Report: Business Board - June 17, 2025

REPORT NUMBER 285 OF THE BUSINESS  BOARD

WEDNESDAY, JUNE 17, 2025

To the Governing Council,
University of Toronto,

Your Business Board reports that it held a meeting in the Council Chamber, Simcoe Hall on June 17, 2025, at 5:00 p.m. with the following members present:

PRESENT: Rajiv Mathur (Chair), Mathangi Gopinathan (Vice-Chair), Anna Kennedy (Chair of the Governing Council), Scott Mabury (Vice-President, Operations & Real Estate Partnerships), Kelly Hannah-Moffat (Vice-President, People Strategy, Equity & Culture), Trevor Rodgers (Chief Financial Officer), Sharleen Ahmed, Jovan Bursac, Vikram Chadalawada, Janet Anne Cloud, Samuel Elfassy, K. Sonu Gaind, Kathryn Jenkins, Samantha Kappagoda, Scott MacKendrick, Brian Madden, Adel Melek*, Rima Ramchandani, David Regan, Ian Taylor

REGRETS: Glen W Bandiera, Lindsay Boyce, Maureen Harquail, Paul Huyer, Firdaus Sadid, Mary-Agnes Wilson

NON-VOTING ASSESSORS: Christine Szustaczek (Vice-President, Communications), Nicholas Rule (Vice-Provost, Academic Programs), David Lehto (Chief of University Planning, Design & Construction), Deborah Brown, Chief Administrative Officer, UTM)

SECRETARIAT: Timothy Harlick (Secretary), Sheree Drummond (Secretary of the Governing Council), Megann Davidson

IN ATTENDANCE: Timothy Chan (Associate Vice-President and Vice-Provost, Strategic Initiatives), Alex Matos (Executive Director, Internal Audit), Sanish Samuel (Controller and Director of Financial Service), Anthony Tia (Director of Treasury and Investment Services), Elizabeth Cragg (Director, Office of the Vice President, Operations & Real Estate Partnerships), Helen Bao (Executive Finance Officer, OREP)

*Participated remotely

Pursuant to section 38 of By-Law Number 2,
consideration of items 15 to 18 took place in camera.

OPEN SESSION

1. Chair’s Remarks
   
   The Chair welcomed members and guests to the final meeting of the academic year.
2. Reports of the Administrative Assessors
   
   Professor Scott Mabury, Vice-President, Operations & Real Estate Partnerships, provided an update on the university’s enrolment and financial outlook for 2025-2026. He reported that international projects based on confirmations of offers were approximately 1,150 students below the plan for Fall 2025. This decline was partially attributed to the introduction of a $3,000 deposit requirement for international students accepting offers. While the initiative may have discouraged some applicants, it was intended to improve enrolment predictability by reducing the number of students who accept an offer but do not register.
   
   Domestic enrolment exceeded plan by several hundred students, generating a $7 million positive tuition variance. However, as these students were enrolled above the government’s approved corridor, there was no corresponding increase in grant funding.
   
   Professor Mabury also noted that summer enrolment generated a $19 million positive variance, marking the second consecutive year of strong performance. While last year’s results were initially viewed as atypical, the consistency of this year’s outcome has prompted a reassessment of summer enrolment’s role in financial projections. When all enrolment streams were taken together, the university was forecasting a revenue shortfall of approximately $50 million compared to plans, with the international underperformance partially offset by strong domestic and summer results. He emphasized that these results were consistent with earlier projections shared during budget planning and reflected well-managed enrolment coordination across the institution.
   
   He concluded that although investment income had a positive impact on the financial position, the institution could not rely on such returns going forward. Future financial sustainability would depend on cost containment and operational efficiency.
3. Financial Statements
   
   (Arising from the meeting of the Audit Committee held on June 16, 2025)
   1. Audited Financial Statements for the Fiscal Year ended April 30, 2025
      
      Trevor Rodgers, Chief Financial Officer, presented the audited financial statements for the fiscal year ended April 30, 2025. He acknowledged the work of Financial Services, University of Toronto Asset Management Corporation (UTAM), Internal Audit, and the external auditors.
      
      As a member of the Audit Committee, the Chair summarized the Committee’s discussions of the Audited Financial Statements. The Committee reviewed the audit plan at its November 2024 meeting and confirmed satisfaction with the areas of emphasis, which included revenue recognition, investment accounting, employee benefits, and capital projects. The external auditors reported no deviations from the audit scope or plan. There were no issues related to fraud or material misstatement. He concluded his summary by noting that the Committee met privately with the external and internal auditors and no matters requiring Board attention were raised.
      
      Mr. Rodgers reported that the university realized $519 million in net income before allocating funds to reserves and capital spending. Revenue increased by 5.1% and expenses by 5.4%. Investment returns were strong across long, medium, and short-term portfolios, contributing to positive overall results. Enrolment increased by 2.9% and research grants reached a record $693 million. The university raised $361 million in fundraising, exceeding its campaign goal for the year. Capital investment totaled $630 million, and the debt burden ratio remained low at 2.3%, well below the 6.0% policy limit.
      
      Discussion
      
      Members engaged in a detailed discussion of the financial results, including the implications of lower operational cash flow relative to the Ministry of Colleges, Universities, Research Excellence and Security’s (MCURES) 7% benchmark. Mr. Rodgers clarified that the metric reflects the university’s ability to generate sufficient cash from operations to fund capital investments over time and does not signal a liquidity concern. Liquidity remains strong, with reserves exceeding 260 days of operating expenses.
      
      The Board also discussed the retention of supplementary retirement plan (SRA) pension liabilities on the university’s balance sheet. It was noted that these plans fall outside the scope of the University Pension Plan (UPP) due to their structure and purpose and therefore remain under university management.
      
      Additional questions addressed tuition volatility risk, which is managed through divisional reserves, and the growth in accounts receivable, which was attributed to timing differences and growth in overall volume of student fees rather than collection issues.

On motion duly made, seconded and carried,

YOUR BOARD RECOMMENDED

THAT the University of Toronto audited financial statements for the fiscal year ended April 30, 2025, be approved.

2. Supplementary Report by Fund (April 30, 2025)
   
   The Supplementary Report was received by the Board for information.

4. Appointment of the External Auditors
   
   (Arising from the meeting of the Audit Committee held on June 17, 2025)

   Mr. Rodgers reported that fiscal 2025 marked the first year of a five-year master services agreement with Ernst & Young, subject to annual appointment by the Governing Council, following an RFP process in 2024. The auditors met expectations, provided sector-specific expertise, and demonstrated an appropriate degree of professional skepticism and independence. No concerns were raised regarding their re-appointment.
   
   As a member of the Audit Committee, the Chair of Business Board commented that the Committee expressed their continued confidence in the work undertaken by EY.
   
   There were no questions from members.

On motion duly made, seconded and carried,

YOUR BOARD RECOMMENDED

THAT Ernst & Young LLP be re-appointed as external auditors of the University of Toronto for the fiscal year ending April 30, 2026.

5. Debt Policy Limit, Debt Allocations, Outstanding Debt Issued and Status of the Long-Term Borrowing Pool to April 30, 2025
   
   The Debt Policy Limit, Debt Allocations, Outstanding Debt Issued and Status of the Long-Term Borrowing Pool to April 30, 2025 Report was received for information.
   
   Mr. Rodgers reported that as of April 30, 2025, the university’s debt capacity was $3.1 billion. Actual debt issued was $1.2 billion, resulting in a 2.3% debt burden ratio. The university’s sinking fund fully offsets its outstanding external debt.
6. Annual Report 2024-25: Vice President, Operations & Real Estate Partnerships
   
   The Annual Report 2024-25: Vice President, Operations & Real Estate Partnerships was provided to the Board for information.
   
   Professor Mabury offered brief remarks thanking his team for their work and acknowledged their contributions to the outcomes summarized in the report.

7. UniForum and Operational Excellence
   
   Professor Mabury and Professor Timothy Chan, Associate Vice-President and Vice-Provost, Strategic Initiatives and a Professor in Mechanical and Industrial Engineering, delivered a comprehensive presentation on the university’s operational efficiency initiative, grounded in benchmarking data from its participation as one of 36 institutions in the UniForum global data collection and benchmarking program and the associated service effectiveness survey. The presentation emphasized that the OpEx initiative is key to the university's long-term financial resilience and had been in development for a few years.
   
   The presentation highlighted the following key findings and priorities:

   • U of T's operational expenditures are approximately 15% higher than the global average but on par with our Canadian U15 comparators
   • The data revealed that ~45% of administrative time is focussed on routine, process- driven activities though this is down from 49% in 2020/21 and 47% in 21/22 as processes are being redesigned for consistency and simplicity and systems are being implemented along with clearly defined workflows
   • Benchmarking functions included finance, human resources, institutional governance (management), research administration, information technology, and facilities management, each measured against global best practices in cost efficiency, service quality, and structural configuration.
   • The data allows us to focus on areas of high spend and low satisfaction, within the university’s own context and landscape while peer comparisons provide case studies showcasing efforts and successes in streamlining processes, reducing duplicative work, and improving service quality and client experience.
   • The OpEx initiative is a strategic alignment exercise, intended to ensure that administrative resources are effectively deployed in support of the university’s academic and research mission.
   • A staged approach to operational excellence will include expanded data validation efforts, collaborative engagement with divisional leadership, identification of shared and centralized service opportunities, development of service delivery standards and performance metrics, and the establishment of long-term accountability mechanisms.

Discussion

Following the presentation, members expressed strong support for the direction of the initiative and emphasized the importance of communicating clearly that the goal is to improve services, not reduce headcount. Some members inquired about the interplay between central and divisional services, and how best practices might be shared across campuses. Others asked about timelines, accountability, and the degree of consultation anticipated with affected stakeholders. The discussion also touched on how operational benchmarking will influence future budget planning and the potential for reallocating savings to strategic priorities.

Board members expressed broad support for the initiative, recognizing its alignment with long-term financial sustainability goals.

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.

8. Quarterly List of Donations of $250,000 or more to the University of Toronto: February 1 - April 30, 2025
   
   The Quarterly List of Donations of $250,000 or more to the University of Toronto – February 1 to April 30, 2025, was received for information.
9. Status Report on Debt to May 31, 2025
   
   The Status Report on Debt to May 31, 2025, was received for information.
10. Report of the Previous Meeting: Report Number 284, April 23, 2025
    
    Report Number 284 of the Special Meeting of the Business Board held on April 23, 2025, was approved.

11. Business Arising from the Report of the Previous Meeting
    
    There was no business arising from the Report of the previous meeting.

12. Date of Next Meeting – September 25, 2025, at 5:00 p.m.
    
    Returning members were reminded that the first meeting of the 2025-26 academic year would be September 25, 2025, at 5:00 p.m.

13. Other Business
    
    
    There were no other items of business.

The Board moved In Camera.

IN CAMERA SESSION

14. In Camera Reports of the Administrative Assessors
    
    There were no In camera reports made by the administrative assessors.
15. Annual Report of the Senior Appointments and Compensation Committee for 2024–25
    
    Anna Kennedy, Chair of the Governing Council provided an overview of the Annual Report of the Senior Appointments and Compensation Committee for 2024–25
16. Report on Capital Projects as of May 30, 2025
    
    The Report on Capital Projects as of May 30, 2025, was received for information.
17. Collective Agreement Updates
    1. Renewal May 1, 2021 – April 30, 2027 Collective Agreement between the University of Toronto and The United Association of Journeymen and Apprentices of the Plumbing and Pipe Fitting Industry of the United States and Canada, Local 46 (UA Local 46)
    2. Renewal June 1, 2021 – May 31, 2027 Collective Agreement between the University of Toronto and the Sheet Metal Workers’ International Association, Local 30 (SMWIA Local 30)
    3. Renewal May 1, 2021 – April 30, 2027 Collective Agreement between the University of Toronto and International Brotherhood of Electrical Workers (IBEW), Local 353: Machinists/Millwrights
    4. Renewal May 1, 2021 – April 30, 2027 Collective Agreement between the University of Toronto and International Brotherhood of Electrical Workers (IBEW), Local 353: Locksmiths
    5. Renewal May 1, 2021 – April 30, 2027 Collective Agreement between the University of Toronto and International Brotherhood of Electrical Workers (IBEW), Local 353: Electricians
    6. Renewal July 1, 2023 to June 30, 2026 Collective Agreement between the University of Toronto and the (CUPE Local 2484)
    7. Renewal September 1, 2024 to August 31, 2027. Collective Agreement between the University of Toronto and the CUPE 3902 – Unit 3
    8. Renewal January 1, 2025 to December 31, 2027. Collective Agreement between the University of Toronto and the CUPE 3902 – Unit 6
    9. Renewal September 1, 2024 to August 31, 2027. Collective Agreement between the University of Toronto and the CUPE 3902 – Unit 7
    10. Renewal January 1, 2025 to December 31, 2027 Collective Agreement between the University of Toronto and the USW Local 1998 Resident Dons

Professor Kelly Hannah-Moffat provided an update on a series of collective agreements.

18. Report of the Striking Committee: Coopted Membership of the Business Board and the Audit Committee for 2024-2025

On motion duly made, seconded and carried

IT WAS RESOLVED

BUSINESS BOARD

THAT Samantha Figenshaw be appointed to the Business Board as a co-opted administrative staff member for a one-year term from July 1, 2025 to June 30, 2026; and

THAT Nicole Martin and Debbie Oakley be appointed to the Business Board as co-opted lay members for three-year terms from July 1, 2025 to June 30, 2028.

AUDIT COMMITTEE

THAT the following be appointed as co-opted members of the Audit Committee for one-year terms from July 1, 2025 to June 30, 2026:

• Adel Melek (appointed);
• Rima Ramchandani (re-appointed); and

 THAT Paul Huyer be appointed as Chair of the Audit Committee and Samuel Elfassy be appointed as Vice-Chair of the Audit Committee for one-year terms from July 1, 2025 to June 30, 2026.

The Board returned to Open Session.

Before adjourning, the Chair expressed appreciation to all members for their service over the past year. Special thanks were extended to outgoing members, including student members Jovan Bursac and Firdaus Sadid; co-opted administrative staff member Lindsay Boyce; and co-opted lay members Kathryn Jenkins and Ian Taylor, who have each completed two three-year terms.

The Chair also acknowledged the contributions of Vice-Chair Mathangi Gopinathan, Senior Assessor Scott Mabury, and Voting Assessors Kelly Hannah-Moffat and Trevor Rodgers, as well as the broader group of non-voting administrative assessors who advised the Board throughout a demanding year.

Members were reminded that a Board evaluation survey would be circulated shortly and were encouraged to participate, as feedback plays an important role in supporting effective governance.

The meeting adjourned at 7:04 p.m.

June 19, 2025