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Final Report
Prepared by
Internal Audit and Evaluation

Approved by the Deputy Minister of Finance on the recommendation of the Audit and Evaluation Committee on December 9, 2013

Table of Content

Executive Summary

1.0 Background

2.0 Evaluation Objectives and Scope

3.0 Methodology

4.0 Evaluation Findings

5.0 Conclusion

Comparative Study

References

Annex A: Logic Model

Annex B: Contribution Agreement Approval Process

Annex C: Evaluation Issues and Lines of Evidence

Annex D: Toronto Waterfront Region

Annex E: List of Selected TWRI projects

Executive Summary

This report presents the results of the Evaluation of the Toronto Waterfront Revitalization Initiative (TWRI), conducted by Internal Audit and Evaluation between April and September 2013. This evaluation fulfills the requirement of the Financial Administration Act, section 42.1, that all programs of grants and contributions be assessed every five years. As such, the evaluation examined the relevance and performance of TWRI over the fiscal years 2008–09 to 2012–13, covering a total of $269.2 million in contribution spending. On October 20, 2000, the Government of Canada, the Province of Ontario, and the City of Toronto each announced a commitment of$500 million to fund the TWRI. To this end, the Toronto Waterfront Revitalization Corporation (TWRC), a not-for-profit corporation, was established on November 1, 2001 to lead the waterfront renewal. In addition, the Government of Canada created a federal TWRI Secretariat to oversee the federal contribution and the TWRC on its behalf. The revitalization of the waterfront involves over 2,000 acres of land, and takes form in traditional city-building infrastructure such as local transportation and sewers, and in contemporary urban development such as the regeneration of ecosystems and post-industrial regions, in order to deliver economic and social benefits for the region.

Relevance

Although the TWRI was initially intended to prepare Toronto for hosting the 2008 Summer Olympics, the objective was shifted to delivering a revitalized Toronto waterfront and contributing to the economic and social development of the region. The evaluation found that the TWRI objectives and activities were well aligned with the economic and social strategic priorities, as well as the roles and responsibilities of the Government of Canada. For some time now, the federal government has had a strong commitment to investing in infrastructure across Canada, including significant contributions to small- and large-scale waterfront-related development. The investment in the TWRI underlines the importance of Toronto as one of the largest commercial centers in Canada and enhances its international image as a global city. The involvement and contribution of the federal government in the TWRI was needed, as it facilitated the transfer of lands and added credence to the program, which in turn elicited local interest and prompted additional investment from the private sector.

Performance

The TWRI was found to have achieved its stated outcomes. The federally funded projects outlined in TWRC’s Long-term Funding Plan have been successfully implemented and completed. In doing so, the polluted land in the region has been reclaimed through soil remediation, the cleanup of main pipes, and the decontamination of the land. The TWRI contributed significantly to the economic development and growth in the waterfront area, which also became more accessible and usable. To conduct projects effectively, the TWRC implemented a consultative approach whereby the public was regularly consulted and informed on project progress. Portals on TWRC’s website were developed so that stakeholders, as well as the general public, could follow and regularly provide feedback on projects. The TWRI was managed according to tri-government environmental policies that were in place at the start of the program. Between 2004 and 2013, the TWRC won over 50 awards in urban design, environmental management and public consultations.

The evaluation found that the governance structure has been effective and conducive to rigorous, albeit lengthy processes. In particular, the involvement of the three levels of government promoted a single vision and gave credibility to the program. The federal TWRI Secretariat provided meticulous oversight to the management of the federal contribution, and brought a level of rigour to the practices of the TWRC. However, the contribution agreement approval process and the structure of the contribution agreements also created delays for some projects. For example, each layer of government review considerably lengthened the approval time. Also, at the federal level, the terms and conditions of the contribution agreement do not allow funding to be transferred from one project to another should there be an unexpected delay in implementation. The $10 million threshold for contribution agreements, set by Treasury Board, was found to be too low for many of the TWRI projects. Originally, the federal contribution to the TWRI was planned to end in 2007–08, but the program was extended and the final payment was issued in 2012–13. Ultimately, this resulted in less being achieved with federal funds in comparison to what was originally planned. Conclusion Overall, the TWRI was found to be relevant and to have achieved its stated outcomes. To the extent possible within the existing governance structure, the TWRI was also found to have streamlined its processes to improve efficiency. Through a review of the TWRI governance structure, this evaluation provides findings (or “lessons learned”) that could inform future large contribution programs that cross multiple levels of government or involve several federal departments. In particular, to further improve efficiency, future large infrastructure programs should be designed so that the mechanisms governing the tripartite system, including the approval process and the structure of the contribution agreements, allow for a balance between adequate oversight and sufficient flexibility to meet the needs of the program. 1.0 Background 1.1 Introduction This report presents the results of the Evaluation of the Toronto Waterfront Revitalization Initiative (TWRI). Internal Audit and Evaluation (IAE) conducted the evaluation between April and September 2013. The evaluation was slated for 2013–14 in the Department of Finance Canada’s Five-Year Evaluation Plan (2012–17), which was approved in March 2012 by the Deputy Minister[1]. This evaluation fulfills the requirement of the Financial Administration Act, section 42.1, that all programs of grants and contributions be assessed every five years. 1.2 Profile of the TWRI Driven by Toronto’s bid for the 2008 Summer Olympics, the TWRI was the latest initiative in a series of attempts at the time to transform the Toronto waterfront from an industrial region to a more attractive, accessible and active waterfront. Although Toronto ultimately lost the bid, the planning and implementation of the revitalized waterfront initiative continued with the expectation of yielding both economic and social benefits for the region. The revitalization of the Toronto waterfront has taken form in traditional city-building infrastructure, such as local transportation and sewers, and more contemporary urban development, including regeneration of ecosystems and post-industrial regions. The revitalization of the waterfront implicates over 2000 acres of land and is one of the world’s largest waterfront brownfield revitalization projects.[2] On October 20, 2000, the Government of Canada, the Province of Ontario, and the City of Toronto each announced a commitment of$500 million to fund the TWRI. To lead the waterfront renewal the Toronto Waterfront Revitalization Corporation (TWRC or Waterfront Toronto), a not-for-profit corporation, was established on November 1, 2001, under the Toronto Waterfront Revitalization Corporation Act. As the primary recipient, the TWRC received the TWRI funding and then contracted private firms to implement the planned projects. A federal TWRI Secretariat was also created to ensure that federal policy direction was followed, and to manage and coordinate federal contributions totaling $410 million. The remaining$90 million was managed by Transport Canada and Infrastructure Canada. The federal contribution of $500 million has now been fully disbursed, with the last payment issued in January 2013. The federal funding was “seed money” to launch the TWRI, with the expectation that eventually the TWRC would leverage other sources of funding once the initiative was well-established. The Toronto Waterfront Revitalization Corporation Act sets out a clear 25-year mandate for the TWRC. The original federal commitment for the TWRI was from fiscal years 2001–02 to 2007–08; this was extended to 2011–12, and then further extended to 2012–13, ending March 31, 2013. The operational funding for the Secretariat continues until March 31, 2014, to allow for the administrative closing of the program. Consistent with these changes, actual expenditures have declined over time. Over the last five years, from 2008–09 to 2012–13, the Secretariat operational expenditures (Vote 1), declined from$1.2 million to $440,000, along with the contribution amounts (Vote 5) from$77 million to $10 million.[3] It was expected that the investments would result in both social and economic benefits for the Toronto region. The objectives of the TWRI[4] were to: • Enhance and improve the quality of life in the Toronto region. • Contribute to sustainable urban development. • Enhance and improve transit and transportation infrastructure. • Enhance Canada’s, Ontario’s, and Toronto’s international images. • Increase opportunities for economic growth and development. • Increase Toronto’s ability to develop, attract and retain knowledge-based workers. Governance Structure of the TWRI From its inception, the TWRI has been overseen by the Minister responsible for the Greater Toronto Area and/or the Province of Ontario. The federal role in the TWRI has had three main components: leadership through the delegation of the Minister responsible for the TWRI; oversight of the TWRC, through the appointment of Board members, the joint appointment of the chair, and the tri-government requirement to consent to any governance changes; and the management of the$410 million federal contribution by the federal TWRI Secretariat.[5] The federal Board members had a fiduciary responsibility to the TWRC, and acted independently from the federal TWRI Secretariat. They played an active oversight role over TWRC affairs, including providing stewardship of funds and taking part in various issue-specific Board committees.

The Director of the federal TWRI Secretariat exercised functional authority for the contribution agreements[6] and was responsible for the management of federally funded projects. The federal TWRI Secretariat was housed in several departments since the inception of the program. For the past five years, it has been located in the Economic Development and Corporate Finance Branch, Department of Finance Canada.

The Intergovernmental Steering Committee (IGSC) and the Operating Working Group (OWG) were established to ensure sound program management of the TWRI. The IGSC is composed of the following members representing the three levels of government: the Finance Canada Associate Deputy Minister for the Government of Canada; the Deputy Minister and Assistant Deputy Minister of Infrastructure Renewal for the Government of Ontario; and, the City Manager and Deputy Manager for the City of Toronto. The OWG is the main forum for the coordination and planning of the TWRI activities, reporting the progress and results to respective senior management and the IGSC. The OWG is comprised of program officials from the three levels of government, and members have met quarterly to ensure a coordinated approach to contribution agreement management and a strategic approach to TWRI project management.

Funding Governance Model

In 2005, in order to ensure a consistent approach, a Long-term Funding Plan (LTFP) was developed through the combined efforts of TWRC and the federal, provincial and municipal governments. The LTFP is reviewed and updated annually, obtaining approval from all three levels of government and the TWRC. Given that the federal government’s funding was scheduled[7] to sunset earlier, federal priorities and corresponding expenditures were “front-loaded” in the LTFP, while other government commitments were scheduled for later years. The LTFP included all projects up to 2015, and accommodated the individual and shared priorities of the three governments while maintaining the overall vision and coherence of waterfront revitalization.

For each of the projects in the LTFP, an individual detailed proposal was developed by the TWRC.[8] Once this proposal was approved for funding, the TWRC worked with the federal TWRI Secretariat to develop a contribution agreement that clearly articulated the parameters and conditions governing the delivery of the funding. In the case of multilateral projects, the provincial/municipal governments would also be involved in the review processes. Upon endorsement, the contribution agreement followed the formal approval process from the Director, Associate Deputy Minister, Deputy Minister and finally the Minister.[9] Should project issues arise during implementation, the agreement would be adjusted based on a detailed amendment request. As the project progressed, the TWRC would submit quarterly cash flows with supporting financial documentation to the federal Secretariat; the documents were reviewed and checked against eligible costs and the payments were made accordingly.

The rest of this evaluation report is structured as follows: Section 2 outlines the evaluation objectives and scope of the study; Section 3 details the methodology used for the evaluation, including the questions addressed, and the data collection methods used; Section 4 presents the evaluation findings; and Section 5 concludes the report.

2.0 Evaluation Objectives and Scope

The objective of the evaluation was to assess the relevance and performance (effectiveness, efficiency and economy) of the TWRI managed by the federal TWRI Secretariat (410 million) over the past five fiscal years. Given that the federal contribution has ended, the evaluation focused on the following three key issues. • Whether the funding given to TWRC achieved its expected outcomes? • Whether the tri-government governance structure was effective and efficient? • What were the important lessons learned about this program? 3.0 Methodology The methodological approach used for this evaluation was based on the TWRI logic model, given in Annex A. The logic model illustrates the results chain for the TWRI through which activities and outputs are expected to lead to immediate and intermediate outcomes, and ultimately contribute to the final outcome of the TWRI: sustainable urban development and infrastructure renewal in the Toronto waterfront area. The methodology chosen was commensurate with the risks associated with the program as well as management needs. The program risk level was assessed as being relatively low, since the federal contribution for the TWRI projects ended March 31, 2013, and further funding is not anticipated. Although policy support for the TWRI will exist within Finance Canada, the federal TWRI Secretariat will be dissolved by the end of 2013–14. Furthermore, the level of effort for each evaluation issue[10] was calibrated with its associated risk level. The assessment of risk took into account, for example, that an evaluation of the relevance and performance of the TWRI was conducted in 2008, covering fiscal years 2000–01 to 2007–08. The 2008 evaluation examined the relevance of the program in detail and no concerns were cited. Since that study the rationale for the TWRI has not changed, therefore the issue of relevance was considered low-risk relative to other issues, and the level of effort was adjusted accordingly. On the other hand, the 2008 evaluation noted that many individual projects had experienced delays in implementation, in part due to the tri-governmental approvals required. As a result, considerable effort was spent examining this and other governance issues, the results of which can be expected to inform future initiatives funded by more than one level of government. The evaluation assessed the extent to which the immediate and intermediate outcomes have been achieved, with attainment of the final outcome being assumed to immediately follow.[11] The immediate and intermediate outcomes are summarized below: • Project implementation and completion • Increased economic development and opportunities • Revitalized urban infrastructure • Sound environmental processes and improved environmental management • Greater community awareness • Increased accessibility and usage 3.1 Evaluation Issues The table of evaluation issues and relevant lines of evidence are presented in Annex C. The questions are given below. Relevance • To what extent were the role, mission, objectives and activities of the TWRI in line with the priorities, objectives, roles and responsibilities of the federal government? • Was there a demonstrable need for the federal contribution? Was there a demonstrable need for the projects that were selected? Did they align with the objectives of the federal government? Performance: Achievement of Outcomes • To what extent was TWRI able to achieve its outcomes? What were the factors that impeded or facilitated the achievement of these outcomes? • What were the unintended consequences (negative and positive) of this program? Performance: Program Delivery • To what extent did the governance structure and processes contribute to the effective and efficient execution of the TWRI mandate and achievement of its objectives? Is there an alternative model that would have been more efficient? • What has been the value-added of the tri-government system of governance? Is there a more effective system that would provide sufficient oversight? • How did the TWRI Secretariat add value to the initiative? To what extent did it contribute to the efficiency and effectiveness of the operations and management of the TWRI? Economy and Efficiency • What were the important characteristics that allowed or prevented the contribution agreements to run effectively and efficiently? Were there specific conditions associated with developing and maintaining momentum in a tripartite system? • What have been the trends in the sources of funding vs. expenditures for TWRC? Does TWRC have a workable strategy in place to sustain itself after the government funding ends? • What were the overall lessons learned for the program? 3.2 Data Collection and Analysis A mixed-method approach was applied, using a combination of quantitative and qualitative lines of evidence. Primary quantitative methods involved an analysis of financial expenditures for the TWRI. Secondary quantitative information on outcomes was gathered from impact studies. For the most part, qualitative data were collected through document review, interviews and a comparative study. Triangulation of data from the different lines of evidence was used to validate conclusions and recommendations, and to maximize the level of rigour. The four lines of evidence are as follows: Review of Administrative and Operational Documents Documents considered for review were comprised of internal administrative documents, as well as operational process documents. Examples include departmental Reports on Plans and Priorities and Departmental Performance Reports; the Waterfront Toronto Strategic Business Plan; as well as management documents supplied by the federal TWRI Secretariat. Financial documents were used to determine the trends in funding and spending over time, with a particular focus on the federal portion of the contributions. Monitoring Documents, Audits, Impact Studies, Sustainability Reports and Other Reports TWRI collected significant amounts of performance data, and the TWRC generated a number of assessment reports, as outlined in the 2010 Performance Measurement Strategy prepared by the TWRI.[12] Audits, including project-level audits, were conducted based on identified risks during the life of the program and were usually led by the federal TWRI Secretariat. Other key TWRC documents include a sustainability report, economic impact studies, and audits conducted by external consultants and published on the TWRC website. In addition, as per requirement in the contribution agreements, the TWRC collected performance data on a quarterly basis and provided them to the federal Secretariat. The data were used to monitor the progress during the different stages of project implementation. These reports were reviewed for the assessment of the program. Key Informant Interviews Key informant interviews confirmed findings from the document review and also yielded new information that was not otherwise available. The methodology used for selecting the interviewees was based on a judgemental sampling. Lists of members of the different groups listed below were obtained, and interviewees were selected based on the individuals’ years of experience with the TWRI, and their roles in the program. Care was taken to ensure adequate representation from each level of government, each Secretariat[13] and, where possible, from each group identified in this list: • Department of Finance • Employees of the Toronto Waterfront Revitalization Corporation (Waterfront Toronto) • Members of the Toronto Waterfront Revitalization Corporation Board of Directors • Members of the Operating Working Group • Representatives of stakeholders of the program (described below). Since the program was intended to benefit the Toronto community (stakeholders), representatives of the community were interviewed to obtain their perspectives on the benefits/drawbacks of the program. Representatives included members of the local community group, business community, tourism industry and an environmental group. Exhibit 1: Composition of Interviewees Group # of Completed Interviews Finance Officials 5 Operating Working Group 4 TWRC[14] 6 External Stakeholders 5 Total 20 Comparative Study A comparative study was conducted to obtain a more complete understanding of the governance structure and its impact on the effectiveness and efficiency of the completion of planned projects. This was accomplished by comparing the governance structure of the TWRI with that of the Vancouver Organizing Committee (VANOC) for the 2010 Olympics and Paralympics. The two projects were found to be similar enough in purpose and structure to compare governance practices, and it was expected that a comparative analysis would yield interesting results. In particular, the following two issues were examined: • The value-added of a dedicated group within a federal government department, such as the federal TWRI Secretariat, that directly managed a contribution program. • The effectiveness of the tripartite governance and oversight requirements of the TWRI. Evidence for the comparative study was collected for TWRI via interviews with Finance officials, TWRC members and a review of two case files as well as other documents. VANOC evidence was collected through questionnaires filled out by federal VANOC officials, phone calls, and various internal and external documents, including the Horizontal Summative Evaluation of the Government of Canada's Investment in the 2010 Olympic and Paralympic Winter Gamesconducted by Canadian Heritage in 2012. 3.3 Limitations The evaluation methodology had the following three limitations: • In order to get an objective perspective on the success and the challenges of the TWRI, the usual procedure in evaluation is to interview individuals who are directly affected by the program, but not affiliated with the managers of the program. Unfortunately, there is evidence[15] to suggest that most individual businesses and residents in the area are unfamiliar with the accomplishments or issues associated with the TWRI. Without an external viewpoint on the program, there is a potential for bias in the evaluation. To mitigate this, IAE interviewed representatives from the community who were knowledgeable about the operations and outputs of the program. The interviewees were chosen from the local tourism industry, the local community association, a provincial environmental group and the Toronto business community. This allowed for perspectives from a diverse group. Therefore, the possible bias was reduced considerably, and the conclusions drawn from the evaluation can be relied upon. • For the comparative study, there were very few programs resembling the TWRI, but VANOC was chosen as it was found to be the most similar to the TWRI in terms of purpose and structure. The findings of the comparative study were meant as an illustration. This limitation was further mitigated by complementing the comparative study with a review of specific documents assessing the governance processes of the TWRC, such as the 2004 Mercer Delta report. Therefore, the impact of this limitation was expected to be minimal. • Primary quantitative data was restricted to an analysis of the financial data and analysis of approval times for the contribution agreements. However, secondary quantitative analysis was available from the external economic impact studies, in particular, an analysis of the estimated multiplier effect of the original investment. Also, since this evaluation focussed on assessing the governance structure of the program, the qualitative evidence was more relevant. The quantitative and qualitative findings and conclusions were well-substantiated by the existing evidence. 4.0 Evaluation Findings 4.1 Relevance Alignment with Government Priorities The evaluation confirmed that the TWRI was aligned with government priorities. TWRI’s focus on implementing changes such as the soil remediation at Sugar Beach, and the construction of the West Don Lands Flood Protection Platform intersects with the federal government’s focus on nationwide infrastructure investment. Canada has made substantial investments in infrastructure since 1994, with the2.4 billion Canada Infrastructure Works Program, and has contributed to 40,000 municipal, provincial and federal infrastructure projects, including transportation, historical sites and soil remediation. In addition, the Building Canada Plan established in 2007, as well as the priorities listed in the Economic Action Plans from 2009 to 2013, further confirmed this commitment.[16]

Alignment with Federal Roles and Responsibilities

The program was found to be aligned with federal roles and responsibilities. The Toronto waterfront is of international importance, for several reasons: Toronto is identified as a “global city”,[17] one of the commercial centers of Canada, and a focal point for a variety of international business, sports and cultural events, such as the annual Toronto International Film Festival. Toronto’s bid for the 2008 Summer Olympics also demonstrates its international importance, and as such, investment in the city’s waterfront would be considered a federal responsibility.

As noted above, there is a precedent for federal involvement of this nature. The federal government has provided seed money for a variety of initiatives around the country, including region-specific projects, similar to the TWRI. For example, over the last decade, Canada committed $12.5 million to over 40 waterfront-related development projects in Northern Ontario. During 1975–80, the federal government contributed almost$175 million[18] to a Nova Scotia waterfront revitalization and port development project in Halifax-Dartmouth. More recently, the Old Port of Montreal, a federal Crown Corporation, received $30.3 million in Parliamentary appropriations in 2011–12. In December 2012, the federal government announced a commitment of$46.3 million towards the cleanup of Randle Reef in Hamilton Harbour, Ontario.

Demonstrable Need for the Federal Contribution

There was a definite need for the federal contribution and involvement in the TWRI, according to interviews and supporting documents. The development of the waterfront, with its industrial remnants and contaminated soil, is one of the largest infrastructure projects in North America and required significant upfront funding. Operationally, direct federal participation was needed to facilitate transfers of federal land to the TWRC. The Department of Finance, OWG and TWRC interviewees also agreed that the federal contribution amount was beneficial for the program and added credence to the TWRI, eliciting local interest and support.

4.2 Performance

4.2.1. Effectiveness: Achievement of the Expected Outcomes

The TWRI has achieved the stated outcomes of the program. The supporting evidence was taken from interviews and analyzed with extractions from the performance reports prepared by external consultants. Two key documents consisted of the Waterfront Toronto Economic Impact Analysis (2001–2013) Report and the Corporate Social Responsibility and Sustainability Report 2012 (Sustainability Report). These studies, described below, were initiated and funded by TWRC. There was a consensus among the interviewees that the results in these reports reflected the extent to which outcomes were achieved.

The 2013 Waterfront Toronto Economic Impact Analysis Report examined the direct, indirect and induced impacts of the TWRI projects on waterfront[19] economic activity including employment; real-estate development; and private investment. The consulting firm developed an input-output model[20] to estimate these impacts, using Waterfront Toronto expenditure data. The induced impacts were obtained from the estimation of the multiplier effect of the initial investment. Induced impacts should be treated with caution, as multiplier effects can often be overstated since the estimate does not: (1) take into account factors such as dynamic price and other financial changes; and (2) calculate the effects at the level of the aggregate economy.

The 2012 Sustainability Report yields an assessment of the environmental, social and economic sustainability of the TWRI. Sustainability is assessed using the Global Reporting Initiative (GRI 3.1) framework, an internationally accepted independent standard for reporting on sustainability performance.

Project Implementation and Completion: Overall, projects that were outlined in the Long-term Funding Plan have been successfully implemented and completed to the extent the designated funding would allow. A list of selected projects is given in Annex E to give a sense of the types of activities funded by the federal government. Since 2001, there have been 56 TWRI projects to which the federal government has contributed funds. All of these project files have now been closed.[21] In some cases, it was the federal component of the work that was completed—the remaining components were identified as the responsibility of the province/municipality. Projects were found to be within the planned budget, particularly with respect to the federal portion of the payments. Delays in some of the projects occurred due to several factors, as discussed in Section 4.2.2 Effectiveness: Program Design and Delivery.

Project audits were conducted from time to time based on risks identified by the federal TWRI Secretariat to ensure that controls were in place and the necessary rules and regulations were being followed. One audit, the 2011 District Energy Audit, found some discrepancies in the project spending. The TWRC and the federal Secretariat resolved the issue and the requisite portion of the funds were paid back to the government.

Revitalized Urban Infrastructure: The 2012 Sustainability Report indicated that the urban infrastructure has been revitalized with significant enhancements to the usability of the region for development. The TWRI has been successful in reclaiming the heavily polluted land in the region through soil remediation, the cleanup of main pipes and the decontamination of the land, amongst other actions. Examples included the Sugar Beach site preparation, and the preparation of the Portlands and West Don Lands regions. Prior to the development of Sugar Beach, the area contained 9,500 cubic metres of contaminated soil—a completely inaccessible waterfront dock. The soil was replaced, providing a basis for the subsequent creation of Sugar Beach, an urban public park that now serves multiple purposes. Similarly, the preparation of the Portlands and West Don Lands regions involved soil remediation and management, with geo-environmental investigations and assessment, which eventually led to the implementation of the preliminary infrastructure for the development of public parks.

By developing the undervalued and underutilized waterfront lands, building conditions have improved and land values have increased. The upfront work of building major parks and public spaces, ensuring that zoning was in place, building roads and services, and remediating contaminated soil has provided a foundation upon which further investment and revitalization efforts can take place. The Economic Impact Analysis Report noted that real estate activity between 2004 and 2012 increased more in the Harbourfront area (Central Waterfront) than in other parts of Toronto. The report stated that independent analysis of real-estate prices, particularly resale prices, showed higher price changes in the Central Waterfront area than in other parts of the city.

Two neighbourhoods often cited as noteworthy examples of revitalization, were East Bayfront and West Don Lands. After the full development[22], the lands controlled by Waterfront Toronto in East Bayfront and the West Don Lands are expected to yield 10,023 residential units, 1 million square feet of office space, 230,000 square feet of retail space, and 937,000 square feet of institutional space.[23] Interviews with Toronto’s business development community confirmed that many parts of the waterfront would have probably continued to remain vacant and underused brownfield sites if Waterfront Toronto had not initiated the planning, land assembly, remediation and infrastructure construction.

Sound Environmental Processes and Improved Environmental Management: The TWRC followed a step-by-step approach for environmental management, according to tri-government environmental policies. An overall Sustainability Framework was developed in 2005 outlining the planned environmental processes. Environmental assessments were conducted throughout the life of the projects, and most recently, the Sustainability Report was published, which is a review of the overall environmental sustainability of the waterfront development.

The 2005 Sustainability Framework report was a “roadmap” document outlining the steps that would be taken to achieve the following five broad goals: remediated brownfields, reduced energy consumptions, the construction of green buildings, improvement of air and water quality, expanded public transit and vibrant downtown communities. To support this framework, an Environmental Management Plan was developed that set out the policies and broad areas of the environment that would be monitored throughout including, for example, air quality and groundwater management. All projects were expected to satisfy municipal, provincial and federal environmental policy requirements.

Standard (class) environmental assessments for infrastructure projects were conducted on a regular basis as part of the project implementation. Individual environmental assessments were conducted when a more detailed study was needed, for example, if significant environmental issues were flagged during the planning process. In addition, during the construction of residential buildings, the LEED[24] Gold standard and the Minimum Green Building Requirements[25] were followed, and the projects implemented energy efficient systems.

Finally, in 2012 the Sustainability Report assessed the extent to which the projects were found to be managed according to the environmental policies established at the start of the program. Accomplishments of the TWRI cited in the report included the building of parks, improvement of aquatic habitat, and the use of efficient energy sources throughout the projects. For example, Sherbourne Common is the first park in Canada to integrate a stormwater management system in its design. In addition, TWRC won an award “2012 Excellence in Urban Sustainability”, given by the GLOBE[26] Foundation for the updated Minimum Green Building requirements.

Greater Community Awareness: Waterfront Toronto has been successful in consulting and informing the public on current and upcoming events. In 2004, Waterfront Toronto received the Public Sector Quality Fair Certificate of Excellence for the Precinct Planning Consultation Process for its West Don Lands project. In 2011, Waterfront Toronto won two IABC Toronto Ovation Awards for establishing and maintaining community relations and media relations.

A formal approach for consulting and informing the public was developed at the inception of the Waterfront Toronto, detailing the issues related to each type of project and the relevant stakeholders involved. The main mechanism for establishing public awareness has been the website, and it has been regularly updated to outline the various activities being undertaken by Waterfront Toronto. The other key mechanism has been regular public consultations on current projects and upcoming plans. For example, a virtual town hall and a public meeting scheduled for October 2013 were announced on the Waterfront Toronto website, to discuss the results of the Sustainability Report and to consult with the public about the future of the Gardiner Expressway East, respectively. A review of internal documents confirmed the frequency of the public consultations that have occurred, including their dates. Waterfront Toronto consulted with stakeholders on a regular basis to obtain feedback on the planning and implementation stages of the projects. Portals on the website were developed to provide a way in which the public and stakeholders could take part in the process and inform the project teams.

Increased Economic Development and Opportunities: The TWRI contributed significantly to the economic development and growth in the waterfront area. Interviewees stated that considerable economic development and growth had occurred, and referred to the 2013 Economic Impact Analysis Report for citation of actual numbers and the impact on specific elements, such as employment generation.

Accordingly, the three governments have spent, to date, $1.26 billion and the study estimates that this direct investment on public lands generated impacts as follows:$3.2 billion of Canadian economic output, 16,200 full time years of employment and $622 million of tax revenues to government ($348 million to federal, $237 million to provincial, and$36 million to municipal). The tri-government expenditures for TWRI have been considered a catalyst for private sector investment valued at $9.6 billion[27] in the waterfront neighbourhoods adjacent to the TWRI project areas. Development projects generated directly by Waterfront Toronto are expected to yield over 4,900 permanent employees. When the analysis included the development of all projects, including those in waterfront neighbourhoods adjacent to the TWRI regions (but resulting from TWRI activities), and applied the usual employment density for the area, given its major land use (retail/service, commercial, office, institutional and industrial), it was estimated that the TWRI-related development would accommodate more than 21,700 employees when fully completed. When fully developed, the TWRI-related projects are expected to generate more than$163 million annually[28] in property taxes, of which $58 million is education tax revenue, and$105 million is municipal tax revenue. Development projects directly generated by Waterfront Toronto are expected to yield 51 million in property tax revenue annually. The majority of the individuals interviewed for the 2013 Economic Impact Analysis Report stated that the development of the Eastern Waterfront would not have been possible without the initial infrastructural investments made through TWRI. Therefore, the study concluded that the TWRI was directly responsible for the economic benefits derived from the recent development in the area. Increased Accessibility and Usage: The evaluation found that the waterfront has become more attractive, accessible and usable in recent years after the completion of several TWRI projects, with a significant increase in useable parks and other public areas. Although most interviewees agreed with this finding, some suggested that it may be too early to be certain of the long-term usage. Polluted areas of the waterfront have been cleaned up, allowing for various uses by interested businesses and residents. Newly created spaces, such as Sugar Beach and Mimico Waterfront Park have increased accessibility to the waterfront. Improvements to Cherry Beach and Tommy Thompson Park have made these areas more functional than prior to the program. TWRI has also generated development of land adjacent to the waterfront, which is estimated to have led to 16,660 residential units,[29] 4 million square feet of office, 1.4 million square feet of retail space, and 150,000 square feet of new industrial and institutional space. George Brown College, a separate private development, has opened a campus right on the waterfront, bringing students and related parties to the waterfront. Accessibility along the waterfront has been and will continue to be limited in multiple areas because of the ongoing construction. Examples include several blocks on Queen’s Quay[30], located right along the central waterfront and areas involving the Pan American Games. This type of construction is expected to continue for the remaining duration of the program, potentially for at least another ten years. Unexpected Outcomes: Several unexpected outcomes emerged from the TWRI. First of all, the cooperation, trust and engagement across the three levels of government towards the common goal of the success of TWRI has led to an expectation that future tri-governmental endeavours of this size could be successful with a similar approach. This particular venture did well primarily because the goal was well-defined, and as will be discussed in Section 4.2.2, partisanship views and approaches were avoided and the focus was on the collaboration. Second, the carefully laid out strategy that the TWRC had prepared in 2002, Public Consultation and Participation Strategy, was claimed to have “raised the bar” for public consultations on large-scale development projects. As noted above, Waterfront Toronto won two awards for this in 2011. Community and stakeholder involvement have been considerable—in the design and even the implementation phases of the projects. This promoted the expectation that future large-scale development projects would also have a similar “open” approach to public consultations. Finally, Toronto was chosen as the location for the 2015 Pan Am Games, and the TWRI development has likely played a role.[31] A section of the West Don Lands community will be used as the two million square foot Athletes’ Village, which is expected to increase the pace at which the industrial lands would be transformed into a long-term, sustainable, mixed-use neighbourhood. 4.2.2 Effectiveness: Program Design and Delivery Overall, the evaluation found that the governance structure has been effective and conducive to rigorous, albeit lengthy processes. The federal payments were disbursed for their expected purpose, and the federal projects have been implemented and were on budget. The Toronto waterfront development is well underway to being successfully completed, and the program has already contributed to significant economic impact in the region. The economic impact study, website reports and interviews show that the projects would not have been easily initiated and completed without the current governance framework in place, including the active involvement of all three levels of government. On the other hand, the 2008 Evaluation, interviews and other documents revealed that some projects encountered delays. The reasons include the following: • The complexities of tri-governmental structures that included diverse priorities and changes in governments following elections. • At the start, approval processes for the contribution agreements were long and cumbersome; these were later streamlined. • At the early implementation of TWRI, when the bulk of the projects were initiated, the environmental requirements under the Canadian Environmental Assessment Act (Act) were extensive and required a significant amount of time to fulfill. Since then, the government has simplified the Act, making the compliance process easier. In addition to the interviews and document review, a comparative study was conducted to examine the governance structure and processes of the program in some depth. Analysis of data from these three lines of evidence resulted in the following findings. Tripartite Governance Structure: In general, the evidence indicated that the tripartite structure was valuable. There was a consensus among interviewees that the tripartite structure enabled a single, long-term vision for the TWRI—otherwise projects would have been executed in a piecemeal fashion. Prior to the TWRI, plans to rejuvenate the Toronto waterfront had been formulated many times, but implementation had proven to be untenable. For example, ownership of much of the waterfront real estate has historically been intertwined between the three levels of governments, and therefore transfers of ownership were necessary before development projects could even be considered. With the tripartite structure, a necessary component supporting the single vision was the annual review and update of the Long-term Funding Plan (LTFP). The LTFP required approval from all three levels of government, so discussions and cooperation were promoted across all three levels of government. Once the LTFP was endorsed, each individual project proposal was developed and then approval was sought by the government with a direct interest in that project. Some concern had been raised about the seeming redundancy of obtaining approvals for separate project proposals after the LTFP was already approved. However, Treasury Board policy requires that each contribution agreement outline detailed information on the project, including precise estimates with a maximum amount as well as the processes and controls in place for monitoring and assessment. Meanwhile, the LTFP was meant only to be an overarching plan giving basic project information to stakeholders. The representatives from the three levels of government in the Operating Working Group stated that they reviewed the approach and the associated budget for each of the individual projects. The discussions during the meeting were non-partisan and were affected less by the political cycles of the three governments than the mutual goal of waterfront revitalization. The meeting agenda was balanced, as it could be set by more than one government. The tri-government involvement also ensured transparency of the planning process and of the expenditures. For example, the federal Secretariat monitored quarterly progress on the projects, and ensured receipt of appropriate documents, before approving payments. Involvement from all three levels of government has also helped to promote social and environmental objectives. On the other hand, complexities in the tripartite structure led to challenges in the governance processes. For example, aligning the differences in priorities across the three governments was time-consuming. Navigating through the different government administrative processes for obtaining approvals was found to be lengthy and complicated for the TWRC. Similarly, different accountability requirements across the three levels of government increased the reporting burden for the TWRC. Another challenge was keeping the momentum in the program after an election changed the leadership in one of the governments. The new government regime usually had different priorities from the last, and sometimes even another perspective on the TWRI as a whole. Overall, the federal involvement was found to be valuable. Consequently, the federal role will persist even after its sunset on March 2013, although the responsibilities will change somewhat. From this date, the Government of Canada will continue to appoint four members of the Board of the Toronto Waterfront Revitalization Corporation, and jointly appoint the Chair with the City and the Province. The federal government would also be required to provide consent for governance changes to the TWRC, as set out in the TWRC Act, sit on the Intergovernmental Steering Committee for the TWRI, as well as maintain a visible public role in the TWRI, including participation in communications opportunities as appropriate. However, the federal Minister responsible for the TWRI will no longer approve the annual TWRI Long-Term Funding Plan and federal participation in the Operating Working Group will be reduced to observer status.[32] Contribution Agreement Approval Process: The timeline for contribution agreement approval processes were sometimes lengthy and led to some delays, which in turn increased construction costs.[33] A challenge noted by the interviewees, and later confirmed by an analysis of the contribution agreement approval times, was that each additional layer of government review led to an additional delay in the process (Exhibit 2). The average time required for a unilateral federal agreement was 99 days, while the average multilateral time was 203 days. The notable differences in approval times eventually led to projects funded almost exclusively through unilateral contribution agreements. It should also be noted that projects involving all three levels of government were usually worth much more than those under a unilateral contribution agreement. In addition, the value of the federal contribution agreements was limited to10 million by the funding condition set by Treasury Board. Anything above this threshold obliged the federal Secretariat to request Treasury Board authorization, creating a significant delay by adding weeks or months to the approval process. Since projects often included a large infrastructure element, the cost of the project was often greater than the $10 million threshold permitted. This issue was raised in the 2008 Evaluation along with a discussion of alternative options. However, the subsequent Treasury Board decision left the threshold unchanged. The findings of the 2005 report on the Audit of the Toronto Waterfront Revitalization Initiative (TWRI), conducted by Human Resources and Skills Development Canada (HRSDC), also provided support for the constraint, as it recommended that more stringent rules be put in place, with clearly identified thresholds. This led to the funding of small-scale projects and the corresponding development of small-scale contribution agreements, each requiring individual approval. Consequently, this aspect of the funding continued to be a hindrance to the program. A further challenge was that the terms and conditions of the contribution agreements[34] would not allow funding to be reallocated from one project to another, if there was an unexpected delay in implementation (for example waiting for zoning permits from the city). Exhibit 2: Contribution Agreement Timing for Approvals Type of contribution agreement Average turnaround time (days) Average amount (millions) Range of amount (millions) Federal Unilateral 99$7.8 $0.9 to$21.1
Provincial Unilateral 156 $32.8$3.4 to $62.1 Municipal Unilateral 166$15.9 $7.6 to$35.7
Multi-government 203 $51.7$21.6 to $89.3 Note 1: Of the four multi-government funding contribution agreements, 2 were trilateral ($89.3M and $21.7M) and 2 were bilateral between the city and the province ($51.3M and 44.5M). Note 2: Calculations for provincial, municipal and multi-government funding are based on four contribution agreements each, while the calculation for the federal funding is based on 14 contribution agreements. Federal TWRI Secretariat: Overall the federal Secretariat provided considerable value to the TWRI—this was confirmed with interviews and the comparative study. The federal Secretariat provided considerable oversight to the TWRC and the management of the federal contributions. The officers reviewed project proposals, prepared contribution agreements, verified payments against progress, audited payments when needed, and confirmed the alignment of projects with key program objectives. The Secretariat examined the LTFP in detail and often raised questions to ensure that the proposals clearly presented reasonable rationales, timelines and budgets. The evaluation found that the demands for accountability brought a level of rigour to the practices of the TWRI. The Secretariat was also able to maintain a balance between addressing concerns of the TWRC, while providing assurance for the Government of Canada. However, the Secretariat has been a stand-alone entity created to follow the Minister responsible for the Greater Toronto Area as opposed to being an integral part of a department. Consequently, the relocation from one department to another several times between 2003 and 2008 imposed a significant administrative burden. This entailed the Secretariat having to re-establish many administrative processes at each transfer, namely its capacity to issuing payments to the TWRC, payroll for its employees, and corporate support services (i.e., finance, legal, human resources, audit and evaluation) from its new host department. The Secretariat has remained with the Department of Finance since 2008, and this has provided some stability to the function. In addition, the continuity and stability in the management of the Secretariat over the last seven years has strengthened its capacities to add value. Toronto Waterfront Revitalization Corporation: Waterfront Toronto’s mission, as stated in 2002, is: “To put Toronto at the forefront of global cities in the 21st century by transforming the waterfront into beautiful, accessible new communities, parks and public spaces, fostering economic growth in knowledge-based creative industries, redefining how the city, province and country are perceived by the world.[35] This mission was originally planned for a 25-year time frame. However, federal funding was provided from 2000–01 to 2012–13, as part of tri-government seed money to start the revitalization effort, and provincial and municipal funding was provided from 2000–01 and will be ending in 2016–17 and 2020–21 respectively. The TWRC Act, which governs the operations of the TWRC, allows the corporation to raise or borrow funds only with the approval of all three levels of government. In 2007, some flexibility was introduced into the funding structure, when one tri-government approval gave TWRC the authority to raise revenues by collecting rents, fees and other money from the leases and the sales of municipal, provincial and federal land that had been transferred to the corporation for development purposes. Alternative funding models were reviewed and suggested through the 2004 Mercer Delta study and the 2007 PricewaterhouseCoopers report. One possibility was to move to an empowered development corporation model, which would allow additional mechanisms for raising funds, other than selling or leasing land. An alternative suggested by the TWRC was a single multiyear, conditional transfer payment. Another option was to treat the TWRC as a crown corporation, and provide base or block funding in which a lump sum would be given on an annual basis, with annual reporting requirements. These options would have increased financial flexibility, by allowing the TWRC to have more autonomy, and could be expected to reduce delays due to approvals or implementation issues. On the other hand, the monitoring role of the federal Secretariat would have been much more complex. The 2005 HRSDC audit supported the given approach, as it had recommended more stringent controls on the funding and a stricter governance structure. In addition, project proposals by the TWRC had occasionally been found to lack sufficient details regarding the costs, underlining the need for solid accountability mechanisms. Therefore, the existing funding model, while cumbersome, facilitated careful monitoring of the program and its expenditures. Given the future scope of the program, there is a need for a workable, approved plan enabling the TWRC to acquire additional funds as needed to fulfill its mandate.[36] Municipal funding will be provided until 2021, while other revenue sources will come from the sales and leases of land for development. For the year 2013–14, the TWRC planned to manage revenues so that it would maintain a sufficient reserve for mitigating potential funding delays. The TWRC outlined this general approach in its Business Strategy document, and is currently developing a more comprehensive financial strategy in its Waterfront Toronto 2.0 plan[37], including possible approaches for generating additional revenue and achieving self-sustainability such as the ability to borrow funds. Thus far, the plan has not been reviewed by the three levels of government. Without an approved financial sustainability strategy in place, as well as the current restrictions in the TWRC Act, there is some uncertainty as to how the TWRC will ensure it has the required funding to complete the planned development in the long term. Delays in the formulation and approval of an adequate plan could impede the momentum of the waterfront development. 4.2.3 Efficiency and Economy As expected, since the federal contributions were scheduled to end in 2012–13, both operational expenditures (Vote 1) and contribution amounts (Vote 5) have declined in recent years since fewer staff were required to manage fewer contribution agreements. The breakdown of expenditures over the last five years is given in Exhibit 3. Improvements in efficiencies were attained over the years in several ways, for example, by moving to primarily unilateral or bilateral contribution agreements, thereby shortening approval processes. In addition, contribution agreements were developed with standard legal clauses that were used for most of the TWRI projects. In this way, most contribution agreements could be approved without an additional examination by the Law Branch at the Department of Finance. Exhibit 3: Actual Expenditures[38] Operating and Maintenance - Vote 1 2008–09 2009–10 2010–11 2011–12 2012–13 Salary (incl. EBP[39])815,974 $706,542$678,406 $444,084$262,847
Goods and Services $346,951$125,476 $247,506$48,725 $67,003 Corporate Levy[40] n/a$235,983 $227,212$170,000 $115,000 Total - Vote 1$1,162,925 $1,068,001$1,153,124 $662,809$444,850
Contribution - Vote 5 $77,411,044$67,098,869 $79,453,606$35,226,544 $9,987,006 During OWG meetings, partisan views or goals were not the focus of the discussions between the three levels of government representatives – “partisanship was parked at the door”. This helped to ensure effective and efficient discussions. It should also be noted that since 2008, TWRC made a few changes to its processes in an effort to become more efficient. For example: • TWRC switched to obtaining legal services in-house, while initially the services had been outsourced. • TWRC implemented more efficient procurement services. However, the federal contribution of$500 million was disbursed late in comparison to the original timeline. The planned date for the final payment was for 2007–08, while the actual last payment was distributed in 2012–13. Therefore, less was achieved with the contribution[41] than was initially planned, since the delays resulted in an increase in costs over time, for example, the cost of construction. It should also be noted that delays often occur in complex infrastructure projects, especially those with a tripartite government regime.

5.0 Conclusion

Overall, the TWRI was found to be relevant and has achieved the stated outcomes effectively and also achieved some unexpected positive results. However, analysis of the governance structure and processes of the program has resulted in some “lessons learned” that could inform future large contribution programs that cross multiple levels of government or involving several federal departments. These lessons learned are discussed below.

The tripartite involvement in the TWRI was found to be valuable for the following reasons.

• The support from all three levels of government added credibility to the program, and attained more wide-spread support than otherwise possible.
• The collaboration, along with an overarching plan (for example, the Long-term Funding Plan) enabled a single cohesive vision to be promoted.
• Social and environmental objectives for each level of government were advanced more easily.
• Because of the multiple partners and stakeholders, it became important to provide accountability and transparency to all three levels of government and the external investors.

The evaluation determined that the federal Secretariat was effective in maintaining a cohesive planning approach and providing oversight for complex projects involving multiple partners, as well as large dollar amounts. The Secretariat’s demands for accountability also brought a level of rigour to the practices of the TWRI.

However, the evaluation found that mechanisms used for governing tripartite systems and funding projects should be considered carefully to strike a balance between adequate oversight and sufficient flexibility to meet program needs. Rigid funding structures contributed to delays in project implementation, resulting in increased costs. This was particularly true for TWRI with its large number of infrastructure projects. Potential changes to the existing funding structure are given below for consideration in planning future funding programs:

• The $10 million threshold for the contribution agreements was challenging to work with; a better approach may be to determine the contribution threshold limit that meets the risks and satisfies the needs of the program. The threshold could be reviewed periodically for its appropriateness. • A more flexible funding structure would likely improve efficiency. Possible options are discussed in Section 4.2.2. However, the pursuit of a more efficient structure would have to be balanced by the risk associated with the program. • For any funding mechanism selected, a method of streamlining the accountability requirements across the three levels of government would help to reduce the reporting burden. Comparative Study The purpose of the study was to compare the TWRI with a similar program in order to identify best practices in governance and management of large scale programs, in particular those that incorporated projects for building infrastructure. The venue construction for the Vancouver Olympics was chosen because the program has a similar system design to the TWRI. The Vancouver Organizing Committee (VANOC), a not-for-profit corporation, was established on September 30, 2003, for planning and organizing the 2010 Olympic and Paralympic Winter Games, to ensure social and economic benefits and to create legacies for Canadians. VANOC has a 20-members board of directors nominated by the three levels of government, the Canadian Olympic Committee, the Canadian Paralympic Committee, and local First Nations. A federal Secretariat was set up within the Department of Canadian Heritage. The federal Secretariat ensured diligent administration of the funding and provided a secretariat function to coordinate the involvement of several federal departments, agencies and committees on various issues related to the Games. For venue construction for the Vancouver Olympics, the federal and provincial governments each committed$290 million through contribution agreements. The cities of Vancouver, Whistler and Richmond invested an additional $380 million. Venue construction included competitive and non-competitive venues such as the Vancouver Olympic and Paralympic Centre, the Whistler Olympic and Paralympic Park, the Richmond Oval, and the Olympic and Paralympic Villages of Vancouver and Whistler. All of these venues won an international award for Excellence in Green Building Practices awarded by the GLOBE Foundation and World Green Building Council. In addition to the construction of venues, the different funding partners created the Legacy Endowment Fund (LEF) to ensure operational funding for some sport venues, and to support amateur sport and coaching development across Canada. The federal and provincial governments each committed$55 million to the LEF.

Enough similarities were found between the TWRI and the VANOC to allow for an interesting comparison of the governance processes. For both programs: 1) all three levels of governments (federal, provincial and municipal) provided funding as well as oversight; 2) there were federal Secretariats with similar roles and responsibilities; 3) the transfer payments were classified as grant and contribution programs; 4) the sizes and importance of the programs were similar for the federal government; and 5) there was an international dimension for Canada.

As can be expected, there were also a number of differences between the two programs. For example, project schedules were not comparable; VANOC faced fixed and immutable deadlines within a seven-year period, while the timeline of TWRI was extended when Toronto Olympics bid did not succeed. The comparative study took these differences into account but kept a focus on the governance processes surrounding the funding and approval processes, with emphasis on the infrastructure component of the two programs. The sections below highlight and discuss the best practices across the two programs.

Federal Secretariats

Both the TWRI and the VANOC Secretariats played important roles for the federal government. While providing some guidance to the TWRC and VANOC, the federal Secretariats coordinated the federal government involvement and ensured compliance with federal legislation, regulations, and policies. They also tracked the implementation of large multi-year construction projects through ongoing monitoring, project audits and assessments, and debriefed senior management on a regular basis. The federal TWRI Secretariat provided input into the Long-term Funding Plan (LTFP) and the federal Secretariat of the Vancouver Olympics developed the Business Plan for its program. These planning documents helped to ensure that the activities and outputs remained aligned with the program priorities.

In addition, both of the federal Secretariats provided continuity and stability to their respective programs. The TWRI Secretariat had moved from one department to another on several occasions prior to 2009, which added a considerable administrative burden; however by having the program data and the documentation self-contained within the Secretariat reduced the challenges of frequent adjustments. For the last five years the Secretariat was housed within the Department of Finance, which provided stability in the delivery of the program, although the “fit” was not ideal since this department did not usually deliver infrastructure-based programs. In the case of the Vancouver Olympics, the Framework for Federal Coordination outlined the governance structure and ascertained the federal Secretariat as the focal point for more than thirty federal departments, agencies and committees involved in the preparation of the Games.

Multipartite Structure

Similar to the tripartite nature of the TWRI and the existence of the LTFP, the multipartite nature of the Vancouver Olympics, the Multi-Party Agreement (MPA) and the Business Plan contributed to maintain a single vision throughout the program, while allowing each level of government to pursue their priorities. The multipartite structure also contributed to lessen the impacts of the political cycles on the course of the programs (e.g., elections or shifts in government priorities), as the agenda was determined jointly by the representatives of the three levels of governments. Also, the involvement of the public sector supported the promotion of a common agenda based on long-term social and economic benefits. For example, the objectives of the TWRI included “increased development opportunities, sound environmental processes and management”, whereas the Vancouver Olympics’ expected outcomes included “sport, economic, social and cultural legacies are established for the benefit of all Canadians”.

Funding Structure

The level of flexibility of the funding structure impacted the efficiency in the approval processes. For the Vancouver Olympics, the federal and provincial governments increased their commitments from $235 million to$290 million each for the construction of sport venues in order to adjust for increases in construction costs. In addition, partnering with the province of British Columbia helped to handle cash flow interruptions because the province had fewer restrictions on funding than the federal government. The annual funding cycle and cash flow forecasts of project managers did not always match the needs of the projects. For example, when weather conditions during the winter precipitated or delayed the construction work, the province of British Columbia could more easily make up temporary cash shortfalls compared to the federal government.

The participation of the three levels of government, however, introduced some administrative delays related to the approval process of contribution agreements, which occasionally resulted in cash flow interruptions for TWRC and VANOC. Both TWRC and VANOC developed mitigation strategies and worked collaboratively with their funding partners to manage these challenges. This helped to minimize the impacts of the existing structures of payments, which were not always flexible enough for large multi-year construction projects. Also, the funding model of the TWRI was streamlined in later years by using mainly unilateral contribution agreements, wherever possible, reducing the approval times considerably. This model facilitated the management of the program and reduced the burden of negotiating contribution agreements while still in keeping with federal policies.

References

A.T. Kearney. 2012 Global Cities Index and Emerging Cities Outlook. 2012. Accessed June 20, 2013.

Canadian Heritage. Horizontal Summative Evaluation of the Government of Canada's Investment in the 2010 Olympic and Paralympic Winter Games. March 2012. Accessed September 10, 2013.

Canadian Heritage. Joint Audit and Formative Evaluation of the 2010 Olympic and Paralympic Winter Games Federal Secretariat. 2008.

Environment Canada. Evaluation of the Federal Government's Participation in the Toronto Waterfront Revitalization Initiative. July 2008. Accessed April 15, 2013.

Finance Canada. 2012-13 Report on Plans and Priorities. Accessed April 20, 2013.

Finance Canada. Departmental Performance Report 2011-12. Accessed April 20, 2013.

GLOBE Awards. The 2012 GLOBE Awards Winners. Accessed August 1, 2013.

Government of Canada. Economic Action Plan 2013. Accessed April 20, 2013.

Government of Ontario. Toronto Waterfront Revitalization Corporation Act. Accessed June 28, 2013.

Human Resources and Skills Development Canada. Audit of the Toronto Waterfront Revitalization Initiative. December 2005. Accessed July 14, 2013.

Infrastructure Canada. Building Canada - Modern Infrastructure for a Strong Canada. No date. Accessed June 25, 2013.

Olympic.org. Vancouver 2010. Accessed August 20, 2013.

Treasury Board of Canada Secretariat. Directive on the Evaluation Function. Accessed April 10, 2013.

Treasury Board of Canada Secretariat. Policy on Evaluation. Accessed April 10, 2013.

Vancouver Organizing Committee. Multiparty Agreement for the 2010 Winter Olympic and Paralympic Games. November 14, 2002. Accessed August 20, 2013.

Waterfront Toronto. 2012-13 Management Plan for Project-Related Activities. Accessed July 20, 2013.

Waterfront Toronto. Annual Corporate Plan - 2013/14. December 5, 2012. Accessed August 3, 2013.

Waterfront Toronto. Assessment of the Funding Process, July 17, 2007.

Waterfront Toronto. Awards and Recognition. Accessed August 1, 2013.

Waterfront Toronto. Corporate Social Responsibility and Sustainability Report 2012. Accessed July 25, 2013.

Waterfront Toronto. Economic Impact Analysis (2001-2013). April 26, 2013. Accessed July 3, 2013.

Waterfront Toronto. Environmental Management Plan for Project-Related Activities. March 2010. Accessed August 26, 2013.

Waterfront Toronto. Environmental Management Plan for Project-Related Activities. August 2013. Accessed August 20, 2013.

Waterfront Toronto. Financial Statements of Toronto Waterfront Revitalization Corporation. March 31, 2012. Accessed June 20, 2013.

Waterfront Toronto. Financial Statements of Toronto Waterfront Revitalization Corporation. March 31, 2013 and 2012. Accessed August 25, 2013.

Waterfront Toronto. Long-term Funding Plan. 2011-12, 2012-13.

Waterfront Toronto. Minimum Green Building Requirements. Accessed August 26, 2013.

Waterfront Toronto. News. Waterfront Toronto invites you to participate in a virtual townhall. September 25, 2013. Accessed October 1, 2013.

Waterfront Toronto. Review of Alternative Governance Structures and Delivery Models, September 10, 2004.

Waterfront Toronto. Sustainability Framework. July 27, 2005. Accessed August 1, 2013.

Waterfront Toronto. Waterfront Toronto Strategic Business Plan 2011-12. June 29, 2011. Accessed July 30, 2013.

Waterfront Toronto. Waterfront Toronto Revitalization Corporation Public Consultation and Participation Strategy, 2002. Accessed August 5, 2013.

Annex C: Evaluation Issues and Lines of Evidence

Evaluation Issues and Lines of Evidence
Note: “X” indicates that this line of evidence was used.
Evaluation Issues and Questions Lines of Evidence Pages

Document Review Evaluations and Monitoring Interviews Comparative Study
Continued Need for Program, Alignment with Government Priorities, and Alignment with Federal Roles and Responsibilities
R1: To what extent were the role, mission, objectives and activities of the TWRI in line with the priorities, objectives, roles and responsibilities of the federal government? X   X   8-9
R2: Was there a demonstrable need for the federal contribution? Was there a demonstrable need for the projects that were selected? Did they align with the objectives of the federal government?     X   9
Program Design and Implementation
P1: To what extent did the governance structure and processes contribute to the effective and efficient execution of the TWRI mandate and achievement of its objectives? Is there an alternative model that would have been more efficient? X X X X 15-19, 22-23
P1a: What has been the value-added of the tri-government system of governance? Is there a more effective system that would provide sufficient oversight? X   X X 15-16, 22-23
P1b: How did the TWRI Secretariat add value to the initiative? To what extent did it contribute to the efficiency and effectiveness of the operations and management of the TWRI? X   X X 17, 22-23
Achievement of Expected Outcomes
P2: To what extent was TWRI able to achieve its outcomes? What were the factors that impeded or facilitated the achievement of these outcomes? X X X   10-14
P3: What were the unintended consequences (negative and positive) of this program? X   X   14
Efficiency and Economy
P4: What were the important characteristics that allowed or prevented the contribution agreements to run effectively and efficiently? Were there specific conditions associated with developing and maintaining momentum in a tripartite system? X X X X 19-20, 22-23
P5: What have been the trends in the sources of funding vs. expenditures for TWRC? Does TWRC have a workable strategy in place to sustain itself after the government funding ends? X   X   19-20
P6: What were the overall lessons learned for the program? X   X X 20-23

Annex E: List of Selected TWRI projects

List of Selected TWRI projects
Name Amount Objectives
Trilateral agreements
Portlands Permanent Beautification Total: $14,168,836 M:$1,865,727
P: $2,303,109 F:$10,000,000
To begin improvements to the Portlands areas including: Leslie St., Transitional Sports Fields, Martin Goodman Trail and access corridors to Lake Ontario Park.
Union Station Second Platform Total: $86,233,000 M:$40,000,000
P: $30,000,000 F:$16,233,000
To add a second subway platform to the south of the existing platform in order to improve the flow of Toronto Transit Commission (TTC) and that of GO transit users.
Federal agreements
Tommy Thompson Park $7,800,000 To complete the implementation of the Tommy Thompson Park Master Plan. At completion, the park will function as an urban wilderness park providing both recreational and tourism opportunities. East Bayfront Parks & Waters Edge Promenade Design$8,678,000 To complete the design of parks and public spaces within East Bayfront.
Transitional Sports Fields $5,000,000 To construct sports fields in the Port Lands to serve the residents of Toronto and the Greater Toronto Area while reclaiming derelict, underutilized land. Don River Park and River Square – Construction$9,800,000 To construct Don River Park and River Square, including site preparation, facility installation and establishment of a flood protection landform that mitigates flooding risks.
Canada's Sugar Beach Construction - Services and Special Installations $4,560,724 To complete the construction of service and special installations for Canada’s Sugar Beach such as; installation of storm water provision and sanitary installation, domestic water installation, process water installation, electrical installation and park lighting installation. Canada's Sugar Beach - Roads, Landscaping & Fixture$6,826,761 To complete the construction for Canada’s Sugar Beach Park such as; roads and paving, landscaping, fixtures and fitting.
Canada's Sugar Beach Park - Site Preparation $917,818 To complete the site preparation for Canada’s Sugar Beach Park. Naturalization & Flood Protection of the Don - Phase 2$1,299,990 To complete environmental assessments for the area of the mouth of the Don River where it enters into the northeast corner of Toronto’s Inner Harbour.
Strategic Land Acquisition - 291 Lake Shore Blvd. $12,404,239 To purchase 291 Lake Shore Blvd E. located in the East Bayfront precinct. Harbourfront Canada Square - Planning & Design$3,500,000 To conduct a feasibility study to evaluate the design, programming and financial feasibility of replacing 3.5 acres of surface parking with a vibrant mixed-use of urban park and cultural cluster on top of a new underground parking garage.
West Don Lands (WDL) - Soil Treatment $4,300,000 To dispose of approximately 75,000 cubic meters of excavated soils from WDL's and to conduct a soil remediation pilot project which will remediate approximately 25,000 cubic meters of soils. 1 The Five-Year Evaluation Plan was developed in accordance with the Government of Canada Policy on Evaluation, requiring that all departmental program direct spending be evaluated at least once every five years. The Five-Year Evaluation Plan is available upon request from IAE of the Department of Finance Canada. 2 Waterfront Toronto’s Strategic Business Plan. 3 Exhibit 3 in Section 4.2.3 gives the detailed breakdown of expenditures for each year. 4 The list outlines the general objectives given in the original Terms and Conditions document. The expected outcomes of the TWRI are listed in Section 3.0, and given in the logic model in Annex A. 5 Internal documents, Department of Finance. 6 As per the Treasury Board Guide on Grants, Contributions and Other Transfer Payments. 7 The approval of the April 2007 Treasury Board Submission (Document No: 833532) provided an extension of the TWRI to March 31, 2011. Subsequently, in 2009, Ministerial approval was obtained for a further extension to March 31, 2012. 8 The federal Secretariat developed a number of tools to ensure the project proposals included the right elements: Proposal Requirement Guidelines, Proposal Review Guidelines, Financial and Progress Reporting Guidelines, and a Contribution Agreement Template. The template was developed early on in the initiative but was reviewed by Legal Services at Finance Canada when the program was transferred to the department in 2008. 9 This process is illustrated in Annex B. 10 These evaluation issues with the corresponding lines of evidence are listed in the table in Annex C. The issues are in line with the Treasury Board Directive on the Evaluation Function. 11 A revitalized urban infrastructure with sound environmental management would imply that sustainable urban development and infrastructure renewal (the final outcome) has been achieved. 12 The development of a Performance Measurement Strategy is a Treasury Board requirement. 13 This includes the federal Secretariat, the municipal Secretariat as well as a dedicated team within the provincial government. 14 This group includes TWRC Board members as well TWRC staff. 15 For example, Figure 3 in the 2008 Evaluation Report of the TWRI shows that 69% of all waterfront area businesses surveyed for the evaluation were not aware or only somewhat aware of the TWRI activities. 16 Information has been taken from the Government’s Economic Action Plan 2013. 17 According to the 2012 Global Cities Index, produced by A.T. Kearney and the Chicago Council on Global Affairs, Toronto ranks 16th globally based on the following criteria: levels of business activity, information exchange, political engagement, human capital and cultural experience. 18 Dollar amounts were in constant dollars. 19 In Annex D, a map of the region can be found with the key areas identified. 20 The input-output model was developed by urbanMetrics, the same firm that prepared the report. The model is based on the input-output tables produced by Statistics Canada. 21 Three projects were cancelled, for example, ShakespeareWorks was an unsuccessful business venture and went into insolvency. 22 These are the estimated results in the Economic Impact Study, p.64, expected upon completion of the development. 23 Institutional space refers to George Brown College Campus and the local YMCA. 24 Leadership in Energy and Environmental Design (LEED). 25 The Minimum Green Building Requirements defines minimum performance measures and targets for building development related to energy, water, waste, transportation, and materials. These were originally outlined in 2006, and most recently updated in 2012. 26 The GLOBE Awards are Canada’s most high profile annual national environmental awards for outstanding achievement in environmental stewardship. 27 Economic Impact Study, pp ii-ix. 28 Ibid, p.72. 29 Ibid, p.64. 30 The construction on Queen’s Quay is scheduled to be completed in 2015, in advance of the Pan American Games. However construction and transformation of other areas of the waterfront will continue to the end of Waterfront Toronto’s mandate. 31 David Peterson, chair of the committee that proposed the Pan Am bid in 2009, stated regarding the TWRI: “This new development will be an exceptional fit for the requirements of the Games and also a wonderful legacy for the City of Toronto.” 32 The new role was outlined in a Ministerial briefing note, approved in December 2012. 33 For example, increased construction cost due to inflation was cited as a reason for raising the allotted dollar amount for one of the projects that was noted as delayed, in the LTFP. 34 Appendix G of the Treasury Board Directive on Transfer Payments outlines the funding agreement provisions for contributions, which indicate that funds are to be spent specifically for the purpose described in the agreement. 35 Waterfront Toronto’s Annual Report 2002-03, p.1. 36 Under the 2002 provincial TWRC Act, TWRC was given a mandate to continue for 25 years. 37 The financial strategy will take into account the City of Toronto’s new Development Charge by-law which came into effect on November 1, 2013 and includes funding for projects identified in the draft Waterfront Toronto 2.0 plan. Development charges are fees the city collects from developers when issuing a building permit that help pay for the infrastructure needed to provide municipal services to new development, such as roads, water. 38 The data was provided by the federal TWRI Secretariat. 39 EBP refers to employment benefit plans. 40 Corporate Levy is the amount charged to the federal TWRI Secretariat for the use of the Department’s corporate services (i.e., legal advice, communications and other services). 41 It was noted in the 2012-13 Management Plan that the original cost estimate (in 2001) was for$17 billion in total over 30 years. This estimate has doubled to \$34 billion in 2012-13; one of the main causes cited is escalating construction costs.