REPORT NUMBER 281 OF THE BUSINESS BOARD
WEDNESDAY, NOVEMBER 27, 2024
To the Governing Council,
University of Toronto,
Your Business Board reports that it held a meeting held in the Council Chamber, Simcoe Hall, on November 27, 2024, at 5:00 p.m. with the following members present:
PRESENT: Rajiv Mathur (Chair), Mathangi Gopinathan* (Vice-Chair), Sandra Hanington (Vice 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, Amanda Bartley, Jovan Bursac, Vikram Chadalawada, Janet Cloud, Samuel Elfassy, K. Sonu Gaind*, Maureen Harquail, Thomas Hofmann, Paul Huyer, Kathryn Jenkins, Samantha Kappagoda*, Scott MacKendrick, Adel Melek, Rima Ramchandani, David Regan, Firdaus Sadid, Mary-Agnes Wilson
REGRETS: Glen Bandiera, Lindsay Boyce, Brian Madden, Ian Taylor
NON-VOTING ASSESSORS: Christine Szustaczek (Vice-President, Communications), Jeff Lennon (Assistant Vice-President, Planning & Budget), David Lehto (Chief of University Planning, Design & Construction), Nicholas Rule (Vice-Provost, Academic Programs)
*attended remotely
SECRETARIAT: Timothy Harlick (Secretary), Megann Davidson
IN ATTENDANCE:
Chuck O’Reilly (President and Chief Investment Officer, University of Toronto Asset Management Corporation), Tanya Kreinin (Assistant Vice-President, Brand Strategy & Chief Marketing Officer), Catherine Riddell (Assistant Vice-President, Communications), Sanish Samuel (Controller and Director of Financial Service), Anthony Tia (Director of Treasury and Investment Services), Alex Matos (Director, Office of Internal Audit), Ihab Khalil (Chief Operations Officer for the Division of People Strategy, Equity & Culture) , Helen Bao (Executive Finance Officer, OREP), Lisa Clements (Executive Director, Marketing & Communications, UTSC), Amanda Pautler (Interim Executive Director, Public Affairs, UTM), Noreen Ahmed-Ullah (Director, Office of the VP, Communications) Jessica Schwalb (the Varsity)
Pursuant to section 38 of By-Law Number 2,
consideration of items 13 to 16 took place in camera.
OPEN SESSION
- Chair’s Remarks
The Chair welcomed members and guests to the meeting. - Reports of the Administrative Assessors
Fall Enrolment Update
Professor Scott Mabury, Vice-President Operations & Real Estate Partnerships provided an update on fall enrolment, highlighting both international and domestic student intake. The anticipated international intake fell short by 978 students, a 6% variance to budget, translating to a financial shortfall of approximately $62 million. Despite this, the University fared better than other institutions, which saw an average 40% shortall. The domestic intake exceeded the target by 733 students, contributing an additional $5 million in revenue. Retention rates were higher than expected, resulting in $15 million in unrealized revenues. Overall, the University was $30 million below the budget plan for the year, but this was considered manageable within the context of a $4 billion budget.
Professor Mabury also updated on the impact of recent changes in immigration policies by Immigration, Refugees and Citizenship Canada (IRCC), including a 10% reduction in international study permits for 2025-26 and the introduction of provincial attestation letters (PALs) for certain students. Despite these challenges, the University remained optimistic in meeting its PAL allocation. The cancellation of the Student Direct Stream (SDS) was noted as a potential factor in slower visa processing times, which had already affected some students' ability to arrive on time.
He further commented on the University’s Strategic Mandate Agreement 4 with the provincial government and the anticipated increase in demand for STEM education due to demographic changes. The University proposed an increase of 5,500 students in STEM fields, which would provide a significant financial boost. The overall financial outlook for the next year was projected to be lower than historical levels, largely due to the international student intake issues.
Discussion
A member inquired about the conflicting news stories regarding colleges enrolling international students. Professor Mabury confirmed that while there were instances of for-profit institutions enrolling students who did not attend classes, the larger numbers were in the college sector, particularly in Ontario. He noted that the province and federal government had taken steps to address these issues, including changes to work permit policies.
In response to a member’s question about whether the government would reverse recent policies that negatively impacted universities. Professor Mabury responded that while universities were not the target of these policies, the overall message about Canada's openness to international students needed improvement. He emphasized the importance of a robust immigration program for maintaining a healthy post-secondary education system.
A question was also raised about the retention rates of international students. Mr. Jeff Lennon, Assistant Vice President, Planning & Budget, confirmed that retention rates for both international and domestic students had improved, rebounding from a drop during COVID-19. The positive trend in retention was seen as a good signal for the future.
Kosher Food Offerings
Professor Mabury provided an update on the new kosher food program initiated by the provost and the president, with Ms Anne MacDonald, Assistant Vice-President, Spaces & Experiences, leading the effort. The university had collaborated with the Wolfond Centre for Jewish Campus Life, several years, offering a hot meal for dinner at a nominal cost, though it had seen limited uptake. Additionally, grab-and-go kosher food options were available at various campus locations, albeit at a slightly higher cost due to labor and specific requirements.
Beginning in December, the university planned to expand its kosher food offerings across multiple locations, including those managed by independent and private food operators. These meals would be frozen and available for reheating, with the subsidization provided by the Vice-President & Provost to match the cost of regular offerings. The University was also exploring the possibility of recruiting a kosher food operator for a new space in one of its buildings.
The update also highlighted the existing robust halal food options on campus, which were easier to manage due to the high volume and no price differential compared to non-halal options. The university aimed to reflect the diverse dietary needs of its large student population, including those with specific food allergies.
Discussion
A member inquired about the limited uptake of the Wolfond Center's hot meal program. Professor Mabury explained that the program was not widely advertised, which contributed to the small numbers. He emphasized the need for a more robust and widely available kosher food option.
Another question focused on the cost and logistics of providing kosher meals. Professor Mabury acknowledged that kosher food is more expensive due to labor and specific requirements but noted that the Vice-President & Provost's subsidy would help make these meals more affordable. He also mentioned the plan to offer frozen meals for reheating to ensure availability across multiple locations.
A member asked about the potential for recruiting a kosher food operator for a new space on campus. Professor Mabury confirmed that the University was actively seeking an operator to enhance the kosher food offerings further.
Deferred Maintenance Program
Professor Scott Mabury noted that a proposal was being developed for a significant deferred maintenance program, aiming to address hundreds of millions of dollars in maintenance needs over the next few years. The proposal would be brought forward at a future meeting for approval of a substantial level of debt to fund these efforts. Historically, the University had faced criticism for not allocating enough funds to address deferred maintenance, given annual budget constraints.
This year, Professor Mabury emphasized the responsibility of Deans as long-term capital leaseholders of their buildings, accountable for the necessary upkeep. Despite limited provincial funding of $13 million for facilities renewal, the Deans unanimously supported the idea of a major deferred maintenance initiative. The goal would be to improve the university’s ability to address deferred maintenance items further down the prioritization scale by increasing annual spending from the current $40 million.
The program, which had been broadly consulted, originated from a request by the President to identify significant initiatives. It would be a tri-campus effort and aim to align spending with the stated importance of deferred maintenance.
Regular updates were to be provided to the Business Board, similar to the Strategic Investment Fund (SIF) project from 2016, which involved 57 projects and $200 million over 18 months. - Annual Report: Vice-President, Communications
The Board received the Annual Report of the Vice-President, Communications, for information. The Report provided members with an update on University of Toronto Communications’ (UTC) activities during the FY2023-2024 period.
Highlights of Ms Christine Szustaczek, Vice-President, Communication, presentation included:
UTC had established its first five-year vision, adopting a stakeholder management approach to transform from a broadcast model into an integrated organizational communications framework. This vision emphasized two-way communication and relationship building with stakeholders.
Their team generated significant success in promoting U of T through:
- Ranking 1st among public institutions and 5th among 700 global institutions in the 2024 Global University Visibility Rankings, thanks to UTC efforts to share U of T’s research and teaching expertise, increase news mentions, and generate public interest, our online footprint and social media reach
- More than 1.2 million social media followers, with U of T having the largest social media following of any Canadian university
- 176 million targeted impressions
- Over 310,000 global news media mentions
- Leading share (13.4%) of coverage among Canadian universities
- Extensive coverage in major international publications including The Guardian, The New York Times, BBC and The Economist
- Internal operations focused on developing guidelines for institutional statements, coordinating tri-campus communications, and managing issues related to international students, diversity, and campus safety. The team developed over 50 issues briefs and handled 297 reporter requests.
UTC's effectiveness was validated through 46 industry awards from CASE (Council for Advancement and Support of Education), CCAE (Canadian Council for Advancement of Education), and other professional organizations, including being named Not-for-Profit Communications Department of the Year by the International Association of Business Communicators.
Their work supported operational goals like recruitment, retention, partnerships and investment by building brand awareness, fostering engagement, and maintaining U of T's reputation through strategic communications and stakeholder relationship management.
Discussion
In response to a member’s question about the distribution between positive and neutral global mentions of the University, Ms. Szustaczek commented that she would follow up with the Board member regarding this statistic.
Another member commended the thoroughness of the report and asked about strategies to mitigate risks associated with unfavorable themes. Ms. Szustaczek explained the University's proactive measures, including social media monitoring, rigorous review of media coverage, and direct communication with stakeholders to address potential issues before they escalate.
Ms. Szustaczek also highlighted UTC’s work in issues management by considering trends in society and matters that we observe unfolding at peer institutions. UTC works closely with the Issues Management Group in preparing responses and addressing issues across the University.
A question was raised about addressing reputational damage to Canada in international markets. Ms. Szustaczek noted that this issue was on their radar and involved a multi-institutional approach, with efforts to engage local media during international trips to tell the University’s story.
In response to a member's question about the impact of a new U.S. administration on international student recruitment, Ms. Szustaczek acknowledged the challenge and mentioned that the university was better prepared this time, drawing on past experiences. She emphasized the need for a balanced approach to attract international students without appearing opportunistic. She also addressed the difficulties international students might face in the U.S. under the new administration, deferring to the Vice-President, International and government relations teams, who are focused on removing barriers and facilitating easier access for international students.
The discussion concluded with thanks for the report and congratulations on the university's rankings.
- Investments: Semi-Annual Update on Investment Performance
Mr. Trevor Rodgers, Chief Financial Officer introduced the Semi-Annual Update on Investment Performance and provided an overview of the two main investment pools: the Long-Term Capital Appreciation Pool (LTCAP) and the Expendable Funds Investment Pool (EIP). He noted that the LTCAP funds the annual payout from the endowment, supporting financial aid, endowed chairs, academic programming, and research, while the EFIP invests the university's working capital to generate unrestricted investment income for the operating budget.
Mr. Chuck O’Reilly, President and Chief Investment Officer, University of Toronto Asset Management Corporation (UTAM), provided the semi-annual update on investment performance for UTAM-managed investment pools as of June 30, 2024.
LTCAP had demonstrated strong performance with a one-year return of 8.5% and a 10-year return of 8.0%, having exceeded its target return by 1.5 percentage points over that period. The medium-term expendable funds had achieved a 6-month return of 2.7%, outperforming its target by 1.1 percentage points, while the short-term expendable funds had delivered a 6-month return of 2.2%, slightly above its 2.0% target.
The investment framework emphasized long-term performance targets and risk management rather than peer comparisons, with regular monitoring having been conducted by UTAM, the Investment Committee, University administration, and the Business Board.
Discussion
The Board discussed the shift in the asset mix between short-term and midterm portfolios. Mr. O’Reilly explained that the midterm portfolio had a target allocation of 30% within the total EIP assets but was currently below that target. The University was assessing its risk tolerance for the midterm portfolio, especially after significant negative returns in 2022. The strategy involved potentially changing the benchmark to reduce interest rate risk.
Members also inquired into the composition of the reference portfolio and the performance of private investments. Mr. O’Reilly clarified that the reference portfolio was broadly based, benchmarked against the MSCI All Country World Index. He emphasized the long-term horizon for private investments and the need to evaluate performance within the context of market conditions.
Questions were raised about the increase in assets under management and the impact of U.S. political changes on UTAM's investment strategy. Mr. O’Reilly noted that the increase was primarily due to performance, with minimal net increase from cash flows. He emphasized UTAM's long-term focus and the importance of allocating capital to the best managers globally, rather than reacting to short-term political changes. - Collective Agreement Updates:
- IATSE Local 58 Collective Agreement Renewal September 1, 2021 – August 31, 2026
- OPSEU 519 Collective Agreement Renewal July 1, 2023 to June 30, 2026
- OPSEU 578 Collective Agreement Renewal July 1, 2023 to June 30, 2026
Professor Kelly Hannah-Moffat, Vice President, People Strategy, Equity & Culture provided a summary of three collective agreements covering technicians, OPSU members (including campus safety officers, corporals, special constables, and communication officers), and research officers. She noted that the University employs pattern bargaining to ensure consistent across the board (ATB) increases across all units.
CONSENT AGENDA
On motion duly moved, seconded, and carried
YOUR BOARD APPROVED
THAT the consent agenda be adopted and that Item 8, the Report of the Previous Meeting, be approved.
- Status Report on Debt to October 31, 2024
The Status Report on Debt to October 31, 2024, was received for information. -
Health and Safety Requirements: Quarterly Report on Compliance – July 1 to September 30, 2024
The Health and Safety Requirements – Quarterly Report on Compliance for July 1, 2024 to September 30, 2024, was received for information. -
Report of the Previous Meeting: Report Number 280, September 25, 2024
Report Number 280 of the Special Meeting of the Business Board held on September 25, 2024, was approved. - Business Arising from the Report of the Previous Meeting
There was no business arising from the Report of the previous meeting. - Report Number 159 of the Audit Committee, September 18, 2024
Report number 159 of the Audit Committee, September 18, 2024, was received for information. - Date of Next Meeting – January 29, 2025, at 5:00 p.m.
The Board was reminded that the next meeting was scheduled for Wednesday, January 29, 2025, at 5:00 p.m.
- Other Business
There were no items of other business.
The Board moved In-Camera.
IN CAMERA SESSION
- In Camera Reports of the Administrative Assessors
There were no reports made by the administrative assessors while in camera. - University Pension Plan Ontario (UPP) Actuarial Valuation at January 1, 2024
The Board received an update on the University Pension Plan Ontario (UPP) Actuarial Valuation at January 1, 2024 by Mr. Rodgers. - Report on Capital Projects
The Board received the Report on Capital Projects as of October 31, 2024, for information.
Professor Mabury and Mr. David Lehto, Chief, University Planning, Design & Construction, provided a summary overview and progress update of the capital projects underway this academic year. - Business Board Striking Committee 2024-25 Membership
On a motion duly moved, seconded, and carried,
YOUR BOARD APPROVED
THAT the following be appointed to the Business Board Striking Committee to recommend appointments for 2024-2025:- Vikram Chadalawada (Administrative Staff)
- Scott MacKendrick (Alumni)
- Samuel Elfassy (Lieutenant-Governor-in-Council)
- Jovan Bursac (Student)
- K. Sonu Gaind (Teaching Staff)
The Board returned to Open Session.
The meeting adjourned at 7:02 p.m.
December 2, 2024