City of Vancouver to adjust investments as portfolio rakes in $200 million per year | Daily Hive

City of Vancouver eyes investment strategy changes as portfolio generates up to $200 million per year

Vancouver City Hall. (Yvonne Hanson/Shutterstock)

City of Vancouver staff are planning to adjust how the municipal government invests billions of dollars in public funds, aiming to earn better returns while keeping financial risks under control.

The City currently manages an investment portfolio worth about $4 billion, which helps fund day-to-day services and long-term projects.

Over the past three years, these investments have brought in between $170 million and $200 million annually, supporting everything from new and improved infrastructure to public programs.

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Historically, Vancouver’s municipal government has taken a cautious approach — putting money into low-risk options like government bonds and short-term securities. While stable, these investments don’t always keep up with rising costs.

Now, City staff assert it is time to diversify.

One key step is a planned $50 million investment into a pooled fund managed by the Municipal Finance Authority (MFA). This fund spreads money across a mix of assets — such as stocks and bonds — and is also designed to be fossil-fuel-free.

The fund has already shown strong early performance, delivering about 18 per cent returns since 2023, and is expected to continue providing higher long-term gains without taking on excessive risk.

The shift comes as the City faces rising costs. Inflation has averaged around three per cent, while construction costs have risen even faster at about 5.7 per cent annually.

In simple terms, if the City sticks to lower-return investments, its money may not stretch as far in the future.

City officials assert diversifying investments can help ensure funds set aside today will still be enough to pay for future expenses, such as capital costs and emergency reserves.

The City’s investment portfolio is not just about growth — it also supports essential operations. The funds are used to temporarily hold tax payments for other tax authorities, save for future debt repayment, store development contributions until they are needed, and maintain reserves for emergencies and planned spending.

In addition to the investment portfolio, the City’s Property Endowment Fund of strategic land properties — for the purpose of growing value and reserving long-term uses — is worth $5.7 billion. It also has a separate $1.7-billion endowment fund for non-market property holdings, called the Vancouver Affordable Housing Endowment Fund.

The municipal government’s operating budget in 2026 will be $2.39 billion. In 2024, the City’s operating expenditures first reached and exceeded the $2 billion mark — 13 years after it reached and crossed the $1 billion mark. In particular, there have been substantial increases to the operating budget in the years just before and during the pandemic.

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