Item - 2026.GG28.8

The General Government Committee recommends that:

1. City Council authorize the Chief Technology Officer in accordance with Section 195-7.1(C) of Toronto Municipal Code Chapter 195 (Procurement), to negotiate and enter into an agreement with Microsoft Canada Inc., commencing from June 1, 2026 for a contract term of five (5) years in total which may include three (3) years initial with the option to extend for two (2) additional one-year periods, for up to the total amount set out in Confidential Attachment 1 to the report (March 23, 2026) from the Chief Technology Officer, and the Chief Procurement Officer, subject to terms and conditions in a form satisfactory to the Chief Technology Officer and City Solicitor.

2. City Council direct that Confidential Attachment 1 to the report (March 23, 2026) from the Chief Technology Officer, and the Chief Procurement Officer, remain confidential in its entirety as it pertains to a strategic negotiation approach including financials.

3. City Council authorize the Chief Technology Officer to amend the authority for the Chief Technology Officer under GG24.9 with Microsoft Canada Inc., for Unified Support to extend the contract term for an additional five (5) months from December 31, 2030 to May 31, 2031 with no increase in the contract value.

The purpose of this report is to request City Council authority to:

- Enter into a non-competitive contract with Microsoft Canada Inc., ("Microsoft"), a Canadian business subsidiary, for software licenses, cloud subscriptions, and support services for five (5) years in total which may include three (3) years initial with the option to extend for two (2) additional one-year periods.

- Amend authority previously approved under GG24.9 for Microsoft Unified Support, extending it by an additional five (5) months with no increase in the contract value, to ensure access to the enterprise support service for Microsoft products for the full duration of the proposed non-competitive Microsoft agreement.

Microsoft 365 (M365) is a set of cloud‑based solutions and applications that help staff communicate and collaborate with each other, including Outlook, MS Teams, SharePoint, OneDrive, and Office applications like Word, Excel, and PowerPoint. The City’s current agreement with Microsoft provides access and support to these tools for about 32,000 City staff. The current contract expires on May 31, 2026.

A non-competitive agreement directly with Microsoft is recommended to secure favourable commercial terms and enhanced discounts not offered through resellers. This proposed non‑competitive contract ensures uninterrupted access to these essential services and allows the City to purchase additional pay‑per‑use Microsoft tools (e.g., Copilot, Power BI, etc.), when there is a business need.

The total contract value is outlined in Confidential Attachment 1. This report also seeks the establishment of a total ceiling authority, with no commitment to spend the full amount. The Technology Services Division engaged an independent third-party firm to provide objective market insight to ensure the City negotiates fair and competitive pricing.

City Council approval is required in accordance with Municipal Code Chapter 195, Purchasing, where the current request exceeds the Chief Procurement Officer’s authority of the cumulative five-year commitment limit for each vendor under Article 7, Section 195-7.3(D) of the Purchasing By-law or exceeds the threshold of $500,000 net of Harmonized Sales Tax allowed under staff authority as per the Toronto Municipal Code, Chapter 71, Financial Control, Section 71-11(A).