Item - 2026.GG28.7

The General Manager, Fleet Services, and the Chief Procurement Officer recommend that:

1. City Council authorize the General Manager, Fleet Services, to negotiate and execute a non-competitive agreement with Bureau Veritas Marine (Canada) Inc., for marine survey and certification services, including issuance of Canadian Maritime Documentation on behalf of Transport Canada, for an initial term from June 1, 2026, to May 31, 2027, with four (4) optional one-year renewal periods, for a total potential cost of $1,017,845 net of Harmonized Sales Tax recoveries ($1,000,241 net of Harmonized Sales Tax, $1,130,272 including all taxes and charges), on terms and conditions satisfactory to the General Manager, Fleet Services, and in a form satisfactory to the City Solicitor.

2. City Council authorize the General Manager, Fleet Services, to negotiate and execute a non-competitive agreement with Lloyd's Register Canada Limited for marine survey and certification services, including issuance of Canadian Maritime Documentation on behalf of Transport Canada, for an initial term from June 1, 2026, to May 31, 2027, with four (4) optional one-year renewal periods, for a total potential cost of $1,596,314 net of Harmonized Sales Tax recoveries ($1,568,705 net of Harmonized Sales Tax, $1,772,637 including all taxes and charges), on terms and conditions satisfactory to the General Manager, Fleet Services, and in a form satisfactory to the City Solicitor.

3. City Council authorize the General Manager, Fleet Services, to negotiate and execute a non-competitive agreement with Ontario Shipyards Inc., for the non-exclusive supply of labour, equipment, materials, dry docking services, warranty and non-warranty repairs, transportation, permits, and incidentals required for vessel maintenance for an initial term from June 1, 2026, to May 31, 2027, with four (4) optional one-year renewal periods, for a total potential cost of $8,799,461 net of Harmonized Sales Tax recoveries ($8,647,269 net of Harmonized Sales Tax, $9,771,414 including all taxes and charges), on terms and conditions satisfactory to the General Manager, Fleet Services, and in a form satisfactory to the City Solicitor.

4. City Council authorize the General Manager, Fleet Services, to negotiate and execute a non-competitive agreement with Aspin Kemp and Associates Inc., for the non-exclusive supply of labour, parts, equipment, diagnostics, repairs, training, travel, and Original Equipment Manufacturer warranty and non-warranty services for the Shore Electrical System, Automatic Shore Charging System Towers and Vessel Electrical System, for an initial term from June 1, 2026, to May 31, 2027, with four (4) optional one-year renewal periods, for a total potential cost of $6,070,337 net of Harmonized Sales Tax recoveries ($5,965,347 net of Harmonized Sales Tax, $6,740,842 including all taxes and charges), on terms and conditions satisfactory to the General Manager, Fleet Services, and in a form satisfactory to the City Solicitor.

The purpose of this report is to seek authority for the General Manager, Fleet Services, to enter into four (4) separate non-competitive agreements required to ensure the safe, reliable, and compliant operation of the City of Toronto's ferry services. These agreements support regulatory certification, vessel maintenance and repair, and specialized electrical systems support for both the existing and new electrical ferries entering service in 2026 and 2027.

The agreements are required to meet legislative obligations under the Canada Shipping Act, 2001 (CSA 2001), including maintaining continuity with existing certification service providers and ensuring access to specialized infrastructure, as well as securing Original Equipment Manufacturer support that cannot be competitively sourced.

The General Manager, Fleet Services and the Chief Procurement Officer support and recommend non-competitive procurements for the services noted in this report, to:

- Align with industry best practices;

- Maintain critical business continuity, particularly important during an upcoming and sustained critical period (i.e., 2026 FIFA World Cup and the arrival of two new vessels); and,

- Respond to unique market conditions where no other suitable vendor can deliver certain ferry services needed by the City.

The General Manager, Fleet Services, and the Chief Procurement Officer support and recommend non-competitive procurements for the following:

- Bureau Veritas Marine (Canada) Inc., and Lloyd's Register Canada Limited to provide mandatory marine surveys, inspections, and certification services under the CSA 2001 through the Delegated Statutory Inspection Program. Continuity with current Classification Societies aligns with industry best practice and avoids significant operational and regulatory risks.

- Ontario Shipyards Inc., to provide required dry docking and ship repair services. This is the only facility on Lake Ontario capable of accommodating the size and weight of the new electric ferries.

- Aspin Kemp and Associates Inc., (AKA Energy Systems) to provide Original Equipment Manufacturer warranty and non-warranty maintenance, diagnostics, repair, training and parts for the ferry electrical and charging systems, including the Shore Electrical System, Automatic Shore Charging System, and Vessel Electrical System.

The initial term for each agreement will be from June 1, 2026, to May 31, 2027, with the option to renew each agreement for four (4) additional one (1) year periods.

The total combined cost to the City for the initial term is $4,060,288 net of Harmonized Sales Tax recoveries ($3,990,063 net of Harmonized Sales Tax, $4,508,771 including all taxes and charges). The total combined potential cost, including all renewal options, is $17,483,958 net of Harmonized Sales Tax recoveries ($17,181,562 net of Harmonized Sales Tax, $19,415,165 including all taxes and charges).

City Council approval is required in accordance with Municipal Code Chapter 195- Procurement, where the current request exceeds the Chief Procurement Officer's authority of the cumulative five-year commitment for each supplier, under Article 7, Section 195- 7.3 (D) of the Procurement By-Law or exceeds the threshold of $500,000 net of Harmonized Sales Tax allowed under staff authority.

Adoption of the recommendations in this report will enable Fleet Services to continue delivering safe, reliable, and compliant ferry service to Toronto Island residents and visitors.

The total combined potential value of the four (4) agreements identified in this report is $17,483,958 net of Harmonized Sales Tax recoveries ($17,181,562 net of Harmonized Sales Tax, $19,415,165 including all taxes and charges).

Funding in the amount of $2,368,502 net of Harmonized Sales Tax recoveries for the 2026 portion of the initial term of the contract is included in the 2026-2035 Capital Budget and Plan for Fleet Services Division. Funding for the remainder of the initial term will be included in future Operating Budget submissions for the Fleet Services Division.

Should the City exercise the optional renewal periods, funding, if required, will be included in the 2027-2031 Annual Operating and Capital Budget submissions for the Fleet Services Division. Funding details are provided in Tables 1 through 5, below.

Table 1: Non-Competitive Agreement with Bureau Veritas Marine (Canada) Inc, financial impact summary by contract year, net of Harmonized Sales Tax Recoveries

Table 2: Non-Competitive Agreement with Lloyd's Register Canada Limited, financial impact summary by contract year, net of Harmonized Sales Tax Recoveries

Table 3: Non-Competitive Agreement with Ontario Shipyards Inc., financial Impact summary by contract year, net of Harmonized Sales Tax Recoveries

Table 4: Non-Competitive Agreement with Aspin Kemp and Associates Inc., financial Impact summary by contract year, net of Harmonized Sales Tax Recoveries

Table 5: Combined Financial Impact Summary by Budget Year

The Chief Financial Officer and Treasurer has reviewed this report and agrees with the financial impact information.