Operating Variance Report for the Six Months Ended June 30, 2023

As a result, the 2023 Operating Budget was balanced based on the expectation of continued COVID-19 support funding from the Government of Canada and Province of Ontario with a total budget amount of $932.8 million. To date, $53.7 million in 2023 COVID-19 support funding has been committed specific to Public Health costs with an additional $4.5 million committed related to Seniors Services and Long Term Care. In addition to COVID-19 support funding, the City has generated $33.7 million in offsets associated with projected COVID-19 impacts compared to budgeted estimates, resulting in a $840.9 million remaining COVID-19 funding shortfall in 2023. Table 1 below details the budgeted 2023 City-wide COVID-19 related financial impacts against secured and assured COVID-19 support funding; and the resulting financial position that is reflected in the year-end variance projections: Table 1: 2023 Anticipated COVID-19 Financial Impacts COVID-19 Impacts ($Millions) 2023 Budget Committed Fed/Prov Funding Internal Offsets / Savings Remaining 2023 Shortfall Transit 366.4 366.4 Shelters 317.2 317.2 Other Municipal Pressures 161.9 4.5 157.4 Public Health 87.4 53.7 33.7 0 Total COVID-19 Impacts 932.8 58.2 33.7 840.9 Tax Supported Programs: The following table summarizes the projected year-end financial position of the City's Tax Supported Operations as of June 30, 2023. Table 2: Tax Supported Operating Variance Summary Variance ($M) Favourable / (Unfavourable) 2023 June YTD 2023 Year-End Projection Budget Actual Var Budget Actual Var Tax Supported Operating Variance Summary City Operations 1,465.1 1,467.4 (2.3) 3,066.6 3,081.1 (14.6) Agencies 1,475.3 1,461.8 13.5 2,899.3 2,851.5 47.8 Corporate Accounts (445.8) (216.4) (229.4) (1,057.8) (230.4) (827.4) Total 2,494.6 2,712.8 (218.3) 4,908.1 5,702.2 (794.1) Less Toronto Building (5.3) (14.5) 9.2 (16.1) (31.3) 15.1 Less City Planning 8.9 4.7 4.2 10.0 2.3 7.7 Total Variance-Excluding Toronto Building/City Planning 2,491.1 2,722.7 (231.6) 4,914.3 5,731.2 (816.9) % of Gross Budget -9.3% -16.6% Six Month Year-to-Date and Projected Year-End Spending Results: As noted in Table 2 above, for the six months ended June 30, 2023, Tax Supported Operations experienced an unfavourable net variance of $231.6 million or (9.3%) of planned expenditures adjusted for Toronto Building and City Planning. It is important to note that the June 30th experience is a snapshot in time and the year-end projection is based on current and expected future impacts. The continued impact of COVID-19 and any deviation from expectations to year end will impact variance projections. Any changes will be reflected in the third quarter, and year end variance report. For year-end, the City is projecting an unfavourable variance of $816.9 million or (16.6%) of the 2023 Gross Operating Budget, adjusted for Toronto Building and City Planning. The projected unfavourable variance results from: - $840.9 million COVID-19 funding shortfall; - $31.9 million projected unfavourable variance within Shelter Services attributed to the Refugee Response funding shortfall of $103.0 million; - $55.9 million projected favourable variance across all other divisions and agencies. Rate Supported Programs: Rate Supported Programs reported a favourable year-to-date net variance of $26.0 million. At year end, rate programs are projecting a favourable variance of $45.2M. Table 3: Rate Supported Operating Variance Summary Variance ($M) Favourable / (Unfavourable) 2023 June YTD 2023 Year-End Projection Budget Actual Var Budget Actual Var Solid Waste Management Services (6.7) (14.0) 7.3 0.0 (14.6) 14.6 Toronto Parking Authority (11.4) (21.2) 9.8 (25.4) (35.2) 9.8 Toronto Water (1.3) (10.3) 9.0 0.0 (20.8) 20.8 Total Variance (19.4) (45.5) 26.0 (25.4) (70.7) 45.2 The favourable year to date variance is driven by all three programs fairly evenly with expense savings in Solid Waste Management, and favourable revenue in Toronto Water. The year end is projecting similar drivers with Toronto Water, then Solid Waste showing the largest favourable variance. Rate Supported Programs are funded entirely by the user fees that are used to pay for the services provided and the infrastructure to deliver them. Solid Waste Management Services and Toronto Water's respective year-end surpluses, if any, must be transferred to the Wastewater and Water Stabilization Reserves and Waste Management Reserve Fund, respectively, to finance capital investments and ongoing capital repairs and maintenance.