Item - 2019.TA2.4

The Board of Directors of the Toronto Atmospheric Fund:

1.  Directed the Chair of the Board to convey its thanks to the Government of Canada for their commitment to accelerating climate action in cities, and the support pledged in Budget 2019 to enhance Toronto Atmospheric Fund's endowment and capitalize Low Carbon Cities Canada centres in six other cities across the country.

2.  Directed Toronto Atmospheric Fund staff to:

a.  Negotiate an agreement with the Federation of Canadian Municipalities Green Municipal Fund (GMF) specifying the terms and conditions for receiving, use of, and accountability for the $40 million federal endowment whose purpose is to support and advance actions in the Greater Toronto and Hamilton Area (GHTA) that will reduce greenhouse gas emissions, in consultation with City staff via the City Manager's Office, and with guidance from the Ad Hoc LC3 Working Group and the Investment Committee;

b.  Prepare the terms and conditions of a final agreement with the Federation of Canadian Municipalities Green Municipal Fund (GMF), to the satisfaction of Toronto Atmospheric Fund’s Solicitor, the City Solicitor, the City Manager, the City's Chief Financial Officer and Treasurer, for the Board and City Council approval at the earliest opportunity.

3.  Directed the Ad Hoc LC3 Working Group to:

a.  Expand its membership to include the Chair, two other members of the Board and a member drawn from one of the Toronto Atmospheric Fund Committees;

b.  Support Toronto Atmospheric Fund's Chief Executive Officer in framing and guiding the negotiation of terms; and

c.  Bring and present the draft agreement to the Board for approval.

4.  Appointed the following to the Ad Hoc LC3 Working Group:

Councillor Jennifer McKelvie

Sandra Odendahl

Karim Bardeesy, and

Andrew Dooner

5.  Directed the Investment Committee to:

a.  Develop a plan for prompt deployment of the federal endowment once it is received that is compliant with the Statement of Investment Objectives and Principles and aligned with the Target Portfolio, that mirrors the asset mix of the Toronto and Ontario endowments to the extent possible, and is subject to any conditions/constraints established in the agreement with Green Municipal Fund;   

b.  Seek the Board's approval for:

i. the proposed plan, and

ii. deployment of the funds with current money managers in keeping with the strategy, recognizing that separate and specific Board approval will be required for any Direct Investments and new managers.

6.   Approved the use of up to $250,000 from the Toronto endowment in 2019 and 2020 for costs associated with initial programming, to be repaid from revenues from the federal endowment no later than December 31, 2021.

The Chief Executive Officer gave an overview of the report (April 12, 2019) from the Chief Executive Officer, Toronto Atmospheric Fund.

In Budget 2019, the federal government committed $183 million to the Federation of Canadian Municipalities (FCM) Green Municipal Fund (GMF) to capitalize Low Carbon Cities Canada (LC3) to “provide municipalities and non-profit community organizations with financing and grants to retrofit and improve the energy efficiency of large community buildings as well as community pilot and demonstration projects in Canadian municipalities, both large and small. FCM and Low Carbon Cities Canada Initiatives will create a network across Canada that will support local community actions to reduce Greenhouse Gas emissions”. This includes $40 million for Toronto Atmospheric Fund (TAF), with the balance to six other centres across the country modelled on TAF. 

TAF’s mandate, geographic focus and core governance remains the same, with this federal contribution enhancing TAF’s endowment and therefore TAF’s capacity to invest in and accelerate low-carbon solutions in the Greater Toronto and Hamilton Area (GHTA). TAF and the other centres will contribute to and have a role in steering the national coordinating office to be housed within GMF which will support accountability, provide some shared services, and undertake knowledge-transfer to leverage the work of all the centres.    

This report sets in motion the actions required for TAF and the City of Toronto to negotiate and approve a contribution agreement with GMF and to develop a strategy for deployment of the new endowment in keeping with TAF’s investment policy and target portfolio. It also proposes, if necessary, ‘borrowing’ funds from the Toronto endowment to cover costs of initiating programming in 2020 which would be reimbursed once the federal endowment generates revenues and no later than December 31, 2021.