Item - 2022.EC28.7

The Economic and Community Development Committee recommends that:

1. City Council direct the General Manager, Economic Development and Culture, in consultation with the Chief Financial Officer and Treasurer, the Chief Planner and Executive Director City Planning, and the City Solicitor, to initiate a review of the Imagination, Manufacturing, Innovation and Technology Imagination, Manufacturing, Innovation and Technology Financial Incentive Program in 2022, based on the Terms of Reference as set out in Attachment 1 to the report (March 10, 2022) from the Interim General Manager, Economic Development and Culture, the Chief Planner and Executive Director, City Planning and the Controller.

2. City Council direct staff to report back to the Economic and Community Development Committee on the results of the Imagination, Manufacturing, Innovation and Technology Program Review and any recommended changes to the Imagination, Manufacturing, Innovation and Technology Program in the first quarter of 2023.

The Imagination, Manufacturing, Innovation and Technology Financial Incentive Program (the "Imagination, Manufacturing, Innovation and Technology Program") provides incentives in the form of property tax increment grants to support the renovation or construction of buildings in targeted employment sectors and uses throughout Toronto. This report provides an overview of the economic and financial impacts of the Imagination, Manufacturing, Innovation and Technology Program and proposed Terms of Reference for the upcoming review of the Imagination, Manufacturing, Innovation and Technology Program.

Since the Imagination, Manufacturing, Innovation and Technology Program commenced in 2008, there have been 63 Imagination, Manufacturing, Innovation and Technology applications approved in a wide range of employment sectors, representing almost $5.8 billion in total construction investment, 14.5 million square feet of new commercial/industrial space and the creation or retention of 70,000 jobs. In total, these new developments are expected to result in about $1.1 billion in new municipal taxes during the period in which the successful applicants receive grants. Of this amount, about $664 million will be returned to the property owners and tenants in the form of development grants, while about $436 million will be retained by the City. After each ten year payment term is complete the City then receives the full municipal tax on the property.

The Community Improvement Plans that implement the Imagination, Manufacturing, Innovation and Technology Program are reviewed periodically, typically four years after the by-law comes into full force and effect. In 2018, the previous review of the Imagination, Manufacturing, Innovation and Technology Program resulted in a new Community Improvement Plans by-law that consolidated the three previous Community Improvement Plans into a single city-wide by-law (By-law 1207-2018). The 2018 by-law remains under appeal and as such, the three previously adopted Community Improvement Plans by-laws remain in effect. The City continues to receive and review Imagination, Manufacturing, Innovation and Technology applications under the 2012 Imagination, Manufacturing, Innovation and Technology by-laws on a regular basis.

Despite the appeal of the 2018 by-law, it is recommended that a new review be initiated to ensure the mandate and objectives of the Imagination, Manufacturing, Innovation and Technology Program are being achieved in an efficient manner given the magnitude of the grant money being expended, and an altered investment and city-building context shaped by the COVID-19 pandemic, emergent markets and technology, and provincial policy changes among other factors. The review will result in recommendations for Council regarding whether the Imagination, Manufacturing, Innovation and Technology Development Grant and related Brownfield Remediation Tax Assistance Grant programs should continue, be modified or terminated.