Item - 2024.EX16.5

The City Manager recommends that:  

1. Executive Committee receive this report for information.

Further to City Council's direction in June 2024 (MM19.25), the City Manager will be submitting a report to Executive Committee before its meeting on July 16, 2024 that provides an update on City staff's preliminary work related to the future of the Ontario Science Centre (OSC).

Further information on financial impacts will be outlined in the forthcoming supplementary report.

The Chief Financial Officer and Treasurer has reviewed this report and agrees with the financial information as presented in the Financial Impact Section.

The City Manager recommends that:  

1. City Council receive this report for information.

This report provides an update on City staff's preliminary work related to the future of the Ontario Science Centre (OSC) in response to City Council's request at its meeting of June 26, 2024. Further to City Council's direction, the report includes an overview of:

- the provincial requirements in the lease with the City and the Toronto and Region Conservation Authority (TRCA) to operate the Ontario Science Centre at the Don Mills and Eglinton site; 

- the feasibility of the City operating the Science Centre at its current location, including an assessment of potential revenues from event rentals; and

-  the November 29, 2023, Provincial business case for the Ontario Science Centre relocation and the December 6, 2023 Office of the Auditor General of Ontario Value-for-Money Audit: Science Centres (2023), which evaluated the November business case.

The City, the TRCA and the Province (through the OSC agency) entered into a 99-year nominal lease commencing July 1, 1965, with the City and TRCA leasing their respective interests in the OSC Site to the Province. Two of the three OSC buildings (Tower and Valley Buildings) reside on TRCA property, while a majority of the third (the Reception Building) and on-site parking facilities are on City-owned lands. The lease restricts the Province’s permitted use of the OSC Site to a science centre but does not obligate the operation of one. Provincial obligations in the event that the Province wishes to terminate the lease early are not specified and would require the City, TRCA and Province to negotiate a termination agreement.

Publicly available information regarding the OSC’s operations and financial performance indicate that even with a substantial annual provincial operating grant, the OSC was operating at a financial loss. The OSC also requires significant capital investment to be returned to a state of good repair that would allow for continued operation of the facility. Based on this information and preliminary analysis by staff, it does not appear the City alone could sustainably fund and maintain the operations of the OSC under the current conditions.

The most recent engineering report commissioned by the Province, the provincial business case for the OSC’s relocation to Ontario Place, and the Auditor General of Ontario’s subsequent Value-for-Money Audit indicate that while the OSC requires significant State of Good Repair (SOGR) work, including some that is critical and urgent, other options beyond the immediate full closure of the OSC were available to the Province. Further, the Auditor General of Ontario noted “that the recent relocation decision was not fully informed and based on preliminary and incomplete costing information”[1].  City staff do not have access to full information on the factors that led to the Province’s decision to relocate the OSC and thus are unable to provide independent analysis on the merits of this decision.

Further discussions with the Province and the TRCA are required to understand the Province’s obligations and intentions with respect to the current Site, and to explore opportunities to maintain science programming in the Flemingdon Park and Thorncliffe Park communities.

 
[1] https://www.auditor.on.ca/en/content/annualreports/arreports/en23/AR_sciencecentres_en23.pdf

There are no financial impacts arising from the recommendation in this report. 

Additional steps to conduct further due diligence of the OSC Site, including contemplation of whether the City could or should assume a direct role in operations, or to review and assess the existing engineers' reports and business case in greater detail, would require additional resources which have not been budgeted for, including procurement of third-party consultants.

The Chief Financial Officer and Treasurer has reviewed this report and agrees with the financial implications as presented in the Financial Impact Section.