Item - 2020.EP11.16

The Board of Governors of Exhibition Place:

1.  Directed the Chief Executive Officer to submit another update to the 2020 operating budget impact due to COVID-19 and the projected 2020 results at the next Board meeting.

The City of Toronto and the Provincial Public Health Officials made a decision in March to cancel all programs and events up to June 30, 2020 due to COVID-19 pandemic risk to public health and safety. Since then, a number of Exhibition Place Show Organizers has invoked their Force Majeure clause in their License Agreement to cancel or postpone their 2020 events. In addition to the cancellation of shows/events, Tenants operations across the grounds has also been impacted and therefore the loss of related ancillary revenue, such as Parking and Show Services from their closure.

The Boards operations are highly dependent on the cash flow and net income from our trade and consumer shows, conferences, conventions, socials, galas, meetings and tenants operations. Since early in March, given the rise in concern over COVID-19, staff has been monitoring its cash flow from operations on a daily basis and have put a hold on all non-essential costs and discretionary expenditures such as travel, training, etc.

Given the cancellation / postponement of all events up to June 30, 2020 Exhibition Place staff has been in constant communications with the City Managers Office and the City Financial Planning Department regarding financing opportunities to cover the Boards next 3-5 month cash shortfall requirements. Show Organizers of these cancelled events are requesting full refund of their space rental fees due to Force Majeure. The Board approved 2020 operating budget is a surplus of $500,000. The estimated impact from COVID-19 to the Boards operating budget as at May 31, 2020 is a reduction of net income/surplus of $14.497 million (Schedule A).

The loss of net income and resultant cash flow is a concern not only to Exhibition Place, but also to the City of Toronto as the Board operates, manages and maintains Exhibition Place on behalf of the City, and the City is entitled to any surplus resulting from the Board’s activities, and is responsible for any deficit the Board incurs.