Another small amendment to our Condo Act came into force on December 15, 2009, this time by virtue of Bill 218, the Ontario Tax Plan for More Jobs and Growth Act, 2009.
Clause (b) of the definition of "eligible security" in subsection 115(5) of the Condominium Act, 1998 is amended to include certain financial instruments issued by institutions located in Ontario insured by the Deposit Insurance Corporation of Ontario ("DICO").
Subsection 115(5) now reads as follows (with amendment underlined):
(5) In subsections (6) and (7),
“eligible security” means a bond, debenture, guaranteed investment certificate, deposit receipt, deposit note, certificate of deposit, term deposit or other similar instrument that,
(a) is issued or guaranteed by the government of Canada or the government of any province of Canada,
(b) is issued by an institution located in Ontario insured by the Canada Deposit Insurance Corporation or the Deposit Insurance Corporation of Ontario, or
(c) is a security of a prescribed class.
In practical terms, this amendment allows condominium corporations to purchase investments issued by credit unions or caisses populaires that are located in Ontario and are insured by DICO. This effectively destroys the monopoly enjoyed until now by CDIC-insured banks and trust companies and provides greater choice of investment products and providers.
Condominium corporations that are unhappy with the investment choices offered by their banks now have more flexibility as to where to purchase investments. This provides considerably more leverage when negotiating rates and terms. Choice is good.