Agenda

This meeting of the Executive Committee will be conducted with members participating in person and remotely.

Members of Council, City Officials, and members of the public who register to speak will be provided with the video conference details closer to the meeting date.

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Notice to People Writing to the Executive Committee: The City of Toronto Act, 2006 and the City of Toronto Municipal Code authorize the City of Toronto to collect any personal information in your communication to City Council or its Committees and Boards. The City collects this information to enable it to make informed decisions on the relevant issue(s). If you are submitting letters, faxes, e-mails, presentations or other communications to the City, you should be aware that your name and the fact that you communicated with the City will become part of the public record and will appear on the City’s website. The City will also make your communication and any personal information in it - such as your postal address, telephone number or e-mail address - available to the public, unless you expressly request the City to remove it.

If you want to learn more about why and how the City collects your information, write to the City Clerk's Office, City Hall, 100 Queen Street West, Toronto ON M5H 2N2 or call 416-392-7033. 

toronto.ca/council

This agenda and any supplementary materials submitted to the City Clerk can be found online at www.toronto.ca/council. Visit the website for access to all agendas, reports, decisions and minutes of City Council and its Committees and Boards.

Declarations of Interest under the Municipal Conflict of Interest Act

Confirmation of Minutes - December 5, 2023

Speakers/Presentations - The speakers list will be posted online at 8:30 a.m. on January 30, 2024.

Communications/Reports

The Chief Financial Officer and Treasurer recommends that:  

1. City Council approve the implementation of a Municipal Non-Resident Speculation Tax (MNRST) on foreign buyers of residential property in the City of Toronto, effective January 1, 2025, at a rate of 10% of the value of consideration for the purchase of property.

2. City Council approve the final tax design features for the MNRST as set out in Attachment 2 to this report, and amend the City of Toronto Municipal Code Chapter 760, Taxation, Municipal Land Transfer Tax, to add the MNRST.

As part of the Updated Long-Term Financial Plan considered in September 2023, City Council directed staff to report back with an implementation plan to introduce a new land transfer tax on foreign buyers of residential property in the City. This report recommends introduction of a new Municipal Non-Resident Speculation Tax on foreign buyers of certain residential property, effective January 1, 2025.

The primarily objective of the Municipal Non-Resident Speculation Tax is to safeguard and enhance the availability of residential housing supply and to maintain a level of affordability in the residential real estate market by discouraging international buyers from purchasing property in the City of Toronto, particularly those buyers who do not intend to live in the property, or where the purchase is for purely speculative motives. Staff are recommending introduction of a 10% rate on the residential purchase price, which, when coupled with other land transfer tax related impacts, is expected to effectively deter real estate speculation.

The Province of Ontario currently levies its own Non-Resident Speculation Tax of 25% of the purchase price on the purchase or acquisition of an interest in certain residential property located anywhere in Ontario by foreign entities (individuals who are not citizens or permanent residents of Canada and foreign corporations) and taxable trustees. Originally implemented in 2017, the purpose of the provincial Non-Resident Speculation Tax was to discourage speculation and thereby 'help to address unsustainable demand' in the Greater Golden Horseshoe area.

To ensure successful implementation, it is recommended that the Municipal Non-Resident Speculation Tax mirror the current provincial Non-Resident Speculation Tax provisions, as outlined further in this report, as it pertains to applicability, rebates, refunds and exemptions. Implementation is being recommended for January 1, 2025, in recognition of a current federal Prohibition on the Purchase of Residential Property by Non-Canadians Act which temporarily bans the purchase of homes by foreign buyers from January 2023 to December 2024.

Overall, the introduction of the Municipal Non-Resident Speculation Tax is expected to have a positive impact on reducing speculation, and where speculation may persist the Municipal Non-Resident Speculation Tax will positively contribute to the City's multi-year budgeting strategy.. Preliminary estimates indicate the City may generate up to $15 million in revenue in 2025, following the lifting of the federal ban.  These estimates have been reflected in the City's enhanced multi-year budget modelling introduced as part of the 2024 budget process and are intended to offset one-time bridging actions applied to the 2024 budget.

In addition, the New Deal Agreement with the Province identified the Non-Resident Speculation Tax as a key opportunity for the City and the Province to strengthen alignment of incentives to help ensure availability of housing to residents. Staff will continue to engage in discussions with the Province to promote alignment between the Non-Resident Speculation Tax and Municipal Non-Resident Speculation Tax, among other financial-related incentives, while monitoring any potential impacts of the federal ban in order to refine estimated impacts for 2025.

The introduction of an MNRST is primarily being recommended as a policy tool, with the objective of curbing real estate speculation, rather than a tool to maximize revenue generation. As discussed later in the report, in consideration of the Federal Foreign Homebuyer Ban in place until the end of 2024, staff are recommending the MNRST be effective as of January 1, 2025, as both the policy and resulting revenue benefits would have minimal impacts in 2024. 

Preliminary estimates of potential revenues for the City of Toronto in 2025 range from $9.6 million to $15 million with the application of a 10% MNRST rate. As identified below in Table 1, these estimates will significantly vary according to the federal ban currently in place. While the ban is scheduled to be lifted at the end of 2024, there is a possibility of further extension.

The full impact of the federal ban has not yet been fully quantified and these estimates will continue to be refined throughout the year based on provincial experiences, federal updates, and additional availability of non-resident buyer data, to support the 2025 budget process.

Table 1: Estimated Revenue in 2025 ($ millions)

These estimates are informed by the annual revenues collected through the provincial NRST, specifically by the amounts collected for properties registered in the City of Toronto. From the implementation of the provincial NRST in April 2017 to December 2022, the Province collected approximately $1.06 billion in total, with approximately half of this revenue attributable to home purchases in the City of Toronto (link). During that same time period, the Province charged an NRST rate ranging from 15% at its inception to 25% as of October 2022. While 2023 data is still being finalized and verified, the Province estimates that NRST revenue attributable to property purchases in Toronto is down by over 65% in 2023, resulting in an estimated $31.2 million for the year, in comparison to $91.5 million in 2022.

Table 2: Provincial NRST Collected in Ontario and Toronto

*The NRST collected is still subject to ongoing rebates and refunds that could significantly reduce the NRST net revenue over time.

The potential revenues of the MNRST have been factored into the City's multi-year budgeting strategy presented during the 2024 budget process, with financial benefits to be realized in 2025 and future years, in support of the City's goal of enhanced financial sustainability. As revenues are realized from the MNRST and introduction of other financial actions, the City can rely less on one-time bridging actions required to develop a balanced budget.

As noted, revenue estimates will continue to be further refined throughout the year in consideration of the Province's experiences, federal impacts and real estate trends. Potential revenues associated with the MNRST will be impacted by a variety of factors including real estate market conditions and immigration trends.

The Chief Financial Officer and Treasurer recommends the Executive Committee receive this report for information.

The City of Toronto created positive impact across key Environment, Social, and Governance priorities this year, demonstrating commitment, innovation and transparency, through the performance disclosure and consideration of Environment, Social, and Governance risks and opportunities in the Environmental, Social, and Governance Performance Report ("ESG Report") for 2023 contained in Attachment 1. The objective of the Environment, Social, and Governance Report is to communicate Environment, Social, and Governance commitments, define targeted outcomes, and to account for progress towards sustainability, positive socioeconomic outcomes and good governance, as well as demonstrating transparency, accountability, participation, responsiveness, progress measurement and leadership.

Climate action and Environment, Social, and Governance factors are quickly establishing importance and gaining attention globally in both private and public sectors whereby organizations are measured on how well Environment, Social, and Governance-related risks and opportunities are handled. Many corporations are now being formally assessed on Environment, Social, and Governance impact and public entities will be required to follow this practice. The Environment, Social, and Governance Report offers a snapshot of Environment, Social, and Governance performance and an opportunity to reflect on improvements that can be made to City plans, actions and outcomes to successfully manage Environment, Social, and Governance risks and opportunities going forward. Environment, Social, and Governance factors are increasingly being incorporated in the risk assessments of Toronto's credit rating agencies, insurance companies and other investors. As this trend is only expected to grow stronger, it is important to address these factors appropriately and with a sense of urgency.

This report includes key Environment, Social, and Governance highlights and achievements. Toronto continues to build and implement an integrated Environment, Social, and Governance approach, with responsible practices embedded across the organization to build a sustainable, transparent and resilient foundation in order to continue developing a government that is transparent, accountable, sustainability responsible, socially conscious, and minimizes Environment, Social, and Governance risks. This approach ensures progress is established on the commitments made to achieve Environment, Social, and Governance priorities.

The financial impacts of this report are embedded in the Council Approved 2023 Budget which include:

Embedded in the Council Approved 2023 Operating Budget:

- $10.3 million for Transit Expansion, a major driver of GHG emissions reductions daily

- $267.9 million for Road and Sidewalk management, which includes the maintenance of 776 centerline kilometers of bikeway network

- $299.6 million for solid waste collection and processing services such as solid waste recycling, organics recycling, leave and yard waste, and safe disposal of durable goods and hazardous waste

- $8 million for promotion, education, enforcement, community outreach, and environment days

- $285.7 million for wastewater collection and treatment and storm water management that reduces likelihood of negative impact of water and floods on the ecosystem

- $707.1 million to provide shelter, support, and housing to Torontonians, improving housing and health access equity

- $13.6 million in total funding for the four accountability officers (Auditor General, Integrity Commissioner, Ombudsman Toronto, and Lobbyist Registrar) that help ensure Toronto remains open and transparent

Embedded in the Council Approved 2023-2032 Capital Plan:

- $17.6 billion of investments that support Council-approved sustainability outcomes which is comprised of:  

including $4.2 billion for GHG emission reductions;

$5.4 billion supporting climate resilience, and;

$8 billion supporting both GHG emission reductions and climate resilience.

- Moreover, a total of $1.1 billion is embedded in the budget for social outcomes such as:

$616 million for Social and Affordable housing:

$247 million for Social Services such as Childcare, Employment Services and Youth development, and;

$256 million for Health Services such as infectious Disease Control, Long-term Care Homes and Family Health.

The impacts of progress on ESG prioritization are reflected in the annual financial report. In addition, ESG factors such as a climate lens and an equity lens are integrated in the annual budget process.

The Chief Financial Officer and Treasurer recommends that:

1. City Council determine that the Development Charges By-law have been properly applied to the development project located at 615 Kennedy Road.

2. City Council dismiss the complaint dated July 12, 2023, with respect to 615 Kennedy Road filed pursuant to Section 20 of the Development Charges Act, 1997.

3. City Council authorize City Staff to defend any appeal of City Council’s decision or non decision to the Ontario Land Tribunal.

This report responds to a complaint filed pursuant to Section 20 of the Development Charges Act, 1997, relating to a development project located at 615 Kennedy Road in Scarborough.

The development project consists of a 10-storey residential apartment building containing 215 dwelling units with two levels of underground parking. The complainant, 615 Kennedy Road Inc., objects to the amount of development charges determined in relation to permit issuance. The complainant applied for a building permit on December 21, 2021 to construct the development. A building permit for the development could not be issued as the proposed construction did not comply with all applicable law. The Building Code Act, 1992 (the “Act”) provides that a Chief Building Official must issue a building permit unless the proposed construction will contravene the Act, the building code or any other applicable law. However, the Act provides that the Chief Building Official may issue a conditional permit for any stage of construction, where the proposal complies with certain applicable laws and where it is the opinion of the Chief Building Official that an unreasonable delay in construction would occur should a conditional permit not be issued. Community Benefits Charges is applicable law for the purpose of issuance of a conditional building permit. The issuance of a conditional permit is at the sole discretion of the Chief Building Official pursuant to the Act.

The complainant requested a below grade conditional permit for the development on June 14, 2022, as the proposed construction still did not comply with all applicable law as required by the Act.   In accordance with City Council’s  conditional permit policy 2016.EX11.7, as further amended by 2023.EX1.6, the complainant entered into a Section 27 Development Charges Agreement with the City executed on April 24, 2023 (Section 27 Agreement).

The Section 27 Agreement stipulates that development charges are determined based on the “higher of” rates on the By-law in effect on the date of issuance of the first building permit or if applicable, rates frozen at site plan or rezoning application. The Section 27 Agreement only deals with the amount and timing of payment of development charges. Other applicable law requirements must be satisfied in order for a building permit to be issued. In respect of this application, the rates are determined by the By-law rates in effect on the date of first building permit issuance. In addition to development charges, the complainant was required to remit payment of a Community Benefits Charge. Pursuant to Article VI of Toronto Municipal Code Chapter 415 (Development of Land), where a Community Benefits Charges payment is required, this payment must be received prior to issuance of the first building permit.  The Development Charges By-law, requiring the payment of development charges and the Community Benefits Charge By-law, requiring the payment of Community Benefits Charges are applicable law for the issuance of a building permit, including a conditional building permit, under the Act.

While development charges were paid by the complainant, they did not submit payment of the Community Benefits Charges prior to the May 1, 2023 development charges rate increase and, consequently, the building permit was not issued prior to that date. By the time the Community Benefits Charges was paid, the amount of development charges were recalculated based on the new rates in effect at the time, and payment of the difference was requested pursuant to the Section 27 agreement executed by the owner and the City to issue the permit.  The complainant takes the position that they were not informed of the requirement to pay the Community Benefits Charges prior to the permit being issued, and since they paid development charges prior to May 1, 2023, they should not be subject to the increased rate.

According to their complaint, they relied solely on the terms of the Section 27 agreement which only speaks to the requirement to pay the development charges to issue the permit. They claim they were advised of the requirement to pay the Community Benefits Charges at the end of the business day on Friday, April 28, 2023, and there was not enough time for them to send the wire transfer before May 1st. The complainant is not taking issue with the application of the Development Charges By-law, but attempting to indirectly attack the application of applicable law in issuing a Building Permit respecting the payment of the Community Benefits Charges through a section 20 complaint. There is no error in applying the Development Charges By-law.

City staff have reviewed the complaint and are of the opinion that the Development Charges By-law was applied properly, and no error was made in determination of the applicable development charges. The complainant was aware of the requirement to pay the development charges and Community Benefits Charges in full at permit issuance prior to the May 1st increase and staff made several efforts to assist the complainant to ensure that the permit could be issued as it complied with all other applicable law.  This included expediting the appraisal of the site within two weeks to facilitate the calculation of the Community Benefits Charges which generally requires approximately six weeks to complete. Several communications were made between staff and the complainant over email and phone advising that the Community Benefits Charges payment must be made to issue the permit. Ultimately, the Community Benefits Charges payment was made on May 1st and development charges had to be recalculated due to indexing.

The Development Charges By-law provides the timing of calculation and payment of development charges to be determined by applying the rates in effect on the date that the building permit is issued. Prior to May 1st, the amount of development charges was determined to be $6,106,283.90. As the permit was not issued before May 1st due to the outstanding Community Benefits Charges payment, the development charges was recalculated and an additional $2,039,501.57 was requested by Toronto Building for permit issuance. To date, the complainant has not remitted further payment for development charges nor have they requested that the conditional permit be issued.  As such, the conditional building permit has not been issued. Since there was another rate increase on August 15, 2023, the development charge was recalculated again. Currently, the complainant would have to pay $2,548,547.92 to have the permit released. Furthermore, since a long period of time has passed and the requested permit is not an as-of-right permit, but rather, a request for a conditional building permit, the owner would have to demonstrate to the Chief Building Official that an unreasonable delay in construction still exists prior to issuing the permit.  Development charge rates are not a criteria for the consideration of issuing a conditional permit.

This report recommends that the complaint be dismissed. A decision or a non-decision of Council to dismiss the complaint may be appealed to the Ontario Land Tribunal. This report was prepared in consultation with the (Acting) Chief Building Official and Executive Director, Toronto Building and the City Solicitor.

There is no financial impact on the City's capital or operating budget from the adoption of recommendations contained in this report. Development Charges, in the amount of $6,106,283.90 were collected by the City. Should the complaint be dismissed, the developer will be required to pay additional development charges in the amount of $2,548,547.92 as of the date of this report to receive their building permit, subject to the outcome of any appeal to the Ontario Land Tribunal.

If the complainant appeals Council's decision to the Ontario Land Tribunal, the City's defence would be provided by the Legal Services Division.

The General Manager, Toronto Shelter and Support Services recommends that:  

1. City Council authorize the General Manager, Toronto Shelter and Support Services, or their designate, to accept the donation of $92,675.88 from Private Giving Foundation for the City of Toronto.

2. City Council authorize the General Manager, Toronto Shelter and Support Services, or their designate, to negotiate and sign on behalf of the City a donor agreement with Private Giving Foundation or their designate, on terms and conditions satisfactory to the General Manager, Toronto Shelter and Support Services and in a form satisfactory to the City Solicitor.

3. City Council authorize the General Manager, Toronto Shelter and Support Services, or their designate, to allocate and disburse the donated amount to Robertson House Portfolio.

This report seeks approval from City Council to accept a donation from Private Giving Foundation in the amount of $92,675.88. The donation has been made to Toronto Shelter and Support Services’ Robertson House emergency shelter. Robertson House offers emergency shelter to women and their children experiencing homelessness.

The donation will be used as an opportunity to enhance the programming area of Robertson House. A welcoming, client-centred space for children’s programming helps to improve social, health and recreational outcomes of vulnerable families staying in the shelter program.

The value of this offer exceeds the $50,000 threshold for donation acceptance under the Donations to the City of Toronto for Community Benefits Policy. As a result, City Council approval is required to accept this donation.

The donated funds will be used for one-time costs in the Robertson House emergency shelter and will not create any future year pressure on the City. The proposed changes are not included in Toronto Shelter and Support Services Division’s 2024 proposed budget. This donation provides an opportunity to improve the space for residents that otherwise would not be undertaken in 2024. City staff will submit a request for an in-year adjustment through the first 2024 Operating Variance report.

The Chief Financial Officer and Treasurer has reviewed this report and agrees with the financial implications as identified in the Financial Impact section.

The General Manager, Economic Development and Culture, recommends that:  

1. City Council refuse Imagination, Manufacturing, Innovation and Technology incentives for the following applications:

21 Don Roadway-Building 1A- CF EHL (21 Don Roadway) Holdings Inc. (Cadillac Fairview)

21 Don Roadway-Building 1B- CF EHL (21 Don Roadway) Holdings Inc.  (Cadillac Fairview)

21 Don Roadway-Building 2A- CF EHL (21 Don Roadway) Holdings Inc. (Cadillac Fairview)

This report provides recommendations on Imagination, Manufacturing, Innovation, and Technology program applications for three proposed projects in East Harbour, an area of land on the east side of the Don River in Ward 14 (Toronto – Danforth).

The three Imagination, Manufacturing, Innovation, and Technology program applications were submitted by Cadillac Fairview on August 11, 2020, and are subject to the South of Eastern Community Improvement Plan, By-law 1324-2012, which was the bylaw in effect at the time of application.

Under this Community Improvement Plan, Imagination, Manufacturing, Innovation, and Technology applications for projects with an estimated construction value above $150 million require City Council approval. Due to the potential financial implications to the City of approving an Imagination, Manufacturing, Innovation, and Technology incentive for a project with a construction value exceeding $150 million, the City contracted with Hemson Consulting Ltd. to provide a third-party review of the subject applications.

Among other factors, staff’s assessment of the applications considers Hemson’s analysis (Attachment 2); the City’s aggregate investment in East Harbour and the surrounding area (in flood protection, transit, roads, and community infrastructure); Toronto’s fiscal position and priorities; and changes to land use planning permissions in East Harbour resulting from the issuance of Minister’s Zoning Order 329/22 (MZO).

For the reasons detailed in this report, staff recommends refusal of the three applications.

This report was prepared by the Economic Development and Culture division in consultation with City Planning, Legal Services, and Finance and Treasury Services divisions.

The cumulative IMIT grant amount for these three developments, if provided, is estimated to be $230 Million over 10 years, as summarized in Table 1.

Table 1 – IMIT Grant Amounts Based on Proposed Gross Floor Area

As of December 2023, the IMIT program has approved 74 applications and disbursed or provisioned $269.45 million in grants, with another $50.1 million in grants projected for 2024. In addition, the estimated amount of grants that the IMIT program is committed to provide until 2037 is $459.55 million. Therefore, the total cumulative value of IMIT grants approved to date is approximately $729 million, not including the estimated amount required for the 3 grant applications that are the subject of this report. If the above three applications are approved, the City’s total committed grants under this program are projected to be $959 million by 2037.

The Chief Financial Officer and Treasurer has reviewed this report and agrees with the financial implications as presented in the Financial Impact section.

The General Manager, Economic Development and Culture, the Interim Chief Planner and Executive Director, City Planning, and the Chief Financial Officer and Treasurer recommend that:

1. City Council direct the Chief Planner and Executive Director, City Planning, in consultation with the General Manager, Economic Development and Culture and the Chief Financial Officer and Treasurer, to bring forward for City Council’s consideration, targeting Q4 2024, a new City-wide Community Improvement Plan (CIP) for a Financial Incentive Program consisting of development grants, in the form of Tax Increment Equivalent Grants (TIEG) for certain defined uses and Brownfield Remediation Tax Assistance, substantially addressing the policy considerations in this report and the program parameters detailed in Attachment 1, including with respect to:

i. eligible uses – no eligibility for office space, except when linked to associated industrial buildings and except in limited circumstances within designated Employment Areas as defined in Toronto's Official Plan;

ii. basis for the provision of TIEG – grant acts as one of several factors contributing to investment decisions, not necessarily the primary decisive factor;

iii. quantum and term of TIEG – basic grant equivalent to 60 percent of the municipal tax increment payable over a five-year period;

iv. approval and financial control requirements - all applications to be approved by City Council and considered as a group no less than once per year; provisions to ensure approved projects are built within certain timelines; expiry of the program after 10 years; inclusion of a program budget target or upset limit with flexibility to address exceptional projects or circumstances; etc.

v. local employment plan requirements; and

vi. mechanisms to support City goals related to sustainability, job quality and access, and community wealth building.

2. Until such time as any new Community Improvement Plan by-law indicated in Recommendation 1 above is approved and in force, City Council direct the General Manager, Economic Development and Culture, the Chief Planner and Executive Director, City Planning and the Chief Financial Officer and Treasurer to bring forward, no less than annually, as a group: (i) for Council’s information, notice of any IMIT development grants approved by the General Manager, Economic Development and Culture under their delegated authority for projects meeting all program eligibility requirements and with a construction value of less than $150,000,000; and (ii) for Council’s approval, any complete applications for IMIT development grants for projects with a construction value greater than $150,000,000.

3. City Council request the Chief Planner and Executive Director, City Planning, in consultation with the General Manager, Economic Development and Culture, as part of the Office Space Needs Study to explore opportunities to provide financial incentives, policies and other options to support the conversion or adaptation of vacant office space into other non-residential employment uses, including the potential to utilize as a funding source for such efforts savings from lower than forecast TIEG payments to office developments covered by an IMIT Program Financial Incentive Agreement (FIA) experiencing high vacancy rates.

The purpose of this report is to share the findings of a review of the Imagination, Manufacturing, Innovation, and Technology Financial Incentive Program and the results of a Council directed assessment of the program’s Local Employment Requirement points-based pilot.

The review of the Imagination, Manufacturing, Innovation, and Technology Financial Incentive Program considered the City’s planning and economic development priorities and financial position (including directions from the Updated Long-Term Financial Plan); assessed current and anticipated market conditions (especially with respect to office and industrial sector requirements); and includes an independent third-party evaluation of the Program’s performance, costs and benefits to date informed by consultation with stakeholders.

Drawing on the review's findings, this report recommends that Council authorize staff to develop a more targeted and far less costly employment space development incentive to replace the Imagination, Manufacturing, Innovation, and Technology Financial Incentive Program, focused on the development of commercial/industrial space rather than office space, for Council’s consideration, by the fourth quarter of 2024.

Established in 2008, the Imagination, Manufacturing, Innovation, and Technology Financial Incentive Program has been one of the City's principal measures to incent business development and support job retention and growth, complementing land use planning and property tax policies.

The Imagination, Manufacturing, Innovation, and Technology Financial Incentive Program provides incentives in the form of Tax Increment Equivalent Grants to support the new construction or major renovation of buildings in targeted employment sectors and for certain uses throughout Toronto. The Program also includes an added grant element for Brownfield Remediation Tax Assistance. The provision of development incentives through Imagination, Manufacturing, Innovation, and Technology Financial Incentive is enabled by a Community Improvement Plan by-law authorized under Section 28 of the Planning Act.

Typically, projects approved for Imagination, Manufacturing, Innovation, and Technology Financial Incentive Program receive grants over a ten-year period equivalent to 60% of the increased property taxes paid resulting from the new construction or renovation completed through the development.

Since its inception, 74 projects have been approved for Imagination, Manufacturing, Innovation, and Technology Financial Incentive Program (and/or Brownfield Remediation Tax Assistance) development incentives, with a total construction value of approximately $5.9 billion. Together, these projects are forecast to yield $1.3 billion in new incremental property taxes during the 10-year (or with Brownfield Remediation Tax Assistance up to 12 year) term of their applicable Imagination, Manufacturing, Innovation, and Technology Financial Incentive Program Financial Incentive Agreement, while receiving $729 million in grants from the City, resulting in net municipal tax revenue of $571 million. The majority (84%) of grants issued or committed to date through the Imagination, Manufacturing, Innovation, and Technology Financial Incentive Program are for office space developments.

Approved IMIT Applications and Projects

Forty of 74 projects approved for an IMIT development incentive since the Program’s inception have completed construction, are either partially or fully occupied, and have received or are currently in receipt of IMIT grants over a 10-year (or with BRTA up to 12-year) period. The other 34 approved projects have either not yet completed construction or have not signed a Financial Incentive Agreement (FIA) based on the updated Current Value Assessment (CVA) of the improved property (as assessed by MPAC), post construction or major renovation.

Together, these 74 projects are forecast to yield $1.3 billion in new incremental property tax revenue during the 10-year (or with BRTA up to 12-year) term of their FIAs, while collectively receiving $729 million in grants from the City, resulting in a net revenue gain for the City of $571 million via increased municipal tax proceeds.

As of December 2023, the City had disbursed or provisioned $269.45 million of the forecast $729 million in IMIT grants, with a further $50.1 million in grants projected to be issued in 2024.

As shown in Table 1 below, for projects approved to date, the amount of IMIT grant payments the City will need to make in any given year will peak at $61.3 million in 2025 and then decline each year until 2037. From 2038 onwards, the City will retain the full incremental property tax payable on each of the 74 developments, resulting in net new incremental tax revenue of $110 million each year.

Table 1: Estimated Net New Tax Revenues of Approved Projects (2011-2037)

(Refer to page 4 of the report (January 16, 2024) from the General Manager, Economic Development and Culture, Interim Chief Planner and Executive Director, City Planning, and the Chief Financial Officer and Treasurer)

The above projections for payable IMIT grants are based on full occupancy of the new or improved employment space associated with each development and assumed continued compliance with Program requirements. However, the value of grants payable through 2037 could be as much as $40 million less than forecast, if IMIT beneficiary office projects entering the payment cycle experience high vacancy rates.

Other IMIT Applications Received and Under Review

Under the existing IMIT CIP by-law, applications for projects with an estimated construction value above $150 million require City Council approval. Council can exercise discretion to approve or refuse these applications based on its determination of whether granting or denying the application aligns with the City’s interests. Those projects with an estimated construction value below $150 million must meet eligibility criteria to be approved by the General Manager, Economic Development and Culture under delegated authority from Council.

IMIT applications are required to be assessed according to the criteria set out in the applicable IMIT CIP by-law in effect at the time the application was initiated. 

As of December 2023, the City had received and is reviewing IMIT financial incentive applications for 17 projects at different stages of application completeness. These applications are at various stages in the review process, as described in Table 2 below. Were they all to be approved, these applications would result in significant financial commitments up to $329 million in the form of property tax incentives collectively over their 10-year (or with BRTA up to 12-year) grant terms. However, conditions in the local real property market appear to be slowing if not jeopardizing the viability of some of the projects, although final determinations can only be made following the full application assessment process.  Of the applications for these 17 projects:

- Five projects have an estimated construction value exceeding $150 million:

Third-party review for 3 of these 5 projects (in East Harbour) has been completed and will be brought forward for City Council consideration in early Q1 2024. The cumulative anticipated grant value of these 3 projects, if approved, would be $230 million.

Third-party review for the remaining 2 of these 5 projects is in progress, with City Council consideration expected in late Q1 or Q2 2024. The combined anticipated grant value of these 2 projects, if approved, would be $48.6 million. 

- Nine projects have a construction value under $150 million and are considered active but their applications may or may not be deemed complete or be approved. The combined anticipated grant value of these 9 projects, if approved, would be $32.8 million.

- Three other projects have a construction value under $150 million but are currently deemed inactive due to a lack of response from the applicant. The cumulative anticipated grant value of these 3 projects, if approved, would be $17.6 million.

As noted, prevailing market conditions may impact the viability of some projects to move forward.

Table 2: IMIT Applications Under Review

*Third-Party review of these applications (East Harbour) is complete. Council consideration anticipated in early Q1 2024.

**Third-Party review of these applications is in progress. Council consideration anticipated in late Q1 or Q2 2024.

Potential Financial Impact of Proposed New Financial Incentive Program and CIP to Replace IMIT

The new financial incentive program to replace the IMIT Program proposed in this report is more targeted in terms of outcomes sought and offers more financial predictability, administrative controls and Council oversight. Total costs of the new program can be expected to be just 8 to 10% of the costs incurred under the IMIT Program. This notable difference in costs is largely attributed to two factors:

i.Eligible uses – In the proposed new incentive program, there would be no eligibility for office space, except in very limited exceptions where linked to associated industrial buildings or certain highly proscribed scenarios in designated Employment Areas as defined in the Official Plan. Under the current IMIT Program, 84% of grants are attributable to office space.

ii.Quantum and term of TIEGs – In the proposed new incentive program, a basic grant of 60% of the municipal tax increment would be payable over only a five-year period instead of over a ten-year period (i.e. half the time and therefore half the amount of grants paid through the IMIT Program).

Ultimately, the take-up, costs and benefits of any new development incentive program in the future will depend on prevailing market conditions and corresponding demand for new and upgraded employment space, interest rates, technological changes, and other government policies impacting investment decisions (including with respect to tax rates and development charges), among other factors.

Program Administration and Financing

The IMIT Program administration fee is anticipated to generate $907,619 (as of 2023) since it was introduced in 2019 and is estimated to yield approximately $300,000 per year moving forward as previously approved IMIT applications begin receiving grants, while other projects reach the end of their grant term.

Program delivery costs (e.g. for staffing, etc.) are borne by Economic Development and Culture, offset by the administration fee. Any additional cost to amend the Office Space Needs Study to explore options to support the conversion or adaptation of vacant office space into other non-residential employment uses will be accommodated within the approved operating budget for Economic Development and Culture.

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

The Executive Director, Transit Expansion recommends that:  

1. City Council authorize the Deputy City Manager, Infrastructure Services, or their designate, in consultation with the Chief Executive Officer, Toronto Transit Commission, to finalize negotiations, enter into and execute the Finch West Light Rail Transit - Train Operating and Services Agreement with Metrolinx and the TTC, based on the Term Sheet set out in Attachment 1 of this report, and any such necessary ancillary or related agreements, amendments and renewals (including with any other relevant parties), all substantially in accordance with the Term Sheet and on such other terms and conditions satisfactory to the Deputy City Manager, Infrastructure Services, the Chief Financial Officer and Treasurer and any other relevant officials, and in a form satisfactory to the City Solicitor.

2. City Council forward this report to the Toronto Transit Commission Board.

The Finch West Light Rail Transit is an 11-kilometre light rail transit line that will run along the surface of Finch Avenue West between the existing Finch West Subway Station and the new Humber College Station, with 18 stops that will link to Line 1 (Yonge-University line), Toronto Transit Commission (TTC) buses, as well as GO Transit, MiWay, Viva, and Zum transit services. The Province, through their agency Metrolinx, has ownership of the Finch West Light Rail Transit and is funding the construction and delivery of the project, as established by the 2012 Light Rail Transit Master Agreement.[1] As per the Master Agreement, the City is responsible for funding operations and day-to-day maintenance (i.e., non-lifecycle maintenance) of the Finch West Light Rail Transit and the TTC is responsible for operating the Finch West Light Rail Transit. The City will be reimbursed for annual operating funding over three years beginning in 2024 for the Finch West Light Rail Transit through the Ontario-Toronto New Deal. At this time, Metrolinx anticipates that the Finch West Light Rail Transit will achieve Substantial Completion and be ready for revenue service operation by the end of 2024.

A clear understanding and agreement between the City, TTC and Metrolinx on the operating procedures, funding obligations, approvals, dispute resolution and decision-making processes is critical to the successful implementation and operation of the Finch West Light Rail Transit. This report recommends terms negotiated by the City and TTC with Metrolinx that expand on the terms of the 2021 Revised Agreement in Principle[2]. The terms in this report outline the details that will govern the City’s funding obligations, the TTC’s operating performance and maintenance requirements, revenue and payment processes, renewal and dispute terms, and processes for resolving non-fulfillment of obligations. As such, this report seeks City Council authority for City staff to execute the Finch West Light Rail Transit Train Operating and Services Agreement with the TTC and Metrolinx, based on the key terms identified in this report and set out in Attachment 1. Should City Council approve the recommendations in this report, the Train Operating and Services Agreement is expected to be executed in the first quarter of 2024.

[1] https://www.toronto.ca/legdocs/mmis/2012/cc/bgrd/backgroundfile-53862.pdf
[2] https://www.toronto.ca/wp-content/uploads/2021/08/9672-revised-ontario-toronto-agreement-in-principle-2021.pdf

The Finch West Light Rail Transit (FWLRT) - Train Operating and Services Agreement (TOSA) will be the main agreement between the City, TTC, and Metrolinx that will govern the operations of the FWLRT once the line commences service. The TOSA will establish the roles and responsibilities of the City, TTC, and Metrolinx, including the City's obligations for funding FWLRT operations and the TTC's responsibilities for operating the FWLRT.

City, TTC and Metrolinx staff were engaged in negotiations that have resulted in the agreed upon terms in Attachment 1 of this report. These terms outline the details that will govern the City’s funding obligations, the TTC’s operating performance and maintenance requirements, revenue and payment processes, renewal and dispute terms, and processes for resolving non-fulfillment of obligations. If approved by City Council, these terms will be used to finalize and execute a 30-year FWLRT TOSA, structured as an initial 10-year term with two automatic successive 10-year renewals. Prior to the end of the final renewal term, the City, TTC and Metrolinx will start negotiations for an extended or new TOSA.

Over the term of the TOSA, the City will fund the operations and non-lifecycle maintenance costs for the FWLRT, including any net operating subsidy, and will recover farebox and non-farebox revenue to defray these costs. Metrolinx will fund all lifecycle maintenance costs. The City will have an ongoing obligation to fund FWLRT operations and non-lifecycle maintenance for the duration of the TOSA, with annual budgets to be established as part of the TTC's operating budget through the budget process each year.

The City's funding obligations will be limited to the cost areas outlined in the terms provided in Attachment 1 of this report, unless otherwise agreed upon through a financial change management process to be outlined in the TOSA. The TOSA will also establish the processes for reimbursement to the City and TTC for failures or delays attributed to Metrolinx or Project Co. Any substantial additional funding obligations identified during the TOSA drafting process, beyond the cost obligations listed in this report and in the terms in Attachment 1, will be subject to further approval by City Council.

The 2024 Operating Budget approved by the TTC Board on December 20, 2023, includes approximately $18 million for net operating, non-lifecycle maintenance and mobilization costs associated with the FWLRT. This amount is consistent with the 2024 Budget prepared by the City Manager and the City’s Chief Financial Officer and Treasurer and was based on an assumed service commencement date of September 2024.

Funding for the FWLRT costs identified in the 2024 Budget will be fully reimbursed by the Province through the Ontario-Toronto New Deal which was announced in November 2023. The provincial funding for the FWLRT in 2024 is part of a 3-year (2024-2026) commitment of $330 million total annual operating funding by the Province to support bringing the provincially-owned Finch West LRT and the Eglinton Crosstown LRT into revenue service.

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

The General Manager, Transportation Services recommends that:

1. City Council endorse, in principle, the Surface Transit Network Plan, as depicted in Attachment 1, and direct the General Manager, Transportation Services to use the Plan as the basis of Transportation Services’ planning and programming of surface transit priority projects.

2. City Council direct the General Manager, Transportation Services, in consultation with the Chief Planner and Executive Director, City Planning and the Chief Executive Officer, Toronto Transit Commission, to initiate three additional roadway-specific studies, public consultation, and design of the following individual roadways proposed for surface transit priority, and to bring study findings and recommendations to the appropriate Committee and Council for approval at the appropriate time:

a. Finch Avenue East between Victoria Park Avenue and McCowan Road;

b. Dufferin Street between Wilson Station and Dufferin Gate; and

c. Lawrence Avenue East between Victoria Park Avenue and Morningside Avenue.

3. City Council direct the General Manager, Transportation Services, to forward a copy of this report to the Toronto Transit Commission Board.

While the majority of transit planning efforts in the City of Toronto are focused on higher-order transit initiatives, bus and streetcar routes provide transit services across most parts of the city as complements to, and extensions of, the higher-order transit network. Currently, 70 percent of all Toronto Transit Commission journeys include a surface transit trip.

Improving the reliability of bus and streetcar transit supports the City's priority of keeping Toronto moving. A reliable surface transit network is essential to enable people to move around the city and access employment, business/retail, education and recreational/cultural facilities, particularly for Neighbourhood Improvement Areas and equity-deserving communities. Improving transit services in the inner suburbs is a key recommendation of the City of Toronto’s Poverty Reduction Strategy. Supporting transit reliability is critical for meeting the City’s TransformTO Climate Action Strategy’s goal of 75 percent of trips under a 5 kilometres area walked, biked, or by transit by 2030.

The Official Plan identifies that “recognizing their importance, the network of bus and streetcar routes will be enhanced to improve service reliability and travel times by reducing interference from other road traffic through the implementation of transit priority measures, and by improving operational efficiency and rider convenience by such means as providing more frequent service.”

The Surface Transit Network Plan aims to create a comprehensive network of surface transit priority corridors along arterial roads through the use of tools such as reserved lanes, intersection and signal improvements and customer comfort improvements at transit stops to prioritize public transit in the City's road network. The Surface Transit Network Plan was referred to as the RapidTO: Surface Transit Network Plan during the consultation process.

This report seeks City Council endorsement in principle of the overall Surface Transit Network Plan, provides a status update on four projects where roadway-specific studies have been completed or initiated, seeks City Council endorsement of the initiation of three (3) additional roadway-specific studies in the near-term (2024-2025), and responds to a related request from Infrastructure and Environment Committee.

Staff from Transportation Services, City Planning and the Toronto Transit Commission worked collaboratively to develop the Surface Transit Network Plan with consideration for roadways identified in the City of Toronto Official Plan's Surface Transit Priority Network (Map 5), the Toronto Transit Commission's 5-Year Service Plan and 10-Year Outlook, as well as other bus and streetcar routes with more than 20,000 daily riders.

In developing the plan, feedback was received from over 7,100 participants over two phases of consultation with local community representatives and the public:

In Phase 1 (October to November 2021), participants were asked to rate and provide feedback on the importance of evaluation criteria in selecting bus and streetcar roadways to prioritize. There was overall support for the initial evaluation criteria presented, and a new criterion for connectivity to Major Destinations was added as a result of the consultation feedback.

In Phase 2 (March to April 2022), participants were asked to provide feedback on the list of roadways to be prioritized over the next ten years. Overall, participants expressed support for the initial twenty (20) roadways. Many survey respondents expressed support for accelerated implementation and some frustration about the need to undertake more studies for individual roadways.

Assessment of technical data and public input helped inform the identification, evaluation, and prioritization of 47 candidate roadways for surface transit improvements. As a result, twenty (20) priority roadways have been identified to be included in the Surface Transit Network Plan over the next ten years. Attachment 1 shows the location of the Surface Transit Network Plan priority roadways, along with the 27 candidates for long-term planning studies across the City of Toronto.

Corridors identified for roadway-specific studies will be subject to further feasibility analysis to determine suitable surface transit priority measures and development of design options. Public consultation for each corridor will strive to engage residents and local community groups through online and in-person consultation activities, where possible. Staff will work with Councillors' offices to identify key groups, such as residents, businesses and other community representatives, that should be included in outreach and notification efforts. The public will have an opportunity to review and provide feedback on proposed design options.

Confirmation of the preferred design will be developed with both technical

analysis and community input. The preferred option would be recommended in an

implementation report to the appropriate Committee for Council approval,

before proceeding to implementation.

As previously directed by Council, there are four (4) projects where roadway-specific studies have been completed or initiated associated with the Surface Transit Network Plan: Eglinton Avenue East, Jane Street, Steeles Avenue, and Victoria Park Avenue. This report contains updates on each of these studies.

Subject to City Council approval of the Surface Transit Network Plan, three (3) additional roadway-specific studies are proposed to be initiated in the near-term (2024-2025) to move forward on feasibility study, design, and community consultation for the following roadways:

- Finch Avenue East between Victoria Park Avenue and McCowan Road;

- Dufferin Street between Wilson Station and Dufferin Gate; and

- Lawrence Avenue East between Victoria Park Avenue and Morningside Avenue. Transit signal priority and improving accessibility at bus stops will be considered east of Morningside Avenue.

Finch Avenue East, Dufferin Street, and Lawrence Avenue East were identified as priority corridors in Toronto Transit Commission’s 5-Year Service Plan and 10-Year Outlook. Dufferin Street and Lawrence Avenue East were identified as high priority corridors under the Surface Transit Network Plan evaluation framework. The above referenced sections of these roadways are being recommended for near-term study to leverage potential opportunities for delivery as part of upcoming capital projects. Initiation of feasibility studies for the remaining segments of Finch Avenue East and Lawrence Avenue East will be considered at a future time.

Each roadway-specific study will require two to three years to undertake feasibility study, design, and community consultation prior to seeking City Council approval for implementation of the proposed changes which will include a phased approach to accelerate implementation of shorter segments of the roadway, where possible.

While the Surface Transit Network Plan looks at delivering large scale surface transit improvements on priority roadways, there are other concurrent programs that aim to implement localized transit priority measures city-wide to enhance service.  Actions include:

- Delivering up to 12 stand alone queue jump lanes in the next 5 years;

- Implementing transit signal priority to 50 locations annually; and

- Implementing targeted regulatory measures at 10 locations per year.

More information about these actions along with other transit improvements will be presented in the Toronto Transit Commission’s 5-Year Service and Customer Experience Action Plan to be submitted to the Toronto Transit Commission Board in the first quarter of 2024.

In partnership with Toronto Transit Commission and City Planning, Transportation Services will report to the appropriate Committee and City Council at key milestones as part of the implementation of the Surface Transit Network Plan.

Funding of $4.875 million is identified within the 2023-2032 Capital Budget and Plan for Transportation Services to commence feasibility studies and designs of the Surface Transit Network Plan priority roadways. The existing funding allotment is estimated to be sufficient to study and design approximately eight (8) to nine (9) priority roadways. This funding is categorized as a service improvement and enhancement in the approved 2023-2032 Capital Budget and Plan for Transportation Services.

Funding of $11.967 million in service improvement and enhancements is approved in the TTC’s 2023-2032 Capital Budget and Plan to implement Surface Transit Network Plan projects, with cash flow funding of $0.7 million in 2023 and $11.259 million across the Capital Plan years of 2024 and 2026. The approved funding is estimated to be sufficient to implement surface transit priority measures on approximately two (2) to three (3) priority roadways, subject to final cost estimates.

As progress on the Surface Transit Network Plan advances, subsequent funding requests for roadway-specific studies and implementation will be made in future Transportation Services and TTC capital budget submissions for additional priority roadways. The funding required to maintain the Surface Transit Network Plan priority roadways will be considered as part of future operating budget submissions for Transportation Services.

The Chief Financial Officer and Treasurer has reviewed this report and agrees with the financial implications as contained in the Financial Impact Section.

The Deputy City Manager, Corporate Services recommends that:

1. City Council adopt the confidential instructions to staff in Confidential Attachment 1.

2. City Council authorize the public release of Confidential Attachment 1, once adopted by City Council.

3. City Council authorize the public release of Confidential Attachment 2 following the closing of any legal and financial transactions.

This report provides an update and recommendations around the next phase of procurement and construction of the George Street Revitalization project which are further described in detail in Confidential Attachment 1 and Confidential Attachment 2.

In 2013, Toronto City Council approved proceeding with the George Street Revitalization project, which would include a new facility to replace the existing Seaton House men's shelter and facilitate the co-location of a long-term care home, shelters services, affordable housing, and a community service hub. City Council also approved delivering the project through an alternative financing and procurement (public-private partnership, "P3") model with Infrastructure Ontario and Lands Corporation (known as Infrastructure Ontario, "IO") acting as procurement lead.

The George Street Revitalization project is a core project of the Downtown East Action Plan and advances several initiatives to address the barriers and needs of community members from equity-deserving groups who have a history of accessing services in Toronto's Downtown East area.

The proposed George Street Revitalization project is on George Street between Gerrard Street East to the north and Dundas Street East to the south. George Street is located in the Garden District in downtown Toronto and is also part of the Moss Park neighbourhood, one of City’s most animated, diverse and dense communities with a historic role as an inclusive place for vulnerable populations.

Financial impacts associated with this report are described in Confidential Attachment 2.

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

Please find attached an extract from the Minutes of the Public meeting of the Toronto Police
Services Board held on October 19, 2023, regarding City Council Decision – MM11.37 – Keeping Toronto Safe from Hate.

The Board agreed that a copy of this Minute be forwarded to the Executive Committee for
information.