Greater Toronto Airports Authority ANNUAL REPORT 2016 CONNECTS PEARSON 44.3M PASSENGERS More than 44 million passengers travelled through Toronto Pearson in 2016, an increase of 8 per cent over the previous year’s record total. LOCAL Toronto Pearson connects Canadians to the far corners of the globe and welcomes people from around the world through our nation’s front door. For tourists and adventurers, innovators and dealmakers, families reuniting Scott Robertson, human and newcomers reinventing their resources associate and frequent traveller lives – we’re the vital link between here and there. CONTENTS A Message from the Board Chair 30 • A Message from the President and CEO 32 • Board of Directors 34 • Executive Team 36 • Corporate Governance 37 • Management’s Discussion and Analysis F1 • Financial Statements F21 • Corporate Sustainability 2016 C1 • Corporate Information C30 67% REACH Two-thirds of the global economy is in reach of daily direct flights from Toronto Pearson. Last year our international traffic grew by 8.8 per cent to 27.4 million passengers, once again outpacing domestic growth of 6.9 per cent. 180+ CITIES The 65 airlines flying in and out of GLOBAL Toronto Pearson provide regular non-stop service to more than 150 international destinations and over 30 Canadian centres. Last year we offered direct flights to more international destinations than any other North American airport. Georgeta Suvaina, Passenger Service Representative, GTAA CONNECTING CANADA TO THE As a global hub, Toronto Pearson opens up new opportunities WORLD not just for Southern Ontario, but for dynamic regional economies across the country – including the ski tourism areas of British Columbia. “ Our resort, surrounding communities and the entire ski and snowboard industry in the Okanagan Valley have all benefited substantially from increased non-stop flights between Toronto and Kelowna.” Michael Ballingall, Senior Vice President, Big White Ski Resort Looking out from his office perched above the snow-covered slopes of the Okanagan Highland, Michael Ballingall sees clearly the crucial role that air connectivity plays in business growth. As Senior Vice President with Big White Ski Resort, the second-most popular skiing destination in British Columbia, Michael has worked with nearby Kelowna International Airport to promote vacation packages as well as real estate opportunities to skiing and snowboarding enthusiasts from Eastern Canada and beyond. “Since non-stop service began from Toronto Pearson, there have been many positive economic spinoffs,” Michael says, “including new families moving into our area, better medical facilities, more technology- based businesses and even higher enrolments at our campus of the University of British Columbia. Most important for us has been the substantial increase in skiers arriving via Toronto. The easy connection, with business-class options and the ability to bring your equipment on the same aircraft, has brought a whole new group of guests to local resorts, benefiting the entire Okanagan Valley.” GTAA Annual Report 2016 1 We help growing companies expand into new markets, product developers find manufacturers, entrepreneurs meet investors, and professionals collaborate on projects across Canada and in every part of the world. The result: more jobs here at home. “ We’re rapidly evolving from an ethnic food maker into a provider of baked goods and snacks for retailers across North America and worldwide. We now do 60 per cent of our business in the U.S. and are creating opportunities in Europe, the Middle East and Australasia. A globally connected airport is crucial to sustaining our growth.” GROWTH Zak Mashadi, Business Development and Legal Counsel, TWI Foods Inc. Founded in 1997, family-owned TWI Foods Inc. began as a producer of South Asian baked goods such as naan bread and rotis. Today its two plants in Etobicoke and Mississauga employ about 300 people on 12 production lines that meet the highest quality standards in the food industry. The company produces everything from naan crisps to shortbread cookies for direct sales and under private label for well-known retailers. Named Ontario Exporter of Zak Mashadi, the Year in 2015, TWI is regularly ranked among Canada’s fastest Business Development growing entrepreneurial businesses. and Legal Counsel, TWI Foods Inc. 2 GTAA Annual Report 2016 332,000 JOBS Our airport generates and facilitates more than 300,000 jobs – about 6 per cent of all employment in Ontario.* 49,000 JOBS Toronto Pearson creates direct employment for 49,000 people. About half live in the Region of Peel; the rest commute from across the GTA and surrounding municipalities.* JOBS “ From healthcare and life sciences to retail administration and logistics, businesses in our region, many of them world-leading innovators, depend on the global connections that Toronto Pearson provides. Continued investment in connectivity to facilitate the movement of people and goods to and from the airport is money well spent.” Todd Letts, Chief Executive Officer, Brampton Board of Trade The Brampton Board of Trade represents a diverse range of businesses across Peel Region, from startups to multinationals. A pillar of the Board’s mission is to “help businesses connect on a local, national and global scale.” Todd Letts, Chief Executive Officer, Brampton Board of Trade * From Toronto Pearson’s Economic Impact, produced for the GTAA in October 2016 by Frontier Economics (using updated 2014 and 2015 data). GTAA Annual Report 2016 3 LINKING INNOVATION TO OPPORTUNITY From high-tech startups to research-driven 179,000 JOBS Toronto Pearson’s “catalytic” impacts – multinationals, Canada’s future is being resulting from business travel and our shaped by pioneers who need to connect role in facilitating international trade and investment – create an estimated ideas with capital, and innovative products 179,000 jobs across Ontario, more than or services with potential customers. half of them outside the GTA.* We help to make it happen. $42BN GDP Toronto Pearson’s annual contribution to economic activity in Ontario is estimated to be $42 billion – about 6 per cent of provincial GDP.* * From Toronto Pearson’s Economic Impact, produced for the GTAA in October 2016 by Frontier Economics (using updated 2014 and 2015 data). 4 GTAA Annual Report 2016 “ The global economy is increasingly made up of ‘spikes’ or clusters of activity in major urban regions. These are places where people gather and can share knowledge easily – places that are connected to other places around the world that are doing the same thing. Airports are crucial factors in the success of these spiky places. A case in point is Toronto Pearson, which plays an increasingly important role in shaping the prosperity of the GTA and beyond.” Dr. Meric Gertler, President, University of Toronto With nearly 87,000 students, the University of Toronto is regularly ranked best in Canada and among the top 10 public universities in the world. Renowned for its academic excellence and pioneering research, U of T is also a generator of new ventures: over 150 research-based startups were launched from the university in the last five years. With more than 20,000 faculty and staff, U of T contributes about $16 billion annually to the Canadian economy. The university both relies on and helps to extend global connections, welcoming students from 165 countries and building research partnerships and collaborative networks worldwide. “ Thanks to digital technology, it’s amazing what we can accomplish remotely on projects worldwide. But face-to-face contact is still vital. That’s why so many of our people are constantly catching flights to meet with current or potential clients, as well as colleagues and other partners. We say our firm is about redefining possible – and with a global hub airport right down the road, we know we can keep that promise.” Mike Soligo, Chief Executive Officer, RWDI Headquartered in Guelph, Ontario, RWDI is a firm of engineers and scientists who tackle complex technical challenges in the built environment, from mitigating the effects of wind, rain and snow around landmark developments to designing the sophisticated damping systems that stabilize many of the world’s tallest buildings – including the 830 m Burj Khalifa (right) in Dubai. Working from offices across North America, Europe and Asia, RWDI’s 500 employees collaborate with architects and other engineers on a diverse range of projects, balancing the demands of innovative design with the requirements of safety, economy and sustainability. The firm’s success underlines the growing impact of high-value services on the export side of Canada’s economy. GTAA Annual Report 2016 5 CONNECTING OUR BACKYARD Our airport is not an island. The connections we offer worldwide must be mirrored by ground transportation networks that bring passengers efficiently to our terminals while providing easy access to the region’s communities, businesses, attractions and public institutions. “ Toronto is increasingly recognized as a key player globally, backed by Canada’s reputation for economic, social and political stability. The GTA and the surrounding Golden Horseshoe, as the country’s fastest-growing region, must have an effective and efficient transportation network that integrates air connections with regional transit, high-speed rail and other services to enhance productivity, provide access to jobs and ensure long-term sustainability. Toronto Pearson is at the heart of that network – and is a nexus for the entire country.” Jennifer Keesmaat, Chief Planner, City of Toronto 6 GTAA Annual Report 2016 “ More key stakeholders are recognizing that the Airport Employment Zone, with Toronto Pearson at its centre, plays a critical role in the regional economy. Its high concentration of ‘core jobs,’ providing tradeable goods and services that bring in revenue from outside the region, is essential to economic competitiveness. But because this zone spans several jurisdictions, planning has been fragmented – especially in the urgent area of transit, as each day over one million auto trips to and from the area add to already high congestion and GHG emissions.