Item - 2026.DB15.2

The Debenture Committee adopted the following:

1. The information provided by the report (March 23, 2026) be received by the Debenture Committee.

This report provides the Debenture Committee with information on the City's new Sustainable Debenture Program. This new program consolidates, updates and builds upon the City’s previously established Green Debenture Framework (2018) and Social Debenture Framework (2020) and enables the City to issue Green, Social, or Sustainability Debentures. In addition, under this program, the City may be able to achieve slightly lower borrowing costs.

To establish this new program, a Sustainable Debenture Framework (Framework) provides flexibility to finance eligible capital projects that deliver environmental and/or social benefits, while continuing to align the City’s debt program with evolving global sustainable finance standards and investor demand. The Framework supports the City’s leadership in sustainable finance and reinforces its commitment to transparency, accountability, and impact reporting. Attachment 1 provides the new City of Toronto Sustainable Debenture Framework.

In keeping with best practices, and to support transparency and market credibility, the City engaged Moody’s Ratings (Moody's) to provide an independent Second-Party Opinion (SPO) on the Sustainable Debenture Framework (Attachment 2). Moody’s assigned the City’s Framework a Sustainability Quality Score of SQS1(Excellent), the highest score available.  At the present time, there are no other Canadian sustainable debt issuers that have been assessed at this high level.

City of Toronto's sustainable debentures will share the same financial and legal characteristics as other City's general obligation debentures issued in the past which are backed by the credit and taxing power of the City. The main difference is the limitation on the use of proceeds. The Framework does not change the City’s overall debt authority or borrowing limits, which continue to be governed by Council-approved multi-year debenture and temporary borrowing limits. Any issuance under the Framework will be subject to existing Council authorities, policies, and reporting requirements.