Item - 2026.IB17.2

The Director, Capital Markets and Treasury recommends that:

1. The Toronto Investment Board approve the updated Investment Plan, as set out in Attachment 1.

2. The Toronto Investment Board authorize the Chief Financial Officer and Treasurer and designate appropriate staff, to transfer funds from the Long-Term Fund's Short-Term Fund to the City's Short-Term Fund, as required to support liquidity requirements, up to the lesser of $2.0 billion or the available balance within the Long-Term Fund's Short-Term Fund.

3. The Toronto Investment Board authorize the Chief Financial Officer and Treasurer, and designate appropriate staff, to take the necessary actions to implement the Investment Plan and meet the City's liquidity requirements.

4. The Toronto Investment Board direct the Chief Financial Officer and Treasurer to provide quarterly updates to the Board on the City's liquidity requirements, utilization of the Short-Term Fund, and progress in implementing the Investment Plan.

5. The Toronto Investment Board authorize the Chief Financial Officer and Treasurer to negotiate and enter into a non-competitive agreement with Aon to undertake an Asset Liability Management Study of the Long-Term Fund.

6.The Toronto Investment Board direct that the confidential information contained in Confidential Attachment 1 remain confidential in its entirety, as it contains information that involves the security of property belonging to the City or one of its agencies or corporations.

This report  presents an updated Investment Plan for the Toronto Investment Board's consideration and seeks authority for the Chief Financial Officer and Treasurer (CFO&T) to retain Aon to undertake an Asset Liability Management (ALM) Study in 2026.

In 2024, funds that were identified as excess liquidity in working capital were transferred to the Long-Term Fund for long-term investment. Since then, the City's liquidity profile and projected cash flow requirements have evolved significantly. This has been a result of changes in capital spending, decreases in anticipated Development Charge and Municipal Land Transfer Tax revenues, and the changes in timing and use of reserve funds to support the City's operating and capital requirements.

Accordingly, and as permitted under Section 6.3 of the Council-adopted Investment Policy, it is proposed that the Chief Financial Officer & Treasurer (CFO&T) segregate a portion of the Long-Term Fund into the Short-Term Fund portion of the Long-Term Fund (LTF-STF), which will be based on forecasted City liquidity requirements. The segregated LTF-STF would be invested in accordance with the Council-adopted Investment Policy pertaining to the Short-Term Fund and designated to meet anticipated City cash flow requirements.

This approach is consistent with the Flow of Funds procedures outlined in the Investment Policy and provides alignment between the City's evolving liquidity requirements and the investment of Long-Term Fund assets.

The proposed changes in this report are intended to enhance the City's liquidity management framework while maintaining the long-term investment strategy and strategic asset of the Long-Term Fund.

Costs associated with the Asset Liability Management Study has been provisioned within the Toronto Investment Board approved 2026 operating budget. No additional budget authority is required.