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.

To provide comments or make a presentation to the Executive Committee

The public may submit written comments or register to speak to the Committee on any item on the agenda. The public may speak to the Committee in person or by video conference.

Written comments may be submitted by writing to exc@toronto.ca

To speak to the Committee, please register by email to exc@toronto.ca or by phone at 416-392-7033. Members of the public who register to speak will be provided with instructions on how to participate in to the meeting.

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Closed Meeting Requirements: If the Executive Committee wants to meet in closed session (privately), a member of the Committee must make a motion to do so and give the reason why the Committee has to meet privately (City of Toronto Act, 2006).

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 - July 16, 2024

Speakers/Presentations - The speakers list will be posted online at 8:30 a.m. on October 1, 2024.

Communications/Reports

Mayor Olivia Chow recommends that:

1.  City Council request the City Manager, in coordination with the Medical Officer of Health, to report to the November 2024 Executive Committee the funding, including intergovernmental contributions, and operational considerations required to deliver student food programs by January 2025 in the schools that applied for the 2023/4 or 2024/5 school years, were deemed eligible, but were denied due to funding constraints.

2.  City Council request the City Manager, in coordination with the Medical Officer of Health, in consultation with relevant stakeholders, to report back by Q2 2025 on a vision and strategy for achieving a universal student food program where a universal mid-morning meal is provided in Toronto by the 2026/2027 school year; a clear strategic path to achieving a universal lunch program no later than 2030, and the decisions adopted under EX13.1 in April 2024 are included.

In my time as a City Councillor and Toronto’s Child and Youth Advocate, I spoke with youth across the city - asking them what they would do if they were mayor for a day. One entry from Sylvia stood out above all the others. She submitted a drawing of a stick figure child holding up a shopping bag, her note read that she would ask God for money to buy groceries. This image and this need has haunted me ever since.

That’s why today I am taking the next step as Mayor to build a Universal Student Food Program in our city. I am committed to making this happen. It exists in cities around the world and Torontonians deserve it too.

I am very proud to have helped establish Toronto’s student food program when I was a school trustee and later a councillor. Today it helps to serve over 227,000 meals per day to kids across our city. But still there are over 100,000 kids across more than 220 public schools who do not have access to good food, including thousands in some of our lowest income neighbourhoods.

In fact, we have 21 schools that have the infrastructure in place, that are eligible, that have applied in the last two years, and have been denied because of a lack of funding. That means 8,000 kids at these schools don’t have the same opportunities, they’re stuck trying to focus and learn on empty stomachs. My first recommendation below puts us on a path to feeding these students in January 2025.

The rising cost of groceries is putting pressure on families in our City. In Toronto, nearly one in three food bank clients are children and youth. The reality is, in our city with so much wealth, we have thousands of kids going to school every single day hungry. When you’re hungry, you can’t learn. We need our kids to be able to focus on their teacher, not their hunger. We know that student meal programs increase attendance, improve math, science and reading scores, reduce dropouts, and create healthier communities.

City Council and the Toronto Board of Health have a long history of offering nutritious meals at school through the Student Nutrition Program. This program is funded through municipal and provincial funding streams. The City of Toronto currently invests $19.16 million annually and the Province of Ontario nearly $9 million. School community contributions and fundraising alongside corporate donations also help to fund the program. And in its April 2024 Budget, the Federal Government announced the National School Food Program, where they committed hundreds of millions that we expect to soon flow here in Ontario.

With this alignment across orders of government and, frankly, across political parties - we have a big opportunity to make a universal school food program a reality in our city.

That’s why I am recommending Executive Committee adopt the recommendations below.

Mayor Olivia Chow recommends that:

1. The Executive Committee receive for information an update from the General Manager, Parks, Forestry, and Recreation, on enhanced safety measures on our ferries, including steps taken by the City of Toronto meet federal safety regulations and standards on Toronto’s ferries.

Toronto’s ferries carry 1.4 million passengers each year. They help people access our beautiful island to enjoy the parks and beaches. Millions of Torontonians have memories of riding the ferries, excited to spend a day on the island, taking in the beautiful views of our waterfront and skyline from the water.

Unfortunately, we have seen a number of incidents that risk shaking people’s faith in our ferries. Over the past few years, the ferries have experienced hard dock incidents, power outages, maintenance delays and other challenges.

The City has taken action over the past year to ensure the safety of passengers and the good working order of our ferry system. These actions include hiring 70 deckhands to staff the ferries, and improving signage, pre-departure safety announcements, lighting and more.

Further, recognizing the need to provide reliable access to the islands, I introduced a motion to explore leasing more ferries. Leasing ferries can help us run frequent and reliable service while we wait for our new ferries to arrive.

Despite these commendable actions, we need to assure the public that our ferry system is safe, reliable and well-managed.

I am requesting City staff provide an update on enhanced safety measures on our public ferries.

The City Manager recommends that:

1. City Council authorize the City Manager and their designate, as appropriate, to negotiate, enter into, and execute a delivery agreement with CreateTO or its managed corporations, Toronto Port Lands Company and Build Toronto, for the project management, design, build, and commissioning on the City's behalf of the City's Shoreside Infrastructure Project for a period of three years, for an amount not to exceed $42,535,680, on terms and conditions acceptable to the City Manager and the General Manager, Parks, Forestry and Recreation and in a form satisfactory to the City Solicitor.

2. City Council direct that funding be provided to CreateTO and its managed corporations, Toronto Port Lands Company and Build Toronto, for the delivery of the project management, design, construction and commissioning on the City's behalf of the City's Shoreside Infrastructure Project from the Parks, Forestry and Recreation Capital Budget and Plan, to a maximum of $42,535,680.

3. City Council authorize the public release of Confidential Attachment 1 to the report (September 17, 2024) from the City Manager once the purchase transactions related to the Shoreside Infrastructure Project have been completed.

At its meeting on July 24, 2024, City Council approved the award of a contract to construct and deliver two new fully electric ferry vessels for operations to and from Toronto Island. This report in response to Council's request outlines the work plan to install shoreside infrastructure at Jack Layton Ferry Terminal ("Shoreside Infrastructure Project") to enable operation of new electric ferries, beginning with the vessels scheduled to arrive in Q4 2026 and Q2 2027 and including other electric replacement vessels to be added to the City's ferry fleet. No capital work is required at the Toronto Islands to enable operation of electric ferries. The work plan presents the tasks and associated timelines required to complete the shoreside infrastructure including the design, permits and approvals, procurement and construction phases.

The report also presents the roles and responsibilities within City divisions, CreateTO and Toronto Hydro to effectively advance the project and ensure oversight regarding project budget, timelines, quality control and integration with parallel projects and with ferry operations.

The shoreside infrastructure is scheduled to be installed by Q3 2026 in advance of the delivery of the first new ferry, the passenger and vehicle vessel, in Q4 (November) 2026 and the new passenger vessel in Q2 (April) 2027. The upgrades to Jack Layton Ferry Terminal will include charging and electrical infrastructure and modifications to the ferry berths to support the new ferries.

This report provides the work plan for the infrastructure associated with forthcoming electric ferries. The estimated capital and related costs, such as project management, to implement shoreside infrastructure is $41,800,000 net of all applicable taxes and charges ($42,535,680 net of Harmonized Sales Tax Recoveries) and is included in the 2024 Capital Budget and 2025-2033 Capital Plan for Parks, Forestry and Recreation. This will be funded through a combination of Debt and Development Charges. City Council approved the funding to support this component of the project through a budget adjustment at the July 24, 2024 meeting through the Capital Variance Report for the Four Months Ended April 30, 2024. This funding will be provided to CreateTO and its affiliate corporations, Toronto Port Lands Company and Build Toronto, to deliver the project.

The estimated cost to implement shoreside infrastructure excludes the incremental costs to be incurred by Toronto Hydro as a part of electrical connection work within the right-of-way that will be recoverable from the City for this project. Toronto Hydro is currently in the process of developing the scope and costing for this work and once that work is completed, those costs will be brought forward for approval. Any future financial implications resulting from electrical connection work within the right-of-way and other additional cost implications would be addressed through future budget processes, as needed.

Contract administration and design costs for the shoreside infrastructure are funded through the separate project budget for Ferry Fleet Replacement Project included in Parks, Forestry and Recreation's approved 2024 Capital Budget and 2025-2033 Capital Plan. The value of Purchase Order Number 6044203 with Concept Naval Experts Maritimes Inc. is $9,346,221 net of all applicable taxes and charges ($9,510,715 net of Harmonized Sales Tax recoveries), including both the Shoreside Infrastructure and vessel construction and delivery.

The Chief Financial Officer and Treasurer has reviewed this report and agrees with the information as presented in the Financial Impact Section.

The Chief Financial Officer and Treasurer recommends that:  

1.  City Council approve the following changes to the Vacant Home Tax program and timeline, effective for the 2024 Taxation Year unless specified otherwise, and amend City of Toronto Municipal Code Chapter 778, Taxation, Vacant Home Tax, accordingly:

a.  extend the declaration due date to the last business day of April of the year following the Taxation Year in respect of which the declaration is made;

b.  change the deadline for the issuance of the Notice of Tax to June 1. Should June 1 fall on a weekend, the bill will be issued the first business day following June 1;

c.  change the payment due dates to the 15th of September, October, and November, from the 15th of May, June, and July, or such other date as may be indicated on a notice of assessment;

d.  delegate authority to the Chief Financial Officer and Treasurer to alter the declaration due date, date of Notice of Tax issuance, payment due dates and Notice of Complaint deadline, if required; and subsequently report to Council, in consultation with the City Solicitor, as soon as practical with a bill to amend Chapter 778;

e.  add a new exemption for Secondary Residence for Medical Reasons;

f.  change the requirement for the exemption occupancy for full-time employment from “the Vacant Unit is required for occupation for employment purposes for an aggregate of at least six months in the Taxation Year, by its Owner who has a Principal Residence outside of the Greater Toronto Area” to:

“The Vacant Unit is required for residential purposes by the Owner or their spouse and the following conditions have been met:

(a) Owner or their spouse was employed full-time during the taxation year and the nature of the employment required their physical presence in Toronto;

(b) the employment term(s) was an aggregate of at least six months during the taxation year; and

(c) the unit occupant (owner or their spouse) has a Principal Residence outside of the Greater Toronto Area.”;

g.  change the definition of Self-Contained Unit from “a dwelling unit which includes a dedicated washroom and kitchen” to “a dwelling unit that is classified as a residential unit by the Municipal Property Assessment Corporation, which includes a dedicated washroom and kitchen even if in disrepair”;

h.  remove section 778-7.2. Demand for information subsection (A)(3);

i.  change section 778-7.2 Demand for information subsection (A)(4) to “Income tax notices of assessment of any Occupant and Owner”; and

j. change the definition of Appellate Authority from the City’s Controller to the City’s Deputy Treasurer. 

2.  City Council amend City of Toronto Municipal Code Chapter 441, Fees And Charges, Appendix C, Schedule 5, Revenue Services, effective January 1, 2025, to suspend the issuance of the user fee for failing to provide a Declaration of Occupancy Status by the declaration due date.

In 2021, City Council approved the Vacant Home Tax (VHT) as a policy tool to help address the housing crisis that exists in Toronto. The primary objective of the VHT is to improve housing availability by reducing the number of residential properties that would otherwise be left vacant. The VHT program creates a disincentive for property owners to leave residential properties vacant and encourages them to bring these homes into the active rental or ownership housing market. Where property owners choose to keep a property vacant, revenues collected from the program are invested in initiatives that increase or preserve housing supply, such as the City’s Multi-Unit Residential Acquisition (MURA) Program.

While the VHT program is still relatively new in Toronto, evidence from other jurisdictions has shown that it is an effective policy tool to increase housing supply. As seen in Vancouver, their equivalent policy tool to the VHT has directly resulted in an increase in housing stock in the rental market.

While the VHT program is an important policy tool to support housing supply in the City, the 2023 declaration process that culminated last April was incredibly challenging for residents who received a Vacant Home Tax charge for a property they continued to reside in, as well as Members of Council, their teams and City staff that fielded countless calls from distressed residents. During a report to Council in April 2024, staff acknowledged the challenging 2023 VHT declaration process and immediately identified actions to address those challenges. Staff committed to undertaking a full review of the program and reporting back with a completely redesigned VHT process effective for the 2024 taxation year.

Since then, Revenue Services, in collaboration with Strategic Public & Employee Communications, Technology Services, Customer Experience (311), Legal Services, Office of the Chief Information Security Officer (CISO) and Office of the Chief Financial Officer & Treasurer have completed a full review and redesign of the program, focusing on improvements to the following four key areas, all with a customer centred approach:

1.    Process and timelines,

2.    Ease of declaration,

3.    Communications strategy, and

4.    Technology and customer interface.

Together, these improvements aim to make the declaration process as simple and accessible as possible based on feedback from discussions and consultations with various target audiences.

The recommended changes outlined in this report will ensure that homeowners are able to declare their occupancy status in a format that works best for them, whether online, in-person or over the phone, over an extended period of time with access to a dedicated customer care team should additional support be needed. The revised program will ensure a smoother and more efficient experience for Torontonians who, through annual declarations, are a key part of helping the City address its current housing crisis. These changes will also ensure that no homeowner will receive any billing related to VHT, unless they are specifically determined as vacant in accordance with the VHT program by-law.

Investments in Housing

The VHT is a policy tool specifically designed to increase the supply of housing in the City by disincentivizing keeping homes vacant. When a home remains vacant, any VHT revenue collected is directed towards initiatives that increase or preserve housing supply.

Following the second year of implementation of the VHT program, it is estimated that the current vacancy rate in the City is approximately 1% - 1.2%. As the program has its desired impact of reducing the number of vacant homes, there will be a corresponding decrease in VHT revenues collected. The program currently generates approximately $55 million annually. These funds are not used to offset general budget pressures or balance the City’s budget but rather are reinvested specifically into housing initiatives. After offsetting program administration costs, funds have been used to support capital initiatives within the Housing Secretariat and Toronto Community Housing Corporation, with a further allocation towards the Multi-Unit Residential Acquisition (MURA) program that enables the purchase of at-risk private market rental housing to secure the homes as permanently affordable non-profit housing.

To date, it is estimated that the VHT program has collected total revenues of $107.2 million ($56.5 million for the 2022 taxation year and $50.6 million for the 2023 taxation year). Actual revenues generated by VHT program will not be finalized until all Notices of Complaint and audits are complete for these taxation years.

To further encourage a reduction in vacancies and support adequate housing supply, City Council has approved a rate increase to the VHT from 1% of a residential property’s current value assessment (CVA) to 3%, effective for the 2024 taxation year. As a result, the City anticipates a decrease in the current vacancy rate with preliminary estimates for annual revenues of approximately $105 million in 2025. A refined estimate will be considered as part of the 2025 Budget process based on market trends and response to the program. Staff anticipate this to be diminishing revenue, with an expected decline each year as more homes are actively occupied.

Program Administration

This report includes recommendations on a redesign of the VHT program that includes a series of program enhancement with an overall financial impact estimated at approximately $5.8 million annually associated with administering the program. This includes areas of staffing for a dedicated customer care team available through 311, totalling an estimated $1.1 million annually. The enhanced communication strategy including a more robust print and online advertising campaign, additional mail notices, and print and postage costs for tax bills inserts is expected to have an annual cost of approximately $1.6 million. Table 1 below provides details on proposed additional impacts for the 2024 VHT Taxation Year.

Table 1: Comparison of 2023 and 2024 VHT Program Administration Budgets

Program administration costs will continue to be fully offset through VHT revenue collected with no impact on the City’s property tax base.

Waiving the Declaration Late Fee

For the 2023 taxation year, City Council waived the user fee for failing to declare occupancy status by the due date (Item CC17.1). This fee had previously been implemented as of January 1, 2024, at an amount of $21.24 for each property owner with the intent to apply funds received to administrative costs. Staff recommend that the user fee continue to be waived while the success of program redesign initiatives are evaluated. Staff will reassess the success of the program through evaluation of the ease of declaration and the declaration rate to make appropriate recommendations on the further extension of this user fee waiver or the reinstatement of the inflation-adjusted user fee for subsequent taxation years.

Given the recommended program design changes in this report, specifically including the extended deadline to April 30, increased ease of declaration, and enhanced communication strategy, staff expect the number of property owners to submit a late declaration to be significantly minimized in future years.         

The Deputy City Manager, Development and Growth recommends that:  

1. City Council receive this report for information.

PortsToronto must meet a federal regulatory requirement to have Runway Safety End Areas (RESA) at Billy Bishop Toronto City Airport (BBTCA) by July 12, 2027. RESAs are level ground past the ends of a runway created to mitigate the impact when an airplane over or under shoots either end of a runway. Airports in Canada are now required to have a minimum of 150 meters of safety length beyond runway ends.

The City is hosting a public meeting on this issue on September 24, 2024. A supplementary report will be provided to the Executive Committee after the public meeting. This supplementary report will provide an overview of the federal requirement and the RESA options at BBTCA. It will also provide City staff comments on PortsToronto's RESA options and requests, and the decisions and approvals that may be required as a result of these requests. Further, City staff will summarize public consultation on this matter.

Financial implications will be outlined in the forthcoming supplementary report. There are no financial impacts arising from the recommendations contained in this report.

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

The Deputy City Manager, Development and Growth Services recommends that:  

1. City Council authorize the Deputy City Manager, Development and Growth Services, working with the Director, Waterfront Secretariat, to consider the detailed RESA designs provided by PortsToronto and based on those designs, to negotiate and execute an amendment to the Tripartite Agreement to permit a landmass extension that meets the RESA compliance requirements consistent with RESA Option 1 and as substantially outlined in Attachment 2, in a form satisfactory to the City Solicitor.

2. City Council direct that the execution of the amendment to the Tripartite Agreement authorized by Recommendation 1 be subject to PortsToronto fulfilling the following conditions, to the satisfaction of the Deputy City Manager, Development and Growth Services, working with the Director, Waterfront Secretariat and the City Solicitor:

a. completing the RESA Environmental Assessment;

b. engaging Toronto and Region Conservation Authority to leverage their shoreline expertise throughout detailed design and implementation and present detailed RESA designs to Aquatic Habitat Toronto for input and advice on habitat compensations strategies that advance the objectives of the Toronto Waterfront Aquatic Habitat Restoration Strategy;

c. developing a RESA construction management plan that minimizes community impacts including overnight work; and

d. developing a traffic management plan related to construction activities.

3. City Council direct the City Manager and/or delegate(s) to participate in discussions with PortsToronto and Transport Canada on a process to update the 2018 airport master plan in advance of the 2033 expiry of the Tripartite Agreement, and report to Executive Committee in 2025 with a framework to guide this process, including funding requirements, which takes into consideration the City's overall vision for waterfront revitalization, economic development and the City's housing targets.

PortsToronto has a federal regulatory requirement to implement Runway End Safety Areas (RESA) at the Billy Bishop Toronto City Airport (BBTCA) by July 12, 2027 (See Attachment 1). The potential for RESA regulations was first raised by Transport Canada in 2010, with regulations ultimately finalized and published in the Canada Gazette in December 2021. The potential RESA options at BBTCA were also highlighted in PortsToronto's 2018 Airport Master Plan.

The purpose of this report is to provide an overview of the federal RESA requirement and the proposed runway end options at BBTCA. It also provides City staff comments on the runway end options and PortsToronto's requests, and the decisions and approvals that are recommended as a result of these requests. Further, this report provides a summary of the City-led public engagement on this matter. Staff advice is focused on RESA compliance, per the federal requirement described in Attachment 1.

BBTCA is operated by the Toronto Port Authority (operating as PortsToronto) and is on land that is approximately 78% owned by PortsToronto, 20% by the City of Toronto and 2% by the Government of Canada, represented by the Minister of Transport. The operations at BBTCA are governed under a Tripartite Agreement that was signed by the three landowners in 1983, and which has a current end date in 2033. The agreement is unique because, in addition to setting out conventional lease terms, it includes numerous conditions and prohibitions respecting airport operations and describes certain requirements and responsibilities of the signatories, including a prohibition of any actions that would "…interfere with the safe use and operation of the island airport." The airport has and continues to operate safely, as is required under federal Canadian Aviation Regulations.

PortsToronto has requested that Transport Canada and the City amend the Tripartite Agreement by providing permission to extend the available landmass, which is currently prohibited.

As a result of due diligence and public engagement, City staff are in a position to recommend PortsToronto's "Option 1" as the most efficient option for meeting RESA compliance by the federal regulatory deadline. Accordingly, this report recommends that City Council authorize a limited Tripartite Agreement amendment to permit the essential land mass expansion required for Option 1. This would be a limited, technical amendment to permit limited lakefill works to achieve RESA compliance most quickly.

City Council's adoption of the recommendations in this report would indicate the City's support for the completion of Option 1 and provide clarity to PortsToronto's Board of Directors on the extent of City approvals that will be provided to enable RESA compliance.

Providing permission for essential land mass expansion (and thus limited lakefill works) will focus the project as a compliance effort and encourage PortsToronto to ensure delivery of an essential and time-sensitive public safety upgrade for this important transportation asset.

Providing permission for the lakefill required for RESA Option 1 represents a balanced approach that preserves the airport's existing commercial operations (thus maintaining its contribution to the city's economy) while having the lowest possible incremental impacts to livability on Toronto's waterfront. City Council approval of the lakefill required for Option 1 would in effect be a continuation of 'status quo' from a waterfront revitalization perspective.

Among the RESA options under study by PortsToronto, Option 1 represents a focused scope of work which is:

- The lowest risk scenario to achieving the mandated federal safety requirements by the July 12, 2027 federal deadline;

- Has a considerably lower project cost;

- Avoids the need for additional planning approvals, such as an Official Plan Amendment, which would add additional time; and,

- Provides the shortest construction timeline and smallest scope of lakefill, resulting in minimum disruption over two and a half years to residents and recreational activities within the surrounding area.

PortsToronto has also requested an extension to the lease to provide for a longer window for RESA financing, as well as greater operational and planning certainty; the request is for the agreement to run for 48 years from 2025, meaning an extension of term from 2033 to 2073 (an extra 40 years). Further, PortsToronto has proposed related/ancillary airport infrastructure and safety upgrades that could be enabled by expanded lakefill scope. Due to RESA compliance timelines, PortsToronto has requested City Council direction on their desired amendments to the Tripartite Agreement by November 29, 2024, and for a new or amended Tripartite Agreement, to be signed by the parties, by January 31, 2025. 

City staff are not recommending changes to the term of the Tripartite Agreement in this report, as this issue is also best considered as a part of an airport master planning exercise and following robust public consultation.

City staff note that the ancillary works that are proposed in more complex RESA options, as well as other items, could be implemented later, in an incremental fashion, and are best considered in the context of an airport master planning exercise. This would allow for a holistic study while avoiding building these items into a considerably larger size RESA project that has additional cost, risk and complexity associated with non-essential (to the RESA project) lakefill works.

City staff are also not making a recommendation that would result in a material and immediate impact to airport operations, such as not taking a position on RESA compliance, reducing declared runway distances or implementing an Engineered Material Arresting System (EMAS) option. These options represent significant changes and would have wide ranging implications on matters which have not been studied since the last comprehensive airport proposal in 2014. Rather the study of broader issues is better considered as a part of a fulsome public conversation in the context of an airport master planning exercise.

PortsToronto and some stakeholders have raised the need for a broader public discussion on the future of the airport. With the focus on RESA compliance, PortsToronto, Transport Canada and the City have not fully explored how such a public discussion could occur. Further, BBTCA's airport master plan was last updated in 2018 with best practices dictating an update every ten years. PortsToronto has previously committed to updating its master plan every five years. Accordingly, this report recommends that staff be authorized to participate in discussions with PortsToronto and Transport Canada on the need for an update to the airport's 2018 master plan and be directed to report to Executive Committee in 2025 on the framework, including funding requirements, required for such a process. It is important that the parties work together to develop a process to guide this larger discussion and agree on its timelines. An effective process would seek to promote robust engagement, allow for thoughtful consideration of the issues involved, and provide transparency and accountability in decision making.

The recommendations outlined in this report would allow for RESA implementation by the 2027 deadline, while separating this safety objective from the much larger discussion about the airport in the context of broader City goals. City staff are recommending this approach to provide the time and space for robust and thoughtful consideration about an update to the airport master plan and the possible comprehensive review and renewal of the Tripartite Agreement. 

Previous City Council directions and City policies acknowledge the complexities of a downtown airport including the land-use compatibility challenges in the Bathurst Quay neighbourhood, the City's broader objectives related to waterfront revitalization, including building more housing, and the regional economic importance of this unique transportation asset.

In 2000, the vision document Our Toronto Waterfront: Gateway to a New Canada, set out a new direction for the waterfront to become a "model to the world of how economic development, environmental protection and cultural and recreational growth can complement each other… [creating] a place to play, live and work." While the vision has evolved, including through the core principles of the Central Waterfront Secondary Plan and the renewed priorities of the Next Phase of Waterfront Revitalization, what is unchanged is the idea that waterfront revitalization offers a unique opportunity to address complex, often intersecting challenges to create a prosperous, vibrant and livable city. This includes the need to balance public policy objectives as we continue to recover, renew and enhance Toronto's global competitiveness. A downtown airport is an asset that can support Toronto and the region’s economy by contributing to key sectors such as film and culture, innovation & technology, life sciences and cleantech, while enhancing the visitor economy.

As detailed further below City Council authority for RESA Option 1 and direction for staff to work with Transport Canada and PortsToronto on an updated airport master plan would achieve the following public policy objectives:

- Encourage compliance with relevant City of Toronto Official Plan lakefill policies, which limit lakefill to meeting the needs of "essential public works."

- Reinforce the core principles of the Central Waterfront Secondary Plan and the principles which guide the Next Phase of Waterfront Revitalization.

- Create the space for a longer-term discussion to occur about the airport master planning process and the possible comprehensive review and renewal of the Tripartite Agreement.

Next Steps for RESA

Following City Council decision making, the next steps on RESA will largely be determined by PortsToronto, which will complete its Environmental Assessment and identify a preferred option.

Should PortsToronto select their current Option 1 as a compliance-focused RESA design that is limited to essential lakefill works, the RESA project could proceed in short order and maintain the critical path required for compliance by 2027. In this scenario, PortsToronto may refine their approach following City Council approvals since the Environmental Assessment is ongoing.

Should PortsToronto pursue a RESA option that is substantially scoped beyond Option 1 and the essential lakefill works required to achieve RESA compliance, other City processes such as an Official Plan Amendment would be required. An Official Plan Amendment for example would require submission of an application with a number of information items (plans, reports and studies) that may be required to assess proposals and the completeness of applications. Community consultation meetings are requirements in the Official Plan Amendment process. Staff evaluate requests for site specific Official Plan Amendments through a rigorous process that includes reports to committee and Council, public consultation, and an appeal period. Additional processes and approvals would add to project timelines and could have a negative impact on achieving RESA compliance by the federal deadline.

Next Steps for Airport Master Planning

Subject to City Council approval, City staff will enter further discussions with PortsToronto and Transport Canada on an airport master planning process that would set out a clear and transparent framework to guide an upcoming public process. City staff will report back on these matters in 2025.

Costs related to construction of Runway End Safety Areas (RESA) will be borne exclusively by PortsToronto as airport owner and operator.

The City Planning division has advanced the City's role as outlined in this report within existing approved budgets. This included securing $125,000 in specialized aviation consulting services and $50,000 in public and Indigenous engagement support in 2023 and 2024. These services were required on an urgent and specialized basis to provide staff with technical inputs to respond to an evolving PortsToronto workplan related to RESA; they were procured on a non-competitive basis under existing delegated authorities.

Future year requirements will be addressed in the 2025 report to Executive Committee and in future year budget submissions.

The Chief Financial Officer and Treasurer has reviewed this report and agrees with the information as presented in the Financial Impact Section.

The Board of Directors of Casa Loma Corporation recommends that:

1. City Council treat that portion of the City Council meeting at which this Report is considered as the Annual General Meeting of the Shareholder for Casa Loma Corporation, and:

a. receive the Board-approved "Casa Loma Corporation 2023 Annual Report", and the "Casa Loma Corporation 2023 Audited Financial Statements", forming Attachments 1 and 2 to this Report, respectively; and

b. appoint Welch LLP as the Auditor of Casa Loma Corporation for fiscal year 2024.

 The Board of Directors of Casa Loma Corporation (“CLC”) recommend to City Council actions necessary to comply with the requirements of the Business Corporations Act, Ontario for holding the Annual General Meeting of the Shareholder of CLC, including receipt of its Annual Report and Audited Financial Statements (“Statements”) for 2023 and appointment of the auditor for 2024.

CLC's 2023 Statements were audited by Welch LLP and received an opinion stating that the financial statements present fairly, in all material respects, the financial position of the CLC as of December 31, 2023, and the results of operations and its cash flows for the year then ended in accordance with Canadian public sector accounting standards.

There are no financial implications to the City resulting from the approval of recommendations in this report.

Casa Loma Corporation's 2023 Financial Statements reflect a net operating surplus of $2.2 million, an increase of $0.4 million from 2022. Total assets increased to $6.1 million, up $0.7 million from the previous year, while total liabilities decreased to $1.2 million, down $0.3 million.  The accumulated surplus at year-end stands at $5.8 million, a $0.9 million increase from 2022. The increase in surplus is attributed to a rise in unrestricted funds to $4.0 million from $3.0 million in 2022. 

In 2023, Casa Loma Corporation distributed $1.2 million towards the City of Toronto’s Capital Reserve Fund, which was paid out in 2024. The reserve balance continues to support the City’s Economic Development and Culture initiatives for capital maintenance and repair projects at Casa Loma.

Following the economic recovery from COVID, the organization received revenues for each month in 2023, without any concerns of bad debts, which resulted in an increase in the surplus during the year. 

Further information on Casa Loma Corporation's financial position and results can be found in Attachment 1.

The Chief Procurement Officer recommends that:

1. The Executive Committee receive this report for information.

This report provides an overview of the activities of the Fair Wage Office for 2023. Under Municipal Code, Chapter 67, Fair Wage, the Manager, Fair Wage Office is responsible for preparing an annual report containing the names of Contractors and Sub-Contractors that have violated the Fair Wage Policy or settled Labour Trades Contractual Obligations in the Construction Industry Policy grievances, and any other necessary information. The annual report is transmitted to the appropriate standing committee by the Chief Procurement Officer.

There is no financial impact resulting from the adoption of the recommendation in this report.

While not a direct financial impact to the City, the overview of Fair Wage Office activities from 2020 to 2023 and corresponding value of violations/settlements, value of Fair Wage Policy violations (back wages and benefits owed to workers), value of Fair Wage Policy administrative fees collected and value of Labour Trade Contractual Obligations Policy settlements is detailed in Table 1 of this report.

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

The City Manager recommends that:  

1. City Council approve the records retention policy for the Cecil Street Community Centre Board of Management set out in Appendix A to the report (June 25, 2024) from the Executive Director, Cecil Street Community Centre, and amend Toronto Municipal Code Chapter 219, Records, Corporate (Local Boards) to incorporate the records retention policy for Cecil Street Community Centre Board of Management as a new Article VIII.

2. City Council further amend Toronto Municipal Code Chapter 219, Records, Corporate (Local Boards), to add Schedule J, Article VIII, Records Retention Schedule (Board of Management of Cecil Street Community Centre), as set out in Appendix B to the report (June 25, 2024) from the Executive Director, Cecil Street Community Centre.

Under section 201 of the City of Toronto Act, 2006, a record of the City or of its Local Boards, other than a copy of the original record, may only be destroyed if the retention period for the record has expired, or except as otherwise provided.

The City Clerk's Office assists its city or agency clients with storage, retention, and disposition in order to meet their record keeping obligations under the City of Toronto Act, 2006 and the Toronto Municipal Code, Chapter 217, Records, Corporate (City), and may also provide limited record keeping support to some Local Boards, including advice and recommendations on the development of records retention schedules.

Cecil Community Centre engaged staff at the City Clerk's Office Corporate Information Management Services (CIMS) unit for consultative advice to aid in the development and review of their records retention schedules.

This report recommends that Council formally approve the inclusion of a records retention policy and schedule for the records of the Cecil Community Centre, by adding it to the other records retention schedules for the various Local Boards of the City contained in Municipal Code Chapter 219, Records, Corporate (Local Boards) as approved by the Board of Management (the "Board") and as requested in the Executive Director's Report in Attachment 1 to this report.

There is no financial impact from the adoption of the recommendations in this report.

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

The Toronto Accessibility Advisory Committee recommends that the Executive Committee recommend that:

1.  City Council direct the Chief Procurement Officer to:

a. include businesses owned by people with disabilities (PWD) specifically in the mandate of the Social Procurement Program and Policy;

b. develop certification and procurement policies that will make it easier for businesses owned by people with disabilities;

c. track the number of business owned by people with disabilities participating in the social procurement program;

d. track the number of contracts awarded to businesses owned by people with disabilities participating in the Social Procurement Program; and

e. investigate and report to the Executive Committee on the feasibility of collecting disaggregated business ownership data for City suppliers, including businesses owned by people with disabilities, to improve tracking and reporting.

At its meeting on September 6, 2024, the Toronto Accessibility Advisory Committee considered Item DI8.5 and made recommendations to the Executive Committee.

Summary from the Toronto Accessibility Advisory Committee:

The Purchasing and Materials Management Division will present on the City’s Social Procurement Program and proposed program and policy improvements for the Committee’s feedback in advance of a report to Executive Committee on December 10, 2024.

The Service Excellence Committee recommends that:

1. The Executive Committee request the General Manager, Toronto Water to consider developing additional information and communications products regarding sewer back-ups, including a checklist to assist citizens, before, during, and after, and to make these materials available through various channels.

At its meeting on July 19, 2024, the Service Excellence Committee considered Item SE4.2 and made recommendations to the Executive Committee.

Summary from the report (July 5, 2024) from the General Manager, Toronto Water:

At its meeting on April 9, 2024, the Executive Committee requested that Infrastructure Services divisions provide updates regarding service standards and opportunities for improving responses and response times to service requests.

In response to this request, Toronto Water has prepared a brief presentation that highlights the Division's strategic customer service objectives, Key Performance Indicators used to monitor progress towards these goals and provides a discussion of Toronto Water's most frequently requested service, "Sewer Line Block Service," as well as work conducted to improve the response service standard.

The Chief Financial Officer and Treasurer recommends that:

1.  City Council approve in-year budget adjustments to the 2024-2033 Approved Capital Budget and Plan, as well as reallocations of funding sources for prior Approved Capital Budgets, as detailed in Appendix 3.

The purpose of this report is to provide City Council with the City of Toronto capital spending for the six-month period ended June 30, 2024, as well as the projected 2024 year-end expenditures. Furthermore, this report seeks Council's approval for in-year budget adjustments to previous approved Capital Budget and Plan as outlined in Appendix 3 of this report.

Table 1 below summarizes the City's 2024 actual capital expenditures compared with the 2024 Approved Capital Budget for the six-month period ended June 30, 2024, and the projected expenditures by year-end, December 31, 2024.

Table 1: Capital Variance Summary

The City's actual capital spending through the first six months of 2024 is $1.681 billion or 26.6% of the 2024 Approved Capital Budget. This is slightly better than prior year’s experience. The projected year-end spending rate is 81.8% based on estimates provided by City Programs and Agencies, which is largely in line with last year’s projection at the same reporting period. Capital spending will continue to be reviewed with updates provided in future variance reports that will benefit from actual experience in the months where capital expenditures are more intense. As more actual delivery materialized over the course of the year, the Programs and Agencies will provide updated spending projections.

The capital expenditures in the first six months of 2024 totalled $1.681 billion and year-end expenditures are anticipated to increase to $5.165 billion or 81.8% of the total 2024 Adjusted Capital budget.

Appendix 1 summarizes the Year-To-Date (YTD) spending in the first six months of 2024 and the projected year-end spending rate by City Programs and Agencies.

Appendix 3 includes recommended in-year capital budget adjustments to the 10-Year Capital Budget and Plan. The adjustments include a net addition funding of $120.7 million, which mainly consists of converting $105.0 million from the previous approved future year debt estimate included in the approved 10-Year Capital Plan to future year commitment, and the remaining net additional funding of $15.7 million is supported by the Province. On the other hand, the adjustments encompass a total reallocation and transfer of $73.8 million between projects, and a net acceleration of $54.3 million which is offset by the deferral of $47.1 million. In addition, the budget adjustment also includes a reallocation of funding source totalling $33.2 million for prior Approved Capital Budgets to align with the year-end funding requirements.

Appendix 5 details a list of projects and subprojects scheduled for closure. The majority of projects to be closed have been identified as part of a capital cleanup process. All projects have been reviewed and approved by divisions and agencies for closure.

The Chief Financial Officer and Treasurer recommends that:

1. City Council approve the budget adjustments and any associated complement changes detailed in Appendix D to amend the 2024 Approved Operating Budget, with no impact on the Net Operating Budget of the City.

The purpose of this report is to provide City Council with the Operating Variance for the six months ended June 30, 2024, as well as projections to the year-end, December 31, 2024. This report also requests City Council's approval for amendments to the 2024 Approved Operating Budget that have no impact on the City's Net Budget.

The following table summarizes the year-to-date financial position and year-end projections for the City's Tax-Supported Operations as of June 30, 2024.

Table 1: Tax-Supported Operating Variance Summary

As detailed in Table 1 above, for the six-month period, Tax-Supported Operations experienced a favourable net variance of $246.7 million. A favourable net variance is projected at year-end of $138.3 million. These figures are adjusted for Toronto Building, City Planning, which have surplus allocated to reserves by legislation or reserve draws if a deficit is experienced. It is important to note that the financial information presented is as of June 30, which is a snapshot in time and the year-end projection is based on current and expected future activities as known and anticipated as at June 30, 2024.

Of the $138.3 million year-end net favourable variance, $117.0 million or 84.6% of the overall variance can be attributed to net favourable variances arising from the following three key drivers:

-Toronto Shelter and Support Services whose expenditures are projected to be $34.6 million lower than budgeted primarily due to reduced costs for the temporary hotel program, driven by negotiated longer-term contracts;

- Toronto Transit Commission (Conventional Service) that is projecting a $54.1 million positive net variance that is largely driven by increased passenger revenue from more leisure trips; and

- Interest/Investment Income which are expected to be $28.3 million greater than budgeted earning estimates.

- The remaining $21.3 million reflects the consolidated favourable variance projection across all other Divisions and Agencies.

The funding provided by the New Deal struck with the Province of Ontario makes significant contributions towards transit and shelter related services. To date, $300.0 million has been received for Subway and Transit Safety, Recovery and Sustainable Operations, $200.0 million for Shelters and Homelessness, and $6.9 million related to operating costs of the Gardner Expressway and Don Valley Parkway, which are all reflected in the City’s year-to-date results.

The City continues to advocate to the Federal government for ongoing funding for the refugee claimants in the City’s shelter system. Included in the 2024 Operating Budget, Toronto Shelter and Support Services has a budgeted recovery of $250 million in the Interim Housing Assistance Program (IHAP) funding. Projection to year-end indicates that the actual costs for refugee claimants in 2024 will increase above $250 million in 2024 due to ongoing refugee arrivals. The City has submitted claims for expenses incurred through June 30, 2024 and will submit reimbursement claims for the final yearend actuals costs. As of today, Immigration, Refugees and Citizenship Canada (IRCC) has provided the City with $47.6 million in reimbursements for expenses incurred in 2024 Q1.

Rate-Supported Programs:

Rate-Supported Programs reported a favourable year-to-date net variance of $16.6 million. At year-end, Rate-Supported Programs are projecting a favourable variance of $38.1 million.         

Table 2: Rate-Supported Operating Variance Summary

While the favourable year-to-date variance was driven by all three programs, Toronto Parking Authority accounts for over fifty percent of the variance. The year-end projection of $41.1 million is the net revenue amount from the Toronto Parking Authority. Of this amount, a dividend of $30.8 million would be paid to the City based on the new Income Share Agreement, adopted by City Council on June 26, 2024 (https://secure.toronto.ca/council/agenda-item.do?item=2024.EX15.9), which changed the dividend contribution rate from 85 percent to 75 percent.

The year-end projections forecast all programs seeing a favourable net variance with Toronto Water accounting for over fifty percent of the variance.

Rate-Supported Programs are funded entirely by user fees that are used to pay for the services provided and the infrastructure to deliver them. Solid Waste Management Services and Toronto Water’s respective year-end surpluses, if any, must be transferred to the Waste Management Reserve Fund and the Wastewater and Water Stabilization Reserves respectively, to finance capital investments and ongoing capital repairs and maintenance.

When adjusted for Toronto Building and City Planning, for the six months ended June 30, 2024, the City experienced a favourable net variance in Tax-Supported programs of $246.7 million and is projecting a favourable net variance of $138.3 million for December 31, 2024.

Appendices

Appendices A, B and C provide a detailed summary of Net Expenditures, Gross Expenditures, Revenue for the six-month results and projections to year-end by City Program and Agency, respectively. Appendix D details the recommended in-year budget adjustments that are financially neutral to the 2024 Approved Operating Budget. Appendix E and F outline Donations and Sponsorship funds respectively, that have been provided to the City, and Appendix G provides a dashboard with information for each City Program and Agency.

The Chief Financial Officer and Treasurer recommends that:

1. Executive Committee receive the Deferred Revenue Report as at June 30, 2024 for information.

This report provides an update of the deferred revenue balances as at June 30, 2024, and earned revenue for the six months ended June 30, 2024, which is included in the City of Toronto's (City) Statement of Operations and Accumulated Surplus.

The City receives monies from external parties and is obligated to set these monies aside for specific purposes outlined in Provincial legislation or third-party agreements. When these monies are received, they are recognized on the City's Statement of Financial Position as a liability called deferred revenue. The deferred revenue amounts are recognized as earned revenue only when the committed investment is completed, and expenditures are recognized as tangible capital assets in the Statement of Financial Position or as operating expenses in the Statement of Operations and Accumulated Surplus.

As at June 30, 2024, the City recorded $7,241.0 million in deferred revenues, as compared to $6,301.7 million recorded at December 31, 2023. The increase of $939.3 million results from the City receiving more monies ($994.1 million) than amounts recognized as revenue ($54.8 million) in the period.

There are no financial implications arising from the adoption of the recommendation in this report.

Deferred revenue, as reflected in the Statement of Financial Position, is recorded as a liability for which the City must fulfill a future obligation, either through investment or the delivery of goods or services before it is recognized as earned revenue. Earned revenue, on the Statement of Operations and Accumulated Surplus, is recognized when the committed investment is completed, or the intended purpose related to the monies has been executed. As an example, development charges are recorded as deferred revenues when the cash is first received and earned revenue as the growth-related infrastructure investments are made. The full amount of the development charge is recognized as earned revenue when the full investment has been completed and is in service. 

For budget purposes, deferred revenue is budgeted as earned revenue based on budgeted expenditures in a fiscal year. However, since actual expenditures will vary from planned expenditures, the actual amount of deferred revenue recognized as earned revenue can differ based on planned versus actual activity. 

As at June 30, 2024, the City recorded $7,241.0 million in deferred revenues, which includes an increase of $994.1 million from monies received predominantly from water and waste water rate revenue, development and planning act contributions and federal housing accelerator fund, as well as a decrease of $54.8 million from the conversion to earned revenues. The December 31, 2023 deferred revenues balance was $6,301.7 million.

The Chief Financial Officer and Treasurer recommends that:

1. City Council approve the establishment of an obligatory reserve called the New Deal – Building Faster Fund Reserve Fund in City of Toronto Municipal Code Chapter 227, Reserves and Reserve Funds, Appendix C, Schedule 15 – Third Party Agreements Obligatory Reserve Funds. The purpose of this reserve fund is to hold funds provided by the Provincial government under the Toronto-Ontario New Deal Agreement, aimed at supporting the building targets of new rental and affordable housing supply set in the HousingTO 2020-2030 Action Plan in Toronto.

2. City Council approve the establishment of an obligatory reserve called the New Deal – Subway and Transit Operations Reserve Fund in City of Toronto Municipal Code Chapter 227, Reserves and Reserve Funds, Appendix C, Schedule 15 – Third Party Agreements Obligatory Reserve Funds. The purpose of this reserve fund is to hold funds from the Provincial government under the Toronto-Ontario New Deal Agreement to support subway and transit safety, recovery, and sustainable operations.

3. City Council approve the establishment of an obligatory reserve called the New Deal - Gardiner Expressway and Don Valley Parkway Upload Reserve Fund in City of Toronto Municipal Code Chapter 227, Reserves and Reserve Funds, Appendix C, Schedule 15 – Third Party Agreements Obligatory Reserve Funds. The purpose of this reserve fund is to hold funds from the Provincial government under the Toronto-Ontario New Deal Agreement to support the rehabilitation, operations, and maintenance of the Gardiner Expressway and Don Valley Parkway while the due diligence assessment for the upload of these assets to the Province is underway.

4. City Council authorize that the City’s policy concerning the allocation of investment earnings to reserve accounts be amended as follows:

a. delete the paragraph under the section Determination of Quantum of Earnings and replace with: The amount to be assigned to each reserve fund account be the lesser of the (i) 3-month treasury bill rate as estimated at the time of the preparation of the annual operating budget or (ii) 1 percent, credited on November 30th each year based on the account’s average balance.

This report summarizes the activities of the City's Reserves and Reserve Fund balances for the six months ended June 30, 2024, and recommends Council approval to establish three obligatory reserve funds to hold provincial funding contributions from the Ontario-Toronto New Deal Agreement.

Reserves and Reserve Funds established by Toronto City Council (Council) are key to support the financial management and operations of the City of Toronto (City). These funds are set aside to help offset future capital needs, future obligations such as employee expenses, fiscal pressures from ongoing programs and unforeseen costs or to offset revenue shortfalls, in order to minimize annual tax rate fluctuations.

Reserves and Reserve Funds balances as at June 30, 2024 totaled $5,530.0 million, an increase of $238.3 million from December 31, 2023 ($5,291.7 million). This net increase is the result of deliberate contributions for capital investments in housing, transit, capital infrastructure, and vehicle and equipment replacement as authorized by Council. The majority of the City's reserve and reserve fund balances ($5,303.3 million, or 95.9%) are committed to future Council directed activities that include capital and operating expenditures and rate-based activities. Only the remaining balance of $226.7 million, or 4.1% of total reserves and reserve funds is uncommitted and available to respond to various unanticipated costs, stabilize funding sources, including the tax base, or for emergency purposes such as extreme weather events.

Of the $5,303.3 million in committed reserve and reserve funds, there are approximately $15,720.8 million in future commitments and obligations against the existing reserves and discretionary reserve fund balances, which are consistent with Council approved plans over the 2024-2033 capital planning period. These commitments and obligations are nearly 3 times greater than the current reserve and discretionary reserve fund balances, requiring continued reserve contributions to support planned expenditures.

There are no financial implications arising from the adoption of the recommendation in this report.

To ensure prudent financial management and considering uncertain levels of federal and provincial funding support in future years, the City must retain a contingency amount as part of its reserves and reserve funds to be in a position to address both unanticipated costs, while still maintaining a balanced budget. As an example, prudent financial management requires the City to retain a Tax Rate Stabilization Reserve balance as a contingency to address unanticipated and emergency events. The City has committed to maintaining a Tax Rate Stabilization Reserve balance of no less than 2% of annual property tax revenues for this purpose.

Reserve and Reserve Fund balances as at June 30, 2024, totaled $5,530.0 million, an increase of $238.3 million from the December 31, 2023 balance of $5,291.7 million. The net increase is the result of various Council approved contributions for capital investments in housing, transit and capital, and contributions to vehicle and equipment replacement.

As of June 30, 2024, 95.9% of the City’s reserve and reserve fund balances are fully committed to supporting future operating expenses, or other Council-directed commitments, and expenditures in the 10-year capital plan. The remaining 4.1% of the City's reserves and reserve funds are uncommitted and being retained for emergency purposes such as stabilization of various funding sources, including the tax base, or for emergency purposes such as extreme weather events. The uncommitted amount represents 1.3% of the total 2024 approved Operating Budget of $17,119.6 million.

The Chief Financial Officer and Treasurer recommends that:

1. City Council adopt the amended Direct Capital Loan and Loan Guarantee Policies, as set out in Appendices 1 and 2 to this report, replacing any previously existing direct loan, loan and line of credit guarantee policies.

2. City Council direct that:

a. any investigation of a potential request for a new or extended loan request or a loan guarantee by an eligible entity under the amended policies referenced above must include a financial due diligence assessment, to be undertaken by the City Chief Financial Officer and Treasurer;

b. the Chief Financial Officer and Treasurer undertake ongoing financial monitoring of existing loans and loan guarantees; and

c. the above be undertaken in conjunction with capital project assessments or monitoring, as may be deemed appropriate, to be undertaken by the Deputy City Manager of the relevant program areas.

3. City Council direct the City Solicitor to work together with the Chief Financial Officer and Treasurer to develop standard terms and conditions to be included in Loan and Loan Guarantee Agreements.

4. City Council amend the Unanimous Shareholder Declaration for Lakeshore Arena Corporation, as set out in Appendix 3, with such amendments to include the following:

a. Lakeshore Arena Corporation to provide the City with its annual audited financial statements, to be delivered to the Chief Financial Officer and Treasurer within 120 days after the end of each fiscal year;

b. Lakeshore Arena Corporation shall not undertake any additional borrowings without the approval of the City, with the exception of equipment leases as may be required in support of operations;

c. Lakeshore Arena Corporation to make an annual shareholder capital contribution to the City, due by the end of each fiscal year, and based on its prior year audited financial statements, with the contribution equal to 65 percent of net revenues in excess of expenses before amortization and depreciation and after debt principal repayments, to be deposited into the Lakeshore Arena Capital Reserve Fund. This revised formula is intended to replace any previous formulas relating to the return of capital contributions, commencing in in 2025 in relation to the 2024 fiscal year. Together with amounts deposited between 2016 and 2023, the total amount shall be to a limit of $8.1 million;

d. the Chief Financial Officer and Treasurer, upon request from Lakeshore Arena Corporation, may consider temporary adjustments to the contribution rate, on an annual case by case basis, which shall be supported by an explanation and supporting materials, to the satisfaction of the Chief Financial Officer and Treasurer, with such requests limited to two times over any ten-year period; and

e. the Chief Financial Officer and Treasurer will review the contribution percentage in the revised formula every three years to determine whether further adjustments should be recommended to the City.

5. City Council approve the renewal of the line of credit guarantee issued by the City on behalf of Toronto Symphony Orchestra to its lender, in the amount of $5 million, inclusive of all interest payable by Toronto Symphony Orchestra, for a three-year period, commencing on November 1, 2024 and expiring on October 31, 2027.

This report provides information and makes recommendations in relation to the City loans and loan guarantees. Recommendations include adoption of amended Direct Capital Loan and Loan Guarantee Policies (Appendices 1 and 2) which address financial due diligence assessments in support of new loan and loan guarantee requests, and ongoing financial monitoring of active loans and loan guarantees.

The amended policies address eligibility in the same manner as previous policies, with City agencies and corporations eligible for direct capital loans for the purpose of contributing to the financing of a capital project which would create or enhance a municipal capital facility. Entities eligible for loan guarantees continue to be non-profit cultural and community organizations or recreational and sports-based organizations, each of which must have an existing financial relationship with the City.

This report also recommends that investigation of requests for a new or extended loans or loan guarantees from eligible entities must include a financial due diligence assessment, to be undertaken by the Chief Financial Officer and Treasurer, who would also be responsible for ongoing financial monitoring of existing loans and loan guarantees.  

This report also provides regular annual update reporting on an existing portfolio of City direct loans, capital loan and line of credit guarantees. The portfolio of loans included in this report is separate and apart from other internal City loan programs (e.g., Home Ownership Assistance Program, Sustainable Energy Plan Financing Program) which are covered under other City policies.

This report also seeks approval for the renewal of the line of credit guarantee issued by the City on behalf of Toronto Symphony Orchestra to its lender, in the amount of $5 million for a three-year period commencing on November 1, 2024 and expiring on October 31, 2027.

Lastly, this report recommends the adoption of an amended repayment formula for Lakeshore Arena Corporation's Shareholder Capital Contribution, which better aligns with estimated annual cash flows and supports Lakeshore Arena Corporation in continuing to operate and make outstanding debt repayments while making Shareholder Capital Contribution repayments.

As at December 31, 2023, the City had authorized line of credit guarantees amounting to approximately $5.995 million, provided capital loan guarantees for underlying loans of $72.5 million, and had outstanding direct loans of $43.4 million, as identified in this report and as outlined in more detail in Appendix 4.

This report recommends the adoption of amended Direct Loan and Loan Guarantee policies, which would enhance the City's ability to mitigate associated financial risks. While there are no immediate costs to the City of providing either loans or loan guarantees, there are financial risks inherent in both. Both loans and loan guarantees are financial commitments made by the City. Depending on the magnitude, either may have potential impacts on the City's credit rating, and on the City's own borrowing capacity.

For loans, the risk is that of potential non-repayment. For loan guarantees, there is also a risk of non-payment, whereby if a supported entity were to default on its debt obligations that are supported by a City guarantee, the City would be required to pay all or a portion of the loan guarantee amount to the third-party lender.

Should the City be required to pay out a loan guarantee to a third-party lender, the City would seek to recover those funds from the supported entity, in the form of a loan. However, the City's ability to do so may be affected by the solvency of the entity, the security that the City may have taken and its ranking as secured creditor.

Table 1 below summarizes the outstanding City loans and loan guarantees as at December 31, 2023. Additional information on City Loans and Loan Guarantees is available in Appendix 4 to this report.

Table 1 - City Loans and Loan Guarantees as at December 31, 2023

Toronto Artscape Inc., an entity which has one outstanding capital loan guarantee, entered into Receivership subsequent to 2023 year-end, leaving the City with the financial responsibility for funding loan repayments in the amount of $225,874. It has yet to be determined whether the City would be able to recover this amount, and staff will report on the resolution of this issue going forward.

This report recommends the adoption of a revised Shareholder Capital Contribution (SCC) repayment formula for Lakeshore Arena Corporation (LAC), which would address LAC cash flow challenges in continuing to operate and make outstanding debt repayments, while making SCC repayments. The proposed change to the SCC repayment formula will also support the City recovering the outstanding $7.026 million SCC balance as at December 31, 2023.

This report also recommends extending the term of a line of credit guarantee for the Toronto Symphony Orchestra, for an additional three-year term, expiring on October 31, 2027, as the underlying line of credit remains in good standing.

The Chief Financial Officer and Treasurer reviews and reports annually on the direct City loans, and loan and line of credit guarantees, which are detailed in this report.

The General Manager, Toronto Water recommends that:

1. City Council authorize the reallocation of cashflows and corresponding funding within Toronto Water’s 2024 Capital Budget and 2025-2033 Capital Plan in the amount of $17.283 million, for acceleration and deferral of projects, as presented in Schedule A (Part A and B) to the report, with a zero Budget impact.

2. City Council authorize the reallocation of project costs, cashflows and corresponding funding in Toronto Water's 2024 Capital Budget and 2025-2033 Capital Plan in the amount of $9.550 million from projects that have been awarded under budget or completed to those requiring additional funding in the same amount as presented in Schedule A (Part C), with a zero Budget impact.

This report requests City Council's authority to amend Toronto Water's 2024 Capital Budget and 2025-2033 Capital Plan by adjusting project cash flows contained within the Budget and Plan, respectively, to align forecasted project accelerations and deferrals. Additional reallocations to project cashflows and project costs are requested where project expenditures exceed the current approved cashflows and project costs. These reallocations will allow Toronto Water to continue to deliver projects within its 10-Year Capital Plan. The adjustments will have a zero-dollar impact on the 2024 Capital Budget and 2025-2033 Capital Plan and will align the budget and plan with Toronto Water's capital project delivery schedule and program requirements.

The approval of this report will authorize the acceleration and deferral of cashflows in Toronto Water's 2024 Capital Budget and 2025-2033 Capital Plan in the total amount of $17.283 million. The report also recommends the reallocation of 2024-2033 project costs and cash flows in the total amount of $9.550 million, as detailed in Schedule A (attached).

A number of multi-year projects are projected to proceed ahead of the forecast. The accelerated spending of these projects is offset by delays within other projects as outlined in Schedule A (Part A and B). These changes result in no changes to total project cost for each project.       

As outlined in Part C of Schedule A, additional funding is required to support the resolution of outstanding claims associated with the Group 5 Sewage Pumping Station projects, and a purchase order amendment required to support the continuation of contract administration services associated with the Basement Flooding Fairbanks Silverthorne project. Additional funding is also required to support increased costs associated with the completion of Raw Water Pump Upgrades at the Horgan Water Treatment Plant ahead of other planned capital works and to address urgent roof replacement required at the Humber Wastewater Treatment Plant. The additional costs for these projects are to be offset from funds available from projects which have been awarded under budget, projects which have been cancelled due to high pricing or projects which are nearing completion and forecast to be completed under budget.

There are no additional costs to the City as a result of the approval of this report. The recommended adjustments, as noted above, will result in zero budget impacts over the 10-year planning period and will align the 2024 Capital Budget and 2025-2033 Capital Plan with Toronto Water’s capital project delivery schedule and program requirements.

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

The Board of Directors of TO Live recommends that:

1. City Council request the Board of Directors of TO Live to direct the President and Chief Executive Officer, TO Live, in consultation with the Executive Director, Corporate Real Estate Management and the Executive Director, Financial Planning:

a. to proceed with the detailed design phase, in accordance with the established stage gate process as outlined in this report page 9 and page 10 entitled Stage Gate Process, and

b. to amend the 2024-2033 Capital Budget and Plan for TO Live to reallocate $8.779 million in funding commitment from the remaining cash flow funding originally intended for state of good repair to advance the Detailed Design phase.

2. City Council direct that Confidential Attachment 1 to the report (September 6, 2024) from the President and Chief Executive Officer remain confidential in its entirety because it contains financial information supplied in confidence to the Board of Directors of TO Live which, if disclosed, could reasonably be expected to significantly prejudice the competitive position, or interfere significantly with the contractual or other negotiations of a person, group of persons, or organization..

At its meeting on September 12, 2024, Board of Directors of TO Live considered Item CT11.2 and made recommendations to City Council.

Summary from the report (August 28, 2024) from the President and Chief Executive Officer, TO Live:

The purpose of this report is to provide an update on the redevelopment of the St. Lawrence Centre for the Arts ("STLC") project, as directed by the Board of Directors of TO Live (Item CT9.9) and City Council (Item CC15.1), on the refined project cost estimates upon completion of a schematic design with appropriate Class Estimates and status on the financing strategies.  Included in this report is information regarding the completion of the schematic design phase and associated Class D estimate, with project management and oversight from Corporate Real Estate Management (CREM), as well as TO Live's fundraising strategy and the established project stage gate process. This report seeks approval from the TO Live Board and City Council to progress from the schematic design phase into the detailed design phase.

Included in the detailed report will be:

1. Recommendations for approval

2. Financial Impact outlining costs for the associated Stage Gate

3. Decision History

4. Background:

a) About TO Live

b) About the STLC

c) Process Outline (How we got here)

d) Stage Gate Process Outline

e) Schematic Design Phase Process; cost estimates, valuation and cost management

f) Design Development Phase Progress Outline

g) Major Design Milestones

h) Funding Model

i) Next Steps

Confidential Attachment: Funding Update.

The Chief Financial Officer and Treasurer recommends that City Council:  

1. Delete Recommendation 1 from the Board of Directors of TO Live as part of report CT11.2 and give direction that the St. Lawrence Centre for the Arts Redevelopment Project will not proceed to the detailed design phase.

2. Subject to Council approval of Recommendation 1 from this supplementary report, direct the Chief Financial Officer and Treasurer to include funding in the 2025 Budget for the Mayor’s consideration, that will enable TO Live to fully address SOGR and accessibility requirements at the St. Lawrence Centre for the Arts, to be informed by the Building Condition Assessment once completed.

This supplementary report from the Chief Financial Officer and Treasurer has been submitted for Council's consideration in companion with the report from the President and Chief Executive Officer of TO Live entitled Update on the St. Lawrence Centre for the Arts Redevelopment Project (CT11.2).

During the 2024 Budget process, City Council approved preliminary project funding to complete the schematic design phase of the St. Lawrence Centre for the Arts (STLC) Redevelopment Project through the reallocation of $8.560 million in funding originally planned for State of Good Repair (SOGR) requirements within TO Live's 10-Year Capital Budget and Plan.

City Council also requested the President and Chief Executive Officer, TO Live, in consultation with the Executive Director, Corporate Real Estate Management (CREM), to report back to Executive Committee on refined project cost estimates upon completion of a schematic design.  Council also requested that reporting include the status of project financing strategies.

In response to this request, at its meeting on September 12, 2024, the Board of Directors of TO Live received an update from the President and Chief Executive Officer, TO Live on the STLC Redevelopment Project (Item CT11.2), which included:

- An updated project cost estimate of $421.467 million at the conceptual design stage, upon completion of the schematic design based on a Class D estimate (+/- 20%-30% accuracy).

- Preliminary results of a building condition assessment that is nearly complete that estimates a total cost of between $70 to $80 million over the next 10 years to alternatively complete only SOGR and accessibility improvements to the venue.

- A proposed updated financing strategy that includes:

- $8.560 million in City funding already allocated to the project as part of the 2024 Budget process to complete the schematic design;

- $41.903 million in further City funding originally planned for SOGR requirements within TO Live's 10-Year Capital Budget and Plan, with its use contingent on federal and provincial funding commitments towards the project; and

- $371.0 million in project costs that are currently unfunded and would need to be secured from federal, provincial, third-party sponsorship, and further City contributions.

- The report also seeks Council authority to advance with the detailed design phase of the project at an estimated cost of $8.779 million, to be to be funded by unspent funds from the $8.560 million noted for the schematic design and an additional draw of $7.0 million from originally planned SOGR funding within TO Live's 10-Year Capital Budget and Plan.

- If approved, completion of this next proposed phase would bring the total spent to advance the project to $15.560 million.

TO Live staff have worked collaboratively with the City on this initiative and engaged staff from within Financial Planning, Economic Development and Culture and Corporate Real Estate Management in preparation of the report (CT11.2). However, City staff advised that they were not supportive of advancing the project further to detailed design or beyond given the project’s outstanding financial risks.

- The financing strategy outlined in CT11.2 relies significantly on financial support from the federal and provincial governments, as well as a third-party fundraising, none of which TOLive and the City have yet to secure.

- In the absence of full funding commitments from other orders of government and third-parties, there is a financial risk that the redevelopment project will not be funded and completed as planned.

- Should funding not be secured from the other orders of government and third-parties, the project could not proceed without further City funding contributions. If the project does not proceed, any amount reallocated from the originally planned SOGR funding within TO Live's 10-Year Capital Budget and Plan will not be available to meet the immediate needs identified in for TO Live’s SOGR plan.

- Furthermore, the City’s Financial Planning Division considered this project through the newly developed Capital Prioritization Framework, and the project scored poorly based on established evaluation criteria that aligns with Council priorities.

Given the continued financial risk of the project coupled with its poor rating within the Capital Prioritization Framework, the City’s Chief Financial Officer and Treasurer is recommending that the redevelopment project not proceed to the detailed design phase and instead consideration be given to accelerating and fully addressing SOGR needs at the venue.

TO Live has been provided with spending authority up to $8.560 million to complete the schematic design phase for the St. Lawrence Centre for the Arts Redevelopment Project. To date, TO Live has spent $6.781 million for this work and has a remaining balance of $1.779 million that is expected to be unspent by the end of 2024.

- Note that the funds set aside for the schematic design are part of the $50.463 million in funding that had previously been budgeted for planned SOGR works at the venue over the 10-year planning period within the TO Live Capital Plan.

The schematic design estimates the total cost for the STLC Redevelopment project at $421.467 million (in 2027 dollars) which includes all design, construction costs, and contingency costs (+/- 20%-30% accuracy).

As noted in report CT11.2, beyond $50.463 million in City funding ($8.560 million Council approved reallocation of SOGR, and a remaining $41.903 million of potential reallocation of SOGR contingent on federal and provincial funding commitments), the remaining balance of $371.0 million in project cost is currently unfunded.  The financing strategy developed by TO Live staff and included as a confidential attachment to CT11.2 expects remaining funds to be secured from federal, provincial, third-party sponsorship, and further City contributions, but does not identify any commitments secured to date.

Through the update report, TO Live is requesting Council authority to advance the project to the Detailed Design phase and to reallocate additional cash flow commitments in the amount of $8.779 million from the remaining $43.683 million in SOGR funding for this purpose. In the absence of full funding commitments from other levels of government, this amount, and all amounts reallocated to the project from SOGR are at risk, which could mean the project does not advance without added City funding contributions.

Furthermore, if the project does not proceed, the City would need to replenish SOGR funds that had been allocated to the redevelopment project that are now needed to address the venues SOGR and accessibility requirements.

- An updated building condition assessment of the STLC is underway with preliminary SOGR and accessibility cost estimates for the venue now totaling $70-$80 million over the next 10 years.  

That the Executive Committee:

1.  Establish a Labour Relations Subcommittee as follows:

a. the mandate of the Labour Relations Subcommittee is to provide direction and bargaining mandates to the City’s bargaining teams in negotiating collective agreements relating to the City.

b. the responsibilities of the Labour Relations Subcommittee are to:

1. to consider updates on the progress of collective bargaining; and

2. to provide direction and bargaining mandates to the City’s bargaining teams in negotiating agreements relating to the City;

c. the Labour Relations Subcommittee consists of 3 members of the Executive Committee; and

d. the Labour Relations Subcommittee makes recommendations to the Executive Committee on matters requiring a final decision by City Council.

2.  Appoint the following Members of the Executive Committee to the Labour Relations Subcommittee:

Councillor Shelley Carroll, as Chair

Deputy Mayor Ausma Malik, as Vice Chair

Deputy Mayor Mike Colle

As the City prepares for collective bargaining, I recommend that the Executive Committee establish a subcommittee to provide direction to the City's bargaining teams. Establishing a subcommittee will allow direction and mandates to be provided quickly, and for City officials to be able to provide updates and receive further direction as the bargaining process requires.