Pedestrianization of rue Wellington, Arrondissement de Verdun Photo credit: Bénédicte Brocard Annual Financial Report Fiscal Year Ended December 31 Deposited at the City Clerk’s office of the 2020 Ville de Montréal on May 12, 2021 Table of contents INTRODUCTION Message from the Mayor ............................................................................................................................................... III Message from the Chairman of the Executive Committee ............................................................................................. IV Message from the City Manager ..................................................................................................................................... V Message from the Treasurer .......................................................................................................................................... VI Map of the Montréal Region ........................................................................................................................................... XI Municipal Organization ................................................................................................................................................ XIII Summary of Powers ..................................................................................................................................................... XIV CONSOLIDATED FINANCIAL INFORMATION Management Responsibility for Financial Reporting ....................................................................................................... 1 Independent Auditors’ Report ......................................................................................................................................... 2 Consolidated Financial Statements Consolidated Statement of Financial Position ........................................................................................................ 5 Consolidated Statement of Operations ................................................................................................................... 6 Consolidated Statement of the Change in Net Debt ............................................................................................... 7 Consolidated Statement of Cash Flows .................................................................................................................. 8 Segment Disclosures Schedule 1 – Consolidated Financial Position by Organization ..................................................................... 9 Schedule 2 – Consolidated Itemized Operations by Organization ............................................................... 10 Schedule 3 – Consolidated Operating Surplus (Deficit) for Tax Purposes by Organization ......................... 11 Schedule 4 – Consolidated (Deficit) Surplus of investing Activities in Capital Asset and in Loans for Tax Purposes by Organization ............................................................................................... 12 Schedule 5 – Consolidated Expenditures by Item and by Organization ....................................................... 13 Table of contents (continued) Notes and Tables to the Consolidated Financial Statements .................................................................................. 15 Table 1 – Consolidated Operating Surplus (Deficit) for Tax Purposes by Responsibility ............................ 46 Table 2 – Consolidated (Deficit) Surplus of investing Activities in Capital Asset and in Loans for Tax Purposes by Responsibility .................................................................................................. 48 Table 3 – Consolidated Accumulated Surplus ............................................................................................ 50 Table 4 – Consolidated Net Total Long-Term Debt ..................................................................................... 52 Table 5 – Reconciliation of Budgets Tabled and Consolidated Budget Presented in the Consolidated Statement of Operations........................................................................................ 53 FINANCIAL INFORMATION OF THE MUNICIPAL ADMINISTRATION Breakdown by Responsibility Table 6 – Non-Consolidated Operating Surplus (Deficit) for Tax Purposes by Responsibility ............... 56 Table 7 – Non-Consolidated Surplus (Deficit) of investing Activities in Capital Assets and in Loans for Tax Purposes by Responsibility ....................................................................................... 59 Table 8 – Non-Consolidated Accumulated Surplus by Responsibility ................................................... 60 Table 9 – Non-Consolidated By-item Amounts for Tax Purposes by Responsibility .............................. 62 Water Management Table 10 – Non-Consolidated Operating Surplus (Deficit) for Tax Purposes Related to Water Management by Responsibility ............................................................................................. 66 Table 11 – Non-Consolidated Deficit of Capital Asset Activities for Tax Purposes Related to Water Management by Responsibility .............................................................................. 69 Breakdown of Mixed Expenditures Independent Auditors’ Report ................................................................................................................. 72 Table of Breakdown of Mixed Expenditures by Responsibility ............................................................... 74 Supplementary Notes ............................................................................................................................. 76 UNAUDITED CLIMATE-RELATED FINANCIAL DISCLOSURE ....................................................................................... 78 Introduction 2020 Message from the Mayor Key to the future and resilience of our metropolis is our ecological transition, which continued to top city priorities, even with our hands full managing the impacts of the pandemic. Our administration continued moving forward with our ecological transition in response to the environmental emergency and to achieve specifi c and ambitious targets. The 2020–2030 Climate Plan, announced in December, as well as the adoption of the 2020–2025 Master Plan for Residual Materials Management, are concrete examples. For the second year, we include a section in the Annual Financial Report on fi nancial information regarding climate change. Lastly, Ville de Montréal’s housing actions gathered pace in 2020, with the health crisis sparking greater fi nancial insecurity for many households. The city continued working to improve the supply of appropriate and aff ordable housing and create more equitable living environments. After its third year in At this time, a year ago, when we were unveiling existence, the 12,000 Social and Aff ordable Housing the fi scal 2019 fi nancial report, the health crisis we Unit Strategy 2018–2021 has achieved 79% of its are experiencing was still in its infancy. overall target. Yet, our administration was fully prepared to deal Despite a challenging year and the extraordinary with the major economic impacts and budgetary circumstances that overshadowed it, I am pleased challenges that this crisis would surely bring. to announce that Ville de Montréal ended fi scal 2020 Our clear minded response to events, from the with a surplus that will allow us to weather outset of the pandemic, allowed us to respond to the coming months, in which we expect to see the emergency and take on 2020 in a solid position. an end to the crisis. It also allowed us to quickly commit to a green and These encouraging results stemmed from a concerted inclusive recovery. The concrete and promising actions eff ort, the determination of our administration, we took during the year were not only in response to impressive cooperation from our partners and a crisis we had to address, but also part of a long term the everyday work carried out by the municipal vision, consistent with our administration’s priorities: departments and boroughs, which remain committed economic development, the ecological transition, to serving the population of Montréal. sustainable mobility and housing. For that, I extend my heartfelt thanks. While Montréal’s tremendous economic growth was disrupted due to COVID 19 challenges, our administration, together with its partners, has adopted an array of measures, including the 2020 Recovery Plan, to support the eff orts of hard hit sectors and drive a stronger, greener and more inclusive recovery. Valérie Plante Mayor of Montréal III Message from the Chairman of the Executive Committee We also implemented the 2021–2030 Ten Year Capital Works Program (CWP), a new measure to plan capital assets over a ten-year horizon and ensure our major projects are better aligned with our ecological transition, our commitment to inclusion and the city’s prosperity. At the same time, we have made the Québec government aware of the pandemic’s major impact on city fi nances, as well as the key role Montréal plays as a metropolis, Québec’s economic powerhouse and a leading partner in combating COVID 19. In the fall, the city received $263.5 million in fi nancial assistance from the Québec government. It is important to note that, barring our fi nancial plan to trim expenses or the government assistance we received, our 2020 fi nancial results would have refl ected non-consolidated operating defi cit for tax purposes of $139.8 million.