Report: Business Board - June 21, 2022

Council Chamber, Simcoe Hall, 27 King's College Circle, 2nd floor


Tuesday, June 21, 2022

To the Governing Council,
University of Toronto.


Your Business Board reports that it held an in-person meeting on Tuesday, June 21, 2022 at 5:00 p.m. with the following members:

Present: Anna Kennedy (Chair), Sandra Hanington* (Vice-Chair), Brian Lawson, Secretary Scott Mabury (Vice-President, Operations and Real Estate Partnerships), Trevor Rodgers, Chief Financial Officer, Olenka Baron, Harvey Botting, David Bowden*, Janet Cloud, Alicia Damley, Sue Graham-Nutter, Thomas Hofmann, Paul Huyer, Sarosh Jamal, Kathryn A. Jenkins, Evan Kanter, Rajiv Mathur, David Regan, Danielle Skipp, Ian Taylor

Regrets:  K. Sonu Gaind, Kelly Hannah-Moffat, Maureen Harquail, Amin Kamaleddin, Nhung Tran, Geeta Yadav, Samra Zafar

Secretariat: Sheree Drummond, Secretary of the Governing Council, Anwar Kazimi, Deputy Secretary of the Governing Council, Timothy Harlick, Assistant Secretary of the Governing Council, Patrick F. McNeill, Secretary

Non-Voting Assessors
Cheryl Regehr, Vice-President and Provosts, David Palmer, Vice-President, Advancement, David Estok*, Vice-President, Communications, Joseph Wong, Vice-President, International, Jeff Lennon, Interim Assistant Vice-President, Planning and Budget, Deborah Brown*, Chief Administrative Officer, UTM, Joshua Mitchell, Director, Real Estate, Dave Lehto, Chief, University Planning, Design and Construction

In Attendance
Elizabeth Cragg, Director, Office of the VPOREP, Owen McCartney*, Director, Asset Management, Jenny Daly*, JLL Capital Markets, Chuck O’Reilly, President and Chief Investment Officer, University of Toronto Asset Management Corporation (UTAM), Pierre Piché, Controller and Director of Financial Services, Andrew Salem*, Cassels Brock & Blackwell LLP, Olivia Stewart*, Development Finance Analyst, Real Estate, Mary Williams, Assistant Vice President, Divisional Relations

* attended remotely – all others in-person 


Pursuant to section 33(i) of By-Law Number 2,
items 16-21 were considered in camera.



  1. Chair’s Remarks

    The Chair welcomed members and guests to the final meeting of the governance year. 

    Recognition of the Business Board Chair
    Mr. Brian Lawson, Chair of the Governing Council, thanked Anna Kennedy for her service to the Board as its Chair from 2020-22. He stated that Ms Kennedy had been an excellent Chair, managing meetings in an efficient and respectful manner, and encouraging members to ask questions and share their views at meetings, over the 2-year period of virtual meetings due to COVID-19.

    He noted that during her time as Chair, the Board had dealt with several major items including the continuation of a record number of capital projects, plus several complex property acquisitions. In particular, under her governance watch, the Business Board recommended the adoption of the Capital Planning and Capital Projects Policy. Ms Kennedy had played a critical role as a member of the Working Group on Governance Oversight of Capital Projects – her experience and understanding of real estate and development had been of significant value to the University. Mr. Lawson added that Ms Kennedy had also provided excellent advice to the senior assessor and voting assessors, and to all the other assessors.

    The Chair made special note that Ms Kennedy would continue to serve as incoming Vice-Chair of the Governing Council. 

    As a token of appreciation and consistent with tradition, Mr. Lawson presented a chair to Ms Kennedy in recognition of exemplary service and leadership.  Members of the Board applauded Ms Kennedy’s recognition.
  2. Annual Report: Senior Appointments and Compensation Committee (SACC)

    Mr. Brian Lawson presented the Annual Report of the Senior Appointments and Compensation Committee (SACC) covering the period May 1, 2021 to April 30, 2022. He noted that SACC was responsible for attesting to the Governing Council, through the Business Board, that compensation policies and programs for particular categories of employees were appropriate, and that decisions about the compensation of individuals had been made in accordance with established policy and practice. 

    As part of its role, SACC reviewed the President’s Annual Activity Report for 2020-21, and considered the Chair of the Governing Council’s performance evaluation for the President – as well as the performance assessments of the Vice-Presidents prepared by the President. SACC had also reviewed the proposed compensation increases for Professional, Managerial and Confidential Staff, Advancement Professionals and Senior Research Associates/Research Associates and had previously recommended them for approval by the Business Board.

    The report was received for information.
  3. Reports of the Administrative Assessors

    Capital Projects Market Conditions
    Professor Scott Mabury, Vice-President, Operations and Real Estate Partnerships (VPOREP) provided an update on capital project market conditions. Highlights included:
  • the construction market continued to be volatile – challenging with tenders being overbid and in some cases no tenders submitted for certain capital projects;
  • the University had to revisit some projects with a view to redesign (cardinal changes to original plans) to reduce costs and/or increase the total capital cost assumptions;
  • increased construction costs related to escalation of unit rates for building materials, lumber market pricing volatility and structural steel market pricing volatility, plus continued impact of COVID-19 on labour supply;
  • to mitigate the cost increases, Project Teams had performed two Value Engineering (VE) exercises: 1. Value Engineering Pre-Tender and 2. Value Engineering during Tender;
  • savings garnered from VE exercises mitigated the initial cost estimate increase;
  • future large and complex projects would be based on an integrated project design model and an adjusted delivery model, where risks and gains were shared with other material players, including the architects;
  • KPMG would continue to be engaged in evaluating market conditions – future contingency costs would be incorporated into the TPC to better reflect such conditions and risks; and
  • VPOREP (including the new Chief, University Planning, Design and Construction) would take stock of the combined building projects across all three campuses and the continued challenges related to pricing volatility, supplies and other market conditions.

    University Pension Plan [the “UPP”]
    Mr. Trevor Rodgers, Chief Financial Officer provided a brief follow-up on the question regarding UPP reporting from the previous meeting. He noted that the UPP was a separate legal trust and U of T had no ownership of the assets or oversight responsibility with respect to UPP's investment activities. However, U of T continued to have financial obligations for past service and will have significant input into the plan structure and funding policy going forward. 

    The CFO will provide a refresher on UPP governance and plan structure at the next Business Board meeting (Cycle 1) and will aim to provide members with an understanding of how the University community (both employer and employees) will be able to assert its interests, contribute to decision making, and continue to shape the evolution of the UPP in future.

    DBRS Morningstar Rating Agency
    Mr. Rodgers reported that the University would be discontinuing its contract with the DBRS Morningstar rating agency. As the University approached the annual renewal date for U of T’s contracts with credit rating agencies, it had been assessing the need to continue with three separate ratings (S&P, Moody’s, DBRS). As part of the analysis, supported by an assessment from KPMG, the University was an outlier among its national and global peers in having three ratings, and there would be no material impact to investors or to our future borrowing terms if it were to reduce the number of ratings from three to two. The CFO reported that the University remained fully committed to transparency and independent assessment of its financial position and believed that S&P and Moody's would continue to provide excellent service in that regard. 

    In response to a Member’s question, Mr. Rodgers explained that by discontinuing the contract with DBRS Morningstar, the University would reduce the administrative burden and cost associated with maintaining three ratings with no loss of transparency for the University’s stakeholders.
  1. Annual Report: Vice President, Operations & Real Estate Partnerships

    Professor Scott Mabury, Vice-President, Operations and Real Estate Partnerships (VPOREP) presented an annual report for 2021-22. 

    Professor Mabury highlighted key accomplishments as outlined in his presentation:
  • as part of its real estate acquisitions, the University had entered into retail agreements with five local retail operations; acquired four off-market properties along College Street; and executed agreements with Knox College for the acquisition of 59 and 63 St. George, two extremely important parcels of land in the heart of the campus;
  • this year, Trademark Licensing partnered with October’s Very Own (OVO) to launch a unique capsule collection that celebrates and spreads school spirit;
  • phase one of the refurbishment of the Chestnut conference centre space was concluded in 2021, bringing a section of the third floor up to modern standards, including up to date audio visual equipment suitable for sophisticated presentations and hybrid meetings;
  • in order to mitigate key cyber security risks, the University continued to develop protocols and initiatives to address remote work issues, fraud and phishing, ransomware, data governance, etc.; completed the first year of the roll-out of new Institutional Data Strategy (IDS) with an initial focus on data curation, creation of a new Common Review Process, and implementation of a new cloud-based data and analytics platform;
  • this past year, the Planning & Budget Office worked closely with divisions to monitor potential impacts related to COVID-19 and led the planning processes to develop the 2022-23 Budget and long-range plan;
  • Facilities and Services (F&S) Department delivered key strategic projects to advance asset management and sustainability including the implantation of the Climate Positive Plan – a roadmap to becoming climate positive by 2050;
  • implemented a multi-year master planning initiative towards establishing a long-term vision (10-15 years) for the UTM campus that supports the University’s academic mission and strategic goals, co-led by UTM & University Planning;\
  • the University continued with advancement of major capital projects (including 4Corners) from the Planning phase into Design and Implementation – a significant number of projects had moved into the design/implementation phase (i.e. expansion at Lash Miller (CFREF), the Health and Wellness Centre at Koffler, new Rotman Commerce Building, and Centre for Civilizations Cultures and Cities;
  • two major 4Corners projects had moved through pre-planning and planning phases, including The Gateway at Site 1 (Bloor & Spadina) and the Schwartz Reisman Innovation Campus Phase 2;
  • as part of the Landmark project, the Geothermal vertical boreholes were completed in May 2021. Horizontal piping commenced in May 2022;  
  • a variety of construction of tri-campus capital projects were well underway (included the Schwartz Reisman Innovation Centre, the Fitzgerald Revitalization, UTM Science Building, UTSC Student Residence; and
  • VPOREP continued to recognize staff from across its divisions/units.

    Professor Mabury expressed his thanks to the numerous staff involved across the tri-campus for their hard work and commitment.

    The report was received for information.
  1. Report on Capital Projects to May 30, 2022

    Mr. Dave Lehto, Chief, University Planning, Design and Construction presented the Report on Capital Projects to May 30, 2022 – the report included a comprehensive list of capital projects under construction and in design.

    There were no questions or comments by members. The report was received for information.
  2. Financial Statements (arising from the meeting of the Audit Committee, June 20, 2022) 
    1. Audited Financial Statements for the Fiscal Year ended April 30, 2022

      In his introduction, Mr. Trevor Rodgers, Chief Financial Officer (CFO), recognized the extraordinary efforts and exceptional job of those members from Financial Services, Internal Audit, University of Toronto Management Corporation and External Audit in the annual preparation of the audited statements, especially during COVID-19 and the continued challenges it had presented. 

      Mr. Rajiv Mathur, Vice-Chair of the Audit Committee, reported that the Audit Committee had met with the external auditors. The Committee reviewed the audit plan at its December meeting and was satisfied with the areas of audit emphasis that included how the University records its revenues and accounts for its investments, employee future benefits and capital projects to name a few. There were no major deviations from the audit plan and scope during the execution of the audit. Mr. Mathur stated that the auditors did perform additional procedures to satisfy themselves of the authenticity of documentation provided since the audit was performed remotely.

      At its June 20th meeting, Mr. Mathur reported that the Audit Committee was satisfied that the financial statements fairly represented the financial position of the University and its results for 2021-22 and had no concern that would call into question the integrity of the financial statements. 

      The committee also reviewed a number of areas of audit risk with the external auditors including the valuation of investments and accounting for its pension plan.

      Mr. Rodgers noted that the University experienced another strong year. Highlights included:
    • for the year ended April 30, 2022, the University recorded a positive net income of $416 million (10.9% of revenues);
    • the positive net income included funds that have been set aside for future capital projects and other priorities in accordance with multi-year divisional academic plans, resulting in an increase of $184 million in central and divisional reserves;
    • net income also included infrastructure spending that is capitalized and not expensed in the current year, including projects like the UTM Science building, the Schwartz Reisman Innovation Centre West, a new Student Residence at UTSC, the Fitzgerald Building Revitalization, and the UTSC Instructional Centre Phase II; 
    • it was the second year in a row that fundraising pledges exceeded $400 million;
    • ancillary operations saw an increase of $78 million in revenues and significant recovery from the pandemic shortfalls of the prior year; and
    • the University’s net assets increased by $429 million to a total of $8.5 billion. This was net of the amount reported as a deficit ($314 million) largely due to the internal financing of capital construction in accordance with the University’s debt strategy. 

      The CFO then offered a presentation, which provided additional granularity in the following areas:
    • Results from the Statement of Operations;
    • Breakdown of Net Assets;
    • Investment Returns;
    • Debt and the Sinking Fund; and
    • Indicators of Overall Financial Heath

      The Chair thanked Mr. Rodgers for his detailed report and extended congratulations to everyone involved with preparing the financial statements. She also thanked the members of the Audit Committee for their careful review of the statements.

      On motion duly made, seconded and carried, 


      THAT the University of Toronto audited financial statements for the fiscal year ended April 30, 2022 be approved.
    1. Supplementary Report by Fund (April 30, 2022)

      The Supplementary Report was received by the Board for information. 
  3. Appointment of the External Auditors (arising from the meeting of the Audit Committee,  June 20, 2022)

    Mr. Rodgers reminded members that Ernst & Young LLP had been re-appointed following a tendering process for the 2014-15 financial statements. The University continued to be very satisfied with the work performed by Ernst & Young LLP. The CFO noted that the Audit Committee and the administration had reviewed the performance of the auditors and that the review had been very favourable. Mr. Rodgers expressed unqualified support for the re-appointment of the external auditors.

    Mr. Rodgers reported that Ernst & Young LLP continued to perform well and were proactive in bringing issues and new developments forward. The firm had also met the University’s very tight deadlines and heavy workload requirements for the various audits. 

    As Vice-Chair of the Audit Committee, Mr. Mathur confirmed that at its meeting on June 20, 2022, the Audit Committee had recommended to the Business Board the re-appointment of Ernst & Young LLP for the upcoming fiscal year 2022-23.

    In response to a Member’s question, Mr. Rodgers advised that the University would undertake a 10-year review of audit services in 2024 – there were no statutory restrictions and based on customary practice among universities, U of T could retain the services of the current Auditors.

    On motion duly made, seconded and carried, 


    THAT Ernst & Young LLP be re-appointed as external auditors of the University of Toronto for the fiscal year ending April 30, 2023.
  4. Debt Policy Limit, Debt Allocations, Outstanding Debt Issued and Status of the Long Term Borrowing Pool to April 30, 2022

    Mr. Rodgers explained that the Report, which was an annual item presented to the Board for information, provided an update on the total debt policy limit; the debt burden ratio and the viability ratio; as well as an update of the status of the long-term borrowing pool. The Long Term Borrowing Pool was a self-imposed sinking fund in which the University was accumulating funds to repay debentures when they matured. 

    The report was received for information.


On a motion duly moved, seconded and carried


THAT the consent agenda be adopted and items approved.

  1. Report of the Previous Meeting

    Report Number 264, from the meeting of April 26, 2022, was approved.
  2. Business Arising from the Report of the Previous Meeting

    There was no other business arising from the report of the previous meeting.
  3. Report 265 of the Special Business Board Meeting

    Report Number 265, from the special Business Board meeting of May 16, 2022, was approved.
  4. Report Number 147 of the Audit Committee, April 25, 2022

    The Board received the report for information.
  5. Status Report on Debt to May 31, 2022

    Members received the status report on debt to May 31, 2022 for information.
  6. Date of the Next Meeting

    The Chair advised Board members that the next meeting was scheduled for Wednesday, September 28, 2022 at 5:00 p.m.
  7. Other Business

    Recognition of Patrick McNeill
    The Chair expressed the gratitude of the Board to Mr. Patrick McNeill, Assistant Secretary of the Governing Council, for his service and guidance he provided, as Secretary to the Business Board. The Chair stated that the Board would miss his regular presence at meetings and spoke for all members in wishing Mr. McNeill the best in his retirement.

    The Board Moved In Camera
  8. In Camera Reports of the Administrative Assessors (oral reports)

    Professor Mabury presented an update on a property matter.

    The were no other in camera reports from the Administrative Assessors.
  9. Quarterly Report on Gifts and Pledges over $250,000: February 1, 2022 to  April 30, 2022

    The Quarterly Report was received by the Board for information.
  10. Collective Agreement: University of Toronto and CUPE 3902, Unit 7

    The Collective Agreement: University of Toronto and CUPE 3902, Unit 7 (September 1, 2021 - August 31, 2024), was received by the Board for information.
  11. Capital Project: University of Toronto Centre for Drama, Theatre & Performance Studies (CDTPS) in University College Laidlaw Wing – Execution of the Project

    On a motion duly moved, seconded and carried


    The recommendation of Professor Scott Mabury, Vice-President, Operations and Real Estate Partnerships, as outlined in the memorandum dated June 13, 2022, regarding the execution of the University of Toronto Centre for Drama, Theatre & Performance Studies (CDTPS) in University College Laidlaw Wing capital project.
  12. Property/Real Estate Matter

    On motion duly made, seconded and carried


    THAT the recommendation of Professor Scott Mabury, Vice-President, Operations and Real Estate Partnership, as outlined in the memorandum dated June 13, 2022, regarding a property/real estate matter, be approved.
  13. Report of the Striking Committee: Co-opted Membership of the Business Board and the Audit Committee for 2022-2023

    On motion duly made, seconded and carried



    THAT Olenka Baron be re-appointed to the Business Board as a co-opted administrative staff member for a one-year term from July 1, 2022 to June 30, 2023; and 

    THAT Kathryn Jenkins and Dr. Ian Taylor be re-appointed to the Business Board as co-opted lay members for three-year terms from July 1, 2022 to June 30, 2024.


    THAT the following be re-appointed as co-opted members of the Audit Committee for one-year terms from July 1, 2022 to June 30, 2023:
  • Sue Graham-Nutter (re-appointed)
  • Rima Ramchandani (re-appointed)

    THAT Joanne McNamara be re-appointed as Chair of the Audit Committee and Teo Dechev be appointed as Vice-Chair of the Audit Committee for one-year terms from July 1, 2022 to June 30, 2023. 

    The Chair returned to the meeting.

    The Board returned to Open Session.

    Chair’s Closing Remarks
    The Chair thanked members for their attendance, diligence and participation in the Board meetings, offering special thanks to the Vice-Chair, Senior Assessor, Voting Assessors, outgoing Board members and the Secretariat. 

The meeting adjourned at 7:40 p.m.


June 23, 2022