plans. In addition, the cost of post-retirement, non-pension employee benefits are paid by the province. As such, The Public Guardian and Trustee makes no contributions to these post-employment benefit plans. There is no contractual agreement or stated policy for charging the net benefit cost for the plans as a whole (measured in accordance with IAS 19, employee benefits) to individual reporting entities of the Province of Ontario. As a result, the costs associated with post-employment benefits are not reflected in the financial statements.

(f) Income and expenses

Income from pensions, social benefits and settlements and items of a related nature is recognized when received. Pension income is primarily payments from the Government Canada including old age security and Canada Pension Plan, and other pension plans. Social benefits primarily consists of the Family Benefit Allowance and Guaranteed Income Supplement. Other income includes settlements and income tax refunds and other government payments.

The administration fund charges fees to each estate and trust account for services provided by the OPGT as prescribed by the Fee Schedule created pursuant to The Public Guardian and Trustee Act. The fees, comprising management, transaction and service fees, are recognized as the related services are performed. Transactions fees are calculated daily and accrued and paid on the last business day of the month. The management fee is calculated on the last business day of the month based on the clients’ equity. Fees are deferred for clients receiving ODSP benefit payments and are excluded from revenue. Recoveries of deferred fees are recognized in the period they are paid.

Expenses are recognized as incurred on an accrual basis. Investment management fees, placement and transaction fees that do not qualify for inclusion as part of the initial measurement of an asset are expensed as the services are received.

(g) Government grants

Government grants partially fund the Public Guardian and Trustee’s operating expenses. Grants that compensate the administration fund for the operations of the Public Guardian and Trustee by way of amounts recovered from the Ministry of the Attorney General, are recognized in net income or loss as income on a systematic basis in the same periods in which the expenses are recognized.

(h) Capital contributions and distributions

Contributions and distributions represent changes directly to net assets. Assets and liabilities of new clients are recorded as increases to net assets at the time the OPGT gains authority and are initially recognized at fair value. Proceeds, including gains and losses, from the sale of real estate and other assets are included in contributions. Assets and liabilities released to clients, beneficiaries and heirs are recorded as a decrease to net assets at fair value of those assets and liabilities at the time of release except real estate and other assets which are at cost.

4. Investments in financial assets

4.1 Estates and trusts – cash and cash equivalents, bonds and other debt securities – client owned

As at March 31 (in thousands of dollars).

Cash equivalents and other debt securities have an annual interest rate of between 0.00–8.00% (2023: 0.00–10.50%) and, at the reporting date, have remaining maturity periods ranging between 0–32 years (2023: 0–33 years).

Interest rates on bonds and other debt securities with maturities greater than one year are as follows:

Interest income is distributed to client accounts based on an interest rate as approved by The Public Guardian and Trustee’s Investment Advisory Committee. The approved rates and effective dates for Canadian dollars during the year ending March 31, 2024 and March 31, 2023, were as follows:

The approved rates and effective dates for United States dollars during the year ending March 31, 2024 and March 31, 2023, were as follows:

4.2 Canadian Core Fixed Income Fund

The short-term notes and bonds yield, on a fair value basis, annual interest of between 0.00–8.70% (2023: 0.00–8.70%) and, at the reporting date, have remaining maturity periods ranging between 1 day to 59 years (2023: 3 days to 60 years).

The financial assets held in the Canadian Core Fixed Income Fund as at March 31 are held by:

The income earned in this fund may be distributed in cash to unit holders monthly or reinvested in this fund.

4.3 Canadian Core Equity Fund

The average annual yield on investments in Canadian equity securities was 2.42% (2023: 2.51%).

The financial assets held in the Canadian Core Equity Fund as at March 31 are held by:

The income earned in this fund may be distributed in cash to unit holders monthly or reinvested in this fund.

4.4 Global Equity Fund

The average annual yield on investments in foreign equity securities was 1.82% (2023: 2.05%).

The financial assets held in the Global Equity Fund as at March 31 are held by:

The income earned in this fund may be distributed in cash to unit holders monthly or reinvested in this fund.

4.5 Canadian income and dividend fund

The short-term notes and bonds yield, on a fair value basis, annual interest of between 0.00–8.50% (2023: 0.00–8.50%) and, at the reporting date, have remaining maturity periods ranging between 53 days to 58 years (2023: 41 days to 60 years). The average annual yield on investments in Canadian equity securities was 5.40% (2023: 4.93%).

The financial assets held in the Canadian Income and Dividend Fund as at March 31 are held by:

The income earned in this fund may be distributed in cash to unit holders monthly or reinvested in this fund.

4.6 Equity securities – client owned

These balances do not include indirect client holdings by way of their investment in Public Guardian and Trustee Funds by virtue of unit holdings in the various OPGT funds.

4.7 Fixed income funds

The bonds yield (at cost) an annual interest of between 1.13-6.50% (2023 1.13-7.50%) and, at the reporting date, have remaining maturity periods ranging between 1 day to 5 years (2023: 3 days to 5 years).

The financial assets held in the fixed income funds as at March 31 are held by:

5. Financial risk management

The Public Guardian and Trustee has exposure to credit risk, liquidity risk and market risk arising from financial instruments. This note presents information about OPGT’s exposure to each of the above risks, and the OPGT’s objectives, policies and processes for management of capital and measuring and managing risk.

5.1 Credit risk

Management of credit risk

Credit risk is the risk that a counterparty to a financial instrument will fail to discharge an obligation or commitment that it has entered into with The Public Guardian and Trustee, resulting in a financial loss to the estates and trusts and the administration fund. Credit risk arises principally from cash and cash equivalents, debt securities held, and accounts receivables.

The Public Guardian and Trustee mitigates this risk by engaging experienced investment managers and structuring their investment policies and goals to minimize the risk to clients’ capital. In particular, investments in lower investment grade fixed income instruments (typically a rating of BBB) are minimized. As well, investment managers are required to report immediately adverse changes in the credit ratings of financial instruments.

Impairment of Financial Assets – At each reporting date, OPGT’s management measures the loss allowance for financial assets carried at amortized cost. If, at the reporting date, the credit risk has increased significantly since initial recognition, management measures the loss allowance at an amount equal to the lifetime expected credit losses. If, at the reporting date, the credit risk has not increased significantly since initial recognition, OPGT measures the loss allowance at an amount equal to 12–month expected credit losses. Significant financial difficulties and probability that the counterparty may default in payments are considered indicators that a loss allowance may be required. If the credit risk increases to the point that it is considered to be credit impaired, interest income will be calculated based on the gross carrying amount adjusted for the loss allowance.

OPGT’s management measures credit risk and expected credit losses using probability of default, exposure at default and loss given default. Management considers both historical analysis and forward looking information in determining any expected credit loss. A significant increase in credit risk is defined by management as any contractual payment which is more than 30 days past due or on a low quality credit standing. Any contractual payment which is more than 90 days past due is considered credit impaired. As at March 31, 2024 and March 31, 2023, all amounts receivable for investments sold, cash or short term deposits are held with high credit quality counterparties. Management considers the probability of default to be close to zero as these instruments have a low risk of default and the counterparties have a strong capacity to meet their contractual obligations in the near term. As a result, no loss allowance has been recognized based on 12–month expected credit losses as any such impairment would be wholly insignificant to a Fund.

Client accounts receivable are reviewed on an individual basis; any necessary adjustments to amounts recorded are made at that time.

Exposure to credit risk

The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporting date for the financial assets of both estates and trusts and the administration fund was:

[1] ^ Financial assets within these funds that are subject to credit risk are limited to cash, short-term notes, and bonds. See also notes 4.2, 4.3, 4.4 and 4.5.

Credit quality

As at March 31, estates and trusts and the administration fund hold unit investments in The Public Guardian and Trustee’s unit funds that have underlying debt securities with the following credit quality:

Concentration of credit risk

As at March 31, the debt securities of estates and trusts and the administration fund hold unit investments in The Public Guardian and Trustee’s unitized funds that have underlying debt securities that were concentrated in the following sectors:

5.2 Liquidity risk

Liquidity risk is the risk that The Public Guardian and Trustee may not be able to generate sufficient cash resources to settle its obligations in full as they fall due or can only do so on terms that are materially disadvantageous.

The objective of The Public Guardian and Trustee is to ensure that adequate financial resources are available to meet ongoing requirements and to discharge the obligations of the estates and trusts and the administration fund. The Public Guardian and Trustee mitigates liquidity risk by maintaining significant holdings in short-term, liquid, money market instruments within OPGT’s fixed income funds.

Maturity analysis for financial instruments

As at March 31, 2024 and 2023, the financial assets and liabilities of estates and trusts and the administration fund had the following remaining contractual maturity profile:

Estates and trusts 2024

Estates and trusts 2023

Administration fund 2024

Administration fund 2023

5.3 Market risk

Market risk is the risk that changes in market prices, such as interest rates, equity prices, foreign exchange rates and credit spreads (not relating to changes in the obligor’s/issuer’s credit standing) will affect investment income or the value of the holdings in financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return on risk.

Geopolitical tension was elevated in 2023 and the early part of 2024. The conflicts in Europe and the Middle East and rising tensions between the U.S and China continued to impact the global economy and markets. These events have constrained global supply chains which have pushed inflation and interest rates higher. The investment portfolios of the OPGT have been subject to these market fluctuations and may continue to experience significant volatility.

Market risk comprises currency risk, interest rate risk and other price risks (including equity price risk).

5.3.1 Currency risk

Currency risk is the risk that the fair value of investment assets and earnings on those assets will fluctuate as a result of changes in foreign exchange rates. Investments in the Global Equity Fund are exposed to this risk which is also part of the return potential in the fund. Hedging foreign currency exposure is considered by management as part of an annual review of investment policies. OPGT’s management did not undertake any hedging activities as of March 31, 2024 and 2023.

At March 31, the carrying value of net financial assets and liabilities held in foreign currencies expressed in Canadian dollars is as follows:

The table below sets out the impact on net financial assets and liabilities from a reasonably possible weakening of the Canadian dollar against the other currencies by 5% (2023: 5%) at March 31. The analysis assumes that all other variables, in particular interest rates, remain constant.

A strengthening of the Canadian dollar by 5% against the other currencies would have resulted in a proportionate but opposite effect to the amounts shown above.

5.3.2 Interest rate risk

Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. By adopting a hold to maturity policy on its fixed income funds, The Public Guardian and Trustee has significantly mitigated this risk, particularly for short-term, temporary movements in market interest rates.

The table below sets out the impact on the net financial assets and liabilities from an increase of 75 basis points in interest rates as at March 31. The impact of such an increase has been estimated by calculating the fair value changes of the fixed interest debt securities, excluding the fixed income funds which are measured at amortized cost. This analysis assumes that all other variables, in particular foreign currency rates, remain constant.

A decrease of 75 basis points in interest as at March 31 would have resulted in a proportionate but opposite effect to the amounts shown above.

5.3.3 Equity price risk

Equity price risk is the risk that the fair value of equity securities will fluctuate as a result of changes in the market price of equity instruments whether caused by factors specific to an individual investment or factors affecting all instruments traded in the market which, for international equities, includes changes in currency rates.

The Public Guardian and Trustee has mitigated this risk by engaging experienced investment managers and structuring their investment policies and goals, including limits on the holding of individual securities, limits on the investments in non-government debt, and defining asset component ranges to minimize the risk to clients’ capital. As well, investments in financial instruments that are subject to changes in market prices, including equity securities, are undertaken only when the client can invest for a medium to longer term.

Investments are made in funds, namely the Canadian Core Fixed Income Fund, the Canadian Core Equity Fund, the Global Equity Fund and the Canadian Income and Dividend Fund that have the following benchmarks for concentration of asset portfolios.

Canadian Core Fixed Income Fund:

• Canadian bonds - 100% of fund assets

Canadian Core Equity Fund:

• Equity investments listed on Canadian stock exchanges - 100% of fund assets

Global Equity Fund:

• Equity investments listed on foreign stock exchanges - 100% of fund assets

Canadian Income and Dividend Fund:

• Equity investments listed on Canadian stock exchanges - 50% of fund assets
• Canadian bonds - 50% of fund assets

Canadian income and dividend fund:
Equity investments listed on Canadian stock exchanges - 100% of fund assets

Investment managers are permitted to vary from these benchmarks within stipulated limits.

Investment managers further monitor concentration of risk based on counterparties and industry sectors.

At March 31, equity investments are concentrated in the following sectors:

The table below sets out the impact on the net financial assets and liabilities from a reasonably possible decrease of 15% (2023: 15%) in the price of individual equity securities as at March 31. This analysis assumes that all other variables, in particular interest and foreign currency rates, remain constant.

A strengthening in the individual equity market prices of 15% (2023: 15%) as at March 31 would have resulted in a proportionate but opposite effect to the amounts shown above.

5.4 Fair value disclosures

The accounting policy for fair value measurements is detailed in accounting policy 3c(iii).

5.4.1 Fair values versus carrying amounts

The carrying amounts approximate fair value for all financial assets and liabilities, except for the fixed income funds, which are measured at amortized cost, and for real estate, whose fair values for the estates and trusts administered by OPGT are $1,825,109 (2023: $1,772,580) and $309,378 (2023: $336,881) respectively. As a result, the fair value of net assets attributable to beneficiaries of estates and trust clients is $2,765,508 (2023: $2,652,731). Fair value of the fixed income funds for the administration fund is $17,799 (2023: 17,989). As a result, the total assets for the administration fund is $190,124 (2023: $172,022). The fixed income funds are categorized within Level 2 of the fair value hierarchy while real estate is categorized within Level 3. The fair value of real estate as at March 31, 2024 and March 31, 2023 is determined using the direct comparison method. Appraisals are carried out by a qualified independent appraiser contracted by the PGT.

5.4.2 Fair value hierarchy

The fair value measurements used by The Public Guardian and Trustee place the highest priority on observable market inputs and the lowest priority on unobservable internally developed inputs. Accordingly, The Public Guardian and Trustee classifies its assets and liabilities that are measured at fair value, or for which fair value information is disclosed, within a three-level valuation hierarchy that reflects the inputs to valuation techniques used to determine fair value. Level 1 represents valuations based on unadjusted quoted prices in active markets for identical assets or liabilities, level 2 comprises valuations using models or techniques that incorporate observable market information and level 3 comprises valuations based on models without observable market information as inputs. The classification determination is based on the lowest level of input that is significant to the valuation.

The following fair value hierarchy table presents information about financial assets measured at fair value on a recurring basis as of March 31, 2024 and March 31, 2023.

Estates and trusts 2024

Estates and trusts 2023

Administration fund 2024

Administration fund 2023

The fair value of bonds and equities categorized in Level 2 was determined by obtaining quoted market prices or executable dealer quotes for identical or similar instruments in inactive markets, or other inputs that are observable or can be corroborated by observable market data.

Transfers between fair value hierarchy levels are considered effective from the beginning of the reporting period in which the transfer is identified. During 2024 and 2023 there were no significant transfers of financial instruments between Level 1 and Level 2.

For assets and liabilities carried at amortised cost, their carrying values are a reasonable approximation of fair value except for the assets and liabilities above.

5.5 Capital management

The Public Guardian and Trustee’s operating capital is shown in the administration fund and consists of various specific purpose funds and an unappropriated fund (detailed in the statement of changes in equity of the administration fund).

The Public Guardian and Trustee’s primary objective when managing its administration fund is to safeguard its ability to continue operations and provide adequate resources to service clients and safeguard clients’ interests. The Public Guardian and Trustee expects the current balance in the administration fund, together with future cash flows from operations, to be sufficient to support The Public Guardian and Trustee’s ability to operate on an ongoing basis and to meet this objective.

A secondary objective is to use available funds, not required to meet the primary objective, to modernize the infrastructure of the office of The Public Guardian and Trustee.

The Public Guardian and Trustee has invested part of its administration fund in the Canadian Core Fixed Income Fund, the Canadian Core Equity Fund, the Global Equity Fund and the Canadian Income and Dividend Fund. Investment income earned is, in part, used to replenish the various specific purpose funds for expenses incurred.

6. Accounts receivable

7. Other assets

8. Accounts payable and accrued liabilities

Other liabilities of estates and trusts include mortgages payable, credit card balances, health facility accommodation fees, and charges for services such as telecommunication and utilities.

9. Fees charged by the administration fund to estates and trusts

10. Other dividend and interest income

11. Change in fair value on investments at fair value through profit or loss

12. Salaries, wages and benefits

13. General administration

14. Related party transactions

The Province of Ontario, its agencies and its crown corporations are related parties to The Public Guardian and Trustee. Under IFRS, a reporting entity is exempt from the disclosure requirements of IAS 24, Related Party Disclosures in relation to related party transactions and outstanding balances, including commitments, with a government that has control, joint control or significant influence over the reporting entity and another entity that is a related party because the same government has control, joint control or significant influence over both the reporting entity and the other entity. The Public Guardian and Trustee has used this exemption in preparing these financial statements.

In the normal course of business, transactions occur with the Province of Ontario, its agencies and its crown corporations and include the following types of transactions and outstanding balances, all of which have been recognized in these financial statements:

• Investments in certain financial instruments that are issued by these related parties;
• Expenditure on certain services including information technology and telecommunication costs provided by these related parties; and
• The Province of Ontario provides funding for the operations of OPGT including expenditures relating to salaries, wages and benefits, transportation and communication costs, supplies, equipment and general administrative costs. In addition, OPGT remits surplus income to the Province of Ontario on a quarterly basis. During the year the Province provided funding amounting to $64,708 (2023: $59,699) and recovered $41,863 (2023: $39,093), for a net grant by the Province of $22,845 (2023: $20,606).

In addition, in the normal course of business, the following transactions are entered into with these related parties at no charge to The Public Guardian and Trustee and therefore are not reflected in the financial statements:

• Staff of The Public Guardian and Trustee are employees of the Ontario Public Service which provides pension benefits to its employees through participation in the Public Service Pension Fund and the Ontario Public Service Employees’ Union Pension Fund. The province funds the employer’s contribution to the pension funds.
• The cost of post-retirement, non-pension employee benefits are paid by the province.
• The Public Guardian and Trustee occupies leased premises paid for by the Ministry of the Attorney General.
• The province provides payroll and payment processing for The Public Guardian and Trustee.

Key management personnel compensation

Staff, including key management personnel are employees of the Ministry of the Attorney General, Ontario Public Service (OPS). All management compensation is in accordance with Management Board of Cabinet Compensation Directives and compensation follows approved OPS compensation practices. This includes public disclosure for all individuals earning more than $100 in a calendar year.

The benefit costs as set out in the schedule below does not include any specific post–employment, termination or other long term benefits but the cost of these benefits are funded by the province as set out in Note 3(e) (ii).

In addition to the salaries and mandatory employer contributions to government programs (Canada Pension Plan and Employment Insurance), senior managers also participate in various group life, health and dental plans for which the employer shares the premiums.

Key management personnel are members of the OPS’s Office management committee. Their compensation comprises the following:

15. Funds escheated to the Crown

Deceased Estates include estates administered under the Crown Administration of Estates Act and the Estates Act. The Public Guardian and Trustee is authorized by the Escheats Act to take possession of property reverting to the Crown under the Succession Law Reform Act. After a period of ten years, any property so received by The Public Guardian and Trustee which remains unclaimed is required to be transferred to the Consolidated Revenue Fund (CRF) of the Province of Ontario. Such property transfers to the CRF are included in the statement of changes in net assets attributable to beneficiaries of estates and trusts. During the year, escheats from Deceased Estates totalling $1,334 (2023: $2,290) were transferred to the CRF.

Under the Escheats Act, The Public Guardian and Trustee may take possession of assets of dissolved corporations which have been forfeited to the Crown under various corporate statutes. Such property transfers to the CRF are included in the statement of changes in net assets attributable to beneficiaries of estates and trusts. During the year, $24,779 (2023: $4,787) was transferred to the CRF.

16. Funds and reserves – Administration fund

Assurance Fund

The Public Guardian and Trustee Act and the regulations under the Act provide that an Assurance Fund shall be established to meet losses for which The Public Guardian and Trustee might become liable.

Litigation Reserve Fund

This reserve is used to cover expenses and costs of legal proceedings paid by The Public Guardian and Trustee on behalf of its litigation guardian clients.

Reserve for Doubtful Accounts

The intent of this reserve is to provide for all clients’ accounts whereby The Public Guardian and Trustee has advanced funds on a client’s behalf and has a statutory lien pursuant to section 8.1 of the Public Guardian and Trustee Act but may not be able to recover the amount from the client.

Capacity Assessment Fund

This reserve was set up to cover fees of capacity assessors when a client is unable to pay costs of an assessment or re-assessment.

Unappropriated Fund

Pursuant to Section 9(5) of the Public Guardian and Trustee Act, the Lieutenant Governor in Council may from time to time direct the payment into the Consolidated Revenue Fund of the province of any balance at the credit of the administration fund.

17. Contingencies and commitments

The Public Guardian and Trustee is involved in various legal actions arising in the normal course of business operations. We review the status of all proceedings on an ongoing basis however, it is difficult to determine the outcome and or to reliably estimate the amount of any loss at this time. Liabilities for any settlements will be recognized if and when The Public Guardian and Trustee has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Claims for which we have made provisions for are not material.