O. Reg. 423/04: ONTARIO POWER AUTHORITY - ELIGIBLE INVESTMENTS AND BORROWINGSkip to content
Electricity Act, 1998
Loi de 1998 sur l’électricité
ONTARIO REGULATION 423/04
Ontario Power Authority — Eligible Investments and borrowing
Note: This Regulation was revoked on January 1, 2015. (See: O. Reg. 280/14, ss. 5, 6 (1))
Last amendment: O. Reg. 280/14.
This Regulation is made in English only.
1. (1) The OPA may make investments in accordance with this Regulation when it considers the investment advisable for the sound and efficient management of its financial affairs. O. Reg. 423/04, s. 1 (1).
(2) The OPA may make investments in only the following types of securities:
1. Bonds, debentures, promissory notes and other evidences of indebtedness, issued or guaranteed by,
i. Canada or a province or territory of Canada, or
ii. an agency of Canada or of a province or territory of Canada.
2. Bonds, debentures, promissory notes and other evidences of indebtedness, issued or guaranteed by,
i. a municipality in Canada,
ii. a school board in Canada, or
iii. the Municipal Finance Authority of British Columbia.
3. Bonds, debentures, promissory notes, deposit receipts, deposit notes, certificates of deposit or investment, acceptances, commercial paper and similar instruments issued, guaranteed or endorsed by,
i. a bank listed in Schedule I, II or III to the Bank Act (Canada),
ii. a loan corporation or trust corporation registered under the Loan and Trust Corporations Act, or
iii. a credit union under the Credit Unions and Caisses Populaires Act, 1994.
4. Promissory notes and commercial paper, other than asset-backed securities, issued by a corporation that is incorporated under the laws of Canada or a province of Canada.
5. Asset-backed commercial paper, notes, bonds, debentures or other evidences of indebtedness issued by an issuer in Canada,
i. that is a trust, corporation, partnership or other entity organized for the principal purpose of issuing fixed-income securities secured by a security interest in its assets, and
ii. whose assets consist of debts, receivables, accounts, claims or other rights to payments or contracts or obligations that generate or secure debts, receivables, accounts or claims. O. Reg. 423/04, s. 1 (2).
(3) The OPA shall not invest in a security described in paragraph 2, 3, 4 or 5 of subsection (2) unless, at the time the investment is made by the OPA, the security has a minimum rating of,
(a) “R-1(mid)” or “AA(low)” by Dominion Bond Rating Service Limited;
(b) “Prime-1” or “Aa3” by Moody’s Investors Services Inc.; or
(c) “A-1+” or “AA-” by Standard and Poor’s. O. Reg. 423/04, s. 1 (3).
(4) Investments described in subsection (2) must have terms that provide that principal and interest shall be fully repaid no later than one year after the day the investment is made by the OPA. O. Reg. 423/04, s. 1 (4).
(5) Nothing in this section restricts the OPA’s authority to enter into contracts referred to in section 25.32 of the Act. O. Reg. 423/04, s. 1 (5).
2. The OPA shall not do the following:
1. Invest in an investment that fails to satisfy the requirements of section 1.
2. Invest in a security that is expressed or payable in any currency other than Canadian dollars.
3. Enter into interest rate or currency exchange agreements, forward rate agreements or any other type of financial agreement to manage its financial assets, liability or risks, except those permitted by section 1. O. Reg. 423/04, s. 2.
3. The OPA may borrow only for the following purposes:
1. To fund the payment of amounts payable by the OPA under sections 25.33 and 25.34 of the Act and any amounts payable under the regulations.
2. To provide such funds as may be necessary for the management of any variance account established and maintained under the Act by the OPA.
3. To provide such funds as may be necessary for the OPA to manage timing differences between the receipt of amounts and the payment of costs and expenses incurred by the OPA in exercising its rights and performing its duties under the Act.
4. To provide such funds as may be necessary for the OPA to manage timing differences between the receipt of payments by the OPA from the IESO under sections 78.3 and 78.4 of the Ontario Energy Board Act, 1998 and the payment of amounts by the OPA under the procurement contracts referred to in those sections. O. Reg. 423/04, s. 3.
Statement of investment, borrowing and financial management policies and procedures
4. (1) Before the OPA makes an investment described in section 1 or enters into an arrangement to borrow funds, the board of directors of the OPA shall, if it has not already done so, adopt a statement setting out the OPA’s investment, borrowing and financial management policies and procedures. O. Reg. 423/04, s. 4 (1).
(2) In preparing the statement, the board of directors,
(a) shall ensure that the statement does not contain any policy or procedure that would conflict with the requirements of sections 1, 2 and 3; and
(b) shall bear in mind the timing considerations of the OPA’s investments and borrowings in relation to the OPA’s expected cash flow requirements. O. Reg. 423/04, s. 4 (2).
(3) The OPA shall submit to the Minister of Finance for approval,
(a) its proposed statement of investment, borrowing and financial management policies and procedures; and
(b) every change it proposes to make to its statement of investment, borrowing and financial management policies and procedures after the statement has been approved. O. Reg. 423/04, s. 4 (3).
(4) The Minister of Finance may approve the proposed statement or change to the statement or refer it back to the OPA for further consideration. O. Reg. 423/04, s. 4 (4).
(5) If the Minister of Finance does not approve the proposed statement or change to the statement and does not refer it back to the OPA for further consideration within 60 days of receipt, the Minister shall be deemed to approve the OPA’s proposed statement or change. O. Reg. 423/04, s. 4 (5).
(6) The OPA shall comply with its statement of investment, borrowing and financial management policies and procedures as amended and as approved by the Minister of Finance in carrying out its investment, borrowing and financial management activities. O. Reg. 423/04, s. 4 (6).
5. Omitted (provides for coming into force of provisions of this Regulation). O. Reg. 423/04, s. 5.