Item - 2025.IE22.9

The Infrastructure and Environment Committee recommends that:

1. City Council receive the report (May 28, 2025) from the Executive Director, Environment, Climate and Forestry, for information.

This report provides an update on the City's progress to the end of 2024 on implementing the TransformTO Net Zero Strategy and Short-term Implementation Plan (STIP, 2022-25). Development of the Net Zero Strategy, Short-term Implementation Plan and annual updates are a City Corporate-wide effort coordinated by Environment, Climate and Forestry.

In 2021, City Council adopted the Net Zero Strategy and the ambitious climate target of net zero greenhouse gas emissions community-wide in Toronto by 2040 and asked for annual progress reports that track implementation towards achieving the net zero target.

The City of Toronto has direct control over approximately five percent of greenhouse gas emissions community-wide in Toronto and has demonstrated strong leadership in its corporate investments and operations. Addressing the remaining 95 percent of emissions will require collaborative approaches from the City, other orders of government, the private sector and individuals.

Four critical steps were identified as necessary to reach net zero (2024.IE12.3):

Step 1 - Demonstrate carbon accountability locally and globally by establishing a carbon budget: Work on this step in 2024 culminated with Toronto's first Carbon Budget in 2025. The 2025 Carbon Budget prioritized 31 new or enhanced climate projects in the City's 2025 financial budget which are projected to reduce emissions by 65,858 tonnes carbon dioxide equivalent in 2025, increasing to 244,615 tonnes carbon dioxide equivalent per year once fully implemented.

Step 2 - Accelerate rapid and significant reduction in fossil (natural) gas use in buildings: To improve affordability for homeowners, the Home Energy Loan Program supported more than 250 energy-efficient renovation projects in 2024. Several programs reduce natural gas use in commercial buildings: the Deep Retrofit Challenge, Navigation and Support Services, Green Will Initiative and the Energy Retrofit Loan. For new buildings, to date the City has certified 110 projects as meeting Tier 2 of the Toronto Green Standard, targeting higher performance and lower emissions.

Step 3 - Increase access to low carbon transportation options, including walking, biking, public transit and electric vehicles: New critical infrastructure in 2024 included 4.5 kilometres of new sidewalks and approximately 26.7 kilometres of bikeways, with an additional 25 kilometres of bikeway installations and upgrades under construction as of December 2024. To reduce emissions and improve local air quality, the Toronto Transit Commission increased its fleet of hybrid electric buses by 336 buses and added 16 battery-electric buses (e-Buses). Partnerships to expand the public Electric Vehicle charging network for private vehicles are underway.

Step 4 - Increase local renewable energy to contribute to a carbon-free grid: City and  partner projects to enable innovative energy technologies include wastewater heat recovery at Toronto Western Hospital and Exhibition Place, beneficial use of biogas and landfill gas and the first geo-exchange field installation at the Etobicoke Civic Centre Precinct. A partnership with Waterfront Toronto studied deep geothermal systems to provide zero-carbon heating for Port Lands developments, and solar energy partnerships with Toronto Hydro advanced Toronto's energy independence objectives.

In addition to the critical steps, detailed progress updates on individual implementation actions found in the Short-term Implementation Plan (2022-25), all of which provide practical actions towards achieving the four critical steps, can be found in Attachment 1.

Overall, by the end of 2024, the City continued to move forward in achieving City Council's climate goals. In some areas, the City of Toronto continues to demonstrate leadership among world municipalities, while in other areas the City moves forward but faces significant policy and implementation challenges. Key emission sources, such as fossil (natural) gas in buildings for space and water heating, and gasoline and diesel fuel use in vehicles, continue to require an expansion of approaches to reduce emissions and meet our targets.

The next Net Zero Strategy Action Plan, outlining the actions the City will take over 2026-30 as the second set of actions that move toward City Council's climate goals for Toronto, will be brought forward for City Council consideration in the fourth quarter 2025. This second set of actions will be closely aligned with the upcoming report on Building Emissions Performance Standards, which will present an implementation pathway for Building Emissions Performance Standards and supporting programs. The pathway chosen through Building Emissions Performance Standards will have the most material effect on the pace at which Toronto can move toward its climate goals.

There is no additional financial impact to the approved 2025 Operating and Capital budgets for Environment, Climate and Forestry.

There is no financial impact relating to Annual TransformTO Net Zero Strategy - 2024 Annual Report on Implementation Progress.

The Chief Financial Officer and Treasurer has been advised of the financial impacts associated with this report and agrees with the financial impact information statement.