Trustee investments under the Ontario
Trustee Act
In this Advisory, we present an overview of the principles of
trustee investment under Ontario's governing legislation, the
Trustee Act. As well, we provide a critical analysis of
the main implications of the legislation for trustees,
beneficiaries and advisors concerned with trust investment.
OVERVIEW OF TRUSTEE INVESTMENTS IN ONTARIO
Standard of Care
In July 1999, significant amendments to the Trustee Act
regarding trustee investment came into force and those rules
continue to govern today. By far the most sweeping change to the
law governing trustee investment at the time was the introduction
of a new standard of care incorporating the "prudent investor
rule". Under prior legislation, if a trust agreement did not
provide broad investment authority, a trustee was obligated to
invest only in "trustee investments" set out under the
Trustee Act, which were conservative and heavily
fixed-income oriented. If a
