TransformTO - Critical Steps for Net Zero by 2040

City Council's 2019 declaration of a global climate emergency shifts Toronto's focus to align with the Intergovernmental Panel on Climate Change's recommended pathway - net zero by 2050 or sooner. This Report recommends that Toronto adopt a new net zero by 2040 goal. By doing so, Toronto will ensure alignment with the 2030 trajectory to meet the necessary scientific-based commitments to keep the planet's temperature habitable. Technical modelling of Toronto's net zero pathway shows us that in order to reach net zero greenhouse gas emissions by 2050 or sooner, Toronto must first be on the correct trajectory for achieving its 2030 City Council adopted goal of 65 per cent emissions reduction from 1990 levels. Without aligning our action and implementation to that steeper trajectory, net zero by 2040 or 2050 will be out of reach. The City is taking action to tackle Toronto's emissions through established programs and major policy achievement such as the Net Zero Existing Building Strategy, Net Zero Carbon Plan for City-owned buildings, an update to the Toronto Green Standard, the Electric Vehicle Strategy, advancing the City's Cycling Plan, and greening City and Toronto Transit Commission fleets. Steady progress has been made to reduce emissions in recent years and community-wide greenhouse gas emissions have decreased since 1990. Toronto is on track to achieve its 2020 greenhouse gas emissions target of a 30 per cent reduction from 1990 levels. Despite population growth, community-wide emissions continue to decline while Toronto's gross domestic product rises. The decrease in greenhouse gas emissions in recent years can be attributed to a less carbon intensive electricity grid and lower transportation emissions from gasoline and diesel fuels. Toronto's current 2019 greenhouse gas inventory shows that our emissions are currently tracking on the trajectory of an 80 per cent reduction by 2050, from 1990 levels, however, emissions have not decreased fast enough in recent years. Data shows that acting incrementally will not be enough to put us on the net zero trajectory. Rapid action to scale up existing programs, additional authorities for the City of Toronto (City) to implement nimbly and effectively, significant levels of investment and coordinated action with other levels of government will be needed to match City Council's ambition. TransformTO Net Zero Framework: The TransformTO: Critical Steps for Net Zero by 2040 Report approach is presented in the following parts: - This staff report outlines the rationale, roles and opportunities needed for successful delivery on climate action, and presents an overview of the actions the City will take to reach the 2030 interim targets; - Attachment A is the TransformTO Net Zero Strategy Short-Term Implementation Plan 2022 to 2025; - Attachment B is the TransformTO Net Zero Strategy, which includes the rationale behind the net zero pathway and opportunities needed to successfully reach the net zero target; - Attachment C is the TransformTO Net Zero Framework Technical Report, which provides details on the pathway and specific actions that can be taken by the City, other governments, residents, and businesses; - Attachment D provides highlights of Toronto's programs that are reducing emissions; - Attachment E provides a summary of public and stakeholder consultations from 2018 to 2021 that have supported the development of this strategy and actions; and - Attachment F responds to a City Council request on the impact of small engine law and garden equipment. Achieving net zero is not simply a technology solution. The combination of attentive urban design, city planning, active transportation, and transit systems, changes in consumptive behaviour and supportive net zero consumer choices, will all need to work in step to cumulatively increase the efficiencies of corresponding urban systems. No municipal government has the legislative tools or fiscal capacity to achieve ambitious targets on its own. Reaching net zero by 2040 will require additional authority or action from other levels of government, the private sector, and resident action. For example, the City of Toronto does not regulate electric vehicle sales targets, but the City can enable uptake through providing charging infrastructure. Similarly, implementation of the Existing Buildings Strategy to retrofit homes and buildings will require additional legal authority to set performance standards from the provincial government. The Net Zero Strategy presents a set of 2030 interim targets for community-wide emissions as well as City of Toronto corporate targets to demonstrate leadership by example. These targets are designed to reduce emissions by 6.8Mt in the next eight years. This is equivalent to about 2 million cars off the road. The 2030 targets presented in the Strategy are: 1. 100 per cent of new buildings are designed and built to be near zero greenhouse gas emissions; 2. 50 per cent reduction in greenhouse gas emissions from existing buildings, from 2008 levels; this means that approximately 100,000 buildings must be retrofitted in the next 8 years, or approximately 12,500 buildings per year; 3. 50 per cent of community-wide energy comes from renewable or low-carbon sources; this will mean that approximately 35 million megawatt hour of energy will need to be sourced from renewable or low carbon sources; 4. 25 per cent of commercial and industrial floor area is connected to low carbon thermal energy sources; 5. 75 per cent of school/work trips under 5kilometres are walked, biked or by transit; 6. 30 per cent of registered vehicles in Toronto will be electric; this means that by 2030, an estimated 332,000 vehicles will need to be electric; 7. Identify pathways to more sustainable consumption in City of Toronto operations and in Toronto's economy; 8. 70 per cent residential waste diversion from the City of Toronto's Integrated Waste Management System; and 9. Reduce corporate emissions by 65 per cent, over 2008 levels, to demonstrate leading by example; this will mean that approximately 330 kiloton of emissions will need to be reduced cross-corporately. Achieving these 2030 targets requires action now. A summary of thirty (30) near-term actions to be implemented between 2022 and 2025 are listed below. More detailed descriptions of each action including their timeline for report back is included in the TransformTO Short-Term Implementation Plan 2022-2025 (Attachment A) and in the Net Zero Strategy (Attachment B). Meeting Targets: Achieving the targets in the Net Zero Strategy will not just be the work of the City government. The City of Toronto Corporation can control only a small portion of Toronto's community-wide emissions directly -- nearly 5 per cent according to recent greenhouse gas inventories. However, the City plays a clear role in defining the ways we build, travel, and consume and when policies are effectively implemented and programs are easily accessed to realize maximum uptake and engagement, our municipal government can have a greater impact on the community's emissions. In order to meet the 2030 targets, the City will use its influence to regulate, advocate and facilitate rapid transformation in five critical steps: - Demonstrate carbon accountability locally and globally by establishing a carbon budget - Leading by example, the City will establish a carbon budget to track climate actions against annual emission limits to drive accountability. The City's actions will be measured against these limits each year until net zero is achieved, with any gaps in action identified and solutions proposed so we stay on course. - Accelerate a rapid and significant reduction in natural gas use - Toronto will take further action to limit the use of natural gas. Natural gas use for water and space heating represents over half of Toronto's total greenhouse gas emissions. In addition to new buildings eliminating natural gas use through the Toronto Green Standard, the Net Zero Existing Buildings Strategy articulates ambitious targets to replace conventional heating systems with more efficient electric heat pumps drawing from a green provincial electricity grid. - Establish performance targets for existing buildings - Toronto will establish mandatory emissions performance reporting, disclosure, and emissions performance targets for buildings so we can better understand and limit emissions from our homes and buildings. These mandatory targets will be preceded by voluntary targets. Catalyzing the electrification of building heating systems, as a preferred alternative to the use of fossil-fuel heating systems, will be key. - Increase access to low carbon transportation options, including walking, biking, public transit and electric vehicles - Toronto will increase the use of active and public transportation reduces greenhouse gas emissions, energy use and congestion while promoting equity and health benefits. The City will also advance options to incentivize electric vehicle adoption and disincentivize the use of carbon-polluting gasoline and diesel vehicles, through supporting the transition to electric vehicles. - Increase local renewable energy to contribute to a resilient, carbon-free grid - Toronto will work in step with Toronto Hydro to successfully support the growth and prosperity of the city through reliable, uninterrupted electric service provision. By increasing opportunities for local renewable generation to be located within the City's boundary, Toronto will be more resilient and will contribute to a decarbonized provincial electricity grid. Although these five steps will put the community on the correct path to 2030, it is critical that these steps be sustained through to the year 2040 in order to achieve net zero emissions by 2040. Technical modelling suggests that if every single resident, business, non-commercial institution, industry and the City of Toronto government itself was enabled to choose net zero choices now, 2040 is achievable. Summary of Short Term Implementation Plan Actions (2022-2025) 100 per cent of new buildings are designed and built to be near zero greenhouse gas emissions, by 2030 1 Ensure near zero emissions for all new construction 2 Evaluate and limit impacts of embodied carbon in construction Greenhouse gas emissions from existing buildings are cut in half, from 2008 levels, by 2030 3 Advance Implementation of the Net Zero Existing Buildings Strategy 50 per cent of community-wide energy comes from renewable or low-carbon sources and 25 per cent of commercial and industrial floor area is connected to low carbon thermal energy sources, by 2030 4 Work with industry experts to explore limiting the expansion of natural gas systems and reversing system growth, where feasible, and limiting installation of natural gas equipment 5 Support adoption and mainstreaming of net zero, resilient energy sources for new and existing developments 6 Address barriers and develop strategies to increase the deployment of renewable energy and storage technologies, including but not limited to solar, wind, biomass, geothermal, waste heat recovery and heat pumps 7 Actively support, advocate to and partner with Toronto Hydro, as well as the Provincial and Federal governments and agencies, to decarbonize the provincial electricity grid, promote energy conservation and enable local renewable energy generation 75 per cent of school/work trips under 5 kilometres are walked, biked, or by transit, by 2030 8 Expand biking and pedestrian infrastructure, including the rollout of cycling routes, bicycle parking and bike share at or near Toronto Transit Commission stations 9 Increase existing bus and streetcar service levels to encourage shifts to low-carbon, sustainable transportation 10 Update and accelerate implementation of city-wide Transportation Demand Management Strategy 11 Develop tools to address emissions of greenhouse gases and air pollutants on an area or project level 30 per cent of registered vehicles in Toronto are electric, by 2030 12 Align the City's Electric Vehicle Strategy to the net zero goals and implement the Electric Vehicle Strategy 13 Determine options to incentivize Electric Vehicle adoption and disincentivize use of gas and diesel vehicles 14 Encourage the adoption of electric commercial and freight vehicles, including Electric Vehicles and e-bikes for last mile deliveries Identify pathways to more sustainable consumption in City of Toronto operations and in Toronto's economy 15 Continue to pursue policy and programmatic interventions that help the City reach its aspirational goals of zero waste and a circular economy, and which identify pathways to more sustainable consumption in both municipal operations and in all sectors of the economy 70 per cent residential waste diversion from the City of Toronto's Integrated Waste Management System 16 Continue implementation of the City's Long Term Waste Management Strategy which sets a goal of diverting 70 per cent of waste managed from City customers away from landfill, by focusing on waste reduction, reuse and recycling activities that promote resource conservation and reduce environmental impact Develop and implement strategies to improve greenspace infrastructure to build climate resilience 17 Increase canopy cover and biodiversity and enhance greenspaces Ensure equitable implementation and ongoing improvement of engagement and reporting 18 Support resident-led climate action and engagement 19 Work with Indigenous rights holders and urban Indigenous communities to share knowledge and learnings 20 Develop and implement youth engagement strategy 21 Design and launch a climate advisory group for 2022 and beyond to ensure implementation of the Net Zero Strategy is equitable and reflects the priorities and interests of the community 22 Develop equity indicators to be reported out as part of the TransformTO implementation status update 23 Encourage the growth of green industry to provide the products and services needed to enable a net zero city 24 Leverage Live Green Toronto to develop and implement a city-wide climate action awareness campaign Lead by Example - City of Toronto corporate greenhouse gas emissions are reduced by 65 per cent over 2008 base year 25 Develop and apply a Climate Lens in decision-making 26 Design and implement a Toronto Carbon Budget 27 Ensure net zero City-owned buildings 28 Reduce emissions from City and Agency-owned vehicles 29 Encourage City staff to adopt sustainable and climate positive practices at work and in their commute 30 Lead by example in managing waste and producing renewable energy from biogas at City facilities City staff will begin further analysis and engagement on the thirty (30) short-term actions outlined in Attachment A as the City transitions to implementation. Before 2030, two short-term implementation plans will be presented to Council -- the first one identifies actions to be delivered 2022 to 2025 (Attachment A), and the second one covering the period from 2026 to 2030 will outline additional actions that will ensure that we are on track to reach the 2030 target. Detailed reports outlining recommendations for bylaws, policies, and new programs will be brought back to City Council for consideration starting in 2022 and continuing over the following four years. Included in this report back will be an assessment of our progress towards the goal of net zero by 2040. For the most part, the short-term actions do not require Toronto to pursue dramatically new climate actions -- they require Toronto to do them faster and at a larger scale. Existing strategies and plans such as Electric Vehicle Strategy, the Toronto Green Standard, the Net Zero Existing Buildings Strategy, Corporate Real Estate Management's Net Zero Carbon Plan for City-owned buildings, and the Toronto Transit Commission Green Bus Program are examples of plans that identify detailed steps and considerations to get to net zero. The 2030 greenhouse gas emission reduction targets and short term actions have been developed through extensive consultation across City divisions and agencies, and with stakeholders and the public. Since 2019, the City has engaged over 5,000 residents, businesses, and other stakeholders to understand key priorities, opportunities and challenges. Consultations from recent years, particularly in 2021, have highlighted the issue of responding to the climate crisis with urgency. Current City Plans and Investments: The City has approved a number of ambitious plans and targets to reduce emissions from its own operations, including the Corporate Real Estate Management's Net Zero Carbon Plan which was adopted earlier this year. The Net Zero Carbon Plan focuses on City-owned buildings. Beginning with the 2023 Budget, staff will be integrating the Net Zero Carbon Plan for City-owned buildings into the capital planning process synchronously with the application of a Climate Lens and Financial Planning's Asset Management Strategy. The City will continue to make investments every year to achieve City Council-identified emissions reduction targets and net zero emissions status in its buildings. Like the Net Zero Carbon Plan for City-owned buildings, the Sustainable Fleets Plan, the Toronto Transit Commission Green Bus Program, and other key City plans will follow a similar process. Implementation of these plans is underway and will go a long way to reduce emissions from City operations. For the first time in Toronto's history, a Climate Lens was utilized in the 2021 budget process. Initial data reported through the Climate Lens identified that Toronto invested $611.3 million on capital projects that have components related to GHG reduction or climate resilience in 2021. As 2021 reflected the first year of this initiative, data has not yet been collected across all divisions and agencies and these figures excluded climate investments made by key services such as Toronto Water, Toronto Community Housing Corporation and the Toronto Transit Commission. The 2022 Budget Process builds on the 2021 Budget process to evidence progress in cross corporate culture change including projects being flagged by programs that did not do so last year. City staff are working to capture investments directly related to climate action in the 2022 budget. For example, the recommended 2022 Rate-Supported Budgets for water, solid waste, and parking identify climate related investments. In addition to this investment, the City is making significant capital investments in the Toronto Transit Commission - the 2021-2030 10-year Capital Plan totals $11.907 billion and includes $1.576 billion alone for vehicles such as buses, streetcars and subway cars, including the acquisition of electric buses to enable residents to reduce their transportation related greenhouse gas emissions. Further, Toronto has also issued $630 million in Green Bonds which have financed a range of key climate projects targeting mitigation and resilience activities such as extending subway lines and expanding the local cycling network, to energy retrofits in social housing and flood protection projects. Collaboration: Many challenges outside of the City's control have also been identified through consultation, including the slow pace of market transformation, labour force training and matching expertise for implementation, consumer education and awareness, education of service providers, strong provincial and federal policy and financial support for decarbonization. This report emphasizes that in order to be successful, bold leadership and collaboration will be required from public and private stakeholders. Furthermore, innovative partnerships and business models must be supported and evolve and traditional economic priorities must include environmental cost-benefit analyses and climate outcomes. To summarize, climate action means collective action. Lastly the opportunities to avoid 'lock in' of carbon emissions in city systems are being missed. Achieving the targets set out in this report, the TransformTO Short-Term Implementation Plan 2022-2025 (Attachment A) and the Net Zero Strategy (Attachment B) will require a different means of delivery and decision-making will need to be re-oriented so that the net zero choice becomes the best choice now and in the future.

net zero greenhouse gas emissions by 2040. 3. City Council direct the Interim Director, Environment and Energy to report back: a. in the second quarter of 2025, with a status update on progress in meeting the City of Toronto's 2030 corporate and community-wide greenhouse gas reduction targets, as outlined in recommendation 2 and Attachment B titled TransformTO Net Zero Strategy dated (December 2, 2021) from the Interim Director, Environment and Energy; b. in the second quarter of 2025, with a four year implementation plan for 2026-2030 on any additional actions and authorities required to achieve the City of Toronto's 2030 greenhouse gas reduction target; and c. annually on progress towards achieving community-wide greenhouse gas reduction targets and 2030 goals. 4. City Council direct the City Manager, in consultation with all appropriate Divisions Heads, including the City Solicitor, or their designates, to develop and implement a plan that outlines how to refer to TransformTO Net Zero Strategy goals and targets as and where appropriate in all relevant: a. submissions that the City of Toronto makes or the City of Toronto staff make in federal and provincial public comment processes; b. filings that the City of Toronto makes in proceedings before federal and provincial regulatory bodies, administrative tribunals and courts. 5. City Council authorize the Deputy City Manager, Corporate Services, or their designate, until December 31, 2030, to negotiate and enter into agreements, as may be required, to support the implementation of the City Council-adopted recommendations presented in the TransformTO Net Zero Strategy, dated December 2, 2021 with non-profit, public, and private sector organizations to: a. enter into non-competitive procurements under Toronto Municipal Code Chapter 195, Purchasing; b. collaborate on projects or initiatives; c. provide in-kind and/or financial support from the approved Environment and Energy Division budget on projects or initiatives; and/or d. receive funding, on terms and conditions acceptable to the Deputy City Manager, Corporate Services, in consultation with the Interim Director, Environment and Energy, and in a form satisfactory to the City Solicitor. 6. City Council authorize the Deputy City Managers to negotiate and enter into non-competitive agreements, including those with a value exceeding $500,000 for which City Council approval would normally be required under City of Toronto Municipal Code Chapter 195, Purchasing, with companies that have won Climate Champion status through the MaRS Discovery District's Mission from MaRS Climate Impact Challenge, on the following conditions: a. that the provision of goods or services from the company will assist the City to reduce greenhouse gas emissions and is aligned with the City's Net Zero Strategy; b. that any agreement is within the budget of the respective Division within the Deputy City Manager's Service Area; c. that the agreement is on such terms and conditions satisfactory to the Deputy City Manager; d. that the agreement is in a form satisfactory to the City Solicitor. 7. City Council direct that the Chief Procurement Officer report, as part of the Annual Controller's Report, on any non-competitive agreement that the Deputy City Managers enter into with companies that have won Climate Champion status through the MaRS Discovery District's Mission from MaRS Climate Impact Challenge. 8. City Council authorize the City Solicitor, in consultation with the City Clerk, to submit a Bill to Council to codify the currently Council-adopted targets, strategies, policies, programs and initiatives pertaining to green energy and climate change, in the first instance from this report, as additional articles in Chapter 669 of the City of Toronto Municipal Code, as and where appropriate. 9. City Council direct the City Manager and Deputy City Managers, in consultation with the interim Director, Environment and Energy to report back by the first quarter of 2023 on: a. what aspects of existing City programs and/or by-laws aimed at reducing natural gas use in new and existing buildings need to be strengthened or accelerated; and b. what additional programs and/or by-laws aimed at reducing natural gas use in new and existing buildings need to be developed and implemented, in order to achieve the greenhouse gas emission reduction targets as outlined in recommendation 2 and Attachment B entitled TransformTO Net Zero Strategy dated (December 2, 2021) from the Interim Director, Environment and Energy. 10. City Council direct the Interim Director, Environment and Energy, in consultation with the Controller, the Director, Accounting Services, the General Manager, Transportation Services, the Chief Planner and Executive Director, City Planning and other appropriate City Divisions, to report in 2023 with options for financial and other incentives that the City could provide to encourage uptake of personal electric vehicles and disincentives to discourage use of fossil-fueled personal vehicles within the City of Toronto boundaries. 11. City Council direct the Interim Director, Environment and Energy in consultation with the Controller, the Director, Accounting Services, the Chief Planner, and Executive Director, City Planning, Chief Building Official and Executive Director, Toronto Buildings, and other appropriate City Divisions, and with Toronto Hydro, to report back in the first quarter of 2023 on options for additional financial incentives, disincentives and other mechanisms to further encourage deep retrofits of existing buildings. 12. City Council direct the Interim Director, Environment and Energy and the Chief Financial Officer and Treasurer to report back in the first quarter of 2023 on design and implementation options for a Toronto Carbon Budget covering corporate and community emissions in Toronto, with a goal of implementation by no later than 2025. 13. City Council request the Government of Ontario and provincial agencies and corporations to: a. develop and implement new or amend existing legislation, regulations, policies and/or programs in order to prioritize: 1. demand response and conservation as sources of electricity generation in Independent Electricity System Operator generation selection; 2. increase the share of renewable electricity generated on the provincial electricity grid; b. implement legislation, regulations, policies/or programs to encourage the transition to electric vehicles, including: 1. financial incentives for new and used Electric Vehicles; 2. financial incentives for home, workplace and fleet Electric Vehicles charging infrastructure; 3. establish a provincial sales mandate for Zero Emission Vehicles ("Zero Emission Vehicles" are battery-electric vehicles, plug-in hybrid electric vehicles or hydrogen fuel cell vehicles) that meets or exceeds any federal sales mandate for Zero Emission Vehicles: 4. support and encourage Electric Vehicles-ready new construction; 5. funding for publicly-accessibly Electric Vehicle charging infrastructure; and 6. maintain existing benefits for Electric Vehicle drivers (e.g. High Occupancy Vehicle lane access on provincial highways); c. require all new and replacement equipment for building heating systems to be greater than 100 per cent efficiency. 14. City Council request the Government of Canada and federal agencies and corporations to: a. create and enforce a national clean electricity standard to ensure decarbonization of the electricity grid as soon as possible; b. ensure all new and replacement equipment for building heating systems be greater than 100 per cent efficient as soon as possible; c. implement new and maintain existing financial incentives to encourage the transition to electric vehicles, including: 1. maintain purchase incentives for new electric vehicles and providing purchase incentives for used electric vehicles; 2. provide financial incentives for home, workplace and fleet electric vehicle charging infrastructure; 3. provide funding to provinces and municipalities for public electric vehicle charging infrastructure; d. create and fund a national workforce and skills development strategy to enable a just net zero transition; e. conduct a strategic review of international and national supply chain requirements and issues to ensure that municipalities have sufficient access to all goods and services necessary to enable a transition to the net zero emission economy; f. provide mechanisms and tools to lower the risk to lenders or similar entities involved with financing projects that enable decarbonization at scale. 15. City Council direct the Interim Director, Environment and Energy, in coordination with Executive Director, Social Development, Finance and Administration and the Chief Procurement Officer, Purchasing and Materials Management Division, to identify ways that the City can support the reduction of the greenhouse gas emissions associated with food the City of Toronto procures, in alignment with the City's Cool Food Pledge and the C40 Good Food Cities Declaration, and to report back in the second quarter of 2025 on the status of corporate food-related emissions and recommended actions for the TransformTO 2026-2030 short-term action plan.