Cash consists of cash net of cheques issued in excess of amounts on deposit. Included in cash and short-term investments are funds held in trust on behalf of other insurance companies in the amount of $11,576,000 (2003–$5,500,000).

Short-term investments have a total principal amount of $74,436,000 (2003–$130,897,000) comprised of provincial short-term deposits with effective interest rates of 2.05% to 2.25% (2003–2.55% to 2.80%), with interest receivable at varying dates.

				2004				2003
		Interest  Receivable  Basis		Effective  Rate		Coupon  Rate		Effective  Rate		Coupon  Rate
				% Range				% Range
Federal		semi-annual		2.39 to 5.05		4.00 to 8.75		3.58 to 5.44		4.00 to 8.75
Provincial		semi-annual		2.24 to 11.03		2.71 to 10.50		3.23 to 5.93		4.75 to 10.50
Municipal		semi-annual		2.27 to 13.51		5.38 to 14.88		3.45 to 14.06		6.00 to 14.88
Hospitals		semi-annual		10.13 to 13.49		10.13 to 13.63		10.13 to 13.56		10.13 to 13.63
Schools		semi-annual		5.66 to 13.61		5.75 to 14.75		5.66 to 13.95		5.75 to 14.75
Corporations		semi-annual		1.97 to 5.20		3.96 to 11.00		3.25 to 10.20		5.00 to 11.25

The Corporation has allocated investments with an average yield of 10.5% (2003–9.5%) to maturity to fully fund pre-March 1, 1994 weekly indemnity discounted unpaid claims of approximately $22.4 million.

Total Return Swaps
In the normal course of operations, the Corporation may enter into total return swaps to provide a return based upon an underlying Canadian and/or USA equity index. The agreements provide that, at predetermined future dates, the Corporation pays a fixed interest amount based upon a notional principal amount and receives a return based upon the underlying equity index.

The notional amounts of total return swaps are not recorded as assets or liabilities on the balance sheet as they represent the face amount of the contract to which a rate or price is applied to determine the amount of cash flows to be exchanged under the contracts. Notional amounts represent the volume of outstanding transactions and do not represent the potential gain or loss associated with market risk or credit risk of such instruments.

At February 29, 2004 the notional amount of total return swaps was $ nil (2003–$70,387,000).

Currency Risk

Currency Swap
The Corporation has entered into a currency swap relating to a Province of Quebec provincial bond denominated in US dollars for $10,000,000. The currency swap provides a fixed 5.76% return in Canadian dollars. The agreement also provides that at predetermined future dates, the Corporation pays a fixed 7.5% rate based on the US $10,000,000 par value of the bond and receives 5.76% return based on a Canadian dollar notional value of $13,350,000. The maturity date of the currency swap is July 15, 2023.