REPORT NUMBER 274 OF THE BUSINESS BOARD
WEDNESDAY, SEPTEMBER 27, 2023
To the Governing Council,
University of Toronto,
Your Board reports that it held a meeting in the Council Chamber, Simcoe Hall on September 27, 2023, at 5:00 p.m. with the following members present:
PRESENT: Rajiv Mathur (Chair), Ron Saporta (Acting Vice-President, Operations), Kelly Hannah-Moffat (Vice-President, People Strategy, Equity & Culture), Trevor Rodgers (Chief Financial Officer), Sharleen Ahmed, Glen W Bandiera, Janet Anne Cloud, Alicia Damley, Thomas Hofmann*, Nelson Lee, Scott MacKendrick, Brian Madden, Rima Ramchandani, David Regan, Carmen Sebert, Ian Taylor, Veronica Wadey, Grace Westcott
REGRETS: Vikram Chadalawada, Mathangi Gopinathan, Maureen Harquail, Paul Huyer, Kathryn Jenkins, Kikelomo Lawal, Mary-Agnes Wilson
NON-VOTING ASSESSORS: David Palmer, Vice-President, Advancement*, David Lehto, Chief, University Planning, Design & Construction, Luke Barber, Acting Chief Operating Officer, Deborah Brown, Chief Administrative Officer, UTM*, Jeff Lennon, Assistant Vice-President, Planning & Budget, Christine Szustaczek, Vice-President, Communications
SECRETARIAT: Timothy Harlick, Secretary, Tracery Gameiro
IN ATTENDANCE: Tanya Kreinin, Assistant Vice-President, Brand Strategy and Chief Marketing Officer, Gillian Morrison, Assistant Vice-President, University Development, Barbara Dick, Assistant Vice-President, Alumni Relations, Raj Sharda, Chief Operating Officer, University Advancement, Steve Hoscheit, Assistant Vice President, Divisional Relations Tad Brown, Counsel, Business Affairs and Advancement, Chuck O’Reilly, President and Chief Investment Officer, UTAM, Anthony Tia, Director of Treasury and Investment Services, Sanish Samuel, Controller & Director Financial Services
*attended remotely
Pursuant to section 33(i) of By-Law Number 2,
items 18 to 25 were considered in camera.
OPEN SESSION
- Chair’s Remarks
The Chair welcomed new and returning members and guests to the first meeting of the 2023-24 academic year and introduced Vice-Chair, Indi Gopinathan, and Board Secretary, Timothy Harlick.
The Chair then introduced the Senior Assessor, Mr. Ron Saporta, Acting Vice-President, Operations, and the Voting Assessors, Professor Kelly Hannah-Moffat, Vice-President, People Strategy, Equity & Culture, and Mr. Trevor Rodgers, Chief Financial Officer.
- Reports of the Administrative Assessors
Mr. Saporta provided an update on behalf of Professor Cheryl Regehr, Vice-President, Academic & Provost who was unable to attend the meeting due to university-related travel. The update included the following matters.
Back to School Activities
The university community was vibrant as students returned to campus for the academic year. Orientation events were extremely well attended and Clubs Day had been a resounding success.
International Relations
The University was closely monitoring international relations between Canada and India. There were approximately 2400 international students from India and a majority of those students were already on campus. There would therefore be minimal immediate risk to those students’ ability to attend class. The University was assessing the emerging risks relating to academic travel and research partnerships should there be further escalation between the two countries.
Discussion
In the ensuing discussion, Mr. Jeff Lennon, Assistant Vice-President, Planning & Budget, highlighted that enrolment for international students had been slightly lower than anticipated. This was partly due to minimal historical data in new international markets as the University continued to diversify its global recruitment efforts. He further noted that a small portion of accepted international students had dual citizenship and registered as domestic students. It was to the discretion of the student to declare their status which sometimes resulted in a slight variance in international enrolment numbers.
- Health and Safety Requirements – Quarterly Report on Compliance for April 1, 2023 to June 30, 2023
The Quarterly Report on Compliance (April 1, 2023 – June 30, 2023) was received by the Board for information. Professor Hannah-Moffat confirmed that to that best of her knowledge, the University was in compliance with its health and safety obligations.
Discussion
In the ensuing discussion, Professor Hannah-Moffat advised that, in general, certain incidents could trigger public health visits by the Ontario Ministry of Labour, Immigration, Training and Skills Development (MLITSD) and that these visits were not overly burdensome for administration.
- Annual Report: Vice-President, Advancement
The Annual Report of the Vice-President, Advancement, was received by the Board for information. Mr. David Palmer, Vice-President Advancement, began by thanking the Business Board for the opportunity to present on Advancement’s year end and what was ahead for the Defy Gravity campaign. Mr. Palmer introduced the senior members of his team and thanked them and divisional advancement teams across the University for their many contributions throughout the past fiscal year.
Mr. Palmer along with Barbara Dick, Assistant Vice-President, Alumni Relations, and Tanya Kreinin, Assistant Vice-President, Brand Strategy and Chief Marketing Officer presented the Report. Highlights of the presentation included:
- During the fiscal year, the University had engaged with alumni more than 137,000 times as volunteers, advocates, donors, and event participants.
- The University had raised $308.6 million in philanthropic gifts and grants.
- The University of Toronto Scarborough had received two remarkable gifts; one established a new medical academy for training local health professionals, and another created an innovation hub for developing and keeping talent, ideas and ventures in Scarborough and the eastern Greater Toronto Area.
- University Advancement continued its work addressing the recommendations in the Advancing Inclusive Excellence report brought forward by DUA’s Equity, Diversity and Inclusion Task Force in 2022.
- The University held its first annual giving day in March 2023. The event raised $1.23 million from 532 donors supporting 37 equity, diversity, and inclusion initiatives across the University.
- The Defy Gravity campaign remained on target to raise its $4 billion goal for the university.
Discussion
In response to a member’s question, Mr. Palmer explained that University Advancement’s cost per dollar of funding raised was 19.08¢ for the fiscal year. Over the past 10 years, Advancement’s average cost per dollar raised had been 15.3¢, far below the 35¢ threshold cost for registered charities recommended by the Canada Revenue Agency. It also fell within the industry-wide accepted range of 15¢ to 20¢ for large institutions of higher education.
- Quarterly List of Donations of $250,000 or more to the University of Toronto – May 1, 2023, to July 31, 2023
The Quarterly List of Donations of $250,000 or more to the University of Toronto – May 1, 2023, to July 31, 2023, was received by the Board for information.
Discussion
In response to a member’s question, Mr. Palmer advised that the University conducted extensive due diligence on all large donations to ensure that the University fully understood the source of the funds and the donor involved. He further noted that all donations were assessed in accordance with the Provost’s Guidelines on Donations and the Policy on Naming.
- Investments: Semi-Annual Update on Investment Performance to June 30, 2023
The Board received the Semi-Annual Update on Investment Performance to June 30, 2023, for information.
Mr. Rodgers reported that there were two pools of funds that UTAM managed: the expendable funds investment pool (EFIP) which included working capital in operating, ancillary, expendable donations, capital and research funds; and the long-term capital appreciation pool (LTCAP), which included funds invested for the long-term, including, predominantly endowments. Each investment pool had its own risk profile, target return and investment strategy.
All funds were under the management of the University of Toronto Asset Management Corporation (UTAM), which reported on a January to December fiscal year, resulting in timing differences with the results reported in the University financial statements based on a May to April fiscal year. He also noted that the University was primarily concerned with long-term investment returns and had smoothing mechanisms in place to minimize the impact of short-term market volatility on the University’s operations.
Mr. Chuck O’Reilly, President and Chief Investment Officer, University of Toronto Asset Management Corporation (UTAM), highlighted the following key points related to investment performance for LTCAP and EFIP:
- All investment returns for LTCAP and EFIP were net of all investment fees and expenses, including UTAM fees.
- Over the past 12 months, total assets under management increased by 7.6% to approximately $7.4 billion.
- Over the first half of the calendar year (H1 2023), LTCAP returned 7.6%. EFIP returned 2.3%.
- The Reference Portfolio had realized a return of 8.7% in H1 2023, while the Target Return (CPI plus 4% annually) was 3.3% for the first six months of the year.
- Driven by strong capital market returns since early October 2022, the Reference Portfolio outperformed the Target Return over all time periods ending June 30, 2023, except the 5-year time horizon.
- LTCAP’s long-term track record remained strong, as it had outperformed the Reference Portfolio over the 5-year and 10-year time horizons.
- For the first six months of the year, UTAM’s LTCAP portfolio under-performed the reference portfolio by $41.7 million. This short-term underperformance was driven largely by private investments, which had not kept up with the strong performance of public equity markets since the end of Q3 2022.
- However, over the 5-year horizon, on a simple arithmetic basis (i.e., without including the impact of compounding), LTCAP’s dollar value-add was $224.5 million and the 10-year dollar value add exceeded $434 million.
- Active Risk for LTCAP remained well within the “Normal” Zone (-50 bps to 100 bps) at the end of June 2023.
- At the end of June 2023, LTCAP was in compliance with all limits.
Discussion
In response to a member’s questions, Mr. Rodgers noted that CPI was 2.8% as of June 30, 2023, resulting in an annualized target of 6.8% ̶ equivalent to a six-month target return of 3.3%. This compared to actual returns of 8.7% for the reference portfolio and 7.6% for the LTCAP portfolio for H1 2023, which were both reported for a six-month period.
- Status Report on Debt to August 31, 2023
The Status Report on Debt to August 31, 2023, was received for information. Mr. Rodgers provided an overview of the Report and advised that Board that going forward, this item would be included in the consent agenda. He also noted that the Governments financial health indicators would be incorporated into this Report when the requirements were finalized.
CONSENT AGENDA
On motion duly moved, seconded, and carried
YOUR COMMITTEE APPROVED
THAT the consent agenda be adopted and that Item 10, the Report of the Previous Meeting, be approved.
- Approvals Under Summer Executive Authority
The Report on Approvals Under Summer Executive Authority was received for information.
- Credit Rating Report Moody’s Investors Service – Credit Opinion dated Aug 30, 2023
The credit report was received for information.
- Report of the Previous Meeting: Report Number 273, June 20, 2023
Report Number 273, from the meeting of June 20, 2023, was approved.
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Business Arising from the Report of the Previous Meeting
There was no business arising from the report of the previous meeting.
- Report Number 153 of the Audit Committee, June 19, 2023
Report number 153 of the Audit Committee, June 19, 2023, was received for information.
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Calendar of Business, 2023-24
The Calendar of Business (2023-2024) was received for information.
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Date of Next Meeting – Wednesday, November 22, 2023, at 5:00 p.m.
The Board was informed that the next meeting was scheduled for Wednesday, November 22, 2023, at 5:00 p.m.
CLOSING ADMINISTRATIVE MATTERS
- Other Business
The Chair advised the Board that following this meeting, the Secretary would be seeking interest from members to serve on the Board’s Striking Committee to make recommendations for non-Governing Council “co-opted” appointments to the Board for the 2024-25 governance year.
The Board moved In-camera.
IN CAMERA CONSENT AGENDA
- In Camera Reports of the Administrative Assessors
Mr. Saporta reported on the University’s upcoming capital priorities and ongoing capital projects.
The were no other in camera reports from the Administrative Assessors.
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Agreement Updates:
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Arbitration Award between the University and the University of Toronto Faculty Association
The Board received for information the Arbitration Award between the University and the University of Toronto Faculty Association was received by the Board, for information.
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July 1, 2023 – June 30, 2026 - Collective Agreement between the University of Toronto and USW Local 1998 – Staff Appointed
The July 1, 2023 – June 30, 2026 - Collective Agreement between the University of Toronto and USW Local 1998 – Staff Appointed was received by the Board, for information.
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Professional, Managerial and Confidential Staff, Advancement Professionals and Senior Research Associates/Research Associates
As required under section 27(d) of the University of Toronto Governing Council By-law Number 2, Board member Ms Carmen Sebert, and voting assessor, Mr. Rodgers, declared a conflict of interest and abstained from the discussion and vote of this item.[1]-
Performance and Compensation
On motion duly made, seconded and carried
IT WAS RESOLVED
THAT the recommendation of Professor Kelly Hannah-Moffat, Vice-President, People Strategy, Equity and Culture, as outlined in the memorandum dated September 19, 2023, regarding the Performance and Compensation for Professional, Managerial and Confidential Staff, Advancement Professionals and Senior Research Associates/Research Associates, be approved.
- Benefit Enhancements
On motion duly made, seconded and carried
IT WAS RESOLVED
THAT the recommendation of Professor Kelly Hannah-Moffat, Vice-President, People Strategy, Equity and Culture, as outlined in the memorandum dated September 19, 2023, regarding the Benefit Enhancements for Professional, Managerial and Confidential Staff, Advancement Professionals and Senior Research Associates/Research Associates, be approved.
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July 1, 2020 – June 30, 2023 - Collective Agreement between the University of Toronto and CUPE Local 1230 – Student Casual
The July 1, 2020 – June 30, 2023 - Collective Agreement between the University of Toronto and CUPE Local 1230 – Student Casual was received by the Board, for information.
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January 1, 2022 to December 31, 2023 – Collective Agreement between the University of Toronto and CUPE Local 3261 – 89 Chestnut
The January 1, 2022 to December 31, 2023 – Collective Agreement between the University of Toronto and CUPE Local 3261 – 89 Chestnut was received by the Board, for information.
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January 1, 2022 to December 31, 2024 – First Collective Agreement between the University of Toronto and USW Local 1998 – Residence Dons
The January 1, 2022 to December 31, 2024 – First Collective Agreement between the University of Toronto and USW Local 1998 – Residence Dons was received by the Board, for information.
The Board returned to Open Session.
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The meeting adjourned at 7:09 p.m.
October 3, 2023
[1] Secretary’s Note: It was confirmed by the Secretary to members following the meeting that By-law Number 2 prohibited an employee of the University from voting on such matters. (The President and the Vice-Presidents are exempt from this provision.) The two members were made aware that their declaration of a conflict of interest would stand and their vote would be excluded. This exclusion did not have an impact on the decisions made by the Board as no other opposition or abstention was recorded.