Capital Variance Report for the Twelve Months Ended December 31, 2021

- Rate Supported Programs reported capital expenditures of $1.226 billion, representing 83.9% of their collective 2021 Approved Capital Budget of $1.462 billion. As reported in the April 7, 2021 COVID-19 Recovery and Rebuild Update to City Council, the 2021 Capital Budget anticipated potential impacts to capital project delivery as a result of pending intergovernmental funding commitments to address COVID-19 financial pressures. These challenges were sustained throughout 2021 due to ongoing significant global supply chain issues and labour challenges attributed to COVID-19, severely impacting capital delivery. In Q4 the emergence of the Omicron wave further impacted capital project delivery. Table 1 : Capital Variance Summary Table 1 Corporate Capital Variance Summary for the Period Ended December 31, 2021 2021 Approved Budget* 2021 YE Actual Expenditures $M $M % City Operations 2,139 1,263 59.1% Agencies 1,644 1,055 64.2% Tax Supported 3,783 2,319 61.3% Rate Supported Programs: 1,462 1,226 83.9% TOTAL 5,245 3,545 67.6% * Note: Includes carry forward funding While further efforts to improve capital spending continue, divisional and agency improvements in capital planning along with refinements in capital budgeting have resulted in improved capital spend rates over the last few years, with the 2021 spend rate of 67.6% greater than the 5 year historical average of 65.7%. However, the 2021 spend rate is lower than 2020, as challenges were experienced early in the year while awaiting intergovernmental funding commitments to address COVID-19 financial pressures; and were sustained throughout 2021 due to ongoing significant global supply chain issues and labour challenges attributed to COVID-19, severely impacting capital delivery. This was particularly impactful during Q4 where the emergence of the Omicron wave resulted in lower spending than forecasted for the fourth quarter, with actual spending reported as 67.6% as compared to a projected year-end spend of 77.4% or $4.076 billion. While less than projected, the City still accomplished a total capital spend of $3.545 billion at year-end, a $1.628 billion increase in actual spending over reported figures in the capital variance report for the nine month ended September 30, 2021, and $0.531 billion less than projected. Moving forward, the City will continue to plan annual capital projects in line with both affordability and achievability, based on the historical actual capacity and in consideration of emerging challenges such as inflationary impacts and supply chain disruptions. The strategy is expected to build on improvements experienced to date and improve the capital spend rate in future years; fully utilizing approved funding and enabling any excess funding capacity to support additional capital priorities, while promoting realistic capacity to spend in light of external factors and challenges.