region of peel · 2019-12-19 · bmo canadian fixed income conference may 1 & 2, 2018 . ......

Spring 2018 1

Region of Peel

BMO Canadian Fixed Income

Conference

May 1 & 2, 2018

Spring 2018 Who we are Economy Finances Debt Issuance 2

Meet the Region of Peel

2

Table of Contents

Who we are ……… 2

Economy ………… 5

Finances ………… 14

Debt Issuance ….. 27


Responsibilities

Infrastructure Peel Member

Munis*

Water

Wastewater (Sewer)

Storm Water

Roads (Arterial)

Roads (Local)

Waste Collection & Disposal

Parks & Recreation

* Member Municipalities include the Cities of Mississauga

and Brampton, and the Town of Caledon

Services Peel Member

Munis*

Police

Paramedics

Fire

Transit

Public Health

Long-Term Care

Social Assistance

Social Housing

Children’s Services

Debt Issuance

Libraries

Licensing

Economic Development

Planning & Development

Parking


Governance

4

Peel Region is governed by the Regional Chair and 24 other members of Council comprised of the Mayors and Councillors from Mississauga, Brampton and Caledon

Regional

Chair

Members of Regional Council (25) Regional Chair (1)

Mayors of Mississauga, Brampton, Caledon (3)

Councillors representing City of Mississauga (11)

Councillors representing City of Brampton (6)

Councillors representing Town of Caledon (4)

Executive Leadership Team (7) Chief Administrative Officer;

Commissioner, Finance & Chief Financial Officer;

Commissioner, Corporate Services;

Commissioner, Digital & Information Services;

Commissioner, Health Services;

Commissioner, Human Services;

Commissioner, Public Works.


Peel’s Strategic Advantages

Location

Situated in GTA, largest economic hub in Canada

Close to large US market (within 200 km / 120 miles)

Transportation network

Five major highways

Toronto’s Pearson Int’l Airport

Regional, national & international rail

Young and well educated population

Peel’s median age of 38.1 years is lowest in GTA (2016 census)

65% of Peel’s working age population have a post-secondary certificate, diploma or degree (2016 census)

Spring 2018 Who we are Economy Finances Debt Issuance

Strong Population Growth

1.48 million residents in 2017, 2nd largest in GTA & Ontario, 4th largest in Canada

An estimated 32,147 new residents (2016 – 2017)

Future population forecasted to reach 1.77 million by 2031

Future population forecasted to reach almost 2 million by 2041

Peel Region Population Growth

1.36 1.48

1.56

1.77

1.97

0.0

0.5

1.0

1.5

2.0

2.5

2011 2017 2021F 2031F 2041F

Millio

ns

Brampton 44%

1.48

million (2017)

Peel Region Population Share

Caledon 5%

Mississauga 51%

6


Labour Market Conditions

Strong labour market performance in 2017

Total labour force increased by 2.1% to remain strong at 873,000 persons

Employment at 812,500 positions, up 2.5%

Unemployment rate fell to 6.9% in 2017

Employment growth was broad-based

Source: Statistics Canada and Peel Data Centre

Employed Labour Force Unemployment Rate

135 127 151

169 171.2

481 487

604 604 624

616 614

755 793

812.5

0

100

200

300

400

500

600

700

800

900

2013 2014 2015 2016 2017

Thousands

Goods Producing Services All Industries

8.9%

8.1%

7.7% 7.3%

6.9%

0%

2%

4%

6%

8%

10%

2013 2014 2015 2016 2017


Diversified Labour Market

812,500 strong employed labour force in Peel in 2017

Peel’s well-diversified labour market supports a resilient economy

Source: Statistics Canada

Labour Market Breakdown by Sector – 2017

Trade

Manufacturing and other Goods Producing

Transportation and Warehousing

Health Care and Social Assistance

Finance, Insurance, Real Estate and Leasing

Professional, Scientific and Technical Services

Construction

Educational Services

Business, Building and Other Support Services

Accommodation and Food Services

Other Services

Information, Culture and Recreation

Public Administration 2.6%

2.8%

3.7%

5.0%

5.0%

5.1%

6.0%

8.5%

8.9%

9.4%

9.7%

15.1%

18.2%

% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20%


Household Income

9

Source: Statistics Canada, Census of Canada, 2016

Median Household Income (After-Tax) Peel at almost $76,000 in median

after-tax household income

is about:

10% higher than Toronto CMA

median and

25% higher than the national

median 61 65

69

76

0

15

30

45

60

75

90

Canada Ontario Toronto CMA Peel

Thousands


Growing Business Sector

10

Source: Statistics Canada and Draft Growth Management ROPA – Oct 2017 Allocation

Region of Peel Employment Forecast

530

646

717 766

870

0

200

400

600

800

1000

2001 2011 2017 2021F 2031F

’00

0

Approximately 717,000 jobs in

Peel in 2017

An estimated 34,000 new jobs

in 2017, up 5.0% from 2016


Diversified Business Sector - 2017

Source: Statistics Canada, Canadian Business Patterns

Distribution of Business Sectors in Peel Region - 2017

1.0%

1.1%

2.6%

3.8%

5.0%

5.4%

6.7%

9.5%

10.3%

14.8%

19.8%

20.0%

% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20%

Trade

Manufacturing and Other Goods-Producing

Transportation & Warehousing

Professional, Scientific & Technical Services

Financial, Insurance, Real Estate & Leasing

Construction

Management, Administrative & Other Support

Educational Services

Healthcare & Social Assistance

Accommodation and Food Services

Information & Culture

Peel’s business sector is broadly diversified

Business growth has been led by the Transportation & Warehousing sector

Other Services


Strong Business Sector

Strong and growing business sector

The largest employers in Peel

include Royal Bank (RBC) Financial

Group, Suncor Energy, Rogers

Communications, and Hewlett-

Packard (Canada) Ltd

With strong location and

infrastructure advantages, Peel will

continue to be an attractive

destination for businesses

New University approved for

Brampton


Business Establishments by Category

17.7 18.2 18.7 19.2

108.4 113.9 117.1 124.3

0

20

40

60

80

100

120

140

160

2014 2015 2016 2017

'000

Goods Producing Services


Housing Market


Building Permits Issued

A total of 6,739 residential housing starts in Peel in 2017

Building permit issuance at $2.8 billion

1.45

2.14

2.14

2.40

1.65

1.16

1.48

1.48

1.32

1.09

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

2013 2014 2015 2016 2017

Residential Non-residential

Housing Starts

6,298

4,607

8,100

5,362

6,739

0

2,000

4,000

6,000

8,000

10,000

2013 2014 2015 2016 2017

$ B

illio

ns

Units


Sustained Growth in Assessment

Peel’s total assessment base

continues to grow at a healthy pace

Both residential and non-residential

sectors contribute to growth

Peel region represents about 10%

of the Province of Ontario’s

assessment base for property taxes

Taxable Assessment 2008-2018

173 190

205

46

50

53

0

50

100

150

200

250

300

2008 2013 2018

$ B

illio

ns

Residential & Farm Commercial & Industrial

Source: Municipal Property Assessment Corporation


Planning Financial Sustainability

Council and Management Actions

Long-term Financial Planning Strategy

Includes 10 year operating budget model

Commitment to funding infrastructure replacement from reserves

Tax: 1% average annual increase for State of Good Repair reserves since 2008

Water/wastewater: 4% average annual increase for SOGR reserves since 2009

Commitment to integrated Growth Management

Creation of Growth Management Committee overseeing land use planning, master services planning and DCs for 2041 growth forecasts

Includes earlier and more integrated consultation with area municipalities and develop community in part to minimize debt

Term of Council Priority

Development Charges (DC) By-law updated in 2015

Collection of residential DCs for hard services (97% of DC rate) at subdivision approval expected to offset $100 million in borrowing

Cash Management Strategy adopted

15


$ millions

CAPITAL BUDGET $723 (23%) OPERATING BUDGET $2,374 (77%)

Operating Capital

$286

$177

$134

$54

$72

Water

Wastewater

Transportation/Roads

Police

Other

16

Budgets and Borrowing

2018 Total Budget $3.1 Billion (Gross)

Debt can only be issued for capital


Investing in Growth Infrastructure

Water, Wastewater and Roads at 75% of the Capital Budget Expenditures

Repair and replacement funded from reserves

External funding from: York Region for joint water/wastewater projects and

Clean Water and Wastewater Fund (CWWF) for proposed projects

$4,124 $2,786

$257

Reserves (57%)

Development Charges(39%)

External Sources (4%)

$ millions

2018 – 2027 Capital Funding $7.2B

$2,583

$1,421

$1,388

$398

$455

$488

$434

Water (36%)

Transportation (20%)

Wastewater (19%)

Police Services (6%)

Housing Support (6%)

Other (7%)

Waste (6%)

$ millions

2018 – 2027 Capital Expenditures $7.2B


Levy DCs against new development to fund growth-related infrastructure (Provincial legislation)

Peel Council: “growth pays for growth” philosophy to ensure existing tax base not impacted by cost of development

DC rates must be updated at least every 5 years Peel DC by-law updated Sept. 2015

with a new DC by-law review scheduled for 2019/2020

Borrowing needs are for long life projects

Water, wastewater, roads are major programs funded from DCs

Development Charges (DCs) (a.k.a. System Impact Fees)


Growth Projects funded with Development Charges

Key Key DC Related Capital Projects

2015-2018 Expensed/Committed($ mm)

2019-2031 Planned Investment($ mm)

Wastewater G.E. Booth Plant Expansion & Upgrades $35.3 $32.5 Clarkson Plant Expansion & Improvements $34.3 West Trunk Sewer Twinning $189.7 $38.8 East to West Diversion Forcemain & Pumping Station $22.4 $230.2

Water

West Caledon Elevated Tank / Transmission Main $51.5

West Brampton Transmission Main & Pumping Station $26.4 Williams Parkway / Central Brampton Transmission Main $54.9 $174.0 Hanlan Transmission Main & Pumping Station $228.0 Lakeview Treatment Plant $41.5 $24.3 Alloa Reservoir & Pumping Station $82.1 Victoria Transmission Main & Reservoir $56.6 $127.2 Mississauga City Centre Feeder Main $224.5 $34.9 East Brampton – Transmission Main $43.7 $162.0 Meadowvale North Transmission Main $170.5 Streetsville Transmission Main $166.5 Mayfield Road Transmission Main $31.2

Total Key Water/Wastewater Capital Projects $1,013.0 $1,270.0

Total Water/Wastewater Capital Projects $1,584.3 $1,834.2

Total DC Related Capital Projects $2,050.5 $2,836.3


Hanlan Water Project

20

Section of 8 foot (diameter) water pipe


Hanlan Water Project

21

Tunnel boring machine


Peel’s Development Charges

22

Per Person Residential Development Charges in the GTA

19.6 20.8 20.6

19.5

17.7

21.3

23.6

15.3

$0

$5

$10

$15

$20

$25

Caledon(Peel)

Brampton(Peel)

Mississauga(Peel)

Oakville(Halton)

Milton(Halton)

Vaughan(York)

Markham(York)

Whitby(Durham)

Note: Values represent Regional, Area, Education and GO Transit Development Charges - As of February, 2018

Peel DC rates are competitive with our peers in the GTA. ’0

00



Development Charges for a Single/Semi-Detached Family Dwelling Unit in the GTA

81.3

86.4 85.6

68.5

62.3

79.7

88.4

53.0

$0

$10

$20

$30

$40

$50

$60

$70

$80

$90

$100

Caledon(Peel)

Brampton(Peel)

Mississauga(Peel)

Oakville(Halton)

Milton(Halton)

Vaughan(York)

Markham(York)

Whitby(Durham)

Note: Values represent Regional, Area, Education and GO Transit Development Charges - As of February 2018

Higher Persons Per Unit drive Peel’s residential dwelling rates higher.

’000



Development Charges for Industrial Development ($ per m2) in the GTA

191.69 203.72

239.48

260.13

180.70

261.60

310.70

176.89

$0

$50

$100

$150

$200

$250

$300

$350

Caledon(Peel)

Brampton(Peel)

Mississauga(Peel)

Oakville(Halton)

Milton(Halton)

Vaughan(York)

Markham(York)

Whitby(Durham)

Note: Values represent Regional, Area and Education Development Charges - As of February, 2018

Peel DC rates are competitive with our peers in the GTA.

$/m

2


Future Development

Peel Region is well positioned to attract growth given its central location and land base that will be serviced and available for development.

Provincial legislation has an impact on land development.

Future development is restricted in the Greenbelt.

Greenbelt Plan 2005


Peel’s Low Water and Wastewater Rates

2018 Combined Water & Wastewater Utility Bill – Residential Homeowner

Peel’s combined water and wastewater rates are the lowest in the GTA.

Peel contributes approximately 49% of its rates (or $179 million in 2018) to

reserves for future repair and replacement of the system.

Low water and wastewater rates help attract businesses like Coca-Cola, Pepsi

and Cott Beverages to Peel Region.

Based on 290 m3 / 77k US gal usage per year

$1,061

$659

$1,103

$1,173

$1,253

$1,177 $1,134

0

200

400

600

800

1000

1200

1400

Halton Peel Toronto Vaughan(York)

Richmond Hill(York)

Markham(York)

Durham

$/Y

ear


Ontario Municipal Act, 2001 Safeguards

Municipal debentures rank pari passu s.408(7)

Annual budget provisions

Debt provision: municipality shall in each year prepare and adopt a

budget including estimates of all sums required during the year

including amounts sufficient to pay all debts falling due within the year

and amounts required to be raised annually for sinking funds and

retirement funds

Balanced budget: budget shall provide that estimated revenues are

equal to the estimated expenditures and the municipality will levy taxes

sufficient to ensure that this is the case s.289 and 290

Proceeds from the sale of a debenture issue cannot be applied

towards the payment of current expenditures s.413(1) and 408(2.1)


Municipal Act, 2001 Safeguards (cont’d)

Debenture by-law cannot be repealed until the debt and interest have been paid s.414(1)

Doctrine of ultra vires

Municipalities only have borrowing powers which are expressly set out in legislation s.9 and 17

Municipal officer guilty of an offense

Any municipal officer who refuses to perform his or her duty to ensure that all the obligations of their municipality’s debenture by-law are fulfilled is guilty of an offence s. 422

Liability of members of council for diversion of funds

Any member of Council who votes to divert funds to pay current expenditures – funds that were originally raised to retire debt is personally liable for the misapplied funds and is disqualified from holding any municipal office for two years s.424


Strong Credit Rating

Long Range Financial Planning Strategy endorsed by Council commits to maintaining a strong credit rating

S&P “AAA” since 2001

Moody’s “Aaa” since 2011

Large, highly liquid investments of $2.4B (as of March 31, 2018)


Borrowing Summary

Forecasted borrowing equals net of

slowing growth infrastructure

spending, offset by

increasing DC revenues

Benchmark sized bullet C$ offerings

$150 - 200 mm, 10 year

Reduced Regional forecasted

borrowing makes benchmark bullets

less frequent

Smaller long term bullets for social

housing & Long Term Care

Still expect to issue smaller serial

once per year and long term bullet for

lower-tier (local) municipal needs

Peel’s Total Debt Issuance

0

100

200

300

400

500

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019* 2020*

($)

Mil

lio

ns

FORECASTED

*Region Only

Spring 2018

Summary

Bullet benchmark debt issues. These bridge

upfront DC growth expenditures (water, wastewater and roads) with

longer term DC revenue collections as development is built

Peel also issuing annually for Area municipalities and

forecasting occasional smaller long term bullets

All Peel debt is general obligation

AAA/Aaa credit ratings

Strong liquidity ($2.4B) with large annual contributions to reserves

Water and Wastewater rates lowest in GTA

Strong and diversified Peel economy

Strong financial management

31

Spring 2018

More Information

Dave Bingham, MBA, CPA, CMA

Program Director, Treasury Transformation

Finance

10 Peel Centre Drive, Suite A, 4th Floor

Brampton, ON L6T 4B9

[email protected]

tel: 905-791-7800 ext. 4292

peelregion.ca/investors

Julie Pittini, MBA

Director, Treasury Services

Finance

10 Peel Centre Drive, Suite A, 2nd Floor

Brampton, ON L6T 4B9

[email protected]

tel: 905-791-7800 ext. 7120

fax: 905-791-9691


Updated information including:

credit rating reports

financial statements

budget

tax and water/wastewater rates

development charges


Peel Investor Website

32

Bloomberg Ticker: PEEL

mailto:[email protected]

http://www.peelregion.ca/finance/investors.htm





http://www.peelregion.ca/investors

region of peel · 2019-12-19 · bmo canadian fixed income conference may 1 & 2, 2018 . ......

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