Item - 2025.EX23.7

The Chief Financial Officer and Treasurer recommends that:

1. City Council adopt the 2025 Corporate Asset Management Plan as set out in Attachment 1 to this report and provide approval for submission to the Province of Ontario by the July 1, 2025 regulatory deadline.

2. City Council direct the Chief Financial Officer and Treasurer to make available the final approved 2025 Corporate Asset Management Plan as amended to the public via the City website and to distribute printed copies as requested.

This report presents the City of Toronto’s 2025 Corporate Asset Management Plan for City Council's approval, in accordance with Ontario Regulation 588/17: Asset Management Planning for Municipal Infrastructure (the "Regulation") under the Infrastructure for Jobs and Prosperity Act. The regulation was subsequently amended in March of 2021 under Ontario Regulation 193/21 to change the timing of reporting requirements under the Act. The report will address all municipal infrastructure assets reported through the Core Infrastructure Asset Management Plan approved by Council in November 2021, and the 2024 Corporate Asset Management Plan approved by Council in May 2024. The infrastructure assets contained in this report are categorized into 11 asset classes: amenities, collections, equipment, equipment & appurtenances, facilities, fleet, linear infrastructure, natural assets, point infrastructure, structures and systems.

The 2025 Corporate Asset Management Plan (AMP) encompasses 26 City Divisions, Agencies, and Corporations (DACs) that hold ownership and/or responsibility over City-owned municipal infrastructure assets, as defined by the regulation. Organized into 9 service areas and 26 subservices, the Corporate AMP exhibits the multitude of services provided by the City and demonstrates the relationship between service delivery and the assets that support those services. The AMP is based on the data, information, professional judgement, and expertise of the asset management teams and leads that reside within each area, in conjunction with the work and analysis conducted through the City’s annual Budget process and reflected in the 2025 Operating Budget and 2025-2034 Capital Budget and Plan.

The City’s asset portfolio, within the scope of this AMP, has a current replacement value of $215 billion. In addition to the assets included in the 2024 Corporate AMP, the portfolio is inclusive of the 6 core infrastructure assets of water, wastewater, stormwater, roads, bridges and culverts included in the 2021 Core Infrastructure AMP. The overall performance distribution of the City’s in-scope assets is rated as ‘Fair’, indicating that, on average, City assets are fit for service and continue to perform at an acceptable standard. These assets are approaching the end of its service life and, as such, are likely performing at a higher operating cost where ongoing monitoring and maintenance may be required to sustain service levels.

To proactively respond to aging infrastructure and growing renewal needs, the City has prioritized actions that result in the ‘flattening of the SOGR curve’ through increased renewal investments and prioritization as reflected in the City’s multi-year strategy to improve services and the day-to-day experiences of Toronto residents. These efforts reflect both an increase in SOGR investments as well as a resulting reduction to the previous $26 billion 10-year SOGR infrastructure gap, reflected in the 2024 Corporate AMP, to an estimated $18 billion renewal shortfall identified through the 2025 Corporate AMP where transit and housing renewals continue to be the main drivers. The City acknowledges that there is still further work to be done to improve the state of its infrastructure and ensure ongoing sustainability of services to the public. The overall reduction to the City’s estimated 10-year SOGR infrastructure gap is represented below in Chart 1.

Chart 1 – Change in Estimated 10-Year SOGR Infrastructure Gap

($ billions)

Adoption of the recommended 2025 Corporate Asset Management Plan does not result in immediate financial implications. However, ongoing compliance with the legislative requirements will result in the need for an additional investment in resources and functions corporately to establish an organization-wide practice of integrated asset management in support of a whole-of-government approach to asset management (AM) that will promote consistency and standardization of AM practices across the City.

The City of Toronto has an expansive asset inventory that is aging and requires various types of interventions and levels of investment. In addition, the landscape for many industries and service sectors are experiencing significant changes and economic shifts. The SOGR infrastructure gap of $18 billion over the next 10 years identified through this analysis (with an additional $20 billion funding shortfall identified for service improvement and growth initiatives) is indicative of the financial constraint the City is experiencing to ensure long-term sustainability and viability of its services with limited funding availability and competing growth initiatives.

Through the utilization of the City’s revenue tools, the 2025-2034 Capital Plan reflects the City’s largest ever investment in capital with $32.4 billion (54%) of the total $59.6 billion planned capital investments in renewal work to manage and maintain assets in a state of good repair over the next decade. The plan represents an increase of $6.0 billion (23%) in SOGR compared to last year’s 10-year Capital Plan of $26.4 billion.

The Corporate Asset Management Plan will be integrated into the City’s annual budget process and capital prioritization framework as recommended through the Updated Long-Term Financial Plan. This will enhance existing prioritization processes and be used to make strategic decisions regarding the 10-Year Capital Plan, including both the funded and unfunded portions, during the City’s annual budget process. It will also allow Council to set strategic direction in the allocation of available capital funds using a consistent set of guiding principles, while considering overall affordability and capacity to deliver capital investments.