17. Financial instruments and risk management (continued):

(iv) Capital disclosures:

The main objectives of the Commission when managing capital are to ensure ongoing access to funding to maintain and improve the water distribution system and ensure adequate cost recovery.

The Commission’s debt to equity ratio at the end of the reporting period was:

		2019		2018
Total liabilities	$	77,392	$	79,825
Total equity		272,682		254,501
Debt to equity ratio at December 31	0.28	0.31

The Commission has customary covenants typically associated with long-term debt. The Commission is in compliance with all credit agreement covenants and limitations associated with its long-term debt.

(v) Interest rate risk:

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Commission is subject to variable interest rate cash flow risk with respect to its investments. The Commission has addressed this risk by entering into fixed interest rates on invested funds and debts.

(vi) Currency risk:

Currency risk is the risk that the fair value or future cash flow of a financial instrument will fluctuate due to changes in foreign exchange rates. The Commission is exposed to currency risk through its foreign currency denominated bank and investment accounts. A weakening or strengthening of the Canadian dollar can affect the cash flows. This risk is monitored by investment managers and the exposure is limited to these accounts. For sensitivity purposes, a 1% change in the Canadian dollar would result in a change of $11 (2018 - $9) on the balance sheet and the statement of income.