Report: Business Board - January 31, 2024

Council Chamber, Simcoe Hall



To the Governing Council,
University of Toronto,

Your Board reports that it held a meeting in the Council Chamber, Simcoe Hall on January 31, 2024, at 5:00 p.m. with the following members present:

PRESENT: Rajiv Mathur (Chair), Mathangi Gopinathan (Vice-Chair), Scott Mabury (Vice-President, Operations & Real Estate Partnerships), Kelly Hannah-Moffat (Vice-President, People Strategy, Equity & Culture), Trevor Rodgers (Chief Financial Officer), Sharleen Ahmed, Glen W Bandiera, Vikram Chadalawada*, Janet Anne Cloud, Alicia Damley, Maureen Harquail*, Paul Huyer, Thomas Hofmann, Nelson Lee, Scott MacKendrick*, Brian Madden, David Regan, Carmen Sebert, Ian Taylor, Veronica Wadey, Grace Westcott

REGRETS: Kathryn Jenkins, Kikelomo Lawal, Rima Ramchandani, Mary-Agnes Wilson

NON-VOTING ASSESSORS: Trevor Young, Vice-President & Provost, David Palmer, Vice-President, Advancement, Christine Szustaczek, Vice-President, Communications, David Lehto, Chief, University Planning, Design & Construction, Susan McCahan, Vice-Provost, Academic Programs and Vice-Provost, Innovations in Undergraduate Education, Jeff Lennon, Assistant Vice-President, Planning & Budget

SECRETARIAT: Timothy Harlick (Secretary), Joanne Chou

IN ATTENDANCE: Chuck O’Reilly, President & Chief Investment Officer, UTAM, Anthony Tia, Director, Treasury and Investments, Elizabeth Cragg, Director, Office of the Vice President, Operations & Real Estate Partnerships, Lawrence Artin, Head of Special Capital Initiatives, Eli, Ihab Khalil, Chief Operations Officer for the Division of People Strategy, Equity & Culture (PSEC), Alex Matos, Director, Internal Audit, Flavio Bertolo, Director, Infrastructure Planning & Implementation, Anna Kulikov, Senior Manager, Business Improvement and Strategic Initiatives, Michael Strizic, Senior Communications Officer

*attended remotely

Pursuant to section 38 of By-Law Number 2,

consideration of items 15 and 16 took place in camera.


  1. Chair’s Remarks

    The Chair welcomed members and guests to the meeting. He then introduced Professor Trevor Young who had been recently appointed Vice-President & Provost and would be serving as a non-voting assessor to the Board. He also welcomed back Professor Scott Mabury, Vice-President, Operations & Real Estate Partnerships, who had rejoined the Board as the Senior Assessor from his recent administrative leave of absence.

  2. Reports of the Administrative Assessors

    Professor Mabury began his remarks with an update on the recent media coverage Queen’s had been receiving regarding its long-term financial sustainability due to the impact of lower international student enrolment. He noted that the coverage illustrated the need for clear and concise communication about a university's financial situation and a balanced approach to addressing a budget deficit without resorting to alarmist rhetoric.

    Professor Mabury also provided a brief update on the Federal Government’s recently announced intake cap on international student permit applications for a period of two years. He noted that the percent decrease was effective March 31, 2024, and would be assessed and distributed across institutions by the Provincial government.

    He concluded his remarks noting that in reference to a related announcement made by the Federal government that required Colleges and Universities to provide adequate housing to newly accepted international students, UofT had both a Residence guarantee for all new full-time students entering their first year of a postsecondary program for the first time, as well as a 1998 Policy on Student Financial Support which stated that no student offered admission to its programs will be unable to enter or to complete the program due to a lack of financial means.


    In the ensuing discussion, Professor Mabury and Professor Young informed the Board that the Council of Ontario Universities had met with the Ministry of Colleges and Universities to discuss the impact of these decisions and understand how the international student cap would be applied across the sector. Professor Mabury highlighted the discrepancy between modest international student enrolment for the University compared to several other colleges in Ontario.
  3. Annual Report: Deferred Maintenance, 2023

    Mr. Ron Saporta, Chief Operating Officer, Property Services & Sustainability offered a presentation on the Annual Report on Deferred Maintenance

    The presentation highlighted the following key points:
  • The deferred maintenance budget was reviewed on an annual basis through the budget process.
  • As reported in the 2023 budget report, deferred maintenance funding remained a key budget risk for the institution. The current level of funding for the St. George campus had to increase to $76M to match the 1.45% average level of investment by our peers in Ontario.
  • Aligned with the 10-year budget plan, an additional $2.5M in base funding was being sought through the Divisional Advisory Committee (DAC) process for fiscal year 2024–25 for the St. George campus.
  • Combined current replacement value of all academic and administrative buildings at the University of Toronto had grown from $5.9B in 2022 to $6.6B in 2023.
  • Tri-campus deferred maintenance liability of all academic and administrative buildings had increased from $961M to $1.2B over the same period.
  • The tri-campus Facilities Condition Index (FCI) had grown by 1.8% to 18.2%.
  • There had been two primary causes for the increased in deferred maintenance costs: Inflationary cost; and multiple building systems approach end of useful life simultaneously.
  • The University maintained a comprehensive deferred maintenance risk model that focused on the system level.
  • Construction projects also played a critical role in indirectly addressing a significant portion of deferred maintenance by replacing building elements and systems at or beyond their useful remaining life.
  • In 2023, the St. George campus had formed a single central team dedicated to delivering consistent, high-quality deferred maintenance projects.


    In response to questions from members, Mr. Saporta provided greater detail on the risk model used to assess and prioritize deferred maintenance. He noted that each year, each asset was assigned a weighted risk score based on its physical condition, current use, future use, and the severity of impact on building occupants and other building systems. Those scores were then compiled and ranked. The priority one category contained the highest risks, while priority three contained the lowest risk. The majority of deferred maintenance fell into the priority three category.
  1. Debt Strategy - Annual Review December 31, 2023

    Mr. Anthony Tia, Director, Treasury and Investments, provided the Board with a presentation on the Debt Strategy – Annual Review December 31, 2023.

    Highlights of the presentation included:
  • the current debt strategy sets a debt policy limit each year based on a 6% debt burden ratio and a 0.8 viability ratio. As of April 30, 2023, the debt policy limit was $2,558M, with $1,064.8M internal and $1,493.5M external debt.
  • As of December 31, 2023, $1,839.5 million of borrowing room had been allocated to capital projects and other requirements that had been reviewed by the Business Board, leaving $718.8 million for future debt to finance projects under active consideration but that had not yet been brought forward for the consideration of the Business Board.
  • Based on planned growth in the University’s financial resources, the maximum debt policy limit, determined using a 6% debt burden ratio, was projected to grow by an additional $808 million to $3,366 million over the next five years to April 30, 2029, sufficient to meet the projected borrowing needs.
  • In view of the rising interest rate environment, the University had assumed a 6.0% borrowing rate for future debt. The 6.0% assumption was 100 bps higher than borrowing rates of recent debt issued by some Canadian universities. If future borrowing costs remained in the range of 5% to 7%, the debt limit would reach $3,199M to $3,576M by 2029.


    In response to a member’s question regarding increases to total project costs, Professor Mabury explained that financing included in a capital project’s total cost was approved by the Business Board as per the Policy on Capital Planning and Capital Projects, and any increases over the thresholds outlined in the Policy required further governance approval.
  1. Forecast of University Financial Results to April 30, 2023, prepared as at January 6, 2023

    Mr. Rodgers noted that the forecast, which was presented annually to the Board for information, contained high-level projections of the net income and net assets of the University for the fiscal year ending April 30, 2023, including operating, ancillary, capital, and restricted funds. The forecast was a reasonable estimate based on available information and included uncertainties and risks that could cause actual results to differ.

    The forecast assumed a 4.3% investment return in the long-term capital appreciation pool, an endowment payout of $120M, and $351M in capital asset additions. A sensitivity analysis showed the impact of varying investment returns for LTCAP on net income and net assets at -2.0%, 0.0%, 4.3% (forecast), and 6.0% for the year. It also showed forecasted net income under all four scenarios.

    The operating fund unrestricted deficit was projected to be ($29 million), as compared to the budgeted cumulative surplus of nil. This change was primarily due to a decrease in budgeted tuition fees partially offset by an increase in EFIP investment income. Lower international undergraduate enrolment and domestic graduate enrolment contributed to the decrease in tuition fees.


    Following the presentation, the Board discussed the University’s strategic use of divisional reserve funds. Mr. Rodgers commented that the university’s guideline was to set aside reserves equal to approximately 5-10% of divisional operating budgets for general risk contingencies. Additional funds above that level were expected to be earmarked for specific purposes, including capital planning and donation matching.

    Professor Mabury added that many core academic functions were in rented spaces and that Deans were prioritizing setting funds aside for capital projects to reduce costs associated with the rental market.
  2. University of Toronto Asset Management Corporation Strategic Plan

    Mr. Chuck O’Reilly, President & Chief Investment Officer, University of Toronto Asset Management Corporation, provided the Board with a presentation on UTAM’s strategic plan. He noted that the strategic plan was the result of a request from UTAM’s Board of Directors to undertake a planning review in 2023. The review included a strategy consultant to support in the strategic plan’s development, and established a planning framework that UTAM could adopt and apply independently in future strategic planning processes.

    Highlights of the strategic plan included its foundational statements, strategic pillars, and strategic goals that were aligned to the Strategic Pillars. He concluded his presentation noting that at its December 15, 2023, meeting, the UTAM Board approved specific strategic initiatives and detailed key performance indicators for the coming year that were aligned to these strategic pillars.

    There were no questions from members.



On motion duly moved, seconded, and carried


THAT the consent agenda be adopted and that Items 8 (a), (b) & (c) and Item 9, the Report of the Previous Meeting, be approved.

  1. Status Report on Debt to December 31, 2023

    Members received the Status Report on Debt to December 31, 2023, for information.

  2. Annual Review of Policies:
    1. University of Toronto Health and Safety Policy

      On motion duly moved, seconded, and carried,


      THAT the on-going application of the University of Toronto Health and Safety Policy, a copy of which is attached, be confirmed in its current form without amendments.

    2. Policy with Respect to Workplace Harassment

      On motion duly moved, seconded, and carried,


      THAT the University of Toronto Policy with Respect to Workplace Harassment, a copy of which is attached, be confirmed in its current form without amendments.

    3. Policy with Respect to Workplace Violence

      On motion duly moved, seconded, and carried,


      THAT the University of Toronto Policy with Respect to Workplace Violence, a copy of which is attached, be confirmed in its current form without amendments.
  3. Health and Safety Requirements: Quarterly Report on Compliance

    The Health and Safety Requirements – Quarterly Report on Compliance for October 1, 2023 to December 31, 2023, was received for information.
  4. Report of the Previous Meeting: Report Number 275, November 22, 2023

    Report Number 275, from the meeting of November 22, 2023, was approved.
  5. Business Arising from the Report of the Previous Meeting

    There was no business arising from the report of the previous meeting.

  6. Report Number 154 of the Audit Committee, September 20, 2023

    Report number 154 of the Audit Committee, September 20, 2023, was received for information.
  7. Date of Next Meeting – Wednesday, March 13, 2024, at 5:00 p.m.

    The Board was informed that the next meeting was scheduled for Wednesday, March 13, 2024, at 5:00 p.m.

  1. Other Business

    No other business was raised by members.


The Board returned to Open Session.


  1. In Camera Reports of the Administrative Assessors

    Professor Mabury provided an update on three capital projects.             

    Thomas Hofmann declared a conflict of interest and exited the Council Chamber in advance of the Board’s discussion of one capital project.

    Professor Kelly Hannah-Moffat, Vice-President, People Strategy, Equity & Culture, provided the Board with an update on ongoing collective bargaining negotiations.
  2. Report on Capital Projects as of December 31, 2023

    The Board received the Report on Capital Projects as of December 31, 2023, for information.

    Professor Mabury and David Lehto, Chief, University Planning, Design & Construction, provided a summary overview and update of the capital projects underway this academic year.

The Board returned to Open Session.

The meeting adjourned at 7:13 p.m.

February 12, 2024