Budget/Audit Advisory Board Meeting #1/16 was held at TRCA Head Office, on Friday, April 1, 2016. The Chief Executive Officer Brian Denney, called the meeting to order at 9:35 a.m.

PRESENT Colleen Jordan Member Gino Rosati Member John Sprovieri Member

ABSENT Maria Augimeri Chair

RES.#C1/16 - ELECTION OF CHAIR

Moved by: Gino Rosati Seconded by: John Sproveri

THAT Colleen Jordan be elected Chair to conduct Budget/Audit Advisory Board Meeting #1/16, held on April 1, 2016. CARRIED ______

RES.#C2/16 - MINUTES

Moved by: Gino Rosati Seconded by: John Sprovieri

THAT the Minutes of Meetings #2/15, held on June 26, 2015 and #3/15, held on October 16, 2015, be received. CARRIED ______

(a) A presentation by Rocco Sgambelluri, Chief Financial Officer, TRCA, in regard to item 8.1 - 2016 Budget, Operating and Capital.

RES.#C3/15 - PRESENTATIONS

Moved by: Gino Rosati Seconded by: John Sprovieri

THAT above-noted presentation (a) be received. CARRIED ______

1 Section I – Items for Authority Action

RES.#C4/16 - 2016 BUDGET, OPERATING AND CAPITAL Recommends approval of the 2016 operating and capital budget.

Moved by: Gino Rosati Seconded by: John Sprovieri

THE BOARD RECOMMENDS TO THE AUTHORITY THAT WHEREAS the Conservation Authorities Act (CA Act) provides that a conservation authority, in establishing its annual levy, shall have the power to determine the proportion of the total benefit afforded to all the participating municipalities that is afforded to each of them;

THEREFORE LET IT BE RESOLVED THAT, subject to such regulations under the Conservation Authorities Act as may be approved by the Lieutenant-Governor-in-Council:

(i) all participating municipalities be designated as benefitting for programs included in the 2016 Operating Budget;

(ii) Toronto and Region Conservation Authority's (TRCA) share of the cost of the programs included in the 2016 Operating Budget shall be raised from the participating municipalities as part of the general levy;

(iii) the 2016 general levy be apportioned to the participating municipalities in the proportion that the modified current value assessment of the whole is under the jurisdiction of TRCA, unless otherwise provided in the levy or a project;

(iv) appropriate TRCA officials be directed to advise the participating municipalities, pursuant to the Conservation Authorities Act and the regulations made thereunder, and to levy the said municipalities the amount of the general levy set forth in the 2016 Operating Budget, including property tax adjustments and non-current value assessment (CVA) levy, and to levy the said municipalities the amount of the project and special levy set forth in the 2016 Capital Budget and in the approved projects of TRCA;

THAT the 2016 Budget, Operating and Capital, and all projects therein, be adopted;

THAT TRCA staff be authorized to amend the 2016 Budget, Operating and Capital to reflect actual 2016 provincial transfer payment allocations in order to set the amount of matching levy required by the CA Act;

THAT the cost of property taxes imposed by municipalities be included as additional levy to the participating municipalities where the lands are located, excluding the cost of property taxes which are passed on to a third party under a lease or similar agreement;

THAT, except where statutory or regulatory requirements provide otherwise, TRCA staff be authorized to enter into agreements with private sector organizations, non-governmental organizations or governments and their agencies for the undertaking of projects which are of benefit to TRCA and funded by the sponsoring organization or agency, including projects that have not been provided for in the approved budget;

2 THAT, as required by Ontario Regulations 139/96 and 231/97, this recommendation and the accompanying budget documents, including the schedule of matching and non-matching levies, be approved by recorded vote;

THAT the presentation of 2015 budget comparisons and related actuals be amended to conform to the presentation adopted in the 2016 budget document;

AND FURTHER THAT authorized TRCA officials be directed to take such action as may be necessary to implement the foregoing, including obtaining approvals and the signing and execution of documents. CARRIED RATIONALE Enclosed is the recommended 2016 Budget, Operating and Capital. The budget will be presented to the Authority for approval at its meeting scheduled to be held on April 1, 2016.

Municipal Approvals Estimates are prepared in the summer and fall of each year for submission to TRCA's municipal funding partners. Staff meets with municipal staff as required by the budget processes and schedules as set out by each participating municipality. Presentations are made to municipal finance staff and the committees and councils of the funding partners as required. In the case of Peel Region, TRCA works closely with staff at Credit Valley and Halton conservation authorities to align budget information and requirements. A similar process occurs with York Region where TRCA works closely with the Lake Simcoe Region Conservation Authority. In Durham Region, TRCA staff works with five conservation authorities to align budgets and financial submissions to meet the Region of Durham requirements. TRCA's submissions to the City of Toronto for capital and operating levy are reviewed with Finance and Toronto Water staff.

The funding identified in the recommended apportionment of the levy reflects the amounts that the municipal funding partners have approved in their 2016 budgets. Contributions from the City of Toronto and the regional municipalities of Durham, Peel and York have received council approval. The Township of Adjala-Tosorontio and the Town of Mono have been advised of TRCA's levy request.

Notice of Meeting As required by regulation, TRCA has provided 30 days written notice to its member municipalities of the date of the meeting at which the Authority will consider the municipal levy. At the April 1, 2016 Authority meeting a recorded vote on the budget recommendations, including adoption of the non-matching municipal levy, is required. The weighted voting procedure prescribed by regulation will be used, if necessary.

MNRF Transfer Payments The 2016 provincial transfer payments to conservation authorities, which must be matched with levy, have not been announced. The 2016 operating budget includes a provision for Ministry of Natural Resources and Forestry (MNRF) transfer payments at an amount equal to the funding received in 2015 or $774,000.

3 2016 Budget Presentation In order to meet the provisions of the Conservation Authorities Act and the regulations made thereunder, it continues to be necessary to distinguish between general levy (operating) and benefitting levy (capital and special projects.) However, due to the unique budgetary requirements of each of the four major participating municipalities, the distinction between operating and capital expenditures has been blurred over the years. For this reason the presentation adopted in the 2016 budget continues to focus on the nine service areas of the TRCA business plan, regardless of the underlying nature of the funding.

Commencing in 2016, the budget document includes the following additional components:  an expenditure summary which is aligned with the financial statement presentation (i.e., includes amortization, but excludes planned expenditures on tangible capital assets);  a summary of expenditures by object classification, also consistent with proposed financial statement presentation;  an accompanying document entitled, “Business Synopsis and Rationale” which describes the 32 programs of TRCA in greater detail (Attachment 2).

Further, during the compilation of the 2016 budget staff became aware of certain adjustments in presentation required to better reflect the work contained in each service areas. Consequently, the 2016 budget and actuals presentation has been modified to conform to the presentation adopted for 2016.

Operating Budget - Overview of Key Issues Salary/Wage Guideline In October 2015 the Authority adopted a staff recommendation for a wage increase of 2%, effective April 3, 2016. TRCA salary and wage adjustments over the last five years have averaged 2.2% per year, on a simple average basis, as follows:

2016 - 2% 2015 - 2% 2014 - 2% 2013 - 2% 2012 - 3%

Staffing Levels and Costs The full time equivalents (FTE) included in the operating budget are projected to be 426.6 for 2016 as compared to 418.6 for 2015. Including the FTE count within the capital program, the 2016 total FTE count is estimated at 716.8 (695.9 for 2015). A summary of FTEs by service area is found on page 5, in section I of the budget document.

Wage and benefit costs within the operating budget amount to $34.0 million or 74% of the gross expenditures, representing an increase of about $1.5 million or 4.7% over 2015 budget. This amount includes the 2% cost of living adjustment noted above as well as above average increases in the cost of the TRCA employee benefit program. Also provided for are the cost of the new FTEs as noted above and the annualization of positions hired in 2015.

Gross Operating Expenditures/Revenues The 2016 gross operating expenditure budget is $46.0 million, an increase of $3.1 million or 7.1% over the 2015 budget. The increase in expenditures will be financed by additional general levy of $0.3 million; additional revenues of $2.1 million and net reserve contributions of $0.7 million.

4 Municipal Levy Each of TRCA's participating municipalities has its own unique budget requirements and annual budgetary pressures. TRCA has met each of the individual participating municipality’s requirements. TRCA’s funding "formula" has been designed to achieve the flexibility required in meeting individual municipal partner funding guidelines. To this end, the 2016 operating levy includes a provision, totaling $415,600 (2014 - $359,200) referred to as "Non-CVA Levy". Under the provisions of the Act, TRCA makes a general levy against all of its participating municipalities to fund its general operating requirements. With regard to the portion of the levy that is for "administration costs" as defined in the Act, TRCA must use CVA as the basis of apportionment. With respect to the balance of the general levy which is raised for "maintenance costs" a conservation authority may apportion benefit using another allocation method that is approved in adopting the budget. In essence, the non-CVA levy adjusts the amount of the general levy that relates to maintenance costs that would otherwise be apportioned using CVA as the basis and allows TRCA to meet the unique funding guidelines of each participating municipality.

The non-CVA levy apportionment has been allocated to the municipalities as follows:

Municipality 2016 2015 Durham $61,800 $62,200 Peel $183,300 $169,900 Toronto - - York 170,500 $127,100 Mono - - Adjala-Tosorontio - - Total $415,600 $359,200

After giving consideration to all of the factors that affect the general municipal levy, including tax adjustments, year over year shifts in CVA and individual municipal targets, TRCA has achieved total municipal levy funding in the amount of $13,552,000 representing an average increase over 2015 of 2.0%. The general levy has been allocated to the participating municipalities as follows:

Municipality Tax Adjustment 2016 General Levy Change over 2015 Durham $127,800 $548,804 2.5% Peel $111,000 $1,741,000 3.3% Toronto $300 $8,187,400 1.7% York $176,000 $3,072,000 2.1% Mono $900 $1,933 13.7% Adjala-Tosorontio - $863 1.5% Total $416,000 $13,552,000 2.0%

Property Taxes on Conservation Lands TRCA is required to pay property taxes on its lands, with some exceptions. One exception is where TRCA has received an exemption or partial exemption under the Conservation Land Tax Incentive Program (CLTIP). Another exception occurs in the City of Toronto, where park and conservation lands are exempt from property taxation because the City exercises its rights under the City of Toronto Act to exempt park land from taxation. In the regions of Peel, York and Durham, the Town of Mono and the Township of Adjala-Tosorontio, property taxes are paid on conservation lands not included under CLTIP. In fairness to the City of Toronto which grants a tax exemption, TRCA has long had a practice of allocating the cost of property taxes to the

5 participating municipality where the property is situated. This is reflected as an adjustment to the apportionment of the general levy, in the amounts noted in the chart above. An exception to this practice is provided for property taxes paid on rental properties, where the cost of taxes is recovered from rent.

In 2016, the budget assumes a grant from the Region of York in the amount of $112,000 to cover the estimated taxes for the interim head office at 101 Exchange Way in Vaughan.

Capital Budget Summary The 2016 capital budget is set at $64.8 million, approximately $13.6 million lower than the 2015 budget, and just slightly higher than the 2015 year to date (YTD) actual capital expenditures of $63.2 million. The decrease in capital spending as compared to the 2015 program reflects more realistic assumptions as to the actual level of work that will be undertaken during 2016. Municipal levy funding will finance $42.6 million of the capital program, of which $36.6 million will be raised in 2016 and the balance ($7.3 million) is on hand, as it was raised in previous years. The 2016 FTE estimate within the capital program is 290.1, as compared to 277.3 in 2015. A summary of the 2016 capital program appears at page 22 of the budget document.

Capital projects are usually funded by the municipal partners on a benefitting municipality basis. That is, with few exceptions, capital projects funded by a municipality are undertaken within that municipality. These include: • erosion control projects (Peel, Toronto and York); • Living City Action Plan program (Toronto); • waterfront development (Toronto and Durham); • natural heritage regeneration projects (Peel and York); • regional watershed monitoring; • Black Creek Pioneer Village restoration program (Toronto); • flood control works and floodplain mapping; • watershed management projects; • Peel Region Climate Change project; • conservation land care (Peel and York).

A few capital programs are generally benefitting. These include: • information technology - levy based on CVA, used to fund common capital IT needs across the organization; • major facilities retrofit - levy based on CVA, used for major capital expenditures for buildings and office accommodations.

Certain capital programs are uniquely funded: • land acquisition - major acquisitions leverage funding available from participating municipalities, local municipalities, land sale and easement proceeds, and other sources; • the source water protection program is funded entirely by the Province of Ontario; • Toronto Waterfront Revitalization Corporation (TWRC) projects - funded directly by TWRC through delivery agreements, including Don Mouth Naturalization and Port Lands Flood Protection Project; • Humber Bay Shores (Etobicoke Motel Strip) - legacy project for which the City of Toronto and Province of Ontario have a continuing commitment to finance the final costs of the expropriation process; • groundwater strategies and management - costs shared equally by regions of Peel, York, Durham and the City of Toronto.

6 Municipal Project Agreements: • TRCA works with its municipal partners to undertake special projects wherein TRCA has significant, specialized expertise. These special projects include erosion work, construction of trails, bridges and wetlands, and tree planting. This funding varies from year to year and is completely separate from the municipal operating and capital levy funding.

Summary The 2016 audited financial statements will be available at the June meeting of the Budget/Audit Advisory Board. The comparable 2015 actual results are not final as there may still be a need to process a few minor adjustments as staff prepares for the audit. The disposition of the in-year surplus, as noted in the 2015 Year End Financial Progress Report which is presented as another report on this BAAB agenda, will be considered with the approval of the audited financial statements.

DETAILS OF WORK TO BE DONE At the Budget/Audit Advisory Board meeting, staff will make a presentation on key aspects of the 2016 operating and capital budgets.

Report prepared by: Rocco Sgambelluri, extension 5232 Emails: [email protected] For Information contact: Rocco Sgambelluri, extension 5232 Emails: [email protected] Date: March 23, 2016 Attachments: 2

7 Attachment 1

2016 BUDGET

OPERATING AND CAPITAL

8 Table of Contents

Section I - Operating and Capital Budget

Summary by Service Area 1 Summary by Object Classification 4 Full Time Equivalents by Service Area 5 Service Area Details Watershed Studies and Strategies 6 Water Risk Management 7 Regional Biodiversity 8 Greenspace Securement and Management 10 Tourism and Recreation 11 Planning and Development Review 13 Education and Outreach 14 Sustainable Communities 15 Corporate Services 16

Section II - Operating Budget

Operating Summary 18 Apportionment of 2016 General Levy 20 2016 Basis of Levy Apportionment 21

Section III - Capital Budget

Capital Summary 22 2016 Capital Levy by Service Area 24

Section IV

Summary by Service Area excluding TCA 25 Summary by Object excluding TCA 28

Attachment I - 2016 Business Synopsis and Rational

9 Section I - Operating and Capital Budget 1

Toronto and Region Conservation Authority 2016 Operating and Capital Budget

Revised $ Change % Change 2016 2015 2015 over 2015 over 2015 Budget Budget Year to date Budget Budget Revenue Municipal Operating levies 13,552,000 13,285,000 13,285,021 267,000 2.0% Capital levies 43,004,000 42,691,000 33,665,166 313,000 0.7% Other 8,843,000 4,533,000 3,889,714 4,310,000 95.1% Government Grants Provincial 3,263,000 3,572,000 3,675,213 (309,000) -8.7% Federal 1,861,000 1,277,000 1,833,998 584,000 45.7% Other - - - - 0.0% User fees, sales and admissions 20,004,000 18,432,000 18,864,715 1,572,000 8.5% Contract services Municipal 8,842,000 19,375,000 16,890,527 (10,533,000) -54.4% Compensation agreements 255,000 2,158,000 1,205,352 (1,903,000) -88.2% Corporate and other 1,266,000 2,247,000 1,352,678 (981,000) -43.7% Rent and property interests 2,993,000 3,631,000 3,206,134 (638,000) -17.6% Fundraising Donations 1,192,000 2,299,000 1,128,844 (1,107,000) -48.2% The Living City Foundation 1,514,000 2,004,000 1,832,343 (490,000) -24.5% Investment income 600,000 600,000 611,831 - 0.0% Sundry 143,000 82,000 330,501 61,000 Total Revenue 107,332,000 116,186,000 101,772,037 (8,854,000) -7.6%

10 2

Toronto and Region Conservation Authority 2016 Operating and Capital Budget

Revised $ Change % Change 2016 2015 2015 over 2015 over 2015 Budget Budget Year to Date Budget Budget

Expenditures Watershed Studies and Strategies Watershed Planning and Reporting 2,563,000 2,217,000 1,383,995 346,000 15.6% Climate Science 590,000 690,000 605,612 (100,000) -14.5% 3,153,000 2,907,000 1,989,607 246,000 8.5% Water Risk Management Water Resource Science 2,742,000 6,200,000 3,675,454 (3,458,000) -55.8% Erosion Management 13,823,000 16,869,000 19,369,757 (3,046,000) -18.1% Flood Management 3,700,000 4,130,000 2,649,597 (430,000) -10.4% 20,265,000 27,199,000 25,694,808 (6,934,000) -25.5% Regional Biodiversity Biodiversity Monitoring 2,510,000 2,109,000 2,231,794 401,000 19.0% Ecosystem Management Research and Directions 998,000 879,000 1,109,158 119,000 13.5% Forest Management 1,191,000 1,333,000 962,612 (142,000) -10.7% Restoration and Regeneration 6,887,000 10,762,000 7,170,348 (3,875,000) -36.0% 11,586,000 15,083,000 11,473,912 (3,497,000) -23.2% Greenspace Securement and Management Greenspace Securement 6,185,000 3,506,000 4,307,966 2,679,000 76.4% Greenspace Management 2,727,000 4,062,000 2,409,806 (1,335,000) -32.9% Rental Properties 2,075,000 1,980,000 2,052,324 95,000 4.8% 10,987,000 9,548,000 8,770,096 1,439,000 15.1% Tourism and Recreation Waterfront Parks 2,832,000 3,729,000 1,909,147 (897,000) -24.1% Conservation Parks 7,085,000 6,241,000 6,360,052 844,000 13.5% Trails 1,880,000 3,864,000 2,857,838 (1,984,000) -51.3% Bathurst Glen Golf Course 1,239,000 1,239,000 1,161,120 - 0.0% Black Creek Pioneer Village 4,115,000 3,944,000 4,436,406 171,000 4.3% Events and Festivals 724,000 747,000 793,680 (23,000) -3.1% Wedding and Corporate Events 1,754,000 1,622,000 1,679,550 132,000 8.1% 19,629,000 21,386,000 19,197,793 (1,757,000) -8.2% Planning and Development Review Development Planning and Regulation Permitting 4,377,000 4,166,000 3,911,719 211,000 5.1% Environmental Assessment Planning and Permitting 3,262,000 3,183,000 3,201,488 79,000 2.5% Policy Development and Review 887,000 821,000 726,856 66,000 8.0% 8,526,000 8,170,000 7,840,063 356,000 4.4% Education and Outreach School Programs 10,311,000 10,314,000 6,861,477 (3,000) 0.0% Newcomer Services 1,286,000 957,000 1,002,516 329,000 34.4% Family and Community Programs 767,000 825,000 498,432 (58,000) -7.0% 12,364,000 12,096,000 8,362,425 268,000 2.2% Sustainable Communities Living City Transition Program 6,740,000 6,196,000 5,347,604 544,000 8.8% Community Engagement 4,321,000 4,139,000 3,247,441 182,000 4.4% 11,061,000 10,335,000 8,595,045 726,000 7.0%

11 3

Revised $ Change % Change 2016 2015 2015 over 2015 over 2015 Budget Budget Year to Date Budget Budget Corporate Services Financial Management 2,291,000 1,957,000 1,946,320 334,000 17.1% Corporate Management and Governance 5,701,000 7,469,000 7,608,517 (1,768,000) -23.7% Human Resources 1,040,000 814,000 764,594 226,000 27.8% Corporate Communications 1,553,000 1,615,000 1,497,554 (62,000) -3.8% Information Infrastructure and Management 2,679,000 2,756,000 2,602,571 (77,000) -2.8% Vehicles and Equipment - net - 40,000 (22,643) (40,000) -100.0% 13,264,000 14,651,000 14,396,913 (1,387,000) -9.5%

Total Expenditures 110,835,000 121,375,000 106,320,662 (10,540,000) -8.7%

Project Recoveries (3,029,000) (3,034,000) (2,947,588) 5,000 -0.2%

Net Expenditures 107,806,000 118,341,000 103,373,074 (10,535,000) -8.9%

Net Surplus (Deficit) (475,000) (2,152,000) (1,601,036) 1,677,000 -77.9%

Reserves 976,000 2,850,000 2,427,837 (1,874,000) -65.8%

Net Budget 501,000 698,000 826,801 (197,000) -28.2%

12 4

Toronto and Region Conservation Authority 2016 Operating and Capital Budget - by object classification

$ Change % Change 2016 2015 2015 over 2015 over 2015 Budget Budget Year to date Budget Budget Revenue Municipal Operating levies 13,552,000 13,285,000 13,285,021 267,000 2.0% Capital levies 43,004,000 42,691,000 33,665,166 313,000 0.7% Other 8,843,000 4,533,000 3,889,714 4,310,000 95.1% Government Grants Provincial 3,263,000 3,572,000 3,675,213 (309,000) -8.7% Federal 1,861,000 1,277,000 1,833,998 584,000 45.7% Other - - - - 0.0% User fees, sales and admissions 20,004,000 18,432,000 18,864,715 1,572,000 8.5% Contract services Municipal 8,842,000 19,375,000 16,890,527 (10,533,000) -54.4% Compensation agreements 255,000 2,158,000 1,205,352 (1,903,000) -88.2% Corporate and other 1,266,000 2,247,000 1,352,678 (981,000) -43.7% Rent and property interests 2,993,000 3,631,000 3,206,134 (638,000) -17.6% Fundraising Donations 1,192,000 2,299,000 1,128,844 (1,107,000) -48.2% The Living City Foundation 1,514,000 2,004,000 1,832,343 (490,000) -24.5% Investment income 600,000 600,000 611,831 - 0.0% Sundry 143,000 82,000 330,501 61,000 Total Revenue 107,332,000 116,186,000 101,772,037 (8,854,000) -7.6%

Expenditures Wages and benefits 58,705,000 55,353,000 56,676,980 3,352,000 6.1% Contracted services 31,119,000 43,882,000 29,446,561 (12,763,000) -29.1% Materials and supplies 5,881,000 7,250,000 6,581,738 (1,369,000) -18.9% Utilities 1,112,000 1,008,000 1,189,147 104,000 10.3% Property taxes 1,229,000 1,088,000 1,012,497 141,000 13.0% Grants to other organizations 1,935,000 2,487,000 1,785,559 (552,000) -22.2% Land 5,794,000 3,700,000 3,729,133 2,094,000 56.6% Furniture and equipment 1,786,000 3,341,000 2,871,597 (1,555,000) -46.5% Sundry 246,000 229,000 189,057 17,000 7.4% 107,807,000 118,338,000 103,482,269 (10,531,000) -8.9%

Internal Recoveries (16,349,000) (15,516,000) (28,120,204) (833,000) 5.4% Internal Charges 16,349,000 15,516,000 28,011,009 833,000 5.4% Total Expenditures 107,807,000 118,338,000 103,373,074 (10,531,000) -8.9%

Net Surplus (Deficit) (475,000) (2,152,000) (1,601,037) 1,677,000 -77.9%

Reserves 976,000 2,850,000 2,427,837 - 0.0%

Net Budget 501,000 698,000 826,800 1,677,000 240.3%

13 5

Toronto and Region Conservation Authority 2016 Operating and Capital Budget

Full-time Equivalent Employees (FTEs)

2016 Operating Capital Total Watershed Studies and Strategies 3.70 6.98 10.68 Water Risk Management 4.71 77.12 81.83 Regional Biodiversity 15.95 92.76 108.71 Greenspace Securement and Management 20.30 6.19 26.49 Tourism and Recreation 153.36 26.98 180.34 Planning and Development Review 68.70 3.50 72.20 Education and Outreach 63.28 16.05 79.33 Sustainable Communities 10.94 58.18 69.12 Corporate Services 85.69 2.40 88.09 426.63 290.16 716.79

2015 Operating Capital Total Watershed Studies and Strategies 4.53 6.40 10.93 Water Risk Management 4.46 64.91 69.37 Regional Biodiversity 15.05 100.07 115.12 Greenspace Securement and Management 23.61 13.71 37.32 Tourism and Recreation 149.57 19.55 169.12 Planning and Development Review 66.51 3.40 69.91 Education and Outreach 62.64 13.77 76.41 Sustainable Communities 10.88 54.11 64.99 Corporate Services 81.35 1.34 82.69 418.60 277.26 695.86

14 6

Toronto and Region Conservation Authority 2016 Operating and Capital Budget - Watershed Studies and Strategies

Revised $ Change % Change 2016 2015 2015 over 2015 over 2015 Budget Budget Year to date Budget Budget Revenue Municipal Operating levies 496,000 632,000 631,600 (136,000) -21.5% Capital levies 1,893,000 1,293,000 770,184 600,000 46.4% Other - - - - 0.0% Government Grants Provincial 328,000 328,000 224,419 - 0.0% Federal 260,000 307,000 314,514 (47,000) -15.3% Other - - - - 0.0% User fees, sales and admissions - - 41 - 0.0% Contract services Municipal 100,000 300,000 196,721 (200,000) -66.7% Compensation agreements - - - - 0.0% Corporate and other 76,000 47,000 27,620 29,000 61.7% Rent and property interests - - - - 0.0% Fundraising Donations - - - - 0.0% The Living City Foundation - - - - 0.0% Investment income - - - - 0.0% Sundry - - - - Total Revenue 3,153,000 2,907,000 2,165,099 246,000 8.5%

Expenditures Watershed Planning and Reporting Watershed Plans and Strategies 2,150,000 1,962,000 1,366,599 188,000 9.6% Report Cards 413,000 255,000 17,395 158,000 62.0% 2,563,000 2,217,000 1,383,994 346,000 15.6% Climate Science Emerging and Integrative Climate Science 590,000 690,000 605,612 (100,000) -14.5% 590,000 690,000 605,612 (100,000) -14.5% Total Expenditures 3,153,000 2,907,000 1,989,606 246,000 8.5%

Net Surplus (Deficit) - - 175,493 - 0.0%

Reserves - - - - 0.0%

Net Budget - - 175,493 - 0.0%

15 7

Toronto and Region Conservation Authority 2016 Operating and Capital Budget - Water Risk Management

Revised $ Change % Change 2016 2015 2015 over 2015 over 2015 Budget Budget Year to date Budget Budget Revenue Municipal Operating levies 380,000 334,000 334,000 46,000 13.8% Capital levies 16,092,000 17,321,000 13,977,240 (1,229,000) -7.1% Other 31,000 31,000 (1,878) - 0.0% Government Grants Provincial 992,000 1,245,000 1,482,135 (253,000) -20.3% Federal - - 3,960 - 0.0% Other - - - - 0.0% User fees, sales and admissions 26,000 28,000 53,692 (2,000) -7.1% Contract services Municipal 3,198,000 8,300,000 9,747,606 (5,102,000) -61.5% Compensation agreements - 200,000 - (200,000) -100.0% Corporate and other 6,000 6,000 1,552 - 0.0% Rent and property interests - - - - 0.0% Fundraising Donations - - - - 0.0% The Living City Foundation - 1,000 250 (1,000) -100.0% Investment income - - 9,723 - 0.0% Sundry - - - - Total Revenue 20,725,000 27,466,000 25,608,280 (6,741,000) -24.5%

Expenditures Water Resource Science Groundwater Strategies 700,000 796,000 675,035 (96,000) -12.1% Source Water Protection Strategy 656,000 909,000 878,801 (253,000) -27.8% Regional Monitoring - Water 347,000 382,000 344,237 (35,000) -9.2% Hydrology 256,000 375,000 213,733 (119,000) -31.7% Stormwater Management Strategies 533,000 3,384,000 1,344,687 (2,851,000) -84.2% Flood Plain Mapping 250,000 354,000 218,961 (104,000) -29.4% 2,742,000 6,200,000 3,675,454 (3,458,000) -55.8% Erosion Management Capital Works 12,477,000 15,421,000 17,712,847 (2,944,000) -19.1% Hazard Monitoring 1,346,000 1,448,000 1,656,910 (102,000) -7.0% 13,823,000 16,869,000 19,369,757 (3,046,000) -18.1% Flood Management Flood Forecasting and Warning 328,000 337,000 365,941 (9,000) -2.7% Flood Risk Management 2,326,000 2,803,000 1,287,268 (477,000) -17.0% Flood Infrastructure and Operations 1,046,000 990,000 996,388 56,000 5.7% 3,700,000 4,130,000 2,649,597 (430,000) -10.4% Total Expenditures 20,265,000 27,199,000 25,694,808 (6,934,000) -25.5%

Net Surplus (Deficit) 460,000 267,000 (86,528) 193,000 72.3%

Reserves - - - - 0.0%

Net Budget 460,000 267,000 (86,528) 193,000 72.3%

16 8

Toronto and Region Conservation Authority 2016 Operating and Capital Budget - Regional Biodiversity

Revised $ Change % Change 2016 2015 2015 over 2015 over 2015 Budget Budget Year to date Budget Budget Revenue Municipal Operating levies 273,000 258,000 258,200 15,000 5.8% Capital levies 6,753,000 6,736,000 6,114,129 17,000 0.3% Other 163,000 170,000 173,980 (7,000) -4.1% Government Grants Provincial - 22,000 173,980 (22,000) -100.0% Federal 885,000 422,000 929,716 463,000 109.7% Other - - - - 0.0% User fees, sales and admissions 80,000 67,000 67,861 13,000 19.4% Contract services Municipal 2,786,000 5,317,000 3,100,163 (2,531,000) -47.6% Compensation agreements 221,000 767,000 141,129 (546,000) -71.2% Corporate and other 89,000 705,000 88,291 (616,000) -87.4% Rent and property interests - - 2,766 - 0.0% Fundraising Donations 17,000 17,000 19,755 - 0.0% The Living City Foundation 59,000 316,000 625,770 (257,000) -81.3% Investment income - - 4,410 - 0.0% Sundry - - - - Total Revenue 11,326,000 14,797,000 11,700,150 (3,471,000) -23.5%

Expenditures Biodiversity Monitoring Regional Monitoring - Biodiversity 1,241,000 1,149,000 1,151,657 92,000 8.0% Activity Based Monitoring 940,000 695,000 689,265 245,000 35.3% Terrestrial Inventory and Assessment 330,000 265,000 390,872 65,000 24.5% 2,511,000 2,109,000 2,231,794 402,000 19.1% Ecosystem Management Research and Directions Aquatic System Priority Planning 232,000 182,000 188,352 50,000 27.5% Terrestrial (and Integrated) Ecosystem Management 675,000 525,000 753,892 150,000 28.6% Natural Channel Design 91,000 172,000 166,914 (81,000) -47.1% 998,000 879,000 1,109,158 119,000 13.5% Forest Management Managed Forest Tax Incentive Planning - - 84 - 0.0% Hazard Tree Management 116,000 131,000 34,949 (15,000) -11.5% Invasive Species Management 503,000 780,000 544,789 (277,000) -35.5% Forest Management Planning 36,000 35,000 39,253 1,000 2.9% Forest Management Operations 536,000 387,000 343,538 149,000 38.5% 1,191,000 1,333,000 962,613 (142,000) -10.7%

17 9

Revised $ Change % Change 2016 2015 2015 over 2015 over 2015 Budget Budget Year to date Budget Budget Restoration and Regeneration Propagation and Sale of Plants (8,000) 140,000 117,079 (148,000) -105.7% Inland and Lakefill Soil Management 255,000 265,000 330,353 (10,000) -3.8% Shoreline Restoration 457,000 889,000 739,560 (432,000) -48.6% Wetlands 1,208,000 1,545,000 1,405,453 (337,000) -21.8% Riparian and Flood Plain Restoration 325,000 682,000 361,013 (357,000) -52.3% Natural Channel and Stream Restoration 1,604,000 2,262,000 1,424,440 (658,000) -29.1% Terrestrial Planting 1,287,000 2,933,000 998,108 (1,646,000) -56.1% Wildlife Habitat Management 125,000 144,000 190,952 (19,000) -13.2% Compensation Restoration - - - - 0.0% Watershed Restoration 1,634,000 1,903,000 1,603,390 (269,000) -14.1% 6,887,000 10,763,000 7,170,348 (3,876,000) -36.0% Total Expenditures 11,587,000 15,084,000 11,473,913 (3,497,000) -23.2%

Net Surplus (Deficit) (260,000) (285,000) 226,238 25,000 -8.8%

Reserves 10,000 20,000 28,046 (10,000) -50.0%

Net Budget (250,000) (265,000) 254,284 15,000 -5.7%

18 10

Toronto and Region Conservation Authority 2016 Operating and Capital Budget - Greenspace Securement and Management

Revised $ Change % Change 2016 2015 2015 over 2015 over 2015 Budget Budget Year to date Budget Budget Revenue Municipal Operating levies 96,000 195,000 194,500 (99,000) -50.8% Capital levies 2,387,000 1,787,000 1,587,043 600,000 33.6% Other 4,848,000 100,000 1,636,144 4,748,000 4748.0% Government Grants Provincial - - (3,576) - 0.0% Federal 50,000 - 25,746 50,000 0.0% Other - - - - 0.0% User fees, sales and admissions 10,000 10,000 15,554 - 0.0% Contract services Municipal 430,000 450,000 428,284 (20,000) -4.4% Compensation agreements - 1,100,000 947,499 (1,100,000) -100.0% Corporate and other 254,000 190,000 17,273 64,000 33.7% Rent and property interests 2,869,000 3,553,000 2,872,895 (684,000) -19.3% Fundraising Donations 620,000 1,750,000 949,970 (1,130,000) -64.6% The Living City Foundation - - 2,396 - 0.0% Investment income - - 11,974 - 0.0% Sundry 10,000 25,000 29,477 (15,000) Total Revenue 11,574,000 9,160,000 8,715,179 2,414,000 26.4%

Expenditures Greenspace Securement Greenspace Land Acqusition 6,185,000 3,506,000 4,307,966 2,679,000 76.4% 6,185,000 3,506,000 4,307,966 2,679,000 76.4% Greenspace Management Archaeology 430,000 509,000 480,901 (79,000) -15.5% Property Taxes and Insurance 603,000 580,000 559,196 23,000 4.0% Resource Management Planning 533,000 241,000 163,857 292,000 121.2% Inventory and Audit 262,000 827,000 771,923 (565,000) -68.3% Implementation 599,000 1,905,000 420,270 (1,306,000) -68.6% Hazard Management 300,000 - 13,661 300,000 0.0% 2,727,000 4,062,000 2,409,808 (1,335,000) -32.9% Rental Properties Rentals 2,075,000 1,980,000 2,052,324 95,000 4.8% 2,075,000 1,980,000 2,052,324 95,000 4.8% Total Expenditures 10,987,000 9,548,000 8,770,098 1,439,000 15.1%

Net Surplus (Deficit) 587,000 (388,000) (54,916) 975,000 -251.3%

Reserves 388,000 388,000 - - 0.0%

Net Budget 975,000 - (54,916) 975,000 0.0%

19 11

Toronto and Region Conservation Authority 2016 Operating and Capital Budget - Tourism and Recreation

Revised $ Change % Change 2016 2015 2015 over 2015 over 2015 Budget Budget Year to date Budget Budget Revenue Municipal Operating levies 2,918,000 3,036,000 3,036,000 (118,000) -3.9% Capital levies 2,897,000 2,195,000 1,529,060 702,000 32.0% Other 1,542,000 1,761,000 1,078,074 (219,000) -12.4% Government Grants Provincial 369,000 369,000 216,456 - 0.0% Federal - - 81,837 - 0.0% Other - - - - 0.0% User fees, sales and admissions 9,726,000 9,143,000 9,659,026 583,000 6.4% Contract services Municipal 1,238,000 4,869,000 2,910,398 (3,631,000) -74.6% Compensation agreements - 27,000 100,000 (27,000) -100.0% Corporate and other 80,000 188,000 171,799 (108,000) -57.4% Rent and property interests 96,000 65,000 315,115 31,000 47.7% Fundraising Donations 5,000 11,000 13,970 (6,000) -54.5% The Living City Foundation - 12,000 300,717 (12,000) -100.0% Investment income - - 172 - 0.0% Sundry 61,000 - 1,350 61,000 Total Revenue 18,932,000 21,676,000 19,413,974 (2,744,000) -12.7%

Expenditures Waterfront Parks General Maintenance 240,000 255,000 291,142 (15,000) -5.9% Park Planning 1,616,000 3,207,000 1,405,824 (1,591,000) -49.6% Arsenal Lands 976,000 267,000 95,486 709,000 265.5% Park Development - - 116,695 - 0.0% 2,832,000 3,729,000 1,909,147 (897,000) -24.1% Conservation Parks Day Use 3,698,000 4,113,000 4,215,080 (415,000) -10.1% Picnics 956,000 538,000 446,320 418,000 77.7% Swimming 562,000 536,000 542,446 26,000 4.9% Fishing 31,000 72,000 81,536 (41,000) -56.9% Mountain Biking 2,000 2,000 876 - 0.0% Camping 1,202,000 853,000 882,945 349,000 40.9% Cross Country Skiing 135,000 116,000 181,923 19,000 16.4% Filming - 11,000 8,925 (11,000) -100.0% Park Development 500,000 - - 500,000 0.0% 7,086,000 6,241,000 6,360,051 845,000 13.5% Trails Trail Development 1,473,000 2,987,000 1,751,348 (1,514,000) -50.7% Trail Management 163,000 838,000 964,526 (675,000) -80.5% Trail Planning 94,000 40,000 88,855 54,000 135.0% TRCA Trail Strategy 150,000 - 53,109 150,000 0.0% 1,880,000 3,865,000 2,857,838 (1,985,000) -51.4%

20 12

Revised $ Change % Change 2016 2015 2015 over 2015 over 2015 Budget Budget Year to date Budget Budget Bathurst Glen Golf Course Golf Course 1,239,000 1,239,000 1,161,120 - 0.0% 1,239,000 1,239,000 1,161,120 - 0.0% Black Creek Pioneer Village Heritage Village 4,115,000 3,944,000 4,436,406 171,000 4.3% 4,115,000 3,944,000 4,436,406 171,000 4.3% Events and Festivals Kortright 252,000 248,000 236,425 4,000 1.6% Black Creek Pioneer Village 296,000 315,000 322,747 (19,000) -6.0% Other Facilities 176,000 185,000 234,508 (9,000) -4.9% 724,000 748,000 793,680 (24,000) -3.2% Wedding and Corporate Events Kortright 829,000 732,000 785,986 97,000 13.3% Black Creek Pioneer Village 925,000 890,000 893,563 35,000 3.9% 1,754,000 1,622,000 1,679,549 132,000 8.1% Total Expenditures 19,630,000 21,388,000 19,197,791 (1,758,000) -8.2%

Net Surplus (Deficit) (697,000) 291,000 216,182 (988,000) -339.5%

Reserves - - 91,942 - 0.0%

Net Budget (697,000) 291,000 308,124 (988,000) -339.5%

21 13

Toronto and Region Conservation Authority 2016 Operating and Capital Budget - Planning and Development Review

Revised $ Change % Change 2016 2015 2015 over 2015 over 2015 Budget Budget Year to date Budget Budget Revenue Municipal Operating levies 200,000 608,000 608,000 (408,000) -67.1% Capital levies 962,000 980,000 879,193 (18,000) -1.8% Other 989,000 1,141,000 853,472 (152,000) -13.3% Government Grants Provincial 150,000 150,000 150,000 - 0.0% Federal - - - - 0.0% Other - - - - 0.0% User fees, sales and admissions 5,798,000 5,183,000 5,713,755 615,000 11.9% Contract services Municipal 321,000 - 124,198 321,000 0.0% Compensation agreements - - - - 0.0% Corporate and other 106,000 108,000 173,729 (2,000) -1.9% Rent and property interests - - - - 0.0% Fundraising Donations - - - - 0.0% The Living City Foundation - - - - 0.0% Investment income - - - - 0.0% Sundry - - 7,000 - Total Revenue 8,526,000 8,170,000 8,509,347 356,000 4.4%

Expenditures Development Planning and Regulation Permitting Planning 1,531,000 1,538,000 1,386,051 (7,000) -0.5% Permitting 1,247,000 1,168,000 1,083,544 79,000 6.8% Enquiries - - 48 - 0.0% Technical Services 1,202,000 1,059,000 1,038,207 143,000 13.5% Development Enforcement and Compliance 397,000 401,000 403,869 (4,000) -1.0% 4,377,000 4,166,000 3,911,719 211,000 5.1% Environmental Assessment Planning and Permitting Planning 770,000 721,000 726,763 49,000 6.8% Permitting 876,000 829,000 793,355 47,000 5.7% Development Enforcement and Compliance 264,000 268,000 249,326 (4,000) -1.5% Technical Services 1,352,000 1,364,000 1,432,045 (12,000) -0.9% 3,262,000 3,182,000 3,201,489 80,000 2.5% Policy Development and Review Policy 887,000 821,000 726,856 66,000 8.0% 887,000 821,000 726,856 66,000 8.0% Total Expenditures 8,526,000 8,169,000 7,840,064 357,000 4.4%

Net Surplus (Deficit) - - 669,284 - 0.0%

Reserves - - - - 0.0%

Net Budget - - 669,284 - 0.0%

22 14

Toronto and Region Conservation Authority 2016 Operating and Capital Budget - Education and Outreach

Revised $ Change % Change 2016 2015 2015 over 2015 over 2015 Budget Budget Year to date Budget Budget Revenue Municipal Operating levies 893,000 923,000 923,000 (30,000) -3.3% Capital levies 4,577,000 5,244,000 2,751,993 (667,000) -12.7% Other 894,000 1,069,000 89,372 (175,000) -16.4% Government Grants Provincial 797,000 692,000 881,173 105,000 15.2% Federal 356,000 (4,000) 25,000 360,000 -9000.0% Other - - - - 0.0% User fees, sales and admissions 3,412,000 3,156,000 2,448,709 256,000 8.1% Contract services Municipal 436,000 43,000 3,718 393,000 914.0% Compensation agreements - - - - 0.0% Corporate and other 13,000 230,000 24,679 (217,000) -94.3% Rent and property interests - - 400 - 0.0% Fundraising Donations 5,000 - 12,738 5,000 0.0% The Living City Foundation 1,002,000 1,168,000 493,980 (166,000) -14.2% Investment income - - 1,530 - 0.0% Sundry - - - - Total Revenue 12,385,000 12,521,000 7,656,292 (136,000) -1.1%

Expenditures School Programs Early Learners 397,000 416,000 395,615 (19,000) -4.6% Post Secondary 11,000 7,000 8,458 4,000 57.1% Elementary 7,873,000 7,910,000 5,659,159 (37,000) -0.5% Secondary 2,030,000 1,981,000 798,245 49,000 2.5% 10,311,000 10,314,000 6,861,477 (3,000) 0.0% Newcomer Services Development of Internationally Trained Professionals 1,047,000 768,000 774,396 279,000 36.3% Multicultural Connections Program 239,000 189,000 228,120 50,000 26.5% 1,286,000 957,000 1,002,516 329,000 34.4% Family and Community Programs Kortright 57,000 59,000 72,967 (2,000) -3.4% Other Locations 710,000 766,000 425,465 (56,000) -7.3% 767,000 825,000 498,432 (58,000) -7.0% Total Expenditures 12,364,000 12,096,000 8,362,425 268,000 2.2%

Net Surplus (Deficit) 21,000 425,000 (706,134) (404,000) -95.1%

Reserves - (18,000) 4,414 18,000 -100.0%

Net Budget 21,000 407,000 (701,720) (386,000) -94.8%

23 15

Toronto and Region Conservation Authority 2016 Operating and Capital Budget - Sustainable Communities

Revised $ Change % Change 2016 2015 2015 over 2015 over 2015 Budget Budget Year to date Budget Budget Revenue Municipal Operating levies 1,045,000 909,000 909,000 136,000 15.0% Capital levies 6,027,000 5,287,000 4,209,413 740,000 14.0% Other 271,000 251,000 60,551 20,000 8.0% Government Grants Provincial 507,000 646,000 430,625 (139,000) -21.5% Federal 310,000 552,000 453,226 (242,000) -43.8% Other - - - - 0.0% User fees, sales and admissions 888,000 773,000 785,400 115,000 14.9% Contract services Municipal 333,000 86,000 376,022 247,000 287.2% Compensation agreements 34,000 64,000 16,723 (30,000) -46.9% Corporate and other 643,000 773,000 822,063 (130,000) -16.8% Rent and property interests - - - - 0.0% Fundraising Donations 545,000 521,000 132,411 24,000 4.6% The Living City Foundation 454,000 473,000 409,229 (19,000) -4.0% Investment income - - 336 - 0.0% Sundry - - - - Total Revenue 11,057,000 10,335,000 8,604,999 722,000 7.0%

Expenditures Living City Transition Program Sustainable Neighbourhood 1,060,000 1,069,000 942,095 (9,000) -0.8% Community Transformation 1,737,000 1,185,000 824,857 552,000 46.6% Partners in Project Green 1,100,000 1,271,000 1,155,263 (171,000) -13.5% Urban Agriculture 301,000 251,000 100,754 50,000 19.9% Sustainable Technology Evaluation Program 2,065,000 1,864,000 1,773,713 201,000 10.8% Climate Consortium 250,000 367,000 426,116 (117,000) -31.9% Green Infrastructure Ontario 227,000 189,000 124,806 38,000 20.1% 6,740,000 6,196,000 5,347,604 544,000 8.8% Community Engagement Citizen Based Regeneration 2,936,000 2,678,000 2,114,992 258,000 9.6% Stewardship 656,000 698,000 715,079 (42,000) -6.0% Watershed Engagement 729,000 763,000 417,370 (34,000) -4.5% 4,321,000 4,139,000 3,247,441 182,000 4.4% Total Expenditures 11,061,000 10,335,000 8,595,045 726,000 7.0%

Net Surplus (Deficit) (4,000) - 9,954 (4,000) 0.0%

Reserves - - - - 0.0%

Net Budget (4,000) - 9,954 (4,000) 0.0%

24 16

Toronto and Region Conservation Authority 2016 Operating and Capital Budget - Corporate Services

Revised $ Change % Change 2016 2015 2015 over 2015 over 2015 Budget Budget Year to date Budget Budget Revenue Municipal Operating levies 7,251,000 6,391,000 6,390,721 860,000 13.5% Capital levies 1,417,000 1,849,000 1,846,912 (432,000) -23.4% Other 105,000 10,000 - 95,000 950.0% Government Grants Provincial 120,000 120,000 120,000 - 0.0% Federal - - - - 0.0% Other - - - - 0.0% User fees, sales and admissions 64,000 72,000 120,677 (8,000) -11.1% Contract services Municipal - 10,000 3,417 (10,000) -100.0% Compensation agreements - - - - 0.0% Corporate and other - - 25,672 - 0.0% Rent and property interests 28,000 13,000 14,958 15,000 115.4% Fundraising Donations - - - - 0.0% The Living City Foundation - 35,000 - (35,000) -100.0% Investment income 600,000 600,000 583,685 - 0.0% Net gain/loss on sale of tangible capital assets - - - - 0.0% Sundry 72,000 17,000 292,674 55,000 Total Revenue 9,657,000 9,117,000 9,398,716 540,000 5.9%

Expenditures Financial Management Accounting and Reporting 1,673,000 1,957,000 1,946,320 (284,000) -14.5% Business Planning and Strategic Management 618,000 - - 618,000 0.0% 2,291,000 1,957,000 1,946,320 334,000 17.1% Corporate Management and Governance Corporate Secretariat 1,135,000 1,100,000 1,079,611 35,000 3.2% Corporate Sustainability Management 192,000 91,000 84,035 101,000 111.0% Support Services 4,314,000 6,267,000 6,439,347 (1,953,000) -31.2% Office of the CEO 60,000 11,000 5,524 49,000 445.5% 5,701,000 7,469,000 7,608,517 (1,768,000) -23.7% Human Resources Volunteers 53,000 52,000 - 1,000 1.9% Employee Support 987,000 762,000 764,594 225,000 29.5% Health and Safety - - - - 0.0% 1,040,000 814,000 764,594 226,000 27.8% Corporate Communications Communications 1,422,000 1,322,000 1,280,345 100,000 7.6% Digital and Social Media 131,000 293,000 217,209 (162,000) -55.3% 1,553,000 1,615,000 1,497,554 (62,000) -3.8%

25 17

Revised $ Change % Change 2016 2015 2015 over 2015 over 2015 Budget Budget Year to date Budget Budget Information Infrastructure and Management Information Technology 852,000 768,000 762,277 84,000 10.9% Knowledge and Data Management 1,564,000 1,648,000 1,543,837 (84,000) -5.1% Business Software 263,000 340,000 296,456 (77,000) -22.6% 2,679,000 2,756,000 2,602,570 (77,000) -2.8% Project Recoveries Project Recoveries (3,029,000) (3,034,000) (2,947,588) 5,000 -0.2% (3,029,000) (3,034,000) (2,947,588) 5,000 -0.2% Vehicles and Equipment Operations (896,000) (845,000) (632,022) (51,000) 6.0% Acquisitions 896,000 845,000 609,379 51,000 6.0% - - - (22,643) - 0.0%

Total Expenditures 10,235,000 11,577,000 11,449,324 (1,342,000) -11.6%

Net Surplus (Deficit) (578,000) (2,460,000) (2,050,609) 1,882,000 -76.5%

Reserves 578,000 2,460,000 2,303,435 (1,882,000) -76.5%

Net Budget - - 252,826 - 0.0%

26 Section II - Operating Budget 18

Toronto and Region Conservation Authority 2016 Operating Budget

Revised $ Change % Change 2016 2015 2015 over 2015 over 2015 Budget Budget Year to date Budget Budget Revenue Municipal Operating levies 13,552,000 13,285,000 13,285,021 267,000 2.0% Capital levies 362,000 348,000 348,000 14,000 4.0% Other 1,164,000 1,236,000 941,472 (72,000) -5.8% Government Grants Provincial 1,940,000 1,835,000 1,760,191 105,000 5.7% Federal 254,000 183,000 638,545 71,000 38.8% Other - - - - 0.0% User fees, sales and admissions 19,026,000 17,563,000 17,990,924 1,463,000 8.3% Contract services Municipal 1,257,000 1,065,000 1,777,660 192,000 18.0% Compensation agreements - - - - 0.0% Corporate and other 213,000 216,000 448,450 (3,000) -1.4% Rent and property interests 2,619,000 2,331,000 2,625,505 288,000 12.4% Fundraising Donations 22,000 28,000 33,589 (6,000) -21.4% The Living City Foundation 1,102,000 1,041,000 604,784 61,000 5.9% Investment income 600,000 600,000 585,387 - 0.0% Sundry 82,000 82,000 330,501 - Total Revenue 42,193,000 39,813,000 41,370,029 2,380,000 6.0%

27 19

Toronto and Region Conservation Authority 2016 Operating Budget

Revised $ Change % Change 2016 2015 2015 over 2015 over 2015 Budget Budget Year to Date Budget Budget

Expenditures Watershed Studies and Strategies Watershed Planning and Reporting 447,000 566,000 551,372 (119,000) -21.0% Climate Science 99,000 95,000 96,838 4,000 4.2% 546,000 661,000 648,210 (115,000) -17.4% Water Risk Management Flood Management 714,000 668,000 698,918 46,000 6.9% 714,000 668,000 698,918 46,000 6.9% Regional Biodiversity Biodiversity Monitoring 130,000 130,000 139,157 - 0.0% Ecosystem Management Research and Directions 117,000 67,000 120,029 50,000 74.6% Forest Management 135,000 147,000 146,286 (12,000) -8.2% Restoration and Regeneration 776,000 794,000 1,075,582 (18,000) -2.3% 1,158,000 1,138,000 1,481,054 20,000 1.8% Greenspace Securement and Management Greenspace Securement 105,000 99,000 97,046 6,000 6.1% Greenspace Management 1,239,000 1,242,000 1,185,157 (3,000) -0.2% Rental Properties 2,075,000 1,980,000 2,052,324 95,000 4.8% 3,419,000 3,321,000 3,334,527 98,000 3.0% Tourism and Recreation Conservation Parks 5,467,000 5,122,000 5,635,064 345,000 6.7% Bathurst Glen Golf Course 1,239,000 1,239,000 1,161,120 - 0.0% Black Creek Pioneer Village 3,961,000 3,885,000 3,920,011 76,000 2.0% Events and Festivals 724,000 747,000 793,680 (23,000) -3.1% Wedding and Corporate Events 1,754,000 1,622,000 1,679,550 132,000 8.1% 13,145,000 12,615,000 13,189,425 530,000 4.2% Planning and Development Review Development Planning and Regulation Permitting 4,262,000 4,166,000 3,895,274 96,000 2.3% Environmental Assessment Planning and Permitting 3,262,000 3,183,000 3,201,488 79,000 2.5% Policy Development and Review 287,000 189,000 195,663 98,000 51.9% 7,811,000 7,538,000 7,292,425 273,000 3.6% Education and Outreach School Programs 4,923,000 4,817,000 4,644,438 106,000 2.2% Newcomer Services 1,047,000 768,000 774,396 279,000 36.3% Family and Community Programs 148,000 63,000 89,899 85,000 134.9% 6,118,000 5,648,000 5,508,733 470,000 8.3% Sustainable Communities Living City Transition Program 151,000 - 11 151,000 0.0% Community Engagement 1,279,000 1,344,000 1,133,636 (65,000) -4.8% 1,430,000 1,344,000 1,133,647 86,000 6.4% Corporate Services Financial Management 2,291,000 1,957,000 1,946,320 334,000 17.1% Corporate Management and Governance 4,524,000 3,340,000 3,353,129 1,184,000 35.4% Human Resources 1,040,000 814,000 764,594 226,000 27.8% Corporate Communications 1,553,000 1,615,000 1,497,554 (62,000) -3.8% Information Infrastructure and Management 2,274,000 2,256,000 2,203,073 18,000 0.8% Vehicles and Equipment - 40,000 22,119 (40,000) -100.0% 11,682,000 10,022,000 9,786,789 1,660,000 16.6%

Total Expenditures 46,023,000 42,955,000 43,073,728 3,068,000 7.1%

Project Recoveries (3,029,000) (3,034,000) (2,947,588) 5,000 -0.2%

Net Expenditures 42,994,000 39,921,000 40,126,140 3,073,000 7.7%

Net Surplus (Deficit) (801,000) (106,000) 1,243,889 (695,000) 655.7%

Reserves 801,000 106,000 (514,867) 695,000 655.7%

Net Budget - - 729,022 - 0.0% 28 20

Toronto and Region Conservation Authority Apportionment of 2016 General Levy

2016 2015 Matching Matching Tax Non-CVA General Operating Change Over 2014 Levy Non-Levy Adjustment Levy Levy Levy $$$ $$$%

ADJALA-TOSORONTIO 52 811 863 850 13 1.5%

DURHAM 21,863 337,341 127,800 61,800 548,804 535,450 13,354 2.5%

TORONTO 498,163 7,688,937 300 8,187,400 8,054,000 133,400 1.7%

MONO 62 971 900 1,933 1,700 233 13.7%

PEEL 88,029 1,358,671 111,000 183,300 1,741,000 1,685,000 56,000 3.3%

YORK 165,831 2,559,669 176,000 170,500 3,072,000 3,008,000 64,000 2.1%

774,000 11,946,400 416,000 415,600 13,552,000 13,285,000 267,000 2.0%

29 21

Toronto and Region Conservation Authority 2016 Basis of Apportionment - Municipal Levy

Municipality % OF Current Value Current Value Population in Municipality in Assessment in Total Population Assessment Authority Authority Watershed

$(000's) $(000's)

Township of Adjala-Tosorontio 1,821,856 4 72,874 9,557 382 Durham, Regional Municipality of 37,137,612 * 30,597,408 198,993 165,895 City of Toronto 697,169,400 100 697,169,400 2,168,832 2,168,832 Town of Mono 1,745,289 5 87,264 6,979 349 Peel, Regional Municipality of 279,458,134 * 123,195,129 1,062,417 486,056 York, Regional Municipality of 254,258,672 * 232,077,215 772,881 696,478

1,271,590,963 1,083,199,290 4,219,659 3,517,992

Analysis of Regional Municipalities*

Durham, Regional Municipality of Ajax, Town of 16,393,808 86 14,098,675 97,445 83,803 Pickering, Town of 16,522,909 95 15,696,763 82,628 78,497 Uxbridge Township 4,220,895 19 801,970 18,920 3,595

37,137,612 30,597,408 198,993 165,895

Peel, Regional Municipality of Brampton, City 91,656,717 63 57,743,732 409,807 258,178 Mississauga, City of 171,997,190 33 56,759,073 595,715 196,586 Caledon, Town of 15,804,227 55 8,692,325 56,895 31,292

279,458,134 123,195,129 1,062,417 486,056

York, Regional Municipality of Aurora, Town of 12,834,529 4 513,381 45,546 1,822 Markham, Town of 80,952,492 100 80,952,492 259,311 259,311 Richmond Hill, Town of 48,744,104 99 48,256,663 154,897 153,348 Vaughan, Town of 95,048,065 100 95,048,065 257,794 257,794 Whitchurch-Stouffville, Town of 9,957,702 43 4,281,812 34,839 14,981 King Township 6,721,780 45 3,024,801 20,494 9,222

254,258,672 232,077,215 772,881 696,478

*As provided by the Ministry of Natural Resources and Forestry

30 Section III - Capital Budget 22

Toronto and Region Conservation Authority 2016 Capital Budget

Revised $ Change % Change 2016 2015 2015 over 2015 over 2015 Budget Budget Year to date Budget Budget Revenue Municipal Operating levies - - - - 0.0% Capital levies 42,642,000 42,343,000 33,317,166 299,000 0.7% Other 7,679,000 3,297,000 2,948,242 4,382,000 132.9% Government Grants Provincial 1,323,000 1,737,000 1,915,021 (414,000) -23.8% Federal 1,607,000 1,094,000 1,195,454 513,000 46.9% Other - - - - 0.0% User fees, sales and admissions 978,000 869,000 873,791 109,000 12.5% Contract services Municipal 7,584,000 18,310,000 15,112,867 (10,726,000) -58.6% Compensation agreements 255,000 2,158,000 1,205,352 (1,903,000) -88.2% Corporate and other 1,053,000 2,031,000 904,229 (978,000) -48.2% Rent and property interests 374,000 1,300,000 580,630 (926,000) -71.2% Fundraising Donations 1,170,000 2,271,000 1,095,255 (1,101,000) -48.5% The Living City Foundation 412,000 963,000 1,227,558 (551,000) -57.2% Investment income - - 26,444 - 0.0% Sundry 61,000 - - 61,000 Total Revenue 65,138,000 76,373,000 60,402,009 (11,235,000) -14.7%

31 23

Toronto and Region Conservation Authority 2016 Capital Budget

Revised $ Change % Change 2016 2015 2015 over 2015 over 2015 Budget Budget Year to Date Budget Budget

Expenditures Watershed Studies and Strategies Watershed Planning and Reporting 2,116,000 1,651,000 832,622 465,000 28.2% Climate Science 491,000 595,000 508,773 (104,000) -17.5% 2,607,000 2,246,000 1,341,395 361,000 16.1% Water Risk Management Water Resource Science 2,742,000 6,200,000 3,675,454 (3,458,000) -55.8% Erosion Management 13,823,000 16,869,000 19,369,757 (3,046,000) -18.1% Flood Management 2,986,000 3,462,000 1,950,679 (476,000) -13.7% 19,551,000 26,531,000 24,995,890 (6,980,000) -26.3% Regional Biodiversity Biodiversity Monitoring 2,380,000 1,979,000 2,092,637 401,000 20.3% Ecosystem Management Research and Directions 881,000 812,000 989,128 69,000 8.5% Forest Management 1,056,000 1,186,000 816,326 (130,000) -11.0% Restoration and Regeneration 6,111,000 9,968,000 6,094,766 (3,857,000) -38.7% 10,428,000 13,945,000 9,992,857 (3,517,000) -25.2% Greenspace Securement and Management Greenspace Securement 6,080,000 3,407,000 4,210,920 2,673,000 78.5% Greenspace Management 1,488,000 2,820,000 1,224,649 (1,332,000) -47.2% Rental Properties - - - - 0.0% 7,568,000 6,227,000 5,435,569 1,341,000 21.5% Tourism and Recreation Waterfront Parks 2,832,000 3,729,000 1,909,147 (897,000) -24.1% Conservation Parks 1,618,000 1,119,000 724,987 499,000 44.6% Trails 1,880,000 3,864,000 2,857,838 (1,984,000) -51.3% Black Creek Pioneer Village 154,000 59,000 516,395 95,000 161.0% 6,484,000 8,771,000 6,008,367 (2,287,000) -26.1% Planning and Development Review Development Planning and Regulation Permitting 115,000 - 16,446 115,000 0.0% Policy Development and Review 600,000 632,000 531,193 (32,000) -5.1% 715,000 632,000 547,639 83,000 13.1% Education and Outreach School Programs 5,388,000 5,497,000 2,217,039 (109,000) -2.0% Newcomer Services 239,000 189,000 228,120 50,000 26.5% Family and Community Programs 619,000 762,000 408,534 (143,000) -18.8% 6,246,000 6,448,000 2,853,693 (202,000) -3.1% Sustainable Communities Living City Transition Program 6,589,000 6,196,000 5,347,594 393,000 6.3% Community Engagement 3,042,000 2,795,000 2,113,805 247,000 8.8% 9,631,000 8,991,000 7,461,399 640,000 7.1% Corporate Services Financial Management - - - - 0.0% Corporate Management and Governance 1,177,000 4,129,000 4,255,388 (2,952,000) -71.5% Human Resources - - - - 0.0% Information Infrastructure and Management 405,000 500,000 399,498 (95,000) -19.0% Vehicles and Equipment - - (44,761) - 0.0% 1,582,000 4,629,000 4,610,125 (3,047,000) -65.8%

Total Expenditures 64,812,000 78,420,000 63,246,934 (13,608,000) -17.4%

Net Surplus (Deficit) 326,000 (2,046,000) (2,844,925) 2,372,000 -115.9%

Reserves 175,000 2,744,000 2,942,704 (2,569,000) -93.6%

Net Budget 501,000 698,000 97,779 (197,000) -28.2%

32 24

Toronto and Region Conservation Authority 2016 Capital Levy Summary by Service Area

Total by Service Area Peel Toronto York Durham Adjala Mono Service Area (000s) Watershed Studies and Strategies 692 680 67 1,439

Water Risk Management 2,658 8,940 1,905 342 13,845

Regional Biodiversity 3,344 1,457 915 267 5,983

Land Securement and Management 1,330 400 410 17 2,157

Tourism and Recreation 900 590 129 1,619

Planning and Development Review 558 119 160 60 897

Education and Outreach 3,506 247 683 4,436

Sustainable Communities 3,388 816 527 114 4,845

Corporate Services 163 922 290 42 1,417

16,539 14,171 4,957 971 36,638

Carryforward (net) 4,094 1,825 325 121 6,365

Total by Municipality 20,633 15,996 5,282 1,092 43,003

33 Section IV - Operating and Capital excluding TCA 25

Toronto and Region Conservation Authority 2016 Operating and Capital Budget - excluding tangible capital asset expenditures

Revised $ Change % Change 2016 2015 over 2015 over 2015 Budget Budget Budget Budget Revenue Municipal Operating levies 13,552,000 13,285,000 267,000 2.0% Capital levies 43,004,000 42,691,000 313,000 0.7% Other 8,843,000 4,533,000 4,310,000 95.1% Government Grants Provincial 3,263,000 3,572,000 (309,000) -8.7% Federal 1,861,000 1,277,000 584,000 45.7% Other - - - 0.0% User fees, sales and admissions 20,004,000 18,432,000 1,572,000 8.5% Contract services Municipal 8,842,000 19,375,000 (10,533,000) -54.4% Compensation agreements 255,000 2,158,000 (1,903,000) -88.2% Corporate and other 1,266,000 2,247,000 (981,000) -43.7% Rent and property interests 2,993,000 3,631,000 (638,000) -17.6% Fundraising Donations 1,192,000 2,299,000 (1,107,000) -48.2% The Living City Foundation 1,514,000 2,004,000 (490,000) -24.5% Investment income 600,000 600,000 - 0.0% Net gain/loss on sale of tangible capital assets - - - 0.0% Sundry 143,000 82,000 61,000 Total Revenue 107,332,000 116,186,000 (8,854,000) -7.6%

34 26

Toronto and Region Conservation Authority 2016 Operating and Capital Budget - excluding tangible capital asset expenditures

Revised $ Change % Change 2016 2015 over 2015 over 2015 Budget Budget Budget Budget

Expenditures Watershed Studies and Strategies Watershed Planning and Reporting 2,569,000 2,227,000 342,000 15.4% Climate Science 590,000 688,000 (98,000) -14.2% 3,159,000 2,915,000 244,000 8.4% Water Risk Management Water Resource Science 2,721,000 6,190,000 (3,469,000) -56.0% Erosion Management 14,856,000 17,589,000 (2,733,000) -15.5% Flood Management 3,666,000 4,082,000 (416,000) -10.2% 21,243,000 27,861,000 (6,618,000) -23.8% Regional Biodiversity Biodiversity Monitoring 2,554,000 2,152,000 402,000 18.7% Ecosystem Management Research and Directions 998,000 869,000 129,000 14.8% Forest Management 1,191,000 1,333,000 (142,000) -10.7% Restoration and Regeneration 6,735,000 10,501,000 (3,766,000) -35.9% 11,478,000 14,855,000 (3,377,000) -22.7% Greenspace Securement and Management Greenspace Securement 1,145,000 1,036,000 109,000 10.5% Greenspace Management 2,726,000 3,981,000 (1,255,000) -31.5% Rental Properties 1,841,000 1,830,000 11,000 0.6% 5,712,000 6,847,000 (1,135,000) -16.6% Tourism and Recreation Waterfront Parks 1,942,000 2,750,000 (808,000) -29.4% Conservation Parks 8,843,000 7,890,000 953,000 12.1% Trails 1,879,000 3,043,000 (1,164,000) -38.3% Bathurst Glen Golf Course 1,239,000 1,225,000 14,000 1.1% Black Creek Pioneer Village 4,093,000 3,940,000 153,000 3.9% Events and Festivals 704,000 734,000 (30,000) -4.1% Wedding and Corporate Events 1,733,000 1,609,000 124,000 7.7% 20,433,000 21,191,000 (758,000) -3.6% Planning and Development Review Development Planning and Regulation Permitting 4,377,000 4,162,000 215,000 5.2% Environmental Assessment Planning and Permitting 3,248,000 3,175,000 73,000 2.3% Policy Development and Review 881,000 819,000 62,000 7.6% 8,506,000 8,156,000 350,000 4.3% Education and Outreach School Programs 7,647,000 9,815,000 (2,168,000) -22.1% Newcomer Services 1,279,000 955,000 324,000 33.9% Family and Community Programs 6,000 99,000 (93,000) -93.9% 8,932,000 10,869,000 (1,937,000) -17.8%

35 27

Sustainable Communities Living City Transition Program 6,767,000 6,212,000 555,000 8.9% Community Engagement 4,316,000 4,137,000 179,000 4.3% 11,083,000 10,349,000 734,000 7.1% Corporate Services Financial Management 2,189,000 1,956,000 233,000 11.9% Corporate Management and Governance 5,593,000 4,732,000 861,000 18.2% Human Resources 1,040,000 814,000 226,000 27.8% Corporate Communications 1,446,000 1,391,000 55,000 4.0% Information Infrastructure and Management 2,493,000 2,286,000 207,000 9.1% Vehicles and Equipment (946,000) (885,000) (61,000) 6.9% 11,815,000 10,294,000 1,521,000 14.8%

Total Expenditures 102,361,000 113,337,000 (10,976,000) -9.7%

Project Recoveries (3,063,000) (3,058,000) (5,000) 0.2%

Net Surplus (Deficit) 8,033,000 5,869,000 2,164,000 36.9%

Reserves 976,000 2,850,000 (1,874,000) -65.8%

Net Budget 9,009,000 8,719,000 290,000 3.3%

36 28

Toronto and Region Conservation Authority 2016 Operating and Capital Budget - by object classification - excluding tangible capital asset expenditures

$ Change % Change 2016 2015 over 2015 over 2015 Budget Budget Budget Budget Revenue Municipal Operating levies 13,552,000 13,285,000 267,000 2.0% Capital Levies 43,004,000 42,692,000 312,000 0.7% Other 8,843,000 4,533,000 4,310,000 95.1% Government Grants Provincial 3,263,000 3,572,000 (309,000) -8.7% Federal 1,861,000 1,277,000 584,000 45.7% Other - - - 0.0% User fees, sales and admissions 20,004,000 18,432,000 1,572,000 8.5% Contract services Municipal 8,842,000 19,375,000 (10,533,000) -54.4% Compensation agreements 255,000 2,158,000 (1,903,000) -88.2% Corporate and other 1,266,000 2,247,000 (981,000) -43.7% Rent and property interests 2,993,000 3,631,000 (638,000) -17.6% Fundraising Donations 1,192,000 2,299,000 (1,107,000) -48.2% The Living City Foundation 1,514,000 2,004,000 (490,000) -24.5% Investment income 600,000 600,000 - 0.0% Sundry 143,000 42,000 101,000 Total Revenue 107,332,000 116,146,000 (9,127,000) -7.9%

Expenditures Wages and benefits 58,058,000 54,948,000 3,110,000 5.7% Contracted services 24,208,000 35,470,000 (11,262,000) -31.8% Materials and supplies 5,597,000 7,153,000 (1,556,000) -21.8% Utilities 1,112,000 1,008,000 104,000 10.3% Property taxes 1,229,000 1,088,000 141,000 13.0% Grants to other organizations 1,935,000 2,487,000 (552,000) -22.2% Land - - - 0.0% Furniture and equipment - 1,085,000 (1,085,000) -100.0% Sundry 246,000 229,000 17,000 7.4% 92,385,000 103,468,000 (11,083,000) -10.7%

Internal Recoveries (16,349,000) (15,516,000) (833,000) 5.4% Internal Charges 16,349,000 15,516,000 833,000 5.4% 92,385,000 103,468,000 (11,083,000) -10.7%

Add Amortization 6,914,000 6,810,000 104,000 1.5%

Total Expenditures 99,299,000 110,278,000 (10,979,000) -10.0%

Net Surplus (Deficit) 8,033,000 5,868,000 1,852,000 31.6%

Reserves 976,000 2,850,000 (1,874,000) -65.8%

Net Budget 9,009,000 8,718,000 (22,000) -0.3%

37 Attachment 1

Toronto and Region Conservation Authority

Business Synopsis and Rationale 2016-2020

38

39 Business Synopsis and Rationale 2016-2020 Executive Summary

Toronto and Region Conservation Authority (TRCA) Business Synopsis and Rationale 2016-2020 outlines 33 Program Areas, organized into nine Service Areas, through which TRCA provides services to jurisdictional partners and citizens. These Program Areas are informed and shaped by TRCA’s mandate as a conservation authority:

“… to establish and undertake, in the area over which it has jurisdiction, a program designed to further the conservation, restoration, development and management of natural resources other than gas, oil, coal and minerals.” Conservation Authorities Act, Section 20

Situated in Canada’s most populous urban centre, TRCA programs address issues borne of expansive and sustained urbanization, changing climate, infrastructure renewal and resilience demands, and the needs of a dynamic citizenry. TRCA mission to realize The Living City captures TRCA’s modern operating space amidst these challenges:

“To work with our partners to ensure that The Living City is built on a natural foundation of healthy rivers and shorelines, green space and biodiversity and sustainable communities.”

The Business Synopsis and Rationale 2016-2020 outlines how TRCA pursues The Living City vision by offering programming that combines one or more of TRCA’s five main value propositions; these include:

1. Reducing jurisdictional physical, environmental, social, and economic risk on an at-cost basis in areas of legislated responsibility or relevant fields otherwise prone to one or more types of market failure; 2. Delivering value-added and streamlined services to reduce partner or client expense, service time, uncertainty, and/or financial risk; 3. Parlaying public funding into programming that sustains Toronto region as a desirable and competitive location for socially, environmentally, and economically desirable industries and/or enhances citizen, community, and ecosystem health; 4. Maintaining and advancing environmental science, monitoring, technology, and/or best-practices in support of TRCA and partner objectives; and 5. Building productive partnerships, collaborations, and networks, in particular those otherwise unlikely to occur through traditional public, private, or non-profit avenues.

The business rationales contained in this document continue TRCA’s comprehensive performance measurement and management initiative that began with the mapping of TRCA projects to Service Areas in 2014. Future iterations of this document will include enhanced financial analyses, program outcome metrics, and internal operations metrics. Later versions will also include additional sections that demonstrate program delivery and progress against the strategic plan objectives of our partners and TRCA’s own 10-year strategic plan Building The Living City (2013-2022).

Toronto and Region Conservation is committed to creating a Living City that protects and restores the integrity of the region’s natural resources, provides opportunities for the enjoyment of nature and outdoor recreations, and enables sustainable city building that creates value for residents, businesses and nature. We look forward to working with our partners to realize this bright future.

40

41 2016 Budget

($000)

Sources of Revenue

Gross Government Surplus/ Net User Contract Capital Operating Reserves Expenditures Grants and (Deficit) Budget Fees Services Levy Levy Other

Watershed Studies and Strategies

Watershed Planning and Reporting 2,563 588 - 157 1,421 397 - -

Climate Science 590 - - 19 472 99 - - 3,153 588 - 176 1,893 496 - - -

2016 Full-time Equivalent Employees (FTEs)

Operating Capital Total % Change Over 2015

4.53 6.4 10.93 2015

2016 3.7 6.98 10.68 -2.3%

42 Watershed Planning and Reporting

Objectives: • Provide integrated science-based, state-of-the-art strategies and solutions to protect and improve regional water resources, ecosystem health, and community benefits • Integrate watershed and waterfront management with municipal planning and provincial policy directions • Assess watershed and shoreline conditions, and the outcomes of plan implementation and other management activities, on an ongoing basis • Communicate environmental and sustainability data to inform municipal plans and strategies and increase awareness and level of engagement throughout communities

Program Features Positioning TRCA conducts watershed and waterfront planning in collaboration with partner municipalities to develop comprehensive strategies to protect water and natural resources, life, and property from flooding and erosion and provide community benefits.

Report Cards serve a data synthesis function; watershed report card and The Living City Report Card data provide TRCA and regional State of the Environment reports with watershed and environmental conditions. This information is also useful to TRCA, municipal partners, and stakeholders in understanding the outcomes of environmental and sustainability plans and strategies and evolving plans and strategies for future success.

Context TRCA’s jurisdiction includes the Humber, Etobicoke, Mimico, Duffins, Don, Highland, Rouge, Petticoat, and Carruthers watersheds as well as 67 km of Lake Ontario shoreline. This area encompasses 3,495 km2 of land and 3,653.6 km of river or stream winding through 20 municipal jurisdictions. Watershed, subwatershed and waterfront plans enable TRCA to fulfil its responsibilities for natural hazard and natural resource management under the Conservation Authorities Act and Planning Act -as well as supporting partner municipalities in undertaking land use planning - by assessing risks, developing strategies and identifying implementation priorities at a cumulative and comprehensive scale. Data, analysis, and/or recommendations contained in watershed, subwatershed and waterfront plans supports TRCA and municipal policy and programs related to natural hazard and water management, natural heritage protection and habitat restoration, stormwater management design and planning, and stewardship and outreach activities.

The Government of Ontario, through the implementation of the Endangered Species Act, updates to the Provincial Policy Statement and the Coordinated Land Use Planning Review for the Greater Golden Horseshoe, has stipulated that watershed and subwatershed planning will be a required element of land use planning in the Toronto Region and elsewhere moving forward.

TRCA began releasing Report Cards in the early 1990’s. Watershed Report Cards convey the status of watershed health indicators, communicate TRCA and partners watershed management plan implementation, actions and encourage stakeholders and communities to take action where improvements were still required. In 2011, TRCA collaborated with CivicAction, municipalities, and other partners to release a consolidated regional environmental report card – The Living City Report Card. This document reports on regional environment and sustainability indicators addressing water, greenspace, energy, air, stewardship and outdoor recreation.

Stressors and Opportunities Watersheds and the waterfront within TRCA’s jurisdiction are under very significant pressures resulting from the expansion and intensification of urban areas, aging infrastructure, extreme weather impacts and other emerging threats such as invasive species. In the coming years, partner municipalities will implement growth, intensification and redevelopment and revitalization plans and undertake infrastructure renewal projects. TRCA will require up-to-date understanding of watersheds and waterfront conditions to ensure management directions are current, relevant and integrated with a broad range of community sustainability objectives.

Business Synopsis & Rationale 2016-2020 1 Watershed Planning and Reporting 43

Climate change will have a significant effect on TRCA watersheds and waterfront areas. Climate change effects will cascade through watershed ecosystems and are expected to negatively affect water balance and availability, groundwater levels, stream flow, channel and bank stability, surface water quality and terrestrial and aquatic habitats. Watershed, subwatershed and waterfront planning provide a robust, integrated mechanism for analyzing and modelling the potential cumulative impacts of climate change.

The releases of watershed Report Cards and the Living City Report Card are significant public communications opportunities. Such events can be used to build public knowledge of, and/or draw attention to, specific environmental or sustainability needs or successes. Realizing this opportunity requires the effective translation of high volumes of science and data into completing narratives and visuals that capture public attention amidst multiple competing alternatives.

Funding Funding for Watershed Planning and Reporting is obtained through general and municipal levy.

Direct Actions and Activities Watershed, subwatershed and waterfront plans are developed cooperatively by TRCA, partner municipalities, and a variety of stakeholders. Plan development incorporates regional and watershed data, land use projections, and demographic and behavioral trends. From the data syntheses, watershed plans advance actions and strategies to address the interconnected and interdependent management needs for natural resources, human activities, and biotic and abiotic stressors. Recommendations are advanced that seek to address issues and opportunities at the most efficacious ecological, social, and political junctures.

Report card development includes the analysis and synthesis of data collected by TRCA, partner municipalities and other partners such as provincial government agencies. Following Report Card release, presentations are made to municipal councils and other key stakeholders. Public opinion surveys may be conducted to inform Report Card preparation; these surveys enable TRCA to assess the public's level of knowledge and awareness of watershed issues, understand attitudes or perspectives and willingness to support TRCA objectives, and record environmental behaviors and participation in activities that enhance watershed health.

Report cards and associated data and analyses are used to close the watershed and waterfront planning and implementation cycle; key management issues are identified, improvements realized by restoration and protection efforts are evaluated, and restoration and regeneration priorities are identified. This adaptive management approach enables preventative actions and reduces costs by identifying and remedying planning and/or implementation problems in a timely manner.

Complementary TRCA Actions and Activities Watershed Planning and Reporting are complemented by the following TRCA activities: • Biodiversity Monitoring and Water Resource Science provide data, analysis and modelling to enable the defensible, science-based planning and recommendations in watershed, subwatershed and waterfront plans. These also provide data and analysis to inform Report Cards • Policy Development and Review liaises with municipal, provincial, and federal partners to ensure watershed plan consistency and integration with their policies, plans, and strategies, as well as incorporation through development planning and approvals processes • Community Engagement ensures watershed planning processes includes elements of participative consultation and support for implementation • Watershed Planning and Reporting recommendations are implemented through the Living City Policies and guidelines • Restoration and Regeneration, Community Engagement and Living City Transition programs area assist with the implementation the watershed management plan actions

Business Synopsis & Rationale 2016-2020 2 Watershed Planning and Reporting 44 Key Outcomes • Municipal partners technical and policy/planning needs are adequately supported • TRCA conducts and advances state-of-the-science watershed, subwatershed, and waterfront planning; science/engineering/technical insights are reflected in Municipal Official Plans, strategies, and other relevant internal and external documents and regulations • Watershed Planning and Reporting, Water Resource Science and Ecosystem Management Research and Directions programs are evidence-based and informed by an understanding of the response of watershed health to management actions • Population is inspired to engage in actions that have a positive benefit on local environmental conditions as well as their own physical and social well-being • Indicators of watershed health improve

Key Activities – 2017-2020 • In consultation with municipal partners, develop the framework and scope of work for the next generation of TRCA Watershed Plans • Initiate and complete background studies and update three priority subwatershed/watershed plans • Strengthen connections between watershed management and management of the Lake Ontario near- shore area • Continue to fill data gaps, apply emerging science, and maintain up-to-date understanding of watershed and waterfront conditions including responding to municipal growth and intensification objectives, climate change, and community sustainability objectives • Produce, release, and undertake activities to promote the Watershed Report Cards and The Living City Report Card.

Outlook Integrated watershed and waterfront planning processes will continue to be a cornerstone in the development and implementation of TRCA programming, and in many aspects of the policies and programs of TRCA municipal partners and other stakeholders. TRCA will continue to refine watershed and waterfront plan structure and content to ensure their continued relevance. Of particular note, future iterations of waterfront and watershed plans will continue to focus on natural heritage and natural hazard issues, but will increasingly focus on sustainability, climate change resilience, and improving human health and well-being ( through improved environmental health, access to greenspace and recreational opportunities). Where necessary, TRCA will also develop supplementary plans and strategies to address issues that are related to watershed management but that are best addressed at a different scale, such as terrestrial habitat and wildlife connectivity.

Business Synopsis & Rationale 2016-2020 3 Watershed Planning and Reporting 45 Climate Science

Objectives:  Enable integrated science-based planning and decision making  Pursue research opportunities with municipal, academic, and private sector partners to address climate science data deficiencies  Identify and/or develop best-practices and policies for climate change adaptation  Prevent, eliminate, or reduce the risk of climate change to human life, local ecosystems, infrastructure, and private and public property

Program Features Positioning TRCA’s Climate Science program responds to information needs and knowledge gaps identified by municipal partners, other government agencies, and local stakeholders. TRCA maintains in-house applied climate adaptation expertise to support the application and integration of climate science and best-practices into both TRCA and municipal plans and policies. TRCA’s pre-existing familiarity with municipal infrastructure, natural heritage, and municipal strategies allow it to engage and respond in a timely manner and offer tailored recommendations.

Context In Ontario, as elsewhere, climate impacts are likely be more severe in the coming decades than previously anticipated. The Toronto region has already experienced a wide range of recent extreme climate events including heat waves, ice storms, severe precipitation events, windstorms, and drought. These events are consistent with climate change projections and have resulted in significant negative effects on ecosystems, water resources, critical infrastructure, and human health. Average temperatures across Peel Region, for example, could increase by 1.4°C (from 1981-2010) by 2020, 2.0°C by 2050 and 4.9°C by 2080 according to worst-case modelling scenario. (Source: Climate Trends and Future Projections in the Region of Peel, 2016).

Toronto region natural systems contain diverse climate vulnerabilities. With respect to natural heritage, the greatest concerns relate to the shallow unconfined aquifers, isolated and surface water-fed wetlands, transitional cold and warmwater streams and climate-sensitive vegetation that are distributed through urban and natural areas. Inland ponds and the shoreline of Lake Ontario are likely to sustain more frequent algal blooms. Vulnerable flora and faunal species - and/or those that rely on these vulnerable habitats sensitive to predicted climate impacts - include brook trout, many amphibians, and white spruce.

Low-lying areas, particularly those in urbanized areas surrounded by paved surfaces that convey high volume run off, will become increasingly flood vulnerable under current climate change scenarios.

Human populations are vulnerable to climate health impacts. Those particularly at risk include seniors, children, those experiencing social isolation, individuals with chronic conditions, disabilities, or both, and, socially or economically marginalized individuals.

Stressors and Opportunities Historical climate records will no longer be a reliable indicator of future conditions. Accordingly, historical design standards may be insufficient to accommodate more extreme events in the future. More intense storm events in the Toronto Region will pose risks to municipal infrastructure. Increased stormwater flows, in combination with stormwater infrastructure nearing the end of its lifecycle throughout the jurisdiction, is expected to increase risk to property and life. Better understanding of anticipated future wet weather scenarios will enable more accurate cost-benefit analysis of standard and innovative stormwater management practices. This, in turn, will enable TRCA and partner municipalities to optimize climate adaptation and risk reduction investments. Such investments also have the potential to significantly decrease future storm-related property and infrastructure repair costs.

Business Synopsis & Rationale 2016-2020 1 Climate Science 46 Changes to seasonal temperature patterns and the timing, duration, and intensity of precipitation may disproportionately harm certain ecosystem components. Better understanding of local natural heritage climate vulnerabilities enables TRCA and partner municipalities to preemptively increase proactive adaptation measures while reducing and/or discontinuing investments in projects or programs facing significant climate threats. This will increase the short- and long-term value for money of ongoing natural heritage investments.

Funding Funding for Climate Science programming is a combination of municipal levy and government grants.

Direct Actions and Activities TRCA in-house climate staff provides technical expertise in support of strategies, assessments and action planning for extreme weather resilience and climate change adaptation together with a growing knowledge base from which to advise on evolving climate policies and federal/provincial objectives. These services are offered to internal TRCA programs and municipal partners.

Complementary TRCA Actions and Activities The Climate Science program is complemented by the following TRCA activities:  Water Resource Science and Biodiversity Monitoring provide the raw data, and analysis thereof, to support the assessment of local conditions, vulnerabilities, and early-stage climate mediated change  Ecosystem Management Research and Directions fills knowledge gaps pertaining to best practice, target setting, planning and policy for urban ecosystems that integrate aquatic and terrestrial management objectives  Policy Development and Review work with municipal, provincial, and federal governments to incorporate the best available science and planning practices into plans and policies  Watershed Planning and Reporting incorporate climate science into integrated watershed and waterfront management plans to guide implementation activities at the watershed scale  The Ontario Climate Consortium (the Secretariat for whom is situated at TRCA) generates and/or synthesizes wide-ranging, evidence-based guidance (science to policy) for public and private sector stakeholders on climate change adaptation and mitigation

Key Outcomes  Climate change strategies and adaptation plans and recommendations are based on defensible data and supporting science  Defensible expert climate advice and best practices are provided to internal and municipal partners  Reduced risk to human safety, private and public property, essential structures and infrastructure and ecosystem function and services

Key Activities – 2017-2020  Support TRCA partner municipalities in the development and implementation of climate change adaptation action plans  Continue to conduct climate change impact, vulnerability and risk assessments for partner municipalities and other stakeholders  Ensure that understanding of climate change impacts and risks is integrated into updates to TRCA-led watershed and waterfront plans and other guidance documents as required (e.g., stormwater management criteria, LID guidelines, invasive species strategies, planting programs, etc.).  Provide guidance on evolving federal and provincial climate policy and funding programs geared toward adaptation.

Business Synopsis & Rationale 2016-2020 2 Climate Science 47 Outlook TRCA will continue to maintain and expand its science/technical climate change expertise and services. To enhance the efficacy and uptake of these offerings, TRCA will significantly expand its efforts in climate change policy, advocacy, and regional coordination to assist public sector partners in proposed implementation of region-wide climate strategies. This may include new initiatives to accelerate and/or coordinate climate adaptation planning and implementation across jurisdictional, sectoral and institutional boundaries. Although the recently released Provincial Climate Change Strategy and pending Cap and Trade Program will have a strong focus on advancing and funding mitigation activities in support of achieving provincial greenhouse gas reduction targets, the opportunity to invest in carbon sequestration through afforestation, wetland creation and other naturalization initiatives undertaken by TRCA is yet to be fully understood as the “science to practice” equation requires significant examination before related policies and programs can be implemented. TRCA will actively seek to participate in this examination to determine the links our restoration programs may have to available green funding and estimate the net contribution to achieving carbon-neutral operations at TRCA and municipalities. .

Business Synopsis & Rationale 2016-2020 3 Climate Science 48

49 2016 Budget

($000)

Sources of Revenue

Gross Government Surplus/ Net Contract Capital Operating Reserves Expenditures Grants and User Fees (Deficit) Budget Services Levy Levy Other

Water Risk Management

Water Resource Science 2,742 689 26 226 2,115 - 314 314

Flood Management 3,700 334 - 309 2,677 380 - -

Erosion Management 13,823 - - 2,669 11,300 146 146 20,265 1,023 26 3,204 16,092 380 460 - 460

2016 Full-time Equivalent Employees (FTEs)

Operating Capital Total % Change Over 2015

2015 4.46 64.91 69.37

2016 4.71 77.12 81.83 18.0%

50 Water Resource Science

Objectives:  Enable science-based planning, monitoring and decision making  Enable best-practice identification and implementation  Enable evidence-based program design  Meet data needs and requirements of municipal, academic, and private sector partners

Program Features Positioning The Conservation Authorities Act, Section 21(a) assigns TRCA a mandate “to study and investigate the watershed to determine a program whereby the natural resources of the watershed may be conserved, restored, developed and managed”. To this end, TRCA maintains research, monitoring, and data analysis capabilities to meet internal and municipal partner data requirements in a manner that maintains intellectual property, data integrity, and cost-effectiveness. TRCA may offer free and/or fee-for-service data collection, sharing, and/or analysis for projects on which it is actively involved.

TRCA has conducted (and continues to conduct) research and method validation for stormwater management pond (SWMP) cleanout and retrofit technologies. As a result, TRCA holds unique local competencies in SWMP cleanout practices and offers this service to municipalities primarily on a fee-for-service basis. When bundled with habitat and/or public greenspace enhancements, TRCA’s offerings provide economic and environmental value-added services at low marginal cost.

Context Many TRCA Service Areas - including Water Risk Management, Regional Biodiversity, and Watershed Studies and Strategies – require high volume data collection and analysis to develop and legitimize plan and policy development. TRCA maintains its own data collection activities because the scope and scale of data collection need for known and standardized QA/QC and on-call expertise, and applied use of TRCA landholdings render the use of consultants inappropriate and prohibitively expensive. In-house data collection is also more easily adapt to evolving needs.

Approximately 61% of TRCA’s jurisdiction is urbanized or urbanizing. The accompanying increase in surface hardening and stormwater collection in grey infrastructure diverts water flows away from natural features such as wetlands and groundwater recharge zones. Low Impact Development (LID) technologies offer alternatives to grey infrastructure and provide an opportunity to reduce negative outcomes associated urbanization. Adoption and implementation of LID technologies, however, is currently hampered by policy barriers related to performance validation as well as by high implementation costs associated with early stage commercialization.

TRCA jurisdiction contains approximately 995 stormwater management ponds, the life expectancy of which spans from 8 to 12 years without major maintenance. The cleanout and/or retrofit of a SWMP typically costs approximately $300/m3 of sediment to be removed (or ~ $350,000/SWMP) and can face complications including construction and environmental challenges.

Stressors and Opportunities Water Resource Science provides the empiric and theoretical foundation for many TRCA activities. The loss of comprehensive and/or sustained data collection could threaten the legitimacy of TRCA plans and recommendations.

Changing climate and weather patterns in the Toronto region will result in more frequent and intense storm events. During a rain event, the “first flush” of stormwater over impervious surfaces has a significantly high concentration of pollutants. LID measures can detain and treat flows of highly contaminated stormwater bound for local waterways, allow for onsite contaminant reduction and groundwater recharge, and protect nearby natural features reliant upon surface and/or groundwater inflows. Provided they can be rendered increasingly cost-effective and applied at scale, LID technologies pose the opportunity to mitigate the negative hydrologic impact of urban surface hardening.

Business Synopsis & Rationale 2016-2020 1 Water Resource Science 51 Many SWMPs within TRCA jurisdiction are operating at reduced capacity and require maintenance or retrofit in order to continue to meet design objectives. TRCA’s assessment of SWMP cleanout practices have led to offerings tailored to local climate, sediment, and hydrologic conditions. TRCA’s collaborative fee-for-service model will provide municipalities with cost-effective, low-risk services to meet SWMP maintenance needs as they arise.

Funding Water Resource Science is funded through municipal levy, as well as federal and provincial funding. Agreements with environmental analytical laboratories at the Ontario Ministry of the Environment and Climate Change and City of Toronto laboratories provide significant cost provision by conducting sample analysis on an in-kind and/or at-cost basis.

Direct Actions and Activities TRCA maintains the physical and intellectual assets – including 320 monitoring stations – required to assess hydrology, river hydraulics, water quality, fluvial geomorphology, and hydrogeology across the jurisdiction. TRCA’s comprehensive data collection and analysis capabilities increase standardization, reduce risk, and ensure predictable and cost-effective operation. Economies of scale are realized by centralizing and sharing data between applications including source water protection, stormwater management, and hydrology and floodplain mapping.

TRCA undertakes research to determine the effects of traditional stormwater management and LID infrastructure on local natural features, runoff quantity, and quality. These data are used to inform sustainable community design parameters, inform planning and permitting reviews and criteria, and protect natural features such as wetlands. This last consideration holds considerable significance for individual landholders for whom the aesthetic and recreational values of natural features offer a property value premium.

As requested and funded by municipalities, TRCA undertakes stormwater management inventories, pond clean-out and retrofits; TRCA has conducted an average of 3 clean-out/retrofits per year and it is anticipated that this quantity will remain stable or increase in coming years. Cleanout and retrofit initiatives restore stormwater management pond capacity and improve physical and chemical water quality parameters, thereby reducing flood and pollution risk.

Complementary TRCA Actions and Activities Water Resource Science is complemented by the following TRCA activities:  The Biodiversity Monitoring program collects data that provide ecological context to physical/chemical data collected by the Water Resource Science program  Watershed Planning and Reporting and Planning and Development Review identify future watershed scenarios and outline current and future data needs

Key Outcomes  Plans, criteria, and recommendations are based on defensible data and supporting science  Data sets are of sufficient extent and quality to be utilized by academic research partners and published in peer-reviewed publications  Defensible expert advice and best practices services are provided to internal, municipal, and private sector partners

Business Synopsis & Rationale 2016-2020 2 Water Resource Science 52 Key Activities – 2017-2020  Finalize flood management guidelines and provide training and technical support to staff, Municipal partners, Provincial Agencies and the building industry  Complete Stormwater Pond inventory and prepare maintenance plans  Undertake stormwater and low impact development retrofit projects in partnership with local municipalities  Initiate and finalize major update to Low Impact Development (LID) Guidelines in collaboration with partner Conservation Authorities and provide training and technical support to staff, Municipal partners, Provincial Agencies and the building industry  Continue long-term Regional Watershed Monitoring to add necessary data and to track changes within watersheds and throughout the GTA Region

Outlook TRCA will intensify investigation of the impacts of urban development and climate change on flood risk, groundwater resources, erosion and water quality in TRCA watersheds through advanced modelling and monitoring. TRCA will also seek to develop innovative stormwater management strategies in concert with partner municipalities and the provincial government to fully address climate change and urbanization impacts.

Business Synopsis & Rationale 2016-2020 3 Water Resource Science 53 Flood Management Program Objectives:  Prevent, eliminate or reduce the loss of life and property due to flooding  Protection and regeneration of natural systems to reduce frequency and severity of flooding

Program Features Positioning The Conservation Authorities Act (1946) grants Conservation Authorities the mandate to reduce the risk to life and property from flooding. As a result, TRCA provides municipalities and citizens with comprehensive flood risk identification, warning, and mitigation services.

Context In 1995, the Minister of Natural Resources and Forestry delegated natural hazard responsibilities to conservation authorities. This delegation included flood plain management, hazardous slopes, Great Lakes shorelines, unstable soils and erosion, all of which are now encompassed in Section 3.1 "Natural Hazards" of the Provincial Policy Statement (2014). In this delegated role, conservation authorities are responsible for representing the "provincial interest" on natural hazards.

TRCA jurisdiction contains 15 provincially designated Special Policy Areas (SPAs) and 42 Flood Vulnerable Areas (FVAs), and 18 lower, upper and single tier municipal governments.

TRCA owns and manages flood control infrastructure and flood vulnerable lands to manage and mitigate floodplain and/or erosion risk. This inventory includes four major dams, seven minor dams, 15 flood control structures and channels, and 4,124 ha of land subject to flood risk. To assist with real time flood monitoring and warning, TRCA operates a system of 32 rainfall and water level gauges covering more than 80% of TRCA’s 249,222 ha jurisdiction.

Stressors and Opportunities Climate predictions for the Toronto region point to more extreme weather patterns including more frequent and intense rainfall events. Stormwater runoff continues to be exacerbated by ongoing development and urbanization practices that incorporate inadequate stormwater controls. Collectively, these conditions will place additional loading on existing flood infrastructure, whose capacity is already limited as it approaches its service life. Enabling flood infrastructure to meet both existing and future wet weather events is critical to manage risk to property and life. One or both of the cost of flood remediation works, and/or the attendant risks of flood related disruptions to society and commerce are expected to increase.

The renewal of flood and stormwater infrastructure - particularly of stormwater conveyance channels/systems - poses a significant opportunity to apply natural design standards to reduce stormwater intensity, increase resilience to wet weather events, improve runoff water quality and create or enhance riparian habitat and aquatic communities.

A robust Toronto region real estate market continues to prompt applications for development including intensification in SPAs and FVAs. The approval of these developments has the potential to compound flood risk, increase the impact of flood events, and entrain liability questions.

Funding Funding for Flood Management is obtained primarily through general and municipal levy. Matching dollars (1:1) for specific projects are obtained through the Ministry of Natural Resources and Forestry Water and Erosion Control Infrastructure (WECI) program.

Direct Actions and Activities TRCA operates a comprehensive remote rainfall gauging network that spans its jurisdiction and provides real- time data to TRCA’s Flood Forecasting and Warning Centre and on call Flood Duty Officers. When wet weather or other hydrological events (i.e. thunderstorms) pose a threat to citizens, infrastructure, or property, TRCA alerts relevant public response agencies and issues appropriate warning messages to the public.

Business Synopsis & Rationale 2016-2020 1 Flood Management 54 Flood control infrastructure managed and maintained by TRCA mitigates the volume and intensity of stormwater flows reaching vulnerable areas. The Claireville and G. Ross Lord dams retain water flows upstream of highly populated areas of the lower Don and Humber Rivers, respectively. During low flow periods the dam’s reservoirs provide baseflow quantities sufficient to meet aquatic wildlife and habitat needs in the lower river stretches.

TRCA Flood Management program conducts extensive data collection, flood modelling, and plan development to mitigate flood vulnerability and steer development outside of flood and erosion hazard areas. Intense and sustained rainfall conditions nonetheless occasionally overwhelm system capacity and results in damage. In such circumstances TRCA provides at-cost engineering and construction services to municipal partners through Restoration Services; TRCA service delivery focuses on expedited repair, reduced financial risk to municipal partners and, where appropriate, enhanced aesthetic or natural features.

Complementary TRCA Actions and Activities Flood Management is complemented by the following TRCA activities:  Erosion Management initiatives identify and remediate priority erosion sites  Planning and Development Review and floodline mapping initiatives direct development away from the floodplain  Stormwater management initiatives mitigate runoff impacts from urban development  Climate Science research and modelling initiatives enable preparation for future climate scenarios

Key Outcomes  Reduced risk to human safety  Reduced risk to private and public property  Reduced risk to essential structures and infrastructure  Improved aquatic habitat

Key Activities – 2017-2020  Complete jurisdictional coverage of real time rainfall/stormwater gauging network  Continue flood monitoring and warning program  Flood modelling and mapping  Operations and maintenance of flood control infrastructure  Planning and design, of remedial projects to the limit of available funds with a focus on special policy areas (i.e. Lower Don, Downtown Brampton)

Outlook Flood Management will continue to be responsible for producing long term plans for the sustainable management of flood risk to minimize impacts due to riverine flooding on life and property.

Business Synopsis & Rationale 2016-2020 2 Flood Management 55 Erosion Management Program Objectives:  Prevent, eliminate or reduce the risk to life and property from flooding, erosion and slope instability  Encourage the protection and regeneration of natural systems

Program Features Positioning The Conservation Authorities Act (1946) underlies TRCA’s mandate to reduce the risk to life and property from erosion hazards. Accordingly, TRCA offers comprehensive and integrated erosion identification, assessment and remediation services (collectively “erosion management”) to municipal and provincial partners and private property owners. Erosion works are frequently bundled with habitat and/or public greenspace enhancements to achieve aesthetic, environmental, and economic gains at low marginal cost. These enhancements, combined with the ability to offer streamlined environmental assessment and permitting services, make TRCA’s offerings unique in the delivery of both economic and environmental value-added services.

Context In 1995, the Minister of Natural Resources and Forestry delegated natural hazard responsibilities to conservation authorities. This delegation included flood plain management, hazardous slopes, Great Lakes shorelines, unstable soils and erosion, all of which are now encompassed in Section 3.1 "Natural Hazards" of the Provincial Policy Statement (2014). In this delegated role, conservation authorities are responsible for representing the "provincial interest" on natural hazards.

TRCA’s jurisdiction spans nine watersheds that contain several major ravine systems and stretches approximately 67 kilometres (km) along the Lake Ontario shoreline. Of land within TRCA’s jurisdiction, 4,124 ha (or ~1.6%) is owned by TRCA to mitigate floodplain and/or erosion risk; this area represents a highly conservative estimate of erosion vulnerable area within the jurisdiction. To manage and mitigate flood and erosion within a highly urbanized area, TRCA owns and maintains an inventory of more than 500 erosion control structures that provide protection for pathways, roads, bridge abutments, sewer infrastructure, green space and private property.

Stressors and Opportunities There is scientific consensus that climate and weather patterns in the Toronto region will result in more intense storm events with attendant risks to municipal infrastructure. Stormwater runoff from such events will be exacerbated by ongoing development and urbanization practices that incorporate inadequate stormwater controls. Increased stormwater flows, in combination with stormwater infrastructure that is nearing the end of its lifecycle throughout the jurisdiction, is expected to dramatically increase risk to property and life. As such, the cost of erosion maintenance and remediation are anticipated to increase considerably in the future.

The expertise of TRCA’s Erosion Management Program is recognized and accessed by several partner municipalities and other Conservation Authorities; TRCA now enters into agreements with both to assist with projects in which it holds experience. Through these opportunities TRCA is enhancing already strong partnerships, and reducing project cost and uncertainty for municipal partners undertaking works outside TRCA’s jurisdiction.

Funding Funding for Erosion Management is obtained primarily through municipal levy and special capital projects. In certain circumstances, partial or full cost recovery (typically $10K - $100K per property) will be collected from private landowners when an alternate agreement cannot be reached.

Direct Actions and Activities TRCA monitors existing erosion control structures and known hazard sites on public and private property. New erosion control works are typically planned in accordance with the Class Environmental Assessment for Remedial Flood and Erosion Control Projects (amended 2013) or Class EA; the approved process for projects of this type that undertaken by CAs.

Business Synopsis & Rationale 2016-2020 1 Erosion Management 56 A condition assessment and priority ranking of all hazard sites and existing structures is maintained and updated annually or as conditions require, such as following a significant weather event. These priority rankings provide the rationale for TRCA’s annual and long-term work plans for erosion control maintenance and remedial works.

Complementary TRCA Actions and Activities Erosion Management is complemented by the following TRCA activities:  Planning and Development Review and floodline mapping initiatives direct development away from areas vulnerable to erosion and communicate risks to existing property owners and seeks to mitigate existing hazards to private land  Climate Science research and modelling initiatives, which offer insight and enable preparation for future climate scenarios  Stormwater management initiatives promote the reduction of runoff which is known to exacerbate flooding and erosion

Key Outcomes  Reduced risk to human safety  Reduced risk to essential structures and infrastructure  Reduced risk to safety and marine vehicles from sedimentation  Improved terrestrial and/or aquatic habitat

Key Activities – 2017-2020  Conduct annual and post-storm monitoring of TRCA and partnering priority sites to generate a prioritized list of maintenance and remedial works to be undertaken in 2017 and beyond  Continue planning, design and construction of maintenance and remedial projects as identified in 2016 on a priority basis, to the limit of available funds, including Class EA projects

Outlook The Erosion Management Program is anticipated to continue in its present form. As noted, the scope of the program is expanding to serve as a source of expertise to Conservation Authorities in adjoining jurisdictions on a cost-recovery basis. The scale of the program may increase as weather patterns become more volatile and rainfall events intensify. TRCA’s Erosion Management Program is capable of adapting to these circumstances; the business model is readily scalable as works undertaken each year are bounded only by available funding.

Business Synopsis & Rationale 2016-2020 2 Erosion Management 57

58

2016 Budget

($000)

Sources of Revenue

Gross Government Surplus/ Net Contract Capital Operating Reserves Expenditures Grants and User Fees (Deficit) Budget Services Levy Levy Other

Regional Biodiversity

Biodiversity Monitoring 2,510 61 27 776 1,218 273 (155) 10 (145)

Ecosystem Management Research and Directions 998 356 53 31 558 - - -

Restoration and Regeneration 6,887 707 - 2,249 3,919 - (12) (12)

Forest Management 1,191 - - 40 1,058 - (93) (93) 11,586 1,124 80 3,096 6,753 273 (260) 10 (250)

2016 Full-time Equivalent Employees (FTEs)

Operating Capital Total % Change Over 2015

2015 15.05 100.07 115.12

2016 15.95 92.76 108.71 -5.6%

59 Ecosystem Management Research and Directions

Objectives:  Identify and address data and policy deficiencies regarding urban ecosystem health  Identify targets for urban ecosystem components  Enable science-based planning and decision making  Identify best-practices for urban ecosystem management  Improve watershed health

Program Features Positioning TRCA’s Ecosystem Management Research and Directions program responds to information needs and knowledge gaps identified internally or by municipal partners. Pre-existing relationships with academic, non- profit, and private sector partners are maintained and, where favorable, TRCA enters into partnerships where research needs and interests overlap. Use of this research partnership model increases and diversifies external funding and human capital for TRCA-initiated and/or managed research to meet high priority research needs in a cost-effective manner.

TRCA maintains in-house expertise in applied aquatic and terrestrial ecology. In addition to ensuring value creation and capture in partnership arrangements, on-demand internal expertise enables TRCA to independently pursue research in support of TRCA, municipal, and provincial/federal program and policy development. Internal capacity also ensures the inclusion of integrated watershed management principles early in the research planning and policy development stages.

Context An extensive body of academic literature exists on the management targets, methodologies, and best practices for urban and near-urban ecosystems. This literature has identified habitat connectivity as a lynchpin factor in climate change resilience, biodiversity protection, and the maintenance of ecosystem health at the watershed scale. Many practices and methodologies from the primary literature are transferrable to the Toronto region; however associated ecological targets must be customized to be relevant and defensible in a specific local or regional context.

In the past, TRCA has worked with municipal and provincial partners, academic institutions, and other stakeholders to fill data and target gaps. Examples include the Terrestrial Natural Heritage System Strategy (2007) that sets terrestrial habitat objectives at a region-wide scale, as well as individual watershed fisheries management plans that outline river and stream conditions necessary to support diverse and abundant fish populations. Target values for many critical ecosystem components, however, remain outstanding. Further, most existing aquatic and terrestrial objectives have yet to be fully integrated. As a result, many important ecosystem interrelationships may be inadequately managed and regulated through existing TRCA policy and planning processes.

Stressors and Opportunities The Toronto region is home to many academic and government research. With adequate and sustained funding, few barriers are anticipated to assembling credible research teams capable of synthesizing defensible ecological targets for the Toronto region.

Climate change is expected to result in a southern Ontario climate that is warmer and more variable with increased extreme weather events such as droughts and storms. These changes will stress ecosystems and are expected to negatively affect water balance and availability, groundwater levels, stream flow, channel and

Business Synopsis & Rationale 2016-2020 1 Ecosystem Management Research and Directions 60 bank stability, surface water quality and terrestrial and aquatic habitats. At present, there is a significant need for climate change considerations to be incorporated into new and existing ecosystem targets, particularly in regard to habitat connectivity. Connected habitats increase the probability that climate stressed organisms can migrate - either through direct locomotion (fauna) or seed dispersion (flora) - toward more hospitable conditions. In the absence of habitat connectivity and constrained movement, many species may be extirpated and regional biodiversity and ecosystem health will be reduced. Ecological targets that incorporate interconnected terrestrial and aquatic habitat considerations pose an opportunity to mitigate this risk.

Ongoing urbanization activities – both Greenfield development and urban retrofit – pose both opportunities and threats to a sustainable urban/ecosystem balance. The population of the TRCA’s jurisdiction is anticipated to increase 6.8% in the coming four years. This growth, combined with the renewal of existing aging infrastructure, will involve the planning and review of projects of sufficient scale to significantly enhance or undermine ecological objectives. Lacking an adequate suite of ecological targets, it is unlikely that development and associated infrastructure implementation will see potential benefits realized or significant threats avoided.

Funding Funding for ecosystem management is obtained primarily through municipal levy and government grants.

Direct Actions and Activities Ecosystem Management Research and Directions synthesizes the outcomes of primary research with local data to develop ecosystem targets, management strategies, and practices sensitive to local meteorological, hydrogeological, ecosystem, and policy considerations. As needed or when mutually beneficial, TRCA partners with academic, public, and/or private sector groups to undertake novel or supplementary research on questions of urban and near-urban ecological health and management.

Data and analysis outputs are used to support the implementation and/or update of internal strategy documents, planning and development policies, and ecological restoration and remediation activities. Current initiatives in this regard include the identification and ranking of priority restoration sites, the development of a protocol to ensure terrestrial ecosystems lost in development are adequately replaced, and the re-evaluation of stream crossing structures to ensure sufficient habitat connectivity.

Complementary TRCA Actions and Activities Ecosystem Management Research and Directions is complemented by the following TRCA activities:  Policy Development and Review identifies key development stressors and opportunities within TRCA’s jurisdiction  The Watershed Planning and Reporting processes help identify and situate data and knowledge gaps within an integrated watershed management perspective  Restoration and Regeneration initiatives and the monitoring of site performance following remediation activities, support best practice evaluation and adaptive management  Living City Transition helps support best practice demonstration, knowledge mobilization and citizen science engagement activities.

Business Synopsis & Rationale 2016-2020 2 Ecosystem Management Research and Directions 61 Key Outcomes  TRCA conducts and advances state-of-the-science urban ecosystem planning  Municipal partners technical and policy/planning needs are adequately supported; plans and recommendations are based on defensible data and supporting science  TRCA science/engineering/technical insights are reflected in municipal Official Plans, strategies, as well as other relevant internal and external documents and regulations  Indicators of watershed health improve, in particular those related to terrestrial and aquatic ecosystem health  Data analyses are of sufficient quality to be utilized by academic research partners and published in peer-reviewed publications

Key Activities – 2017-2020  Develop a prioritized research agenda to address data and knowledge gaps  Provide science and tools to assess and manage risk and opportunity associated with extreme weather and changing climate  Complete and implement the Ecosystem Compensation Program  Complete and implement the TRCA Crossing Guidelines for Valley and Stream protocol  Continue development and implementation of the Restoration Opportunities Bank

Outlook The agenda for Ecosystem Management Research and Directions will continue to be sensitive and adaptive to emerging scientific research and ecosystem data as well as municipal partner needs. In addition to maintaining a research agenda at the intersection of urban development and ecosystem science, TRCA anticipates incorporating the economic perspective more frequently in coming years. The economic dimension of ecosystem health, and changes thereof, are captured by the evolving field of ecosystem valuation (which provides a monetary equivalent of the value of ecosystem goods and services). As the practice and expertise around this disciple become more standardized and readily available, TRCA expects to increasingly incorporate this dimension in the dialogue around urban ecosystem priorities and alternatives.

Business Synopsis & Rationale 2016-2020 3 Ecosystem Management Research and Directions 62 Biodiversity Monitoring

Objectives:  Enable science-based planning and decision making  Enable best-practice identification and implementation  Enable evidence-based program design  Meet data needs and requirements of federal, provincial, municipal, academic, and private sector partners

Program Features Positioning The Conservation Authorities Act, Section 21(a) assigns TRCA a mandate “to study and investigate the watershed to determine a program whereby the natural resources of the watershed may be conserved, restored, developed and managed”. To this end, TRCA maintains research, monitoring, and data analysis capabilities to meet internal municipal, federal and provincial partner data needs in a manner that protects intellectual property and data integrity while minimizing expense. TRCA may offer free or fee-for-service data collection, sharing, and/or analysis for projects in which it is actively collaborating. It also actively partners with adjacent Conservation Authorities to address regional data needs in a consistent and coordinated manner; the standardization of monitoring protocols at diverse sites allow data integration and comparison with watershed- and region-scale data sets.

As part of an integrated service delivery model, Biodiversity Monitoring enables TRCA to accelerate the adaptive management cycle and address emerging opportunities and concerns more quickly, comprehensively, and cost-effectively.

Context Many TRCA program areas - including Restoration and Regeneration, Forest Management, and Watershed Studies and Strategies – require high quality data collection and analysis to inform plan/policy development and habitat creation or restoration initiatives. The scope and scale of data collection, the need for in-house QA/QC practices and specialized expertise, and the frequent requirement for access to TRCA lands, partnerships and/or specialized aquatic monitoring equipment render the use of consultants unsuitable and prohibitively expensive for most projects.

Stressors and Opportunities Biodiversity Monitoring provides the empiric and theoretical foundation for many of TRCA initiatives. Many of this program’s activities, however, do not produce immediately recognizable, stand-alone outputs. If funding pressures were to prohibit sustained data collection, the legitimacy of TRCA plans and recommendations may be compromised. Further, long-standing data records reflecting the effects of urbanization, climate change, and environmental restoration activities may be interrupted. The absence of robust, comprehensive, and continuous data records would compromise the ability of private and public sector clients to access data to support or refute proposals in a timely manner.

TRCA’s involvement in Toronto region monitoring collaborations (including advisory services to adjacent Conservation Authorities) ensures that data collection targets and protocols are regionally coordinated and consistent. This consistency of approach increases data value and usability for public, private, and academic partners while reducing unproductive data collection redundancies.

Funding Funding for biodiversity monitoring is obtained primarily through municipal levy, federal funding and special capital projects. Significant in-kind contributions are made by Ontario Ministry of Environment and Climate Change and City of Toronto for laboratory analysis of water samples.

Business Synopsis & Rationale 2016-2020 1 Biodiversity Monitoring 63 Direct Actions and Activities Fixed monitoring sites are assessed on an annual or rotational basis and provide insight on the effects of regional urbanization on terrestrial and aquatic habitat, species and communities. Results from this work, in combination with comparable site specific monitoring undertaken at development and (restoration) project sites guide greenspace acquisition, restoration planning, and management strategies to ensure continued biodiversity and regional ecosystem stability. The data may also be used to establish pre-development baselines and assess the relative success or failure of sustainable community building and restoration activities.

In addition to the above, TRCA conducts a Terrestrial Biological Inventory and Assessment on lands acquired or scheduled for development. By applying the same methodologies as at fixed plot monitoring sites, TRCA garners data that inform regional analysis and perspectives on issues such as the distribution of species of conservation concern and landscape-scale opportunities and threats.

Waterfront monitoring activities assess the abundance and diversity of aquatic habitat and communities such as fish. Data from this program validate the effectiveness of aquatic habitat restoration activities and guide and/or support future water and/or waterfront initiatives and environmental assessments (EAs) while demonstrating compliance with federal and provincial fisheries legislation.

Complementary TRCA Actions and Activities Biodiversity Monitoring is complemented by the following TRCA activities:  Water Resource Science program collects data that provide physical and chemical context to the ecological data collected by the Biodiversity Monitoring program  Watershed Planning and Reporting, Ecosystem Management Research and Directions identify future watershed scenarios and outline current and future data needs  Restoration and Regeneration projects identify and/or motivate site specific monitoring needs

Key Outcomes  Plans and recommendations are based on defensible data and supporting science  Data sets are of sufficient extent and quality to be utilized by academic research partners and published in peer-reviewed publications  Defensible expert advice and best practices services are provided to internal, municipal, and private sector partners and stakeholders

Key Activities – 2017-2020  Maintain and expand the Biodiversity Monitoring network, including required investments in capital assets (data collection equipment/instruments) and human capital (staff resources and training on current practices and techniques)  Investigate and implement data and information technologies to more effectively house and share large data sets  Streamline internal and external data/information sharing and transfer  Support the development of key TRCA communication products including watershed report cards (2018) and the next generation of watershed strategy reporting

Outlook The Biodiversity Monitoring program will continue to pursue partnerships and technologies that expand, refine, and coordinate the scope and scale of data collected while enhancing data integrity, security, and accessibility. Additional avenues – either though increasing accessible platforms or new communications products – will be sought to highlight the type of data available, the value resulting from its collection, and/or specific narratives used to enhance our understanding of the issues and outcomes related to regional biodiversity.

Business Synopsis & Rationale 2016-2020 2 Biodiversity Monitoring 64 Restoration and Regeneration

Objectives:  Plan and implement the protection and restoration of natural systems: o Protect and restore ecosystem health and function o Enhance landforms and shorelines o Improve watershed health

Program Features Positioning The Conservation Authorities Act, Section 20 assigns TRCA a mandate “to establish and undertake… a program designed to further the conservation, restoration, development and management to natural resources other than gas, oil, coal and minerals.” To this end, the Restoration and Regeneration program undertakes comprehensive and integrated environmental restoration services for public sector partners and private clients. Restoration works are commonly bundled with erosion, habitat and/or greenspace enhancements to achieve aesthetic, environmental and economic gains at low marginal cost. These enhancements, combined with the ability to offer streamlined habitat implementation plans and permitting services, make TRCA’s offerings unique in the delivery of both economic and environmental value-added services.

Context Healthy natural systems rely on functional hydrologic and landform processes and vegetative cover. Impairment occurs when those processes have been altered. The current state of the Toronto region represents over 100 years of such alterations; these extend from initial deforestation through the damming of rivers to power mills to current Greenfield development for residential and commercial purposes. As a result of this continued legacy of landscape alteration and/or degradation, TRCA now holds an inventory over 10,000 lake, stream, and terrestrial sites that require restoration and/or regeneration.

Restoration and regeneration occurs within a multijurisdictional space with diverse legislative and regulatory inputs. To streamline aquatic initiatives, TRCA is a founding member of Aquatic Habitat Toronto; this group includes municipal, provincial, and federal partners as well as Waterfront Toronto. At present no equivalent exists for the coordination and acceleration of terrestrial project planning and implementation, however TRCA maintains positive relationships with each of the relevant stakeholders for terrestrial initiatives.

Stressors and Opportunities Continued development and urbanization of the Toronto region will continue to compromise natural features, communities, and processes. Through internal collaboration with internal divisions addressing flood and erosion risk, urban infrastructure retrofit, and regulatory planning and permitting processes, however, TRCA is able to identify sites where restorative works can be undertaken at favorable cost-benefit profiles. Despite these service delivery efficiencies, the ongoing creation of new restoration sites and opportunities decrease the rate at which the backlog can be addressed.

As climate change continues to progress the number of sites requiring restoration and/or regeneration is anticipated to increase. High intensity storms, such as that of summer 2013, can significantly increase priority restoration site count and priorities with a single acute event. In contrast, climate change effects such as drought or altered hydrologic regimes will unfold more slowly but create a need for restoration and regeneration over very large areas.

Funding Funding for restoration and regeneration is obtained through municipal levy and contracted services throughout TRCA’s jurisdiction.

Business Synopsis & Rationale 2016-2020 1 Restoration and Regeneration 65 Direct Actions and Activities Restoration sites are identified through field assessments; priority restoration site rankings are updated annually or as conditions require (i.e. following a significant storm event). Priority rankings inform annual and long-term restoration and regeneration projects and associated habitat improvement projects. In 2015, TRCA implemented over 112 restoration projects which restored 1,649 metres of stream and shoreline, 100.09 hectares of wetland and terrestrial habitat, 21 in-stream barriers were removed and 996 habitat structures were installed.

Restoration and Regeneration’s expertise assists municipal, regional, and provincial partners in the development of policies and guidelines relating to natural protection and restoration. TRCA also conducts informative workshops for private landowners, partners and other conservation authorities on ecosystems and biodiversity.

Complementary TRCA Actions and Activities Restoration and Regeneration is complemented by the following TRCA activities:  The Water Resource Science program collects data that provide physical and chemical context to the ecological data collected by the Biodiversity Monitoring program  Watershed Planning and Reporting and Ecosystem Management Research and Directions identify future watershed scenarios and outline current and future data needs

Key Outcomes  Restored natural hydrologic processes and balanced hydrologic regimes  Improved aquatic systems and habitat (including critical habitat)  Increased natural vegetative cover, soil stabilization, and terrestrial habitat (including critical habitat)  Improved air and water quality

Key Activities – 2017 - 2020  Continue to provide expert technical guidance to municipal and agency partners on the natural systems, terrestrial and aquatic habitat, and green infrastructure  Conduct annual monitoring to report the health and condition of the watershed within TRCA’s jurisdiction, as well as track the changes in health, condition and regional biodiversity over time  Implementation of high priority restoration and habitat projects  Continue to provide expertise, data and mapping to municipalities to support the continued development of municipal natural heritage policies, strategies and programs

Outlook In addition to remaining abreast of current restoration and regeneration science and engineering, the Restoration and Regeneration program will continue its three-pronged approach of planning, implementation, and regulatory insight to achieve on-the-ground gains. No significant program shifts are anticipated and the program will continue to be sensitive and responsive to the changing needs of municipal partners, cost saving and value-add opportunities, and the state of the natural environment.

Business Synopsis & Rationale 2016-2020 2 Restoration and Regeneration 66

Forest Management

Objectives:  Establish and maintain healthy, vigorous, and diverse forest cover and associated habitat  Improve watershed health  Increase awareness and level of engagement throughout communities

Program Features Positioning TRCA’s forestry expertise allows it to offer comprehensive and integrated reforestation and restoration services to municipal and regional partners and private property landowners. Reforestation projects are commonly bundled with habitat and/or public greenspace enhancements to achieve aesthetic, environmental and economic gains at low marginal cost.

To ensure supply availability and cost-effectiveness for the use of native species in TRCA ecosystem regeneration projects, Forest Management operates its own nursery. Locally collected seed is used to grow hardy native plant materials well adapted to local conditions.

Context TRCA manages over 6,000 hectares (15,000 acres) of forested lands within its jurisdiction. Active management of forests greatly improves positive forest attributes including biodiversity, resilience to insects and disease, wildlife habitat value, environmental protection, stormwater management and long-term survival.

The use of locally adapted genetic populations in ongoing planting and other regenerative activities is critical to supporting robust natural cover on the landscape. This objective is in part accomplished by the use and promotion of native species collected and propagated from local trees and shrubs.

The Emerald Ash Borer (EAB) is an invasive species that kills host ash trees. Despite substantial research and control efforts, this beetle is now found throughout much of southern Ontario. Recent findings and EAB observations in the Toronto region indicate the spread and intensity of EAB infestation has accelerated and compressed the anticipated ash tree mortality curve; within TRCA’s jurisdiction it is believed that ash mortality will peak in 2015/2016 and diminish thereafter as ash tree populations decline.

Stressors and Opportunities Existing forest resources under both public and private ownership are experiencing increased biotic and abiotic stressors including invasive species and climate change. The combined effects of these stresses can have a detrimental effect on the overall health and quality of the forest resource and its ability to sustain its ecological functions. In particular, continued global trade and an increasingly warm climate anticipate the continued arrival and establishment of invasive species that target trees and other plants. Like Emerald Ash Borer, and Dutch elm disease before it, invasive species may decimate local tree populations, cause extensive ecological damage, and increase risks to human health risk as trees die and collapse.

TRCA uses stressors as educational opportunities to promote good forestry practices and to proactively maintain and increase forest health and vitality. By realizing opportunities to create more knowledgeable and engaged public and private landowners, TRCA fosters a growing constituency of landowners capable of contributing to forest cover targets and associated ecosystem services. The expertise of TRCA’s Forest Management Program is recognized and accessed by several partner municipalities and conservation authorities. Other conservation authorities now coordinate planting efforts with TRCA as well as combine program advertising and promotional activities. Through these opportunities TRCA is enhancing already strong partnerships.

Funding Funding for Forest Management is obtained primarily through municipal levy.

Business Synopsis & Rationale 2016-2020 1 Forest Management 67

Direct Actions and Activities The Forest Management program fulfills TRCA’s goal of ongoing reforestation and riparian planting on public and private lands. TRCA staff provides reforestation and riparian habitat site planning and advisory services to support tree planting efforts with municipal and regional partners. Planting sites are screened and selected based on established program criteria.

To manage and maintain reforestation and restoration, TRCA propagates and produces trees and shrubs at its nursery. Between 2001 and 2015, more than 3.8 million trees and shrubs were supplied and/or planted by TRCA.

Complementary TRCA Actions and Activities Forest Management is complemented by the following TRCA activities:  Ongoing public engagement, community based restoration and education through Community Engagement activities including participation in forest stewardship and reforestation planting events  Delivery of Private Landowner Forest Stewardship programming and services  Greenspace Acquisition program to protect and grow the publicly held and managed forested land base for a variety of green space values and sustainable nature based recreation activities  Risk mitigation activities that include hazard tree monitoring and abatement to provide a safe environment for users of TRCA properties  Terrestrial Natural Heritage Strategy that establishes targeted priority enhancement areas for natural cover on the landscape  Regional Monitoring program to gauge the general health and integrity of forests across the jurisdiction and document changes over time

Key Outcomes  Maintain, increase, and improve forest cover  Transform marginal and or agriculturally fragile lands into forests  Contribute to watershed objectives including: o Healthy habitat and wildlife populations thereof o Greenhouse gas reduction and climate change mitigation  Contribute to landowner and/or citizen benefits including: o Improve outdoor recreation opportunities and realize attendant academic, health, and wellbeing benefits o Reduce private property energy costs (shade and shelter) o Increase social and community well-being through collective contribution to the natural environment

Key Activities – 2017-2020  Continue public engagement and education on best forestry practices  Continue identification, planning and implementation of reforestation and restoration priority projects, including prepare site specific forest resource management plans  Continue to monitor, grow and supply hardy native plant materials from TRCA’s nursery  Analyze, prioritize and coordinate enhanced Managed Forest implementation on TRCA lands with an emphasis on stands with a high composition of ash trees as a result of the emerald ash borer

Outlook At present, the Forest Management Program is anticipated to continue working toward high quality forest cover capable of sustaining ecosystem functions while providing safe and enjoyable passive recreational opportunities for citizens. TRCA will continue to educate the community and improve existing forest health by implementing good forestry practices.

Business Synopsis & Rationale 2016-2020 2 Forest Management 68

69 2016 Budget

($000)

Sources of Revenue

Gross Government Surplus/ Net Contract Capital Operating Reserves Expenditures Grants and User Fees (Deficit) Budget Services Levy Levy Other

Greenspace Securement and Management

Greenspace Securement 6,185 5,518 374 30 159 96 (8) (8)

Greenspace Management 2,727 10 10 654 2,228 - 175 175

Rental Properties 2,075 - 2,495 - - - 420 388 808 10,987 5,528 2,879 684 2,387 96 587 388 975

2016 Full-time Equivalent Employees (FTEs)

Operating Capital Total % Change Over 2015

2015 23.61 13.71 37.32

2016 20.3 6.19 26.49 -29.0%

70 Greenspace Securement

Objectives:  Bring environmentally significant natural heritage lands into public ownership  Ensure the protection of life and property by securing lands subject to flood and erosion hazards  Increase the recreational health benefits by allowing for public use and enjoyment

Program Features Positioning The Conservation Authorities Act provides TRCA with the mandate “to acquire by purchase, lease or otherwise and to expropriate any land that it may require.” This securement allows for the protection of human life and property by securing lands subject to erosion or flooding hazards, protects the form and function of natural heritage lands by bringing them into public ownership and management, and increases the local and regional recreational health benefits by allowing for public use and programming. Greenspace is secured through a variety of methods including fee simple purchases, donations, conservation and other easements, restrictive covenants, leases and management and other agreements. Greenspace securement is primarily achieved through the Greenlands Acquisition Project 2016-2020.

Context TRCA’s current landholdings contain approximately 7.3% of the total land base of TRCA’s jurisdiction; these include several conservation areas, major ravine systems including nine watersheds, the Lake Ontario shoreline, and other existing greenspace holdings of more than 18,000 hectares. TRCA’s Greenlands Acquisition Project 2016-2020 includes criteria such as TRCA’s Terrestrial Natural Heritage System Strategy (TNHSS) and outlines priority areas and parcels for acquisition. Securement of these lands was identified as critical to maintain viable functioning of Toronto region’s watersheds and associated ecosystems.

Stressors and Opportunities TRCA is currently constrained in being able to fund fee simple acquisitions. While the regions of Peel, York and Durham currently have greenlands funding programs that will contribute up to a maximum of 50% of the total cost of acquisition, matching funding sources have proven difficult to obtain.

Opportunities to secure greenspace through donation have increased due to the Environment Canada’s Ecological Gifts Program, which allows donors to use their charitable tax receipt for up to 10 years, offsetting up to 100% of their annual income. While such transactions bring important natural heritage features into public ownership, they are opportunity based and complement TRCA’s greenspace securement initiatives. TRCA also continues to acquire lands through the development process for nominal consideration.

Funding Funding for securement of nominal value transactions and donations is obtained through current value assessment municipal levy. For market value land/greenspace acquisitions, regional and local municipal programs exist which allocate up to 50% of the total costs for the purchase of priority environmental significant lands as identified by TRCA. These regional and municipal initiatives are constrained by a lack of matching funding. Funding may also be secured from other organizations such as the Nature Conservancy of Canada, the Ontario Heritage Land Trust and private foundations.

Direct Actions and Activities TRCA secured 906 hectares between 2011 and 2015, and achieved the target of 1,000 hectares or 90% established in the Greenlands Acquisition Project for 2011-2015. The Greenlands Acquisition Project for 2016- 2020 identifies funding partners and estimated financial contributions over its five year duration. Based on recent rate projections, it is estimated that 1,000 hectares (2,500 acres) could be secured during the period of this acquisition project.

Business Synopsis & Rationale 2016-2020 1 Greenspace Securement 71 Complementary TRCA Actions and Activities Greenspace Securement is complemented by the following TRCA activities:  The Water Resource Science, Flood Management, and Erosion Management programs identify natural hazard areas to target for land acquisition  The Ecosystem Management Research and Directions program identifies lands targeted for inclusion through the Greenlands Acquisition Project 2016-2020

Key Outcomes  Acquisition of greenspace in support of TRCA’s Living City Policies, Integrated watershed and waterfront plans, provincial, regional and municipal official plans and the Terrestrial Natural Heritage System Strategy as well as other TRCA plans and strategies  Protection of environmentally significant land/greenspace including terrestrial and aquatic habitat  Protection of greenspace for health and wellness benefits including air and water quality preservation, trails and active recreation, social enhancement, and aesthetic benefits  Increased use of natural features in the attractiveness of the Toronto region as a location for business and residence

Key Activities – 2017 - 2020  Implement the Greenlands Acquisition Project for 2016-2020 o Acquire lots of record that are located in the flood plain or in ecologically or hydrologically important areas o Secure areas for source water protection, as they are identified o Acquire lands to extend and to complete the missing connections in the TNHSS and public ownership along the river valleys and Lake Ontario shoreline o Secure continuous corridors for the regional trail system o Acquire greenspace around existing TRCA properties, to amass larger areas o Communicate the benefits of the Ecological Gifts Program to private landowners

Outlook Greenspace Securement is delivered primarily through the Greenlands Acquisition Project 2016-2020 and will continue in its present form. This new project will include revised objectives regarding the quantity, location, and parameters of land TRCA seeks to acquire. Program implementation and success will ultimately depend on securing adequate funds to acquire priority parcels of land.

Business Synopsis & Rationale 2016-2020 2 Greenspace Securement 72 Greenspace Management Program Objectives:  Extensive networks of healthy and sustainable greenspace  Improved protection of Toronto region’s natural systems  Increased public utilization and enjoyment of greenspace, with individual and social health and wellbeing benefits

Program Features Positioning The Conservation Authorities Act (1946) provides the legal basis for TRCA’s mandate to undertake watershed planning and management programs that prevent, eliminate, or reduce the risk to life and property from flood and erosion hazards, as well as encourage the conservation and restoration of natural resources. To meet this mandate, TRCA undertakes comprehensive land asset management services on TRCA managed greenspace to reduce human and asset risk from natural or human hazards, eliminate encroachments, and discourage unauthorized use of conservation lands.

Through its greenspace management activities, TRCA is able to ensure that natural and cultural heritage resources are protected and, where appropriate, provide opportunities for safe and enjoyable recreation experiences to residents and visitors.

Context TRCA owns over 18,000 hectares of land within the Toronto region (approximately 7.3% of TRCA’s jurisdiction). TRCA’s ownership enables the protection and management of valley and stream corridors, flood plains, the Lake Ontario shore lands, wildlife, vegetation and environmentally significant areas. Over half of TRCA-owned lands are managed outright by TRCA and offer limited or no public access (8,300 hectares), or instead serve as conservation parks and education field centres (530 hectares). The balance of TRCA land is managed under municipal management agreements, third-party leases, rentals or other covenants and easements.

TRCA and its municipal partners manage trails, conservation areas and parks within communities. Trail linkages include those within ravine systems and on the Lake Ontario shoreline. Large urban wilderness parks like Tommy Thompson Park offer outdoor activities such as hiking, cross country skiing, bird-watching and nature appreciation.

While most of TRCA greenspace provide opportunities for minor recreational use or passive non-intrusive uses, certain areas are managed to support major recreational uses such as campgrounds, educational facilities, sustainable community demonstration sites, a living museum, and a golf course. TRCA employs best management practices and environmental stewardship, through the establishment of land management and master plans, to protect and conserve the valuable natural and cultural heritage attributes within each of its nine watersheds. All TRCA properties, regardless of the management category and intensity of public use, require regular and proper inspection, land planning, management and monitoring.

Stressors and Opportunities The Toronto region faces a rapidly growing urban population with increasing demand for access to greenspace, greenspace that is declining in quality. To meet future needs, greenspace planning and management must be addressed as an integrated system. To this end, TRCA will assist municipal partners in the development of a greenspace network that maximizes community wellbeing and local ecosystem protection. Opportunities with this approach include increased citizen health and happiness, increased appropriate access to existing nature, and the creation of new green infrastructure in urban areas. Investment in long-term greenspace management and renewal will be required for these objectives to be realized.

Business Synopsis & Rationale 2016-2020 1 Greenspace Management 73 TRCA lacks stable funding to ensure comprehensive site securement and/or maintain state of good repair on existing infrastructure. Funding to develop additional land management or public use plans (to proactively prepare for future public needs for accessible greenspace) is also lacking. The absence of stable public funding indexed to land securement poses a significant threat to TRCA’s ability to continue providing greenspace access in a responsible manner. Should stable funding sources not be identified, TRCA expects to develop strategies that curtail greenspace access and decrease associated expenses to sustainable levels.

Funding Funding for greenspace management is obtained primarily through municipal levy and special capital projects. Taxes and insurance are funded through general levy.

Direct Actions and Activities TRCA’s Greenspace Management activities complement TRCA’s aim to protect and restore the form and function of existing ecological systems. Program initiatives include the assessment, planning, management, monitoring and administration of TRCA properties. These actions ensure that natural and cultural heritage resources are protected and, where appropriate, opportunities are provided for safe and enjoyable visitor experiences.

Administrative functions undertaken through the Greenspace Management program include asset inventories and management planning, stewardship and monitoring, site securement and encroachment removal, hazard identification and mitigation, and the administration of insurance and realty taxes.

Complementary TRCA Actions and Activities Greenspace Management is supported by the following TRCA activities:  Greenspace Securement and Rental program initiatives bring new lands into TRCA ownership and generate revenue for TRCA programs  Forest Management programs assist in the identification and mitigation of natural hazards on TRCA lands and reduce or eliminate the realty tax burden on qualifying lands  The Trails program directly coordinates with land management actions on lands where public access is permitted  Conservation Parks and School Program field centres include high-intensity public uses such as campgrounds, swimming facilities, educational programing and facilities etc. However, the basic land management requirements for these lands are still consistent with a broader land management framework for all TRCA lands  Community Engagement programs are involved in the development and implementation of land management plans and programs

Key Outcomes  Identify and protect ecological functions and services and cultural heritage on TRCA lands  Provide safe, sustainable public recreation opportunities (where appropriate) and reduce/mitigate TRCA liability and risk as a landowner  Undertake responsible steward/partnership with respect to aboriginal engagement and heritage  Improve individual and social health and wellbeing indicators by providing safe access to natural environment interaction and activity

Key Activities – 2017 - 2020  Initial inventory of new property acquisitions and greenspace not previously assessed  Ongoing audit of TRCA property boundaries  Ongoing assessment and abatement of hazard trees along prescribed property boundaries.  Ongoing greenspace operation activities including site securement, encroachment removal, hazard identification and mitigation  Development of jurisdiction-wide Trail Strategy and Greenspace Strategy  Ongoing preparation of property specific management and master plans to protect environmental features and identify appropriate nature based recreation activities that could occur

Business Synopsis & Rationale 2016-2020 2 Greenspace Management 74  Ongoing administration of TRCA’s Cultural Heritage Master Plan including archaeological database management, assessments and monitoring, collection management, aboriginal engagement, and archaeological education and outreach  Ongoing collaboration with Parks Canada for the establishment of Rouge National Urban Park

Outlook As the broader socio-ecological context of the region continues to change, TRCA management systems will seek to remain responsive and adaptive. Greenspace Management program activities, however, are dependent on the level of financial resources made available by benefitting municipalities. Where financial support is strong, greenspace management activities will continue to be robust, comprehensive and proactive. Where little or no financial support is provided, Greenspace Management activities will include only basic hazard audits and mitigation necessary to permit safe public use on select lands; remaining greenspace in unfunded regions will be closed to public access.

Business Synopsis & Rationale 2016-2020 3 Greenspace Management 75 Rental Properties Program Objectives:  Financial sustainability  Maximize asset values and associated revenues  Comply with relevant legislation

Program Features Positioning The Conservation Authorities Act empowers TRCA to lease land that it has acquired. TRCA does on occasion acquire property that is improved with residential dwellings/outbuildings and parcels of land that may be suitable for leasing. Provided the environmental features for which the properties were purchased are not being impacted, the dwellings/outbuildings and suitable land are being leased to maximize asset values and associated revenues. Retrofits, upgrades and renovations to the structures are considered in conjunction with TRCA’s overall commitment to sustainability, a healthy and safe environment and net revenues to support other corporate projects.

Context TRCA currently manages 163 leases comprised of 118 residential leases, 19 farm land leases, 8 commercial leases, together with 18 ancillary land use leases. Commercial leases include but are not limited to, cellular telecommunication towers, Wild Water Kingdom, Frenchman’s Bay Club, and the Claireville Ranch. TRCA also rents more than 2,534 acres of land for farming purposes, which includes near urban farm agricultural agreements. TRCA in partnership with trail organizers and school boards has entered into trail agreements and field school agreements.

Stressors and Opportunities A key stressor associated with maximizing rental income is the age of the structures. Older homes have poor insulation, are more difficult to heat and maintain. Budgetary constraints limit the capital expenditures available for this purpose. TRCA is exploring partnerships with private individuals or companies wherein uninhabitable TRCA homes (poorly insulated or otherwise) would be renovated in exchange for free or significantly reduced rent over a defined period of time. At the end of the lease period TRCA would have a housing unit in an improved and habitable condition.

TRCA continues to explore and pursue revenue generating opportunities from the lease of TRCA land. Some examples include expanding near urban agricultural opportunities and trail agreements. These opportunities contribute to community engagement, i.e. trail users and ability to purchase locally grown food.

Funding The rental program is self-sufficient. Revenue generated from this program covers the costs for maintaining the residential properties and the net revenue generated, supports other corporate programs and supports staff costs for managing TRCA lands.

Direct Actions and Activities The residential component of the portfolio is governed by the Residential Tenancies Act, 2006. Rental related activities include, managing rental payments, rental expenditures and terms and conditions of the leases, and includes the renewal of leases and filling of vacancies. This includes the negotiation of new commercial leases and long term restoration agreements. Furthermore, TRCA arranges for regular and major maintenance repairs to the structures, as well as prepares 10 year maintenance plans. TRCA abides by all Ontario Health and Safety Regulations, the Heritage Act and the Ontario Building Code.

Complementary TRCA Actions and Activities Rental Properties are complemented by the following TRCA activities:  Greenspace Securement acquires the properties in the initial stage

Business Synopsis & Rationale 2016-2020 1 Rental Properties 76 Key Outcomes  Revenue generation  Compliance with all applicable legislation  Support staff costs for managing TRCA lands

Key Activities – 2017-2020  Ongoing health, safety, and major maintenance inspections  Water quality within residential and commercial properties  Negotiate long-term occupancies and/or restoration agreements  Increase rental income by increasing near urban agricultural leases, cell tower leases and other lease opportunities  Prepare ten-year maintenance plans

Outlook Rental Property income is anticipated to increase in 2016 in accordance with the Residential Tenancies Act. Continue to carry out regular and major maintenance on the residential dwellings and manage the rental portfolio. Explore opportunities for long term restoration agreements and commercial leases, in an effort to increase revenues to support other TRCA programs and for asset betterment.

On May 4, 2011, the federal government announced the creation of the Rouge National Urban Park. This site, located within the Rouge watershed, consolidated TRCA, federal, provincial and municipal lands into a new park under Parks Canada management. TRCA is working with Parks Canada on the conveyance of 2,266 hectares of TRCA land to the Park which includes 68 residential leases, 9 farm land leases, 2 commercial leases and 2 ancillary land use leases. TRCA is in discussions with Parks Canada about its ongoing role in the management of the rentals and leases after transfer.

Business Synopsis & Rationale 2016-2020 2 Rental Properties 77

78 2016 Budget

($000)

Sources of Revenue

Gross Government Surplus/ Net Contract Capital Operating Reserves Expenditures Grants and User Fees (Deficit) Budget Services Levy Levy Other

Tourism and Recreation

Waterfront Parks 2,832 1,022 4 578 1,228 - - -

Conservation Parks 7,085 500 4,295 76 1,078 1,136 - -

Trails 1,880 20 - 663 241 - (956) (956)

Bathurst Glen Golf Course 1,239 149 1,090 - - - - -

Black Creek Pioneer Village 4,115 285 1,620 - 350 1,782 (78) (78)

Events and Festivals 724 - 807 - - - 83 83

Wedding and Corporate Events 1,754 - 2,008 - - - 254 254 19,629 1,976 9,824 1,317 2,897 2,918 (697) - (697)

2016 Full-time Equivalent Employees (FTEs)

Operating Capital Total % Change Over 2015

2015 149.57 19.55 169.12

2016 153.36 26.98 180.34 6.6%

79 Conservation Parks

Objectives: • Provide sustainable and accessible nature-based recreation and tourism experiences for residents and visitors • Enable behaviours that foster individual and social health and well-being, including: o Fostering active living through active recreation; and o Fostering connections to nature through recreation • Enhance equality, inclusion, and access to natural environment settings for populations facing barriers to participation • Deliver high quality customer experiences in support of a vibrant eco-tourism economy. • Ensure financial sustainability and promote sustainable growth • Draw and retain regional tourism visitation by developing, operating and maintaining world-class recreational programming, facilities and trails

Program Features Positioning Toronto and Region Conservation (TRCA) is the largest landowner in the Toronto region and manages ten Conservation Parks across nine watersheds. Proximity to the urban core makes Conservation Parks attractive to urban and suburban residents and visitors seeking natural spaces and recreation opportunities within the Greater Toronto Area (GTA).

In addition to natural spaces, TRCA Conservation Parks offer unique outdoor experiences by providing specialized site-based amenities and nature-based recreation activities and products. TRCA facilities also offer the closest camping and RV sites to downtown Toronto; in doing so, TRCA Conservation Parks cater to an important segment of the travel and tourism market by offering easy access to Toronto region businesses, attractions, and amenities.

Context TRCA Conservation Parks are generally located within a 45-minute driving radius of Toronto’s urban core. Daily park admission fees are charged at seven parks, and are $6.50 for adults, $5.50 for seniors, and free admission for children ages 14 and under when accompanied by a paying adult. Park sites for which admission fees are not charged include campgrounds, sites that offer fewer amenities, and sites subject to agreements whereby park administration expenses are funded by the local municipality.

TRCA Conservation Parks complement the greenspaces offered by local municipalities by providing enhanced outdoor recreation offerings that draw users from across the GTA. Conservation Parks offer multi-use trails designed for hiking, biking, cross-country skiing and similar activities. In addition to trails, the parks also feature short and long-term camping and RV facilities, swimming pools, splash pads, fishing ponds, fully serviced manicured spaces for gatherings and picnics, and comfort amenities. Specialized facilities include a BMX bike park, Treetop Trekking experiences and indoor venues that are available as rental venues for private bookings. Conservation Parks also serve as host sites for public programs and special events, such as family programs, workshops and festivals, adrenaline races, green weddings, and corporate events.

No provincial parks are located within TRCA’s jurisdiction, however adjacent municipalities and watersheds with Provincial Parks including the Credit, Georgina/Lake Simcoe, Mono, Oakville, and Oshawa/Darlington. Some offerings available at provincial parks, such as camping, trails, and public programming, pose direct competition to TRCA’s offerings. TRCA Conservation Areas are differentiated from provincial parks, however, in their capacity to cater to both public users and private clients. Provincial park fees are structured differently from TRCA Conservation Park fees making direct comparison difficult.

On May 4, 2011, the federal government announced the creation of the Rouge National Urban Park. This site, located within the Rouge Watershed, consolidated TRCA, federal, and provincial lands into a new site under federal management. Parks Canada is responsible for further development and administration of Rouge Park. It is it is anticipated, however, that site Rouge Park offerings and constraints will be similar to those of provincial parks.

Business Synopsis & Rationale 2016-2020 1 Conservation Parks 80 Stressors and Opportunities Research indicates that strong links exist between experiences in nature and key academic, health, social and environmental outcomes. As many TRCA Conservation Parks are situated in locations where access is motor- vehicle dependent, these sites offer greater benefit to families with the time and resources to travel to the park. TRCA is taking steps to improve park access and diversify visitation through partnerships with organizations like Park Bus, which provides transportation from Toronto’s core to specific TRCA parks, and through the creation of trail connections for active use travel. Further opportunities exist to reduce barriers to access for populations facing constraints to participation in outdoor recreation. TRCA will explore potential partnerships with TTC and other transit providers to this effect.

Through the Education and Outreach and Community Engagement program areas, TRCA aims to better engage all demographics of the Toronto region at Conservation Parks. To do so, TRCA seeks to provide supportive physical, social, and programming environments such that participation in outdoor recreation is available and attractive to the diverse citizenry of the Toronto region. Such investments present an equitable approach to improving individual and social health and wellbeing indicators across the region.

Many of TRCA’s Conservation Parks were established over 50 years ago. As a result, a high proportion of existing park infrastructure is now reaching the end of its lifecycle and requires renewal or replacement. Insufficient funding for infrastructure and its attendant risk to human safety and visitor experience poses a stressor to TRCA’s objective of increasing the quantity and duration of visits to Conservation Parks.

Volatility in fuel prices and Canadian dollar exchange rates may result in more Toronto region residents choosing to spend vacations or other leisure days near their primary residence (“staycations”). Accordingly, increases in the number of area residents seeking single-day outings present an opportunity for Conservation Parks to enhance attendance and revenue generation.

Funding TRCA Conservation Parks are funded through general levy and user fees.

Direct Actions and Activities In 2015, more than 700,000 visitors were hosted at park sites. The majority of day-use visitors were travelling from areas within the GTA.

Administration and upkeep of TRCA Conservation Parks include park maintenance, staffing, day-to-day operations, program development and management, and business development. In addition to program- specific facilities, infrastructure at Conservation Parks includes trails, all-season buildings, over 65 seasonal buildings and/or washrooms, three swimming facilities, 56 picnic sites, and over 600 campsites.

Complementary TRCA Actions and Activities • TRCA’s Greenspace Securement and Management and Trails programs coordinate with Conservation Parks to ensure lands and trails are maintained according to the appropriate SOP standard. • Education and Outreach, Family Programming, and Festivals and Events offer activities and programming that enhance the visitor experience at Conservation parks.

Key Outcomes • Increase park visitors, park visit frequency, and park visit duration • Increase the proportion of attendees ranking their Conservation Park experience as “good” or better • Enhance financial sustainability through partnerships and business development • Maintain or enhance demographic diversity of park users

Business Synopsis & Rationale 2016-2020 2 Conservation Parks 81 Key Activities – 2017-2020 • Continued Conservation park master plan development and implementation processes • Increase partnerships with public and private entities able to offer unique outdoor experiences at Conservation Parks • Continue offering accessible amenities and programming to all visitors at Conservation Parks • Continue addressing park infrastructure needs on a priority basis • Continue examining the costs, revenues, and attendee profile of individual parks to identify service refinement alternatives that increase and diversify attendance and reduce barriers

Outlook TRCA will continue to manage its conservation lands to ensure that communities and partners have sustainable access to protected conservation lands, parks, valleys and stream corridors. In addition to daily operations, the activities of Conservation Parks will focus on increasing and diversifying sources of revenue. TRCA will also continue to pursue opportunities to bundle Conservation Parks membership into package offerings containing complementary goods and services. Internally, TRCA will continue to evaluate its park programming and seek to more uniformly distribute its offerings across the seasons.

Business Synopsis & Rationale 2016-2020 3 Conservation Parks 82 Waterfront Parks

Objectives:  Provide sustainable and accessible nature-based recreation and tourism experiences for residents and visitors  Enable behaviours that foster individual and social health and well-being including: o Active living through active recreation o Connections to nature through recreation  Enhance equality, inclusion, and access to natural environment settings for populations facing constraints to participation  Deliver a high quality visitor experience  Draw and retain regional tourism visitation by developing high quality waterfront parks and trails

Program Features Positioning TRCA is a significant waterfront landholder with jurisdictional authority over the Lake Ontario shoreline (less the Central Waterfront). In combination with TRCA’s standing expertise in park development, project management, erosion and landform works, integrated shoreline management, environmental assessment, and public engagement, TRCA provides uniquely comprehensive, streamlined, and value-added waterfront park development offerings that mitigate municipal partner risk and associated expense.

Context TRCA’s jurisdiction includes 67 linear kilometres, and 231 total wetted kilometres of Lake Ontario shoreline. TRCA’s shoreline property holdings include 648 ha of the waterfront’s terrestrial watershed. The majority of TRCA’s terrestrial holdings have been converted into public greenspace and waterfront park amenities including Colonel Samuel Smith Park, Mimico Waterfront Park, Humber Bay Park Complex, Ashbridges Bay Park, Tommy Thompson Park, Bluffer’s Park, and Port Union Waterfront Park.

Many of TRCA’s waterfront park holdings contain stretches of the Waterfront Trail network. Free and accessed by many millions of users each year, the Waterfront Trail extends over 1,600 km along the Canadian shores of Lake Ontario, Lake Erie, and Lake St. Clair and the Niagara, Detroit and St. Lawrence Rivers; the trail connects 75 communities, over 405 parks, and natural areas including wetlands, forests and beaches.

The sediments that make up the Toronto region shoreline are generally a mixture of sands, silts, clays, tills, and gravels. These materials are highly erodible; only with shoreline hardening initiatives have the contours of Toronto’s shoreline become fixed. In many areas the shoreline has been modified, and/or new lands created, with the use of construction rubble and and/or soils excavated for construction (collectively referred to as lakefill). TRCA has monitored and controlled the chemical integrity of lakefill materials since 1988.

Stressors and Opportunities TRCA’s waterfront park infrastructure consists largely of materials and works that prevent shoreline erosion and undermining. Examples include breakwalls, seawalls, and shoreline features constructed with armour stone. Although robust, these works are subject to continual weathering by wave action, and many of the structures have reached or exceeded their design life. This has resulted in the need for regular monitoring and maintenance to reduce risks to, among others, marine navigation, public property and buildings, roads and services, and public safety.

Business Synopsis & Rationale 2016-2020 1 Waterfront Parks 83

Because funding for waterfront infrastructure repair has not kept pace with emerging need, significant capital investment is required to maintain waterfront assets. Acute and chronic stressors include increased frequency and intensity of storm damage resulting from climate change, ongoing deterioration of existing assets, and increased asset stock and liability resulting from new park construction. Accordingly, the cost of waterfront park maintenance and remediation is anticipated to increase for the foreseeable future.

Waterfront parks are free, aesthetically pleasing, and transit accessible spaces through which citizens and visitors partake in active and passive recreation, enjoy formal and informal events and festivals, and access terrestrial and aquatic natural environments. As climate change increases temperatures and summer heat events increase in intensity and duration, waterfront parks (in particular those with swimmable beaches) will increase in importance as locations for citizens to mitigate heat-related stress. Continued and increased investment in maintaining safe and attractive waterfront parks are an important opportunity to increase attendant benefits to individual and social health and wellbeing while mitigating liability risk. Coordination of shoreline works with landside infrastructure improvements offer the benefits of reduced construction, coordination, and permitting burdens, reduced risk of erosion and undermining to renewed landside assets, and the delivery of a consistent, high quality park user experience.

Waterfront park planning and implementation offers significant opportunities for the creation of aquatic and terrestrial habitat. Formally set aside as a park in 1973, Tommy Thompson Park has since been recognized as a globally significant Important Bird Area for its role as a stopover site during spring and fall migrations. Similarly, aquatic works such as the habitat and wetland at Spadina Quay increase feeding and breeding sites for resident fish populations (in turn supporting local recreational fisheries). The continued deliberate and directed implementation of habitat works at waterfront park locations poses the opportunity to directly enhance local biodiversity, habitat connectivity, and climate resilience. These activities also contribute to the delisting of the Toronto region as a bi-national Great Lakes Area of Concern.

The expertise of TRCA’s Waterfont Park Program is recognized and accessed by several partner municipalities and other Conservation Authorities; TRCA now enters into agreements to assist with projects in which it holds experience. To this end, TRCA is currently providing technical and project management expertise to the Lakeview Waterfront Connection Project, a new waterfront park along the eastern Mississauga shoreline. Through these opportunities TRCA is enhancing already strong partnerships while reducing project cost and uncertainty for municipal partners.

Funding Funding for waterfront parks is obtained primarily through municipal levy and contract services. Direct Actions and Activities Waterfront Parks staff partner with municipalities in the planning, implementation, and management of waterfront parks. Roles include facilitating consultation and master planning processes, providing project management services, developing funding and budget management strategies, addressing legal matters arising from new park creation, and ongoing stakeholder communication and outreach.

Business Synopsis & Rationale 2016-2020 2 Waterfront Parks 84 Internal coordination with TRCA Erosion Management staff ensures waterfront park maintenance work is carried out on a priority basis. A condition assessment and priority ranking of infrastructure within waterfront parks is maintained and updated annually or as conditions require ( such as following a significant weather event). These priority rankings underpin TRCA’s annual and long-term work plans that reduce risk to public safety, property and infrastructure through waterfront park maintenance and remedial works. .

Complementary TRCA Actions and Activities  Watershed Planning and Reporting helps guide park development and implementation  Water Risk Management evaluates and addresses erosion/undermining risks identified along the waterfront, including those located in waterfront parks  Restoration and Regeneration contribute and collaborate in the development and implementation of Waterfront Parks to realize terrestrial and aquatic habitat opportunities  Greenspace Securement address property-related matters that may occasionally arise in the waterfront park development process  Archaeology Services prepare any necessary documentation and First Nations engagement for waterfront park initiatives  Community Engagement and Marketing and Communications ssist with stakeholder and public engagement

Key Outcomes  Reduced risk to human and ecosystem health  Reduced risk to essential structures and infrastructure  Reduced risk to safety and marine vehicles from sedimentation and hazards to navigation  Improved terrestrial and/or aquatic habitat  Improved outdoor experience and recreational use of the waterfront

Key Activities – 2017-2020  Continue development of the Scarborough Waterfront Project and Scarborough Bluffs West project  Undertake revitalization projects at Humber Bay Park (east and west), shoreline improvements at Marie Curtis Park East, and shoreline and waterfront amenities at Paradise Beach Park  Continue to advance the Rotary Frenchman’s Bay Master Plan and implement the Tommy Thompson Park Master Plan  Investigate the feasibility of providing increased watersport activities and other public amenities along the Western Beaches

Outlook TRCA will continue to develop and revitalize waterfront park amenities and infrastructure in accordance with municipal interests and funding. No major changes to the function or operation of this program area are anticipated.

Business Synopsis & Rationale 2016-2020 3 Waterfront Parks 85 Trails

Objectives:  More people engaging with nature more often  A network of greenspace and green infrastructure that weaves through every community to connect a healthy and resilient landscape  Increased financial resilience for TRCA through stable and diversified funding

Program Features Positioning TRCA continues a decade’s long legacy of public land acquisition to protect and manage valley and stream corridors, flood plains, the Lake Ontario shoreline lands, wildlife, vegetation and environmentally significant areas. This system should be further developed to reach its potential to provide sustainable nature-based recreation experiences for a growing population and support healthy communities, interpretation of natural and cultural heritage, links with local neighborhoods and connections to surrounding watersheds and regions.

As the largest landowner in the Greater Toronto Area, TRCA is well positioned to be a leader in the planning, implementation and management of trails and associated infrastructure to provide safe, enjoyable recreational trail experiences for area residents and visitors while ensuring that natural and cultural heritage resources are protected. TRCA’s trail management activities compliment TRCA’s aim to provide nature-based recreation experiences for a growing population while protecting and restoring the form and function of existing ecological systems. As the broader socio-ecological context of the region continues to change, TRCA management systems must remain flexible and able to adapt to these changes while remaining firmly rooted in the protection of the environment.

Context TRCA’s trails are valuable infrastructure that provide a myriad of public benefits and recreation opportunities. TRCA owns and operates over 600 kilometres of local and inter-regional trails across its jurisdiction. These are travel destinations themselves but also provide invaluable links between other TRCA, municipal and community facilities. These assets must be managed in a way that addresses TRCA’s liability and risk while also offering accessible and enjoyable recreation experiences.

TRCA and its municipal partners manage trails, conservation areas and parks within communities, continuously linked along the ravine system, and ultimately linked with trails on the Lake Ontario shoreline. TRCA employs best management practices and environmental stewardship, through the establishment of land management and master plans, to protect and conserve the valuable natural and cultural heritage attributes within each of its nine watersheds

Stressors and Opportunities Faced with declining quality of much of the greenspace in the region and increased demands for this essential resource by a rapidly growing urban population, now is the opportune time to rethink greenspace as an integrated system. Through thoughtful planning and action we will help develop a network of greenspace for the Toronto region that maximizes community wellbeing and protection of our local ecosystems. This will include helping people become healthier and happier by promoting appropriate access to existing nature and by creating new green infrastructure in urban areas. To ensure that future generations also benefit from greenspace, we will also create awareness of the need to invest in its long-term management and renewal.

Funding Funding for Trails is obtained primarily through contracted services and municipal levy.

Direct Actions and Activities In addition to developing and maintaining a jurisdiction-wide trail strategy and associated policies, this program includes site specific trail planning, development, management, and monitoring activities. These initiatives are undertaken with the assistance of government and non-government staff, formal trail partners and/or public volunteers and stewards.

Business Synopsis & Rationale 2016-2020 1 Trails 86

Complementary TRCA Actions and Activities Trails are complemented by the following TRCA activities:  TRCA’s Greenspace Management program is directly coordinated with Trails actions on lands where public access is permitted  Greenspace Securement program initiatives bring new lands into TRCA ownership and can facilitate local or regional trail connection objectives  Conservation Parks and Field Centres include high-intensity public uses such as campgrounds, swimming facilities, educational programing and facilities etc. However, the basic trail planning and management requirements and for these lands are still consistent with a broader trail and public recreation framework for all TRCA lands  Community Engagement activities are involved in the development and implementation of trail management plans and programs

Key Outcomes  Contribute towards a healthy and active community  Address TRCA’s liability and risk as a trail provider  Provide safe, accessible and sustainable trail opportunities where appropriate

Key Activities – 2017-2020  Complete final draft of TRCA’s Trail Strategy  Initial inventory of trails on new property acquisitions and lands not previously assessed  Ongoing audit of authorized trails  Ongoing assessment and abatement of hazard trees along authorized trails  Coordinate and implement recommendations and deliverables stemming from trail planning activities including new trail construction, improvement of existing trails, trail re-routing and trail decommissioning and restoration

Outlook At present, funding support for the Trails Program is inconsistent across TRCA’s jurisdiction. Where financial support is strong, trail management activities can continue to be robust, comprehensive and proactive. However, efforts should be made to pursue long term maintenance and monitoring funding which is tied to capital trail development.

Where little or no support is given, trail management activities include only the most basic hazard audits and mitigation necessary to permit safe public use on select trails with the remainder of trails in that region having to be closed to public access. When there is no stable funding, ensuring comprehensive site securement or maintaining state of good repair on existing infrastructure, let alone funding the development of additional trail management or public use plans to proactively prepare for future public demand to access to greenspace, is jeopardized. Alternative management and/or funding models must be sought for these areas if stable public funding is not forthcoming.

Despite the above concerns, TRCA continues to have some success in securing special project funding for trails on select TRCA lands as well as fee for service arrangements with municipal partners for trail planning, implementation and monitoring. These elements of the business model are readily scalable as works undertaken each year are bounded only by available funding.

Business Synopsis & Rationale 2016-2020 2 Trails 87 Black Creek Pioneer Village

Objectives: • Preserve and promote cultural heritage • Demonstrate community relevance • Optimize attendance • Increase financial sustainability

Program Features Positioning Black Creek Pioneer Village (Black Creek) is a living history museum located in the northwest end of Toronto. Black Creek is an important part of the city’s cultural fabric, sharing with visitors the history of mid-nineteenth century village life in South Central Ontario. As a popular Toronto heritage attraction, Black Creek draws increased tourism traffic to its host community while carrying out diverse internal operations in support of its educational mandate.

Context Black Creek is situated at the southeast corner of Jane Street and Steeles Avenue in Toronto - the site of the Stong family farm from 1816 to 1958. Recognizing cultural and historical value in the property and historic buildings on site, TRCA acquired the property and opened Black Creek Pioneer Village to the public in 1960. By 1980, close to 40 heritage structures had been relocated to the site; a contemporary multi-use Visitors’ Centre was constructed in 1984.

Black Creek maintains a collection of approximately 50,000 artifacts. Site programming offers a diverse roster of public programs, special events, and exhibits. In the historic Village, costumed educators use artifacts, interactive activities, demonstrations, drama presentations, and heritage farm animals and gardens to engage and connect with visitors. Black Creek is the largest museum of its kind in Toronto and attracts diverse audiences that include students, seniors, domestic and international tourists, new Canadians and families with children. Black Creek is also used as a venue for wedding and corporate events, and as a location for commercial filming and photography.

In addition to the primary Black Creek site, TRCA owns the Black Creek North Property located opposite to the Village on the northeast corner of Jane Street and Steeles Avenue West. This property features the historic Dalziel Barn, one of the largest and oldest Pennsylvania barns in North America. Staff recently completed a Black Creek North Lands Master Plan and Black Creek Vision Plan to help direct future activities and developments at these sites.

Stressors and Opportunities As a steward of Canadian history and heritage, TRCA works to preserve Black Creek’s collections through ongoing maintenance and infrastructure improvements. These works include both minor alterations and substantial upgrades to ensure that all structures and facilities meet accessibility requirements, are maintained in a state-of-good-repair, and support ongoing operations and program development. While the maintenance and improvement of Black Creek’s heritage buildings support the viability of museum operations and the financial sustainability of the site, they also correlate to a growing fiscal responsibility borne largely by TRCA and the City of Toronto. Despite maintaining diverse revenue streams, the costs of building maintenance and improvements exceed revenue generation at Black Creek. This imbalance represents a stressor, as financial analysis indicates that the removal, replacement, and/or significant retrofit of Black Creek’s structures is a more viable option than continued maintenance and upgrades.

TRCA recognizes Black Creek’s financial situation as an opportunity to pursue new funding opportunities and develop more innovative programming. However, as these opportunities are identified, TRCA needs to consider the constraints, higher sunk costs, and higher risk associated with activities at Black Creek as compared to more contemporary sites. On the whole, this increased risk presents an obstacle in TRCA’s search for more lucrative business models and offerings. TRCA must strategically navigate the situation to secure a viable and sustainable future for Black Creek. At present, TRCA is exploring the possibilities and limitations associated with the branding of goods, services, and experiences linked to Black Creek’s narrative

Business Synopsis & Rationale 2016-2020 1 Black Creek Pioneer Village 88 and public image. TRCA will continue to pursue licensing, co-branding, and/or co-production opportunities with commercial enterprises to increase revenue generation and the public’s awareness of Black Creek while seeking additional opportunities for promotion and business development.

Funding Funding for Black Creek Pioneer Village is obtained primarily through general levy and user fees.

Direct Actions and Activities Black Creek offers a full calendar of public programs, special events and exhibits that are enjoyed by approximately 70,000 general public users and 50,000 school children each year. It is open to the public between May 1st and December 23rd, during March Break, and for education tours and private bookings year- round.

Black Creek’s Village programs include hands-on activities, interactive demonstrations, guided tours and drama performances. Annually, the site hosts approximately 15 special events including the Pioneer Harvest Festival and Christmas by Lamplight. Throughout the year, Black Creek offers education programs for school groups, historic workshops, apprenticeship programs, and exclusive activities for members. Black Creek’s McNair Gallery, open to the public during Village operating hours, shares its historic collection through permanent displays and temporary exhibits. Black Creek also partners with other arts, heritage and cultural organizations to curate and present unique annual exhibits. The Black Creek Gift Shop operates around the public hours of the Village and offers souvenirs, local and hand-made items, traditional candy and sweets, prepared foods, housewares and seasonal decor, books, children’s toys, and other goods for sale.

Complementary TRCA Actions and Activities Black Creek Pioneer Village is complemented by the following TRCA activities: • Education and Outreach, Family Programs, Events and Festivals, and Wedding and Corporate Events co-produce programming and coordinate activities at Black Creek that cater to diverse users and enhance visitor experience • Conservation Parks offers a joint membership to encourage visitation to TRCA’s Conservation Parks, Black Creek Pioneer Village, and the conservation areas of Credit Valley Conservation

Key Outcomes • The natural, cultural, and built heritage of the Toronto region is preserved and shared with the public • Visitors are offered interactive and engaging museum experiences at Black Creek • Visitor demographics demonstrate maintained or enhanced demographic diversity • Strategic partnerships and promotions lead to greater awareness of Black Creek, increased site visitation, increased revenue generation, and greater financial sustainability

Key Activities – 2017-2020 • Continue to develop, fundraise for, and implement the new Black Creek Vision and Black Creek North Lands Master Plan • Continue ongoing site programming, conservation, and maintenance activities • Continue to examine the costs, revenues, and attendee demographic profile of Black Creek to identify service refinement opportunities • Continue to increase and diversify attendance, reduce barriers to access, and seek increased relevance to the local community • Effectively market unique Black Creek branded products, services, and experiences, including increasing partnerships with commercial entities

Business Synopsis & Rationale 2016-2020 2 Black Creek Pioneer Village 89 Outlook TRCA will continue to pursue financial sustainability at Black Creek through improvements to existing business models and the development of new revenue streams. Continued investment in human, technological, and financial resources will streamline and support Black Creek daily operations through enhanced project management and technological and operational efficiencies.

TRCA is currently working on fundraising for and implementing the Black Creek Vision and Black Creek North Lands Master Plan. The Black Creek North Lands Master Plan recommends improvements to flood control measures, protection of existing heritage structures, the introduction of interactive programs on site, and the creation of three precincts: natural heritage, cultural/agricultural heritage and a commercial development site. The Black Creek Vision incorporates the recommendations of the Black Creek North Lands Master Plan while outlining detailed objectives for creating a more engaging and innovative village experience. Immediate next steps include implementing a fundraising campaign, completing a detailed business plan (including a marketing plan and an operating budget), completing an interpretive plan, and implementing key projects associated with the Black Creek Vision and Black Creek North Lands Master Plan.

Business Synopsis & Rationale 2016-2020 3 Black Creek Pioneer Village 90

Bathurst Glen Golf Course

Objectives:  Promote positive behavioral change to foster individual and social health and well-being  Protect and restore ecosystem health and function  Optimize attendance  Financial sustainability

Program Features Positioning The Bathurst Glen Golf Course (BGGC) is a golfing facility that encourages the use of the natural environment for recreational purposes while fulfilling TRCA’s mandate to protect and enhance the natural environment.

Context Situated within Oak Ridges Corridor Park, the BGGC facility includes an 18-hole executive course and driving range, and programming, a pro shop, rentals, and food services to support and enhance attendee experiences. Bathurst Glen holds Audubon Cooperative Sanctuary Program certification in recognition of its support of terrestrial habitat and environmental integrity objectives.

Stressors and Opportunities Executive golf courses in or near Richmond Hill compete with BGGC for local clients. The development of innovative and unique products and playing opportunities provide an opportunity to encourage attendance and repeat visits.

BGGC holds opportunities to build upon its existing clientele through the development of loyalty programs and new value-added programming. Client-based opportunities include the development of new partnerships with school groups, day camps, and youth groups to build upon its established coaching offerings. Partnership opportunities within the community, and also within TRCA’s existing mix of recreational programming, may also be pursued to enhance BGGC offerings and financial sustainability.

The Audubon Cooperative Sanctuary certification process requires that BGGC be recertified every three years. BGGC implements best management practices and uses the protection of the natural environment as education opportunities for its community of users. Through these actions, it is hoped that the community will become increasingly knowledgeable and engaged in the sustainable management of land, water, wildlife, and other natural resources on a golf course. As biotic and abiotic environmental stressors increase, however, their combined effects may have a detrimental effect on the health and quality of BGGC’s natural environment and standing within the Audubon program.

Funding Funding for BGGC is obtained through user fees, with the province covering the cost of the Oak Ridges Corridor Park through a provincial levy.

Direct Actions and Activities BGGC’s golf course and the driving range facility currently serve over 50,000 people annually including adults, youth, and school groups. In addition to playing opportunities, BGGC offers adult and youth coaching programs, skills development clinics, introductory programs for new Canadians, and other focus clinics throughout the season.

Business Synopsis & Rationale 2016-2020 1 Bathurst Glen Golf Course 91

The BGGC environmental program hosts three community planting and monitoring events throughout the year. These activities engage approximately 50 volunteers in the planting of shrubs, installation of nest boxes, and construction of pollinator habitat. Additional interpretative hikes and group discussions are attended by local community members and interest groups. An educational component (based around the Audubon Cooperative Sanctuary Program) is delivered to junior camps and teaches junior golfers about the importance of the natural environment and environmental management. Outside of public programming, BGGC internal operations have reduced pest control usage by 80% and water consumption by 20%.

Complementary TRCA Actions and Activities Bathurst Glen Golf Course is complemented by the following TRCA activities:  Restoration and Regeneration assists in the development and maintenance of quality terrestrial habitat

Key Outcomes  Provide positive and memorable outdoor recreation opportunities  Develop a sense of well-being through community contribution to the natural environment  Improve aquatic and terrestrial habitat  Financially sustainability

Key Activities – 2017-2020  Continue developing partnerships within the community and with TRCA’s other service groups  Continue public engagement and education on best management practices, including planting and monitoring events with the local community  Continue to implement best management practices to encourage wildlife habitat and protect natural resources for the benefit of the community, wildlife and recreation

Outlook The implementation of best management practices in sustainability, including maintained Audubon Cooperative Sanctuary certification, will be continue to be a priority as TRCA seeks to demonstrate leadership, commitment and high standards of environmental management in the golfing industry. In addition to independently pursuing increased customer experiences and offerings, TRCA will also focus on the creation of new partnerships - both within the community and in association with TRCA’s other recreational offerings - to increase both the facility’s financial sustainability and customer experience.

Business Synopsis & Rationale 2016-2020 2 Bathurst Glen Golf Course 92 Events and Festivals

Objectives:  Promote positive behavioural change that fosters individual and social health and well-being  Enhance access to nature-based recreational experiences  Financial sustainability  Optimized event and festival attendance

Program Features Positioning Events and Festivals promote community involvement and recreation in TRCA’s natural spaces while generating revenue that supports TRCA’s program delivery and financial sustainability. With significant experience delivering festival and event programming, TRCA can host and promote of large-scale events in manner that maximizes revenue and engagement, enjoyment, learning, and customer satisfaction.

Context TRCA owns many public use facilities including nine conservation areas, three campgrounds, Bathurst Glen Golf Course, Black Creek Pioneer Village and Kortright Centre for Conservation. Site host various annual events and festivals, many of which are organized in collaboration with TRCA partners. The majority of TRCA’s facilities possess the capacity to host single and multi-day festivals and events without the need for significant additional staffing or site infrastructure.

TRCA public use facilities are accessible during their respective operating seasons, and most charge a modest entrance fee of only general admission. The majority of events and festivals at TRCA facilities can be enjoyed with the payment of general admission, while others require advance ticket purchases or the payment of a special admission fee. Events and festivals do not affect general site access to TRCA facilities.

Stressors and Opportunities Events and Festivals are most frequently hosted at TRCA Conservation Parks and other TRCA site with public amenities. To the greatest extent possible, TRCA manages these events – in particular those hosted by private external organizations – to mitigate and minimize negative accessibility and experience outcomes for other site users. As open areas and greenspace become less available, TRCA expects an increase in site requests from organizations seeking events and festival space. Successful balancing completing user group demands will be required to ensure TRCA continues to deliver high quality experiences for all.

Funding Events and Festivals are funded through admission fees and consistently generate profit. Admission fees (general or special rate) are charged on TRCA event and festival days.

Direct Actions and Activities Events and festivals hosted by TRCA may align with broader socio-cultural themes and practices, and/or support education and learning, but are not specifically designed for educational purposes. The main objective of TRCA events and festivals is to engage the public, offer entertainment value, and promote celebration and enjoyment. TRCA hosts approximately 40 events annually, with an estimated 120 event days each year.

Private events, for which TRCA rents out the use of venues, land, or both, include adrenaline races, corporate events, and green weddings. Approximately 350 private events are conducted each year across two hosting sites (Kortright Centre for Conservation and Black Creek Pioneer Village).

Complementary TRCA Actions and Activities Events and Festivals are complemented by the following TRCA activities:  Conservation Parks and Black Creek Pioneer Village provide venues Events and Festivals  Education and Outreach may provide programming support to Events and Festivals when requested

Business Synopsis & Rationale 2016-2020 1 Events and Festivals 93 Key Outcomes  Event and festival participants garner experiences leading to improved indicators with respect to: o Citizenship behaviors, including environmental stewardship and social cohesion o Health and wellness outcomes  Revenue generation from event and festival activities

Key Activities – 2017-2020  Business development to promote TRCA’s Conservation Parks as ideal destinations for event and festival rental venues  Continued planning and delivery of existing annual events and festivals  Continue to engage with and implement master plans and vision plans for TRCA facilities that foster the creation of facilities and venues for festivals and events

Outlook TRCA will continue to work with internal and external proponents to promote its diverse public use facilities as ideal locations to host festivals and events. Open spaces, existing infrastructure, and experienced staff make festivals at TRCA sites unique and memorable. With a focus on promoting a greater number of space and venue rentals, TRCA will continue to secure revenue to fund programming and operations while contributing to organization growth and financial sustainability.

Business Synopsis & Rationale 2016-2020 2 Events and Festivals 94 Weddings and Corporate Events

Objectives: • Provide access to natural spaces for private events • Increase financial sustainability • Optimize wedding and corporate events attendance

Program Features Positioning TRCA utilizes existing landholdings and infrastructure to host formal occasions in natural spaces. Revenues generated through the hosting of such events are applied in support of TRCA program delivery and financial sustainability.

Context TRCA owns nine conservation areas, Bathurst Glen Golf Course, Black Creek Pioneer Village and Kortright Centre for Conservation. Many of these sites offer a range of wedding and corporate venue amenities and options that include sheltered picnic areas, open greenspace, indoor meeting rooms and outdoor event spaces. TRCA’s larger event venues are equipped with kitchen facilities and food preparation spaces. Site facilities possess the capacity to host single and multi-day events without the need for significant additional staffing or site infrastructure.

Private events held at TRCA facilities do not impact general public access to the site. Further, public access to TRCA facilities during operating hours is never strictly prohibited during public or private events.

Stressors and Opportunities TRCA manages private events hosted at its venues to ensure that both private clients and public users have high quality experiences during their visit. TRCA minimizes the potential impacts of private events on public access by employing event planning and management tactics and facilitating regular communication between operations and events staff. TRCA expects an increase in site requests for wedding and event bookings at TRCA facilities as open areas and greenspace across the GTA become less available.

Funding Weddings and corporate events are self-funding and consistently generate profit for TRCA.

Direct Actions and Activities TRCA provides venues and, as requested and available, food preparation services for weddings and corporate events. Weddings and corporate events are private events. TRCA may provide education and/or learning programs as part of an event if requested to do so.

Complementary TRCA Actions and Activities The Weddings and Corporate Events Program area is complemented by the following TRCA activities: • Black Creek Pioneer Village, Bathurst Glen Golf Course, and Conservation Parks provide host sites and facilities

Key Outcomes • Wedding and Corporate Events bookings generate revenue for TRCA • Wedding and Corporate Events attendees have positive experiences at TRCA facilities

Business Synopsis & Rationale 2016-2020 1 Weddings and Corporate Events 95 Key Activities – 2017-2020 • Business development to promote TRCA’s facilities as ideal destinations for wedding and corporate events • Continued commitment to service excellence to ensure customer experience satisfaction • Continue to be engaged in and implement master plans and vision plans for TRCA facilities that foster the creation of facilities and venues for weddings and corporate events

Outlook TRCA will continue to work with internal and external proponents to promote its diverse public use facilities as ideal locations to host wedding and corporate events. Open greenspace, scenic environments, existing infrastructure, and experienced staff make wedding and corporate events at TRCA unique and memorable. With a focus on promoting a greater number of space and venue rentals, TRCA will continue to secure revenue to fund programming and operations while contributing to organization growth and financial sustainability.

Business Synopsis & Rationale 2016-2020 2 Weddings and Corporate Events 96

97 2016 Budget

($000)

Sources of Revenue

Gross Government Surplus/ Net Contract Capital Operating Reserves Expenditures Grants and User Fees (Deficit) Budget Services Levy Levy Other

Tourism and Recreation

Waterfront Parks 2,832 1,022 4 578 1,228 - - -

Planning Development and Review

Development Planning and Regulation Permitting 4,377 150 5,112 115 - 1,000 1,000

Environmental Assessment Planning and Permitting 3,262 989 686 312 362 200 (713) (713)

Policy Development and Review 887 - - - 600 - (287) (287) 8,526 1,139 5,798 427 962 200 - - -

2016 Full-Time Equivalent Employees (FTEs)

Operating Capital Total % Change Over 2015

2015 66.51 3.4 69.91

2016 68.7 3.5 72.2 3.3%

98 Policy Development and Review

Objectives:  Implement an integrated watershed-based approach within the existing planning policy framework  Identify and/or develop best-practices and policies for advancing sustainability principles within planning and development processes  Ensure the best available science and planning practices, including integrated watershed management, is incorporated into local, regional, and provincial/national planning and decision making processes  Prevent, eliminate, or reduce the risk to life and property from flooding and erosion  Improve watershed health

Program Features Positioning TRCA holds legislated and delegated roles in planning, development and environmental assessment approvals processes as a commenting body, provincially delegated reviewer for natural hazards, service provider, regulatory authority, resource management agency and landowner. Policy and Development Review provides in-house expertise to ensure TRCA operates at the state-of-practice with respect to policy and legislation development, review, application, and response.

Context TRCA’s jurisdiction includes nine watersheds, 67 kilometres of the Lake Ontario shoreline, 15 provincially designated Special Policy Areas (SPAs) and 42 flood vulnerable areas (FVAs), and 18 lower, upper and single tier municipal governments.

Almost without exception, TRCA’s jurisdiction (including SPA’s and FVAs) is under pressure from redevelopment, intensification and growth planning exercises. In response, TRCA provides input to the municipal policy development and decision making processes that guide growth, redevelopment and intensification throughout TRCA’s jurisdiction. TRCA guidance and responses are guided by The Living City Policies for Planning and Development in the Watersheds of the Toronto and Region Conservation Authority (LCP). The LCP document is consistent with the requirements of federal, provincial and municipal legislation including the Ministry of Natural Resources and Forestry’s ‘Policies and Procedures for CA Plan Review and Permitting Activities’. Based on state-of-the-science watershed research, monitoring, and management practices, the LCP meets provincial natural hazard, natural heritage and water management policy interests while contributing to high quality urban design in municipal growth planning and the advancement of the green economy.

LCP implementation is supported by TRCA’s Planning and Development Procedural Manual; this document includes a suite of technical guidelines and checklists to assist landowners, developers and applications through the planning and regulatory process and ensure quality service to stakeholders.

Stressors and Opportunities TRCA is frequently faced with requests for complex policy, development and infrastructure reviews associated with rapidly developing greenfield communities, intensifying urban centres and revitalization of historic communities within flood vulnerable areas. This complexity is amplified by multiple layers of federal, provincial and municipal plans, policies and regulations as well as diverse and pressing stakeholder considerations. Further, municipal partners and provincial ministries are increasingly requesting TRCA’s expertise to assist with such projects. Provided TRCA funding can sustain sufficient senior technical and project management capabilities at sufficient levels, TRCA’s participation in these requests represent an important opportunity to integrate TRCA, municipal, and provincial objectives into the design and realization of healthy, resilient, and climate adaptive communities.

Funding Policy Development and Review is funded solely through municipal levy.

Business Synopsis & Rationale 2016-2020 1 Policy Development and Review 99 Direct Actions and Activities Policy Development and Review ensures that TRCA’s Planning and Development service area is supported by a current policy framework. This includes maintaining the Planning and Development Procedural Manual in support of the LCP, developing and updating technical guidelines/checklists to reflect current watershed science and best management practices, and developing streamlined protocols for planning and permitting processes. In addition to supporting policy development and review, Policy Development and Review planning ecology and compliance teams also provide technical support and enforcement capabilities for all Planning and Development program areas.

In support of TRCA’s Conservation Authorities Act (Section 28) permitting responsibilities, TRCA planners, ecologists and engineers apply their analytic expertise of new technical information that might affect the screening of permit applications and assessment of planning and development activities. Information reviewed - and the implementation products and tools thereof - are used by municipal partners in official plans and zoning by-laws updates; it also informs municipal growth, intensification and redevelopment/revitalization studies. In addition, Policy Development and Review coordinates the internal expertise required in the development of comprehensive long-term strategies and solutions to manage the flood risk in Special Policy Areas and flood vulnerable areas.

TRCA proactively responds to emerging planning and regulatory trends and issues. External environmental policy advisory services include participation on federal, provincial, municipal and Conservation Ontario initiatives, committees and special projects. Where appropriate and/or necessary, TRCA acts as a convener or liaison between government partners to ensure coordination and consistency.

TRCA reviews municipal official plans, secondary plans, zoning by-laws, and participates on steering committees for a variety of municipal planning and policy initiatives. Ongoing training and support is provided to municipalities in support of the Memorandum of Understanding for the provision of policy, planning and technical expertise and the implementation of The LCP. Similar ongoing training is provided to TRCA staff, stakeholders (BILD, public, etc.) on topics related to planning and regulatory functions and services and development trends and issues.

Complementary TRCA Actions and Activities Policy Development and Review is complemented by the following TRCA activities:  Watershed Planning and Reporting and Climate Science inform the development of the Living City Policies  Water Resource Science, Flood and Erosion Management inform the development of the Living City Policies  Ecosystem Management Research and Directions, Restoration and Regeneration, and Biodiversity Monitoring inform the development of the Living City Policies

Key Outcomes  Policy, planning and technical needs of TRCA and its municipal partners are adequately supported  TRCA planning and integrated watershed science, engineering/ecology/technical insights are reflected in municipal official plans, strategies, growth planning exercises and other relevant studies, documents and projects  Impact of new development and urban intensification and revitalization on water quality, erosion, flood risk and ecosystems is minimized or eliminated  Planning and Development Review processes yield healthy, sustainable communities resilient to the effects of urbanization and climate change and possessing an effective regional transit systems incorporating active transportation through a connected greenlands system

Business Synopsis & Rationale 2016-2020 2 Policy Development and Review 100 Key Activities – 2017-2020  Continue policy development and review to support TRCA’s legislated, mandated and delegated responsibilities in policy, planning and environmental review, permitting and construction compliance  Work cooperatively with municipal partners to incorporate the latest science revealed through TRCA’s integrated watershed research in municipal policies in order to guide growth, redevelopment and intensification throughout TRCA’s jurisdiction  Provide environmental policy advisory services through participation on provincial, municipal and Conservation Ontario policy related initiatives, committees and special projects to facilitate current and responsive approaches to emerging planning and regulatory trends and issues within TRCA’s watersheds

Outlook TRCA’s Policy Development and Review function is expected to continue supporting TRCA’s legislated and delegated roles and responsibilities in the planning, development and environmental assessment approvals process. With the province currently reviewing of several acts and plans related to planning and development – as well as and the MNRF having recently initiated a review of the Conservation Authorities Act - Policy Development and Review will continue engaging in these review processed and seeking to ensure that TRCA interests are represented. Any legislative updates or amendments coming out these provincial review processes that hold implications to TRCA’s roles and responsibilities will be incorporated into TRCA’s policies, procedures and guidelines.

Business Synopsis & Rationale 2016-2020 3 Policy Development and Review 101 Development Planning and Regulation Permitting

Objectives:  Prevent, eliminate, or reduce the risk to life and property  Protect Toronto region’s physical and natural heritage in community building  Ensure the best available science, planning, and design practices, including integrated watershed management, is incorporated into ongoing planning and development permitting approvals  Facilitate TRCA’s acquisition of land containing important natural features and/or natural hazards  Deliver a helpful and knowledgeable customer experience

Program Features Positioning TRCA derives responsibility for development and construction proposal review from the Conservation Authorities Act, Section 28, Ontario Regulation 166/06, and subsequent provincial and municipal Memoranda of Understanding. Projects reviewed range from individual site permits to major development and city building initiatives. As natural hazard and natural feature experts in the planning and development process, TRCA provides technical expertise to its respective municipal partners and serves as a public commenting agency to municipal and provincial governments. When required or requested, TRCA defends municipal partner policies and environmental interests at Ontario Municipal Board hearings.

Through the community planning and permitting processes TRCA seeks to acquire, protect and enhance areas that contain natural hazards and/or significant natural heritage features. Under provincial policy, lands containing such features are not eligible for development and, as a result, are negotiated into the public realm for open space and green infrastructure purposes.

For private sector clients, TRCA offers a value-added solicitor-realty service to respond to requests regarding TRCA’s interest in specific lands prior to real estate transactions.

Context Natural hazard features within TRCA’s jurisdiction include major ravine systems and attendant slope stability issues, creek erosion, river meander belts, 67 kilometres of Lake Ontario shoreline, and 21,448 hectares (53,000 acres) of regulated floodplain.

TRCA Development Planning and Regulation Permitting operate in accordance with, and through delegated authority for all or parts of, the Conservation Authorities Act, Ontario Regulation 166/06: Development, Interference with Wetlands and Alterations to Shorelines and Watercourses, the Planning Act and Provincial Policy Statement, the Environmental Assessment Act, and Memorandums of Understanding between the TRCA municipal and provincial governments. TRCA planning and permitting functions specifically extend to development proposed in Special Policy Areas and Flood Vulnerable Areas. TRCA also advises municipal partners on applications made under the Niagara Escarpment Planning and Development Act, Oak Ridges Moraine Conservation Act, Greenbelt Act, and other applicable legislation.

Stressors and Opportunities According to the Ministry of Finance, the “…Greater Toronto Area (GTA) is projected to be the fastest growing region of the province, with its population increasing by almost 3.0 million … to reach over 9.4 million by 2041”.1 In managing this growth and demand, TRCA and its municipal partners will be challenged to mitigate regional-scale risk to public health arising from long-term and/or permanent ecosystem damage. Examples of such risk include degraded surface and ground water, loss of forests and wetlands, and diminished biodiversity. Acute natural hazard risks, in particular those posed by downstream flooding, may also increase along with attendant risks to natural, social, and economic systems and assets.

Current trends indicate that development pressure will continue to advance toward and into the headwaters of TRCA’s jurisdiction. Should development and urbanization disrupt headwater hydrology or hydrogeology, significant downstream effects including compromised groundwater storage and drastically altered river/creek

1 http://www.fin.gov.on.ca/en/economy/demographics/projections/ Business Synopsis & Rationale 2016-2020 1 Development Planning and Regulation Permitting 102 flow regimes may be expected. Such changes could result in impacts to public safety, significant infrastructure costs to downstream municipalities, and economic losses to individual landowners as natural features are degraded. TRCA integrated environmental planning and technical input preemptively addresses cumulative impacts that would otherwise threaten existing neighborhoods and potential growth for new communities.

Funding The Development Planning and Regulation function is operated on a fee-for-service basis supplemented minimally by general levy. The program currently operates at a planned 100% cost-recovery based on the new 2016 fee schedule. Fees are adjusted every 2 years to reflect shifts in workload.

Direct Actions and Activities Ongoing Toronto region urbanization resulted in 788 new planning and 1194 new permit applications in 2015; these applications continue to increase in complexity as lands with multiple environmental sensitivities become sufficiently valuable to attract development interest. Over 25 new communities planned as part of growth initiatives are also currently under review.

Planning and ecology expertise provides recommendations on how development should proceed and how to maintain, enhance or restore the natural environment. Decisions are made after engaging TRCA’s in-house water resource engineering, hydrology, geo-environmental and ecology experts. Development proposals and applications within or adjacent to natural areas and natural hazards are also reviewed to ensure consistency in the application of the Planning Act, the Conservation Authorities Act and the Provincial Policy Statement.

Development Planning and Regulation staff also review permit applications made under Ontario Regulation 166/06. By applying the “tests” of the regulation within or adjacent to natural areas and natural hazards staff provide direction to landowners, developers, and their respective consultants to ensure there is no impact to flooding, erosion, dynamic beaches, pollution or the conservation of land.

Through the planning process, lands unsuitable for development due to the presence of natural hazards and/or significant natural features may be identified. Development Planning and Regulation staff may further identify these lands as appropriate for acquisition under the TRCA’s Living City Policies and/or Greenlands Acquisition Project. In such scenarios, Planning and Development staff broker introductions between landowners and/or developers and TRCA Property staff to undertake conveyance of these lands to TRCA at nominal cost.

As required, TRCA seeks to manage natural hazards, protect natural heritage features, and represent the environmental interests of the Province and its municipal partners at Ontario Municipal Board (OMB) hearings.

Complementary TRCA Actions and Activities Development Planning and Regulation is complemented by the following TRCA activities:  Planning and Policy staff work with municipal and other government partners to ensure the best available science, planning, and design expertise are incorporated into relevant plans, policies, and strategies  Environmental Assessment Planning staff ensures coordination between public infrastructure works and private development projects  Water Resource Science and Biodiversity Monitoring staff provide data and analysis in support of defensible planning and permitting decisions  Watershed Planning and Reporting synthesize watershed conditions and provide ecosystem-scale perspective on watershed opportunities and vulnerabilities  Property and Risk Management staff completes land transactions for properties identified for conveyance to TRCA  Restoration and Regeneration assesses and implement restoration needs on acquired sites and implement erosion control works where municipal funding is secured

Business Synopsis & Rationale 2016-2020 2 Development Planning and Regulation Permitting 103 Key Outcomes  Prevent, eliminate, or reduce the risk to life and property  Protect and enhance Toronto and Region’s physical and natural heritage  Ensure the best available science, planning, and design practices, including integrated watershed management, is incorporated into ongoing community planning and development permitting.  Facilitate TRCA’s acquisition of land containing important natural features  Deliver a quality customer experience

Key Activities – 2017-2020  Implement an integrated watershed-based approach to planning and permit review that adds value to existing and future policy frameworks and aligns with sustainable community objectives.  Work cooperatively with municipal, provincial, development stakeholders in the implementation of TRCA's planning and regulatory function.  Increase procedural transparency and streamline the review and approval process (where appropriate).  Provide environmental planning and technical expertise and information in the areas of ecology, water resources engineering, geo-environmental engineering, hydrogeology, archaeology, property services, research and development, conservation lands, restoration services and watershed management in accordance with legislated planning and permitting responsibilities.

Outlook TRCA’s Development Planning and Regulatory Permitting function is expected to continue functioning in a manner similar to current operations with enhanced collaboration across divisions. Collaborative efforts will continue between TRCA and municipal partners to develop and integrate strategies for watershed protection, ecological design, and other sustainability considerations into land use planning. To meet 100% cost-recovery objectives, TRCA will update its application fee schedule in 2016 and 2018; it will also concurrently pursue internal process and information technology enhancements that increase operational efficiency and/or customer experience.

Business Synopsis & Rationale 2016-2020 3 Development Planning and Regulation Permitting 104 Environmental Assessment Planning and Permitting

Objectives:  Protect and enhance Toronto region’s physical, natural, and cultural heritage  Ensure the best available science and planning practices, including integrated watershed management, are incorporated into infrastructure planning and development permitting  Prevent, eliminate, or reduce the risk to life and property from flooding, erosion, and other natural hazards  Deliver a high quality customer experience  Develop solutions that are both environmentally sensitive and fiscally conscientious

Program Features Positioning TRCA is a commenting agency under environmental assessment legislation including the Ontario Environmental Assessment Act and a regulator under the Conservation Authorities Act. This dual role positions TRCA to offer value-added environmental assessment consulting services that reduce proponent uncertainty and risk. TRCA’s pre and post-submission environmental assessment advisory, review, and permitting services are extended to public and private proponents on a fee-for-service or contract basis. By entering into dedicated service agreements and operating on a full cost-recovery model TRCA is able to maintain and provide dedicated review teams; review teams enable high levels of in-house expertise to be maintained such that faster and higher quality service can be provided to all clients.

Context Environmental assessments are undertaken when a project has the potential for negative environmental, social, and/or economic impacts. Public and private infrastructure projects currently undergoing environmental assessment within TRCA’s jurisdiction reflect a notable era of growth-related infrastructure that includes roadways, highways and transit systems, oil and gas pipelines, and water and wastewater services. Numerous major infrastructure projects are underway in each of TRCA’s partner municipalities.

For municipal projects, TRCA is a commenting agency under the Ontario Environmental Assessment Act and issues construction permits under Section 28 of the Conservation Authorities Act. Under Ontario Regulation 166/06, TRCA reviews and approves detailed designs associated with approved EA projects. For proponents for whom TRCA permits are non-binding, such as crown agencies, TRCA may undertake a Voluntary Project Review to ensure similar standards of review and evaluation are applied to areas of public interest.

Where events or circumstances pose an immediate and dire risk to municipal infrastructure, TRCA follows its Permission for Emergency Infrastructure Works Protocol. Under this condition TRCA provides support and permitting to partner agencies in the absence of a full, pre-construction environmental assessment. Projects considered both minor and routine are subject to TRCA’s Permission for Routine Infrastructure Works Protocol.

While projects governed by the municipal Class Environmental Assessment process and Transit Project Assessment process represent approximately 70% of TRCA’s environmental assessment work load, TRCA also reviews projects under individual environmental assessment process, as well as the various class environmental assessment processes or exemption regulations for private and public clients.

Stressors and Opportunities Climate change scenarios for the Toronto region include the increased frequency and duration of intense storm events that pose attendant risks to public and private infrastructure. Increased stormwater flows and flooding is expected to increase the frequency of repair and renewal for failed or vulnerable municipal infrastructure. Because of the historical practice of locating infrastructure in valleylands, a practice no longer permissible for current-day infrastructure twinning or replacement, environmental assessments for infrastructure replacement often include infrastructure relocation considerations. Infrastructure relocation stressors have already increased, and are expected to continue increasing, the complexity and workload associated with environmental assessment and permit file review.

Business Synopsis & Rationale 2016-2020 1 Environmental Assessment Planning and Permitting 105 Current federal and provincial economic strategies have focused on infrastructure development and renewal as a preferred source for economic stimulus spending. This enhanced infrastructure creation and renewal process poses many advantages for municipalities and citizens and has resulted in considerable growth in the environmental assessment demand associated with these projects. Environmental assessments proceed on irregular schedules involving multiple stages involving high variability in staffing expertise and intensity/duration of effort required. In the absence of adequate staff capacity fluctuating demand will result in the inability to provide expedited reviews during peak workload periods. Operational stressors such as these will increase with the increased pace of growth pressures and complexity and workload associated with environmental assessment and permit file review. Creative streamlining measures, funding for technical reviewers and new working relationships need continued development to ensure service delivery standards are maintained.

Funding Environmental Assessment Planning and Permitting is operated on an at-cost, fee-for-service, full-cost recovery basis. Clients with a high volume of EA projects, and/or those who face time constraints, have the option of entering into Service Agreements with TRCA to ensure project needs are met. This funding model increases TRCA’s overall capacity to ensure a complete planning and technical review staff compliment, provide continuous improvements to service delivery processes and timelines, increase knowledge and partnerships, and reducing wait and review times.

Direct Actions and Activities Environmental Assessment Planning and Permitting review of environmental assessment documents and applications to ensure the best available science and planning practices are incorporated. This function is supported by TRCA expertise in environment assessment and land use planning, ecology, water resources engineering, hydrogeology, geotechnical, and watershed management. Document review activities are supported by onsite technical and regulatory staff visits to enhance recommendations and ensure permit compliance in the project planning and implementation phases, respectively.

Comments and recommendations are provided to proponents under fee-for-service or dedicated service agreement arrangements. TRCA currently holds ten dedicated service agreements with proponents; this model enables public and private sector clients to mitigate EA procedural uncertainly and risk for high volume and/or time constrained projects. Dedicated service agreements also provide TRCA with a more accurately estimate of the type and intensity of pending EA and, in turn, reduces the risks of under-staffing.

In addition to dedicated service agreements, EA Planning and Permitting staff reviews projects for an additional 12 municipal clients, utility companies, provincial ministries, and private developers on pay-as-you go, fee-for service process.

Complementary TRCA Actions and Activities Environmental Assessment Planning and Permitting is complemented by the following TRCA activities:  Policy Development and Review work with municipal and other government partners to ensure the provides the best available science, planning, and design expertise are incorporated into relevant plans, policies, and strategies as well as oversee permit compliance and enforcement activities  Water Resource Science, Biodiversity Monitoring, and Watershed Planning and Reporting provide the evidence-based analysis to support the application of an integrated watershed perspective in the EA process  Erosion Management, Restoration and Regeneration, and Greenspace Securement and Management provides technical expertise that support the success of risk mitigation and project implementation strategies

Key Outcomes  Service delivery standards are consistently met or exceeded  Public and private infrastructure is created, enhanced or maintained through an integrated environmental approach that is respective of project costs  Local, regional and provincial ecosystems quality and function is protected, mitigated or enhanced

Business Synopsis & Rationale 2016-2020 2 Environmental Assessment Planning and Permitting 106 Key Activities – 2017-2020  Work with municipal, provincial, and private development stakeholders in the implementation of TRCA's environmental assessment planning and permitting function  Provide environmental planning and technical expertise and information in the areas of ecology, water resources engineering, geotechnical engineering, hydrogeology, archaeology, property services, research and development, conservation lands, restoration services and watershed management in accordance with environmental assessment planning and permitting responsibilities  Increase procedural transparency and streamline review and approval process (where appropriate)

Outlook TRCA’s Environmental Assessment Planning and Permitting function is expected to continue in a manner similar to current operations. Program and process efficiencies will continue to be pursued, however it is anticipated that additional technical and environmental assessment planning staff will be required to maintain and/or improve current levels of service. TRCA will also seek to build and expand relationships with public and private infrastructure providers to ensure environmental assessment services are meeting regulatory, ecological, and client needs in approaches to project management and review that are both timely and cost effective.

Business Synopsis & Rationale 2016-2020 3 Environmental Assessment Planning and Permitting 107

108

2016 Budget

($000)

Sources of Revenue

Gross Government Surplus/ Net Contract Capital Operating Reserves Expenditures Grants and User Fees (Deficit) Budget Services Levy Levy Other

Education and Outreach

School Programs 10,311 2,210 3,070 439 3,729 884 21 21

Family and Community Programs 767 92 87 10 619 9 50 50

Newcomer Services 1,286 752 255 - 229 - (50) (50) 12,364 3,054 3,412 449 4,577 893 21 - 21

2016 Full-Time Equivalent Employees (FTEs)

Operating Capital Total % Change Over 2015

2015 62.64 13.77 76.41

2016 63.28 16.05 79.33 3.8%

109 School Programs

Objectives:  Improve knowledge, understanding and awareness related to the environment, conservation and sustainability issues and translate knowledge into actions that improve the sustainability of the Toronto region.  Promote positive behavioral change to foster individual and social health and well-being  Enhance social equity and equalize access to youth environmental education and leadership development experiences  Contribute to integrated TRCA Community Outcome objectives

Program Features Positioning TRCA designs and delivers environmental education programs that complement provincial curriculum outcomes and objectives. This approach leverages TRCA’s long-standing relationships with district school boards to co-create programs tailored for both classroom and TRCA field trip locations.

With the ability to attract secure philanthropic funding, TRCA provides subsidized curricular enhancement to Toronto region schools. These conditions enable TRCA to reach diverse student populations and efficiently target students and classrooms in priority neighborhoods.

Context TRCA has historically provided extended environmental education experiences through week-long programming at its three field centres, offering in-class visits, and hosting field trips and festivals at conservation parks. Single-day field trips are hosted by TRCA at its Kortright Centre for Conservation, Black Creek Pioneer Village and Tommy Thompson Park sites.

The population of enrolled K-12 students in the Toronto region is predicted to be stable and/or growing in coming years. This dynamic suggests TRCA programs will have a predictable market size and may need to increase in scale to maintain equivalent levels of service delivery. School Programs require a high human capital complement and productivity gains are not expected; school program delivery costs are expected to increase accordingly.

Stressors and Opportunities Research clearly demonstrates strong links between experiences in nature and key academic, health, social and environmental outcomes. Each year, however, proportionally fewer Toronto region youth have ready access to, and/or spend time in, the natural environment independently or through TRCA programming. Growing economic polarization exacerbates nature deficit in the classroom context; the top barriers identified by teachers to booking field trips to TRCA centres are program and transportation costs. Despite field trip booking costs being comparatively low (~$2.50/student per programming hour for field trips; ~$5.25/student per programming hour at field centres), classes with students unable to afford field trips are increasingly likely to be denied exposure to the natural environment (TRCA in-class visits are free). Such an outcome would reduce the anticipated health, academic and social outcomes for these youth while diminishing social and environmental outcomes at local and regional scales. Currently, philanthropic sector interest in youth and the environment mitigate the effects of economic disparity on equitable program delivery. Charitable grants significantly enhance the delivery of programs to at-risk youth and/or classrooms in priority neighborhoods. While TRCA will continue to engage with the charitable sector, the risk of reinforcing social inequality through lack of access to programming would be significant should external funding be reduced or discontinued.

Funding School board and/or user fees cover a considerable portion of program expenses for many initiatives. TRCA programs are also supported through both general and municipal levy, provincial and federal grants(s), and private or philanthropic funding.

Business Synopsis & Rationale 2016-2020 1 School Programs 110 Direct Actions and Activities Program offerings are most frequently delivered through some combination of classroom sessions, field trips to natural environments, or a combination thereof. Approximately 7,000 students per year participate in overnight field centre programs, over 85,000 embark on a TRCA field trip, and approximately 20,000 are engaged through in-class activities.

Beyond K-12 classrooms, TRCA offers niche programs that support Ontario educational requirements. The Conservation Youth Corps directs high school students required volunteer hours toward local public interest environmental projects, while the Kortright Centre delivers curriculum-based content and general environmental education programs for homeschooled students and preschoolers, respectively.

Complementary TRCA Actions and Activities School Programs are complemented by the following TRCA activities:  Family Programs and Community Engagement programs provide extension activities for youth and their families to access mediated natural experiences. In future, these activities will be further integrated with or oriented toward community outcomes and objectives

Key Outcomes  Behavioral changes (measured short-term and predicted long-term) in student participants lead to improved indicators with respect to: o Citizenship behaviors, including environmental stewardship and social cohesion o Health and wellness outcomes o Academic achievement  School program access is provided on an equitable manner across the jurisdiction without regard to socioeconomic circumstance  Programming options in support of provincial curriculum objectives are available to diverse student learner categories (early childhood education through post-secondary)  TRCA Community Objectives are advanced

Key Activities – 2017-2020  Initiate redesign of current School Program content and infrastructure to support community activation centre and youth hub implementation  Continue operation of all current class and student programming initiatives  Strengthen new and existing relationships with traditional and non-traditional school board partners  Diversify philanthropic funding base; increase absolute and per student values of philanthropic funds received

Outlook For increased effectiveness and efficacy, TRCA’s ability to provide and promote nature-based experiences for youth will be further extended beyond discrete in-class or field trip experiences. TRCA is currently in the process of re-configuring school programming and infrastructure to serve community scale objectives. Field centres will be transformed into community hubs that offer diverse programming across a wider demographic spectrum. Curricular content will introduce and integrate community themes and linkages. As this programming is brought online, school program outcomes and indicators for school programs will extend beyond the individual and be integrated and harmonized into broader sets of objectives.

Business Synopsis & Rationale 2016-2020 2 School Programs 111 Family and Community Programs

Objectives:  Provide outdoor experiences that foster individual and social health and well-being  Promote sustainable behaviors through learning and engagement activities  Contribute to integrated TRCA Community Outcome objectives

Program Features Positioning Family and Community Programs utilize TRCA landholdings and infrastructure to offer affordable, educational, family-oriented programming. Family and Community Programs seek to enhance the richness and educational value of the attendee experience by delivering programs in unique natural settings.

TRCA Family and Community Programs are differentiated from TRCA Events and Festival offerings by their regular scheduling and programmed educational content.

Context The population of TRCA’s jurisdiction is over 4.5 million, of which over 700,000 are children between infant to 14 years of age; the maximum predicted local market size for family programs is approximately 600,000 families. In addition to this market, TRCA is actively seeking to expand its audience by attracting families from outside its jurisdiction.

Family and Community Programs are hosted at TRCA sites that possess the requisite onsite staffing and/or site facilities. Some onsite infrastructure, for example maple sugar shacks, has been installed at TRCA sites specifically for facilitating public programming. Family and Community Programs are hosted at conservation parks or similar sites and it is anticipated that participant demographics between these two offerings are similar.

Stressors and Opportunities In general, Family and Community Program delivery is constrained by lack of transportation, audience uptake, available space at the hosting venue, qualified program delivery staff and funding available to support the programming.

Family and Community Programs offer a mediated discourse within and about the natural environment. As such, they represent an important tool for engaging those unaccustomed to spending time in the natural environment in a safe and low intensity introduction to Toronto region’s natural spaces. Designing and tailoring Family and Community Programs that meet niche interests and needs may pose an opportunity to increase audience scope and scale.

Research clearly demonstrates strong links between experiences in nature and key academic, health, social and environmental outcomes. Each year, however, proportionally fewer Toronto region families have ready access to, and/or spend time in, the natural environment. Family and Community Programs seek to motivate and enable families to be increasingly comfortable and interested in spending time in the natural environment. Because they are frequently offered at sites requiring vehicle access, however, Family and Community Programs currently disproportionately benefit families with the time and resources to travel to programming sites. Families unable to marshal the requisite time and resources to travel are less likely to partake in natural environment programming.

Funding Admission fees for Family and Community Programs range from being free to $25 per person. Select Family and Community Programs are funded in part through municipal levy.

Direct Actions and Activities Family and Community Programs offer year round informal educational programming at conservation parks and other TRCA lands that is delivered in a family-friendly manner. Each year TRCA delivers approximately 50 Family and Community Programs from 22 different program offerings at 11 different sites including Tommy

Business Synopsis & Rationale 2016-2020 1 Family and Community Programs 112 Thompson Park, Kortright Centre for Conservation, Bolton Camp, McVean Farm, and Cold Creek. Enrollment/participation in each program includes approximately 1-2 TRCA facilitators and 10 to 350 participants.

Many Family and Community Programs are seasonal in nature, such as maple syrup programming in the spring, learn-to-fish programs in the summer, the fall colours festival, and the family day winter carnival. Others are offered year round and engage a particular audience type such as parent and tot programs or children with physical or cognitive impairments (Nature Therapy program). Some are culturally significant (Halloween and Christmas Family programs) or focus on a particular area of natural interest such as astronomy or specific flora and fauna.

Complementary TRCA Actions and Activities Family and Community Programs are complemented by the following TRCA activities:  Conservation Parks provide a venue for Family and Community Programs events  School Programs and Community Engagement initiatives serve as important preliminary or supplementary outreach and engagement mechanisms

Key Outcomes  Behavioral changes in participants leading to: o Improved citizenship behaviors, including environmental stewardship and social cohesion. o Improved health and wellness outcomes o Increased likelihood to spend time in natural areas o Increased interest in participating in other TRCA programming  Family and Community Program offerings are available and of interest to diverse participant categories

Key Activities – 2017- 2020  Continue to design and deliver Family and Community Program offerings under the five themes of recreation, culture, festivals, play, and nature/environment  Introduce Forest School inspired programming, parent and tot programs, and large scale family event offerings at appropriate areas that have been identified to have the greatest need  Introduce programming for older adults and seniors that support improved health, community connectivity and aging-in-place objectives  Continue to learn from, and/or develop partnerships with, agencies that have delivered successful accessibility and inclusion programs, hold a proven record of high program uptake and client satisfaction rates, and/or are delivering innovative environmental programming for families

Outlook In coming years, TRCA Family and Community Programming will evolve from spatiotemporally discrete events to rich community-centric programming. In addition to programming offered at TRCA park sites, new and existing TRCA facilities such as Bolton Camp and TRCA field centres will be transformed into community hubs; the community hub format will enable individuals and groups to take a more active role in the design, delivery, and consumption of public programming. Community hub design is also anticipated to drastically increase awareness, attractiveness, centrality, and accessibility of public programming sites to larger and more diverse audiences.

Business Synopsis & Rationale 2016-2020 2 Family and Community Programs 113 Newcomer Employment and Education

Objective:  Support the successful settlement of new Canadians in the Toronto region

Program Features Positioning TRCA provides support services for new Canadians to settle socially, culturally, academically and economically into the Toronto region. These services are part of the social equity aspect of TRCA’s sustainability work and focus on improving settlement outcomes within the New Canadian community and delivered as part of, and in partnership with, the broader social services sector.

To support employment and economic outcomes, TRCA utilizes in-house staff expertise to provide employment and training supports for new Canadians through bridge training activities that address current and future labour market shortages. Additionally, TRCA provides services to the employment sector that supports the successful integration and retention of new Canadians within the work force. TRCA also develops and delivers programming to expose newcomers to local environmental issues and topics.

Context Canada receives over 260,000 new Canadians each year, of which approximately 30% settle in the Greater Toronto Area. Continued immigration to the Toronto region provides ongoing needs and opportunities for training and experience programs for foreign trained professionals. Over the next 25 years, immigration is expected to account for all increases in Ontario’s working age population and will be a major source of future labour force growth.

Stressors and Opportunities Provided the Toronto region continues to attract new Canadians, job development programs for skilled newcomers will continue to receive sustained or increased participant demand. As discussed in Outlook (below), TRCA programming funded through the Ontario Ministry of Citizenship, Immigration and International Trade (MCIIT) is subject to funding vulnerabilities in its current operating model. Job development programs therefore face both potential funding stressors as well as opportunities for redesign and increased integration with TRCA programming.

The steady influx of newcomers to the Greater Toronto Area will also increase demand for ESL learning classes offered by TRCA’s Multicultural Connections Program. This will result in the opportunity to reach a greater number of participants through these services provided program funding levels increase in concert with demand.

Funding The Ministry of Citizenship, Immigration and International Trade funds the Professional Access Into Employment (PAIE) program through which TRCA works with internationally trained environmental professionals to help them secure employment in their field. This multi-month training and development program for new Canadians is provided at cost and includes an average participant contribution of $399.

English as Second Language (ESL) presentations and the Environmental Experience Subsidy component of Multicultural Connections Program are funded through Peel, York and Toronto municipal levy.

Direct Actions and Activities The PAIE program is a 12 month professional training and development program for foreign trained professionals. This program is undertaken by participants on a part-time basis and includes approximately 230 direct programming hours including Canadian professional and workplace skills updates, mentorship, an internship, and permanent job placement services. Professional categories for which TRCA currently offers the PAIE program include engineering, geoscience, planning and environmental science; these represent areas in which TRCA holds considerable expertise, internal staff resources and professional contacts.

Business Synopsis & Rationale 2016-2020 1 Newcomer Employment and Education 114 The Multicultural Connections Program facilitates newcomer access to natural areas, parks, and recreational facilities, which are often culturally and economically exclusive and inaccessible by public transit. TRCA attends ESL and Language Instruction for Newcomers to Canada (LINC) programs and provides in-class, hands-on learning experiences about local environmental issues, environmental action and conservation. Topics include, but are not limited to, water conservation, solid waste management and energy conservation.

Complementary TRCA Actions and Activities Newcomer Employment and Education is complemented by the following TRCA activities:  Corporate Services provides financial secretariat and audit functions for provincial reporting requirements related to the core funding for PAIE, along with general support for research, marketing and human resource services.

Key Outcomes  Achievement of Community Objectives including social and environmental awareness, employment and well-being

Key Activities – 2017-2020  Professional training and development programming in response to market deficiencies and demands  Capacity building within the employment sector to better integrate and retain new Canadians  Redesign the foreign-trained worker training and development program to reduce per participant cost, increase community objectives, and increase integration with evolving TRCA community outreach and job development programs

Outlook TRCA’s job development and training programs will continue to evolve to be more tightly integrated with complementary TRCA programming and effectively target community needs at scale. The current reliance on program funding from MCIIT will be mitigated by bundling foreign-trained professional job development programming with new youth employment initiatives; this program expansion is anticipated to meet wider community needs, achieve economies of scale and diversify external funding sources. The scope and specificity of populations served will also increase as TRCA’s broader multicultural programming offerings are integrated within professional outreach activities. TRCA will also address market preparedness issues with prospective employers to reduce the intensity of effort required for successful job placement while creating incentives for employers for defray program costs.

Business Synopsis & Rationale 2016-2020 2 Newcomer Employment and Education 115

116 2016 Budget

($000)

Sources of Revenue

Gross Government Surplus/ Net Contract Capital Operating Reserves Expenditures Grants and User Fees (Deficit) Budget Services Levy Levy Other

Sustainable Communities

Living City Transition Program 6,740 1,547 887 709 3,446 151 - -

Community Engagement 4,321 540 - 302 2,581 894 (4) (4) 11,061 2,087 887 1,011 6,027 1,045 (4) - (4)

2016 Full-Time Equivalent Employees (FTEs)

Operating Capital Total % Change Over 2015

2015 10.88 54.11 64.99

2016 10.94 58.18 69.12 6.4%

117 Living City Transition Program

Objectives:  Increase sustainability and resilience in the residential, institutional, commercial, and industrial (ICI) and agricultural sectors  Accelerate the uptake and implementation of sustainable and resilience-enhancing practices by Toronto region citizens  Accelerate the implementation of mitigation and adaptation practices to support the transformation towards low carbon, climate resilient communities  Increase the economic well-being of Toronto region communities, residents, and businesses by increasing the viability of local green economy business and industry  Contribute to the growth of regional Green Economy and sustainability by scaling up sustainability programs and providing Green Jobs

Program Features Positioning TRCA’s status as both a public and non-profit entity enables it to deliver sustainability and resilience development programs that require significant public assets, diverse partnerships, and innovative non-profit funding models. TRCA leverages this unique combination of capacities, in conjunction with 50+ years of city- building and sustainable technology expertise, to create network-based sustainability initiatives in contexts otherwise prone to one or more market failures.

Context In past, TRCA watershed plans and other environmental strategy documents have incorporated assumptions with respect to anticipated development, the rate and ratio of implementation of and/or retrofit to environmentally sustainable best practices, and attendant environmental conditions and outcomes. This program area responds to limited uptake of sustainable practices; causes behind this observation include higher implementation expense, absence of performance validation and/or regulatory/policy incentives, lack of best practices knowledge, and lack of relevant community structures and expectations in support of sustainable practice implementation.

Stressors and Opportunities The population within TRCA’s jurisdiction is estimated to increase to approximately 5 million by 2019. The attendant need for growth in both local/regional housing and employment will increase demands on systems at the local, regional, and global scale; taxed systems include ecological, social, hydrological, energy, and waste management. By the same account, retrofit and greenfield developments are key opportunities to realize resilient, low-carbon communities and enhance the sustainability of watersheds in a context of rapid urbanization and climate change. The degree to which Toronto and region can accommodate this growth while maintaining favorable living conditions will in part determine its status as a desirable location for economically advantageous, highly skilled labour industries.

Recent provincial and national climate change and land use policy changes will create economic opportunities for companies operating within green economy sectors. By reducing local barriers to green technology commercialization and uptake, TRCA seeks to support regional competitiveness in these globally expanding industries.

Funding Funding for the Living City Transition program is obtained through municipal levy, government grants, contracted services and fees.

Direct Actions and Activities TRCA operates an extensive sustainable technology testing and verification facility at the Kortright Living City Campus (LCC). This facility is used to test and verify the performance of sustainable building, energy, and low impact development (LID) technologies under local geologic, hydrologic, and climate conditions. Data from the Kortright LCC (and similar initiatives managed offsite) are provided to industry and government in support of policy changes to incentivize sustainable technology implementation.

Business Synopsis & Rationale 2016-2020 1 Living City Transition Program 118

Within the ICI sectors, TRCA convenes several networks (based on proximity, industry, or a combination thereof) to promote the creation and uptake of sustainability focused corporate social responsibility initiatives. These networks seek to accelerate the identification, adoption, and sharing of sustainable best practices and on the ground demonstrations within their membership. TRCA staff also work with individual members/clients on a fee-for-service basis to identify, evaluate, and implement medium- to large-scale sustainability initiatives and monitor their respective successes.

Within the research community, TRCA acts as the secretariat for the Ontario Climate Consortium (OCC). The OCC brings together a network of Ontario universities to generate and/or synthesize evidence-based guidance (science to policy) for public and private sector stakeholders. OCC initiatives include: organizing an Annual Climate Change Symposium; advancing the understanding and application of vulnerability and risk assessment across sectors for adaptation planning; assessing emerging provincial policy and program changes to identify funding opportunities that accelerate the implementation of mitigation practices, and; exploring opportunities for a single coordinated provincial access portal for climate information and interpretation.

TRCA engages directly with individual landholders in the commercial agricultural sector. Through subsidized expertise and implementation support, TRCA seeks to accelerate the adoption of agricultural best practices and reduce habitat and water quality threats to the surrounding landscape. Within urban areas, TRCA leases land and promotes the development of both for-profit and non-profit community based urban agricultural initiatives.

At the neighborhood scale, TRCA engages directly with citizens and community organizations to test and verify best practices for sustainable technology adoption and behavioral change. Distinct from traditional community stewardship activities, Sustainable Community programming seeks to understand how community factors – including socio-economic and community characteristic variables - affect the uptake and longevity of sustainable behaviors. Practices or interventions found to strengthen desirable community characteristics and increase and/or accelerate metrics of sustainability are shared and scaled to other community sites.

Complementary TRCA Actions and Activities The Living City Transition Program area is supported by the following TRCA activities:  Watershed Planning and Reporting delineate desired targets and end-states  Community Engagement activities foster local environmental stewardship behaviors and promote behavioural change that fosters individual and social health and well-being  Education and Outreach activities help support formal / non-formal education and training of industry professionals, youth, and foreign trained professionals

Key Outcomes  Corporate sustainability initiatives in diverse sectors accelerate the iteration and uptake of effective sustainability measures  Technologies for improving energy and water efficiency, and reducing stormwater impacts, are identified and broadly implemented within region and beyond  Economic performance and competitiveness of the Toronto region’s green technology/services sector is increased  Toronto region food security, including the urban agriculture sector, is strengthened  Neighbourhoods develop social capital while improving reducing their environmental footprint  Defensible, expert climate change mitigation and adaptation guidance and best practices are provided to internal, municipal, provincial, federal and private sector partners  Green jobs

Business Synopsis & Rationale 2016-2020 2 Living City Transition Program 119 Key Activities – 2017-2020  Develop new program directions, sustain existing activities, and implement new Sustainable Neighbourhood Retrofit Action Plans  Continue to expand the Sustainable Technology Evaluation Program, including seeking designation as a non-profit D-entity  Continue to implement, promote, and expand Community Transformation, urban agriculture, and corporate sustainability projects  Scale up Eco-Business Zones to encompass attractive and appropriate business parks and centres within partner municipalities  Work with partners to develop and implement building-related emission reduction programs  Scale up the Ontario Climate Consortium’s climate services and low-carbon research agenda  Support the work of the Green Infrastructure Ontario Coalition

Outlook The Living City Transition Program will continue to be a high potential growth area in the coming years. Each initiative within this program area is readily scalable (throughout Toronto region and beyond) provided adequate business models - and sufficient client-based funding sources therein - are identified. This opportunity imbues the Living City Transition programs with the highest potential for rapid experimentation, iteration, and associated learning. Provided TRCA and current funding partners tolerate the uncertainly associated with innovation processes, the Living City Transition program has the potential to provide the system-wide sustainability and resiliency-building practices needed to transform the Toronto region into a sustainable, low-carbon urban centre.

Business Synopsis & Rationale 2016-2020 3 Living City Transition Program 120 Community Engagement

Objectives:  Maintain and expand an informed citizenry capable of providing feedback on local and regional initiatives with environmental implications  Foster local environmental stewardship behaviors and initiatives  Promote positive behavioral change that fosters individual and social health and well-being

Program Features Positioning For over 50 years, TRCA has been trusted by municipal partners and citizens to deliver environmental stewardship programming and support. Many community engagement activities involve consultation on, or participation in, TRCA and partner plans, strategies, and project development and/or community based restoration initiatives. To meet community and partner needs, TRCA provides integrated, at-cost community engagement services to municipalities with value-added economies of scale and consistency in regional approach and application.

Context TRCA serves a population of over 4.5 million citizens across 18 municipalities. This population is expanding - the population of the GTA increases at an annual rate of ~1.4%. Community Engagement activities are in large part directed to support TRCA’s nine watershed plans and strategies and individual projects in support of these initiatives; projects and programs such as tree planting and Citizen Science foster environmental stewardship and encourage citizen and community groups to gain an understanding of conservation and watershed management issues. Community participation in conservation programs further seeks to motivate individuals and communities to undertake independent initiatives that complement TRCA objectives.

Community Engagement activities build capacity and assists neighbourhoods, businesses, governments and non-governmental organizations to identify and implement strategies and actions in support of collective advancement toward socially, economically, and environmentally resilient communities.

Stressors and Opportunities The increasing size and diversity of the GTA population increases the scope and scale of resources required to meaningfully engage a given fraction of citizens. Accordingly, TRCA’s relative ability to engage citizens within its jurisdiction will decrease if community engagement resources remain static. This poses a threat not only to program objectives including heath, environment, community cohesion, but also undermines the fundamental principle of informed participation in consultation and collaborative planning. Failure to actively engage with the diversity of the GTA population would continue to disproportionally favour the perspective of existing known contacts and participants (and the particular demographics these groups represent) at the expense of the wider whole.

Demographic trends indicate that the average age of those regularly participating in outdoor initiatives is increasing. Addressing the intersectionality of age and other characteristics - including ethnicity and socioeconomic status - in community outreach and engagement activities continues to pose a challenge and requires outreach initiatives targeted toward underrepresented groups. TRCA views both targeted and non- targeted outreach activities as an opportunity to ensure that participants engaged through TRCA initiatives reflect the entire Toronto region community.

Advances in communications and internet technology allow for the production and dissemination of increasingly niche outreach of strategies; communications products can be delivered to wider audiences at lower per capita cost. The engagement of public audiences through remote technology, however, cannot fully replace engaging audiences at specific sites and fostering the social, health, and stewardship benefits of active participation and engagement.

Business Synopsis & Rationale 2016-2020 1 Community Engagement 121 Funding Funding for Community Engagement activities is funded primarily through municipal levy with minor contributions from charitable foundations and government grants. Participating individuals and organizations are not charged fees as doing so would be inappropriate and/or would increase barriers to participation.

Direct Actions and Activities TRCA directly engages citizens through participation in planning and consultation discussions, community based regeneration activities such as tree plantings, and residence-specific programming addressing indoor and outdoor sustainability opportunities. Each year TRCA hosts over 60 events across the jurisdiction. For certain joint projects, TRCA serves as a community liaison and mediator on behalf of municipal and/or other funding partners.

As noted above, TRCA seeks to ensure engaged populations reflect the diversity of the broader Toronto region. To this end, specific populations are targeted by TRCA for active introduction to TRCA sites, services, and objectives.

Complementary TRCA Actions and Activities The Community Engagement program area is complemented by the following TRCA activities:  Watershed Planning and Reporting direct the sites and objectives of community based restoration and consultation activities  School Programs and/or Family Programs serve as an introduction to TRCA’s objectives and program offerings

Key Outcomes  Citizens and community groups, reflecting the cultural diversity of the Toronto region, have an understanding of conservation and watershed management issues and participate in and/or support conservation programs  Citizens are motivated to organize and undertake independent initiatives that complement TRCA and partner objectives, benefit local environmental conditions, and/or advance their own physical and social well-being  TRCA watershed plan development involves a wide variety of stakeholders from public, private and non-profit sectors, community groups and the general public  A large network of volunteers contribute to TRCA projects and programs while gaining experience in the environmental field  Private and public sector stakeholders, including TRCA partner municipalities and communities, are aware of anticipated climate change effects in the Toronto region and understand how they might mitigate these effects

Key Activities – 2017-2020  Develop and implement a new framework to increase the engagement of stakeholders in TRCA watershed planning and reporting implementation  Build capacity and assist neighbourhoods, businesses, governments and non-government organizations to identify and implement strategies and actions that facilitate and accelerate their progress towards socially, environmentally and economically resilient communities  Modify existing outreach programming, as appropriate, to incorporate climate change mitigation and adaptation information

Outlook TRCA will continue to proactively seek involvement with and outreach to a broad cross-section of the Toronto region population. To this end, the Community Engagement program will continue to develop; test, and implement engagement tools and programs that help partner municipalities achieve sustainable communities.

Business Synopsis & Rationale 2016-2020 2 Community Engagement 122 123 2016 Budget

($000)

Sources of Revenue

Gross Governmen Surplus/ Reserve Net Contract Capital Operating Expenditures t Grants User Fees (Deficit) s Budget Services Levy Levy and Other

Corporate Services

Corporate Management and Governance 5,702 177 81 - 1,012 4,267 (165) 353 188

Financial Management 2,290 720 - - - 1,470 (100) 100 -

Human Resources 1,040 - - - - 1,040 - 125 125

Corporate Communication s 1,553 - - - - 373 (1,180) (1,180)

Information Infrastructure and Management 2,679 - 10 - 404 100 (2,165) (2,165)

Vehicles and Equipment ------

Project Recoveries (3,029) - - - - - 3,028 3,028

10,235 897 91 - 1,416 7,250 (582) 578 -

2016 Full-Time Equivalent Employees (FTEs)

Operating Capital Total % Change Over 2015

2015 81.35 1.34 82.69

2016 85.69 2.4 88.09 6.5%

124 Corporate Management and Governance

Objectives  Organizational positioning and strategy is clearly articulated and implemented  Internal and external governance issues are effectively managed  Organizational exposure to risk, including credibility risk, is minimized  TRCA operations are consistent with governing legislation

Program Features Positioning Corporate Management and Governance houses TRCA’s executive and corporate governance functions. Activities provided by this program area - in particular the role of the CEO’s Office – function internally and externally to represent TRCA as a corporate entity and implement corporate governance mandates. Management of the TRCA board governance process ensure TRCA strategic positioning, and actions thereof, are developed in a manner consistent with TRCA’s power and authority as granted through the Conservation Authorities Act (the Act). Corporate Management and Governance also operates internally to maximize adherence to other applicable legislation, TRCA policy and approach while minimizing corporate risk exposure.

Context TRCA is a government-controlled not-for-profit entity created by the Conservation Authorities Act. As such, TRCA is governed by the board of municipal appointees from its six member municipalities (Toronto, Peel, York, Durham, Mono and Adjala/Tosorontio). TRCA strategy and governance direction is taken from the Act and other legislation, its municipal partners political and programmatic needs and cues derived from all levels of government and public and private interests.

A CEO candidate is approved by the Authority on an as-needed basis. In 2013, TRCA transitioned from the position of Chief Administrative Officer to the Chief Executive Officer title to emphasize the responsibility for determining strategic directions and financial capacity and to align with the organizational environments and business lines within which TRCA operates.

Each conservation authority is required to establish and maintain effective internal and external governance systems. Such requirements include attending to matters of board governance and relations while ensuring effective organizational function through internally and externally coherent policies. The development and selection of senior managers, to whom corporate policy interpretation and implementation, fiscal responsibility, and organizational culture expectations are delegated, is shepherded by TRCA’s CEO office to ensure governance objectives are met. Programs to confirm and increase organizational compliance with internal policy are also managed through distinct Corporate Management and Governance programs.

Stressors and Opportunities In 2015, the Ontario provincial government announced its review of the Conservation Authorities Act. The outcome of this review is anticipated in 2016; it is anticipated that the review will provide a renewed statement of provincial commitment to the conservation authority movement while strengthening TRCA’s guiding legislation and therefore the specific authorities, permissions, and constraints under which TRCA operates. Any changes from the review outcome that affect TRCA’s mandate, governance, and/or intergovernmental integration will be addressed through Corporate Management and Governance; this response will seek to ensure continuity in TRCA’s role as a productive, stable, and influential actor and partner in the development of sustainable urban and rural regions.

Through its mandate and programming, TRCA is positioned at the vanguard of ecologically sustainable city building technologies and approaches. This orientation provides TRCA with an opportunity to serve expanded advisory roles to its partners regarding feasible strategies and instruments for green and grey infrastructure financing. It also provides an opportunity for TRCA and its partners to engage in constructive dialogue on the design, development, and implementation of financial instruments to accomplish mutually beneficial ecological and infrastructure outcomes. Corporate Management and Governance will vigorously pursue opportunities to engage in intergovernmental dialogue and advocate for the inclusion of low impact and green infrastructure alternatives within major infrastructure design and implementation initiatives. As new sources of financing are

Business Synopsis & Rationale 2016-2020 1 Corporate Management and Governance 125 developed – in particular carbon cap and trade monies – TRCA will pursue advisory or partnership roles to advance climate change investments in the development of sustainable, resilient city regions.

The recently released Crombie panel review of Ontario’s Greenbelt and Growth plans (2015) underscored the potential for regional scale coordination to realize sustainability goals and objectives at scale. TRCA will continue to parlay its existing strength in partner engagement and coordination into large, diverse, and effective regional sustainability initiatives. As consensus around approaches and endpoints emerges, TRCA may be faced with the opportunity and challenge of relinquishing elements of goal-setting autonomy as it adopts the shared and collaborative goals of larger partnerships. Corporate Management and Governance will ensure any partner-based region-scale objectives are adopted in a manner acceptable to the Authority and partner municipalities.

Through its intergovernmental affairs function, Corporate Management and Governance will pursue opportunities to stimulate interjurisdictional dialogue regarding regional climate risks, stressors, and adaptive approaches. TRCA holds significant expertise in framing and responding to existing and emerging risks at the interface of human society and the environment. To this end, TRCA will continue to identify issues and prepare responses to emerging risks including demographic shifts, green economy preparedness and transition, and the role of diminishing urban greenspace on ecosystem viability and human psychological function. By providing direction and leadership internally and fostering discussion across all levels of government, Corporate Management and Governance will strive to ensure regional preparedness for literal and figurative hurricanes emerging from rapidly evolving environmental, social, and economic trends.

In the next five years, five of seven positions within TRCA’s current senior management cohort (CEO, CFO, and three Director-level positions) are eligible to retire; the balance of TRCA’s current senior management cohort (two Director-level positions) were appointed within the last year (2015). This turnover in senior staff represents both a stressor and opportunity with respect to organizational stability and approach. The restructuring of the staff organization in 2015 created a number of new senior opportunities for the development of future Directors, and development of TRCA’s Strategy Committee provides expanded opportunities for members of TRCA’s senior leadership team to become involved in the full spectrum of corporate strategy and leadership.

Funding All activities undertaken in Corporate Management and Governance are funded from general levy.

Direct Actions and Activities Corporate Management and Governance includes the function of the CEO’s Office, TRCA board relations, and associated organization, documentation, and corporate governance obligations. Activities include oversight of TRCA organizational function including review of TRCA actions to ensure consistency with applicable legislation, best practices, and internal guidelines, policies, and recommendations. Opportunities or issues, where identified, may be handled by Corporate Management and Governance staff or delegated to staff of the respective affected division(s).

Complementary TRCA Actions Corporate Management and Governance supports the following TRCA activities:  Corporate Management and Governance works with Human Resources to develop and implement succession planning initiatives  Corporate Management and Governance works with Financial Management to understand financial capacity and constraints in the realization of strategic and programmatic objectives  Corporate Management and Governance works will all program areas to ensure TRCA objectives are consistently presented and advanced through policy interventions and implementation  Corporate Management and Governance works with senior management in all divisions to ensure real- time identification and response to emerging opportunities and risks

Business Synopsis & Rationale 2016-2020 2 Corporate Management and Governance 126 Key Outcomes  Adoption of shared, collective region-scale environmental goals, objectives, and strategies  TRCA and/or conservation authority representation in key federal, provincial and municipal dialogues addressing built and natural infrastructure risk, redevelopment, and growth  Development and maintenance of a strong and resilient corporate leadership team

Key Activities – 2017-2020  Maintain ongoing board relations and intergovernmental affairs  Determine and articulate internal corporate strategy, priorities, and direction  Through Conservation Ontario, engage with partner conservation authorities to craft regional sustainability objectives and implementation strategies  Engage with all levels of government to articulate and establish the role of conservation authorities in dialogues and initiatives including climate change adaptation, green urban centres, and infrastructure planning and implementation  Develop, train and challenge TRCA’s senior leadership team  Develop a corporate Risk Management Policy

Outlook In the coming years TRCA will experience a period of change and renewal. In addition to its transition to a new senior leadership team, TRCA also will relocate into a new building at its previous Head Office site (5 Shoreham Drive). These activities, with complementary internal programming, will ensure TRCA is able to recruit and retain the talent needed to provide its partners with solutions to issues of increasing complexity, urgency, and variability.

To ensure that it builds and maintains sufficient capacity to meet existing and emerging challenges, TRCA will also aggressively pursue novel funding sources and partnerships. Corporate Management and Governance will play instrumental roles in the identification and management of new relationships while ensuring TRCA maintains sufficient autonomy and accountability to satisfy its obligations as a public institution.

As referenced above, TRCA will continue to actively support and advance regional-scale collaborative initiatives. Shared sustainability objectives, and the collective actions required to achieve them, represent the most promising approach to ensure the Toronto region remains a safe, healthy, and prosperous region amidst the significant challenges and shifts underway. TRCA will actively participate in groups that are pursuing sustainability based, intra-regional prosperity - including the federal government’s green urban agenda - and continue to champion the need for healthy Great Lakes as a requisite precondition for regional security and viability.

Through such activities, TRCA expects to significantly increase its efforts and involvement as a leading proponent of regional sustainability approaches and the development of systematic approaches to realize The Living City vision.

Business Synopsis & Rationale 2016-2020 3 Corporate Management and Governance 127 Financial Management

Objectives:  Timely, accurate, and complete transaction processing in support of effective financial decisions and financial reporting to stakeholders  Compliance with regulatory reporting requirements, TRCA policies and Canadian Public Sector accounting standards  Safeguarding of assets  Delivery of multi-year business plans and budget services

Program Features Positioning TRCA’s Financial Management delivers a variety of services which demonstrate financial stewardship and accountability, principally to government stakeholders which provide approximately 74% of the total funding to TRCA. These services include transaction processing, regulatory compliance, implementation and monitoring of internal controls, safeguarding of assets, risk assessment, multi-faceted financial reporting, and long term financial planning. TRCA strives to maintain the trust of its many stakeholders in its ability to deliver effective programming.

Context TRCA manages an annual budget in excess of $100 million, funded predominantly from government funding, contracted services and user fees. Programming is delivered throughout TRCA’s area of jurisdiction which includes the City of Toronto, and significant area within the regional municipalities of Durham, Peel and York, and parts of the Town of Mono and Township of Adjala-Tosorontio. TRCA also occasionally enters into special agreements to provide services or expertise in concert with adjacent conservation authorities; such services and expertise are managed on a fee-for-service basis and are undertaken to reduce project uncertainty and/or cost to TRCA’s partner municipalities.

Stressors and Opportunities TRCA in currently undertaking a redesign of its business planning and reporting process, with the Centralized Planning and Reporting (CPR) business intelligence tool. This initiative includes data consolidation, standardized business planning processes, internal and external metrics development, and associated design and implementation of business intelligence tools and analysis. This process will be fully incorporated for the fiscal year 2018 planning cycle. The newly adopted CPR approach is anticipated to yield significant improvements in data-driven decision making for TRCA and its municipal partners.

TRCA uses a large number of financial systems to manage bookings, processing of transactions, and to meet the unique reporting requirements of each of our programs. Because these systems are not fully integrated, the collection of data and financial reporting is not as efficient as it could be. The challenge for the Financial Management team is to continue to seek integrated solutions or the automation of integration processes, which are currently not automated in all instances.

Deployment of the Agresso Business World Financial ERP platform continues, although at a slower pace than anticipated due to the lack of dedicated staff resources. Investment in the update, consolidation, and maintenance of financial systems provide a significant opportunity to realize decreased operational risk, increased performance, and significant gains in efficiency. The 2016 budget provides an investment of $100,000 for this purpose.

Funding The Financial Management program area is funded from general levy with contributions from Ministry of Natural Resources and Forestry and investment income.

Business Synopsis & Rationale 2016-2020 1 Financial Management 128 Direct Actions and Activities Financial Management leads the business planning activities of TRCA by collecting and consolidating information from internal sources and liaising with partner municipalities to determine funding opportunities and constraints; data are used to produce annual and multi-year financial projections and associated business plans including capital requests to TRCA’s partner municipalities. In addition to data collection and consolidation, Financial Management staff provide corporate business planning and/or financial analysis support on an as-needed basis including business case preparation and review, cost-benefit analysis, and performance metrics development and reporting.

Current fiscal year activities include all aspects of comptrollership including revenue and expense tracking, managing accounts payable/accounts receivable, and producing quarterly and annual financial reports. Financial management and accounting services are also provided for TRCA’s The Living City Foundation and the World Green Building Council, for whom TRCA acts as a secretariat. TRCA’s payroll function is situated within the Financial Services program area and also serves each of these respective organizations.

Financial Management oversees the management of surplus funds and deferred revenues.

Complementary TRCA Actions Financial Management supports the following TRCA activities:  Financial Management works all program areas to ensure that TRCA’s operations align with short and long-term TRCA strategic and science-based objectives  Financial Management works with all program areas to ensure an integrated business planning approach encompassing financial, physical, and human capital opportunities and needs

Key Outcomes  Single- and multi-year internal business plans and municipal capital requests are developed and supported by data-driven analysis and decision-making tools  Accurate and timely financial plans and reports to internal and external partners  Annual audited financial statements free of qualifications  Maintain TRCA’s long-term fiscal viability of the organization through effective financial management

Key Activities - 2017-2020  Populate and update current fiscal year actuals into the Agresso financial accounting and reporting system  Complete Phase I and Phase II of Centralized Planning and Reporting business intelligence tool build- out

Outlook Financial Management will continue to remain current with public sector accounting practices and to provide stakeholders with sound financial data and analyses. Ongoing efforts to improve both business planning and in-year financial management and reporting will continue.

Business Synopsis & Rationale 2016-2020 2 Financial Management 129 Human Resources

Objectives:  The health and safety of TRCA staff is protected  A robust and equitable human capital pipeline meets organizational hiring needs  Staff receive accurate, reliable, and fair treatment throughout the hiring, employment, and departure/retirement lifecycle

Program Features Positioning TRCA ensures that human capital management and staff health and safety services are provided throughout the organization. In recruiting and retaining talent, TRCA competes with municipalities, provincial and federal government departments, and private sector consulting firms to secure qualified staff. Within the organization, Human Resources seek to ensure that workplace culture and conditions make TRCA an attractive alternative to these competing employers.

Context Since its inception in 1957, TRCA’s staff complement has grown from 15 to 480 full time staff and 400 contract and/or part-time staff. Growth in staff complement reflects the increased human capital needs to meet the growth in the volume, complexity, and diversity of TRCA’s product and service offerings. As a government non- profit entity, TRCA operates its human resource function to public sector accountability standards, including transparency in hiring and compensation. No TRCA staff groups are currently unionized.

Stressors and Opportunities At present, TRCA does not manage staff recruitment, retention, and/or development through a structured staff recruitment and development process. Given many pending retirements, TRCA may face challenges developing an appropriately qualified and trained applicant pool for management and senior management positions. To this end, TRCA is currently undertaking a job evaluation process and review of internal equity throughout the organization. By better understanding staff skills sets and resolving job classification discrepancies, TRCA will be better able to build a systematic, objective evaluation of its existing staff capacity and use this information to support a structured human capital strategy.

Funding All activities undertaken in Human Resources are provided from general levy.

Direct Actions and Activities Human Resources activities include all facets of human capital management including talent recruitment and training, compensation and benefits, and the development and implementation of staff engagement activities and health and safety initiatives. Staff support, assistance, and conflict resolution are also provided on an as- needed basis. Initiatives are guided and supported by the development and updating of human resource policies and procedures, development and implementation of supportive formal and organizational structures and frameworks, and engagement with staff either through in-person interaction or the design and implementation of interactive tool and forums.

Human Resources activities protect the health and safety of TRCA staff by ensuring compliance with health and safety legislation and regulations including the Occupational Health and Safety Act and associated TRCA policies and procedures. Non-mandated health and wellness initiatives offered on an ongoing basis also proactively support and increase staff health, wellness, and long-term productivity.

Complementary TRCA Actions Human Resources support the following TRCA activities:  Human Resources works with Corporate Management and Governance to ensure succession planning for senior staff will address organizational needs  Human Resources works with all program areas to provide internal communications across the organization

Business Synopsis & Rationale 2016-2020 1 Human Resources 130  Human Resources works with Financial Services staff within a framework of integrated management planning that incorporates human capital planning throughout the business planning and resource allocation cycle

Key Outcomes  Staff productivity is maintained through the provision of a safe, fair, respectful, and predictable work environment and employment relationship  Compensation and advancement is internally and externally fair, equitable, and legislatively compliant  A robust recruitment and development process advances the career objectives of individual staff while producing an overall staff complement qualified to assume upcoming management-level vacancies  TRCA adheres to and exceeds Ontario Health and Safety legislation, regulations, and internal policies and procedures

Key Activities 2017-2020  Review of organizational compensation and pay equity  Update and expand Human Resources policies and procedures, including updated and expanded health and safety policies, procedures, and wellness activities  Develop and build r staff development infrastructure, processes, and programming  Integrate Human Resources databases into TRCA’s Centralized Planning and Reporting business intelligence framework

Outlook In 2016, TRCA will undertake a review of the compensation program to ensure fair, competitive compensation that is internally equitable, externally competitive, and legislatively compliant. The resulting expanded understanding of TRCA existing roles, responsibilities, and skill sets will strongly inform TRCA’s ongoing development of a comprehensive, systematic approach to human capital management and compensation. TRCA’s ability to constructively respond to the data provided by this exercise – in particular the ability to design and implement a constructive response to pending management retirements – will depend on the provision of additional resources to expand the scope of Human Resources to include proactive and strategic approach to human capital management.

Business Synopsis & Rationale 2016-2020 2 Human Resources 131 Corporate Communications

Objectives:  Build support for TRCA’s mission, strategic priorities, and activities  Facilitate positive interactions and transactions with TRCA clients, customers, and collaborators  Generate conversation and engagement opportunities to broaden participation in TRCA initiatives

Program Features Positioning Corporate Communications provides communications advice, design, and implementation support to all TRCA divisions and programs. Fulfilling the role of both subject matter experts and operational support, Corporate Communications ensures that information flows in a timely, efficacious, and cost-effective manner between the organization and its many constituencies. In mediating communications flow, Corporate Communications directly maintains relationships with, and distributes content through, major media outlets, independent content curators and distributors such as blogs and local media outlets, and TRCA controlled websites and social media channels. This program area also works on behalf of TRCA to mitigate reputational risk while identifying opportunities to increase organizational reach and outcomes.

Context TRCA’s jurisdiction encompasses Canada’s largest urban centre and many rural areas, 18 lower, upper and single tier municipal governments, and 4.5 million residents. The size and diversity of TRCA audiences will increase into the foreseeable future.

Communications channel and platform range and diversity have drastically increased over the past 30 years. The advent of the internet, mobile communications devices, social media platforms, and other interactive platforms has splintered audiences across multiple channels. As the number of communications channels has increased, so too has audience expectations of customized content and ability to contribute and/or respond to content provided.

Over the past 60 years, TRCA program offerings have increased and diversified. All TRCA programs hold minimum communications requirements to ensure appropriate community engagement. Programs launched more recently, however, are likely to incorporate sophisticated communications strategies that incorporate multiple channels. TRCA programs launched prior to the internet, and for which communications are important, are also increasing in complexity; these programs require updated cohesive communications strategies that engage new audiences while avoiding the alienation of historic audiences.

Stressors and Opportunities The diversity and ubiquity of communications devices and platforms creates the opportunity for TRCA to expand the scope and scale of its communications to desired audiences. Digital technologies generally reduce distribution while concurrently increasing audience expectations of content quality, sophistication, and specificity. Accordingly, TRCA holds the opportunity to reach more audiences more efficaciously but faces the accompanying challenge of winning audience attention, developing high quality content, and staying abreast of best practices on an increasing diverse array of platforms. The interactive nature of many communications channels – including the democratisation of communication and the ability of participants therein to organize and exert influence online –also creates the need for ongoing monitoring and engagement. To meet this challenge, TRCA now supplements its communications management and content services with technology support that contain costs and improve effectiveness.

Digital communications technologies provide TRCA with the opportunity to streamline client interfaces and transactions. TRCA continues to pursue opportunities to reduce search effort and transaction costs for both itself and its clients by integrating data collection and e-commerce applications into its communications products. By applying a client-centred design approach in its products, TRCA seeks to improve service delivery while building positive associations and introductions to TRCA and its programming.

Business Synopsis & Rationale 2016-2020 1 Corporate Communications 132 Data collected from TRCA communications products, assessments, and external sources provide opportunities to better understand strengths, shortcomings, and future opportunities for outreach initiatives. By using data to assess program effectiveness and opportunity, Corporate Communications can provide increasingly tailored advice on new and modified outreach communications strategies. To accelerate this capability, TRCA is currently developing and implementing a customer relationship management (CRM) system to increase the integration, efficiency, and effectiveness of data collection and analysis processes.

Funding Funding for Corporate Communications is obtained primarily through general levy. Some capital projects include municipal levy funding for communications support.

Direct Actions and Activities Corporate Communications engages with TRCA staff to assess communications needs and opportunities from the individual project to corporate scale. Programs are developed around key audiences, messages, and media design; communication strategy implementation and success is evaluated and used in an iterative fashion to inform next steps.

Stakeholder relations are managed through print and digital media design, production and distribution, brand management, media relations, advertising and promotions, market research, and the implementation of digital tools to facilitate e-commerce and client relationships.

Corporate Communications provides ongoing monitoring of significant communications channels to determine stakeholders knowledge, perceptions and opinions; responses to such feedback is developed as required to support TRCA objectives.

Complementary TRCA Actions and Activities Corporate Communications support the following TRCA activities:  Corporate Communications provide and manage digital and print communications channels for programs and projects across TRCA  Corporate Communications support Community Engagement programs in building community understanding, support and dialogue

Key Outcomes  Key stakeholders support TRCA, its mission and its ongoing work and advocate for them through their own networks  TRCA develops and maintains relationship with clients, customers and collaborators in support of its key strategic objectives  Communication reach is expanded and managed in a cost-effective manner

Key Activities - 2017-2020  Apply mobile technologies to respond to the increasing opportunities and demand for mobile-friendly communications and engagement.  Build data analytics tools and capacity to better inform communications strategies and tactics.  Strengthen collaborative relationships with key content creators and communication strategists to leverage their communications resources.  Implement tools and policies that facilitate the dissemination of TRCA communications content through social networks

Outlook Communications technologies are expected to continue evolving at a rapid pace and to affect all aspects of TRCA corporate communications including the communications habits and preferences of TRCA’s stakeholders. Demand for services such as real-time knowledge transfer, customized media content, and immersive media are expected to increase alongside other trends driven by technologies not yet invented. TRCA will monitor these developments and adopt corresponding new approaches to ensure effective and efficient corporate communications.

Business Synopsis & Rationale 2016-2020 2 Corporate Communications 133 Information Infrastructure and Management

Objectives:  Ensure staff, partners and collaborators have access to data and open data, as appropriate, in a timely manner  Provide cost effective technologies enhance, improve, and streamline TRCA business processes  Ensure information resources and technologies meet all applicable records management, privacy, integrity, and reliability standards and best practice

Program Features Positioning Information Infrastructure and Management (IIM) evaluates, integrates and supports digital technologies for internal and external clients. Increased integration and use of information infrastructure and data has re- oriented this program from a business support function to a core organizational capacity. While internal needs and capabilities are a key focus of IIM, services and technologies provided by this group support the needs of diverse users including citizens, partners, and funders.

Context Like many contemporary organizations, TRCA is continuing its transition from paper-based, ad-hoc workflows to automated, transaction-based and integrated process enabled by enterprise software. In pursuing this objective, TRCA now runs approximately 16 enterprise-scale platforms; enterprise solutions are supplemented by licences to another ten application suites held at the user or group level.

The expense associated with per unit computer processing power and data storage continues to decrease. As a result, software applications continue to grow in sophistication and ubiquity with an accompanying increasing demand for data storage. TRCA currently houses 12 TB of data housed in 8 data server locations. This infrastructure and TRCA’s associated technical support services enable and maintain productivity across more than 20 primary TRCA work locations.

Physical and digital records function as corporate memory and are required for ongoing organizational accountability and transparency. Records also house evidence of business activities and transactions and underpin corporate governance and operational efficiency.

Stressors and Opportunities The increased scope and scale of the IIM function requires corresponding increases in ongoing hardware and software administration for individual staff (e.g. PCs, cell phones), the organization (e.g. servers, office phone system), and integration with external users and providers (e.g. purchasing, network connectivity). There pressures introduce an increased risk of technology-based service disruptions and lapses in productivity resulting from inadequate and outdated staff technology tools. Such outcomes would introduce unnecessary lags into TRCA’s innovation and service-delivery potential and capacity. The transfer of activities and functions onto enterprise software platforms yields many opportunities for increased coordination, collaboration, and productivity. The associated transfer of data and need for training, however, represent significant cost and create high switching costs when migrating to another platform. If TRCA is not be able to finance the update of, and/or transition from, existing enterprise-scale systems on an as-needed basis there exists a significant risk of enterprise software and workflows becoming progressively outdated and less integrated; in such scenarios significant losses in productivity and increased data vulnerability would be anticipated. Corporate records management administers the systematic administration of records and documented information throughout its life cycle including creation/receipt, classification, use, filing, retention, storage, and final disposition. Should records management be compromised, TRCA would be exposed to potential fines under the Municipal Freedom of Information and Protection of Privacy Act (MFIPPA); public scrutiny would also be considerable should TRCA be perceived to be hiding, withholding or destroying records in manners other than those prescribed under TRCA policies, procedures or legislation.

Business Synopsis & Rationale 2016-2020 1 Information Infrastructure and Management 134 Funding Funding for Information Infrastructure and Management is funded primarily through general levy.

Direct Activities and Actions IIM manages the platforms supporting Geographic Information Systems (GIS), financial data systems, environmental data systems, internal communications and business processes, customer relationship management, and corporate records management.

Spatial data and analytic tools inform and support many TRCA programs. Activities include developing data collection protocols and field collection tools for field staff, acquiring data from external partners, municipalities and private vendors, performing spatial analysis and reports, and producing cartography and map products.

Custom relational databases are created and supported to house, manage, and report on TRCA’s environmental data. Activities include performing business requirements analysis, building data models, developing GUI (graphical user interfaces) and programming applications.

The procurement of all TRCA hardware and software is managed through Information Infrastructure and Management. Services and logistical supports include upkeep of all IT infrastructure including servers, switches, PC’s/laptops, and peripheral equipment, the purchase and management of stationary and mobile communications devices, and IT disaster recovery planning including ensuring sufficiently back-ups, redundant hardware, and fail-over services.

All TRCA employees are responsible and accountable for making and keeping adequate, accurate, authentic and reliable records of their work-related activities. TRCA has approximately 83,700 active central files; records are added to the central filing system on an ongoing basis as they are identified through the records management program.

Complementary TRCA Actions and Activities  Information Infrastructure and Management provides integrated service delivery to all TRCA programs and staff  Information Infrastructure and Management contributes to the administration of corporate communications applications and systems including web applications and enterprise CRM

Key Outcomes  Up-time of all TRCA networks and systems is maximized  Access to critical business applications and systems is secure and reliable  Data connectivity enables all TRCA sites, including remote offices, park, and educational facilities access to centralized business applications.  Data management processes and policies increase data accessibility to staff, clients and partners  Relational database products manage TRCA data efficiently and effectively  Records are managed in a manner that meets business needs, legislative requirements, and stakeholder expectations

Key Activities – 2017-2020  Install communications conduit and fibre optic cables to all office, park and educational facilities  Extend the TRCA VOIP communications system to all facilities  Improve the PC/Laptop replacement schedule from seven years to three years  Increase redundancies into TRCA data centre to maintain 99.99% network up-time  Complete metadata for all TRCA data holdings to better manage and share TRCA data holdings  Update TRCA’s Records Management Policy, Disaster Recovery Policy and Retention Schedule  Improve Records Series Classification and file structure in the electronic document and records management databases

Business Synopsis & Rationale 2016-2020 2 Information Infrastructure and Management 135 Outlook The value of Information Infrastructure and Management as a key enabler for all other TRCA Service Areas will continue to grow as technology, business processes, and client expectations evolve in concert. To ensure data and workflow coordination and consolidation, Information Infrastructure and Management will become increasingly integrated into program and project planning throughout the organization. Improvements in information technology performance and capability can also be expected to introduce operational improvements in support of TRCA’s service to its partners and the community.

Business Synopsis & Rationale 2016-2020 3 Information Infrastructure and Management 136 Section III – Items for the Information of the Board

RES.#C5/16 - 2015 YEAR END FINANCIAL PROGRESS REPORT Recommends receipt of the 2015 year-end financial progress report.

Moved by: Gino Rosati Seconded by: John Sprovieri

THAT Toronto and Region Conservation Authority's (TRCA) Financial Progress Report dated December 31, 2015, be received. CARRIED BACKGROUND The final progress report focusses on the 2015 year to date (YTD) actual financial results, including comparison to the approved budget. The report is prepared as of December 31, 2015.

RATIONALE Staff has included within the 2016 Operating and Capital Budget documents (which are presented elsewhere on the agenda) detailed 2015 YTD actual and budget information for comparison purposes. Staff will be working with the auditors on the 2015 financial statements throughout May 2016. The financial statements will be presented for approval to the Budget/Audit Advisory Board (BAAB) and the Authority at meetings scheduled to be held on June 24, 2016. In finalizing the 2015 financial statements, the 2015 actuals as presented in attachments 1 and 2 will be adjusted to reflect the capitalization of TRCA assets.

The 2015 projected deficit before reserve allocations is $1.6 million, consisting of a $1.244 million surplus in operating accounts and a deficit of $2.845 in the capital accounts. After application of reserves, there will remain unallocated surplus funds of $0.729 million in the operating accounts and $98,000 in the capital accounts. These results are summarized in the chart below.

Operating Capital Total Budget ($000) ($000) ($000) ($000) Surplus / (Deficit) before reserves 1,244 (2,845) (1,601) (2,152) Allocation (to) / from reserves (515) 2,943 2,428 2,850 Unallocated surplus 729 98 827 698

The key 2015 operating variances are outlined in Attachment 1. Significant expenditure variances within the 2015 capital estimates are outlined in Attachment 2.

The 2015 capital budget included projects for which expenditures varied from budget. Actual expenditures within the capital accounts amounted to $63.2 million as compared to a budget of $78.4 million, a difference of $15.2 million as shown in Attachment 2.

Reasons for the variances include factors such as: • project completion schedules which cover multiple years; • budgets that include funding that was ultimately not realized; • delays in obtaining various approvals, agreements and matching funding; and • weather conditions which caused delays of in-ground work.

137 Where funds have been raised for a project that has been delayed, provisions are made for the carry-forward of funding to the next fiscal year. And where projects are completed in advance of receipt of funding, the deficit is recognized in the current year with a similar amount budgeted as surplus in the following year. In 2015, a surplus of $698,000 was built into the budget to recover deficits incurred in 2014. In 2016, there is a provision of $501,000 to recover amounts spent in 2015 before actual receipt of funds.

Report prepared by: Janice Darnley, extension 5768 Emails: [email protected] For Information contact: Janice Darnley, extension 5768; Rocco Sgambelluri, Extension 5232 Emails: [email protected]; [email protected] Date: April 1, 2016 Attachments: 2

138 Attachment 1

2015 Operating Variance

Surplus Explanation (Deficit) $ 000 Regional Biodiversity 659 Significant increase in inland fill revenues due to accelerated contractor work at Brock South, Bruce’s Mill and Tommy Thompson Park Greenspace (355) Planned deficit of $388,000 with respect to the temporary Securement and closure of the water park at Claireville. Management Tourism and 256 Mostly due to Pan Am Games parking revenue, increased Recreation camping fees due to TransCanada pipeline campers and higher than budgeted revenue for Tree Top Trekking at Bruce’s Mill and Heart Lake conservation areas. Planning and 686 Experienced a higher than anticipated volume of planning Development Review and permitting applications, including large scale plans. Education and (862) Loss of revenue ($694,000) impacted by school boards’ Outreach work to rule affecting six months of the season and decreased number of summer participants. Corporate Services 713 Planned surplus of $320,000 exceeded by receipt of the WSIB NEER and Sun Life premium rebates of $300,000, in addition to staff gapping contributing to the surplus. Other 147 All other variances resulting from the normal day to day business transactions. Total 1,244 Surplus

139 Attachment 2

2015 Capital Variance

Project Under (Over) Explanation Budget $000 Restoration Special 2,032 Holds a budget only to compensate for new previously Projects unbudgeted restoration projects. Storm Water 1,901 New project. Approvals pending. Maintenance – Toronto Lower Duck Pond Living City Campus 1,586 Municipal servicing design and permits have delayed Development majority of construction from occurring in 2015. Wilket Creek (1,248) Project Master Plan for Environmental Assessment (EA) Rehabilitation was finalized and approved. Construction of works for Site 3 Phase 2 has commenced. Restoration plantings will be completed in spring 2016. Flood Remedial 1,236 A five-year work plan to spend the funds on hand and new Works funds. Including Malton integrated flood analysis and feasibility study, Bolton berm capacity and remediation study, floodplain mapping updates for the Humber River, Dixie Dundas/Etobicoke Creek Special Policy Area (SPA) flood remediation feasibility study and Spring Creek/Avondale SPA flood remediation feasibility study that will continue in 2016 through 2019. Bolton Camp Site 1,143 Design and construction of site servicing is multi-year Improvements - project. Servicing to be completed in 2017. Servicing 83 Fishleigh – 1 1,137 Construction delayed until objection to EA addendum Midland Road resolved. Oak Ridges Moraine 1,022 Carry-forward for trail head and trail construction, trail Developer animation, stewardship and restoration. Compensation Mud Creek Reach 2 (952) Budget not established during 2015 budget process Restoration resulting in full expenditure appearing as variance. Completion of Phase 4 of multi-year restoration project at Reach 2 involving major channel reconstruction and stabilization works to protect Belt Line Trail and adjacent steep valley slopes. Post construction restoration in progress. Toronto Parks – 927 Cost recoverable program with the City of Toronto that Additional Sites funds multiple projects annually. Annual budget is estimated and fluctuates based on actual projects completed during the year. Valley Erosion (896) Overruns due to additional work required to protect Toronto Hazard Water infrastructure at Downsview Dells below Whitburn Crescent.

140 Project Under (Over) Explanation Budget $000 Land and Building (886) This project is solely for capturing the market value of $2 Acquisition Estimates acquisitions. There is no budget set up for either revenue or expense as the volume for each year cannot be pre-determined with any degree of accuracy. Enhanced Flood 833 One major project could not commence on schedule due to Work Erosion Major issues accessing private property. Maintenance N1 East Don Trail 616 East Don Trial detailed design project in progress. Project Detailed Design to span 2015 and 2016. UTSC Highland Trail (540) Expenditures are 100% recoverable from City of Toronto Realignment via invoice. Project established after 2015 budget approved. Stormwater Pond – 500 Property acquisition for this project will start after EA has EA Property been submitted to the Ministry of the Environment and Climate Change in 2016. Remaining Projects 6,762 Expense variances ranging from $499,000 to ($499,000) Total 15,173 Expenditure Under-budget Variance

______

141 TERMINATION

ON MOTION, the meeting terminated at 9:36 a.m., on Friday, April 1, 2016.

Maria Augimeri Brian Denney Chair Secretary-Treasurer

/ks

142 Budget/Audit Advisory Board Meeting #2/16 was held at TRCA Head Office, on Friday, June 10, 2016. The Chair Maria Augimeri, called the meeting to order at 8:33 a.m.

PRESENT Maria Augimeri - Chair Ronald Chopowick Colleen Jordan

ABSENT Gino Rosati John Sprovieri

RES.#C6/16 - MINUTES

Moved by: Colleen Jordan Seconded by: Ronald Chopowick

THAT the Minutes of Meeting #1/16, held on April 1, 2016, be approved. CARRIED ______

PRESENTATIONS

5.1 A presentation by Anita Ferrari, Partner, Grant Thornton LLP, and Michael Tolensky, Deputy CFO, TRCA, in regard to item 7.2 - 2015 Audited Financial Statements.

RES.#C7/16 - PRESENTATIONS

Moved by: Ronald Chopowick Seconded by: Colleen Jordan

THAT above-noted presentation 5.1 be received. CARRIED ______

143 Section I – Items for Authority Action

RES.#C8/16 - TRCA INVESTMENT POLICY Policy Update – June 2016. An updated investment policy is presented for the Authority’s approval.

Moved by: Colleen Jordan Seconded by: Ronald Chopowick

THE BOARD RECOMMENDS TO THE AUTHORITY THAT the TRCA Investment Policy, as appended, be approved;

AND FURTHER THAT Toronto and Region Conservation Authority’s (TRCA) Rules of Conduct allow for the investment of surplus funds with the One Investment Program, and accordingly section 2.12 be amended and section 2.12.3 be added, so that it reads as follows:

“2.12 to authorize the investment of money not required immediately by the Authority in accordance with the policies established by the Authority:

2.12.1 in treasury bills, bonds, debentures or other evidences of indebtedness of or guaranteed by the Government of Canada or the Province of Ontario; and

2.12.2 in term deposits, investment certificates, debentures or any other evidences of indebtedness of any chartered bank, financial institution or corporation; and

2.12.3 in the One Investment Program.” CARRIED BACKGROUND TRCA’s investment policy was last updated in June 1997. The policy was developed pursuant to subsection 2.12 of the Rules of Conduct, which reads as follows:

“2.12 to authorize the investment of money not required immediately by the Authority:

2.12.1 in treasury bills, bonds, debentures or other evidences of indebtedness of or guaranteed by the Government of Canada or the Province of Ontario; and

2.12.2 in term deposits, investment certificates, debentures or any other evidences of indebtedness of any chartered bank, financial institution or corporation in accordance with the policies established by the Authority.”

144 Since 1997 TRCA has experienced considerable growth in scope and nature of its operations, and as a consequence of that growth there has occurred commensurate growth in cash flows and idle cash balances. On December 31, 1997 cash and marketable securities amounted to approximately $11 million, which compares to approximately $34 million as at December 31, 2015. Given the current state of low interest rates which have persisted for a number of years, investment income is only marginally higher in recent years as compared to the late 1990s. For the last few years investment income has amounted to approximately $600,000. The recommended investment policy seeks to augment the annual amount of investment earnings.

RATIONALE In April 2016, TRCA staff engaged the services of independent investment consultant Kelly Rodgers, CFA, principal of Rodgers Investment Consulting to review the existing policy and to make recommendations on what options are available to TRCA to increase investment income within a risk-averse framework that is appropriate for a local government agency. The consultant’s main recommendation was that TRCA should consider investing in a pool of professionally managed funds collectively known as the “One Fund.” This program is described below.

The “One Investment Program” or “One Fund:” Amendments made to the Municipal Act in 1992 allow Ontario municipalities to participate in joint municipal investment strategies. These amendments permit municipalities to pool investments in order to gain the opportunity to earn higher returns through access to larger, diversified, high-quality investment portfolios. Local Authority Services (LAS - an affiliate of the Association of Municipalities of Ontario) and the CHUMS Financing Corporation (a subsidiary of the Municipal Finance Officers’ Association of Ontario) both established investment pools in response to the 1992 Municipal Act amendments. In 1995, LAS and CHUMS combined their efforts to create a single professionally-managed investment program known as ONE - The Public Sector Group of Funds (commonly referred to as the “One Fund”).

One Fund historically offered a money market portfolio and a bond portfolio. An equity portfolio was added in 2007 and a corporate bond portfolio in 2008. The corporate bond and equity portfolios were launched as a result of 2005 amendments to the Municipal Act Eligible Investment Regulation (O. Reg. 438/97) allowing municipalities to invest in Canadian equities and longer term Canadian corporate bonds. The regulation, however, offered access to these investment types only through The One Investment Program. Throughout 2006, One worked with a diverse committee of municipal investment practitioners to develop investment policies and operating guidelines for both the equity and corporate bond portfolios, and to select professional managers for the two new portfolios. In February 2010 the program was renamed “The One Investment Program”. The program has continued to grow in recent years and now also welcomes investment from organizations within the broader Ontario public sector. Investors from the broader public sector include conservation authorities and municipal services boards. The program is also available to hospitals and other segments of the MUSH (municipalities, universities, school boards and hospitals) sector.

In 2015, The One Investment Program also launched a High Interest Savings Account (HISA) option with a Schedule 1 Canadian banks. The HISA provides a tiered competitive rate of return for deposits, with complete liquidity.

145 Local co-mingled (pooled) government investments are not a new idea, with many having been established in jurisdictions across Canada and the United States. They have proven to be highly successful and popular investment and cash management tools for municipalities and similar organizations. Participation in such pools is, in fact, recognized as a recommended practice for achieving portfolio diversification and liquidity by the Government Finance Officers Association of the United States and Canada.

Asset levels in One at the end of 2015 were approximately $740 million. The Program provides professional investment services to more than 105 organizations, and performance has been competitive against other permitted alternative investments for Ontario municipalities. All One portfolios are governed by formal investment guidelines requiring that monies be invested only in instruments allowed under the Municipal Act, with additional restrictions being established by the guidelines.

One currently utilizes the professional investment services of MFS Investment Services for the Money Market, Bond, and Corporate Bond Portfolios, and Guardian Capital LP for the Equity Portfolio. Both organizations have billions in assets under management and have a long track record of managing large multi-customer investment pools.

The investment guidelines and manager activities for each investment portfolio are monitored by One staff, an independent third-party investment consultant, as well as the One Advisory Committee, which is comprised primarily of senior public sector officials appointed by LAS and CHUMS. In addition, the program also receives periodic oversight from the Municipal Finance Officers' Association of Ontario (MFOA)/CHUMS and LAS Board of Directors, comprised of municipal finance professionals and municipal administrators and elected officials, respectively.

There is no requirement for municipalities to invest for a specified period in The One Investment Program; money can be invested, withdrawn or transferred at any time, although each of the Portfolios has been established with a certain investment duration in mind. If investment or redemption instructions are provided by 4:00 p.m. on any banking day, the funds are deposited or withdrawn, as the case may be on, the next banking day. The minimum transaction amount is $5,000 for any portfolio. There are no penalties or fees for deposit or withdrawal at any time.

Investors have password protected access to account balances through a secure portion of the One website. Portfolio balances and unit pricing are updated daily.

Investment fees are calculated on a daily basis based on the total balance held in the account, and performance figures provided by One are always posted net of fees. Current One Investment Program annual fees are as follows:

 Money Market - 19 Basis Points  Bond - 40 Basis Points  Universe Corporate Bond - 45 Basis Points  Equity - 60 Basis Points  HISA – 10 basis points

In summary, the One Investment Program offers the following key advantages as an investment option for TRCA:  professional money management;  reduced risk through diversification and regular investment oversight;

146  flexibility and liquidity of investments;  accounting and performance reporting;  legal costs for program related issues;  regulatory compliance guarantee;  low brokerage costs.

To allow for the investment of municipal funds through a co-mingled public sector investment program in order to leverage enhanced returns and reduced administration costs, it is recommended that The One Investment Program be added to TRCA’s list of eligible investments. However, given the current wording within the Rules of Conduct it is necessary that the Rules be changed to permit the One Fund.

Brokerage Account TRCA has maintained a brokerage account with RBC Dominion Securities for a number of years. It is proposed that this account or another account with a competing investment brokerage house be maintained, selected in accordance with TRCA’s procurement policies. However, if the improvement in returns with the One Fund materializes, as anticipated, TRCA will increasingly be placing its investment funds with the One Fund, and relying less on brokerage accounts.

DETAILS OF WORK TO BE DONE Upon approval of the updated investment policy, TRCA will create an investment account with the One Investment Program.

Report prepared by: Michael Tolensky, extension 5965 Emails: [email protected] For Information contact: Michael Tolensky, extension 5965 Rocco Sgambelluri, extension 5232 Emails: [email protected], [email protected] Date: May 30, 2016 Attachments: 1

147 Attachment 1

Toronto and Region Conservation Authority

Investment Policy – June 2016

1. Policy Statement

This policy governs the management of surplus funds and investment portfolio of Toronto and Region Conservation Authority (TRCA) and is established under subsection 2.12 of the Rules of Conduct.

TRCA strives for the optimum utilization of its cash resources within statutory limitations and the basic need to minimize credit, interest and market risks and to preserve capital, while maintaining solvency and liquidity to meet ongoing cash requirements. It is the policy of TRCA to invest funds in a manner which will provide the highest return within the established security framework.

The policy includes all funds that are the responsibility of TRCA, including idle cash, reserves and funds held in trust to the extent allowed by agreement.

2. Standards of Care

2.1 Prudence Investments shall be made with judgment and care, under circumstances then prevailing, which persons of prudence, discretion and intelligence exercise in the management of their own affairs, not for speculation, but for investment, considering the probable safety of their capital as well as the probable income to be derived.

2.2 Ethics and Conflict of Interest Employees involved in the investment process shall refrain from personal business activity that could conflict with the proper execution and management of the investment program, or that could impair their ability to make impartial decisions. Employees shall disclose any material interests in financial institutions with which they conduct business. They shall further disclose any personal financial or investment positions that could be related to the performance of the investment portfolio. Employees shall not undertake personal investment transactions with the same individual with whom business is conducted on behalf of TRCA.

2.3 Delegation of Authority The Chief Financial Officer has overall responsibility for the prudent investment of TRCA’s portfolio and is responsible for the implementation of the investment program and the establishment of investment procedures consistent with this policy. Such procedures shall include explicit delegation of authority to persons responsible for investment transactions. No person may engage in an investment transaction except as provided under the terms of this Policy. The Chief Financial Officer shall be responsible for all transactions undertaken, and shall establish a system of controls to regulate the activities of subordinate staff and shall exercise control over that staff.

148 3. Safekeeping and Custody All securities shall be held for safekeeping with the investment dealer which is a member of the Canadian Investor Protection Fund or financial institution, depending where the transaction takes place. Securities shall be held in the name of Toronto and Region Conservation Authority. The use of a “margin account” to hold securities is prohibited.

The depository shall issue a safekeeping receipt to TRCA listing the specific instrument, rate, maturity and other pertinent information. On a monthly basis, the depository will also provide reports, which list all securities held by TRCA and the book and market value of holdings as of month-end.

Security transactions entered into shall be conducted on a delivery against payment basis. Securities may be held by a third party custodian, designated by the Chief Financial Officer of TRCA and evidenced by safekeeping receipts. The Chief Financial Officer may enter into a securities lending arrangement with the custodian.

4. Internal Controls The Chief Financial Officer shall establish an annual process of independent review by an external auditor, as part of TRCA’s annual audit. This review will provide internal control by ensuring compliance with policies and procedures. The Chief Financial Officer shall develop and maintain all necessary operating procedures for effective control and management of the investment function and reasonable assurance that TRCA’s investments are properly managed and adequately protected.

5. Suitable and Authorized Investments TRCA, under the policies established within the Rules of Conduct is permitted to invest in certain securities as set out by Ontario Regulation 438/97 to the Municipal Act, as amended from time to time. This regulation prescribes the securities in which a municipality may invest. In keeping with the primary objective of TRCA’s investment policy, namely the preservation of capital, permissible investments have been restricted to those of high credit quality and reasonable liquidity.

The portfolio aims for both diversification and near risk-free investments to ensure security of the capital. Emphasis is placed on securities offered by or unconditionally guaranteed by the Government of Canada, a Province of Canada or the six major chartered banks (Royal Bank of Canada, Canadian Imperial Bank of Commerce, Bank of Montreal, Bank of Nova Scotia, Toronto Dominion Bank, and National Bank of Canada).

6. Maximum Maturity To the extent possible, TRCA shall match its investments with anticipated cash flow requirements. Unless matched to a specific cash flow, TRCA will not directly invest in securities maturing more than ten (10) years from the date of purchase. Reserve funds and other funds with longer investment horizons may be invested in securities exceeding ten (10) years if the maturity of such investments is made to coincide as nearly as practicable with the expected use of funds.

149 7. Diversification Investments will be diversified by issuer and by the sector of the economy to which they belong. The Chief Financial Officer may establish maximum amounts and maximum percentages of the portfolio for each issuer and sector from time to time. Investment in a municipal investment pool as allowed by Ontario Regulation 438/97, such as the One Investment Program shall be considered an appropriate method of investment diversification, as they meet all of the aforementioned criteria. Staff is therefore authorized to open a One Investment Program account, in order to invest in accordance with the investment strategy outlined below.

8. Investment Standards The investment portfolio shall be designed with the objective of obtaining a rate of return throughout budgetary and economic cycles, commensurate with the investment risk constraints and the cash flow needs. In order to accomplish this goal, TRCA is permitted to invest through the One Fund or through a TRCA managed brokerage account.

The investment portfolio will be managed in accordance with the parameters specified within this policy. The portfolio should obtain a market average rate of return throughout budgetary and economic cycles, commensurate with the investment risk constraints and the cash flow needs of TRCA. Short-term funds will be compared to the return on the three-month Government of Canada Treasury Bills and the One Investment Program’s Money Market Portfolio. Long-term funds will be compared to Scotia McLeod’s All Government Short Term Bond Index and the One Bond Portfolio.

9. Investment Strategy – One Fund The investment portfolio will be designed to obtain, at a minimum, market rates of return taking into account TRCA’s investment risk tolerance, constraints and cash flow needs and the maximum holdings of any one type of investment as a percentage of the total portfolio is as follows:

Max Intended Portfolio Investment Approach Holdings TRCA Duration Holdings HISA Deposits with a (High Schedule I Canadian Interest 1+ months  Bank Deposits N/A Bank under a master Savings LAS/CHUMS accounts Account)  Canadian treasury bills Preserve capital and  High quality commercial N/A Money 1 - 18 maintain liquidity while papers Market months maximizing short-term  Banker’s acceptances income  Floating rate notes 18 months Provide a higher return  Federal, provincial and - 3 years over longer investment municipal bonds N/A Bond horizons through  High quality bank paper diversified investments  Bank guaranteed debt

150 Max Intended Portfolio Investment Approach Holdings TRCA Duration Holdings Universe Investment in highly  Canadian corporate bonds Corporate rated corporate bonds 25% 4+ years  Federal, provincial and Bond maturing over a wide municipal bonds time frame A diversified conservatively Canadian managed portfolio of 10% 5+ years a) Canadian equity securities Equity equity securities issued by Canadian corporations

Should TRCA be notified that the maximum percentage has been exceeded at any point during the year the Chief Financial Officer is obligated to remedy the situation as quickly as it is reasonable to do so.

10. Investment Strategy – TRCA Managed Account TRCA’s investment strategy is an active strategy and the basis used by staff to determine whether market yields are being achieved shall be appropriate debt market indices as published by leading Canadian investment firms.

To limit the risk on capital, investments made outside of the One Fund are restricted to those which are rated within the two highest rating categories of either the Dominion Bond Rating Service (A (mid) or higher) or the S&P Bond Rating Agency (A or higher). Money market transactions are restricted to R2 high or higher. Equity transactions are forbidden to be made outside of the One Fund. Term Deposits and Investment Certificates issued by a Schedule 1 Chartered Bank are eligible investments.

Where an instrument is split rated, the lower rating shall be applied for the purpose of compliance with these constraints. In the event of a downgrade of credit rating by either agency, the Advisor will immediately notify TRCA and the Chief Financial Officer has one week to remedy the portfolio. If corporate bond holdings exceed 25% of the portfolio external to the One Fund, the advisor will immediately notify TRCA and the Chief Financial Officer has one week to remedy the portfolio.

11. Broker/Advisor Investment Dealers acting as custodian for TRCA must be members of the Investment Industry Regulatory Organization of Canada (IIROC) and be members of the Canadian Investor Protection Fund. Individual investment advisor(s) who are employed by an IIROC firm shall be selected from time to time on the basis of competence, quality of service and cost, such selections being consistent with the TRCA’s Purchasing Policies.

12. Reporting The Chief Financial Officer shall submit an investment report to the board at least annually, including a management summary that provides an analysis of the status of the current investment portfolio and transactions made over the last year. This management summary will be prepared in a manner that will allow the board to ascertain whether investment activities during the reporting period have conformed to the investment policy.

151 Glossary of Terms:

CHUMS Financing Corporation: one of the entities that operates The One Investment Program, a co-mingled investment strategy in which local governments and the broader Ontario public sector can invest.

Credit Risk: the risk to an investor that an issuer will default in the payment of interest and/or principal on a security.

Diversification: a process of investing assets among a range of security types by sector, maturity, and quality rating.

Duration: a measure of the timing of the cash flows, such as the interest payments and the principal repayment, to be received from a given fixed-income security. This calculation is based on three variables: term to maturity, coupon rate, and yield to maturity. The duration of a security is a useful indicator of its price volatility for given changes in interest rates.

Interest Rate Risk: the risk associated with declines or rises in interest rates that cause an investment in a fixed-income security to increase or decrease in value.

Liquidity: a measure of an asset’s convertibility to cash.

Local Authorities Services (LAS): one of the entities that operates The One Investment Program, a co-mingled investment strategy in which local governments and the broader Ontario public sector can invest.

Market Risk: the risk that the value of a security will rise or decline as a result of changes in market conditions.

Market Value: current market price of a security.

Maturity: the date on which payment of a financial obligation is due. The final stated maturity is the date on which the issuer must retire a bond and pay the face value to the bondholder. See “Weighted Average Maturity”.

Weighted Average Maturity (WAM): the average maturity of all the securities that comprise a portfolio.

152 RES.#C9/16 - 2015 AUDITED FINANCIAL STATEMENTS The 2015 audited financial statements are recommended for approval.

Moved by: Ronald Chopowick Seconded by: Colleen Jordan

THE BOARD RECOMMENDS TO THE AUTHORITY THAT the transfer of funds from reserves to surplus in the amount of $2,428,000, as outlined in Note 11, "Accumulated surplus" to the financial statements (Attachment 1), be approved;

AND FURTHER THAT the 2015 audited financial statements, as presented in Attachment 1, be approved, signed by the Chair and Secretary-Treasurer of Toronto and Region Conservation Authority (TRCA), and distributed to each member municipality and the Minister of Natural Resources and Forestry, in accordance with subsection 38 (3) of the Conservation Authorities Act. CARRIED RATIONALE The 2015 TRCA audited financial statements are presented for approval. The accounting firm Grant Thornton LLP has completed its audit and has included with the financial statements an unqualified, independent auditor's report. The audited financial statements are presented as Attachment 1 to the report. A representative from Grant Thornton LLP will be in attendance to present the auditor's report on the 2015 financial statements.

Auditor Communication on Audit Strategy and Results Included as Attachment 2, is a report from Grant Thornton LLP addressed to the Budget/Audit Advisory Board (BAAB), entitled, "Report to the Budget/Audit Advisory Board - communication of audit strategy and results". This report addresses various matters, including the auditors approach to the audit, quality control and independence, audit results, reportable matters, status report on the audit process and other matters which may be of interest to the members. The section of the report entitled "Reportable Matters" includes an internal control recommendation regarding the timeliness of bank reconciliations. The conditions which have caused the delays in completing bank reconciliations are being addressed.

Financial Statement Structure The Statement of Operations and Accumulated Surplus includes revenues, expenses and TRCA’s surplus position for the year, but excludes the impact of tangible capital asset (TCA) expenditures and disposal proceeds. The Statement of Financial Position reports financial assets and liabilities, which define the net assets of the organization. Further, the Statement of Financial Position discloses non-financial assets. The Statement of Changes in Net Financial Assets reconciles the surplus for the year to the change in net assets. Finally, the Statement of Cash Flows itemizes the sources of cash inflows and outflows during the year, classified as either operating, investing or capital in nature.

As previously noted, the Statement of Operations and Accumulated Surplus do not include tangible capital asset expenditures. Note 19 in the audited financial statements outlines the modifications to the approved budget required in order to provide a more meaningful comparison to actual operating results. Also, to assist with the comparison of results to budget, the actual amortization for the year has been added to the approved budget.

153 Changes to the Financial Statement Presentation In order to improve the presentation a number of changes were introduced to the 2015 financial statement format. Attachment 3 provides a comprehensive list of these changes.

Tangible Capital Assets As at December 31, 2015, the gross book value of the tangible capital assets was $588.6 million of which $143.6 million has been amortized. The unamortized balance of $445.0 million is reported in the statement of financial position as the net book value of tangible capital assets. Land, which is carried on the books at a cost of $344.2 million, is not amortized.

During 2015, $16.5 million in TCA was acquired and assets having a book value (original cost) of $1.2 million have been disposed, resulting in a net loss of $0.3 million. The schedule of "Tangible Capital Assets" included in Note 10 to the audited financial statements itemizes the various components of TCA, including contributed TCA in the amount of $0.9 million.

Operating Surplus / Deficit Position Using a "cash basis" approach which compares available funding to actual expenditures incurred including TCA, the same basis upon which the annual budget was developed and presented to the members for approval, TRCA's cumulative operating surplus position as of December 31, 2015 is $0.4 million. This amount is reported in Note 11 of the financial statements under the caption of "Unallocated accumulated surplus (deficit)" and compares to a deficit position of $1 million as of December 31, 2014. The increase in surplus position from 2014, approximately $1.4 million, results mainly from revenues exceeding targets as outlined in the Financial Progress Report presented to the Budget/Audit Advisory Board at its meeting held on April 1, 2016. In that report to BAAB, the projected surplus for the year was reported at $0.8 million. However, additional accruals for work undertaken on behalf of Toronto Waterfront Revitalization Corporation and Infrastructure Ontario processed after the board report had been released increased the unallocated surplus for the year to $1.4 million, as reported in note 11.

Reserves The status of TRCA reserves is also presented in Note 11 of the financial statements. Reserve balances totaled $3,791 million at the end of the year, a reduction of $2.4 million from 2014. Some of the more significant reserve transactions that occurred in 2015 are as follows:  The office accommodation reserve was drawn down by $1.9 million. Approximately $2.4 million was spent to finalize the move to the 101 Exchange Avenue office and $0.5 million was transferred from surplus to this reserve for the purpose of ensuring funds are available in the latter years of the 101 Exchange lease to ease the impact of the lease payments on the operating budget.

 The operating contingency reserve was drawn down by $0.5 million, of which approximately $0.4 million was spent on capital improvements to the Boyd Centre.

Summary From a "bottom line" perspective the 2015 operating results are favourable. TRCA has an unallocated surplus of $0.4 million and the operating contingency of $2.8 million.

Report prepared by: Rocco Sgambelluri, extension 5232 For Information contact: Rocco Sgambelluri, extension 5232; Michael Tolensky, extension 5965 Emails: [email protected]; [email protected] Date: June 1, 2016 Attachments: 3

154 Attachment 1

Financial Statements

Toronto and Region Conservation Authority

December 31, 2015

155

Contents

Page

Independent Auditor’s Report 1 - 2

Statement of Financial Position 3

Statement of Operations and Accumulated Surplus 4

Statement of Changes in Net Financial Assets 5

Statement of Cash Flows 6

Notes to the Financial Statements 7 - 17

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Toronto and Region Conservation Authority Statement of Financial Position (in thousands of dollars) December 31 2015 2014

Assets

Financial Assets Cash (note 4) $ 14,785 $ 10,906 Investments (note 5) 19,751 19,187 Receivables (note 6) 13,446 15,868

47,982 45,961

Liabilities Payables and accrued liabilities (note 7) 10,246 13,411 Vacation pay entitlements (note 8) 2,493 2,452 Deferred revenue (note 9) 33,823 27,712

46,562 43,575

Net Financial Assets 1,420 2,386

Non-Financial Assets Other assets 554 952 Tangible capital assets (note 10) 445,019 435,959 445,573 436,911

Accumulated Surplus (note 11) $ 446,993 $ 439,297

Contingent liabilities and commitments (note 18)

On behalf of Toronto and Region Conservation Authority

______Chair ______Secretary Treasurer

See accompanying notes to the financial statements. 3

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Toronto and Region Conservation Authority Statement of Operations and Accumulated Surplus (in thousands of dollars) Year Ended December 31 2015 2015 2014 Budget Actual Actual (note 19)

Revenue Government funding (note 12) $ 83,314 $ 72,620 $ 72,748 Authority generated (note 13) 32,272 29,265 27,610 Investment income 600 612 591 Net loss on sale of tangible capital assets - (292) (74) 116,186 102,205 100,875

Expenses (note 14) Watershed Studies and Strategies 2,915 2,005 2,303 Water Risk Management 27,861 21,422 17,799 Regional Biodiversity 14,855 11,346 11,988 Greenspace Securement and Management 6,847 5,508 5,834 Tourism and Recreation 21,191 21,693 23,528 Planning and Development Review 8,156 7,882 7,372 Education and Outreach 10,869 8,185 8,658 Sustainable Communities 10,349 8,586 8,865 Corporate Services 7,275 7,882 7,507 110,318 94,509 93,854

Net Surplus $ 5,868 $ 7,696 $ 7,021

Accumulated Surplus, beginning of year 439,297 439,297 432,276

Accumulated Surplus, end of year $ 445,165 $ 446,993 $ 439,297

See accompanying notes to the financial statements. 4

158

Toronto and Region Conservation Authority Statement of Changes in Net Financial Assets (in thousands of dollars) Year Ended December 31 2015 2015 2014 Budget Actual Actual (note 19)

Net surplus for the year $ 5,868 $ 7,696 $ 7,021 Acquisition of tangible capital assets (14,831) (15,587) (13,528) Contributed tangible capital assets - (887) (1,114) Net loss on sale of tangible capital assets - 292 74 Proceeds on disposal of tangible capital assets - 20 51 Amortization 6,810 7,102 6,771 Change in other assets - 398 (331)

Decrease in net financial assets (2,153) (966) (1,056)

Net financial assets, beginning of year 2,386 2,386 3,442

Net financial assets, end of year $ 233 $ 1,420 $ 2,386

See accompanying notes to the financial statements. 5

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Toronto and Region Conservation Authority Statement of Cash Flows (in thousands of dollars) Year Ended December 31 2015 2014

Operating

Net surplus for the year $ 7,696 $ 7,021 Non-cash charge to operations Amortization 7,102 6,771 Net loss on sale of tangible capital assets 292 74 Contributed tangible capital assets (887) (1,114) 14,203 12,752 Change in non-cash working capital Receivables 2,422 (1,012) Other assets 398 (331) Payables and accrued liabilities (3,165) 3,909 Vacation pay entitlements 41 300 Deferred revenue 6,111 (203) 20,010 15,415

Investing

Purchase of investments (4,829) (5,024) Proceeds on maturity of investments 4,265 3,867 (564) (1,157)

Capital

Purchase of tangible capital assets (15,587) (13,528) Proceeds of disposal of tangible capital assets 20 51 (15,567) (13,477)

Net increase in cash 3,879 781

Cash, beginning of year 10,906 10,125

Cash, end of year $ 14,785 $ 10,906

See accompanying notes to the financial statements. 6

160

Toronto and Region Conservation Authority Notes to the Financial Statements (in thousands of dollars) December 31, 2015

1. Nature of operations

Toronto and Region Conservation Authority (“TRCA”) is established under the Conservation Authorities Act of Ontario to further the conservation, restoration, development and management of natural resources, other than gas, oil, coal and minerals for the nine watersheds within its area of jurisdiction. TRCA’s area of jurisdiction includes areas in the City of Toronto, the Regional Municipalities of Durham, Peel and York (including lower-tier municipalities), the Township of Adjala-Tosorontio and Town of Mono. TRCA is a registered charitable organization and is exempt from income taxes under the Canadian Income Tax Act.

2. Summary of significant accounting policies

The financial statements for TRCA are the responsibility of and prepared by management in accordance with Canadian public sector accounting standards (PSAS) as established by the Public Sector Accounting Board, and include the following significant accounting policies:

Basis of accounting The financial statements are prepared using an accrual basis of accounting which recognizes the effect of transactions and events in the period in which the transactions and events occur, regardless of whether there has been a receipt or payment of cash or its equivalent. Accrual accounting recognizes a liability until the obligation(s) or condition(s) underlying the liability is partly or wholly satisfied. Accrual accounting recognizes an asset until the future economic benefit underlying the asset is partly or wholly used or lost.

Revenue recognition Government funding including transfers, municipal capital and operating levies, grants, contract services and management fees are recognized in the financial statements when the payments are authorized and all eligibility criteria have been met, except when there is a stipulation that gives rise to an obligation that meets the definition of a liability. In that case, the funding is recorded as deferred revenue and recognized as revenue as the stipulations are met.

Authority generated revenues including property rental income, contract services, admissions and parking, permits (development, camping, picnic, commercial filming and photography), environmental assessments, programs (education, family and community), events (weddings, festivals and corporate events), athletic fees and equipment rentals, program and event sponsorships, product sales (nursery, food, beverage and merchandise) and membership fees are recognized as revenue in the period in which the related services are performed. Amounts collected for which the related services have not been performed are recorded as deferred revenue and recognized as revenue when the related services are performed. Unrestricted donations are recorded as revenue in the period they are received or receivable, when a reasonable estimate can be made of the amount involved. Externally restricted donations, including funds received from The Living City Foundation, are deferred and recognized as revenue in the year in which the related expenses are recognized. Donated tangible capital assets are recorded at fair market value, when fair market value can be reasonably estimated.

Cash Cash includes cash on hand and deposits in banks.

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Toronto and Region Conservation Authority Notes to the Financial Statements (in thousands of dollars) December 31, 2015

2. Summary of significant accounting policies (continued)

Investments Investments, which consist of guaranteed investment certificates and government, financial institution and corporate bonds, are recorded at cost. Investment income is recognized when earned. Any discount or premium arising on purchase is amortized over the period to maturity. If there is a permanent loss in value, the investment will be written down to recognize the loss. The write-down would be included in the statement of operations.

Other assets Other assets include prepaid expenses and inventory. Inventories of merchandise and food for resale are valued at the lower of cost and net realizable value. Nursery inventory is valued at the lower of cost and replacement value. Cost is determined on a first-in, first-out basis.

Tangible capital assets Tangible capital assets are recorded at cost less accumulated amortization and write-downs, if any, which includes amounts directly attributable to acquisition, construction development, or betterment of the asset. Contributed tangible capital assets are recorded at fair market value at the date of contribution. Amortization is provided on a straight-line basis over the estimated useful life for all assets (except land, which is not amortized, and vehicles, which are amortized on a declining balance basis) as follows:

Infrastructure 10-50 years Buildings and building improvements 10-55 years Land improvements 20-40 years Machinery and equipment 5-12 years Vehicles 20-30% declining balance

Assets under construction are not amortized until the asset is available for productive use.

TRCA has a collection of art and historical buildings. These are not recognized in the financial statements.

When a capital asset no longer contributes to TRCA’s ability to provide services or the value of the future economic benefits associated with the capital asset is less than its net book value, the carrying value of the capital asset is reduced to reflect the asset’s value.

Contaminated sites Contaminated sites are the result of contamination being introduced in air, soil, water or sediment of a chemical, organic, or radioactive material or live organism that exceed an environmental standard. A liability for remediation of contaminated sites is recognized, net of any expected recoveries, when all of the following criteria are met: a) an environmental standard exists; b) contamination exceeds the environmental standard; c) the organization is directly responsible or accepts responsibility for the liability; d) future economic benefits will be given up; and e) a reasonable estimate of the liability can be made. Changes in this estimate are recorded in TRCA’s statement of operations.

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Toronto and Region Conservation Authority Notes to the Financial Statements (in thousands of dollars) December 31, 2015

2. Summary of significant accounting policies (continued)

Employee pension plan The cost of the multi-employer defined benefit pension plan is recognized as the required contributions for employees’ services are rendered in the period.

Reserves TRCA sets up internal reserves to finance the cost of new and replacement vehicles, equipment and office accommodation, the maintenance of TRCA’s tree donation program, and operating contingencies in order to ensure funds are available for financial relief in the event of a significant loss of revenues or other financial emergency for which no other source of funding is available. These reserves are replenished from net assets as directed by the Board. Increases and decreases in reserves are not recorded in the statement of operations.

Use of estimates The preparation of financial statements, in conformity with PSAS, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenue and expenses during the reporting period. Accounts subject to estimates include allowance for doubtful accounts, accrued liabilities and tangible capital assets. Actual results could differ from those estimates.

Accounting standards and amendments issued but not yet effective

PS3450 – Financial Instruments In June 2011, the Public Sector Accounting Standards Board released Section PS3450, Financial Instruments. This standard establishes how to account for and report all types of financial instruments, including derivatives.

This standard will be effective or periods beginning on or after April 1, 2019. TRCA will evaluate the impact of the change to its financial statements based on the characteristics of its financial instruments at the time of adoption.

3. Adoption of a new accounting standard

TRCA adopted Public Sector Accounting Standards Board Standard PS 3260 Liability for Contaminated Sites effective January 1, 2014. Under PS 3260, contaminated sites are defined as the result of contamination being introduced in air, soil, water or sediment of a chemical, organic, or radioactive material or live organism that exceeds an environmental standard. This Standard relates to sites that are not in productive use and sites in productive use where an unexpected event resulted in contamination. The adoption of PS 3260 had no impact on TRCA’s financial statements.

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163

Toronto and Region Conservation Authority Notes to the Financial Statements (in thousands of dollars) December 31, 2015

4. Cash – CTC Source Protection Region

The Credit Valley, Toronto and Region and Central Lake Ontario Source Protection Region (“CTC Source Protection Region”) was established under the Clean Water Act of Ontario to ensure communities protect their drinking water supplies through prevention – by developing collaborative, watershed-based source protection plans that are locally driven and based on science. The CTC Source Protection Region’s jurisdiction includes the Credit Valley, Toronto and Region and Central Lake Ontario source protection areas, which are represented by the respective conservation authorities under the Clean Water Act. The Minister of the Environment and Climate Change provided funding of $728 (2014 - $691) for source protection projects to the TRCA, which delivers the management function on behalf of the region. Unspent funding of $844 (2014 - $948) is held in a separate bank account, which is included on the statement of financial position as cash, with a corresponding deferred revenue balance.

5. Investments 2015 2014

Provincial bonds $ 6,771 $ 6,476 Interest rates: 1.63% - 3.62% (2014: 1.78% - 3.62%) Years of maturity: 2017 - 2021 (2014: 2015 - 2019) Guaranteed investment certificates 4,880 4,701 Interest rates: 1.45% - 2.46% (2014: 1.70% - 2.46%) Years of maturity: 2016 - 2020 (2014: 2015 -2019) Financial institution bonds 4,295 5,112 Interest rates: 1.90% - 3.51% (2014: 1.74% - 3.51%) Years of maturity: 2016 - 2017 (2014: 2015 - 2017) Corporate bonds 2,220 2,898 Interest rates: 3.12% - 3.30% (2014: 1.97% - 3.42%) Years of maturity: 2016 - 2019 (2014: 2015 - 2019) Municipal bonds 1,585 - Interest rates: 1.58% - 1.85% (2014: Not applicable) Years of maturity: 2020 - 2021 (2014: Not applicable) ______$ 19,751 $ 19,187

The fair market value of the investments at December 31, 2015 is $19,931 (2014 - $19,364).

6. Receivables 2015 2014 Government funding Municipal $ 7,159 $ 7,066 Federal 1,341 1,065 Provincial 629 1,180 Authority generated Trade and other 2,238 5,013 The Living City Foundation (note 17) 2,025 1,463 Employee loans 54 81 $ 13,446 $ 15,868

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Toronto and Region Conservation Authority Notes to the Financial Statements (in thousands of dollars) December 31, 2015

7. Liabilities for contaminated sites

TRCA reports environmental liabilities related to the management and remediation of contaminated sites where TRCA is obligated or likely obligated to incur such costs. A contaminated site liability of $nil (2014 – $nil) has been recorded based on environmental assessments or estimations for those sites where an assessment has not been conducted. TRCA’s ongoing efforts to assess contaminated sites may result in additional environmental remediation liabilities related to newly identified sites, or changes in the assessments or intended use of existing sites. Any changes to the TRCA’s liabilities for contaminated sites will be accrued in the year in which they are assessed as likely and reasonably estimable.

8. Vacation pay entitlements

In accordance with TRCA practices, employees are entitled to payment equal to 100% of the value of their accrued vacation days upon leaving TRCA. The liability for the accumulated vacation days represents management's best estimate as to TRCA's future liability.

9. Deferred revenue 2015 2014

Government funding (a) $ 21,948 $ 17,912 Authority generated (b) 11,875 9,800 $ 33,823 $ 27,712

(a) Government funding 2015 2014 Municipal Capital levies $ 12,919 $ 11,018 Contract services 2,828 3,442 Other 840 (196) Provincial 1,850 1,546 Federal 447 321 Revenue sharing policy (i) 3,064 1,781 $ 21,948 $ 17,912

(i) The proceeds on the sale of properties of $1,853 (2014 - $987) are attributed to the province and the member municipalities on the basis of their original contribution when the properties were acquired. The Ministry of Natural Resources and Forestry reserves the right to direct the purpose to which the provincial share of funds may be applied or to request a refund. The balance must always be maintained in proportion to the original contribution by the province and TRCA, represented by the member municipalities. TRCA is permitted to withdraw the municipal share of the funds provided that the corresponding provincial share is either matched by other sources of funding or returned to the province. In the current year, $579 (2014 - $151) was applied to the Greenspace acquisition project and $7 (2014 - $6) was applied to the revised project for the Etobicoke Motel Strip. Interest of $16 (2014 - $10) has been imputed on the unspent balance of the funds.

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165

Toronto and Region Conservation Authority Notes to the Financial Statements (in thousands of dollars) December 31, 2015

9. Deferred revenue (continued)

(b) Authority generated 2015 2014

Cash in lieu and compensation $ 3,190 $ 3,307 Master environmental servicing plans 2,201 1,534 Property easements 1,622 - Oak Ridges Corridor Park 1,464 1,177 Contract services 703 459 Wedding and event deposits 446 423 Other 2,249 2,900 $ 11,875 $ 9,800

10. Tangible capital assets

2015 Opening Additions Transfers Disposals Closing Cost Land $ 340,329 $ 3,872 $ 37 $ - $ 344,238 Infrastructure 149,370 3,958 502 - 153,830 Buildings and building improvements 51,485 2,110 3,923 (281) 57,237 Land improvements 13,383 13 - - 13,396 Machinery and equipment 7,864 2,052 - (566) 9,350 Vehicles 4,382 578 - (217) 4,743 Assets under construction 6,544 3,891 (4,462) (174) 5,799 $ 573,357 $ 16,474 $ - $ (1,238) $ 588,593

2015 Opening Amortization Disposal Closing Accumulated Amortization Infrastructure $ 100,690 $ 3,406 $ - $ 104,096 Buildings and building improvements 25,421 1,842 (149) 27,114 Land improvements 4,442 549 - 4,991 Machinery and equipment 3,659 886 (566) 3,979 Vehicles 3,186 419 (211) 3,394 $ 137,398 $ 7,102 $ (926) $ 143,574

2014 2015 Net Book Value Land $ 340,329 $ 344,238 Infrastructure 48,680 49,734 Buildings and building improvements 26,064 30,123 Land improvements 8,941 8,405 Machinery and equipment 4,205 5,371 Vehicles 1,196 1,349 Assets under construction 6,544 5,799 $ 435,959 $ 445,019

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Toronto and Region Conservation Authority Notes to the Financial Statements (in thousands of dollars) December 31, 2015

10. Tangible capital assets (continued)

In the current year, TRCA sold tangible capital assets for $20 (2014 - $51), resulting in a net loss of $292 (2014 - $74). The value of contributed tangible capital assets within Greenspace Securement and Management received during the year is $887 (2014 - $1,114).

11. Accumulated surplus

TRCA segregates its accumulated surplus into the following internally allocated categories:

2015 2014

Tangible capital assets $ 445,019 $ 435,959 Unfunded vacation pay entitlements (2,264) (1,887) Unallocated accumulated surplus (deficit) 447 (994) Reserves Operating contingency 2,834 3,336 Office accommodation 842 2,747 Vehicles and equipment 106 127 Tree donation program 9 9 3,791 6,219 $ 446,993 $ 439,297

12. Government funding 2015 2015 2014 Budget Actual Actual Municipal Capital levies $ 42,692 $ 33,721 $ 36,065 Contract services 17,956 16,190 15,589 Operating levies 13,285 13,288 12,851 Other 4,532 3,890 2,109 Provincial 3,572 3,670 4,160 Federal 1,277 1,861 1,974 $ 83,314 $ 72,620 $ 72,748

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167

Toronto and Region Conservation Authority Notes to the Financial Statements (in thousands of dollars) December 31, 2015

13. Authority generated 2015 2015 2014 Budget Actual Actual Watershed Studies and Strategies Watershed planning and reporting $ 29 $ 28 $ 13 Climate science 18 - 23 Water Risk Management Erosion and flood management 100 430 118 Water resource science 234 113 114 Regional Biodiversity Biodiversity monitoring 167 137 150 Ecosystem management 110 150 83 Restoration and regeneration 1,949 821 1,025 Greenspace Securement and Management Greenspace management 1,375 383 271 Greenspace securement 3,150 2,405 1,393 Rentals 2,253 2,310 2,643 Tourism and Recreation Camping and picnic permits 2,634 3,251 2,744 Site admission and athletic fees 2,986 2,570 2,734 Wedding and corporate events 1,929 1,940 1,965 Events and festivals 812 865 786 Film and photography permits 60 163 75 Heritage Village 1,488 1,680 1,480 Black Creek historic brewery 49 55 78 Trails 212 178 271 Planning and Development Review Development planning 4,492 4,817 4,546 Environmental assessments 799 995 808 Education and Outreach Educational programs 4,573 3,118 3,432 Sustainable Communities Living City transition programs 2,242 1,949 1,816 Community engagement 424 449 568 Corporate Services 187 458 474

$ 32,272 $ 29,265 $ 27,610

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Toronto and Region Conservation Authority Notes to the Financial Statements (in thousands of dollars) December 31, 2015

14. Expenses by object 2015 2015 2014 Budget Actual Actual

Compensation $ 54,949 $ 55,866 $ 53,682 Contract services 38,139 23,046 24,550 Materials and supplies 8,324 6,293 6,682 Utilities 1,008 1,189 1,190 Property taxes 1,088 1,013 979 Amortization of tangible capital assets 6,810 7,102 6,771 $ 110,318 $ 94,509 $ 93,854

15. Public sector salary disclosure

TRCA is subject to The Public Sector Salary Disclosure Act, 1996. Salaries and taxable benefits for the 47 employees (2014 – 49 employees) that have been paid by TRCA and reported to the Province of Ontario in compliance with this legislation can be obtained from the Ontario Ministry of Finance or upon request from TRCA.

16. Employee pension plan

TRCA makes contributions to the Ontario Municipal Employees Retirement System (OMERS), which is a multi-employer pension plan, on behalf of its qualifying full and part-time employees. The plan is a defined benefit plan, which specifies the amount of the retirement benefit to be received by the employees based on the length of service, pension formula and best 60 months of earnings. Employees and employers contribute equally to the plan.

Because OMERS is a multi-employer pension plan, any pension plan surpluses or deficits are a joint responsibility of all Ontario municipalities and their employees. As a result, TRCA does not recognize any share of the OMERS pension actuarial deficit of $6,977 million (2014 - $7,078 million), as TRCA’s portion of the amount is not determinable. Employers’ current service contributions to the OMERS pension plan in the amount of $3,705 (2014 – $3,678) are included as compensation in the current year.

17. The Living City Foundation

During the year The Living City Foundation (the “Foundation”) contributed $1,857 (2014 - $1,781) to TRCA programs, representing a significant portion of the Foundation’s donations. The Foundation is an independent, non-controlled registered charitable organization which has its own Board. As such, the TRCA’s financial statements do not include the activities of the Foundation. As at December 31, 2015, the Foundation has an externally restricted fund balance of $2,638 (2014 - $2,475), which is to be primarily used for undertaking TRCA projects and an operating fund deficit of $502 (2014 - $417). The receivable balance from the Foundation is non-interest bearing, unsecured and has no specified repayment terms.

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Toronto and Region Conservation Authority Notes to the Financial Statements (in thousands of dollars) December 31, 2015

18. Contingent liabilities and commitments

(a) Legal actions and claims TRCA has received statements of claim as defendant under various legal actions resulting from its involvement in land purchases, fatalities, personal injuries and flooding on or adjacent to its properties. TRCA maintains insurance coverage against such risks and has notified its insurers of the legal actions and claims. It is not possible at this time to determine the outcome of these claims and, therefore, no provision has been made in these financial statements.

(b) Land expropriations TRCA has completed the acquisition of lands required to undertake various projects. There are two projects where TRCA has acquired lands under the Expropriations Act. The first project is the Revised Project for the Etobicoke Motel Strip. Properties required for this project were obtained through expropriation from five owners. Funding was obtained from the City of Etobicoke and the Municipality of Metropolitan Toronto (now collectively known as the City of Toronto) and the Province of Ontario. To date four of the expropriations have been settled and the compensation has been paid.

The second project is the Mimico Waterfront Linear Park Project. This project is funded by the Toronto Waterfront Revitalization Corporation. One property was expropriated for this project and one property was acquired under Section 30 of the Expropriations Act. Both transactions have been settled and compensation has been paid. The additional payment for costs associated with the expropriated property is not determinable.

(c) Lease commitments TRCA has entered into agreements to lease premises and equipment for various periods until 2021. Minimum lease payments in aggregate and for each of the next five years are as follows:

2016 2017 2018 2019 2020 Thereafter Total $1,067 $1,067 $1,018 $ 979 $ 979 $ 489 $5,599

(d) Loan guarantee TRCA and the City of Toronto have jointly and severally provided a loan guarantee in the amount of $7.5 million to the Evergreen Foundation for the Don Valley Brick Works restoration project. The loan guarantee was renegotiated in 2014, reducing the amount of the guarantee to $4.3 million for 2015. As of December 31, 2015, Evergreen Foundation had received advances in the amount of $4.3 million ($4.3 million as of December 31, 2014) from its financing institutional lender. The agreement requires annual reductions in the amounts guaranteed until June 30, 2023.

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170

Toronto and Region Conservation Authority Notes to the Financial Statements (in thousands of dollars) December 31, 2015

19. Budget figures

PSAS requires a comparison of TRCA’s results for the year with those originally planned on the same basis as that used for the actual results. The budget in the statement of operations has been adjusted to be presented on a consistent basis as actual results. Below is a reconciliation of the figures from the approved budget to the budget on the financial statements:

Approved Tangible budget per Approved Capital financial Budget Reclassification Amortization Assets statements

Total revenues $ 119,036 $ (2,850) $ $ $ 116,186

Expenses Watershed Studies and Strategies 4,553 (1,646) 10 (2) 2,915 Water Risk Management 27,358 (159) 1,975 (1,313) 27,861 Regional Biodiversity 15,129 (47) 56 (283) 14,855 Land Securement and Management 9,582 (34) 912 (3,613) 6,847 Tourism and Recreation 22,611 (1,225) 2,595 (2,790) 21,191 Planning and Development Review 8,141 29 12 (26) 8,156 Education and Outreach 11,975 120 345 (1,571) 10,869 Sustainable Communities 7,321 3,013 35 (20) 10,349 Corporate Services 11,668 (51) 867 (5,209) 7,275 $ 118,338 $ - $ 6,807 $ (14,827) $ 110,318

Net surplus $ 698 $ 5,868

20. Comparative figures

Certain comparative figures have been reclassified to conform with the financial statement presentation adopted in the current year.

17

171 Attachment 2

Report to the Budget/Audit Advisory Board—communication of audit strategy and results

Toronto and Region Conservation Authority For the year ended December 31, 2015

172 CONFIDENTIAL

June 10, 2016 Grant Thornton LLP Suite 200 15 Allstate Parkway Markham, ON L3R 5B4

T +1 416 366 0100 F +1 905 475 8906 www.GrantThornton.ca To the members of the Budget/Audit Advisory Board of Toronto and Region Conservation Authority

We are pleased to report that we have now substantially completed our audit of the financial statements of Toronto and Region Conservation Authority (hereinafter the "Authority" or “TRCA”) for the year ended December 31, 2015. We enclose this report as a means to engage in effective two way communication with you regarding our financial statement audit. This communication will assist the Budget/Audit Advisory Board (hereinafter referred to as the Committee) in understanding our overall audit strategy and results of audit procedures and includes comments on misstatements, significant accounting policies, sensitive estimates and other matters.

This communication has been prepared to comply with the requirements outlined in CAS 260 Communication with those Charged with Governance. The information in this document is intended solely for the information and use of the Committee, Board of Directors and management. It is not intended to be distributed or used by anyone other than these specified parties.

We express our appreciation for the cooperation and assistance received from the management and staff of the entity during the course of our audit.

If you have any particular comments or concerns, please do not hesitate to raise them at our scheduled meeting.

Yours sincerely, Grant Thornton LLP

Anita Ferrari, BComm, FCPA, FCA Partner

cc: Brian Denney, Chief Executive Officer Rocco Sgambelluri, Chief Financial Officer

Audit • Tax • Advisory © Grant Thornton LLP. A Canadian Member of Grant Thornton International. All rights reserved. 173

Contents

Page Achieving effective governance 1 Quality control and independence 2 Our audit approach 3 Status of the audit 6 Audit results 7 Reportable matters 9 Technical updates 11 Appendix A—Draft Management representation letter 12 Appendix B—PSAB Accounting developments 17 Appendix C—Engagement Letter 22

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Achieving effective governance

There are several fundamental components of effective governance. Those charged with governance play a key role in achieving strong governance, particularly with respect to financial reporting.

Roles in ensuring strong financial reporting Role of the  Help set the tone for the organization by emphasizing honesty, ethical behaviour and fraud Committee prevention  Oversee management, including ensuring that management establishes and maintains internal controls to provide reasonable assurance regarding reliability of financial reporting  Recommend the nomination and compensation of external auditors to the Board of Directors  Directly oversee the work of the external auditors including reviewing and discussing the audit plan

Role of the  Help set the tone for the organization by emphasizing honesty, ethical behaviour and fraud Board of prevention Directors  Oversee management, including ensuring that management establishes and maintains internal controls to provide reasonable assurance regarding reliability of financial reporting

Role of  Prepare financial statements in accordance with Canadian public sector accounting management standards  Design, implement and maintain effective internal controls over financial reporting processes, including controls to prevent and detect fraud  Exercise sound judgment in selecting and applying accounting policies  Prevent, detect and correct errors, including those caused by fraud  Provide representations to external auditors  Assess quantitative and qualitative impact of misstatements discovered during the audit on fair presentation of the financial statements

Role of  Provide an audit opinion that the financial statements are in accordance with Canadian Grant Thornton public sector accounting standards LLP  Conduct our audit in accordance with Canadian generally accepted auditing standards  Maintain independence and objectivity  Be a resource to management and to those charged with governance  Communicate matters of interest to those charged with governance  Establish an effective two-way communication with those charges with governance, to report matters of interest to them and obtain their comments on audit risk matters.

Audit • Tax • Advisory © Grant Thornton LLP. A Canadian Member of Grant Thornton International. All rights reserved. CONFIDENTIAL 175 Report to the Budget/Audit Advisory Board —communication of audit strategy and 2 results Toronto and Region Conservation Authority For the year ended December 31, 2015

Quality control and independence

Quality control Grant Thornton LLP Grant Thornton LLP has a robust quality control program that forms a core part of our client service. has a robust quality control program We combine internationally developed audit methodology, advanced technology, rigorous review procedures, mandatory professional development requirements, and the use of specialists to deliver high quality audit services to our clients. In addition to our internal processes, we are subject to inspection and oversight by standard setting and regulatory bodies. We are proud of our firm’s approach to quality control and would be pleased to discuss any aspect with you at your convenience.

Independence We have a rigorous process where we continually monitor and maintain our independence. The process of maintaining our independence includes, but is not limited to:

 Identification of threats to our independence and putting into place safeguards to mitigate those threats. For example, we evaluate the independence threat of any non-audit services provided to the Authority;

 Confirming the independence of our engagement team members.

We confirm that there has been no change to our status with respect to independence since we previously confirmed our independence to you on June 26, 2015.

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Our audit approach

An understanding of the Authority and your business drives the Grant Thornton LLP audit approach. The audit methodology is risk based and specifically tailored to the Authority as depicted below:

Our tailored audit approach results in procedures designed to respond to an identified risk. The greater the risk of material misstatement associated with the account, class of transactions or balance, the greater the audit emphasis placed on it in terms of audit verification and analysis.

Throughout the execution of the audit approach, we will maintain our professional scepticism, recognizing the possibility that a material misstatement due to fraud could exist notwithstanding our past experiences with the Authority or our beliefs about management’s honesty and integrity.

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Internal control Our audit includes gaining an understanding of the Authority’s internal control over financial reporting. Our understanding is focused on processes associated with the identified risk areas (see below). We use this understanding to determine the nature, extent and timing of our audit procedures.

Note that the auditor’s objectives with regards to internal control are different from those of management and those charged with governance. For example, we primarily target controls that relate to financial reporting and not those that relate to the Authority’s operations or compliance which may also be relevant to the Authority's objectives. Therefore, management and those charged with governance cannot solely rely on our findings to discharge their responsibilities in this area.

Please see the Reportable matters section for our internal control findings.

Risk assessment Our risk assessment process identified the following areas where we focused our attention:

Risk area Audit procedures Revenue generated from municipal levies, Municipal levies were agreed to billings for the year and contracts, grants and special projects subsequent receipts. We tested a sample of expenditures on the deferred municipal levy schedule to test revenue recognition. Similar testing was completed for contract revenue and grant revenue.

Confirmed a sample of accounts receivable balances, and performed alternative procedures (subsequent receipts) if positive confirmation was not received for the balances sampled. Analytical review of revenue and various reconciliations as well as deferred revenue schedules were performed to identify any additional balances that required investigation.

Employee Compensation We reviewed the T4 summary and general ledger reconciliation for reasonableness and investigated unusual items. Payroll accruals were examined and both payables and compensation expenses were analytically reviewed. The underlying data used for analytical review was tested to source data.

Tangible Capital Assets Examined supporting documentation for significant capital asset additions. Ensured that assets were capitalized in the proper class and that those expenditures not capitalized were properly considered. Amortization was tested to ensure it was applied in accordance with the amortization policy.

Operating Expenses Performed detailed analytical review comparing operating expenses to prior year and investigating and corroborating variances. Also, substantively tested various expense accounts to ensure appropriate recognition. Viewed support for significant payables and accruals and tested cut-off.

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Materiality The purpose of our audit is to provide an opinion as to whether the financial statements are prepared, in all material respects, in accordance with Canadian accounting standards for public sector entities. Therefore, materiality is a critical auditing concept and as such we apply it in all stages of the engagement.

The concept of materiality recognizes that an auditor cannot verify every balance, transaction or judgment made in the financial reporting process. During audit planning, we made a preliminary assessment of materiality for the purpose of developing our audit strategy, including the determination of the extent of our audit procedures. During the completion stage, we consider not only the quantitative assessment of materiality, but also qualitative factors, in assessing the impact on the financial statements, our audit opinion and the matters brought to your attention.

Fraud risk factor considerations Fraud can occur in We are responsible for planning and performing the audit to obtain reasonable assurance as to whether any organization, at any time, and can be the financial statements are free of material misstatement caused by error or by fraud. Our perpetrated by anyone. responsibility includes:  The identification and assessment of the risks of material misstatement of the financial statements due to fraud through procedures including discussions amongst the audit team and specific inquires of management;  Obtaining sufficient appropriate audit evidence to respond to the fraud risks noted; and  Responding appropriately to any fraud or suspected fraud identified during the audit. We would like to obtain your input on these matters. With this regard, we are required to communicate with you on fraud-related matters, including:

 Obtaining an understanding of how you exercise oversight of management's processes for identifying and responding to the risks of fraud in the entity and the internal control that management has established to mitigate these risks.  Inquiring as to whether you have knowledge of any actual, suspected or alleged fraud affecting the Authority.

The following provides a summary of some of the fraud related procedures performed during the audit:

 Test the appropriateness of journal entries recorded in the general ledger and other adjustments made in the preparation of the financial statements.  Review accounting estimates for biases.  Evaluate the business rationale (or the lack thereof) for significant transactions that are or appear to be outside the normal course of business.

We would like to Laws and regulations obtain your input on these matters. One of the auditor’s objectives in the audit is to perform specified audit procedures to help identify instances of non-compliance with laws and regulations that may have a material effect on the financial statements. We would like to know if you are aware of instances of the Authority not being in compliance with laws and regulations.

Audit • Tax • Advisory © Grant Thornton LLP. A Canadian Member of Grant Thornton International. All rights reserved. CONFIDENTIAL 179 Report to the Budget/Audit Advisory Board —communication of audit strategy and 6 results Toronto and Region Conservation Authority For the year ended December 31, 2015

Status of the audit

Outstanding items We have substantially completed our audit of the financial statements of the Authority and the results of that audit are included in this report.

Our draft independent auditor’s report accompanies the draft financial statements. We will finalize the report once the Board of Directors has approved the financial statements.

The following items were outstanding as at the date of this report:

 Approval of the financial statements by the Board of Directors, the date of which becomes the audit report date;  Receipt and evaluation of legal letters, to be dated within 7 days of the audit report date;  Procedures regarding subsequent events up to the audit report date; and  Receipt of the signed management representation letter dated the audit report date. A draft has been attached in the appendices.

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Audit results

Summary of misstatements There were no non-trivial unadjusted misstatements identified as a result of our audit.

Summary of adjusting entries Our audit did not identify any required journal entries. Management identified and provided us with five journal entries during the course of the audit. These adjustments were as expected and related primarily to adjustments to the tangible capital assets accounts as well as adjustments to bring the year end deferred revenue accounts in line.

Summary of disclosure matters

Management implemented a number of changes to the financial statement presentation in fiscal 2015, and we also provided assistance in the drafting of the statements and financial statement notes. Comparative figures were adjusted to conform with the presentation adopted in the current fiscal year. Some of the changes resulted in more and enhanced disclosure, and some of the changes resulted in reduced and condensed disclosure. We understand that the specifics of these various changes have been communicated separately to the Budget/Audit Advisory Board.

The Public Sector Accounting Standards have a number of disclosure requirements which are more comprehensive than those required under other accounting frameworks. We note below a number of disclosure requirements under PSAS which the Authority has not complied with in its fiscal 2015 financial statements. Each of these requirements were discussed with management, and management is of the view that the omission of these disclosures is acceptable as the required information either wouldn’t provide more meaningful information to users of the statements, or the amounts in question are immaterial, or the required disclosures could be obtained in other ways.

Our audit identified the unadjusted non-trivial misstatements from disclosure matters noted below, and we agree with management that these are not significant disclosure deficiencies.

Audit • Tax • Advisory © Grant Thornton LLP. A Canadian Member of Grant Thornton International. All rights reserved. CONFIDENTIAL 181 Report to the Budget/Audit Advisory Board —communication of audit strategy and 8 results Toronto and Region Conservation Authority For the year ended December 31, 2015

Restricted cash Note 4 to the financial statements notes that cash includes $844,000 which represents unspent funding relating to the CTC Source Protection Region, and that this amount is being held in a separate bank account. In prior years this separate bank account amount was presented separately as “restricted cash”, and in the statement of cash flows, it was clear that the Authority did not have unrestricted access to this amount. Management is of the view that including the amount in cash and not separately disclosing this amount on the face of the financial statements is acceptable because the amount is immaterial, it is described in the notes, and with the passage of time it is no longer clear if the original funder requires the separation of this bank account. Management is in the process of clarifying whether this segregation of the cash balance is required going forward.

Vacation pay entitlements Vacation pay entitlements includes amounts which the Authority’s employees can carry forward beyond a year, and it is unknown exactly when in the future these amounts will be settled. Under PSAS 3255, these amounts are considered post-employment benefits, which would require more extensive disclosure in the financial statements, and consideration of engaging an actuary to determine the present value of the liability based on assumptions about when the vacation pay will be taken, appropriate discount rates, and future salary. Management believes the vacation pay entitlement as calculated is conservative as it has not been discounted, any discounting adjustment would be immaterial, and the added comprehensive disclosure would not provide additional meaningful information to the users of the financial statements.

Deferred revenue continuity Under PSAS 3100.18 (c), the Authority is required to disclose the amount of, and changes in, the deferred revenue balance attributable to each major category of external restrictions, ie a continuity of opening deferred revenue, plus gross amounts received, less gross amounts recognized as revenue, and closing deferred revenue. The Authority has chosen not to disclose this continuity in the current year, and believes the amounts could be obtained elsewhere in the financial statements. Management has also agreed to consider this disclosure next year.

Line of credit The Authority has an operating line of credit with a limit of $1 million, none of which was drawn at year end. This operating line is not disclosed in the financial statement notes. Management has chosen not to disclose this information on the basis that its omission is not material to the users of the financial statements.

Audit • Tax • Advisory © Grant Thornton LLP. A Canadian Member of Grant Thornton International. All rights reserved. CONFIDENTIAL 182 Report to the Budget/Audit Advisory Board —communication of audit strategy and 9 results Toronto and Region Conservation Authority For the year ended December 31, 2015

Reportable matters

Internal control If we become aware of a deficiency in your internal controls systems, auditing standards requires us to communicate those deficiencies we consider significant. A financial statement audit is not designed to provide assurance on internal control.

During the course of performing our audit, we did not identify any significant deficiencies in internal control.

However, during the course of performing our audit, we did identify the following matter which we want to bring to the attention of the Committee.

 During the course of our audit, while there was improvement over the prior year, it was noted that bank reconciliations had not been completed in a timely manner throughout the fiscal year. Without timely monthly reconciliations, the risk exists that the interim information provided to management and the Board of Directors could be misstated, and banking errors would not be identified for correction with your financial institutions in a timely manner. Based on our observations, the lack of timely bank reconciliations did not misstate the interim information of the Authority during the 2015 fiscal year. We again this year recommend that monthly bank reconciliations be performed in a more consistently timely manner, for example, within one month of the month end date. This recommendation has been discussed with management and management has indicated that improvements have already been made to their bank reconciliation process which will result in more timely preparation.

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Significant findings from the audit As part of the audit, we identified the following significant items we wanted to discuss:

Significant findings Considerations and results Significant new accounting In the current year the Authority has implemented PS3260, Liability for policies contaminated sites. This requires organizations to record a liability if they have a contaminated site that meets the specified criteria. The standard defines contamination as the introduction into air, soil, water or sediment of a chemical, organic or radioactive or live organism that exceeds a prescribed environmental level. The standard generally applies to sites that are not in productive use. Sites that are in productive use are only considered contaminated if there was an unexpected event that resulted in contamination. This change has been applied retroactively without the restatement of prior periods. The adoption of this standard did not impact on the Authority’s financial statements as no contaminated sites were found to exist.

Acceptable alternative None identified. accounting policies

Significant transactions None identified.

Sensitive accounting Capitalization of tangible capital assets estimates and disclosures Management follows a methodology to ensure that all constructed capital assets are reviewed to ensure that the appropriate assets and amounts are properly capitalized as tangible capital assets. We reviewed management’s methodology, and on a sample basis have tested the capitalization of tangible capital assets. We agree with the method and amounts capitalized as tangible capital assets.

Contributed assets recorded at fair value Management obtains appraisal reports to support the fair values assigned to contributed property. On a test basis we reviewed the appraisal reports supporting the additions tested. The amounts recorded for contributed assets were derived from the valuation reports.

Liability for contaminated sites An assessment has been made by management on all sites owned by the Authority to determine if a liability is required for contaminated sites. Our audit work focused on the judgments and assumptions used by management in assessing whether a site is contaminated as defined by PS3260.

Fraud and illegal acts Our audit procedures were performed for the purpose of forming an opinion on the financial statements and although these procedures might bring possible fraudulent or illegal activities to our attention, our audit procedures are less likely to detect material misstatements arising from fraud or other illegal acts because such acts are usually accompanied by acts designed to conceal their existence. Management has represented they are not aware of any fraud or illegal acts. We did not detect any fraudulent or illegal activities, or misstatements resulting from fraudulent or illegal activities during our audit.

Audit • Tax • Advisory © Grant Thornton LLP. A Canadian Member of Grant Thornton International. All rights reserved. CONFIDENTIAL 184 Report to the Budget/Audit Advisory Board —communication of audit strategy and 11 results Toronto and Region Conservation Authority For the year ended December 31, 2015

Technical updates

Accounting standards Accounting standards issued by the Accounting Standards Board which may affect your business in the current year and future years are attached in the appendices, most of which would be applicable to your 2020 fiscal year. If you have any questions about these changes we invite you to raise them during our next meeting. We will be pleased to address your concerns.

Auditing standards There are no new auditing standards that will have a material impact on the Authority.

Thought leadership

We are focused on the public sector accounting industry, and we pass our knowledge on to our clients through “Thought Leadership” publications, including the following. If you would like to be added to our mailing list to receive such publications, please reach out to [email protected], or [email protected].

Five questions that could save you from a data breach

http://insights.grantthornton.ca/i/569645-five-questions-that-could-save- you-from-a-data-breach

Walking the tightrope – balancing board governance

http://insights.grantthornton.ca/i/572248-walking-the-tightrope-balancing- board-governance-expectations

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Appendix A—Draft Management representation letter

June 24, 2016

Grant Thornton LLP Suite 200 15 Allstate Parkway Markham, ON L3R 5B4

Dear Sir/Madam:

We are providing this letter in connection with your audit of the financial statements of Toronto and Region Conservation Authority (“TCRA”) as of December 31, 2015, and for the year then ended, for the purpose of expressing an opinion as to whether the financial statements present fairly, in all material respects, the financial position, results of operations, changes in net financial assets and cash flows of Toronto and Region Conservation Authority in accordance with Canadian public sector accounting standards.

We acknowledge that we have fulfilled our responsibilities for the preparation of the financial statements in accordance with Canadian public sector accounting standards and for the design and implementation of internal controls to prevent and detect fraud and error. We have assessed the risk that the financial statements may be materially misstated as a result of fraud, and have determined such risk to be low. Further, we acknowledge that your examination was planned and conducted in accordance with Canadian generally accepted auditing standards (GAAS) so as to enable you to express an opinion on the financial statements. We understand that while your work includes an examination of the accounting system, internal controls and related data to the extent you considered necessary in the circumstances, it is not designed to identify, nor can it necessarily be expected to disclose, fraud, shortages, errors and other irregularities, should any exist.

Certain representations in this letter are described as being limited to matters that are material. An item is considered material, regardless of its monetary value, if it is probable that its omission from or misstatement in the financial statements would influence the decision of a reasonable person relying on the financial statements.

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We confirm, to the best of our knowledge and belief, as of June 24, 2016, the following representations made to you during your audit.

Financial statements 1 The financial statements referred to above present fairly, in all material respects, the financial position of the entity as at December 31, 2015 and the results of its operations, changes in net financial assets and its cash flows for the year then ended in accordance with Canadian public sector accounting standards, as agreed to in the terms of the audit engagement.

Completeness of information 2 We have made available to you all financial records and related data and all minutes of the meetings of members, directors, and committees of directors, as agreed in the terms of the audit engagement. Summaries of actions of recent meetings for which minutes have not yet been prepared have been provided to you. All significant Board and Committee actions are included in the summaries.

3 We have provided you with unrestricted access to persons within the entity from whom you determined it necessary to obtain audit evidence.

4 There are no material transactions that have not been properly recorded in the accounting records underlying the financial statements.

5 There were no restatements made to correct a material misstatement in the prior period financial statements that affect the comparative information.

6 We are unaware of any known or probable instances of non-compliance with the requirements of regulatory or governmental authorities, including their financial reporting requirements.

7 We are unaware of any violations or possible violations of laws or regulations the effects of which should be considered for disclosure in the financial statements or as the basis of recording a contingent loss.

8 We have disclosed to you all known deficiencies in the design or operation of internal control over financial reporting of which we are aware.

9 We have identified to you all known related parties and related party transactions, including sales, purchases, loans, transfers of assets, liabilities and services, leasing arrangements guarantees, non- monetary transactions and transactions for no consideration.

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10 You provided a non-audit service by assisting us with drafting the financial statements and related notes. In connection with this non-audit service, we confirm that we have made all management decisions and performed all management functions, have the knowledge to evaluate the accuracy and completeness of the financial statements, and accept responsibility for such financial statements.

Fraud and error 11 We have no knowledge of fraud or suspected fraud affecting the entity involving management; employees who have significant roles in internal control; or others, where the fraud could have a non-trivial effect on the financial statements.

12 We have no knowledge of any allegations of fraud or suspected fraud affecting the entity’s financial statements communicated by employees, former employees, analysts, regulators or others.

13 We acknowledge our responsibility for the design, implementation and maintenance of internal control to prevent and detect fraud.

14 We believe there are no uncorrected financial statement misstatements both individually and in the aggregate, to the financial statements taken as a whole.

Recognition, measurement and disclosure 15 We believe that the significant assumptions used by us in making accounting estimates, including those used in arriving at the fair values of financial instruments as measured and disclosed in the financial statements, are reasonable and appropriate in the circumstances.

16 We have no plans or intentions that may materially affect the carrying value or classification of assets and liabilities, both financial and non-financial, reflected in the financial statements.

17 All related party transactions have been appropriately measured and disclosed in the financial statements.

18 The nature of all material measurement uncertainties has been appropriately disclosed in the financial statements, including all estimates where it is reasonably possible that the estimate will change in the near term and the effect of the change could be material to the financial statements.

19 All outstanding and possible claims, whether or not they have been discussed with legal counsel, have been disclosed to you and are appropriately reflected in the financial statements.

20 All liabilities and contingencies, including those associated with guarantees, whether written or oral, have been disclosed to you and are appropriately reflected in the financial statements.

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21 With respect to environmental matters:

a) at year end, there were no liabilities or contingencies that have not already been disclosed to you; b) liabilities or contingencies have been recognized, measured and disclosed, as appropriate, in the financial statements; and c) commitments have been measured and disclosed, as appropriate, in the financial statements.

22 The entity has satisfactory title to (or lease interest in) all assets, and there are no liens or encumbrances on the entity’s assets nor has any been pledged as collateral except under the Evergreen Loan Guarantee which is accurately described below:

a) TRCA and City of Toronto has jointly and severally provided a loan guarantee in the amount of $7.5 million to the Evergreen Foundation for the Don Valley Brick Works restoration project. As of December 31, 2015, the balance of the loan outstanding covered by the guarantee was $4.3million ($4.8 million as of December 31, 2014). 23 We have disclosed to you, and the entity has complied with, all aspects of contractual agreements that could have a material effect on the financial statements in the event of non-compliance, including all covenants, conditions or other requirements of all outstanding debt.

24 The Harmonized Sales Tax (HST) transactions recorded by the entity are in accordance with the federal and provincial regulations. The HST liability/receivable amounts recorded by the entity are considered complete.

25 Employee future benefit costs, assets, and obligations have been determined, accounted for and disclosed in accordance with the requirements of Public Sector Accounting Standards Section 3250 Retirement benefits of the Chartered Professional Accountants of Canada (CPA Canada) Handbook.

26 There have been no events subsequent to the balance sheet date up to the date hereof that would require recognition or disclosure in the financial statements. Further, there have been no events subsequent to the date of the comparative financial statements that would require adjustment of those financial statements and related notes.

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Other 27 We have considered whether or not events have occurred or conditions exist which may cast significant doubt on the Authority’s ability to continue as a going concern and have concluded that no such events or conditions are evident.

Yours very truly,

Brian Denney, Chief Executive Officer

Rocco Sgambelluri, Chief Financial Officer

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Appendix B—PSAB Accounting developments

Management Public Sector Accounting Board Effective date assessment of applicability Introduction to Public Sector Accounting (PSA) Handbook The Introduction to PSA Handbook directs the Fiscal periods frameworks applicable to public sector entities. beginning on or after January 1, 2015. Government business enterprises must apply the Earlier adoption is standards applicable to publicly accountable permitted. enterprises (PAEs) which is Part I of the CPA Canada Handbook – Accounting – International Financial Reporting Standards (IFRS). Rate- regulated GBEs can defer adoption of these standards until fiscal years beginning on or after January 1, 2015. Earlier adoption is permitted.

Introduction to the PSA Handbook The Introduction to the PSA Handbook has been Government amended to add a new type of public sector entity components that adopt called a government component. A government the PSA standards - component is an integral part of a government, such as Fiscal periods a department, ministry or fund, that is not a separate beginning on or after entity with the power to contract in its own name and January 1, 2017. that can sue and be sued. Government components Earlier adoption is that want to prepare general purpose financial permitted. statements must apply the standards for governments GBPs that adopt the in the PSA Handbook. standards applicable to As a result of adding the definition of a government PAEs - Fiscal periods component, the definition of a government organization beginning on or after was amended. A government organization is any January 1, 2017. organization controlled by a government that is a Earlier adoption is separate entity with the power to contract in its own permitted. name and that can sue and be sued. Government Government organizations include government business enterprises partnerships, other (GBEs), government not-for-profit organizations than GBPs, that (GNFPOs) and other government organizations determine the (OGOs). As a result of the change in the definition of a standards applicable to government organization, some entities that were PAEs are most formerly classified as GNFPOs or OGOs may now be appropriate for their classified as government components which may result partnership - Fiscal in a change in the accounting framework that they are periods beginning on required to apply. or after January 1, Government business partnerships (GBPs) between 2017. Earlier adoption two or more public sector entities that want to issue is permitted. general purpose financial statements must apply the Government

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Management Public Sector Accounting Board Effective date assessment of applicability standards for PAEs in Part I of the CPA Canada components, GBPs Handbook – Accounting – IFRS. and other government Non-business government partnerships between two or partnerships that more public sector entities that want to issue general expect to change their purpose financial statements would normally apply the basis of accounting PSA Handbook, unless it does not meet the needs of must disclose this fact the partnership’s financial statement users. In that in the periods case the partnership can apply, the standards preceding the period applicable to PAEs in Part I of the CPA Canada the change becomes Handbook – Accounting – IFRS. Factors to consider in effective. assessing users' needs include, but are not limited to, whether the partnership:  has issued, or is in the process of issuing, debt or equity instruments that are, or will be, outstanding and traded in a public market;  holds assets in a fiduciary capacity for a broad group of outsiders as one of its primary businesses;  has commercial-type operations and substantially derives its revenue from these activities; and  receives limited government assistance on an ongoing basis. Government components and government partnerships that adopt the PSA Handbook must account for the transition retroactively, with the restatement of prior periods in accordance with Section PS 2125 First-time adoption.

Section PS 3450 Financial instruments, Section PS 2601 Foreign currency translation, Section PS 1201 Financial statement presentation, and PS 3041 Portfolio investments

PS 3450 Financial instruments is a new Section that The new requirements establishes standards for recognizing and measuring are all required to be financial assets, financial liabilities and non-financial applied at the same derivatives. time. PS 2601 Foreign currency translation revises and For governments - Fiscal replaces Section PS 2600 Foreign currency translation. years beginning on or PS 1201 Financial statement presentation revises and after April 1, 2019. This replaces Section PS 1200 Financial statement effective date was presentation. amended in September 2015. PS 3041 Portfolio investments revises and replaces Section PS 3040 Portfolio investments. For government organizations that The issuance of these new sections also includes applied the CPA Canada consequential amendments to Handbook – Accounting  Introduction to accounting standards that apply only prior to their adoption of to government not-for-profit organizations the CPA Canada Public  PS 1000 Financial statement concepts Sector Accounting Handbook - Fiscal years  PS 1100 Financial statement objectives beginning on or after  PS 2125 First-time adoption by government April 1, 2012. organizations For all other government  PS 2500 Basic principles of consolidation organizations - Fiscal years beginning on or  PS 2510 Additional areas of consolidation after April 1, 2019. This  PS 3050 Loans receivable effective date was  PS 3060 Government partnerships amended in September 2015.  PS 3070 Investments in government business

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Management Public Sector Accounting Board Effective date assessment of applicability enterprises Earlier adoption is  PS 3230 Long-term debt permitted.  PS 3310 Loan guarantees  PS 4200 Financial statement presentation by not-for- profit organizations PSG-6 Including results of organizations and partnerships applying fair value measurement was withdrawn as a result of the issuance of these sections.

Section PS 2200 Related party disclosures Fiscal years beginning This Section defines a related party. It also establishes on or after April 1, the disclosures required for related party transactions, 2017. including disclosure of information about an entity’s Earlier adoption is related party transactions and the relationship between permitted. the related parties when the transactions:  have occurred at a value different from that which would have been arrived at if the parties were unrelated; or  have or could have, a material financial effect on the financial statements. As a result of the issuance of this Section, at its June 2015 meeting, the Public Sector Accounting Board (PSAB) approved an Exposure Draft proposing the withdrawal of Section PS 4260 Disclosure of related party transactions by not-for-profit organizations. This proposal would require not-for-profit organizations to apply Section PS 2200. PSAB will also propose amendments to the transitional provisions of Section PS 2200 for not-for-profit organizations applying the 4200 series.

Section PS 3420 Inter-entity transactions This Section establishes how to account for and report Fiscal years beginning transactions between public sector entities that on or after April 1, comprise a government's reporting entity from both a 2017. provider and recipient perspective (i.e., related parties Earlier adoption is within a government reporting entity). The main permitted. features of the new Section are: • Transactions are measured at their carrying amounts, except in specific circumstances. • Transactions occurring on similar terms and conditions as an arm’s length transaction are measured at the exchange amount. • Cost allocation and recovery is the allocation of costs of activities associated with providing goods or services to another entity and the recovery of the costs incurred from the other entities. Under a policy of cost allocation, revenues and expenses are recognized on a gross basis at their exchange amount. • Unallocated costs are the cost of resources recorded by the providing entity in its operating activities that are incurred on behalf of a recipient entity. A recipient may choose to recognize unallocated costs for the provision of goods and services and measure them at their carrying amount, fair value or other amount dictated by policy, accountability structure or

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Management Public Sector Accounting Board Effective date assessment of applicability budget practice. • The transfer of an asset or liability for nominal or no consideration is measured by the provider at its carrying amount and by the recipient at its carrying amount or fair value. • Inter-entity transactions must be disclosed in accordance with Section PS 2200 Related party disclosures.

Section PS 3210 Assets This new Section provides guidance for applying the Fiscal years beginning definition of an asset set out in Section PS 1000 on or after April 1, Financial statement concepts and establishes general 2017. disclosure standards for assets. Earlier adoption is Disclosure of information about the major categories of permitted. assets that are not recognized is required. When an asset is not recognized because a reasonable estimate of the amount involved cannot be made, the reason(s) for this should be disclosed.

Section PS 3320 Contingent assets This new Section defines and establishes disclosure Fiscal years beginning standards for contingent assets. on or after April 1, Contingent assets are possible assets arising from 2017. existing conditions or situations involving uncertainty. Earlier adoption is That uncertainty will ultimately be resolved when one or permitted. more future events not wholly within the public sector entity's control occur or fail to occur and that resolution will confirm the existence or non-existence of an asset. Disclosure of information about contingent assets is required when the occurrence of the confirming future event is likely.

Section PS 3380 Contractual rights This new Section defines and establishes disclosure Fiscal years beginning standards on contractual rights. Contractual rights are on or after April 1, rights to economic resources arising from contracts or 2017. agreements that will result in both an asset and Earlier adoption is revenue in the future. permitted. Disclosure of information about contractual rights is required, including a description about their nature and extent and the timing.

Section PS 3430 Restructuring transactions This new Section defines a restructuring transaction Fiscal years beginning and establishes standards for recognizing and on or after April 1, measuring assets and liabilities transferred in a 2018. restructuring transaction. Earlier adoption is A restructuring transaction is a transfer of an integrated permitted. set of assets and/or liabilities, together with related program or operating responsibilities without consideration based primarily on the fair value of the individual assets and individual liabilities transferred. The main requirements in the new Section are: • The net effect of a restructuring transaction is recognized as revenue or an expense by the entities involved (transferor/recipient).

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Management Public Sector Accounting Board Effective date assessment of applicability • The recipient must recognize the individual assets and liabilities received in a restructuring transaction at their carrying amounts with applicable adjustments at the restructuring date. • The transferor and recipient cannot restate their financial position or results of operations as if the transaction had happened from inception. • The transferor and recipient must disclose sufficient information to enable users to assess the nature and financial effects of a restructuring transaction on their financial position and operations. The issuance of this new Section also resulted in consequential amendments to Section PS 3050 Loans receivable.

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Appendix C—Engagement Letter

Audit • Tax • Advisory © Grant Thornton LLP. A Canadian Member of Grant Thornton International. All rights reserved. CONFIDENTIAL 196 Attachment 3

Changes to the Financial Statements – Comparing 2015 to 2014

Statement of Financial Position  Combined ‘Cash’ and ‘Restricted cash’ into one line, adding a note to explain that the cash held in a separate bank account pertains to the CTC Source Protection Region.  Changed the name of ‘Marketable securities’ to ‘Investments’.  Broke out ‘Vacation pay entitlements’ from ‘Payables and accrued liabilities’, in accordance with accounting standards.  Combined ‘Deferred revenue’ into one line, in order to provide value added information in the note disclosure.  Combined ‘Inventory’ and ‘Prepaids’ into one line (‘Other assets’, as the amount of these other assets is immaterial.

Statement of Operations and Accumulated Surplus  Split revenue into two main groupings on the face of the statements, ‘Government funding’ and ‘Authority generated’, in order to provide value added information in the note disclosure.

Notes  In Note 1, reference has been added that TRCA is a registered charitable organization that is exempt from income taxes under the Canadian Income Tax Act.  In Note 2, TRCA’s policies have been clarified, highlighted by the following changes:  updated the revenue policy to reflect TRCA’s sources of income;  added a contaminated sites note;  added a reference to the accounting standards not yet effective.  Note 3 is a new note, pertaining to the adoption of the Liability for Contaminated Sites accounting standard which went into effect in the current year.  Note 4 is an update of the previous ‘Restricted cash’ note, which now provides increased information regarding the relationship between TRCA and CTC Source Protection Region.  Note 5 is an update of the previous ‘Marketable securities’ note, which now provides increased information on TRCA’s investment holdings.  Note 6 is an update of the previous ‘Receivables’ note, which now breaks down the balance by ‘Government funding’ and ‘Authority generated’ receivables, consistent with TRCA’s revenue sources.  Note 7 is a new note, pertaining to the adoption of the Liability for Contaminated Sites accounting standard which went into effect.  Note 8 is a new note, which explains what vacation pay entitlements are and how they are calculated.  Note 9 is a new note, which breaks down the deferred revenue balance by ‘Government funding’ and ‘Authority generated’ receivables, consistent with TRCA’s revenue sources.  Note 10 is a reformatted version of the previous ‘Tangible Capital Assets’ note, which now shows the respective balances, without having to flip the page sideways.  Note 11 is an update on the previous ‘Accumulated Surplus and Reserve Continuity’ note, which now combines the internally allocated reserves into the surplus chart and explains that the ‘Amount to be funded in future periods’ disclosed in years past pertains to the unfunded vacation pay entitlements, which provides additional transparency to the balance in the Statement of Financial Position.

197  Notes 12 and 13 are new notes, which provide value added information as to where TRCA’s revenues are derived.  Note 14 is a new note, which provides an expense breakdown by object, as required by the standards.  Note 15 is a new note, which provides information regarding the public sector salary disclosure, as TRCA is subject to The Public Sector Salary Disclosure Act.  Note 16 is an update on the previous ‘Pension Agreements’ note, which has been expanded to include additional information on the relationship between TRCA and OMERS (Ontario Municipal Employees Retirement System).  Note 17 is a new note, which provides information on the relationship between TRCA and The Living City Foundation.  Removed the schedules of operations, as this is not a requirement of the standards and the information is provided to the Authority through the budgeting process.

______

TERMINATION

ON MOTION, the meeting terminated at 9:21 a.m., on Friday, June 10, 2016.

Maria Augimeri Brian Denney Chair Secretary-Treasurer

/ks

198

Budget Audit Advisory Board Meeting #3/16 was held at TRCA Head Office, on Friday, October 14, 2016. The Chair Maria Augimeri, called the meeting to order at 8:38 a.m.

PRESENT Maria Augimeri Chair Colleen Jordan Member Ronald Chopowick Member

ABSENT Gino Rosati Member John Sprovieri Member

RES.#C10/16 - MINUTES

Moved by: Ronald Chopowick Seconded by: Colleen Jordan

THAT the Minutes of Meeting #2/16, held on June 10, 2016, be approved. CARRIED ______

PRESENTATIONS

5.1 A presentation by Rocco Sgambelluri, Chief Financial Officer, TRCA, in regard to item 7.1 - 2017 Budget.

RES.#C11/16 - PRESENTATIONS

Moved by: Colleen Jordan Seconded by: Ronald Chopowick

THAT above-noted presentation 5.1 be received. CARRIED ______

199 Section I – Items for Authority Action

RES.#C12/16 - 2017 BUDGET Update on the status of the 2017 TRCA budget process.

Moved by: Ronald Chopowick Seconded by: Colleen Jordan

THE BOARD RECOMMENDS TO THE AUTHORITY THAT Toronto and Region Conservation Authority's (TRCA) 2017 budget make provision for a cost of living adjustment (COLA) on wages of one and one quarter percent (1.25%) effective April 2, 2017;

THAT the 2017 budget include municipal levy provisions consistent with the guidelines provided by the participating municipalities;

AND FURTHER THAT TRCA staff be directed to submit the 2017 estimates and multi-year funding requests to the City of Toronto, the regional municipalities of Peel, York and Durham, the Town of Mono and the Township of Adjala-Tosorontio in accordance with their respective submission schedules. CARRIED BACKGROUND Operating Budget The internal process for finalizing the 2017 operating estimates has commenced. The operating budget will amount to approximately $48.0 million in gross expenditures ($45.0 million net expenditures) and will be balanced with projected revenue and municipal levy. The operating budget includes the direct operating and maintenance components of the conservation parks, Bathurst Glen Golf Course, Kortright Centre for Conservation, Black Creek Pioneer Village and conservation field centres; planning and development services; various watershed management activities and all of corporate services.

The net cost of the services included in the operating budget is funded through the general levy, as adopted by the Authority. TRCA general levy formula apportions the net cost of these services to the participating municipalities on the basis of current value assessment (CVA) in each municipality, as modified by TRCA policy. The components of the operating budget are distinguished from those included in the capital and special levy budget discussed below by the fact that the net cost of capital projects is for the most part designated by the Authority as singularly benefitting and therefore the capital levy is raised from the municipality where the project is undertaken. Within the Capital Estimates there are also projects for which levy support is apportioned on the basis of jurisdiction (e.g., regional monitoring program, watershed plan development, flood operations, etc.) and CVA (e.g., IT capital, Major Facilities Retrofit, Administrative Office Project, etc.)

Staff will finalize the 2017 operating budget using the approved COLA for wages and final approved levy amounts by the participating municipalities and will present it at the March 2017 meeting of the Budget/Audit Advisory Board.

200 Operating Expenditures Wage and benefit cost provisions in the 2016 operating budget account for 74% of gross operating expenditures. The 2017 operating budget will have a similar provision. In addition to the proposed cost of living adjustment, wage related pressures include incremental increases; provisions for staff returning from maternity and other leaves; accommodations; and annualization of positions hired in 2016.

For 2017, staff is recommending a 1.25% COLA effective the first full pay in April. The annual COLA increase between 2013 and 2017 will average (simple) approximately 1.85%, as indicated in the following chart:

TRCA annual salary and wage (COLA) adjustments are:  2017 – 1.25% (proposed)  2016 – 2%  2015 – 2%  2014 – 2%  2013 – 2%

The proposal for a 1.25% COLA increase in 2017 is slightly below that of a number of public sector organizations that had made public their intentions for 2017, mostly falling between 1.5% and 2%. The proposed COLA adjustment is also below the Consumer Price Index for Toronto currently at about 1.9%. The proposed adjustment is consistent with the settlement for unionized staff in the City of Toronto.

With Authority approval, TRCA has commenced a review of TRCA’s compensation practices including a review of its pay equity plans and market analysis. The review should be completed in sufficient time to inform the 2018 budget process.

Increasingly, the cost of TRCA’s employee benefit program is subject to above average increases due to escalating cost of prescription drugs, experience rating and other factors which are unique to this sector of the economy. For the last two years the increases have averaged close to 6%. The employee benefits program will be reviewed with a view to containing the rate of growth in costs.

Tax Adjustment TRCA policy requires that the cost of property taxes paid by TRCA in a participating municipality be added back to the general levy of that municipality as a tax adjustment. This practice ensures equity in the levy allocation process, as the City of Toronto exempts TRCA non-revenue producing property from taxation. In 2015 TRCA consolidated administrative offices, leasing a property at 101 Exchange Way in the City of Vaughan. A special request will continue to be included in the York Region budget to cover 60% of the cost of taxes paid or approximately $110,000. The remainder, $73,000 or 40% of the cost of taxes, is refundable to TRCA as a rebate from the local municipality, as is the case with all charitable organizations.

Municipal Operating (General) Levy Below is a summary of the status of the discussions that have been held at the staff level with the participating municipalities:  Adjala and Mono - No formal communication has occurred.

201  Durham Region - TRCA has requested a 3.6% increase in its preliminary submission. No formal guidelines have yet been released, although a staff report for the October 5, 2016 Committee of the Whole recommended a 2.5% increase on operating funds to conservation authorities.  Peel Region - Peel staff is recommending a 3.3% increase for 2017 ($57,000) consistent with TRCA’s ask.  Toronto - Toronto Water staff will support a 2.5% increase ($118,000) over 2016 on the portion of the levy funded from water revenues (58%). Toronto Finance staff has been requested a 2.5% increase ($87,000) on the 42% of the budget that is funded from the tax base. City Finance has requested from TRCA an analysis of the impact of a 2.6% reduction in the tax levy ($177,000), as compared to the previous year, as well as an analysis which would see the tax supported levy at 0% increase over 2016. TRCA staff has indicated that, if a reduction from the ask is necessary, it will recommend to Authority staff and program reductions associated with Black Creek Pioneer Village.  York Region - The submission made to York Region includes a 4.1% increase ($125,000) which staff is recommending to Council, excluding the impact of the tax adjustment described above.

The following is a summary of the general levy requested from each of the participating municipalities of TRCA for 2017:

Participating Municipality Apportionment* Funding $ Change Over % (000's) 2015 % Adjala - Tosorontio 0.0 .9 4.3 Durham 4.1 568.5 3.6 Mono 0.0 2.0 3.5 Peel 12.9 1,798.0 3.3 Toronto 60.1 8,392.3 2.5 York 22.9 3,197.0 4.1 Total 100.0 13,958.7 * Based on latest CVA data provided by the Province of Ontario, applicable to the 2017 fiscal year as adjusted by TRCA policy.

Operating Revenues User fees and revenue from other sources fund 67% of the operating budget. The remainder, 34%, is funded through the general levy. The final version of the operating budget will include a number of fee adjustments that better reflect market conditions. While a review of planning and permit fees is not scheduled until later in 2017 to be implemented in 2018, actual results for 2016 are indicating that an increase in development activity and fee revenue will likely exceed budget for the current year, and possibly allow for an increased provision for 2017. Further, the water park at Claireville is now under new ownership, and extensive capital improvements to the park have commenced with a target opening date of June 2017, after remaining closed for two full operating seasons. As we get closer to the end of the budget year, staff will analyze the 2016 results and make appropriate adjustments.

Capital and Special Project Budgets Member municipalities usually require that TRCA provide 10-year capital budget projections and each municipality has its own requirements and format for this information. Increasingly, more scrutiny is occurring to the post 2017 estimates.

202 Attachment 1 includes summary tables for capital and special project programs in the City of Toronto and the regions of Peel, York and Durham. Detailed information sheets on each TRCA project and program are available to members who require them.

As a matter of course, TRCA staff regularly consults with municipal staff, to ensure that there is alignment on objectives and deliverables; to avoid duplication of effort; to coordinate activities and procurement to realize maximum value and efficiency; and to report on the achievement of project deliverables.

City of Toronto The 2017 capital submission amounts to $15.275 million ($14.171 million in 2016.) The 2017 request exceeds City guidelines by an amount of $965,000, representing the City’s contribution to the Administrative Head Office Project. The City funds TRCA capital programs from both debt and water rate funding which may include reserve funding. The City's annual debt guideline for TRCA is $3 million and has remained unchanged for many years. The 2017 portion of the budget funded from water rates is $11.310 million, which includes the continuation of a $7 million enhancement for critical erosion control works. Excluding the $7 million funding noted above, the $4.310 million level of core water funding for 2017 represents a 2.5% increase over 2016. Toronto Water staff has confirmed that this level of funding will be included in its 2017 estimates.

Toronto Water continues to fund directly two Environmental Assessments for the Scarborough Waterfront Access Plan and Scarborough Bluffs West Project, which together will provide safe public access along the waterfront between the RC Harris Water Treatment Plant in the west and East Point Park in the east. Discussions are continuing with City staff regarding the implementation of the plans following approval of the Environmental Assessments by the Minister of the Environment and Climate Change. Funding for the implementation phase of the Scarborough Waterfront Access Plan is currently estimated at approximately $100 million, of which $60 million appears in the Toronto Water "Unmet Needs" list and is not included in TRCA's submission. While it is early in the planning process for Scarborough Bluffs West Project, it is estimated that funding for the implementation of the Scarborough Bluffs West Project will be similar to the Scarborough Waterfront Access Plan.

Toronto staff is currently considering TRCA’s request for the additional funding for the Head Office project. A report by City staff on the TRCA Head Office project will go to Council no later than February 2017.

Regional Municipality of York York Region guidelines provide a capital funding envelope in the amount of $4.773 million, which compares to $4.957 million in 2016. The reduction reflects the end of a five-year funding commitment in the amount of $242,000 for Kortright, plus a minor inflationary adjustment on the base. TRCA has requested an additional $321,000 for the Administrative Office Project, bringing the total request to $5,094 million. At a recent meeting with regional staff it appears that the TRCA Administrative Office Project will be recommended by staff provided that the required $321,000 is included in the base level funding. Regional staff has indicated that it may consider additional funding to TRCA for the office project when the next term of council multi-year estimates are presented in 2019.

Regional Municipality of Peel The core 2017 capital submission to Peel is at $15.649 million, which compares to $16.177 million in 2016. This excludes the special two year funding for the Bolton Camp project which ends in 2016. The Peel guidelines for TRCA have been met.

203

Regional Municipality of Durham Approved capital funding for Durham Region totalled $970,500 in 2016 and the preliminary 2017 request is at $982,500, an increase of 2.2% over 2016 excluding York-Peel-Durham-Toronto (YPDT) groundwater funding. In addition, TRCA has requested support for the Administrative Office Project in the amount of $42,000. No formal guidelines have yet been released, although a staff report for the October 5, 2016 Committee of the Whole meeting recommended a 1.5% increase on capital funding to conservation authorities.

Earlier this year discussions were held with staff of the five conservation authorities which operate in Durham and information was provided to the Region in response to a request for additional information regarding TRCA land holdings in Durham. Regional staff is looking into the feasibility of providing additional funding to the five conservation authorities in Durham for land care costs. The result of that analysis has not yet been made available.

“Unmet” Needs Attachment 2 lists priority projects which staff has submitted to the participating municipalities as “unmet or unaccommodated” needs. Discussions continue with staff to review available funding.

Administrative Head Office Project The Town of Mono, Township of Adjala-Tosorontio and the Regional Municipality of Peel have all approved the TRCA Administrative Office Project and the levy contributions required therein. Toronto, York Region and Durham Region approvals remain outstanding.

Levy Formula During the recent discussion before the Authority on the TRCA Administrative Office Project, staff was asked to report back on the levy provisions under the Conservation Authorities Act (Act.) The basic rules for the allocation of costs (benefit) by a conservation authority and the appeal mechanism for each of the cost categories identified by the Act is summarized below:

Cost Category Allocation Appeals by Municipalities Project In relation to benefit Ontario Municipal Board (OMB) or Mining and Lands Commissioner (MLC) Maintenance In relation to benefit OMB or MLC Administration Modified Current Value MLC Assessment (CVA)

The Act identifies three categories of costs, as noted. Any of the costs that do not appear to be included in the “Project” and the related “Maintenance” categories are by default assigned to the “Administration” category. TRCA, like many other Ontario conservation authorities, relies on the CVA formula for cost allocation where no other clear method of allocating benefit is available for both project and maintenance expenditures. At TRCA, non-capital costs which are recommended to be apportioned on the basis of the CVA formula are included in the Operating Budget.

Once the levy amounts and allocation formulas have been determined, regulations require a 30-day notice period be provided to the participating municipalities during which time they may consider how to instruct members with respect to voting on the budget which sets the levy for the coming year.

204 The TRCA levy approval process requires by regulation that Administration costs and any other cost apportioned by the CVA formula must be voted on using a weighted process whereby Toronto appointees are collectively afforded 50% of the vote and the remaining participating municipalities the remainder based on their respective shares of CVA. The balance of the budget can be voted on the basis of one vote per member.

Once the Authority adopts the budget, and the levy provisions contained therein, a municipality may still appeal the levy to the MLC with respect to whether the levy is appropriate and complies with regulations and the legislation. The MLC may confirm, vary or rescind the amount of the levy. With respect to projects costs appeals may also be made to the OMB, which can affirm or vary the apportionment and award costs.

Once the budget and the levy are adopted by Authority resolution, the payment of the levy is enforceable. It should be noted that TRCA’s approach with respect to levy amounts and allocations is one of negotiation and agreement and in recent history (30+ years) has not been challenged by a member municipality with respect to amount or allocation.

DETAILS OF WORK TO BE DONE Following year end, the capital budget can be finalized and will include the municipal capital projects as approved by the respective participating municipalities as well as all other capital projects such as those projects funded by Toronto Waterfront Revitalization Corporation. The operating estimates will become final following year end, at which time staff can determine the impact of the 2016 operating season and final municipal approvals.

Staff will be prepared to describe in greater detail the capital and special projects included in the submissions at the Budget/Audit Advisory Board meeting scheduled to be held on October 14, 2016, and at the Authority meeting scheduled to be held on October 28, 2016. Full details on the operating budget will be available at the March meeting of the Advisory Board.

Report prepared by: Rocco Sgambelluri, extension 5232 Emails: [email protected] For Information contact: Rocco Sgambelluri, extension 5232 Emails: [email protected] Date: October 5, 2016 Attachments: 2

205 Attachment 1

Consolidated Capital 10-Year Forecast

Approved Projected Forecast 2016 2017 2018 2019 2020 2021-2026 Region of Durham - 9,000 9,000 83,000 84, 000 504,000 Region of Peel 625,000 622,000 722,000 722,000 731,000 4,746,000 STRATEGIES

WATERSHED WATERSHED City of Toronto 180,000 226,000 246,000 246,000 250,000 1,512,000 STUDIES AND York Region 36,000 189,000 189,000 189,000 195,000 1,170,000

Watershed Studies and Strategies Total 841,000 1,046,000 1,166,000 1,240,000 1,260,000 7,932,000

Region of Durham 341,900 339,000 341,000 343,000 353,000 2, 208,000 Region of Peel 2,591,500 2,397,000 3,385,000 3,363,000 3,444,000 22,330,000

WATER RISK City of Toronto 9,740,500 10,707,500 10,662,500 12,162,500 12,220,000 87,494,000 MANAGEMENT York Region 1,951,000 1,823,000 1,850,000 1,861,000 1,922,000 12,038,000

Water Risk Management Total 14,624,900 15,266,500 16,238,500 17,729,500 17,939,000 124,070,000

Region of Durham 267,100 370,000 379,000 386,000 396,000 2, 506,000 206 Region of Peel 3,980,500 4,009,000 3,999,000 4,181,000 4,290,000 28,520,000 REGIONAL City of Toronto 1,426,500 1,433,500 1,452,500 1,465,500 1,489,000 9,335,000 BIODIVERSITY York Region 900,000 1,008,000 1,021,000 1,042,000 1,071,000 6,826,000

Regional Biodiversity Total 6,574,100 6,820,500 6,851,500 7,074,500 7,246,000 47,187,000

Region of Durham 5,500 3,000 3,000 3,000 3,000 18,000 AND LAND Region of Peel 1,330,000 1,721,000 2,125,000 2,265,000 2,511,000 16,168,000 City of Toronto 118,000 64,000 64,000 64,000 64,000 384,000 SECUREMENT SECUREMENT MANAGEMENT York Region 410,000 388,000 397,000 408,000 420,000 2,783,000

Land Securement and Management Total 1,863,500 2,176,000 2,589,000 2,740,000 2,998,000 19,353,000

Region of Durham 140,000 105,000 108,000 113,000 116,000 773,000 AND Region of Peel 900,000 850,000 873,000 774,000 800,000 5,391,000 TOURISM

RECREATION City of Toronto 590,000 611,000 641,000 641,000 641,000 3,846,000 York Region ------

Tourism and Recreation Total 1,630,000 1,566,000 1,622,000 1,528,000 1,557,000 10,010,000 Consolidated Capital 10-Year Forecast

Approved Projected Forecast 2016 2017 2018 2019 2020 2021-2026 Region of Durham 60,000 14,000 14,000 14,000 14,000 84,000 Region of Peel 558,000 420,000 435,000 435,000 450,000 2,709,000

PLANNING & City of Toronto 119,000 322,000 322,000 322,000 322,000 1,932,000

DEVELOPMENT DEVELOPMENT York Region 160,000 106,000 106,000 106,000 106,000 636,000 Planning and Development Total 897,000 862,000 877,000 877,000 892,000 5,361,000

Region of Durham ------Region of Peel 3,506,000 2,119,000 2,457,000 2,697,000 2,737,000 17,353,000

OUTREACH City of Toronto 247,000 147,000 147,000 147,000 147,000 1,083,000

EDUCATION AND York Region 683,000 495,000 498,000 503,000 508,000 3,154,000 Education and Outreach Total 4,436,000 2,761,000 3,102,000 3,347,000 3,392,000 21,590,000

Region of Durham 114,000 102,500 123,000 125,000 127,000 804,000

Region of Peel 2,523,000 2,680,000 2,684,000 2,844,000 3,048,000 20,493,000 207 City of Toronto 828,000 863,000 946,000 1,043,000 1,070,000 8,152,000 SUSTAINABLE COMMUNITIES York Region 527,000 464,000 473,000 485,000 497,000 3,301,000 Sustainable Communities Total 3,992,000 4,109,500 4,226,000 4,497,000 4,742,000 32,750,000

Region of Durham 42,000 40,000 40,000 40,000 40,000 240,000 Region of Peel 163,000 831,000 831,000 1,331,000 1,831,000 10,986,000 SERVICES

CORPORATE CORPORATE City of Toronto 922,000 901,000 901,000 901,000 901,000 5,406,000 York Region 290,000 621,000 621,000 621,000 621,000 3,726,000

Corporate Services Total 1,417,000 2,393,000 2,393,000 2,893,000 3,393,000 20,358,000

TOTAL 36,275,500 37,000,500 39,065,000 41,926,000 43,419,000 288,611,000

Region of Durham 970,500 982,500 1,017,000 1,107,000 1,133,000 7,137, 000 Region of Peel 16,177,000 15,649,000 17,511,000 18,612,000 19,842,000 128,696,000 City of Toronto 14,171,000 15,275,000 15,382,000 16,992,000 17,104,000 119,144,000 York Region 4,957,000 5,094,000 5,155,000 5,215,000 5,340,000 33,634,000 36,275,500 37,000,500 39,065,000 41,926,000 43,419,000 288,611,000 Attachment 2 Unmet Needs by Service Area

2017 2018 2019 2020 Flood Protection and Remedial Capital Works Program Region of Durham 50,000 55,000 55,000 Natural Disaster Mitigation Program Region of Durham 150,000 120,000 140,000 125,000

WATER RISK RISK WATER Flood Mitigation Priority Enhancements City of Toronto 150,000 150,000 150,000 150,000 MANAGEMENT Scarborough Bluffs West - Implementation City of Toronto 2,000,000 4,000,000 Lower Don Erosion Restoration Project City of Toronto 100,000 200,000 1,200,000 1,200,000

Albion Hills Master Plan Region of Peel 1,000,000 1,000,000 1,900,000 1,900,000 Nashville RMT York Region 400,000 600,000 600,000 600,000 Greenspace Management Enhancement York Region 292,000 469,000 340,000 350,000 MANAGEMENT Greenspace Implementation - Humber Trails CA Bridget Replacement York Region 75,000

Greenlands Acquisition Project City of Toronto 2,250,000 2,500,000 2,750,000 3,000,000 208

LAND SECUREMENT AND AND SECUREMENT LAND Greenspace Management Region of Durham 200,000 200,000 200,000 200,000 Boyd CA Bridge Replacement York Region 600,000

Future Infrastructure Region of Durham 50,000 50,000 AND Region of Peel 500,000 5,500,000 TOURISM

RECREATION Black Creek Pioneer Village Retrofit City of Toronto 400,000 400,000 400,000 400,000 Gatineau Hydro Corridor Revitalization (Scarborough Butterfly Trail) City of Toronto - - - 100,000 Tommy Thompson Park Enhancements City of Toronto 990,000 4,268,000 2,556,000 2,000,000 South Mimico Trail Connection City of Toronto 1,300,000 700,000

Western Beaches - Breakwall City of Toronto - 500,000 500,000 2, 000,000

Growth Management and Specialized Planning Studies Program Region of Durham - 25,000 26,000 27, 000

Special Policy Areas and Flood Vulnerable Area Reveiws City of Toronto 150,000 150,000 150,000 150,000 PLANNING & PLANNING DEVELOPMENT DEVELOPMENT Unmet Needs by Service Area

2017 2018 2019 2020

Growth Management and Specialized Planning Studies Program Region of Durham - 25,000 26,000 27,000

Special Policy Areas and Flood Vulnerable Area Reveiws City of Toronto 150,000 150,000 150,000 150,000 PLANNING & & PLANNING DEVELOPMENT DEVELOPMENT

Education Infrastructure Region of Durham - 40,000 40,000 40,000 Bolton Camp Region of Peel 1,500,000 1,500,000 1,500,000

OUTREACH Integrated Youth Development Program City of Toronto 350,000 350,000 350,000 350,000

EDUCATION AND Kortright Centre York Region TBD TBD TBD TBD

Watershed Studies Implementation Region of Durham - 73,000 73,000 73,000 Region of Peel - 129,000 129,000 129,000 City of Toronto 175,000 175,000 175,000 175,000 York Region - 169,000 169,000 169,000

Sustainable Technologies Evaluation Program - Air, Energy Region of Durham - 25,000 25,000 30,000

PPG - Eco-Business Zone - Toronto East End City of Toronto 320,000 370,000 250,000 250,000 209 SUSTAINABLE COMMUNITIES The Sustainable Neighbourhood Retrofit Action Plan (SNAP) City of Toronto 75,000 100,000 100,000 100,000 Partners in Project Green - "Once Through Cooling Program York Region 60,000 95,000 100,000

Asset Management Plan Analysis and Development Region of Durham 28,000 28,000 Region of Peel City of Toronto 250,000 York Region 54,000 54,000

CORPORATE SERVICES CORPORATE Capital Asset Management Plan Implementation Region of Durham 250,000 250,000 Region of Peel - - 1,000,000 1,000,000 City of Toronto 500,000 500,000 550,000 York Region - - 500,000 500,000

IT Infrastructure Region of Durham - 3,000 3,000 3,000 Region of Peel - 12,000 12,000 12,000 City of Toronto 100,000 100,000 100,000 100,000 York Region TBD TBD TBD TBD

Office Accomodation Project Region of Durham 42,000 42,000 42,000 42,000 City of Toronto 965,000 965,000 965,000 965,000 York Region 321,000 321,000 321,000 321,000 RES.#C13/16 - AUDIT SERVICES Approval of award of contract and appointment of auditors.

Moved by: Ronald Chopowick Seconded by: Colleen Jordan

THE BOARD RECOMMENDS TO THE AUTHORITY THAT KPMG LLP be appointed auditor of Toronto and Region Conservation Authority (TRCA) for the year 2016, in accordance with section 38 of the Conservation Authorities Act;

THAT the term of the engagement be limited to five years subject to annual appointments by the Authority based on satisfactory performance;

ANF FURTHER THAT the remuneration of the auditor be set at $46,000 per annum ($230,000 over the five year term) for each year of the five year term including incidental expenses, plus an inflationary allowance and taxes. CARRIED BACKGROUND Section 38 of the Conservation Authorities Act requires every conservation authority (CA) to be audited annually, and that the auditor is to be independent of the CA.

The engagement period for the existing audit services agreement has expired. A new competition for audit services was conducted, closing on Friday, September 16, 2016. Request for Proposal #10002580 was released for selection of an individual or company to provide external audit services as required by the Conservation Authorities Act. Included in the proposal call was the audit services for The Living City Foundation and World Green Building Council. Both organizations appoint its own auditor and have agreed to participate in the proposal.

Grant Thornton LLP is the current auditor and over the term of its appointment, which commenced in 2004 and was renewed in 2010, completed audits to the satisfaction of staff. This call for proposal is in keeping with standard public sector procurement practices which require periodic “testing” of the market.

RATIONALE The proposal call was advertised using the Biddingo Government Contract Portal.

The following five firms submitted proposals:  Grant Thornton LLP(GT)  MNP LLP  KPMG LLP  Collins Barrow LLP (CB)  BDO Canada LLP (BDO)

Organizations were evaluated on qualifications, experience, understanding of the sector and the fees and estimated hours of service to complete the assignments. All proponents were found to be qualified to conduct the audits required. The following chart presents the average scoring of proposal by the review team:

210

Criteria GT MNP KPMG CB BDO Capability of Proponent and Proposed Audit Team (40%) 23 25 29 26 27 Proposed Audit Strategy (40%) 31 30 34 33 33 Cost (20%) 13 16 18 7 20 TOTAL 67 71 81 66 80

Based on the above scoring, staff recommends that the contract for audit services be awarded to KPMG LLP.

FINANCIAL DETAILS The awarding of this contract will result in total audit fees of approximately $230,000 over the five year term of the contract for the audit of TRCA. A provision for audit fees is included in the annual operating budget.

Report prepared by: Janice Darnley, extension 5768 Emails: [email protected] For Information contact: Janice Darnley, extension 5768 Emails: [email protected] Date: October 14, 2016

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211 Section III – Items for the Information of the Board

RES.#C14/16 - 2016 FINANCIAL PROGRESS REPORT TO AUGUST 31, 2016 Information is provided on Toronto and Region Conservation Authority’s financial performance as of August 31, 2016 with projections for the year.

Moved by: Colleen Jordan Seconded by: Ronald Chopowick

THAT Toronto and Region Conservation Authority’s (TRCA) 2016 Financial Progress Report as of August 31, 2016, be received. CARRIED BACKGROUND As part of TRCA’s financial management process, staff is presenting to the Budget/Audit Advisory Board the 2016 financial progress report. The report covers the period from January 1, 2016 through to August 31, 2016 and includes projections for the year.

RATIONALE Key Operating Results The 2016 operating results indicate a surplus of approximately $557,000 for the year. Attachment 1 lists the larger anticipated variances by division with a summary explanation.

Key Capital and Special Project Progress Within the capital budget, no major deficits or surpluses are anticipated beyond decisions to spend in advance and the recovery of prior year deficits. Approximately half of the prior year deficits of $872,000, will be recovered this year. Projects which will hold a deficit at year end include Albion Hills Field Centre and Black Creek Pioneer Village as these are large multi-year projects. Funding will be available in 2017 to manage the Black Creek Pioneer Village deficit.

A majority of capital projects will vary from budget primarily due to timing as projects span multiple years, delays in permits, agreements or approvals, and/or delays caused by weather conditions. The status of a number of projects with significant variances from budget can be found in Attachment 2.

Report prepared by: Janice Darnley, extension 5768; Emails: [email protected] For Information contact: Rocco Sgambelluri, extension 5232; Emails: [email protected] Date: October 3, 2016 Attachments: 2

212 Attachment 1

2016 Operating Variances

Division (Surplus) Explanation Deficit $ CEO’s Office (744,000)  NEER (WSIB) rebate of $375,000.  Includes temporary easement revenue of $792,000 (excluding additional easement revenue of $829,500 which was received in 2015 but recognizable in 2017).  Loss of water park revenue ($375,000) at Claireville during transition to new ownership. Education and Outreach 507,000 Deficit is from loss of fundraising revenue and lower than expected school, camp and maple syrup revenue. Planning, Greenspace (256,000) Surplus due to higher than budgeted planning and permit and Communications revenue as a result of increased development activity. Other Divisions (64,000) On budget. Net Operating Surplus (557,000)

213 Attachment 2

2016 Capital and Special Projects Project Approved Projected Status Expense Expense (under Budget budget)/ over $ budget $ Bolton Camp Site 1,737,000 (1,262,000) Multi-year project with balance Improvements deferred to 2017 for additional design and construction of site. Flood Remedial Works 1,580,000 (530,000) A five year work plan has been (Peel) developed for the Flood Remedial Works program to address the priority flood risk sites in Peel Region. The carry forward funds will be utilized in 2017 as per the five year plan. Living City Campus 1,410,000 842,000 Additional funding transferred for Development completion of sanitary pumps in 2016 and implementation in spring 2017. Erosion Work Major 1,150,000 519,000 Includes cost overruns at Denison Maintenance (Toronto) due to issues with temporary stream crossing and legal issues resulting in a change in the design during construction. Fishleigh – Midland 1,000,000 720,100 Increased costs to finalize land Road Erosion Control purchase. Enhancements – Flood 1,000,000 738,700 One major project, Yonge-York Control Channel Mills Channel Maintenance, carried Maintenance (Toronto) forward from 2015 due to issues accessing private property resulting in higher expenditures in 2016, matching funding carried forward from 2015. Wilket Creek 1,000,000 500,000 Multi-year project continues into Rehabilitation Project 2017, fully funded. Arsenal Building 928,000 (375,000) Subject to further approvals and Renovations ongoing negotiations. In 2017 TRCA will transfer all items, including the building, to the City of Mississauga. Eco-Business Program 750,000 939,000 Additional funding from Ministry of – Project in Partners Transportation received. $1 million Green anticipated to cover part of installing 32 electric vehicle charging stations at Toronto Pearson Airport. Guildwood Parkway 600,000 (587,000) Acquisition suspended in 2016.

214 Project Approved Projected Status Expense Expense (under Budget budget)/ over $ budget $ Erosion Control Funds will be applied to next highest priority site. Claremont Field Centre 597,000 (517,000) Retrofit is a 2 year project. The Retrofits – Phase II majority of expenses will occur in 2017 during project implementation. Storm Water 100,000 2,510,000 New project. Agreement signed Maintenance – Toronto with City of Toronto in July 2016. – Lower Duck Pond Unspent funds will carryforward to 2017 for project implementation.

______

215 TERMINATION

ON MOTION, the meeting terminated at 9:27 a.m., on Friday, October 14, 2016.

Maria Augimeri Brian Denney Chair Secretary-Treasurer

/ks

216 Section I – Items for Authority Action

RES.#C8/16 - TRCA INVESTMENT POLICY Policy Update – June 2016. An updated investment policy is presented for the Authority’s approval.

Moved by: Colleen Jordan Seconded by: Ronald Chopowick

THE BOARD RECOMMENDS TO THE AUTHORITY THAT the TRCA Investment Policy, as appended, be approved;

AND FURTHER THAT Toronto and Region Conservation Authority’s (TRCA) Rules of Conduct allow for the investment of surplus funds with the One Investment Program, and accordingly section 2.12 be amended and section 2.12.3 be added, so that it reads as follows:

“2.12 to authorize the investment of money not required immediately by the Authority in accordance with the policies established by the Authority:

2.12.1 in treasury bills, bonds, debentures or other evidences of indebtedness of or guaranteed by the Government of Canada or the Province of Ontario; and

2.12.2 in term deposits, investment certificates, debentures or any other evidences of indebtedness of any chartered bank, financial institution or corporation; and

2.12.3 in the One Investment Program.” CARRIED BACKGROUND TRCA’s investment policy was last updated in June 1997. The policy was developed pursuant to subsection 2.12 of the Rules of Conduct, which reads as follows:

“2.12 to authorize the investment of money not required immediately by the Authority:

2.12.1 in treasury bills, bonds, debentures or other evidences of indebtedness of or guaranteed by the Government of Canada or the Province of Ontario; and

2.12.2 in term deposits, investment certificates, debentures or any other evidences of indebtedness of any chartered bank, financial institution or corporation in accordance with the policies established by the Authority.”

144 Since 1997 TRCA has experienced considerable growth in scope and nature of its operations, and as a consequence of that growth there has occurred commensurate growth in cash flows and idle cash balances. On December 31, 1997 cash and marketable securities amounted to approximately $11 million, which compares to approximately $34 million as at December 31, 2015. Given the current state of low interest rates which have persisted for a number of years, investment income is only marginally higher in recent years as compared to the late 1990s. For the last few years investment income has amounted to approximately $600,000. The recommended investment policy seeks to augment the annual amount of investment earnings.

RATIONALE In April 2016, TRCA staff engaged the services of independent investment consultant Kelly Rodgers, CFA, principal of Rodgers Investment Consulting to review the existing policy and to make recommendations on what options are available to TRCA to increase investment income within a risk-averse framework that is appropriate for a local government agency. The consultant’s main recommendation was that TRCA should consider investing in a pool of professionally managed funds collectively known as the “One Fund.” This program is described below.

The “One Investment Program” or “One Fund:” Amendments made to the Municipal Act in 1992 allow Ontario municipalities to participate in joint municipal investment strategies. These amendments permit municipalities to pool investments in order to gain the opportunity to earn higher returns through access to larger, diversified, high-quality investment portfolios. Local Authority Services (LAS - an affiliate of the Association of Municipalities of Ontario) and the CHUMS Financing Corporation (a subsidiary of the Municipal Finance Officers’ Association of Ontario) both established investment pools in response to the 1992 Municipal Act amendments. In 1995, LAS and CHUMS combined their efforts to create a single professionally-managed investment program known as ONE - The Public Sector Group of Funds (commonly referred to as the “One Fund”).

One Fund historically offered a money market portfolio and a bond portfolio. An equity portfolio was added in 2007 and a corporate bond portfolio in 2008. The corporate bond and equity portfolios were launched as a result of 2005 amendments to the Municipal Act Eligible Investment Regulation (O. Reg. 438/97) allowing municipalities to invest in Canadian equities and longer term Canadian corporate bonds. The regulation, however, offered access to these investment types only through The One Investment Program. Throughout 2006, One worked with a diverse committee of municipal investment practitioners to develop investment policies and operating guidelines for both the equity and corporate bond portfolios, and to select professional managers for the two new portfolios. In February 2010 the program was renamed “The One Investment Program”. The program has continued to grow in recent years and now also welcomes investment from organizations within the broader Ontario public sector. Investors from the broader public sector include conservation authorities and municipal services boards. The program is also available to hospitals and other segments of the MUSH (municipalities, universities, school boards and hospitals) sector.

In 2015, The One Investment Program also launched a High Interest Savings Account (HISA) option with a Schedule 1 Canadian banks. The HISA provides a tiered competitive rate of return for deposits, with complete liquidity.

145 Local co-mingled (pooled) government investments are not a new idea, with many having been established in jurisdictions across Canada and the United States. They have proven to be highly successful and popular investment and cash management tools for municipalities and similar organizations. Participation in such pools is, in fact, recognized as a recommended practice for achieving portfolio diversification and liquidity by the Government Finance Officers Association of the United States and Canada.

Asset levels in One at the end of 2015 were approximately $740 million. The Program provides professional investment services to more than 105 organizations, and performance has been competitive against other permitted alternative investments for Ontario municipalities. All One portfolios are governed by formal investment guidelines requiring that monies be invested only in instruments allowed under the Municipal Act, with additional restrictions being established by the guidelines.

One currently utilizes the professional investment services of MFS Investment Services for the Money Market, Bond, and Corporate Bond Portfolios, and Guardian Capital LP for the Equity Portfolio. Both organizations have billions in assets under management and have a long track record of managing large multi-customer investment pools.

The investment guidelines and manager activities for each investment portfolio are monitored by One staff, an independent third-party investment consultant, as well as the One Advisory Committee, which is comprised primarily of senior public sector officials appointed by LAS and CHUMS. In addition, the program also receives periodic oversight from the Municipal Finance Officers' Association of Ontario (MFOA)/CHUMS and LAS Board of Directors, comprised of municipal finance professionals and municipal administrators and elected officials, respectively.

There is no requirement for municipalities to invest for a specified period in The One Investment Program; money can be invested, withdrawn or transferred at any time, although each of the Portfolios has been established with a certain investment duration in mind. If investment or redemption instructions are provided by 4:00 p.m. on any banking day, the funds are deposited or withdrawn, as the case may be on, the next banking day. The minimum transaction amount is $5,000 for any portfolio. There are no penalties or fees for deposit or withdrawal at any time.

Investors have password protected access to account balances through a secure portion of the One website. Portfolio balances and unit pricing are updated daily.

Investment fees are calculated on a daily basis based on the total balance held in the account, and performance figures provided by One are always posted net of fees. Current One Investment Program annual fees are as follows:

 Money Market - 19 Basis Points  Bond - 40 Basis Points  Universe Corporate Bond - 45 Basis Points  Equity - 60 Basis Points  HISA – 10 basis points

In summary, the One Investment Program offers the following key advantages as an investment option for TRCA:  professional money management;  reduced risk through diversification and regular investment oversight;

146  flexibility and liquidity of investments;  accounting and performance reporting;  legal costs for program related issues;  regulatory compliance guarantee;  low brokerage costs.

To allow for the investment of municipal funds through a co-mingled public sector investment program in order to leverage enhanced returns and reduced administration costs, it is recommended that The One Investment Program be added to TRCA’s list of eligible investments. However, given the current wording within the Rules of Conduct it is necessary that the Rules be changed to permit the One Fund.

Brokerage Account TRCA has maintained a brokerage account with RBC Dominion Securities for a number of years. It is proposed that this account or another account with a competing investment brokerage house be maintained, selected in accordance with TRCA’s procurement policies. However, if the improvement in returns with the One Fund materializes, as anticipated, TRCA will increasingly be placing its investment funds with the One Fund, and relying less on brokerage accounts.

DETAILS OF WORK TO BE DONE Upon approval of the updated investment policy, TRCA will create an investment account with the One Investment Program.

Report prepared by: Michael Tolensky, extension 5965 Emails: [email protected] For Information contact: Michael Tolensky, extension 5965 Rocco Sgambelluri, extension 5232 Emails: [email protected], [email protected] Date: May 30, 2016 Attachments: 1

147 Attachment 1

Toronto and Region Conservation Authority

Investment Policy – June 2016

1. Policy Statement

This policy governs the management of surplus funds and investment portfolio of Toronto and Region Conservation Authority (TRCA) and is established under subsection 2.12 of the Rules of Conduct.

TRCA strives for the optimum utilization of its cash resources within statutory limitations and the basic need to minimize credit, interest and market risks and to preserve capital, while maintaining solvency and liquidity to meet ongoing cash requirements. It is the policy of TRCA to invest funds in a manner which will provide the highest return within the established security framework.

The policy includes all funds that are the responsibility of TRCA, including idle cash, reserves and funds held in trust to the extent allowed by agreement.

2. Standards of Care

2.1 Prudence Investments shall be made with judgment and care, under circumstances then prevailing, which persons of prudence, discretion and intelligence exercise in the management of their own affairs, not for speculation, but for investment, considering the probable safety of their capital as well as the probable income to be derived.

2.2 Ethics and Conflict of Interest Employees involved in the investment process shall refrain from personal business activity that could conflict with the proper execution and management of the investment program, or that could impair their ability to make impartial decisions. Employees shall disclose any material interests in financial institutions with which they conduct business. They shall further disclose any personal financial or investment positions that could be related to the performance of the investment portfolio. Employees shall not undertake personal investment transactions with the same individual with whom business is conducted on behalf of TRCA.

2.3 Delegation of Authority The Chief Financial Officer has overall responsibility for the prudent investment of TRCA’s portfolio and is responsible for the implementation of the investment program and the establishment of investment procedures consistent with this policy. Such procedures shall include explicit delegation of authority to persons responsible for investment transactions. No person may engage in an investment transaction except as provided under the terms of this Policy. The Chief Financial Officer shall be responsible for all transactions undertaken, and shall establish a system of controls to regulate the activities of subordinate staff and shall exercise control over that staff.

148 3. Safekeeping and Custody All securities shall be held for safekeeping with the investment dealer which is a member of the Canadian Investor Protection Fund or financial institution, depending where the transaction takes place. Securities shall be held in the name of Toronto and Region Conservation Authority. The use of a “margin account” to hold securities is prohibited.

The depository shall issue a safekeeping receipt to TRCA listing the specific instrument, rate, maturity and other pertinent information. On a monthly basis, the depository will also provide reports, which list all securities held by TRCA and the book and market value of holdings as of month-end.

Security transactions entered into shall be conducted on a delivery against payment basis. Securities may be held by a third party custodian, designated by the Chief Financial Officer of TRCA and evidenced by safekeeping receipts. The Chief Financial Officer may enter into a securities lending arrangement with the custodian.

4. Internal Controls The Chief Financial Officer shall establish an annual process of independent review by an external auditor, as part of TRCA’s annual audit. This review will provide internal control by ensuring compliance with policies and procedures. The Chief Financial Officer shall develop and maintain all necessary operating procedures for effective control and management of the investment function and reasonable assurance that TRCA’s investments are properly managed and adequately protected.

5. Suitable and Authorized Investments TRCA, under the policies established within the Rules of Conduct is permitted to invest in certain securities as set out by Ontario Regulation 438/97 to the Municipal Act, as amended from time to time. This regulation prescribes the securities in which a municipality may invest. In keeping with the primary objective of TRCA’s investment policy, namely the preservation of capital, permissible investments have been restricted to those of high credit quality and reasonable liquidity.

The portfolio aims for both diversification and near risk-free investments to ensure security of the capital. Emphasis is placed on securities offered by or unconditionally guaranteed by the Government of Canada, a Province of Canada or the six major chartered banks (Royal Bank of Canada, Canadian Imperial Bank of Commerce, Bank of Montreal, Bank of Nova Scotia, Toronto Dominion Bank, and National Bank of Canada).

6. Maximum Maturity To the extent possible, TRCA shall match its investments with anticipated cash flow requirements. Unless matched to a specific cash flow, TRCA will not directly invest in securities maturing more than ten (10) years from the date of purchase. Reserve funds and other funds with longer investment horizons may be invested in securities exceeding ten (10) years if the maturity of such investments is made to coincide as nearly as practicable with the expected use of funds.

149 7. Diversification Investments will be diversified by issuer and by the sector of the economy to which they belong. The Chief Financial Officer may establish maximum amounts and maximum percentages of the portfolio for each issuer and sector from time to time. Investment in a municipal investment pool as allowed by Ontario Regulation 438/97, such as the One Investment Program shall be considered an appropriate method of investment diversification, as they meet all of the aforementioned criteria. Staff is therefore authorized to open a One Investment Program account, in order to invest in accordance with the investment strategy outlined below.

8. Investment Standards The investment portfolio shall be designed with the objective of obtaining a rate of return throughout budgetary and economic cycles, commensurate with the investment risk constraints and the cash flow needs. In order to accomplish this goal, TRCA is permitted to invest through the One Fund or through a TRCA managed brokerage account.

The investment portfolio will be managed in accordance with the parameters specified within this policy. The portfolio should obtain a market average rate of return throughout budgetary and economic cycles, commensurate with the investment risk constraints and the cash flow needs of TRCA. Short-term funds will be compared to the return on the three-month Government of Canada Treasury Bills and the One Investment Program’s Money Market Portfolio. Long-term funds will be compared to Scotia McLeod’s All Government Short Term Bond Index and the One Bond Portfolio.

9. Investment Strategy – One Fund The investment portfolio will be designed to obtain, at a minimum, market rates of return taking into account TRCA’s investment risk tolerance, constraints and cash flow needs and the maximum holdings of any one type of investment as a percentage of the total portfolio is as follows:

Max Intended Portfolio Investment Approach Holdings TRCA Duration Holdings HISA Deposits with a (High Schedule I Canadian Interest 1+ months  Bank Deposits N/A Bank under a master Savings LAS/CHUMS accounts Account)  Canadian treasury bills Preserve capital and  High quality commercial N/A Money 1 - 18 maintain liquidity while papers Market months maximizing short-term  Banker’s acceptances income  Floating rate notes 18 months Provide a higher return  Federal, provincial and - 3 years over longer investment municipal bonds N/A Bond horizons through  High quality bank paper diversified investments  Bank guaranteed debt

150 Max Intended Portfolio Investment Approach Holdings TRCA Duration Holdings Universe Investment in highly  Canadian corporate bonds Corporate rated corporate bonds 25% 4+ years  Federal, provincial and Bond maturing over a wide municipal bonds time frame A diversified conservatively Canadian managed portfolio of 10% 5+ years a) Canadian equity securities Equity equity securities issued by Canadian corporations

Should TRCA be notified that the maximum percentage has been exceeded at any point during the year the Chief Financial Officer is obligated to remedy the situation as quickly as it is reasonable to do so.

10. Investment Strategy – TRCA Managed Account TRCA’s investment strategy is an active strategy and the basis used by staff to determine whether market yields are being achieved shall be appropriate debt market indices as published by leading Canadian investment firms.

To limit the risk on capital, investments made outside of the One Fund are restricted to those which are rated within the two highest rating categories of either the Dominion Bond Rating Service (A (mid) or higher) or the S&P Bond Rating Agency (A or higher). Money market transactions are restricted to R2 high or higher. Equity transactions are forbidden to be made outside of the One Fund. Term Deposits and Investment Certificates issued by a Schedule 1 Chartered Bank are eligible investments.

Where an instrument is split rated, the lower rating shall be applied for the purpose of compliance with these constraints. In the event of a downgrade of credit rating by either agency, the Advisor will immediately notify TRCA and the Chief Financial Officer has one week to remedy the portfolio. If corporate bond holdings exceed 25% of the portfolio external to the One Fund, the advisor will immediately notify TRCA and the Chief Financial Officer has one week to remedy the portfolio.

11. Broker/Advisor Investment Dealers acting as custodian for TRCA must be members of the Investment Industry Regulatory Organization of Canada (IIROC) and be members of the Canadian Investor Protection Fund. Individual investment advisor(s) who are employed by an IIROC firm shall be selected from time to time on the basis of competence, quality of service and cost, such selections being consistent with the TRCA’s Purchasing Policies.

12. Reporting The Chief Financial Officer shall submit an investment report to the board at least annually, including a management summary that provides an analysis of the status of the current investment portfolio and transactions made over the last year. This management summary will be prepared in a manner that will allow the board to ascertain whether investment activities during the reporting period have conformed to the investment policy.

151 Glossary of Terms:

CHUMS Financing Corporation: one of the entities that operates The One Investment Program, a co-mingled investment strategy in which local governments and the broader Ontario public sector can invest.

Credit Risk: the risk to an investor that an issuer will default in the payment of interest and/or principal on a security.

Diversification: a process of investing assets among a range of security types by sector, maturity, and quality rating.

Duration: a measure of the timing of the cash flows, such as the interest payments and the principal repayment, to be received from a given fixed-income security. This calculation is based on three variables: term to maturity, coupon rate, and yield to maturity. The duration of a security is a useful indicator of its price volatility for given changes in interest rates.

Interest Rate Risk: the risk associated with declines or rises in interest rates that cause an investment in a fixed-income security to increase or decrease in value.

Liquidity: a measure of an asset’s convertibility to cash.

Local Authorities Services (LAS): one of the entities that operates The One Investment Program, a co-mingled investment strategy in which local governments and the broader Ontario public sector can invest.

Market Risk: the risk that the value of a security will rise or decline as a result of changes in market conditions.

Market Value: current market price of a security.

Maturity: the date on which payment of a financial obligation is due. The final stated maturity is the date on which the issuer must retire a bond and pay the face value to the bondholder. See “Weighted Average Maturity”.

Weighted Average Maturity (WAM): the average maturity of all the securities that comprise a portfolio.

152 RES.#C9/16 - 2015 AUDITED FINANCIAL STATEMENTS The 2015 audited financial statements are recommended for approval.

Moved by: Ronald Chopowick Seconded by: Colleen Jordan

THE BOARD RECOMMENDS TO THE AUTHORITY THAT the transfer of funds from reserves to surplus in the amount of $2,428,000, as outlined in Note 11, "Accumulated surplus" to the financial statements (Attachment 1), be approved;

AND FURTHER THAT the 2015 audited financial statements, as presented in Attachment 1, be approved, signed by the Chair and Secretary-Treasurer of Toronto and Region Conservation Authority (TRCA), and distributed to each member municipality and the Minister of Natural Resources and Forestry, in accordance with subsection 38 (3) of the Conservation Authorities Act. CARRIED RATIONALE The 2015 TRCA audited financial statements are presented for approval. The accounting firm Grant Thornton LLP has completed its audit and has included with the financial statements an unqualified, independent auditor's report. The audited financial statements are presented as Attachment 1 to the report. A representative from Grant Thornton LLP will be in attendance to present the auditor's report on the 2015 financial statements.

Auditor Communication on Audit Strategy and Results Included as Attachment 2, is a report from Grant Thornton LLP addressed to the Budget/Audit Advisory Board (BAAB), entitled, "Report to the Budget/Audit Advisory Board - communication of audit strategy and results". This report addresses various matters, including the auditors approach to the audit, quality control and independence, audit results, reportable matters, status report on the audit process and other matters which may be of interest to the members. The section of the report entitled "Reportable Matters" includes an internal control recommendation regarding the timeliness of bank reconciliations. The conditions which have caused the delays in completing bank reconciliations are being addressed.

Financial Statement Structure The Statement of Operations and Accumulated Surplus includes revenues, expenses and TRCA’s surplus position for the year, but excludes the impact of tangible capital asset (TCA) expenditures and disposal proceeds. The Statement of Financial Position reports financial assets and liabilities, which define the net assets of the organization. Further, the Statement of Financial Position discloses non-financial assets. The Statement of Changes in Net Financial Assets reconciles the surplus for the year to the change in net assets. Finally, the Statement of Cash Flows itemizes the sources of cash inflows and outflows during the year, classified as either operating, investing or capital in nature.

As previously noted, the Statement of Operations and Accumulated Surplus do not include tangible capital asset expenditures. Note 19 in the audited financial statements outlines the modifications to the approved budget required in order to provide a more meaningful comparison to actual operating results. Also, to assist with the comparison of results to budget, the actual amortization for the year has been added to the approved budget.

153 Changes to the Financial Statement Presentation In order to improve the presentation a number of changes were introduced to the 2015 financial statement format. Attachment 3 provides a comprehensive list of these changes.

Tangible Capital Assets As at December 31, 2015, the gross book value of the tangible capital assets was $588.6 million of which $143.6 million has been amortized. The unamortized balance of $445.0 million is reported in the statement of financial position as the net book value of tangible capital assets. Land, which is carried on the books at a cost of $344.2 million, is not amortized.

During 2015, $16.5 million in TCA was acquired and assets having a book value (original cost) of $1.2 million have been disposed, resulting in a net loss of $0.3 million. The schedule of "Tangible Capital Assets" included in Note 10 to the audited financial statements itemizes the various components of TCA, including contributed TCA in the amount of $0.9 million.

Operating Surplus / Deficit Position Using a "cash basis" approach which compares available funding to actual expenditures incurred including TCA, the same basis upon which the annual budget was developed and presented to the members for approval, TRCA's cumulative operating surplus position as of December 31, 2015 is $0.4 million. This amount is reported in Note 11 of the financial statements under the caption of "Unallocated accumulated surplus (deficit)" and compares to a deficit position of $1 million as of December 31, 2014. The increase in surplus position from 2014, approximately $1.4 million, results mainly from revenues exceeding targets as outlined in the Financial Progress Report presented to the Budget/Audit Advisory Board at its meeting held on April 1, 2016. In that report to BAAB, the projected surplus for the year was reported at $0.8 million. However, additional accruals for work undertaken on behalf of Toronto Waterfront Revitalization Corporation and Infrastructure Ontario processed after the board report had been released increased the unallocated surplus for the year to $1.4 million, as reported in note 11.

Reserves The status of TRCA reserves is also presented in Note 11 of the financial statements. Reserve balances totaled $3,791 million at the end of the year, a reduction of $2.4 million from 2014. Some of the more significant reserve transactions that occurred in 2015 are as follows:  The office accommodation reserve was drawn down by $1.9 million. Approximately $2.4 million was spent to finalize the move to the 101 Exchange Avenue office and $0.5 million was transferred from surplus to this reserve for the purpose of ensuring funds are available in the latter years of the 101 Exchange lease to ease the impact of the lease payments on the operating budget.

 The operating contingency reserve was drawn down by $0.5 million, of which approximately $0.4 million was spent on capital improvements to the Boyd Centre.

Summary From a "bottom line" perspective the 2015 operating results are favourable. TRCA has an unallocated surplus of $0.4 million and the operating contingency of $2.8 million.

Report prepared by: Rocco Sgambelluri, extension 5232 For Information contact: Rocco Sgambelluri, extension 5232; Michael Tolensky, extension 5965 Emails: [email protected]; [email protected] Date: June 1, 2016 Attachments: 3

154 Attachment 1

Financial Statements

Toronto and Region Conservation Authority

December 31, 2015

155

Contents

Page

Independent Auditor’s Report 1 - 2

Statement of Financial Position 3

Statement of Operations and Accumulated Surplus 4

Statement of Changes in Net Financial Assets 5

Statement of Cash Flows 6

Notes to the Financial Statements 7 - 17

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Toronto and Region Conservation Authority Statement of Financial Position (in thousands of dollars) December 31 2015 2014

Assets

Financial Assets Cash (note 4) $ 14,785 $ 10,906 Investments (note 5) 19,751 19,187 Receivables (note 6) 13,446 15,868

47,982 45,961

Liabilities Payables and accrued liabilities (note 7) 10,246 13,411 Vacation pay entitlements (note 8) 2,493 2,452 Deferred revenue (note 9) 33,823 27,712

46,562 43,575

Net Financial Assets 1,420 2,386

Non-Financial Assets Other assets 554 952 Tangible capital assets (note 10) 445,019 435,959 445,573 436,911

Accumulated Surplus (note 11) $ 446,993 $ 439,297

Contingent liabilities and commitments (note 18)

On behalf of Toronto and Region Conservation Authority

______Chair ______Secretary Treasurer

See accompanying notes to the financial statements. 3

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Toronto and Region Conservation Authority Statement of Operations and Accumulated Surplus (in thousands of dollars) Year Ended December 31 2015 2015 2014 Budget Actual Actual (note 19)

Revenue Government funding (note 12) $ 83,314 $ 72,620 $ 72,748 Authority generated (note 13) 32,272 29,265 27,610 Investment income 600 612 591 Net loss on sale of tangible capital assets - (292) (74) 116,186 102,205 100,875

Expenses (note 14) Watershed Studies and Strategies 2,915 2,005 2,303 Water Risk Management 27,861 21,422 17,799 Regional Biodiversity 14,855 11,346 11,988 Greenspace Securement and Management 6,847 5,508 5,834 Tourism and Recreation 21,191 21,693 23,528 Planning and Development Review 8,156 7,882 7,372 Education and Outreach 10,869 8,185 8,658 Sustainable Communities 10,349 8,586 8,865 Corporate Services 7,275 7,882 7,507 110,318 94,509 93,854

Net Surplus $ 5,868 $ 7,696 $ 7,021

Accumulated Surplus, beginning of year 439,297 439,297 432,276

Accumulated Surplus, end of year $ 445,165 $ 446,993 $ 439,297

See accompanying notes to the financial statements. 4

158

Toronto and Region Conservation Authority Statement of Changes in Net Financial Assets (in thousands of dollars) Year Ended December 31 2015 2015 2014 Budget Actual Actual (note 19)

Net surplus for the year $ 5,868 $ 7,696 $ 7,021 Acquisition of tangible capital assets (14,831) (15,587) (13,528) Contributed tangible capital assets - (887) (1,114) Net loss on sale of tangible capital assets - 292 74 Proceeds on disposal of tangible capital assets - 20 51 Amortization 6,810 7,102 6,771 Change in other assets - 398 (331)

Decrease in net financial assets (2,153) (966) (1,056)

Net financial assets, beginning of year 2,386 2,386 3,442

Net financial assets, end of year $ 233 $ 1,420 $ 2,386

See accompanying notes to the financial statements. 5

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Toronto and Region Conservation Authority Statement of Cash Flows (in thousands of dollars) Year Ended December 31 2015 2014

Operating

Net surplus for the year $ 7,696 $ 7,021 Non-cash charge to operations Amortization 7,102 6,771 Net loss on sale of tangible capital assets 292 74 Contributed tangible capital assets (887) (1,114) 14,203 12,752 Change in non-cash working capital Receivables 2,422 (1,012) Other assets 398 (331) Payables and accrued liabilities (3,165) 3,909 Vacation pay entitlements 41 300 Deferred revenue 6,111 (203) 20,010 15,415

Investing

Purchase of investments (4,829) (5,024) Proceeds on maturity of investments 4,265 3,867 (564) (1,157)

Capital

Purchase of tangible capital assets (15,587) (13,528) Proceeds of disposal of tangible capital assets 20 51 (15,567) (13,477)

Net increase in cash 3,879 781

Cash, beginning of year 10,906 10,125

Cash, end of year $ 14,785 $ 10,906

See accompanying notes to the financial statements. 6

160

Toronto and Region Conservation Authority Notes to the Financial Statements (in thousands of dollars) December 31, 2015

1. Nature of operations

Toronto and Region Conservation Authority (“TRCA”) is established under the Conservation Authorities Act of Ontario to further the conservation, restoration, development and management of natural resources, other than gas, oil, coal and minerals for the nine watersheds within its area of jurisdiction. TRCA’s area of jurisdiction includes areas in the City of Toronto, the Regional Municipalities of Durham, Peel and York (including lower-tier municipalities), the Township of Adjala-Tosorontio and Town of Mono. TRCA is a registered charitable organization and is exempt from income taxes under the Canadian Income Tax Act.

2. Summary of significant accounting policies

The financial statements for TRCA are the responsibility of and prepared by management in accordance with Canadian public sector accounting standards (PSAS) as established by the Public Sector Accounting Board, and include the following significant accounting policies:

Basis of accounting The financial statements are prepared using an accrual basis of accounting which recognizes the effect of transactions and events in the period in which the transactions and events occur, regardless of whether there has been a receipt or payment of cash or its equivalent. Accrual accounting recognizes a liability until the obligation(s) or condition(s) underlying the liability is partly or wholly satisfied. Accrual accounting recognizes an asset until the future economic benefit underlying the asset is partly or wholly used or lost.

Revenue recognition Government funding including transfers, municipal capital and operating levies, grants, contract services and management fees are recognized in the financial statements when the payments are authorized and all eligibility criteria have been met, except when there is a stipulation that gives rise to an obligation that meets the definition of a liability. In that case, the funding is recorded as deferred revenue and recognized as revenue as the stipulations are met.

Authority generated revenues including property rental income, contract services, admissions and parking, permits (development, camping, picnic, commercial filming and photography), environmental assessments, programs (education, family and community), events (weddings, festivals and corporate events), athletic fees and equipment rentals, program and event sponsorships, product sales (nursery, food, beverage and merchandise) and membership fees are recognized as revenue in the period in which the related services are performed. Amounts collected for which the related services have not been performed are recorded as deferred revenue and recognized as revenue when the related services are performed. Unrestricted donations are recorded as revenue in the period they are received or receivable, when a reasonable estimate can be made of the amount involved. Externally restricted donations, including funds received from The Living City Foundation, are deferred and recognized as revenue in the year in which the related expenses are recognized. Donated tangible capital assets are recorded at fair market value, when fair market value can be reasonably estimated.

Cash Cash includes cash on hand and deposits in banks.

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Toronto and Region Conservation Authority Notes to the Financial Statements (in thousands of dollars) December 31, 2015

2. Summary of significant accounting policies (continued)

Investments Investments, which consist of guaranteed investment certificates and government, financial institution and corporate bonds, are recorded at cost. Investment income is recognized when earned. Any discount or premium arising on purchase is amortized over the period to maturity. If there is a permanent loss in value, the investment will be written down to recognize the loss. The write-down would be included in the statement of operations.

Other assets Other assets include prepaid expenses and inventory. Inventories of merchandise and food for resale are valued at the lower of cost and net realizable value. Nursery inventory is valued at the lower of cost and replacement value. Cost is determined on a first-in, first-out basis.

Tangible capital assets Tangible capital assets are recorded at cost less accumulated amortization and write-downs, if any, which includes amounts directly attributable to acquisition, construction development, or betterment of the asset. Contributed tangible capital assets are recorded at fair market value at the date of contribution. Amortization is provided on a straight-line basis over the estimated useful life for all assets (except land, which is not amortized, and vehicles, which are amortized on a declining balance basis) as follows:

Infrastructure 10-50 years Buildings and building improvements 10-55 years Land improvements 20-40 years Machinery and equipment 5-12 years Vehicles 20-30% declining balance

Assets under construction are not amortized until the asset is available for productive use.

TRCA has a collection of art and historical buildings. These are not recognized in the financial statements.

When a capital asset no longer contributes to TRCA’s ability to provide services or the value of the future economic benefits associated with the capital asset is less than its net book value, the carrying value of the capital asset is reduced to reflect the asset’s value.

Contaminated sites Contaminated sites are the result of contamination being introduced in air, soil, water or sediment of a chemical, organic, or radioactive material or live organism that exceed an environmental standard. A liability for remediation of contaminated sites is recognized, net of any expected recoveries, when all of the following criteria are met: a) an environmental standard exists; b) contamination exceeds the environmental standard; c) the organization is directly responsible or accepts responsibility for the liability; d) future economic benefits will be given up; and e) a reasonable estimate of the liability can be made. Changes in this estimate are recorded in TRCA’s statement of operations.

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Toronto and Region Conservation Authority Notes to the Financial Statements (in thousands of dollars) December 31, 2015

2. Summary of significant accounting policies (continued)

Employee pension plan The cost of the multi-employer defined benefit pension plan is recognized as the required contributions for employees’ services are rendered in the period.

Reserves TRCA sets up internal reserves to finance the cost of new and replacement vehicles, equipment and office accommodation, the maintenance of TRCA’s tree donation program, and operating contingencies in order to ensure funds are available for financial relief in the event of a significant loss of revenues or other financial emergency for which no other source of funding is available. These reserves are replenished from net assets as directed by the Board. Increases and decreases in reserves are not recorded in the statement of operations.

Use of estimates The preparation of financial statements, in conformity with PSAS, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenue and expenses during the reporting period. Accounts subject to estimates include allowance for doubtful accounts, accrued liabilities and tangible capital assets. Actual results could differ from those estimates.

Accounting standards and amendments issued but not yet effective

PS3450 – Financial Instruments In June 2011, the Public Sector Accounting Standards Board released Section PS3450, Financial Instruments. This standard establishes how to account for and report all types of financial instruments, including derivatives.

This standard will be effective or periods beginning on or after April 1, 2019. TRCA will evaluate the impact of the change to its financial statements based on the characteristics of its financial instruments at the time of adoption.

3. Adoption of a new accounting standard

TRCA adopted Public Sector Accounting Standards Board Standard PS 3260 Liability for Contaminated Sites effective January 1, 2014. Under PS 3260, contaminated sites are defined as the result of contamination being introduced in air, soil, water or sediment of a chemical, organic, or radioactive material or live organism that exceeds an environmental standard. This Standard relates to sites that are not in productive use and sites in productive use where an unexpected event resulted in contamination. The adoption of PS 3260 had no impact on TRCA’s financial statements.

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163

Toronto and Region Conservation Authority Notes to the Financial Statements (in thousands of dollars) December 31, 2015

4. Cash – CTC Source Protection Region

The Credit Valley, Toronto and Region and Central Lake Ontario Source Protection Region (“CTC Source Protection Region”) was established under the Clean Water Act of Ontario to ensure communities protect their drinking water supplies through prevention – by developing collaborative, watershed-based source protection plans that are locally driven and based on science. The CTC Source Protection Region’s jurisdiction includes the Credit Valley, Toronto and Region and Central Lake Ontario source protection areas, which are represented by the respective conservation authorities under the Clean Water Act. The Minister of the Environment and Climate Change provided funding of $728 (2014 - $691) for source protection projects to the TRCA, which delivers the management function on behalf of the region. Unspent funding of $844 (2014 - $948) is held in a separate bank account, which is included on the statement of financial position as cash, with a corresponding deferred revenue balance.

5. Investments 2015 2014

Provincial bonds $ 6,771 $ 6,476 Interest rates: 1.63% - 3.62% (2014: 1.78% - 3.62%) Years of maturity: 2017 - 2021 (2014: 2015 - 2019) Guaranteed investment certificates 4,880 4,701 Interest rates: 1.45% - 2.46% (2014: 1.70% - 2.46%) Years of maturity: 2016 - 2020 (2014: 2015 -2019) Financial institution bonds 4,295 5,112 Interest rates: 1.90% - 3.51% (2014: 1.74% - 3.51%) Years of maturity: 2016 - 2017 (2014: 2015 - 2017) Corporate bonds 2,220 2,898 Interest rates: 3.12% - 3.30% (2014: 1.97% - 3.42%) Years of maturity: 2016 - 2019 (2014: 2015 - 2019) Municipal bonds 1,585 - Interest rates: 1.58% - 1.85% (2014: Not applicable) Years of maturity: 2020 - 2021 (2014: Not applicable) ______$ 19,751 $ 19,187

The fair market value of the investments at December 31, 2015 is $19,931 (2014 - $19,364).

6. Receivables 2015 2014 Government funding Municipal $ 7,159 $ 7,066 Federal 1,341 1,065 Provincial 629 1,180 Authority generated Trade and other 2,238 5,013 The Living City Foundation (note 17) 2,025 1,463 Employee loans 54 81 $ 13,446 $ 15,868

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164

Toronto and Region Conservation Authority Notes to the Financial Statements (in thousands of dollars) December 31, 2015

7. Liabilities for contaminated sites

TRCA reports environmental liabilities related to the management and remediation of contaminated sites where TRCA is obligated or likely obligated to incur such costs. A contaminated site liability of $nil (2014 – $nil) has been recorded based on environmental assessments or estimations for those sites where an assessment has not been conducted. TRCA’s ongoing efforts to assess contaminated sites may result in additional environmental remediation liabilities related to newly identified sites, or changes in the assessments or intended use of existing sites. Any changes to the TRCA’s liabilities for contaminated sites will be accrued in the year in which they are assessed as likely and reasonably estimable.

8. Vacation pay entitlements

In accordance with TRCA practices, employees are entitled to payment equal to 100% of the value of their accrued vacation days upon leaving TRCA. The liability for the accumulated vacation days represents management's best estimate as to TRCA's future liability.

9. Deferred revenue 2015 2014

Government funding (a) $ 21,948 $ 17,912 Authority generated (b) 11,875 9,800 $ 33,823 $ 27,712

(a) Government funding 2015 2014 Municipal Capital levies $ 12,919 $ 11,018 Contract services 2,828 3,442 Other 840 (196) Provincial 1,850 1,546 Federal 447 321 Revenue sharing policy (i) 3,064 1,781 $ 21,948 $ 17,912

(i) The proceeds on the sale of properties of $1,853 (2014 - $987) are attributed to the province and the member municipalities on the basis of their original contribution when the properties were acquired. The Ministry of Natural Resources and Forestry reserves the right to direct the purpose to which the provincial share of funds may be applied or to request a refund. The balance must always be maintained in proportion to the original contribution by the province and TRCA, represented by the member municipalities. TRCA is permitted to withdraw the municipal share of the funds provided that the corresponding provincial share is either matched by other sources of funding or returned to the province. In the current year, $579 (2014 - $151) was applied to the Greenspace acquisition project and $7 (2014 - $6) was applied to the revised project for the Etobicoke Motel Strip. Interest of $16 (2014 - $10) has been imputed on the unspent balance of the funds.

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165

Toronto and Region Conservation Authority Notes to the Financial Statements (in thousands of dollars) December 31, 2015

9. Deferred revenue (continued)

(b) Authority generated 2015 2014

Cash in lieu and compensation $ 3,190 $ 3,307 Master environmental servicing plans 2,201 1,534 Property easements 1,622 - Oak Ridges Corridor Park 1,464 1,177 Contract services 703 459 Wedding and event deposits 446 423 Other 2,249 2,900 $ 11,875 $ 9,800

10. Tangible capital assets

2015 Opening Additions Transfers Disposals Closing Cost Land $ 340,329 $ 3,872 $ 37 $ - $ 344,238 Infrastructure 149,370 3,958 502 - 153,830 Buildings and building improvements 51,485 2,110 3,923 (281) 57,237 Land improvements 13,383 13 - - 13,396 Machinery and equipment 7,864 2,052 - (566) 9,350 Vehicles 4,382 578 - (217) 4,743 Assets under construction 6,544 3,891 (4,462) (174) 5,799 $ 573,357 $ 16,474 $ - $ (1,238) $ 588,593

2015 Opening Amortization Disposal Closing Accumulated Amortization Infrastructure $ 100,690 $ 3,406 $ - $ 104,096 Buildings and building improvements 25,421 1,842 (149) 27,114 Land improvements 4,442 549 - 4,991 Machinery and equipment 3,659 886 (566) 3,979 Vehicles 3,186 419 (211) 3,394 $ 137,398 $ 7,102 $ (926) $ 143,574

2014 2015 Net Book Value Land $ 340,329 $ 344,238 Infrastructure 48,680 49,734 Buildings and building improvements 26,064 30,123 Land improvements 8,941 8,405 Machinery and equipment 4,205 5,371 Vehicles 1,196 1,349 Assets under construction 6,544 5,799 $ 435,959 $ 445,019

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Toronto and Region Conservation Authority Notes to the Financial Statements (in thousands of dollars) December 31, 2015

10. Tangible capital assets (continued)

In the current year, TRCA sold tangible capital assets for $20 (2014 - $51), resulting in a net loss of $292 (2014 - $74). The value of contributed tangible capital assets within Greenspace Securement and Management received during the year is $887 (2014 - $1,114).

11. Accumulated surplus

TRCA segregates its accumulated surplus into the following internally allocated categories:

2015 2014

Tangible capital assets $ 445,019 $ 435,959 Unfunded vacation pay entitlements (2,264) (1,887) Unallocated accumulated surplus (deficit) 447 (994) Reserves Operating contingency 2,834 3,336 Office accommodation 842 2,747 Vehicles and equipment 106 127 Tree donation program 9 9 3,791 6,219 $ 446,993 $ 439,297

12. Government funding 2015 2015 2014 Budget Actual Actual Municipal Capital levies $ 42,692 $ 33,721 $ 36,065 Contract services 17,956 16,190 15,589 Operating levies 13,285 13,288 12,851 Other 4,532 3,890 2,109 Provincial 3,572 3,670 4,160 Federal 1,277 1,861 1,974 $ 83,314 $ 72,620 $ 72,748

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167

Toronto and Region Conservation Authority Notes to the Financial Statements (in thousands of dollars) December 31, 2015

13. Authority generated 2015 2015 2014 Budget Actual Actual Watershed Studies and Strategies Watershed planning and reporting $ 29 $ 28 $ 13 Climate science 18 - 23 Water Risk Management Erosion and flood management 100 430 118 Water resource science 234 113 114 Regional Biodiversity Biodiversity monitoring 167 137 150 Ecosystem management 110 150 83 Restoration and regeneration 1,949 821 1,025 Greenspace Securement and Management Greenspace management 1,375 383 271 Greenspace securement 3,150 2,405 1,393 Rentals 2,253 2,310 2,643 Tourism and Recreation Camping and picnic permits 2,634 3,251 2,744 Site admission and athletic fees 2,986 2,570 2,734 Wedding and corporate events 1,929 1,940 1,965 Events and festivals 812 865 786 Film and photography permits 60 163 75 Heritage Village 1,488 1,680 1,480 Black Creek historic brewery 49 55 78 Trails 212 178 271 Planning and Development Review Development planning 4,492 4,817 4,546 Environmental assessments 799 995 808 Education and Outreach Educational programs 4,573 3,118 3,432 Sustainable Communities Living City transition programs 2,242 1,949 1,816 Community engagement 424 449 568 Corporate Services 187 458 474

$ 32,272 $ 29,265 $ 27,610

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168

Toronto and Region Conservation Authority Notes to the Financial Statements (in thousands of dollars) December 31, 2015

14. Expenses by object 2015 2015 2014 Budget Actual Actual

Compensation $ 54,949 $ 55,866 $ 53,682 Contract services 38,139 23,046 24,550 Materials and supplies 8,324 6,293 6,682 Utilities 1,008 1,189 1,190 Property taxes 1,088 1,013 979 Amortization of tangible capital assets 6,810 7,102 6,771 $ 110,318 $ 94,509 $ 93,854

15. Public sector salary disclosure

TRCA is subject to The Public Sector Salary Disclosure Act, 1996. Salaries and taxable benefits for the 47 employees (2014 – 49 employees) that have been paid by TRCA and reported to the Province of Ontario in compliance with this legislation can be obtained from the Ontario Ministry of Finance or upon request from TRCA.

16. Employee pension plan

TRCA makes contributions to the Ontario Municipal Employees Retirement System (OMERS), which is a multi-employer pension plan, on behalf of its qualifying full and part-time employees. The plan is a defined benefit plan, which specifies the amount of the retirement benefit to be received by the employees based on the length of service, pension formula and best 60 months of earnings. Employees and employers contribute equally to the plan.

Because OMERS is a multi-employer pension plan, any pension plan surpluses or deficits are a joint responsibility of all Ontario municipalities and their employees. As a result, TRCA does not recognize any share of the OMERS pension actuarial deficit of $6,977 million (2014 - $7,078 million), as TRCA’s portion of the amount is not determinable. Employers’ current service contributions to the OMERS pension plan in the amount of $3,705 (2014 – $3,678) are included as compensation in the current year.

17. The Living City Foundation

During the year The Living City Foundation (the “Foundation”) contributed $1,857 (2014 - $1,781) to TRCA programs, representing a significant portion of the Foundation’s donations. The Foundation is an independent, non-controlled registered charitable organization which has its own Board. As such, the TRCA’s financial statements do not include the activities of the Foundation. As at December 31, 2015, the Foundation has an externally restricted fund balance of $2,638 (2014 - $2,475), which is to be primarily used for undertaking TRCA projects and an operating fund deficit of $502 (2014 - $417). The receivable balance from the Foundation is non-interest bearing, unsecured and has no specified repayment terms.

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169

Toronto and Region Conservation Authority Notes to the Financial Statements (in thousands of dollars) December 31, 2015

18. Contingent liabilities and commitments

(a) Legal actions and claims TRCA has received statements of claim as defendant under various legal actions resulting from its involvement in land purchases, fatalities, personal injuries and flooding on or adjacent to its properties. TRCA maintains insurance coverage against such risks and has notified its insurers of the legal actions and claims. It is not possible at this time to determine the outcome of these claims and, therefore, no provision has been made in these financial statements.

(b) Land expropriations TRCA has completed the acquisition of lands required to undertake various projects. There are two projects where TRCA has acquired lands under the Expropriations Act. The first project is the Revised Project for the Etobicoke Motel Strip. Properties required for this project were obtained through expropriation from five owners. Funding was obtained from the City of Etobicoke and the Municipality of Metropolitan Toronto (now collectively known as the City of Toronto) and the Province of Ontario. To date four of the expropriations have been settled and the compensation has been paid.

The second project is the Mimico Waterfront Linear Park Project. This project is funded by the Toronto Waterfront Revitalization Corporation. One property was expropriated for this project and one property was acquired under Section 30 of the Expropriations Act. Both transactions have been settled and compensation has been paid. The additional payment for costs associated with the expropriated property is not determinable.

(c) Lease commitments TRCA has entered into agreements to lease premises and equipment for various periods until 2021. Minimum lease payments in aggregate and for each of the next five years are as follows:

2016 2017 2018 2019 2020 Thereafter Total $1,067 $1,067 $1,018 $ 979 $ 979 $ 489 $5,599

(d) Loan guarantee TRCA and the City of Toronto have jointly and severally provided a loan guarantee in the amount of $7.5 million to the Evergreen Foundation for the Don Valley Brick Works restoration project. The loan guarantee was renegotiated in 2014, reducing the amount of the guarantee to $4.3 million for 2015. As of December 31, 2015, Evergreen Foundation had received advances in the amount of $4.3 million ($4.3 million as of December 31, 2014) from its financing institutional lender. The agreement requires annual reductions in the amounts guaranteed until June 30, 2023.

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Toronto and Region Conservation Authority Notes to the Financial Statements (in thousands of dollars) December 31, 2015

19. Budget figures

PSAS requires a comparison of TRCA’s results for the year with those originally planned on the same basis as that used for the actual results. The budget in the statement of operations has been adjusted to be presented on a consistent basis as actual results. Below is a reconciliation of the figures from the approved budget to the budget on the financial statements:

Approved Tangible budget per Approved Capital financial Budget Reclassification Amortization Assets statements

Total revenues $ 119,036 $ (2,850) $ $ $ 116,186

Expenses Watershed Studies and Strategies 4,553 (1,646) 10 (2) 2,915 Water Risk Management 27,358 (159) 1,975 (1,313) 27,861 Regional Biodiversity 15,129 (47) 56 (283) 14,855 Land Securement and Management 9,582 (34) 912 (3,613) 6,847 Tourism and Recreation 22,611 (1,225) 2,595 (2,790) 21,191 Planning and Development Review 8,141 29 12 (26) 8,156 Education and Outreach 11,975 120 345 (1,571) 10,869 Sustainable Communities 7,321 3,013 35 (20) 10,349 Corporate Services 11,668 (51) 867 (5,209) 7,275 $ 118,338 $ - $ 6,807 $ (14,827) $ 110,318

Net surplus $ 698 $ 5,868

20. Comparative figures

Certain comparative figures have been reclassified to conform with the financial statement presentation adopted in the current year.

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171 Attachment 2

Report to the Budget/Audit Advisory Board—communication of audit strategy and results

Toronto and Region Conservation Authority For the year ended December 31, 2015

172 CONFIDENTIAL

June 10, 2016 Grant Thornton LLP Suite 200 15 Allstate Parkway Markham, ON L3R 5B4

T +1 416 366 0100 F +1 905 475 8906 www.GrantThornton.ca To the members of the Budget/Audit Advisory Board of Toronto and Region Conservation Authority

We are pleased to report that we have now substantially completed our audit of the financial statements of Toronto and Region Conservation Authority (hereinafter the "Authority" or “TRCA”) for the year ended December 31, 2015. We enclose this report as a means to engage in effective two way communication with you regarding our financial statement audit. This communication will assist the Budget/Audit Advisory Board (hereinafter referred to as the Committee) in understanding our overall audit strategy and results of audit procedures and includes comments on misstatements, significant accounting policies, sensitive estimates and other matters.

This communication has been prepared to comply with the requirements outlined in CAS 260 Communication with those Charged with Governance. The information in this document is intended solely for the information and use of the Committee, Board of Directors and management. It is not intended to be distributed or used by anyone other than these specified parties.

We express our appreciation for the cooperation and assistance received from the management and staff of the entity during the course of our audit.

If you have any particular comments or concerns, please do not hesitate to raise them at our scheduled meeting.

Yours sincerely, Grant Thornton LLP

Anita Ferrari, BComm, FCPA, FCA Partner

cc: Brian Denney, Chief Executive Officer Rocco Sgambelluri, Chief Financial Officer

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Contents

Page Achieving effective governance 1 Quality control and independence 2 Our audit approach 3 Status of the audit 6 Audit results 7 Reportable matters 9 Technical updates 11 Appendix A—Draft Management representation letter 12 Appendix B—PSAB Accounting developments 17 Appendix C—Engagement Letter 22

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Achieving effective governance

There are several fundamental components of effective governance. Those charged with governance play a key role in achieving strong governance, particularly with respect to financial reporting.

Roles in ensuring strong financial reporting Role of the  Help set the tone for the organization by emphasizing honesty, ethical behaviour and fraud Committee prevention  Oversee management, including ensuring that management establishes and maintains internal controls to provide reasonable assurance regarding reliability of financial reporting  Recommend the nomination and compensation of external auditors to the Board of Directors  Directly oversee the work of the external auditors including reviewing and discussing the audit plan

Role of the  Help set the tone for the organization by emphasizing honesty, ethical behaviour and fraud Board of prevention Directors  Oversee management, including ensuring that management establishes and maintains internal controls to provide reasonable assurance regarding reliability of financial reporting

Role of  Prepare financial statements in accordance with Canadian public sector accounting management standards  Design, implement and maintain effective internal controls over financial reporting processes, including controls to prevent and detect fraud  Exercise sound judgment in selecting and applying accounting policies  Prevent, detect and correct errors, including those caused by fraud  Provide representations to external auditors  Assess quantitative and qualitative impact of misstatements discovered during the audit on fair presentation of the financial statements

Role of  Provide an audit opinion that the financial statements are in accordance with Canadian Grant Thornton public sector accounting standards LLP  Conduct our audit in accordance with Canadian generally accepted auditing standards  Maintain independence and objectivity  Be a resource to management and to those charged with governance  Communicate matters of interest to those charged with governance  Establish an effective two-way communication with those charges with governance, to report matters of interest to them and obtain their comments on audit risk matters.

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Quality control and independence

Quality control Grant Thornton LLP Grant Thornton LLP has a robust quality control program that forms a core part of our client service. has a robust quality control program We combine internationally developed audit methodology, advanced technology, rigorous review procedures, mandatory professional development requirements, and the use of specialists to deliver high quality audit services to our clients. In addition to our internal processes, we are subject to inspection and oversight by standard setting and regulatory bodies. We are proud of our firm’s approach to quality control and would be pleased to discuss any aspect with you at your convenience.

Independence We have a rigorous process where we continually monitor and maintain our independence. The process of maintaining our independence includes, but is not limited to:

 Identification of threats to our independence and putting into place safeguards to mitigate those threats. For example, we evaluate the independence threat of any non-audit services provided to the Authority;

 Confirming the independence of our engagement team members.

We confirm that there has been no change to our status with respect to independence since we previously confirmed our independence to you on June 26, 2015.

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Our audit approach

An understanding of the Authority and your business drives the Grant Thornton LLP audit approach. The audit methodology is risk based and specifically tailored to the Authority as depicted below:

Our tailored audit approach results in procedures designed to respond to an identified risk. The greater the risk of material misstatement associated with the account, class of transactions or balance, the greater the audit emphasis placed on it in terms of audit verification and analysis.

Throughout the execution of the audit approach, we will maintain our professional scepticism, recognizing the possibility that a material misstatement due to fraud could exist notwithstanding our past experiences with the Authority or our beliefs about management’s honesty and integrity.

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Internal control Our audit includes gaining an understanding of the Authority’s internal control over financial reporting. Our understanding is focused on processes associated with the identified risk areas (see below). We use this understanding to determine the nature, extent and timing of our audit procedures.

Note that the auditor’s objectives with regards to internal control are different from those of management and those charged with governance. For example, we primarily target controls that relate to financial reporting and not those that relate to the Authority’s operations or compliance which may also be relevant to the Authority's objectives. Therefore, management and those charged with governance cannot solely rely on our findings to discharge their responsibilities in this area.

Please see the Reportable matters section for our internal control findings.

Risk assessment Our risk assessment process identified the following areas where we focused our attention:

Risk area Audit procedures Revenue generated from municipal levies, Municipal levies were agreed to billings for the year and contracts, grants and special projects subsequent receipts. We tested a sample of expenditures on the deferred municipal levy schedule to test revenue recognition. Similar testing was completed for contract revenue and grant revenue.

Confirmed a sample of accounts receivable balances, and performed alternative procedures (subsequent receipts) if positive confirmation was not received for the balances sampled. Analytical review of revenue and various reconciliations as well as deferred revenue schedules were performed to identify any additional balances that required investigation.

Employee Compensation We reviewed the T4 summary and general ledger reconciliation for reasonableness and investigated unusual items. Payroll accruals were examined and both payables and compensation expenses were analytically reviewed. The underlying data used for analytical review was tested to source data.

Tangible Capital Assets Examined supporting documentation for significant capital asset additions. Ensured that assets were capitalized in the proper class and that those expenditures not capitalized were properly considered. Amortization was tested to ensure it was applied in accordance with the amortization policy.

Operating Expenses Performed detailed analytical review comparing operating expenses to prior year and investigating and corroborating variances. Also, substantively tested various expense accounts to ensure appropriate recognition. Viewed support for significant payables and accruals and tested cut-off.

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Materiality The purpose of our audit is to provide an opinion as to whether the financial statements are prepared, in all material respects, in accordance with Canadian accounting standards for public sector entities. Therefore, materiality is a critical auditing concept and as such we apply it in all stages of the engagement.

The concept of materiality recognizes that an auditor cannot verify every balance, transaction or judgment made in the financial reporting process. During audit planning, we made a preliminary assessment of materiality for the purpose of developing our audit strategy, including the determination of the extent of our audit procedures. During the completion stage, we consider not only the quantitative assessment of materiality, but also qualitative factors, in assessing the impact on the financial statements, our audit opinion and the matters brought to your attention.

Fraud risk factor considerations Fraud can occur in We are responsible for planning and performing the audit to obtain reasonable assurance as to whether any organization, at any time, and can be the financial statements are free of material misstatement caused by error or by fraud. Our perpetrated by anyone. responsibility includes:  The identification and assessment of the risks of material misstatement of the financial statements due to fraud through procedures including discussions amongst the audit team and specific inquires of management;  Obtaining sufficient appropriate audit evidence to respond to the fraud risks noted; and  Responding appropriately to any fraud or suspected fraud identified during the audit. We would like to obtain your input on these matters. With this regard, we are required to communicate with you on fraud-related matters, including:

 Obtaining an understanding of how you exercise oversight of management's processes for identifying and responding to the risks of fraud in the entity and the internal control that management has established to mitigate these risks.  Inquiring as to whether you have knowledge of any actual, suspected or alleged fraud affecting the Authority.

The following provides a summary of some of the fraud related procedures performed during the audit:

 Test the appropriateness of journal entries recorded in the general ledger and other adjustments made in the preparation of the financial statements.  Review accounting estimates for biases.  Evaluate the business rationale (or the lack thereof) for significant transactions that are or appear to be outside the normal course of business.

We would like to Laws and regulations obtain your input on these matters. One of the auditor’s objectives in the audit is to perform specified audit procedures to help identify instances of non-compliance with laws and regulations that may have a material effect on the financial statements. We would like to know if you are aware of instances of the Authority not being in compliance with laws and regulations.

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Status of the audit

Outstanding items We have substantially completed our audit of the financial statements of the Authority and the results of that audit are included in this report.

Our draft independent auditor’s report accompanies the draft financial statements. We will finalize the report once the Board of Directors has approved the financial statements.

The following items were outstanding as at the date of this report:

 Approval of the financial statements by the Board of Directors, the date of which becomes the audit report date;  Receipt and evaluation of legal letters, to be dated within 7 days of the audit report date;  Procedures regarding subsequent events up to the audit report date; and  Receipt of the signed management representation letter dated the audit report date. A draft has been attached in the appendices.

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Audit results

Summary of misstatements There were no non-trivial unadjusted misstatements identified as a result of our audit.

Summary of adjusting entries Our audit did not identify any required journal entries. Management identified and provided us with five journal entries during the course of the audit. These adjustments were as expected and related primarily to adjustments to the tangible capital assets accounts as well as adjustments to bring the year end deferred revenue accounts in line.

Summary of disclosure matters

Management implemented a number of changes to the financial statement presentation in fiscal 2015, and we also provided assistance in the drafting of the statements and financial statement notes. Comparative figures were adjusted to conform with the presentation adopted in the current fiscal year. Some of the changes resulted in more and enhanced disclosure, and some of the changes resulted in reduced and condensed disclosure. We understand that the specifics of these various changes have been communicated separately to the Budget/Audit Advisory Board.

The Public Sector Accounting Standards have a number of disclosure requirements which are more comprehensive than those required under other accounting frameworks. We note below a number of disclosure requirements under PSAS which the Authority has not complied with in its fiscal 2015 financial statements. Each of these requirements were discussed with management, and management is of the view that the omission of these disclosures is acceptable as the required information either wouldn’t provide more meaningful information to users of the statements, or the amounts in question are immaterial, or the required disclosures could be obtained in other ways.

Our audit identified the unadjusted non-trivial misstatements from disclosure matters noted below, and we agree with management that these are not significant disclosure deficiencies.

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Restricted cash Note 4 to the financial statements notes that cash includes $844,000 which represents unspent funding relating to the CTC Source Protection Region, and that this amount is being held in a separate bank account. In prior years this separate bank account amount was presented separately as “restricted cash”, and in the statement of cash flows, it was clear that the Authority did not have unrestricted access to this amount. Management is of the view that including the amount in cash and not separately disclosing this amount on the face of the financial statements is acceptable because the amount is immaterial, it is described in the notes, and with the passage of time it is no longer clear if the original funder requires the separation of this bank account. Management is in the process of clarifying whether this segregation of the cash balance is required going forward.

Vacation pay entitlements Vacation pay entitlements includes amounts which the Authority’s employees can carry forward beyond a year, and it is unknown exactly when in the future these amounts will be settled. Under PSAS 3255, these amounts are considered post-employment benefits, which would require more extensive disclosure in the financial statements, and consideration of engaging an actuary to determine the present value of the liability based on assumptions about when the vacation pay will be taken, appropriate discount rates, and future salary. Management believes the vacation pay entitlement as calculated is conservative as it has not been discounted, any discounting adjustment would be immaterial, and the added comprehensive disclosure would not provide additional meaningful information to the users of the financial statements.

Deferred revenue continuity Under PSAS 3100.18 (c), the Authority is required to disclose the amount of, and changes in, the deferred revenue balance attributable to each major category of external restrictions, ie a continuity of opening deferred revenue, plus gross amounts received, less gross amounts recognized as revenue, and closing deferred revenue. The Authority has chosen not to disclose this continuity in the current year, and believes the amounts could be obtained elsewhere in the financial statements. Management has also agreed to consider this disclosure next year.

Line of credit The Authority has an operating line of credit with a limit of $1 million, none of which was drawn at year end. This operating line is not disclosed in the financial statement notes. Management has chosen not to disclose this information on the basis that its omission is not material to the users of the financial statements.

Audit • Tax • Advisory © Grant Thornton LLP. A Canadian Member of Grant Thornton International. All rights reserved. CONFIDENTIAL 182 Report to the Budget/Audit Advisory Board —communication of audit strategy and 9 results Toronto and Region Conservation Authority For the year ended December 31, 2015

Reportable matters

Internal control If we become aware of a deficiency in your internal controls systems, auditing standards requires us to communicate those deficiencies we consider significant. A financial statement audit is not designed to provide assurance on internal control.

During the course of performing our audit, we did not identify any significant deficiencies in internal control.

However, during the course of performing our audit, we did identify the following matter which we want to bring to the attention of the Committee.

 During the course of our audit, while there was improvement over the prior year, it was noted that bank reconciliations had not been completed in a timely manner throughout the fiscal year. Without timely monthly reconciliations, the risk exists that the interim information provided to management and the Board of Directors could be misstated, and banking errors would not be identified for correction with your financial institutions in a timely manner. Based on our observations, the lack of timely bank reconciliations did not misstate the interim information of the Authority during the 2015 fiscal year. We again this year recommend that monthly bank reconciliations be performed in a more consistently timely manner, for example, within one month of the month end date. This recommendation has been discussed with management and management has indicated that improvements have already been made to their bank reconciliation process which will result in more timely preparation.

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Significant findings from the audit As part of the audit, we identified the following significant items we wanted to discuss:

Significant findings Considerations and results Significant new accounting In the current year the Authority has implemented PS3260, Liability for policies contaminated sites. This requires organizations to record a liability if they have a contaminated site that meets the specified criteria. The standard defines contamination as the introduction into air, soil, water or sediment of a chemical, organic or radioactive or live organism that exceeds a prescribed environmental level. The standard generally applies to sites that are not in productive use. Sites that are in productive use are only considered contaminated if there was an unexpected event that resulted in contamination. This change has been applied retroactively without the restatement of prior periods. The adoption of this standard did not impact on the Authority’s financial statements as no contaminated sites were found to exist.

Acceptable alternative None identified. accounting policies

Significant transactions None identified.

Sensitive accounting Capitalization of tangible capital assets estimates and disclosures Management follows a methodology to ensure that all constructed capital assets are reviewed to ensure that the appropriate assets and amounts are properly capitalized as tangible capital assets. We reviewed management’s methodology, and on a sample basis have tested the capitalization of tangible capital assets. We agree with the method and amounts capitalized as tangible capital assets.

Contributed assets recorded at fair value Management obtains appraisal reports to support the fair values assigned to contributed property. On a test basis we reviewed the appraisal reports supporting the additions tested. The amounts recorded for contributed assets were derived from the valuation reports.

Liability for contaminated sites An assessment has been made by management on all sites owned by the Authority to determine if a liability is required for contaminated sites. Our audit work focused on the judgments and assumptions used by management in assessing whether a site is contaminated as defined by PS3260.

Fraud and illegal acts Our audit procedures were performed for the purpose of forming an opinion on the financial statements and although these procedures might bring possible fraudulent or illegal activities to our attention, our audit procedures are less likely to detect material misstatements arising from fraud or other illegal acts because such acts are usually accompanied by acts designed to conceal their existence. Management has represented they are not aware of any fraud or illegal acts. We did not detect any fraudulent or illegal activities, or misstatements resulting from fraudulent or illegal activities during our audit.

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Technical updates

Accounting standards Accounting standards issued by the Accounting Standards Board which may affect your business in the current year and future years are attached in the appendices, most of which would be applicable to your 2020 fiscal year. If you have any questions about these changes we invite you to raise them during our next meeting. We will be pleased to address your concerns.

Auditing standards There are no new auditing standards that will have a material impact on the Authority.

Thought leadership

We are focused on the public sector accounting industry, and we pass our knowledge on to our clients through “Thought Leadership” publications, including the following. If you would like to be added to our mailing list to receive such publications, please reach out to [email protected], or [email protected].

Five questions that could save you from a data breach

http://insights.grantthornton.ca/i/569645-five-questions-that-could-save- you-from-a-data-breach

Walking the tightrope – balancing board governance

http://insights.grantthornton.ca/i/572248-walking-the-tightrope-balancing- board-governance-expectations

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Appendix A—Draft Management representation letter

June 24, 2016

Grant Thornton LLP Suite 200 15 Allstate Parkway Markham, ON L3R 5B4

Dear Sir/Madam:

We are providing this letter in connection with your audit of the financial statements of Toronto and Region Conservation Authority (“TCRA”) as of December 31, 2015, and for the year then ended, for the purpose of expressing an opinion as to whether the financial statements present fairly, in all material respects, the financial position, results of operations, changes in net financial assets and cash flows of Toronto and Region Conservation Authority in accordance with Canadian public sector accounting standards.

We acknowledge that we have fulfilled our responsibilities for the preparation of the financial statements in accordance with Canadian public sector accounting standards and for the design and implementation of internal controls to prevent and detect fraud and error. We have assessed the risk that the financial statements may be materially misstated as a result of fraud, and have determined such risk to be low. Further, we acknowledge that your examination was planned and conducted in accordance with Canadian generally accepted auditing standards (GAAS) so as to enable you to express an opinion on the financial statements. We understand that while your work includes an examination of the accounting system, internal controls and related data to the extent you considered necessary in the circumstances, it is not designed to identify, nor can it necessarily be expected to disclose, fraud, shortages, errors and other irregularities, should any exist.

Certain representations in this letter are described as being limited to matters that are material. An item is considered material, regardless of its monetary value, if it is probable that its omission from or misstatement in the financial statements would influence the decision of a reasonable person relying on the financial statements.

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We confirm, to the best of our knowledge and belief, as of June 24, 2016, the following representations made to you during your audit.

Financial statements 1 The financial statements referred to above present fairly, in all material respects, the financial position of the entity as at December 31, 2015 and the results of its operations, changes in net financial assets and its cash flows for the year then ended in accordance with Canadian public sector accounting standards, as agreed to in the terms of the audit engagement.

Completeness of information 2 We have made available to you all financial records and related data and all minutes of the meetings of members, directors, and committees of directors, as agreed in the terms of the audit engagement. Summaries of actions of recent meetings for which minutes have not yet been prepared have been provided to you. All significant Board and Committee actions are included in the summaries.

3 We have provided you with unrestricted access to persons within the entity from whom you determined it necessary to obtain audit evidence.

4 There are no material transactions that have not been properly recorded in the accounting records underlying the financial statements.

5 There were no restatements made to correct a material misstatement in the prior period financial statements that affect the comparative information.

6 We are unaware of any known or probable instances of non-compliance with the requirements of regulatory or governmental authorities, including their financial reporting requirements.

7 We are unaware of any violations or possible violations of laws or regulations the effects of which should be considered for disclosure in the financial statements or as the basis of recording a contingent loss.

8 We have disclosed to you all known deficiencies in the design or operation of internal control over financial reporting of which we are aware.

9 We have identified to you all known related parties and related party transactions, including sales, purchases, loans, transfers of assets, liabilities and services, leasing arrangements guarantees, non- monetary transactions and transactions for no consideration.

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10 You provided a non-audit service by assisting us with drafting the financial statements and related notes. In connection with this non-audit service, we confirm that we have made all management decisions and performed all management functions, have the knowledge to evaluate the accuracy and completeness of the financial statements, and accept responsibility for such financial statements.

Fraud and error 11 We have no knowledge of fraud or suspected fraud affecting the entity involving management; employees who have significant roles in internal control; or others, where the fraud could have a non-trivial effect on the financial statements.

12 We have no knowledge of any allegations of fraud or suspected fraud affecting the entity’s financial statements communicated by employees, former employees, analysts, regulators or others.

13 We acknowledge our responsibility for the design, implementation and maintenance of internal control to prevent and detect fraud.

14 We believe there are no uncorrected financial statement misstatements both individually and in the aggregate, to the financial statements taken as a whole.

Recognition, measurement and disclosure 15 We believe that the significant assumptions used by us in making accounting estimates, including those used in arriving at the fair values of financial instruments as measured and disclosed in the financial statements, are reasonable and appropriate in the circumstances.

16 We have no plans or intentions that may materially affect the carrying value or classification of assets and liabilities, both financial and non-financial, reflected in the financial statements.

17 All related party transactions have been appropriately measured and disclosed in the financial statements.

18 The nature of all material measurement uncertainties has been appropriately disclosed in the financial statements, including all estimates where it is reasonably possible that the estimate will change in the near term and the effect of the change could be material to the financial statements.

19 All outstanding and possible claims, whether or not they have been discussed with legal counsel, have been disclosed to you and are appropriately reflected in the financial statements.

20 All liabilities and contingencies, including those associated with guarantees, whether written or oral, have been disclosed to you and are appropriately reflected in the financial statements.

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21 With respect to environmental matters:

a) at year end, there were no liabilities or contingencies that have not already been disclosed to you; b) liabilities or contingencies have been recognized, measured and disclosed, as appropriate, in the financial statements; and c) commitments have been measured and disclosed, as appropriate, in the financial statements.

22 The entity has satisfactory title to (or lease interest in) all assets, and there are no liens or encumbrances on the entity’s assets nor has any been pledged as collateral except under the Evergreen Loan Guarantee which is accurately described below:

a) TRCA and City of Toronto has jointly and severally provided a loan guarantee in the amount of $7.5 million to the Evergreen Foundation for the Don Valley Brick Works restoration project. As of December 31, 2015, the balance of the loan outstanding covered by the guarantee was $4.3million ($4.8 million as of December 31, 2014). 23 We have disclosed to you, and the entity has complied with, all aspects of contractual agreements that could have a material effect on the financial statements in the event of non-compliance, including all covenants, conditions or other requirements of all outstanding debt.

24 The Harmonized Sales Tax (HST) transactions recorded by the entity are in accordance with the federal and provincial regulations. The HST liability/receivable amounts recorded by the entity are considered complete.

25 Employee future benefit costs, assets, and obligations have been determined, accounted for and disclosed in accordance with the requirements of Public Sector Accounting Standards Section 3250 Retirement benefits of the Chartered Professional Accountants of Canada (CPA Canada) Handbook.

26 There have been no events subsequent to the balance sheet date up to the date hereof that would require recognition or disclosure in the financial statements. Further, there have been no events subsequent to the date of the comparative financial statements that would require adjustment of those financial statements and related notes.

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Other 27 We have considered whether or not events have occurred or conditions exist which may cast significant doubt on the Authority’s ability to continue as a going concern and have concluded that no such events or conditions are evident.

Yours very truly,

Brian Denney, Chief Executive Officer

Rocco Sgambelluri, Chief Financial Officer

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Appendix B—PSAB Accounting developments

Management Public Sector Accounting Board Effective date assessment of applicability Introduction to Public Sector Accounting (PSA) Handbook The Introduction to PSA Handbook directs the Fiscal periods frameworks applicable to public sector entities. beginning on or after January 1, 2015. Government business enterprises must apply the Earlier adoption is standards applicable to publicly accountable permitted. enterprises (PAEs) which is Part I of the CPA Canada Handbook – Accounting – International Financial Reporting Standards (IFRS). Rate- regulated GBEs can defer adoption of these standards until fiscal years beginning on or after January 1, 2015. Earlier adoption is permitted.

Introduction to the PSA Handbook The Introduction to the PSA Handbook has been Government amended to add a new type of public sector entity components that adopt called a government component. A government the PSA standards - component is an integral part of a government, such as Fiscal periods a department, ministry or fund, that is not a separate beginning on or after entity with the power to contract in its own name and January 1, 2017. that can sue and be sued. Government components Earlier adoption is that want to prepare general purpose financial permitted. statements must apply the standards for governments GBPs that adopt the in the PSA Handbook. standards applicable to As a result of adding the definition of a government PAEs - Fiscal periods component, the definition of a government organization beginning on or after was amended. A government organization is any January 1, 2017. organization controlled by a government that is a Earlier adoption is separate entity with the power to contract in its own permitted. name and that can sue and be sued. Government Government organizations include government business enterprises partnerships, other (GBEs), government not-for-profit organizations than GBPs, that (GNFPOs) and other government organizations determine the (OGOs). As a result of the change in the definition of a standards applicable to government organization, some entities that were PAEs are most formerly classified as GNFPOs or OGOs may now be appropriate for their classified as government components which may result partnership - Fiscal in a change in the accounting framework that they are periods beginning on required to apply. or after January 1, Government business partnerships (GBPs) between 2017. Earlier adoption two or more public sector entities that want to issue is permitted. general purpose financial statements must apply the Government

Audit • Tax • Advisory © Grant Thornton LLP. A Canadian Member of Grant Thornton International. All rights reserved. CONFIDENTIAL 191 Report to the Budget/Audit Advisory Board—communication of audit strategy and 18 results Toronto and Region Conservation Authority For the year ended December 31, 2015

Management Public Sector Accounting Board Effective date assessment of applicability standards for PAEs in Part I of the CPA Canada components, GBPs Handbook – Accounting – IFRS. and other government Non-business government partnerships between two or partnerships that more public sector entities that want to issue general expect to change their purpose financial statements would normally apply the basis of accounting PSA Handbook, unless it does not meet the needs of must disclose this fact the partnership’s financial statement users. In that in the periods case the partnership can apply, the standards preceding the period applicable to PAEs in Part I of the CPA Canada the change becomes Handbook – Accounting – IFRS. Factors to consider in effective. assessing users' needs include, but are not limited to, whether the partnership:  has issued, or is in the process of issuing, debt or equity instruments that are, or will be, outstanding and traded in a public market;  holds assets in a fiduciary capacity for a broad group of outsiders as one of its primary businesses;  has commercial-type operations and substantially derives its revenue from these activities; and  receives limited government assistance on an ongoing basis. Government components and government partnerships that adopt the PSA Handbook must account for the transition retroactively, with the restatement of prior periods in accordance with Section PS 2125 First-time adoption.

Section PS 3450 Financial instruments, Section PS 2601 Foreign currency translation, Section PS 1201 Financial statement presentation, and PS 3041 Portfolio investments

PS 3450 Financial instruments is a new Section that The new requirements establishes standards for recognizing and measuring are all required to be financial assets, financial liabilities and non-financial applied at the same derivatives. time. PS 2601 Foreign currency translation revises and For governments - Fiscal replaces Section PS 2600 Foreign currency translation. years beginning on or PS 1201 Financial statement presentation revises and after April 1, 2019. This replaces Section PS 1200 Financial statement effective date was presentation. amended in September 2015. PS 3041 Portfolio investments revises and replaces Section PS 3040 Portfolio investments. For government organizations that The issuance of these new sections also includes applied the CPA Canada consequential amendments to Handbook – Accounting  Introduction to accounting standards that apply only prior to their adoption of to government not-for-profit organizations the CPA Canada Public  PS 1000 Financial statement concepts Sector Accounting Handbook - Fiscal years  PS 1100 Financial statement objectives beginning on or after  PS 2125 First-time adoption by government April 1, 2012. organizations For all other government  PS 2500 Basic principles of consolidation organizations - Fiscal years beginning on or  PS 2510 Additional areas of consolidation after April 1, 2019. This  PS 3050 Loans receivable effective date was  PS 3060 Government partnerships amended in September 2015.  PS 3070 Investments in government business

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Management Public Sector Accounting Board Effective date assessment of applicability enterprises Earlier adoption is  PS 3230 Long-term debt permitted.  PS 3310 Loan guarantees  PS 4200 Financial statement presentation by not-for- profit organizations PSG-6 Including results of organizations and partnerships applying fair value measurement was withdrawn as a result of the issuance of these sections.

Section PS 2200 Related party disclosures Fiscal years beginning This Section defines a related party. It also establishes on or after April 1, the disclosures required for related party transactions, 2017. including disclosure of information about an entity’s Earlier adoption is related party transactions and the relationship between permitted. the related parties when the transactions:  have occurred at a value different from that which would have been arrived at if the parties were unrelated; or  have or could have, a material financial effect on the financial statements. As a result of the issuance of this Section, at its June 2015 meeting, the Public Sector Accounting Board (PSAB) approved an Exposure Draft proposing the withdrawal of Section PS 4260 Disclosure of related party transactions by not-for-profit organizations. This proposal would require not-for-profit organizations to apply Section PS 2200. PSAB will also propose amendments to the transitional provisions of Section PS 2200 for not-for-profit organizations applying the 4200 series.

Section PS 3420 Inter-entity transactions This Section establishes how to account for and report Fiscal years beginning transactions between public sector entities that on or after April 1, comprise a government's reporting entity from both a 2017. provider and recipient perspective (i.e., related parties Earlier adoption is within a government reporting entity). The main permitted. features of the new Section are: • Transactions are measured at their carrying amounts, except in specific circumstances. • Transactions occurring on similar terms and conditions as an arm’s length transaction are measured at the exchange amount. • Cost allocation and recovery is the allocation of costs of activities associated with providing goods or services to another entity and the recovery of the costs incurred from the other entities. Under a policy of cost allocation, revenues and expenses are recognized on a gross basis at their exchange amount. • Unallocated costs are the cost of resources recorded by the providing entity in its operating activities that are incurred on behalf of a recipient entity. A recipient may choose to recognize unallocated costs for the provision of goods and services and measure them at their carrying amount, fair value or other amount dictated by policy, accountability structure or

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Management Public Sector Accounting Board Effective date assessment of applicability budget practice. • The transfer of an asset or liability for nominal or no consideration is measured by the provider at its carrying amount and by the recipient at its carrying amount or fair value. • Inter-entity transactions must be disclosed in accordance with Section PS 2200 Related party disclosures.

Section PS 3210 Assets This new Section provides guidance for applying the Fiscal years beginning definition of an asset set out in Section PS 1000 on or after April 1, Financial statement concepts and establishes general 2017. disclosure standards for assets. Earlier adoption is Disclosure of information about the major categories of permitted. assets that are not recognized is required. When an asset is not recognized because a reasonable estimate of the amount involved cannot be made, the reason(s) for this should be disclosed.

Section PS 3320 Contingent assets This new Section defines and establishes disclosure Fiscal years beginning standards for contingent assets. on or after April 1, Contingent assets are possible assets arising from 2017. existing conditions or situations involving uncertainty. Earlier adoption is That uncertainty will ultimately be resolved when one or permitted. more future events not wholly within the public sector entity's control occur or fail to occur and that resolution will confirm the existence or non-existence of an asset. Disclosure of information about contingent assets is required when the occurrence of the confirming future event is likely.

Section PS 3380 Contractual rights This new Section defines and establishes disclosure Fiscal years beginning standards on contractual rights. Contractual rights are on or after April 1, rights to economic resources arising from contracts or 2017. agreements that will result in both an asset and Earlier adoption is revenue in the future. permitted. Disclosure of information about contractual rights is required, including a description about their nature and extent and the timing.

Section PS 3430 Restructuring transactions This new Section defines a restructuring transaction Fiscal years beginning and establishes standards for recognizing and on or after April 1, measuring assets and liabilities transferred in a 2018. restructuring transaction. Earlier adoption is A restructuring transaction is a transfer of an integrated permitted. set of assets and/or liabilities, together with related program or operating responsibilities without consideration based primarily on the fair value of the individual assets and individual liabilities transferred. The main requirements in the new Section are: • The net effect of a restructuring transaction is recognized as revenue or an expense by the entities involved (transferor/recipient).

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Management Public Sector Accounting Board Effective date assessment of applicability • The recipient must recognize the individual assets and liabilities received in a restructuring transaction at their carrying amounts with applicable adjustments at the restructuring date. • The transferor and recipient cannot restate their financial position or results of operations as if the transaction had happened from inception. • The transferor and recipient must disclose sufficient information to enable users to assess the nature and financial effects of a restructuring transaction on their financial position and operations. The issuance of this new Section also resulted in consequential amendments to Section PS 3050 Loans receivable.

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Appendix C—Engagement Letter

Audit • Tax • Advisory © Grant Thornton LLP. A Canadian Member of Grant Thornton International. All rights reserved. CONFIDENTIAL 196 Attachment 3

Changes to the Financial Statements – Comparing 2015 to 2014

Statement of Financial Position  Combined ‘Cash’ and ‘Restricted cash’ into one line, adding a note to explain that the cash held in a separate bank account pertains to the CTC Source Protection Region.  Changed the name of ‘Marketable securities’ to ‘Investments’.  Broke out ‘Vacation pay entitlements’ from ‘Payables and accrued liabilities’, in accordance with accounting standards.  Combined ‘Deferred revenue’ into one line, in order to provide value added information in the note disclosure.  Combined ‘Inventory’ and ‘Prepaids’ into one line (‘Other assets’, as the amount of these other assets is immaterial.

Statement of Operations and Accumulated Surplus  Split revenue into two main groupings on the face of the statements, ‘Government funding’ and ‘Authority generated’, in order to provide value added information in the note disclosure.

Notes  In Note 1, reference has been added that TRCA is a registered charitable organization that is exempt from income taxes under the Canadian Income Tax Act.  In Note 2, TRCA’s policies have been clarified, highlighted by the following changes:  updated the revenue policy to reflect TRCA’s sources of income;  added a contaminated sites note;  added a reference to the accounting standards not yet effective.  Note 3 is a new note, pertaining to the adoption of the Liability for Contaminated Sites accounting standard which went into effect in the current year.  Note 4 is an update of the previous ‘Restricted cash’ note, which now provides increased information regarding the relationship between TRCA and CTC Source Protection Region.  Note 5 is an update of the previous ‘Marketable securities’ note, which now provides increased information on TRCA’s investment holdings.  Note 6 is an update of the previous ‘Receivables’ note, which now breaks down the balance by ‘Government funding’ and ‘Authority generated’ receivables, consistent with TRCA’s revenue sources.  Note 7 is a new note, pertaining to the adoption of the Liability for Contaminated Sites accounting standard which went into effect.  Note 8 is a new note, which explains what vacation pay entitlements are and how they are calculated.  Note 9 is a new note, which breaks down the deferred revenue balance by ‘Government funding’ and ‘Authority generated’ receivables, consistent with TRCA’s revenue sources.  Note 10 is a reformatted version of the previous ‘Tangible Capital Assets’ note, which now shows the respective balances, without having to flip the page sideways.  Note 11 is an update on the previous ‘Accumulated Surplus and Reserve Continuity’ note, which now combines the internally allocated reserves into the surplus chart and explains that the ‘Amount to be funded in future periods’ disclosed in years past pertains to the unfunded vacation pay entitlements, which provides additional transparency to the balance in the Statement of Financial Position.

197  Notes 12 and 13 are new notes, which provide value added information as to where TRCA’s revenues are derived.  Note 14 is a new note, which provides an expense breakdown by object, as required by the standards.  Note 15 is a new note, which provides information regarding the public sector salary disclosure, as TRCA is subject to The Public Sector Salary Disclosure Act.  Note 16 is an update on the previous ‘Pension Agreements’ note, which has been expanded to include additional information on the relationship between TRCA and OMERS (Ontario Municipal Employees Retirement System).  Note 17 is a new note, which provides information on the relationship between TRCA and The Living City Foundation.  Removed the schedules of operations, as this is not a requirement of the standards and the information is provided to the Authority through the budgeting process.

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TERMINATION

ON MOTION, the meeting terminated at 9:21 a.m., on Friday, June 10, 2016.

Maria Augimeri Brian Denney Chair Secretary-Treasurer

/ks

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