COUNCIL MEETING AGENDA CORPORATION OF THE TOWNSHIP ...

COUNCIL MEETING AGENDA CORPORATION OF THE TOWNSHIP OF ZORRA

274620 27TH LINE, P.O. BOX 306 INGERSOLL, ONTARIO N5C 3K5

JUNE 21, 2016 6:30 P.M.

1. CALL TO ORDER 2. ADOPTION OF AGENDA 3. DECLARATION OF PECUNIARY INTEREST OR THE GENERAL NATURE

THEREOF 4. MINUTES & BUSINESS ARISING OUT OF THE MINUTES (a) Minutes from the Council meeting held on June 7, 2016. 5. PUBLIC MEETINGS & DRAINAGE MEETINGS (a) 6:30 p.m. – Minor Variance Application #A-06-16 Hazeleger submitted by Josh

Smith pertaining to lands described as Part Lots 14 & 15, Concession 4 (West Zorra), Township of Zorra. The lands are located on the west side of 37th Line (County Road 6) and are municipally known as 375825 37th Line.

(b) 7:00 p.m. – Public meeting concerning a proposal to close most of the block of

the 43rd Line between Roads 68 and 74 (30 minutes). (c) 7:30 p.m. – Public meeting concerning the Surplus Property Disposal – Selling of

a Property and Building Located on the West Side of George Street (20 minutes).

6. DELEGATIONS (a) 6:45 p.m. – Christene Scrimgeour, Scrimgeour & Company - Township Auditor

to Present the 2015 Audited Financial Statements. 7. REPORTS FROM STAFF & CORRESPONDENCE REQUIRING DIRECTION (a) Resolution from the Zorra Community Policing Committee regarding the Speed

Zone along Allen Street. (b) Memorandum 2016-061 from the Director of Finance and Recreation and

Facilities Supervisor regarding Canada 150 Funding program – Intake 2.

June 21, 2016 Council Meeting of 3 (c) Correspondence from Canadian Union of Postal Workers regarding an upcoming

review of Canada Post. (d) Memorandum 2016-062 from the Director of Public Works regarding the

Proposed Closing of 43rd Line. (e) Memorandum 2016-063 from the Director of Public Works regarding Road 78

Realignment Engineering Services Recommendation. (f) Memorandum 2016-064 from the Chief Administrative Officer regarding the

Strategic Plan status. 8. INFORMATION ITEMS (a) Correspondence from CN regarding the CN in Your Community 2016 publication. (b) Correspondence from the Municipal Policing Bureau regarding the Calls for

Service (CFS) Billing Summary Report. (c) Minutes from the ZCPC meeting held on March 9, 2016. (d) County of Oxford Land Division Committee Notice of Decision File No. B16-14-5. (e) Correspondence from IESO regarding the 2015 Annual Report: Powering a

Connected World. 9. UNFINISHED BUSINESS No items. 10. COUNCIL QUESTION PERIOD & NEW BUSINESS (a) County Council Update – Mayor Lupton. 11. BY-LAWS No items. 12. PUBLIC QUESTION PERIOD 13. CLOSED MEETING SESSION (a) Memorandum 2016-065 from the Chief Administrative Officer regarding a

personnel issue.

Page 2

June 21, 2016 Council Meeting of 3 (b) Minutes from the closed meeting session held on September 1, 2015. (c) Minutes from the closed meeting session held on April 19, 2016. 14. CONFIRMATORY BY-LAW 24-16 Confirmatory by-law. 15. ADJOURNMENT

Page 3

Council Meeting Minutes - 5283 - June 7, 2016

MEETING MINUTES

THE CORPORATION OF THE TOWNSHIP OF ZORRA

P.O. BOX 306 INGERSOLL, ONTARIO

JUNE 7, 2016 The regular meeting of the Township Council was held at 9:30 a.m. on June 7, 2016 at the Township Municipal Office. Present were: Mayor: Margaret Lupton Councillors: Ron Forbes, Marie Keasey, Marcus Ryan and

Doug Matheson Chief Administrative Officer: Donald W. MacLeod Clerk: Ashley Sage Director of Finance: Maureen Simmons 1. CALL TO ORDER

Mayor Lupton called the meeting to order at 9:30 a.m. 2. ADOPTION OF AGENDA 01-06-16 Moved by: Marcus Ryan Seconded by: Doug Matheson “THAT the agenda be adopted as printed and circulated.” Disposition: Carried 3. DECLARATION OF PECUNIARY INTEREST OR THE GENERAL NATURE

THEREOF No member of Council made a declaration of pecuniary interest or the general

nature thereof. 4. MINUTES & BUSINESS ARISING OUT OF THE MINUTES (a) Minutes from the Council meeting held on May 17, 2016. 02-06-16 Moved by: Ron Forbes Seconded by: Marie Keasey “THAT the minutes from the May 17, 2016 Council meeting be adopted

as printed and circulated and corrected.” Disposition: Carried 5. PUBLIC MEETINGS & DRAINAGE MEETINGS

03-06-16 Moved by: Doug Matheson Seconded by: Marcus Ryan

“THAT the Council meeting be adjourned at 10:30 a.m. for the purposes of holding a public meeting pursuant to the provisions of the Planning Act.” Disposition: Carried


(a) 10:30 a.m. – Minor Variance Application #A-05/16 McCall submitted by Nathan Kok pertaining to lands described as Lot 16, Concession 14, (East Nissouri), Township of Zorra. The lands are located on the northwest corner of Road 84 and 29th Line, and are municipally known as 843467 Road 84.

The applicant Nathan Kok is in attendance.

Presentation of Report

Meghan House of the Oxford Community and Strategic Planning Office reviews the planning report for the Committee pertaining to property

described as Lot 16, Concession 14, (East Nissouri), Township of Zorra. The lands are located on the northwest corner of Road 84 and 29th Line, and are municipally known as 843467 Road 84.

Ms. House notes that the applicant is seeking relief from the Section 7.2.1 of the Township of Zorra’s Zoning By-law to allow construction of a new residential dwelling on an existing farm.

Ms. House notes that the subject lands comprise an area of approximately 48.5 ha (120 ac) and contain agricultural land in agricultural production, a beef barn, and an existing single-detached accessory farm dwelling (to be removed). The existing dwelling on the subject property has an insufficient setback from the neighbouring swine operation. Ms. House notes that the new residential dwelling is proposed to be approximately 222.97 m2 (2,400 ft2) in gross floor area and proposed to be located approximately 30 m (98.4 ft) closer to the neighbouring swine barn than the existing dwelling. Ms. House also notes that the subject lands have direct access to two municipal roads, being Road 84 and 29th Line. The surrounding land uses are agricultural. Council Question Period

None. Public Question Period None. Public in Attendance None. 04-06-16 Moved by: Ron Forbes Seconded by: Marcus Ryan

“THAT the Township of Zorra Committee of Adjustment approve Application File A05-16, submitted by Nathan Kok for lands described as the Lot 16, Concession 14 (East Nissouri) and known municipally as 843467 Road 84 for relief from the provisions of Section 7.2.6 of the Township of Zorra Zoning By-law to reduce the required minimum distance separation between a new farm dwelling and an existing swine barn to facilitate construction of a new residential dwelling;

AND THAT the approval be subject to the survey verification of the requested variances shall be received from an Ontario Land Surveyor at the time that the foundations are poured, to the satisfaction of the Township of Zorra.” Disposition: Carried (b) 10:45 a.m. – ZN 5-16-01 Hutton (Rout) submitted by John and Nancy Hutton

pertaining to lands described as Part Lot 30, Concession 10 (East Nissouri), Township of Zorra. The subject property is located on the southeast corner of Road 96 and the 15th Line, and is municipally known as 962836 Road 96.

The applicant John and Nancy Hutton are in attendance.


Presentation of Report Meghan House of the County of Oxford Community and Strategic Planning Office reviews the planning report for Council pertaining to property described

as Part Lot 30, Concession 10 (East Nissouri), Township of Zorra. The subject property is located on the southeast corner of Road 96 and the 15th Line, and is municipally known as 962836 Road 96.

Ms. House notes that the purpose of the zone change application is to facilitate the severance of agricultural lands to be merged with an adjacent agricultural parcel and retain a lot containing an existing residential dwelling. The severance was conditionally approved by the County of Oxford Land Division Committee on June 2, 2016. Ms. House also notes that the lot to be severed comprises an area of 19.7 ha (48.7 ac), with frontage of 249 m (816.9 ft) along 15th Line. The lot to be retained comprises an area of approximately 0.53 ha (1.3 ac), with frontage of 66 m (216.5 ft) along 15th Line, and contains an existing single detached dwelling with attached garage and a shed. The lot to be enlarged currently comprises 20.2 ha (50 ac) and would have an area of 39.9 ha (98.7 ac) once consolidated with the severed lands.

Council Question Period None. Public Question Period

None. Public in Attendance None. 05-06-16 Moved by: Marie Keasey Seconded by: Ron Forbes

“THAT the public meeting be adjourned at 11:00 a.m. and the regular meeting of Council be called back to order.”

Disposition: Carried 06-06-16 Moved by: Marcus Ryan Seconded by: Doug Matheson

“THAT the Council of the Township of Zorra approve in principal, the zone change application submitted by John and Nancy Hutton, whereby the lands described as Part Lot 30, Concession 10 (East Nissouri) and municipally known as 962836 Road 96, are to be rezoned from “General Agricultural Zone (A2)’ to ‘Rural Residential Zone (RR)’ to permit residential uses on a lot to be retained and to fulfill a condition of consent application B16-14-5.”

Disposition: Carried 6. DELEGATIONS (a) 10:00 a.m. – Special Presentation.

Anne Hollis was awarded the annual Senior of the Year award for the Township of Zorra.

(b) 11:00 a.m. – Donald Campbell regarding his concerns pertaining to the

Embro Dam. Donald Campbell, resident provides Council with research that he has done

pertaining to the Embro Dam. Mr. Campbell notes that he is not in favour of the Embro Dam project. Mr.

Campbell also notes that he has read all four reports regarding the Embro Dam and has found items mentioned to be incorrect and not accurate. Mr. Campbell reviews the research that he has provided to Council.


Council Question Period Councilor Ryan notes that the information Mr. Campbell has provided is very well done and can be used to further assist with determining which of the options are best for the Township going forward. Councillor Keasey thanks Mr. Campbell for his research. Councillor Keasey inquires if there was a costs attached to the reports that were presented at the public meeting. Mr. Campbell responds that no there was not. Councillor Keasey notes that it is important to take all the reports into consideration before a decision is made. Councillor Keasey notes that as a Township we can provide comments and input to the Upper Thames Conservation Authority regarding this matter. Councillor Matheson notes that the Township needs to consider what Federal and Provincial funding is available as well.

07-06-16 Moved by: Marcus Ryan Seconded by: Doug Matheson

“THAT Council refer the information obtained from Donald Campbell to the Upper Thames Conservation Authority.”

Disposition: Carried (c) 11:30 a.m. – Bernia Wheaton, Rural Oxford Economic Development

Corporation regarding an update for Council. Bernia Wheaton of the Rural Oxford Economic Development Corporation

(ROEDC) provides Council with an informative update with regards to what they have been working on over the past year.

Ms. Wheaton notes that the ROEDC have set strategic priorities for 2016 that

include: workforce development, retail leakage, networking, professional development and skill training, business attraction, community improvement plan, and marketing rural economic development corporation internally and externally. Ms. Wheaton explains the workinoxford.ca website that has been launched and notes that reviews how to find and post jobs online.

Ms. Wheaton reviews the regional rideshare that encourages people to car

pool, Oxford connection, upcoming events that ROEDC are hosting and the business directory. Ms. Wheaton also notes that she will be involved in the tv show called We are Oxford this fall.

Ms. Wheaton also notes that a new punch card will be introduced County

wide this Christmas that will encourage people to buy locally. Ms. Wheaton also notes that the ROEDC have also done workshops that teach soft skills to help kids who are going from high school into the workplace.

7. REPORTS FROM STAFF & CORRESPONDENCE REQUIRING DIRECTION 7.1 Fire Department (a) Memorandum 2016-060 from the Fire Chief regarding monthly departmental

activities. 08-06-16 Moved by: Ron Forbes Seconded by: Marie Keasey

“THAT Memorandum 2016-060 from the Fire Chief regarding monthly departmental activities be received and filed for information purposes only.”

Disposition: Carried

7.2 Recreation Department (a) Memorandum 2016-059 from the Recreation and Facilities Supervisor and the Recreational and Facility Program Coordinator regarding monthly


departmental activities. 09-06-16 Moved by: Doug Matheson Seconded by: Marcus Ryan

“THAT Memorandum 2016-059 from the Recreation and Facilities Supervisor and the Recreational and Facility Program Coordinator regarding monthly departmental activities be received and filed for information purposes only.”

Disposition: Carried 7.3 Building & Drainage Department (a) Memorandum 2016-057 from the Chief Building Official/Drainage

Superintendent regarding monthly departmental activities. 10-06-16 Moved by: Marie Keasey Seconded by: Ron Forbes “THAT Memorandum 2016-057 from the Chief Building Official/Drainage

Superintendent be received and filed for information purposes only.” Disposition: Carried 7.4 Public Works Department (a) Memorandum 2016-055 from the Director of Public Works regarding monthly

departmental activities.

11-06-16 Moved by: Marcus Ryan Seconded by: Doug Matheson “THAT Memorandum 2016-055 from the Director of Public Works be

received and filed for information purposes only.” Disposition: Carried (b) Memorandum 2016-056 from the Director of Public Works regarding Bridge

0350 Rehabilitation Recommendation. 12-06-16 Moved by: Ron Forbes Seconded by: Marie Keasey “THAT Council award the Rehabilitation of Bridge 0350 to Theo

Vandenbrink Construction Inc. for a net tendered price of $94,277.59.” Disposition: Carried 7.5 Finance Department No items. 7.6 Clerks Department (a) Memorandum 2016-058 from the By-law Enforcement Officer regarding

monthly departmental activities. 13-06-16 Moved by: Doug Matheson Seconded by: Marcus Ryan “THAT Memorandum 2016-058 from the By-law Enforcement Officer be

received and filed for information purposes only.” Disposition: Carried 7.7 Administration Department No items.


7.8 CORRESPONDENCE REQUIRING DIRECTION (a) Oxford County Report No. CASPO 2016-122 from the Oxford County Development Planner regarding a Request for Extension to Draft Plan

Approval – SB12-07-5 TOIL Development Inc. (10:15 a.m.). 14-06-16 Moved by: Marie Keasey Seconded by: Ron Forbes

“THAT the County of Oxford be advised that the Council of the Township of Zorra has no objection to the application of Toil Development Inc. requesting an extension, until June 12, 2018, to the draft plan of subdivision approval (File No.: SB12-07-5), for a subdivision on lands described as Part Lot 21, Concession 1 (North Oxford), in the Village of Thamesford.”

Disposition: Carried (b) Correspondence from Union Gas Limited regarding an Union Gas Update –

Provincial Climate Change Plan and the Impacts on Natural Gas. 15-06-16 Moved by: Doug Matheson Seconded by: Marcus Ryan

“THAT the correspondence received from Union Gas be received and filed for information purposes only.”

Disposition: Carried (c) Application for Official Plan Amendment - OP16-04-9: County of Oxford. 16-06-16 Moved by: Marcus Ryan Seconded by: Doug Matheson

“THAT Council defer item 7.8(c) until a presentation on the matter can be given to Council.”

Disposition: Carried 8. INFORMATION ITEMS (a) Correspondence from the Muscular Dystrophy Canada. (b) Correspondence from the Municipal Policing Bureau (MPB). (c) Correspondence from Union Gas. 17-06-16 Moved by: Marcus Ryan Seconded by: Doug Matheson “THAT item 8(a)-(c) be received and filed for information purposes

only.” Disposition: Carried 9. UNFINISHED BUSINESS No items. 10. COUNCIL QUESTION PERIOD & NEW BUSINESS (a) County Council Update – Mayor Lupton 11. BY-LAWS No items. 12. PUBLIC QUESTION PERIOD (11:45 a.m. – 12:00 p.m.)


No items. 13. CLOSED MEETING SESSION No items. 14. CONFIRMATORY BY-LAW 23-16 Confirmatory by-law. 18-06-16 Moved by: Ron Forbes Seconded by: Marie Keasey “THAT By-law 23-16, being a by-law to confirm the proceedings of

Council held Tuesday, June 7, 2016, be read a first, second and third time this 7th day June, 2016, and further that the Mayor and Clerk are hereby authorized to sign the same and affix the corporate seal thereto.”

Disposition: Carried 15. ADJOURNMENT 19-06-16 Moved by: Doug Matheson Seconded by: Marcus Ryan “THAT this session of Council be now adjourned and herewith closed at

1:47 p.m. and the next meeting of Council be called for the 21st day of June, 2016, at 6:30 p.m. at the Township Council Chambers.”

Disposition: Carried MAYOR CLERK

Community and Strategic Planning P. O. Box 1614, 21 Reeve Street Woodstock Ontario N4S 7Y3 Phone: 519-539-9800 Fax: 519-421-4712 Web site: www.oxfordcounty.ca

Our File: A06-16

APPLICATION FOR MINOR VARIANCE

TO: Township of Zorra Committee of Adjustment MEETING: June 21, 1016 REPORT NO: 2016-151

OWNER: John Hazeleger 375825 37th Line, RR 1, Embro, ON N0J 1J0

APPLICANT: Josh Smith 155 Elgin Street, Embro, ON N0J 1J0

VARIANCES REQUESTED:

Relief from the Provisions of Section 7.2.1 – Minimum Distance Separation Requirements For Livestock Barns and Structures (MDS II), to reduce the minimum distance separation requirement to the nearest Type A land use (North Embro Cemetery) from 198 m (650 ft) to 193 m (633 ft) in order to facilitate the construction of a new dairy barn; and

Relief from the Provisions of Section 7.2.2 – Minimum Distance Separation Requirements For Manure Storage Facilities (MDS II), to reduce the minimum distance separation requirement to the nearest Type A land use (North Embro Cemetery) from 278 m (913 ft) to 202 m (663 ft) in order to facilitate the construction of a new manure storage facility associated with the proposed dairy barn.

LOCATION:

The subject lands are legally described as Part Lots 14 & 15, Concession 4 (West Zorra), Township of Zorra. The lands are located on the west side of 37th Line (County Road 6) and are municipally known as 375825 37th Line.

BACKGROUND INFORMATION:

COUNTY OF OXFORD OFFICIAL PLAN:

Schedule ‘Z-1’ Township of Zorra Land Use Plan Agricultural Reserve

TOWNSHIP OF ZORRA ZONING BY-LAW: General Agricultural Zone (A2)

5(a)

File Number: A06-16 Report Number 2016-151 Page 2

SURROUNDING USES: Agricultural, rural residential, cemetery, open space/conservation lands

COMMENTS:

(a) Purpose of the Application:

The applicant is seeking relief from the Section 7.2.1 & 7.2.2 of the Township of Zorra Zoning By-law to allow construction of a new dairy barn and manure storage facility.

The new livestock operation will comprise a 3,040 m2 (32,722 sq.ft) barn to house dairy cattle and a 1,452 m2 (15,629 sq.ft) manure storage facility.

The subject lands comprise an area of approximately 60 ha (149 ac) and contain land in agricultural production, a dairy barn, silos, drive shed, manure pit, and an existing single-detached accessory farm dwelling. Once the new barn is built, the existing barn will not house livestock and the existing manure pit will be decommissioned.

The subject lands front on and have direct access to a municipal road, being 37th Line. The surrounding land uses are agricultural, rural residential, open space and the North Embro Cemetery. The Village of Embro is to the south of the subject property.

The agency circulation and public notice also included relief from the Minimum Distance Separation requirements for the nearest Type B land use. The North Embro Cemetery was originally identified as a Type B land use; however, the Cemetery is zoned “Institutional (I)” and the Zoning By-law provides that the MDS II setbacks from an existing institutional use located outside of a designated settlement be calculated as a Type A land use. Staff is of the opinion that a new circulation and/or public notice is not required as the setbacks for Type A land uses are less than for Type B land uses; therefore, the amount of relief requested and potential impact of the application has not increased as result of this amendment.

Plate 1, Location Map with Existing Zoning, shows the location of the subject lands and surrounding properties with zoning information.

Plate 2a, Applicant’s Sketch, showing the location of the proposed dairy barn and manure storage facility.

Plate 2b, Applicant’s Sketch, showing the distance from the proposed dairy barn and manure storage facility to the existing dwelling on the east side of 37th Line and the cemetery as determined by an OLS.

Plate 3, MDS Arcs, showing the required minimum distance separation from the existing dwelling on the east side of 37th Line and the cemetery.

Plate 4, MDS II Report, from the Township Chief Building Official, dated June 14, 2016.

(b) Agency Comments

The application was circulated to a number of public agencies. The Township of Zorra Fire Chief, the Township of Zorra Chief Building Official/Drainage Superintendent, the Township of Zorra Director of Public Works, the County of Oxford Public Works Department and the County of Oxford Public Health and Emergency Services Department advised that they had no comments or objections regarding the proposal.


The Township of Zorra Chief Building Official indicated that the applicant should be required to have an Ontario Land Surveyor verify that the location of the new barn and manure storage complies with any minor variances granted and provide an updated plan to the Township of Zorra once the foundations have been poured.

The Upper Thames River Conservation Authority (UTRCA) reviewed the application as a commenting agency and as an adjacent land owner (lands to the north and northwest of the subject property). UTRCA indicated that they have no objection as the proposed barn and manure storage facility will be located outside of the Regulated Area and no impact to the woodlands identified in the Oxford County Natural Heritage Study (2006) is anticipated.

c) Public Consultation:

The application was circulated on June 10, 2016 in accordance with the requirements of the Planning Act. To date, no concerns or objections with the application have been raised.

(d) Intent and Purpose of the Official Plan:

The subject lands are located within the ‘Agricultural Reserve’ designation according to the Township of Zorra Land Use Plan, Schedule ‘Z-1’ in the County of Oxford Official Plan. In the Agricultural Reserve designation, lands are to be developed for a wide variety of agricultural land uses, including general farming, animal or poultry operations, regulated livestock farms, cash crop farms and specialty crop farms together with farm buildings and structures necessary to the farming operation, and accessory residential uses required for the farm.

The use of the lands for animal and poultry farms, cash crop farming and farm buildings and structures necessary to the farming operation, including manure storage facilities conforms to the relevant policies of the Official Plan.

Section 3.1.1 of the Official Plan directs that it is a goal of the County that conflicts between agricultural and non-agricultural uses be minimized. The application of the Minimum Distance Separation (MDS II) guidelines, as established by the Province of Ontario, is considered to be a key mechanism by which municipalities can reduce and minimize potential land use conflicts and minimize nuisance complaints from odour associated with livestock. MDS is to be implemented via the provisions of the Township’s Zoning By-law.

Section 3.1.4.2 of the Official Plan states that when the establishment of a new or expanded livestock structure or manure storage facility is proposed, Minimum Distance Separation Formula II (MDS II) must be satisfied prior to the issuance of a building permit.

Further, the Official Plan (Section 10.3.6) states that the Committee of Adjustment shall take into account the following points when considering an application for minor variance:

The objectives and policies of the Official Plan can be met if the minor variance is granted; The request for variance constitutes a minor departure from the performance standards of

the zoning by-law; The general intent of the zoning by-law can be met; and Whether the variance is desirable for the appropriate development of the land.


In determining whether a variance is desirable, the Official Plan provides that the following factors be considered:

Whether there are constraints and/or restrictions due to physical or inherent conditions ofthe site;

Whether alternative designs of the proposals are clearly not feasible or appropriate; Whether approval would create an undesirable precedent; Concerns of adjacent owners and residents, and community in general; and, Whether compliance with the By-law would be unreasonable or impossible and impose

undue hardship on the applicant.

(e) Intent and Purpose of the Zoning By-law:

The subject property is located within the ‘General Agricultural Zone (A2)’ in the Township of Zorra Zoning By-Law 35-99. The ‘A2’ Zone permits development of a wide range of agricultural actives and land uses, including regulated farms, agricultural buildings and structures and an accessory single-detached dwelling.

All livestock barns and manure storage facilities in an ‘A2’ Zone are to maintain a 30 m (98.4 ft) front yard depth and a 10 m (32.8 ft) interior and rear yard depth (or as otherwise required through the application of the Minimum Distance Separation II formula).

In addition, Section 7.2.1 of the Zoning By-law states that any new livestock building must meet Minimum Distance Separation II (MDS II) requirements and Section 7.2.2 of the Zoning By-law states that any new manure storage facility must meet Minimum Distance Separation II (MDS II) requirements in accordance with Section 2.7 of the By-law. The purpose of the MDS regulations is to prevent land use conflicts between agricultural and other types of land uses, and to minimize nuisance complaints related to odour.

The MDS calculations are based on two types of land uses. Type A land uses are typically characterized by uses that have a lower density of human occupancy, habitation or activity, while Type B land uses are typically characterized by uses that have a potentially higher density of human occupancy, habitation or activity. The required minimum distance between Type B lands uses and livestock and manure storage facilities is double the distance required for Type A land uses based on the expectation that a Type B land use not only contains an existing high density of human occupancy, habitation or activity but also that it may permit additional high density use.

Section 2.7.1 of the Zoning By-law states that “where an agricultural building or structure or manure structure is being erected, altered, and or used for the housing of livestock, in an A1 or A2 zone, in the vicinity of an existing institutional use located outside of a designated settlement defined in Section 2.7.2.1, with the exception of a public or private school or daycare centre, the MDS II setbacks shall be calculated using a Type A Land Use”.

The required Minimum Distance Separation from the nearest Type A land use to the proposed livestock facility is 198 m (650 ft) and to the proposed manure storage facility is 278 m (913 ft).

The existing buildings and the proposed dairy barn and manure storage appear to comply with the provisions of the Zoning By-law except for the required distance to the nearest Type A land use.


(f) Desirable Development/Use:

The Provincial Minimum Distance Separation Formulae Implementation Guidelines (Publication 707) states that “minor variances to MDS II distances can be considered based on site specific circumstances. Circumstances that meet the intent, if not the precise distances of MDS II, or mitigate environmental impacts, may warrant further consideration”.

This application proposes a new intensive livestock facility where an existing smaller operation currently exists. While the surrounding land uses are predominately agricultural, it is good planning practice to ensure that the barn and manure storage facility are sited in such a way to have the least likelihood of incompatibility with existing uses.

The MDS II arcs for the nearby Type A land uses are shown on Plate 3 and cover the existing farm complex along with the area to the rear of the existing buildings. For the proposed structures to be located in a compliant location they would have to be located at the rear of the property and/or further to the north. There are physical conditions on the site, including flood plain and slopes that limit the potential for the proposed structures to be located in compliant location further to the rear of the property. The applicant also wishes to construct the new buildings as close to the existing buildings as possible to: minimize site grading; take advantage of existing servicing and access; and, minimize impacts to productive agricultural land.

Staff is of the opinion that alternative locations for the proposed use are not feasible or appropriate and compliance with the By-law would be unreasonable and impose undue hardship of the applicant. Further, concerns have not been expressed by adjacent property owners or the general public and approval of the requested relief will not create an undesirable precedent.

Planning staff are of the opinion that the requested variances to the MDS II setback requirements are considered minor in nature and meet the intent and purpose of the Zoning By-law and the Official Plan.

In summary, it is the recommendation of this Office that the application be given favorable consideration.

RECOMMENDATION:

That the Township of Zorra Committee of Adjustment approve Application File A06-16, submitted by Josh Smith for lands described as Part Lots 14 & 15, Concession 4 (West Zorra) Township of Zorra, to facilitate the construction of a new livestock facility as described in CASPO 2016-151 on the subject property, as it relates to:

1. Relief from the Provisions of Section 7.2.1 – Minimum Distance SeparationRequirements For Livestock Barns and Structures (MDS II), to reduce the minimumdistance separation requirement to the nearest Type A land use (North EmbroCemetery) from 198 m (650 ft) to 193 m (633 ft) in order to facilitate the construction of anew dairy barn; and

2. Relief from the Provisions of Section 7.2.2 – Minimum Distance SeparationRequirements For Manure Storage Facilities (MDS II), to reduce the minimum distanceseparation requirement to the nearest Type A land use (North Embro Cemetery) from278 m (913 ft) to 202 m (663 ft) in order to facilitate the construction of a new manurestorage facility associated with the proposed dairy barn.


This Office is of the opinion that this application is acceptable from a planning perspective and should be granted, subject to the following condition:

a) that survey verification of the requested variances shall be received from an OntarioLand Surveyor at the time that the foundations are poured, to the satisfaction of theTownship of Zorra.

as the proposed variances are:

(i) minor variances from the provisions of the Township of Zorra Zoning By-law No. 35-99;

(ii) desirable for the appropriate development or use of the land, building or structure;

(iii) in-keeping with the general intent and purpose of the Township of Zorra Zoning By-law No. 35-99; and,

(iv) in-keeping with the general intent and purpose of the Official Plan.

Authored by: “Original signed by:” Meghan House, MCIP, RPP Development Planner

Approved for submission by: “Original signed by:” Eric Gilbert, MCIP, RPP Senior Planner

MH June 15, 2016

June 1, 2016

This map is a user generated static output from an Internet mapping site andis for reference only. Data layers that appear on this map may or may not be

accurate, current, or otherwise reliable. This is not a plan of survey

Legend

8190

Notes

NAD_1983_UTM_Zone_17N

409 Meters

Parcel LinesProperty BoundaryAssessment BoundaryUnitRoadMunicipal Boundary

Environmental Protection/Flood Overlay

Flood FringeFloodwayEnvironmental Protection (EP1)Environmental Protection (EP2)

Zoning Floodlines/Regulation Limit

100 Year Flood Line30 Metre SetbackConservation Authority Regulation LimitRegulatory Flood And Fill Lines

Zoning (Displays 1:16000 to 1:500)

mhouse

Polygon

mhouse

Text Box

Subject Property

mhouse

Text Box

37th Line (County Road 6)

mhouse

Text Box

Road 84

mhouse

Text Box

North Embro Cemetery

mhouse

Text Box

Village of Embro

mhouse

Text Box

35th Line

mhouse

Text Box

41st Line

mhouse

Text Box

Road 78

mhouse

Text Box

Plate 1: Location Map with Existing Zoning File No: A06-16 - Hazeleger Part Lots 14 & 15, Concession 4 (West Zorra), 375825 37th Line, Township of Zorra

mhouse

Text Box

Plate 2a: Applicant's Sketch, proposed location of new barn and manure storage as determined by OLS File No: A06-16 - Hazeleger Part Lots 14 & 15, Concession 4 (West Zorra), 375825 37th Line, Township of Zorra

BARN

PIT

EXISTING DRIVESHED

EXISTING SILOS

EXISTING DAIRYBARN

EXISTINGMANURE PIT

EXISTINGHYDROTRANSMISSIONLINE

RIVER

HOUSE

mhouse

Text Box

Plate 2b: Applicant's Sketch, proposed location of new barn and manure storage File No: A06-16 - Hazeleger Part Lots 14 & 15, Concession 4 (West Zorra), 375825 37th Line, Township of Zorra

June 13, 2016

This map is a user generated static output from an Internet mapping site andis for reference only. Data layers that appear on this map may or may not be

accurate, current, or otherwise reliable. This is not a plan of survey

Legend

4090

Notes

NAD_1983_UTM_Zone_17N

205 Meters

Parcel LinesProperty BoundaryAssessment BoundaryUnitRoadMunicipal Boundary

Environmental Protection/Flood Overlay

Flood FringeFloodwayEnvironmental Protection (EP1)Environmental Protection (EP2)

Zoning Floodlines/Regulation Limit

100 Year Flood Line30 Metre SetbackConservation Authority Regulation LimitRegulatory Flood And Fill Lines

Zoning (Displays 1:16000 to 1:500)

mhouse

Polygon

mhouse

Text Box

37th Line (County Road 6)

mhouse

Text Box

Subject Property

mhouse

Text Box

North Embro Cemetery

mhouse

Line

mhouse

Text Box

375852 37th Line

mhouse

Text Box

Village of Embro

mhouse

Text Box

Plate 3: MDS Arcs File No: A06-16 - Hazeleger Part Lots 14 & 15, Concession 4 (West Zorra), 375825 37th Line, Township of Zorra

mhouse

Text Box

Plate 4: MDS II Report File No: A06-16 - Hazeleger Part Lots 14 & 15, Concession 4 (West Zorra), 375825 37th Line, Township of Zorra

View of existing barns and pasture from south along 37th Line View of existing barns from north along 37th Line

View of pasture and fields from north along 37th Line

mhouse

Text Box

Site Photos File No: A06-16 - Hazeleger Part Lots 14 & 15, Concession 4 (West Zorra), 375825 37th Line, Township of Zorra

TOWNSHIP OF ZORRA NOTICE OF PROPOSED ROAD CLOSING

NOTICE is hereby given pursuant to the Township of Zorra’s Road Closing Procedure (Policy 200-07) in accordance with Section 270 (1) of the Municipal Act, 2001,as amended, that the Council of the Township of Zorra will be considering a by-law to close 43rd Line between Roads 68 and 74, in the Township of Zorra.

The Council of the Township of Zorra will hear, in person or by counsel or agent, any person who claims that their land, or lands, will be prejudicially affected by the closing the above named road and who applies to be heard at a meeting of Council to be held on June 21, 2016, at 7:00 p.m. in the Council Chamber located at 274620 27th Line, Ingersoll, ON.

See the attached Key Map for location of the proposed road closure.

For any additional information regarding this road closing, please contact the undersigned. Written comments regarding this matter should be submitted to the undersigned by 4:30 p.m. on June 17, 2016.

Ashley Sage Clerk 274620 27th Line, P.O. Box 306, Ingersoll, ON N5C 3K5 519-485-2490 ext. 228 [email protected]

5(b)

Approximate locationof turning circle

Portion of road to be closed(approximately 1.9 km)

ROAD 74

41S

T L

INE

43R

D L

INE

45T

H L

INE

39TH LINE ROAD 68

Hen

dry

Dra

inC

am

pb

ell D

rain

Gol

spie

Dra

in

Huggins Drain

Cody Drain

P E R T H

O X F O R D

MIDDLESEX

London

Stratford

St.Marys

Ingersoll

Woodstock

Location Map

The UTRCA disclaims explicitly any warranty, representation or guarantee as to the content, sequence, accuracy, timeliness, fitness for a particular purpose, merchantability or completeness of any of the data depicted and

provided herein.

The UTRCA assumes no liabililty for any errors, omissions or inaccuracies in the information provided herein and further assumes no liability for any

decisions made or actions taken or not taken by any person in relianceupon the information and data furnished hereunder.

Please contact UTRCA staff for any changes, updates and amendments to the information provided.

This map is not to be used for navigation purposes.This map is not a substitute for professional advice.

THIS MAP IS NOT A SURVEY.

Data Sources:2015 Imagery, Teranet Parcel Copyright used under licence with the Ontario Ministry of Natural Resources,© Queen's Printer for Ontario.

Copyright © 2016 UTRCA.

Proposed Road Closure

0 60 120 180 240 300

metres

43rd LineTownship of Zorra

1

Ashley Sage

From: andy Mc Cullough <[email protected]>Sent: June-07-16 7:01 AMTo: Ashley SageSubject: Proposed Road Closing - 43rd Line

Importance: High

Thank you for the notice advising the Proposed road closure of the 43rd line. My property is located on the SouthWest corner of County Rd 74 & 43rd line. Myself and Fabian Marquez are the 2 properties that are mostly effected by this proposal. I want to say that I support the closure but not at the expense of my properties disfigurement. This proposal totally shows the lack of respect, and total lack of regard to the repercussions and disfigurement, devaluation of my property! The problems the township is facing with the 43rd line, the closure and building of the turnabouts only moves the problem, it does not solve it!

Our property is totally landscaped and we take a lot of pride in the park like setting that we have created. The proposed location is exactly at the end of our lane going to our barn and to the back end of our property.

Over the last 20 years that we have owned our land, we have had several issues with trespassing, theft, damage and excessive traffic from partiers, dumpers and speeding vehicles racing down this road. We have had on numerous occasions the police called to remove people from our back lane, where our pond and barn is located. The trespassers always comment that they did not realize that our place was a private residence and not a public park. We have had our lawn tractor, our boat and several other smaller objects stolen over the years.

With the proposed turnabout directly at the end of my lane, the traffic will be directed into my back lane. I have very expensive Hanoverian horses that are paddocked again directly at the location of the turnabout. My barn, pond area will be totally exposed to more theft, traffic and trespassers. I feel the garbage issue, will now be mine, as the dumpers will still come but now it will be on my property and my responsibility to clean up. The Township, Hydro One and many other service vehicles have used our back lane as a turnaround for years. The weight of these vehicles has caved in our back lane culvert which needs to be repaired. Putting the turnabout there is NOT the answer! My I recommend, that the township posts large signs at either end of the 43rd stating that the road is under video surveillance and that dumpers will be prosecuted and fined. Ideally, it would be the best to actually put surveillance cameras up and actually fine the offenders. It won’t take long, before the news to spread about the fines, etc. As a resident, I will also watch and report any activity we observe. We need to have the townships support in the follow thru.

As I mentioned before, I do support the closure, but the turnaround needs to be relocated further away from my back yard/back lane. . I do not want the traffic, the damage, the dumping, the speeding gravel thrown etc to now be in my backyard!

Looking forward to hearing a response.

Janet MacDonald 744294 Rd 74 Embro, Ont N0J 1J0

Correspondence Recieved

TOWNSHIP OF ZORRA PUBLIC INPUT REQUIRED

SELLING OF A PROPERTY AND

BUILDING LOCATED ON THE

WEST SIDE OF GEORGE STREET The Township Council is seeking public input for the potential selling of municipal lands located on the west side of George Street. The land currently has a building formally the old Thamesford Fire Hall. The Council of the Township of Zorra will hear, in person or by counsel or agent, any person who applies to be heard at a meeting of Council to be held on June 21, 2016, at 7:30 p.m. in the Council Chamber located at 274620 27th Line, Ingersoll, ON.

Key Map

Should you wish to appear before Council to speak on this matter, please contact the undersigned by 4:30 p.m. on June 17, 2016. Written comments are to be submitted by 4:30 p.m. on June 17, 2016 to the undersigned.

Ashley Sage, Clerk 274620 27th Line, P.O. Box 306, Ingersoll, ON N5C 3K5 519-485-2490 ext. 228 [email protected]

Subject Property

5(c)


CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2015

christene

Draft

THE CORPORATION OF THE TOWNSHIP OF ZORRACONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED DECEMBER 31, 2015

-1- Independent Auditor's Report

-2- Statement of Consolidated Financial Position

-3- Consolidated Statement of Operations and Accumulated Surplus

-4- Statement of Consolidated Cash Flows

-5- Statement of Consolidated Changes in Net Financial Assets (Liabilities)

-6- to -13- Notes to the Consolidated Financial Statements

-14- Schedule 1 - Schedule of Consolidated Tangible Capital Assets

-15- Schedule 2 - Schedule of Consolidated Segmented Information

-1-

INDEPENDENT AUDITOR'S REPORT

To the Members of Council, Inhabitants and Ratepayers of the Corporation of the Township ofZorra:

I have audited the accompanying consolidated financial statements of the Corporation of the Township ofZorra, which comprise the Consolidated Statement of Financial Position as at December 31, 2015 and theConsolidated Statements of Operations and Accumulated Surplus, Cash Flows, and Changes in NetFinancial Assets (Liabilities) for the year then ended, and a summary of significant accounting policies andother explanatory information.

Management's Responsibility for the Financial StatementsManagement is responsible for the preparation and fair presentation of these consolidated financialstatements in accordance with Canadian public sector accounting standards, and for such internal control asmanagement determines is necessary to enable the preparation of financial statements that are free frommaterial misstatement, whether due to fraud or error.

Auditor's ResponsibilityMy responsibility is to express an opinion on these consolidated financial statements based on my audit. Iconducted my audit in accordance with Canadian generally accepted auditing standards. Those standardsrequire that I comply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether the financial statements are free from material misstatement.An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in thefinancial statements. The procedures selected depend on the auditor's judgment, including the assessmentof the risks of material misstatement of the financial statements, whether due to fraud or error. In makingthose risk assessments, the auditor considers internal control relevant to the entity's preparation and fairpresentation of the financial statements in order to design audit procedures that are appropriate in thecircumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internalcontrol. An audit also includes evaluating the appropriateness of accounting policies used and thereasonableness of accounting estimates made by management, as well as evaluating overall presentation ofthe financial statements. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my auditopinion.

OpinionIn my opinion, the consolidated financial statements present fairly, in all material respects, the financialposition of the Corporation of the Township of Zorra as at December 31, 2015 and its financialperformance and its changes in cash flows and net financial assets (liabilities) for the year then ended inaccordance with Canadian public sector accounting standards.

June 21, 2016London, Canada LICENSED PUBLIC ACCOUNTANT

-2-THE CORPORATION OF THE TOWNSHIP OF ZORRACONSOLIDATED STATEMENT OF FINANCIAL POSITIONDECEMBER 31, 2015

2015 2014

FINANCIAL ASSETSCash $ 3,394,139 $ 3,148,271Taxes receivable 968,646 829,384Drains receivable 327,119 232,059Accounts receivable 454,430 333,547Inventories for resale 1,862 3,243Investment in ERTH Corporation (note 9) 1,717,059 1,872,206

6,863,255 6,418,710

LIABILITIESAccounts payable and accrued liabilities 1,124,791 547,698Deferred revenue - obligatory reserve funds (note 6) 410,326 177,906Net long-term liabilities (note 7) 8,049,483 6,921,660

9,584,600 7,647,264

NET FINANCIAL ASSETS (LIABILITIES) (2,721,345) (1,228,554)

NON-FINANCIAL ASSETSTangible capital assets (Schedule 1) 23,775,460 23,917,499Capital work in progress 2,597,171 86,284Prepaid supplies and inventory 694,193 626,899

27,066,824 24,630,682

ACCUMULATED SURPLUS (note 8) $ 24,345,479 $ 23,402,128

The accompanying notes are an integral part of these financial statements.

-3-THE CORPORATION OF THE TOWNSHIP OF ZORRACONSOLIDATED STATEMENT OF OPERATIONS AND ACCUMULATED SURPLUSFOR THE YEAR ENDED DECEMBER 31, 2015

BUDGET ACTUAL ACTUAL 2015 2015 2014

REVENUEProperty taxation $ 6,291,520 $ 6,098,639 $ 5,597,322User charges 774,143 835,115 811,258Government grants 1,818,900 1,916,733 2,168,554Investment income 109,270 105,036 130,221Penalty and interest on taxes 115,000 136,051 119,233Other revenue 18,000 23,055 44,517

9,126,833 9,114,629 8,871,105

EXPENDITURESGeneral government 914,545 934,007 912,219Protection to persons and property 2,081,306 2,161,084 2,097,672Transportation services 4,364,713 3,618,972 3,776,638Environmental services 6,680 7,042 11,418Health services 40,702 76,061 54,035Recreation and cultural development 1,220,950 1,204,646 1,344,489Planning and development 91,445 86,518 83,415

8,720,341 8,088,330 8,279,886

EXCESS OF REVENUE OVER EXPENDITURES BEFORE OTHER 406,492 1,026,299 591,219

OTHERIncrease (decrease) in investment in

ERTH Corporation (note 9) - (155,147) 148,197

Gain (loss) on disposal of capital assets - 68,145 93,486Developer and other contributions related to capital 150,000 4,054 386,720

150,000 (82,948) 628,403

EXCESS OF REVENUE OVER EXPENDITURES 556,492 943,351 1,219,622

ACCUMULATED SURPLUS, BEGINNING OF YEAR 23,402,128 23,402,128 22,182,506

ACCUMULATED SURPLUS, END OF YEAR $ 23,958,620 $ 24,345,479 $ 23,402,128


-4-THE CORPORATION OF THE TOWNSHIP OF ZORRACONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 2015

2015 2014

NET INFLOW (OUTFLOW) OF CASH RELATED TOTHE FOLLOWING ACTIVITIES:OPERATING ACTIVITIESExcess of revenue over expenditures (page 3) $ 943,351 $ 1,219,622Non-cash charges to operations

Amortization 1,160,795 1,150,274Net disposal of tangible capital assets 18,718 101,363(Increase) decrease in investment in ERTH Corporation 155,147 (148,197)

Net change in working capital other than cash (A) 455,689 105,609

2,733,700 2,428,671

INVESTING ACTIVITIESAcquisition of tangible capital assets (1,037,474) (1,585,229)Decrease (increase) in capital work in progress (2,510,887) 6,590Decrease (increase) in prepaid supplies (67,294) (68,466)

(3,615,655) (1,647,105)

FINANCING ACTIVITIESNet change in long-term debt 1,127,823 (933,838)

Net change in cash and cash equivalents during the year 245,868 (152,272)

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 3,148,271 3,300,543

CASH AND CASH EQUIVALENTS, END OF YEAR $ 3,394,139 $ 3,148,271

(A) Net change in working capital other than cash includes the net change in taxes receivable, drainsreceivable, accounts receivable, accounts payable and accrued liabilities and deferred revenue.


-5-THE CORPORATION OF THE TOWNSHIP OF ZORRACONSOLIDATED STATEMENT OF CHANGES IN NET FINANCIAL ASSETS (LIABILITIES)FOR THE YEAR ENDED DECEMBER 31, 2015

2015 2014

Excess of revenue over expenditures (page 3) $ 943,351 $ 1,219,622Amortization of tangible capital assets 1,160,795 1,150,274

Investment in capital works in progress (2,510,887) 6,590Change in prepaid supplies (67,294) (68,466)Net disposal of tangible capital assets 18,718 101,363Acquisition of tangible capital assets (1,037,474) (1,585,229)

Increase (decrease) in net financial assets (1,492,791) 824,154

NET FINANCIAL ASSETS (LIABILITIES, BEGINNING OF YEAR (1,228,554) (2,052,708)

NET FINANCIAL ASSETS (LIABILITIES), END OF YEAR $ (2,721,345) $ (1,228,554)


-6-THE CORPORATION OF THE TOWNSHIP OF ZORRANOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED DECEMBER 31, 2015

The Township of Zorra (the Township) is a Township in the Province of Ontario, Canada. It conductsits operations guided by the provisions of provincial statutes such as the Municipal Act, MunicipalAffairs Act and related legislation.

1. Significant Accounting Policies

The consolidated financial statements of the Township are prepared by management in accordancewith Canadian public sector accounting standards. Significant aspects of the accounting policiesadopted by the Township are as follows:

a. Basis of consolidationThese consolidated financial statements reflect the assets, liabilities, operating revenue andexpenditures, and accumulated surpluses and changes in investment in tangible capital assets ofthe Township.

These consolidated financial statements include the activities of all other committees of Councilincluding the Zorra Recreation Advisory Committee and the Village of Embro Cemetery Board.

The investment in a government business enterprise, ERTH Corporation (ERTH), is accountedfor using the modified equity basis of accounting. Under this method, the government businessenterprise's accounting policies, which follow Canadian generally accepted accountingstandards as modified by regulations and policies set forth in the Ontario Energy BoardAccounting Procedures Handbook, are not adjusted to conform with Canadian public sectoraccounting standards and inter-entity transactions and balances are not eliminated.

b. Accrual accountingThe accrual basis of accounting recognizes revenues as they become available and measurable;expenditures are recognized as they are incurred and measurable as a result of receipt of goodsor services and the creation of a legal obligation to pay.

c. Accounting for County and School Board transactionsThe Township is required to bill, collect and remit provincial education and upper tier taxationin respect of residential and other properties on behalf of the School Boards and upper tier. TheTownship has no jurisdiction or control over the School Board or upper tier's operations or theirtax rate. The taxation, other revenue, expenditures, assets and liabilities, with respect to theoperations of the school boards, and the County of Oxford are not reflected in theseconsolidated financial statements.

d. Trust fundThe Corporation of the Township of Zorra Trust Fund (the Trust) and its related operationsadministered by the Township are not consolidated, but are reported separately on the Trust'sStatements of Financial Position and Operations.

THE CORPORATION OF THE TOWNSHIP OF ZORRANOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED DECEMBER 31, 2015

-7-1. Significant accounting policies continued

e. Non-financial assetsNon-financial assets are not available to discharge existing liabilities and are held for use in theprovision of services. They have useful lives extending beyond the current year and are notintended for sale in the ordinary course of operations. The change in non-financial assetsduring the year, together with the excess of revenue over expenditures, provides theconsolidated change in financial assets for the year.

The Township's non-financial assets consist of tangible capital assets. Tangible capital assetsare recorded at cost which includes all amounts that are directly attributable to acquisition,construction, development or betterment of the asset. The cost, less residual value, of thetangible capital assets is amortized on a straight-line basis over their estimated useful lives asfollows:

Land improvements 15 to 30 yearsBuildings 40 yearsMachinery and equipment 10 to 20 yearsVehicles 5 to 20 yearsInfrastructure - Bridges 60 yearsInfrastructure - Roads 10 to 20 yearsInfrastructure - Other 25 to 30 years

Tangible capital assets received as contributions are recorded at their fair value at the date ofthe receipt. The fair value is also recorded as contributed revenue.

f. Revenue recognitionGovernment grants and transfers are recognized in the consolidated financial statements asrevenue in the period in which events giving rise to the transfer occur, providing the transfersare authorized, any eligibility criteria have been met, and reasonable estimates of the amountscan be determined.

g. Deferred revenueGovernment transfers, contributions and other amounts are received from third parties pursuantto legislation, regulation or agreement and may only be used in the conduct of certain programs,in the completion of specific work or for the purchase of tangible capital assets. In addition,certain user charges and fees are collected for which the related services have yet to beperformed. Revenue is recognized in the period when the related expenditures are incurred,services performed, or the tangible capital assets are acquired.


1. Significant accounting policies continued

h. Use of estimatesThe preparation of consolidated financial statements in conformity with Canadian public sectoraccounting standards requires management to make estimates and assumptions that affect thereported amounts of assets, liabilities, disclosure of contingent assets and liabilities at the dateof the consolidated financial statements and the reported amounts of revenue and expendituresduring the period. Such estimates are periodically reviewed and any adjustments necessary arereported in earnings in the period in which they become known. Actual results could differfrom these estimates.

i. LeasesLeases are classified as capital or operating leases. Leases which transfer substantially all of thebenefits and risks incidental to ownership of property are accounted for as capital leases. Allother leases are accounted for as operating leases and the related lease payments are charged toexpense as incurred.

j. Financial instrumentsFinancial instruments of the Township consist mainly of cash, short-term investments, accountsreceivable and taxes receivable. The carrying values of these financial assets approximate theirfair values unless otherwise disclosed.

k. Prepaid supplies and inventoryInventory of supplies for consumption are valued at the lower of cost or replacement cost.Gravel inventory is determined per tonne and includes raw material, extraction and crushingcosts.

2. Tax revenue

Property tax billings are prepared by the Township based on an assessment roll prepared by theOntario Property Assessment Corporation. All assessed property values in the Township werereviewed and new values established based on a common valuation date which was used by theTownship in computing the 2015 property tax bills. Property tax revenue and tax receivables aresubject to appeals which may not have been heard yet. Any supplementary billing adjustmentsmade necessary by the determination of such appeals, will be recognized in the fiscal year they aredetermined and the effect shared with the County of Oxford and the appropriate school boards.

3. Trust fund

Trust fund administered by the Township amounting to $107,442 (2014 - $104,694) has not beenincluded in the these consolidated financial statements.


4. Operations of School Boards and the County of Oxford

Further to note 1(c), the taxation revenues of the school boards and County of Oxford are comprisedof the following:

School Boards County

Taxation and user charges $ 3,438,161 $ 5,169,561

Requisitions $ 3,438,161 $ 5,169,561

5. Pension agreements

The Township makes contributions to the Ontario Municipal Employees Retirement Fund(OMERS), which is a multi-employer plan, on behalf of members of its staff. The plan is a definedbenefit plan which specifies the amount of the retirement benefit to be received by the employeesbased on the length of service and rates of pay.

The amount contributed to OMERS for 2015 was $168,499 (2014 - $170,444) for current serviceand is included as an expenditure on the Consolidated Statement of Operations.

6. Deferred revenue - obligatory reserve funds

A requirement of the Canadian public sector accounting standards is that obligatory reserve funds bereported as deferred revenue. This requirement is in place as provincial legislation restricts howthese funds may be used and under certain circumstances these funds may possibly be refunded.The balances in the obligatory reserve funds of the Township are summarized as follows:

2015 2014

Development charges $ 22,241 $ 22,005Federal gas tax 342,427 107,484Recreational land 43,300 47,354Other 2,358 1,063

$ 410,326 $ 177,906


7. Long-term liabilities

2015 2014

a. The balance of long-term liabilitiesreported on the Consolidated Statementof Financial Position is made up of the following:

Total long-term liabilities incurred by theTownship including those incurred on behalfof school boards, other municipalities andmunicipal enterprises and outstanding at the end the year amount to $ 8,534,150 $ 7,493,448

Of the long-term liabilities shown above, theresponsibility for payment of principal andinterest charges for tile drain loans has beenassumed by individuals. At the end of the year,the outstanding principal amount of thisliability is (484,667) (571,788)

Net long-term liabilities, end of the year $ 8,049,483 $ 6,921,660

b. Debt to be retired over the next five years will be recovered from general taxation and is asfollows:

2016 653,2472017 661,0252018 669,1022019 677,4882020 660,195

c. Approval of the Ontario Municipal Board has been obtained for those pending issues of long-term liabilities and commitments to be financed by revenue beyond the term of Council andapproved on or before December 31, 1992. Those approved after January 1, 1993 have beenapproved by by-law. The principal and interest payments required to service these pendingissues and commitments are within the debt repayment limit prescribed by the Ministry ofMunicipal Affairs.


7. Long-term liabilities continued

d. The Township is contingently liable for long-term liabilities with respect to tile drainage loans,and for those for which the principal and interest have been assumed by other municipalities,school board and unconsolidated local boards, municipal enterprises, and utilities. The totalamount outstanding as at December 31, 2015 is $484,667 (2014 - $571,788) and is not recordedon the Consolidated Statement of Financial Position.

e. Interest paid on long-term liabilities for the year ending December 31, 2015 is $295,327 (2014 -$328,427).

8. Accumulated surplus

The accumulated surplus on the Consolidated Statement of Financial Position at the end of the yearis comprised of the following:

2015 2014

Investment in tangible capital assets $ 18,830,164 $ 17,649,685

Current fund 443 (54,835)

Reserves set aside for specific purpose - for working capital 538,211 538,211- for general purposes 1,196,177 1,331,097- for capital replacement 1,597,802 1,953,674- for tax rate stabilization 406,944 73,411- for insurance 58,679 38,679

Total reserves 3,797,813 3,935,072

Investment in government business enterprise (note 9) 1,717,059 1,872,206

ACCUMULATED SURPLUS $ 24,345,479 $ 23,402,128


9. Investment in ERTH Corporation

As at December 31, 2015, the Township owns 6.98% (2014 - 6.98%) of ERTH and is comprised ofthe following:

2015 2014

Promissory note receivable $ 815,000 $ 815,000Equity 902,059 1,057,206

$ 1,717,059 $ 1,872,206

The promissory note receivable from ERTH is unsecured and bears interest at 7.25% (2014 -7.25%). The term of the note is undefined but no principal repayments are expected with in the nexttwelve months. Interest received in the year and included in other income is $59,088 (2014 -$59,088)

As a business enterprise of the Township, it is accounted for on a Modified Equity basis in theseconsolidated financial statements and the investment is shown at the Township's proportionate shareof the equity of ERTH. ERTH was required to adopt International Financial Reporting Standards forthe year ending December 31, 2015 which required restatement of the comparative balances for theyear ending December 31, 2014. The following table provides condensed supplementary financialinformation for the ERTH for the year ended December 31, 2015, including restated balances for theyear ending December 31, 2014, from their audited financial statements:

2015 2014

Financial Position RestatedTotal net assets $ 12,924,375 $ 12,669,555

Results of OperationsTotal revenue $ 83,471,034 $ 76,527,371Total operating and other expenditures 83,216,214 76,083,761

Total net income (loss) $ 254,820 $ 443,610

ERTH Corporation declared a dividend of $NIL in 2015 (2014 - $175,000) of which the Township'sshare is $NIL (2014 - $12,214).


10. Budget figures

The Township's Council completes separate budget reviews for its operating and capital budgetseach year. The approved operating budget for 2015 is reflected on the Consolidated Statement ofOperations.

11. Public sector salary disclosure

There were two employees paid a salary, as defined in the Public Sector Disclosure Act, 1996 of$100,000 or more.

12. Contaminated sites

The Canadian public sector accounting standard 3510 requires municipalities to evaluate sitesowned by the municipality for potential contamination. This standard requires the municipality todisclose the liability, if any, related to remediation of such sites. The Township is of the opinionthey do not own such sites and therefore, no liability exists.

13. Segmented information

Segmented information is presented on Schedule 2. The Township is a diversified municipalityand provides a wide range of services to its citizens including police through contracted services,fire, protective services, transportation, environmental, including water, wastewater, wastedisposal, and storm management joint projects with the County of Oxford, community services,including recreation, library and planning, including economic development and municipal drains.The general government segment includes such functions as finance and information services,council and administrative offices.

-14-Schedule 1

THE CORPORATION OF THE TOWNSHIP OF ZORRASCHEDULE OF CONSOLIDATED TANGIBLE CAPITAL ASSETSFOR THE YEAR ENDED DECEMBER 31, 2015

Buildings Machinery

Land and and 2015 2014 Land Improvements Fixtures Equipment Automotive Infrastructure Total Total

COSTBalance, beginning of year $ 1,809,962 $ 501,067 $ 5,278,423 $ 4,020,781 $ 3,157,689 $ 22,142,343 $ 36,910,265 $ 36,004,650

Add: Additions during the year - - 163,344 380,278 493,852 - 1,037,474 1,585,229

Less:

Disposals during the year - - - (242,636) (233,451) - (476,087) (679,614)

Balance, end of year 1,809,962 501,067 5,441,767 4,158,423 3,418,090 22,142,343 37,471,652 36,910,265

ACCUMULATED AMORTIZATIONBalance, beginning of year - 268,930 2,896,751 1,965,132 1,951,127 5,910,826 12,992,766 12,420,743

Add: Amortization during the year - 18,861 141,733 285,019 207,333 507,849 1,160,795 1,150,274

Less: Disposals during the year - - - (223,918) (233,451) - (457,369) (578,251)

Balance, end of year - 287,791 3,038,484 2,026,233 1,925,009 6,418,675 13,696,192 12,992,766

NET BOOK VALUE OF TANGIBLE CAPITALASSETS $ 1,809,962 $ 213,276 $ 2,403,283 $ 2,132,190 $ 1,493,081 $ 15,723,668 $ 23,775,460 $ 23,917,499

This schedule is provided for information purposes only.

-15-Schedule 2

THE CORPORATION OF THE TOWNSHIP OF ZORRACONSOLIDATED SCHEDULE OF SEGMENTED INFORMATIONFOR THE YEAR ENDED DECEMBER 31, 2015

General Protective Recreation Planning and

Government Services Transportation Environmental Health and Culture Agriculture Total

REVENUETaxation $ 6,098,639 $ - $ - $ - $ - $ - $ - $ 6,098,639User fees 28,428 201,282 33,200 15,159 11,710 524,198 21,138 835,115Government grants-

operating 1,483,317 49,182 348,148 - - 3,500 32,586 1,916,733Investment income 95,414 - - - - 305 9,317 105,036Penalty and interest on taxes 136,051 - - - - - - 136,051Other - 5,040 - - 18,000 15 - 23,055

7,841,849 255,504 381,348 15,159 29,710 528,018 63,041 9,114,629

EXPENDITURESSalaries and benefits 701,786 520,553 1,013,724 1,108 11,398 504,489 43,904 2,796,962Materials, goods and

services 214,751 1,507,283 1,768,711 5,934 64,647 526,633 42,614 4,130,573Amortization 17,470 133,248 836,537 - 16 173,524 - 1,160,795

934,007 2,161,084 3,618,972 7,042 76,061 1,204,646 86,518 8,088,330

EXCESS OF REVENUE OVER EXPENDITURESBEFORE OTHER 6,907,842 (1,905,580) (3,237,624) 8,117 (46,351) (676,628) (23,477) 1,026,299

OTHERIncrease in investment in ERTH Corporation (155,147) - - - - - - (155,147)

Gain (loss) on disposal 1,216 - 44,317 - 22,612 - - 68,145Developer contributions

related to capital - - - - - 4,054 - 4,054

(153,931) - 44,317 - 22,612 4,054 - (82,948)

EXCESS OF REVENUE

OVER EXPENDITURES $ 6,753,911 $ (1,905,580) $ (3,193,307) $ 8,117 $ (23,739) $ (672,574) $ (23,477) $ 943,351

This schedule is provided for information purposes only.

MEMO

Corporation of the Township of Zorra P.O. Box 306, Ingersoll, Ontario N5C 3K5

Tel. (519) 485-2490 Toll Free 1-888-699-3868 Fax (519) 485-2520 E-mail: [email protected]

To: Don MacLeod, Chief Administrative Officer Date: June 6, 2016

From: Maureen Simmons, Director of Finance Doug Mills, Recreation and Facilities Supervisor

Number: 2016-061

Subject: Canada 150 Community Infrastructure Program in southern Ontario. Intake 2

File:

Council Meeting Date: June 21, 2016 Agenda Item: 7(b)

RECOMMENDATION:

That Council pass a resolution to authorize the Director of Finance to make an application for funding under Canada 150 Community Infrastructure Program – Intake 2 improvements to the Thamesford Pool, including new pool deck and supply and return lines.

BACKGROUND:

On May 24, 2016, the Government of Canada announced Intake 2 under the Canada 150 Community Infrastructure Program (CIP 150). The Federal Economic Development Agency for Southern Ontario is responsible for delivering the program and another $44.4 million, is available under Intake Two. This program is geared towards the rehabilitation, renovation and expansion of existing community infrastructure. The construction of new infrastructure or expansions of more than 50 percent in size are ineligible.

Costs must be incurred between April 1, 2016 to March 31, 2018, and funding is up to 50 percent of total eligible costs of a project up to a maximum of $1,000,000.00. Municipalities can submit more than one project application; deadline for submission for Intake 2 is June 24, 2016 at 5:00p.m.

COMMENTS:

Under the first Intake; the Township submitted two applications; one for renovations to the Thamesford pool and the other for redevelopment of Embro soccer fields. The Embro Soccer field redevelopment was approved under the first Intake with 50% eligible funding to a maximum of $37,500.00.

Staff is recommending that the Township re-submit an application for renovations to the Thamesford pool under Intake 2.

Home News Backgrounders Canada 150 Community Infrastructure Program

Backgrounder

Share this page

Canada 150 Community Infrastructure Program

May 24, 2016

The Government of Canada is doubling its investment in community and cultural

infrastructure, providing an additional $150 million over two years to renovate, expand

or improve these spaces across Canada, including projects designed to promote the

Government's priorities to ensure a better future for Indigenous peoples and promote a

clean growth economy, through the Canada 150 Community Infrastructure Program

(CIP 150).

A part of the federal government's celebration of Canada's 150 anniversary of

Confederation in 2017, this program responds to the significant demand for community

infrastructure improvements.

The program is being administered across Canada by the regional development

agencies (RDAs), with each RDA determining how funding is delivered in their

respective regions.

Intake Two of the Canada 150 Community Infrastructure Program in Southern

Ontario

The Honourable Navdeep Bains, Minister of Innovation, Science and Economic

Development and Minister responsible for FedDev Ontario, announced today that

FedDev Ontario is now accepting applications for Intake Two of CIP 150 in southern

Ontario.

FedDev Ontario is delivering the program in southern Ontario with a total allocation of

up to $88.8 million over two years. During the first intake of the program, FedDev

Ontario received more than 1,100 applications, requesting more than $260 million in

funding.

Up to $44.4 million is now available under Intake Two.

FedDev Ontario may contribute up to $1 million per eligible project. Funding recipients

th

Page 1 of 4Canada 150 Community Infrastructure Program - Canada News Centre

6/1/2016http://news.gc.ca/web/article-en.do?nid=1071179

Attachment #1

may receive up to 50 percent of total eligible project costs.

Priority may be given to projects that require a federal contribution of 33.3 percent of

total eligible project costs and to projects with a smaller scope to ensure broad program

reach and that projects can be completed within the program timeframes.

How to apply?

Applications for CIP 150 projects in southern Ontario must be submitted by 5:00 p.m.

EDT on June 24, 2016. Eligible applicants are encouraged to submit their application

using the online form at www.FedDevOntario.gc.ca/CIP150.

Who can apply?

Eligible recipients under the program include:

• a municipal or regional government established by or under provincial statute;

• a band council or an Aboriginal government authority established by a Self-

Government Agreement or a Comprehensive Land Claim Agreement;

• an incorporated not-for-profit organization (supported by completed incorporation

documentation);

• a provincial entity that provides municipal-type infrastructure services to

communities, as defined by provincial statute; and

• a public-sector body that is established by or under provincial statute or by

regulation or is wholly owned by a province, municipal or regional government

which provides municipal-type infrastructure services to communities.

What projects are eligible?

Examples of eligible projects include improving accessibility to a community centre,

repairing a museum's roof, expanding a gymnasium, or extending a trail or bike path.

The construction of new infrastructure, projects taking place in multiple locations or

facility expansions of more than 50 percent in size are ineligible.

For detailed eligibility requirements, please refer to the guidelines at

www.FedDevOntario.gc.ca/CIP150 or call 1-866-593-5505.

Related Product

Page 2 of 4Canada 150 Community Infrastructure Program - Canada News Centre

6/1/2016http://news.gc.ca/web/article-en.do?nid=1071179

MEMO




From: Aden Corcoran, Director of Public Works Number: 2016-062

Subject: Request for Road Closure File: C11 - Council Reports

Council Meeting Date: June 21, 2016 Agenda Item: 7(d)

RECOMMENDATION:

For Council’s information.

BACKGROUND:

The Township received the attached correspondence from Upper Thames River Conservation Authority (UTRCA). UTRCA is requesting consideration of the Township of Zorra in closing a section of the 43rd Line as per the attached map. The attached notice was sent to abutting property owners.

COMMENTS:

The section of road being considered for closing has been an area of major clean-up operations utilizing Township resources. The attached pictures show some of the recent issues that have required action.

Should Council make a decision to close this section of road, turnaround bulbs would have to be constructed at each end. Any necessary property acquisition for these turnarounds would be transferred to Zorra by UTRCA.

A traffic count on this road taken in June of 2016 showed an AADT of 37.

Based on all of the relevant information, the Public Works Department has no objection to the proposal to close a portion of the 43rd Line.

FINANCIAL IMPLICATIONS

The cost to construct these turnarounds would be approximately $7500 plus $21,500 for guiderail. If approved, it could be considered later in 2016 as budgets permit or become part of the 2017 budget.

Attachment #1

TOWNSHIP OF ZORRA NOTICE OF PROPOSED ROAD CLOSING

NOTICE is hereby given pursuant to the Township of Zorra’s Road Closing Procedure (Policy 200-07) in accordance with Section 270 (1) of the Municipal Act, 2001,as amended, that the Council of the Township of Zorra will be considering a by-law to close 43rd Line between Roads 68 and 74, in the Township of Zorra.

The Council of the Township of Zorra will hear, in person or by counsel or agent, any person who claims that their land, or lands, will be prejudicially affected by the closing the above named road and who applies to be heard at a meeting of Council to be held on June 21, 2016, at 7:00 p.m. in the Council Chamber located at 274620 27th Line, Ingersoll, ON.

See the attached Key Map for location of the proposed road closure.

For any additional information regarding this road closing, please contact the undersigned. Written comments regarding this matter should be submitted to the undersigned by 4:30 p.m. on June 17, 2016.

Ashley Sage Clerk 274620 27th Line, P.O. Box 306, Ingersoll, ON N5C 3K5 519-485-2490 ext. 228 [email protected]

Attachment #2

Approximate locationof turning circle

Portion of road to be closed(approximately 1.9 km)

ROAD 74

41S

T L

INE

43R

D L

INE

45T

H L

INE

39TH LINE ROAD 68

Hen

dry

Dra

inC

am

pb

ell D

rain

Gol

spie

Dra

in

Huggins Drain

Cody Drain

P E R T H

O X F O R D

MIDDLESEX

London

Stratford

St.Marys

Ingersoll

Woodstock

Location Map

The UTRCA disclaims explicitly any warranty, representation or guarantee as to the content, sequence, accuracy, timeliness, fitness for a particular purpose, merchantability or completeness of any of the data depicted and

provided herein.

The UTRCA assumes no liabililty for any errors, omissions or inaccuracies in the information provided herein and further assumes no liability for any

decisions made or actions taken or not taken by any person in relianceupon the information and data furnished hereunder.

Please contact UTRCA staff for any changes, updates and amendments to the information provided.

This map is not to be used for navigation purposes.This map is not a substitute for professional advice.

THIS MAP IS NOT A SURVEY.

Data Sources:2015 Imagery, Teranet Parcel Copyright used under licence with the Ontario Ministry of Natural Resources,© Queen's Printer for Ontario.

Copyright © 2016 UTRCA.

Proposed Road Closure

0 60 120 180 240 300

metres

43rd LineTownship of Zorra

Attachment #3

MEMO




From: Aden Corcoran, Director of Public Works Number: 2016-063

Subject: Road 78 Realignment Engineering Services Recommendation

File: C11 - Council Reports

Council Meeting Date: June 21, 2016 Agenda Item: 7(e)

RECOMMENDATION:

That Council pass a resolution to award RFP 2016-06 for Engineering Services for the Road 78 Realignment to Strik, Baldinelli Moniz Limited for a price of $26,700 plus HST.

BACKGROUND:

Township Public Works are planning the rehabilitation of Road 78 between the 31st Line and Oxford County Road 119 over a number of years. A section of this road between the 25th and 27th Lines has deficient horizontal and vertical curves that should be addressed as part of any road improvements.

COMMENTS:

This was a public RFP that had five bidders. The work includes the survey, determination and layout of the new right-of-way location, determination of property acquisition requirements, layout of the re-aligned hydro line and drainage design of the new roadway section. There were five bidders with the pre-tax results shown in the table below. This work will happen over 2016 and 2017. The initial survey would be carried out in 2016 with the design being done before the construction work in 2017.

Bidder Total Cost

Development Engineering Limited $33,280.00

R J Burnside & Associates $64,256.00

Strik Baldinelli Moniz Limited $26,700.00

B M Ross & Associates Limited $30,480.00

McIntosh Perry Consulting Engineers Ltd. $59,001.00

Actions Action Lead/ Responsibility Remarks Time

Frame

V1

V1.1

Undertake a Recreation Master Planning process inclusive of completing an assessment of the long-term viability of Thamesford District Recreation Centre and Embro Community Centre

Recreation CoordinatorProcess has been started. Our Summer Student has begun gathering background date and research.

2016

V1.2 Work with Maple Leaf Foods for land donation along Thames River to create a trail from Middleton Street to Dundas Street Recreation Coordinator/CAO

Township has been in touch with Maple Leaf and is awaiting word from Maple Leaf Senior Management whether the trail will proceed.

2016

V1.5 Explore viability of a splash pad for Embro and Thamesford and a skateboard park for Thamesford.

Recreation Coordinator Facilities Supervisor

This initiative has now been included in the Recreation Master Plan 2016

V1.6Improve marketing and promotion efforts for the Township’s recreational facilities and programs to increase participation and revenues

Recreation CoordinatorThis is an ongoing process. First initiative has seen implementation of pickle ball at both centres

2016

We are a vibrant community

By providing recreational opportunities for everyone

Attachment #1

Actions Action Lead/ Responsibility Remarks Total

Points

V2

V2.3Explore options for the Township to assist minor sports organizations in taking a more active role in co-ordination of activities

Recreation Coordinator Not started. 2016

V2.4 Investigate how to better support and work with service groups and to encourage service clubs to collaborate with each other Recreation Coordinator RPC has been attending service group

meetings and is working closely with all. 2016


Points

V4

V4.1 Evaluate how to deal with increasing public concerns regarding traffic volume and speed in both rural and urban areas Director of Public Works

Speed cushions are to be installed on Banner Road in July. Speed data from Middleton Street will be reviwed after one year.

2016

Supporting our community, events and celebrations

Developing safe communities


Points

P1

P1.1 Supporting Embro and Thamesford Business Associations through membership and financial assistance where applicable Council No comment 2016

P1.6 Working with, and expanding the role and importance of Rural Oxford Economic Development Corporation ROEDC & CAO

Economic Devevelopment Officer provided an update for Council. Zorra Now will have a feature article on ROEDC in next issue.

2016


PointsP2

P2.2Encourage County of Oxford to amend Official Plan policies to allow flexibility for on-farm diversified uses and/or secondary uses

Council No comment 2016


Points

P1

P3.3 Preparation of long-term financial master plan for sustainability of existing road system

Director of Public Works & Director of Finance Not started 2016

We are a prosperous community

By retaining and expanding our existing businesses

By strengthening our agricultural and agri-business sector



Points

P4

P4.3 Establish a revised budget process and timelines to expedite adoption of annual budget Director of Finance Completed 2016

P4.4 Preparation of yearly departmental work plans that will align with strategic plan directions and actions SMT Completed. Refinement of business plans

will be carried out as part of 2017 Budget 2016

By improving municipal efficiency


Points

E1

E1.4 Undertake an initiative to begin using plain language in all communications Clerk Not started 2016


Points

E3

E3.1 Regularly review operational efficiencies and use of resources SMTSMT meet on a regular basis to discuss operational issues. Will establish a formal reporting system back to Council

2016

E3.2 Keep organization focused on providing a high level of customer service SMT

SMT meet on a regular basis to discuss operational issues. Will establish a formal reporting system back to Council

2016

E3.3 Ensuring staff are cross-trained and ensuring gaps do not occur during absences CAO Not started 2016

E3.4 Build municipal leadership skill through preparation of a Succession Plan CAO Plan has been prepared and will be

presented on July 12 2016

We are an engaged community


By strengthening our customer service and being an employer of choice


Points

EC1

EC1.5 Continue to work work with the County of Oxford to enhance waste management initiatives in the County Director of Public Works Not started 2016


PointsEC2

EC2.1 Begin assessing carbon footprint in anticipation of implementation of a provincial carbon tax CAO Summer student will carry out background

research in August 2016

EC2.2Installation of energy management practices in all of our facilities, eg. low flow toilets, light motion sensors, conversion of lighting to LED fixtures

Facilities Supervisor & CBO Not started 2016

EC2.3 Installing more garbage and recycling containers in all of our parks and in Embro and Thamesford Facilities Supervisor Recreation has purchased additioinal bins

for parks. 2016


Points

EC3

EC3.1 Carry out a yearly review of MNR Compliance Assessment Reports CAO

All 2015 reports have been entered into a spreadsheet and will be used to complete analysis when 2016 reports are filed.

2016

By doing a better job to manage our natural resources

We are an environmentally conscious community

By protecting our natural assets

By using our resources wisely

EC3.2 Adopt new policies as a result of the Interim Control By-law CouncilCounty Planning staff are finalizing policies. Will be presented to Council on August 16.

2016

CN in Your Community 2016

www.cn.ca/community

ConneCting with

Our Neighbours

Hawoods, Saskatchewan

CN Public Inquiry Line 4

Message from Sean Finn 6

Connecting with CN 7

Aboriginal Relations 8

CN Police Service and Risk Mitigation 9

Rail Crossing Safety and Rail Safety Week 10

Delivering Responsibly 12

A Backbone of the North American Economy 14

Total CN Network 16

Supply Chain Solutions 18

Canadian Network 20

Western Region 22

British Columbia 24

Alberta 25

Saskatchewan 26

Manitoba 27

Eastern Region 28

Ontario 30

Quebec 31

New Brunswick 32

Nova Scotia 33

United States Network (Southern Region) 34

Minnesota 36

Wisconsin 37

Michigan 38

Iowa 39

Illinois 40

Indiana 41

Tennessee 42

Mississippi 43

Louisiana 44

Other States 45

CN Stronger Communities Fund 46

CN Employees’ and Pensioners’ Community Fund 52

Frequently Asked Questions 54

Contents

Except where otherwise indicated, all financial information reflected in this document is expressed in Canadian dollars.

See our Leadership in Safety 2016 Highlights insert included

with this report

4 CN in Your Community

Your Portal to CNCN is committed to maintaining a positive and proactive approach in the communities in which we operate. To keep the lines of communication open and deliver accurate, consistent information to the general public, we have established a public inquiry line to respond to the questions or issues that matter most to you.

CN’s Public Inquiry Line handles calls and emails about every aspect of CN’s business. The CN Public Inquiry Line is the central point of contact for the public with non-emergency

concerns. Whether your question is about our physical plant or operations, CN Public Inquiry Line staff have the expertise to provide the answer.

CN is committed to maintaining a positive and proactive approach in the communities through which we operate.

CN Public Inquiry Line Contact Information

8 am to 5 pm ET, Monday to Friday

Toll-free: 1.888.888.5909 Email: [email protected]

In case of emergency, call the CN Police Service at 1.800.465.9239

CN Public Inquiry Line

Connecting with Our Neighbours


We strive for open and positive communication in our communities, ensuring we address the issues that matter most to you.

At CN, we are proud to be part of the fabric of the many cities, towns and villages across our entire 19,600-mile North American network. As your neighbours, we are committed to connecting with you: being engaged, investing in community development, creating positive socio-economic benefits and ensuring open lines of communication.

Our Corporate Services staff play an integral role in keeping CN connected to regional issues, ensuring we participate in impactful community partnership programs that align with local needs and create real benefits. Our Structured Community Engagement Program is focused on engaging with local communities to help them better prepare for potential incidents by reviewing our safety programs, sharing information on dangerous goods traffic, and discussing emergency response planning and training.

At CN, we work hand-in-hand with communities to continuously reduce grade crossing incidents across our network by identifying high-risk areas and working with local authorities to conduct regular public enforcement and education initiatives. This constant effort takes on a special focus during Rail Safety Week when hundreds of CN

employees, stakeholders and community members are mobilized to conduct safety blitzes at commuter stations and rail crossings in Canada and the U.S.

Our spirit of caring is expressed through the CN Stronger Communities Fund – a community partnership program focused on safety, the environment, diversity, transportation education as well as caring and solidarity. Our Public & Government Affairs staff ensure we select causes, organizations, projects and events where we can share our knowledge and experience to really make a difference. We are also proud of our employees, retirees and their families who devote countless hours of their own time to volunteer for non-profit organizations in their neighbourhoods. CN supports these worthy efforts through our Railroaders in the Community program.

As a true backbone of the economy, CN remains committed to providing positive economic benefits to the communities where we operate. Beyond the essential service we provide, CN has a sizable impact on local economies through the salaries we pay, the goods and services we buy and the taxes we contribute to all levels of government.

We strive for open and positive communication in our communities, ensuring we address the issues that matter most to you. To keep the lines of communication open and ensure we deliver accurate, consistent information to the general public, I encourage you to contact our Public Inquiry Line at 1.888.888.5909 or your local member of CN Public & Government Affairs. They will be pleased to respond to your questions or issues of interest.

Thank you for your support.

Sean Finn


Connecting with CN

David MillerAssistant Vice-President Government Affairs

613.562.4730 [email protected]

Gisèle BernierManager Community Partnerships Public & Government Affairs


David WoodruffAssistant Vice-President and Head of Public & Government Affairs U.S.


Pierre-Yves BoivinQuebec Public & Community Affairs


Brent KosseyAlberta and Saskatchewan Public & Community Affairs


Drew ReddenLead Community Affairs Ontario Region


Nancy McKayMaritimes Public & Community Affairs


Paul DeeganVice-President Public & Government Affairs


Julie GaudreauSenior Counsel Corporate Services


Warren ChandlerSenior Manager Government Affairs Canada


Kevin SoucieDirector U.S. Government Affairs


Jim KvedarasDirector U.S. Government Affairs


Sean FinnExecutive Vice-President Corporate Services and Chief Legal Officer


Lise JolicoeurDirector Community Affairs


Emile ScheffelLead Community Affairs B.C. Region


Jim FeenyDirector Public & Community Affairs Western Canada


Kate FenskeManitoba Community Affairs and Western Canada Media Relations



Aboriginal RelationsWorking alongside Aboriginal communities across the CN network, we hope to strengthen our ties, cultivate economic opportunities and set an example among our industry peers.

Aboriginal Vision In 2013, CN adopted its Aboriginal Vision, which is a two-fold commitment to:

• Developrespectful,sustainableandmutually-beneficial relationships with all Aboriginal people, while ensuring service to our customers.

• Berecognizedbykeystakeholders,includingcustomers and governments, as having a sound approach to dealing with Aboriginal communities and having a respectful and sustainable relationship with Aboriginal people across the CN network.

Cultural Awareness Training CN Aboriginal Affairs’ Cultural Awareness Training program, developed in 2014 with the Aboriginal consulting firm Amik, enlightens employees on Aboriginal history, culture and developing relationships with Aboriginal communities for mutual success.

Community PartnershipsExamples of our contribution to the Aboriginal community include:

• CN’sfive-yearsponsorshipofanannualweek-long “Pulling Together” canoe event designed to enhance understanding between Aboriginal and non-Aboriginal communities.

• CNwasaleadsponsor,partnerandfriendofthe Mississaugas of the New Credit First Nation, host of the 2015 Pan Am/Parapan Am Games in Toronto, ON.

• FundsdonatedfromrecyclingCN’sretiredrail cars have provided $1.2 million for the Kidney Foundation of Canada’s nation-wide targeted kidney screening clinics since the program began in 2011. A key focus for the screening clinics is the Aboriginal community where the incidence of kidney disease has risen to alarming levels.

For more on CN’s work with Aboriginal communities and our vision statement, please visit www.cn.ca/aboriginalvision

Doug DevlinManager Aboriginal Relations


Dany ChiltonManager Aboriginal Relations


Brent BallingallSenior Manager Aboriginal Relations


Mélanie AllaireSenior Counsel, Environmental & Aboriginal Affairs


Olivier ChoucVice-President, Law


http://www.cn.ca/aboriginalvision


CN Police Service and Risk MitigationProud of our history in railway policing that dates back to the early 19th century, the CN Police Service is committed to making CN the safest railway in North America by protecting its people, property and resources, and by ensuring the safety and security of the communities that CN serves.

As part of the company’s Corporate Security function, along with the CN Police Service, CN’s Risk Mitigation Officers are strategically positioned throughout the U.S. for effective response and support. Risk Mitigation engages with CN’s community stakeholders and promotes educational activities to help ensure awareness and safety.

Steve CoveyChief Security Officer and Chief of Police – North America


John Robin SnyderInspector South Division Memphis, TN


Benoit TessierInspector Mountain Division Edmonton, AB


Shawn WillAssistant Chief Operations Support


Dan RitchieInspector Pacific Division Surrey, B.C.


Jeremy JohnsonManager U.S. Central Region Risk Mitigation Harvey, IL


Ray CurrierInspector Network Security & Intelligence Concord, ON


David DurantInspector Great Lakes Division – North Concord, ON


Bruce PowerInspector Communications Centre Montreal, QC


Mary WallenfangManager U.S. Northern Region Risk Mitigation Green Bay, WI


Scott McCallumInspector Great Lakes Division – South Sarnia, ON


Brenda GunnSenior Manager U.S. Risk Mitigation Homewood, IL


Charles KraneInspector North Division Detroit, MI


Michael LandiniInspector Central Division Chicago, IL


Jocelyn LatulippeDeputy Chief Operations Montreal, QC


Pierre BergeronInspector Quebec and Maritimes


Kelly CloughAssistant Chief Emergency Preparedness, Regulatory and Intelligence



As rail safety is a shared responsibility, the cities, towns and Aboriginal communities we serve are powerful allies by promoting rail safety in their communities. By looking out for each other and working together, CN employees, retirees, stakeholders and communities focus on preventing fatalities and injuries on or near railroad property through continuous enforcement, education and effective use of technology and engineering initiatives.

Safety always comes first at CN and particularly during Rail Safety Week. During the 2015 campaign, CN police officers and employees across CN’s network, in partnership with Operation Lifesaver, conducted more than 150 safety blitzes at commuter stations and railway crossings in Canada and the U.S. Officers shared information with motorists and commuters about the importance of safety at grade crossings and of not trespassing on railway property. They reminded the public: “See tracks? Think trains!”

Together, we can save lives. CN is proud to partner with Operation Lifesaver to support Rail Safety Week from April 25 to May 1, 2016. You can get involved at any time throughout the year.

• Taketherailsafetypledgeatmysafetypledge.com

• Sharesafetytipswithyourfamily,friends and in your community

• Encourageyourcommunitytopassaresolution supporting Rail Safety Week

• Saysomething!SavetheCNPoliceServicephone number and call if you witness any unsafe situation near the railroad: 1.800.465.9239

For more information, please visit www.cn.ca/railsafety

Rail Crossing Safety and Rail Safety Week

CN police officers participate in numerous educational activities, many in cooperation with Operation Lifesaver. More than 300,000 children and adults benefit from CN presentations every year via our All Aboard for Safety program.

CN Police Service emergency line: 1.800.465.9239

www.mysafetypledge.com

Canadian Communities Supporting Rail Safety WeekIn the last year, more than 100 Canadian communities across CN’s network passed resolutions supporting Rail Safety Week; these were:

British Columbia Ashcroft

Kitimat

New Westminster

North Vancouver

Port Moody

Prince George

Squamish

Surrey

Whistler

Alberta Big Lakes

Edson

Grande Prairie

Jasper

Peace River

Spruce Grove

Saskatchewan Corman Park

Melfort

North Battleford

Regina

Warman

Manitoba Brandon

Portage La Prairie

Ritchot

Riverdale

Ste. Anne

Taché

Ontario Ajax

Blandford Blenheim

Brantford

Brockville

Clarington

Cornwall

Cramahe

Edwardsburgh/Cardinal

Fort Erie

Fort Frances

Georgina

Grimsby

Kenora

Leeds and the Thousand Islands

Markham

Milton

Mississauga

North Bay

Oshawa

Pickering

Port Colborne

Port Hope

Quinte West

Ramara

Severn

Sioux Lookout

St. Catharines

Thunder Bay

Toronto

Vaughan

Whitby

Whitchurch-Stouffville

Woodstock

Quebec Alma

Beauharnois

Beloeil

Brossard

Cowansville

Delson

Deschambault-Grondines

Joliette

Kamouraska

La Broquerie

Lachine

L’Assomption

La Vallée-du-Richelieu

Les Coteaux

Lévis

Magog

Maskoutains

McMasterville

Montmagny

Montreal

Mont-Saint-Hilaire

Rimouski

Rivière-Bleue

Saint-Apollinaire

Saint-Basile-le-Grand

Sainte-Anne-de-Bellevue

Sainte-Catherine

Sainte-Catherine-de-Hatley

Saint-Félicien

Saint-Jean-sur-Richelieu

Saint-Lambert

Saint-Philippe

Saint-Prosper-de-Champlain

Saint-Tite

Salaberry-de-Valleyfield

Sorel-Tracy

Vaudreuil-Dorion

Vaudreuil-Soulanges

Wemotaci Reserve

Westmount

Wôlinak First Nation

New Brunswick Fredericton

Rothesay

Nova Scotia Halifax


Rail Safety Week is a collaborative effort involving all CN employees and hundreds of communities across Canada and the U.S.

Delivering ResponsiblyPromoting Environmental SustainabilityAt CN, environmental protection has become integral to doing business. Not only do we respect all applicable laws and regulations, we take the necessary measures to prevent pollution, reduce our greenhouse gas (GHG) emissions, conserve resources and protect ecosystems.

Rail is the most environmentally friendly way of moving goods over land, and CN is the North American industry leader in fuel efficiency, consuming 15 per cent less fuel than our peers. Since 2005, we have reduced our GHG emission intensity (tonnes of C02e per revenue ton mile) by 17 per cent.

Rail offers a sustainable solution to reduce the environmental impact of transportation. Canada’s transportation sector generates 28 per cent of the country’s GHG, however, railways produce just one per cent with all other modes producing the other 27 per cent of the country’s overall GHG emissions.

CN is making a positive contribution in the fight against climate change. We invest in initiatives that protect the natural environment, in line with our environment sustainability strategy. We engage with various organizations, including Earth Day Canada, Ducks Unlimited, Trans Canada Trail, Tree Canada and Communities in Bloom.

EcoConnexions®

CN’s EcoConnexions® Employee Engagement program encourages and supports CN’s environmental values and initiatives among CN employees across North America, and includes targeted reductions in energy consumption, waste management and improved housekeeping practices at our yards and offices. Since the program began in 2011, we have achieved 15 per cent energy savings in key yards, diverted 90 per cent of operational waste from landfill and completed over 1,000 projects to improve housekeeping and create safer workplaces.

In 2012, CN expanded EcoConnexions® with our From the Ground Up program which provides grants of up to $25,000 to promote the greening of municipal properties in communities along our rail lines. So far, close to 40,000 trees and shrubs have been planted in 120 communities in Canada and the U.S. Thirty additional communities in Canada and 10 in the U.S. will receive funding for tree planting projects in 2016. We are also sponsoring mass reforestation programs to improve biodiversity in the communities we serve. CN is the leading private non-forestry company tree planter in Canada, with over 1.2 million trees and shrubs planted, and more than 600,000 additional plantings planned for 2016.

In 2014, the EcoConnexions® Partnership program was launched to help customers reduce carbon emissions and increase energy efficiency. The goal of this program is to deepen relationships with valued customers and learn from each other as we continue to reduce our impact on the environment. For 2016, CN recognized 22 of our customers for their sustainability practices. CN will plant 100,000 trees in recognition of our customers’ commitment to sustainable business practices.

Awards and RecognitionCN has received many accolades for our sustainability efforts. 2015 marked the fourth consecutive year that CN has been listed on the Dow Jones Sustainability World Index (DJSI World) and the seventh consecutive year that CN has been listed on the DJSI North America Index. We have also been named to the exclusive ‘A list’ of the global Climate Performance Leadership Index. Additionally, CN has been ranked one of the “Best 50 Corporate Citizens in Canada” by Corporate Knights for the past seven consecutive years.



When we say CN is a true backbone of the economy, it is a reflection of the key role we play in fostering the prosperity of the markets, industries and communities we serve. With total revenues of $12.6 billion in 2015, we transport over 300 million tonnes of cargo worth about $250 billion each year. Serving exporters, importers, retailers and manufacturers, we move raw materials, intermediate goods and finished products to market, touching the lives of millions of people every day. If you eat it, drive it or use it, chances are we move it.

CN has long been known as an essential link in the supply chain for natural resources like grain, coal and forest products. But CN is also a prime mover of consumer goods and industrial products. We move over 2.2 million intermodal carloads a year, full of everything we use daily: clothes, furniture, food, toys, and much more.

From lumber and aluminum to electronics and cars, we transport many of the goods that help keep the North American economy moving.

Beyond the services we provide, CN makes a significant positive economic impact through our sizeable investments. We have invested more than $10.6 billion in capital infrastructure over the past five years and plan to maintain significant investments in 2016. We purchased $11 billion of goods and services from some 15,000 suppliers worldwide in 2015. We also contributed $18.2 million to community partnerships and paid over $1.4 billion in cash federal, provincial, state, property, sales and other taxes.

From lumber and aluminum to electronics and cars, we transport many of the goods that help keep the North American economy moving.

A Backbone of the North American Economy


CN 2015 FaCtoids

20 years since CN became a public company

$12M+ raised for children’s hospitals by CN Miracle Match since 2006

1.2M trees planted so far under CN’s From the Ground Up program

5.5M carloads moved by CN

Saint-André, Québec

Total CN Network

CN iN NuMbers

23,172 Railroaders employed

19,572 Route-miles operated

5.5M Carloads

$36.4b Assets

$12.6b Revenues

$11b Local spending

$2.7b Capital investments *

$1.4b Cash taxes paid **

$18.2M Community partnerships

As at December 31, 2015

* Total including rolling stock, IT and other

** Includes federal, provincial, state, property, sales and other taxes


Squamish, British Columbia

WinnipegRegina

Saskatoon

Calgary

Edmonton

Fort McMurray

Hay RiverFort Nelson

Prince George

KamloopsVancouver

HalifaxSaint John

Moncton

Matane

Sept-Îles

Baie-Comeau

Quebec Montreal

Toronto

Sarnia

Hearst

Sault Ste. Marie

Thunder Bay

PrinceRupert

Chippewa FallsMinneapolis-Saint Paul

Arcadia

Sioux City

OmahaChicagoEast Peoria

SpringfieldEast St. Louis

Memphis

Jackson

Conneaut

Auburn

Worcester

New LondonNew York

Pittsburgh

Buffalo

DetroitToledo

Duluth

Green Bay

Fonddu Lac

Stevens Point

MobilePascagoula

Gulfport New Orleans

Baton Rouge

2015 Diversified Traffic Portfolio% of revenues

2015 Geographic Distribution% of revenues

23 Intermodal

19 Petroleum & Chemicals

16 Grain & Fertilizers

14 Forest Products

11 Metals & Minerals

5 Coal

6 Automotive

6 Other

18 United States domestic traffic

33 Transborder traffic

18 Canadian domestic traffic

31 Overseas traffic

CN is North America’s RailroadIn business for nearly 100 years, CN is a world-class transportation leader and the only transcontinental railway in North America. Our 19,600-mile network spans Canada and Mid-America, connecting ports on three coasts: the Atlantic, the Pacific and the Gulf of Mexico. Our extensive network, along with our co-production arrangements, routing protocols, marketing alliances and interline agreements provide connections to all points in North America and beyond.

CN offers fully integrated rail and other transportation services, including intermodal, trucking, freight forwarding, warehousing and distribution. CN’s freight revenues are derived from seven business groups representing a diversified and balanced portfolio of goods transported between a wide range of origins and destinations.

CNSecondary feeder linesShortline partners



CN is a key part of the North American supply chain that links the towns and cities along our network to world markets. Together with our customers and our port, terminal operator, trucking and shortline partners, we play an important role in enabling exports to reach world markets as well as in the distribution of domestic and imported goods across North America. We work hard with our partners to innovate, create and implement solutions that drive sustainable growth for our customers and the communities we serve.

Port access: CN directly serves six port facilities on three coasts, providing easy access to a large portion of the North American population. We also ship bulk commodities like iron ore, limestone and coal to and from four ports on the Great Lakes.

Automotive distribution facilities: Through our extensive network of 17 automotive distribution facilities, CN moves finished vehicles and parts for dealers and assembly plants from origin to destination across North America. We also provide gateway services through the ports of Halifax and Vancouver for vehicles imported from Europe, Japan and Korea.

Forest products transload facilities: CN is the largest rail carrier of forest products in North America and we offer the industry’s first truly integrated solution. Our network of 21 forest products transload centres consists of strategically positioned, state-of-the-art transfer, warehousing and reload facilities that extend our customers’ reach and reduce their costs.

CargoFlo® bulk handling facilities: CN has a network of 21 CargoFlo® bulk distribution terminals. These strategically located transload facilities are designed to handle our customers’ liquid and solid bulk commodities such as specialty grains – quickly, safely and contaminant-free.

Metals distribution centres: Through our network of 16 metals and minerals distribution centres, CN is working closely with customers to develop innovative transportation solutions to make the entire supply chain more efficient.

Supply Chain Solutions

WinnipegRegina

Bienfait Willmar

Saskatoon

Calgary

Edmonton

EdsonFort Saskatchewan

Lloydminster

Fort McMurray


Prince George

KamloopsVancouver

Churchill

HalifaxSaint John

MonctonBelledune

Matane

Sept-ÎlesCorner Brook

St. John’s

Baie-Comeau

Quebec Montreal

Brockville

TorontoBramptonSarnia

Lansing

BattleCreek

Hearst

Sault Ste. Marie

Thunder Bay

The Pas

PrinceRupert


Arcadia

Sioux City

Omaha

ChicagoJoliet

East Peoria

Springfield

East St. Louis

Indianapolis

Memphis

Canton

Decatur

Jackson

Conneaut

Auburn

Worcester

New LondonNew York

Pittsburgh

BuffaloHamilton

Detroit

Toledo

FlatRock

AvonLake

Windsor

Duluth

Green BayEscanaba

Munising

Gladstone

Fonddu Lac

Stevens Point

Kitimat

MobilePascagoula

New Orleans

Baton RougeGulfport

Natchez

Two Harbors


Intermodal terminals: CN’s 21 intermodal terminals are located near major urban centres and port facilities, allowing goods to enter virtually every market in North America and overseas. Our intermodal service transports containerized consumer products, manufactured goods and natural resources both domestically via train and truck and internationally via train and ship.

Warehousing: Enhancing CN’s position as a supply chain enabler, we have 1.3 million square feet of indoor storage space and 850 acres of exterior storage in more than 80 strategically located warehouses across Canada and the U.S.

Logistics parks: Located in Calgary, Chicago, Memphis, Montreal and Toronto, CN’s logistics parks are multi-functional facilities connecting rail with trucks, vessels and barges, as well as offering warehousing and distribution services.

Freight forwarding: CN’s freight forwarding services simplify our customers’ international importing and exporting activities – which can involve many different carriers as well as multiple layers of administrative and legal red tape. Working in conjunction with our ocean partners, CN moves our customers’ products quickly and smoothly along optimal supply chain routes.

Customs brokerage: Our customs brokerage service communicates with agencies and governments throughout the shipping process, making sure that all proper procedures have been followed. Through this supply chain enhancement service, CN ensures that customers’ shipments moving in and out of the U.S., Canada and Mexico are cleared and managed efficiently.

CNSecondary feeder linesShortline partnersSupply chain facilities including: •Ports•Automotivedistribution• Forestproductstransload• Intermodalterminals• Logisticsparks•Bulkfacilities

Canadian Network

CaNada iN NuMbers



$5.8b Local spending

$1.3b Capital investments

$987M Cash taxes paid *



* Includes federal, provincial, property, sales and other taxes


Henry House, Alberta

WinnipegCalgary

Fort McMurray


Prince George

KamloopsVancouver

HalifaxSaint John

Moncton

Matane

Sept-Îles

Baie-Comeau

Quebec Montreal

TorontoSarnia

Hearst

Sault Ste. Marie

Thunder Bay

PrinceRupert

Regina

SaskatoonEdmonton

CN’s Canadian network extends from Halifax on the east coast to Vancouver and Prince Rupert on the west coast, with access to every major Canadian market. CN has long been an indispensable supplier for many key industries and markets, from grain and forest products to consumer goods and automobiles, moving raw materials, intermediate goods and finished products. And, with the endless variety of food products we carry, from animal feed and fertilizer to canned goods and fresh produce, chances are we helped transport a lot of what you eat at your kitchen table or in your favourite restaurant.

Community PartnershipsCN contributed to the following national non-profit organizations in Canada in 2015:

4-H Canada

Assembly of First Nations

Canadian Agricultural Safety Association

Canadian Blood Services

Canadian Council for Aboriginal Business

Canadian Red Cross Society

Communities in Bloom

Community Foundations of Canada –Welcome Fund for Syrian Refugees

Ducks Unlimited Canada

Earth Day Canada

Kidney Foundation of Canada

Operation Lifesaver

Partners for Mental Health

Trans Canada Trail Foundation

Tree Canada

United Way

CN is a member of federal, provincial and local chambers of commerce all along our network.


CN’s Canadian network extends… to every major Canadian market.


Winnipeg

Thunder Bay

Calgary

Fort McMurray


Prince George

KamloopsVancouver

Regina

SaskatoonEdmonton

PrinceRupert

Western RegionCN’s network in Western Canada is extensive. From two ports on the Pacific in Vancouver and Prince Rupert, the rails push eastward through every major western Canadian city including Edmonton, Calgary, Saskatoon, Regina and Winnipeg, extending as far east as Thunder Bay. CN also reaches north to the resource-rich towns of Fort Nelson, B.C., and Hay River, N.W.T. CN is an increasingly important link to the Fort McMurray region.

CN is building for the future with large capital investments in long-term safety and capacity improvements to ensure we continue to play our role as a true backbone of the economy. We see significant long-term potential in our

customer base located on our Western Canada feeder network. We want to provide our customers with the capacity for continued efficient freight transportation services that increase their competitiveness in North American and global markets, as well as ensure our rail infrastructure is as safe as possible. That’s why we’ll be investing approximately $500 million in infrastructure improvements to our Western Canada feeder rail lines in Alberta, Saskatchewan and Manitoba over the next few years.

In 2015 alone, CN allocated approximately $100 million for work on northern Alberta branch lines, investing in infrastructure upgrades and safety improvements.

In recent years, CN has also invested significantly in its Edmonton – Winnipeg main line corridor, installing sections of double track, extending sidings to accommodate longer, more efficient trains, and improving major classification yards.



West iN NuMbers




$858M Capital investments




* Includes provincial, property, sales and other taxes


Fort Nelson

Prince George

Kamloops

Vancouver

Prince Rupert

Kitimat

The bustling ports of Vancouver and Prince Rupert are dynamic gateways to international trade, offering shorter transit times to Asia. Keeping pace with growing imports and exports, CN has established numerous transload facilities to enable our customers to move a variety of goods on and off the rail system. At the Port of Vancouver, we have coal and intermodal terminals. In the Vancouver area, we have two forest products distribution centres, two metals distribution centres, one automotive distribution facility and a CN CargoFlo® bulk handling centre. In Prince George, we have another intermodal terminal. CN also maintains large employee and shop facilities at Vancouver’s Thornton Yard and at our CargoFlo® bulk handling facility near Kamloops.

B.C. is a key gateway for Canada’s global trade, and we are proud that CN’s strong focus on innovation and supply chain collaboration has contributed strongly to the B.C. economy. For example, over the past five years, international container volumes moving over the ports of Vancouver and Prince Rupert combined have more than doubled. Over the same period, CN has invested $1 billion in its B.C. network, which sees a full one-third of all CN traffic, including our investment in the Kaien long rail siding to accommodate the expansion of the Port of Prince Rupert’s Fairview Container Terminal.

Community PartnershipsWelcome Fund for Syrian Refugees

CN and other Canadian corporations contributed $500,000 to the Vancouver Foundation and the Immigrant Services Society of B.C. to support their crucial work with Syrian refugees to help them transition into suitable permanent housing, with a focus on finding and securing suitable accommodation for larger families.

YWCA Metro Vancouver – Women of Distinction Award

Recognized nationally, the Women of Distinction Award is the YWCA’s premier fundraising event, honouring extraordinary women leaders, while highlighting YWCA programs and services that improve the lives of thousands of people each year across Metro Vancouver.

Pulling Together Canoe Society

Once again, a team of CN employees participated in the Pulling Together canoe trip to enhance understanding between Aboriginal peoples, communities and other groups.

Northern BC H.E.R.O.S.

The Northern British Columbia Helicopter Emergency Rescue Operations Society is dedicated to saving lives and improving medical outcomes for victims of serious trauma in northern B.C.


BrItIsh CoLumBIa

british ColuMbia iN NuMbers



$462M Local spending






Alberta generates substantial volumes of forest and agricultural products. CN also handles growing amounts of intermodal container traffic through our Calgary and Edmonton intermodal terminals. In Calgary, you’ll also find our logistics park, an automotive distribution facility, a forest products distribution centre and a CN CargoFlo® bulk handling centre. In Edmonton, we also have automotive distribution and CargoFlo® bulk handling facilities as well as metals and forest products distribution centres. In Fort McMurray, there’s a second metals distribution centre and a third CargoFlo® bulk handling facility. We also have another CargoFlo® bulk handling facility and a forest products distribution centre in Edson. We have one more CargoFlo® bulk handling facility in Hay River, NWT.

In 2015, CN allocated approximately $100 million for work on northern Alberta branch lines, investing in infrastructure upgrades and safety improvements, including heavier rail, crushed rock ballast and new ties, to ensure the network can efficiently accommodate future freight volume growth in the Peace River region.


The Calgary Catholic Immigration Society received $600,000 from CN and other Canadian corporations to invest in community-driven solutions that enable recently arrived Syrian families to transition into suitable permanent housing.

Stollery Children’s Hospital Foundation

CN donated to the 2015 Tee Up for Tots event which supports Edmonton’s children and families by helping the Stollery Children’s Hospital provide the best care to future generations.

Alberta Council of Women’s Shelters

ACWS develops leading-edge support tools for women’s shelters and calls on the public to take action against domestic violence.

YMCA Calgary – Power of Potential

YMCA Calgary is a charitable organization driven by its mission to facilitate and promote the spiritual, physical, mental and social development of individuals as well as to foster a sense of responsibility within the community.

Calgary

Edmonton

Fort McMurray

Fort Saskatchewan

Hay River

Edson

Lloydminster


aLBerta

alberta iN NuMbers









Regina

BienfaitWillmar

Saskatoon

Grains and fertilizers, especially potash, make up a substantial portion of the traffic handled by CN in this prairie province, where our role as a backbone of the provincial resource economy is very evident. Our traffic also reflects the increasing diversification of the Saskatchewan economy by handling growing volumes of consumer goods and specialty crops through our intermodal terminal in Saskatoon. Both Saskatoon and Regina boast metals distribution facilities. Regina also has an automotive distribution facility. In Bienfait, we have a CargoFlo® bulk handling facility as well as forest products and metals distribution centres. Finally, in North Battleford, there is one additional forest products distribution centre.

In 2015, CN reconnected with a key stakeholder group, the agricultural community in Western Canada and beyond, by linking with Prairie farmers at the Canadian Western Agribition in Regina, a major gathering of farmers across the West. CN also announced a national partnership with 4-H Canada, the country’s biggest rural youth association, to promote farm and community safety as well as rural leadership.

In 2016, CN joined the Canadian Agricultural Safety Association to promote farm safety during Canadian Agricultural Safety Week from March 13-19. CN and Canadian farmers share a common commitment to safety. Maintaining a constant focus on working safely is absolutely essential when working with heavy machinery, which is part of daily life on both farm and railway. CN is proud to join CASA in its work to keep farm families safe.

Community PartnershipsCanadian Western Agribition

CWA is the largest livestock show and fourth largest trade show in Canada. One of its programs is Agri-Ed, which hosted more than 6,000 school children and promoted the development of the ‘Making Your Way Safer’ campaign to facilitate the safety education of young people.

Biggar and District Donor’s Choice

Biggar Donor’s Choice conducts an annual campaign in October to raise funds for various charities. Funds from CN are used to enhance community sports programs, cultural activities, health initiatives as well as the senior centre and family centre.

Melville & District Donors Choice Appeal

Representatives of 19 charities get together with volunteers to canvass the City of Melville and surrounding area to raise funds to support various charities.


saskatChewaN

saskatCheWaN iN NuMbers

921 Railroaders employed





$579k Community partnerships



Winnipeg

Churchill

The Pas

Manitoba is a major hub of CN’s transcontinental rail network. The province’s central location means that much of our east-west and north-south traffic passes through Winnipeg’s Symington Yard, where some 3,200 cars are handled every day. Winnipeg is also home to Transcona Shops, our main Canadian heavy car and locomotive repair facility, and our rail plant. In Winnipeg, we also have CargoFlo® bulk handling, forest products and automotive distribution facilities as well as an intermodal terminal. Approximately 2,000 CN employees are based in Winnipeg.

In December 2015, CN announced a new long-term contract with Amsted Rail, a leading manufacturer of railway wheel equipment, to produce one million wheels for use at our Transcona mechanical facility where the wheels will be mounted onto axles and become wheelsets to be installed on freight cars. The new wheels will be produced using 100 per cent recycled steel over the next 10 years at Griffin Wheel Company in Winnipeg, providing 170 high-quality jobs there.

CN’s state-of-the-art Winnipeg Training Centre is delivering our enhanced railroader training program focused on instilling a strong safety culture in new employees and reinforcing it among current employees who are learning new skills or upgrading existing ones. The CN Campus opened in April 2014, and includes a modern training curriculum, key equipment such as locomotive simulators, outdoor training grounds and dedicated rolling stock. An average of 350 CN employees from across Canada come to Winnipeg every week to train at the CN Campus. Their participation provides a major boost to the local economy.


The Winnipeg Foundation received $500,000 from CN and other Canadian corporations to invest in community-driven solutions that enable recently arrived Syrian families to transition into suitable permanent housing.

Children’s Hospital Foundation of Manitoba

Through CN Miracle Match, CN helped raise over $760,000 for children’s health in support of the CHFM’s programs.

Canadian Mental Health Association of Winnipeg

The Canadian Mental Health Association’s Mental Health week is an annual national event that encourages people from all walks of life to learn, talk, reflect and engage with others on all issues relating to mental health.

Green Action Centre

The Active and Safe Routes to School Program, supported by CN, promotes safe behaviour to school kids by focusing on keeping them safe around train tracks while walking and cycling to school.


maNItoBa

MaNitoba iN NuMbers


837 Route-miles operated







HalifaxSaint John

Moncton

Matane

Sept-Îles

Baie-Comeau

Quebec Montreal

Toronto

Sarnia

Hearst

Sault Ste. Marie

Winnipeg

Eastern RegionCN’s Eastern Region extends from Winnipeg eastwards and southwards, interconnecting with our U.S. network at several points in Ontario and south of the Port of Montreal. CN’s network extends deep into the mineral and timber producing regions of northern Quebec. The rails continue east into the Maritimes and the Port of Halifax.

CN is investing in Eastern Canada to build for the future, increasing safety, capacity and fluidity across our networks in Ontario, Quebec and the Maritimes.

In early 2015, CN announced a plan to build a $250 million advanced intermodal and logistics facility in Milton, ON, to help us efficiently handle growing intermodal traffic. The new hub

will benefit our customers and the regional economy by improving Central Canada’s access to the key transborder market as well as the Pacific and Atlantic coast trade gateways we serve, generating new supply chain efficiencies and creating well-paying local jobs.

CN plans to invest up to $95 million over 10 years to ensure the safety and long-term viability of the more than 100-year-old Quebec Bridge. This major rehabilitation project is being undertaken in partnership with the Quebec Ministry of Transport. CN is committed to preserving this strategic piece of infrastructure in Quebec City. In 2015, CN spent an estimated $7 million, bringing the total investment in the bridge since 2013 to $17 million.

In 2015, over $23 million was invested in track infrastructure in New Brunswick to promote the safety and integrity of our network. Also, in cooperation with the Halifax Regional Municipality, CN will undertake work in 2016 to rehabilitate the Oakland Road overhead arch bridge.



east iN NuMbers










TorontoSarnia

Hearst

Sault Ste. Marie

Thunder Bay

Hamilton

Windsor

Brampton

Brockville

Ontario is Canada’s industrial heartland and large volumes of industrial, automotive and petrochemical traffic is handled across the province, much of it at the Toronto-area MacMillan Yard – CN’s largest rail classification facility. The fast-growing population of the Greater Toronto and Hamilton Area (GTHA) fuels heavy demand for food and consumer products, largely handled in containers at our intermodal terminal in Brampton. The GTHA also boasts a logistics park, two automotive distribution facilities as well as a forest products distribution centre, two CargoFlo® bulk handling facilities and two metals distribution centres. In addition, CN has forest products and metals distribution centres in Brockville as well as forest products distribution centres in Thunder Bay and Atikokan.

With our intermodal terminal in Brampton nearing capacity and our intermodal traffic expected to grow, CN has proposed to build a new $250 million “satellite” intermodal terminal in Milton. The facility will create more than 1,000 direct and indirect jobs and generate up to $230 million in new tax revenue.

In early 2016, CN took steps to satisfy the regulatory requirements for this project, submitting a comprehensive environmental impact statement to the Canadian Environmental Assessment Agency as well as an application for approval of the project to the Canadian Transportation Agency. Letters supporting the project were received from leaders of chambers of commerce, ports, businesses across Canada, and the Mississaugas of the New Credit First Nation. These documents and other information on the project are available at www.cnmilton.com.


CN and other Canadian corporations contributed $250,000 to the London United for Refugees initiative, a collaboration of the London Cross Cultural Learner Centre, United Way London & Middlesex, and the City of London, to support refugees from Syria with loans for renters, direct housing subsidies, job training and skills development.

Wesley Urban Ministries in Hamilton received $250,000 from CN and other Canadian corporations to invest in community-driven solutions that enable recently arrived Syrian families to transition into suitable permanent housing.

Daily Bread Food Bank

The Daily Bread Food Bank provides food and support to almost 200 food programs across the Greater Toronto Area and is the largest provider of food relief in the GTA.

Halton Learning Foundation

The Halton Learning Foundation partners with individuals, corporations and community foundations to provide assistance through emergency funds for students in need, post-secondary scholarships, and engagement funds that help schools purchase tools and resources to engage students in learning.

Milton District Hospital Foundation

MDHF works to raise funds for the purchase of vital medical equipment and to improve the facilities of the Milton District Hospital, site of Halton Healthcare Services.


oNtarIo

oNtario iN NuMbers









Matane

Sept-Îles

Baie-Comeau

Quebec

Montreal


QueBeC

Our extensive rail network stretches across Quebec where we have strong supply chain infrastructure to serve the needs of our customers. Montreal is home to CN’s headquarters. CN serves the Port of Montreal, where we handle growing numbers of import/export containers. We also have an intermodal terminal in St-Laurent. Other CN facilities in Montreal include a logistics park, forest products, automotive and metals distribution centres and a CargoFlo® bulk handling facility. Quebec City boasts access to a deep-water port as well as metals, automotive and forest products distribution centres.

A national historic site, the Quebec Bridge has been a vital road and rail link over the St. Lawrence River between Quebec City and Lévis for more than a century. In partnership with the Quebec Ministry of Transport, CN plans to invest up to $95 million over 10 years to ensure the safety and long-term viability of this bridge. The cost of the work undertaken by CN in 2015 was $7 million, bringing our total investment in the bridge since 2013 to $17 million.

In 2016, CN held its Annual General Meeting of shareholders at Le Windsor in Montreal.


The Foundation of Greater Montreal received $750,000 from CN and other Canadian corporations to invest in community-driven solutions that enable recently arrived Syrian families to transition into suitable permanent housing.

Chez Doris

Chez Doris is a charitable organization offering daytime shelter, seven days a week, for all women in difficulty. The house provides meals, respite, clothing, socio-recreational activities as well as practical assistance in a secure and accepting environment.

The Lighthouse Children and Families

To brighten the lives of seriously ill children and their families, The Lighthouse aims to provide the best possible care through in-home respite services, variable length stays at Maison André-Gratton and other resources to make their lives as healthy and happy as possible.

The YMCAs of Quebec Foundation

Each year, the YMCA welcomes more than 120,000 individuals through its numerous services. In 2015, this included over 36,000 children. CN worked closely with the YMCA to educate over 5,000 children and teens about rail safety through its camps and Youth Zones.

QuebeC iN NuMbers









Saint John

Moncton

Belledune

Forest products make up a significant part of the traffic originating or terminating in the province of New Brunswick. We also handle consumer goods and other intermodal traffic through our terminal in Moncton. Other CN facilities in Moncton include an automotive distribution centre and a CargoFlo® bulk handling facility. CN’s network extends to the Port of Saint John where we also have another CargoFlo® bulk handling facility.

In 2015, over $23 million was invested in track infrastructure in New Brunswick to promote the safety and integrity of our network. Significant work focused on the Napadogan Subdivision between Moncton and Edmundston. In cooperation with the Town of Hampton, CN undertook work to replace an overhead bridge on the Kennebecasis River Road. In collaboration with the City of Moncton, CN is proceeding with work to replace an aging culvert system on Jonathan Creek to help reduce potential flooding upstream.

Community PartnershipsCHU Dumont Foundation

In 2015, through CN Miracle Match, CN helped raise over $1 million for the Tree of Hope campaign. One hundred per cent of the money raised is reinvested in New Brunswick to help cancer patients. CN’s donation helps support important programs like the Pediatric Leukemia Research Project, targeting the most common form of cancer among children and teens, the Atlantic Cancer Research Institute, the Dr. Léon-Richard Oncology Centre and the Mgr. Henri-Cormier Lodge.

Petitcodiac Fire Department

Chief Gerald Jones was recognized for his 48 years as a volunteer firefighter by CN under a special CN Railroaders in the Community Award for exceptional volunteers. Gerald was the first recipient of this award, earning $12,500 for the department, which will use the funds to purchase much-needed equipment and help local youth organizations.

St. Thomas University – Women’s Volleyball Team

CN proudly supported Fredericton’s St. Thomas University “Tommies” women’s volleyball team for the 2014-15 season.


New BruNswICk

NeW bruNsWiCk iN NuMbers



$67M Local spending






Halifax

Nova Scotia is home to the Port of Halifax, where CN handles all rail-served containers imported and exported through the marine facility. Halifax is the site of a major autoport, where automotive vehicles imported from overseas enter North America for distribution across the continent. One of our intermodal terminals is also located in Halifax.

In cooperation with the Halifax Regional Municipality, CN will undertake work in 2016 to rehabilitate the Oakland Road overhead arch bridge.

CN has a unique collaboration with Saint Mary’s University in Halifax where we founded the CN Centre for Occupational Health and Safety. This centre of research excellence is a world-class facility, focused on better understanding and addressing occupational health and safety across the globe.


CN and other Canadian corporations contributed $200,000 to a partnership between the Immigrant Services Association of Nova Scotia and the Community Foundation of Nova Scotia to provide direct support to Syrian households settling in the Halifax area, focusing on households with family members who have medical conditions that require them to live near healthcare facilities and larger families requiring large units.

Halifax Women’s History Society

Through its website and public talks, the society has been providing the public with the untold stories of women’s massive and essential work performed during World War II. CN’s contribution will help erect a monument, situated on the Halifax waterfront, to bring this history to a large local, national and international audience.

Royal Nova Scotia International Tattoo

The Tattoo continues to live up to its reputation as one of the world’s premier cultural and entertainment events. It features more than 2,000 participants from military, police and civilian groups from around the world. The 2015 Tattoo commemorated the end of World War II with a focus on the long-standing friendship between the combatants since 1945.


Nova sCotIa

Nova sCotia iN NuMbers



$51M Local spending






United States Network

uNited states iN NuMbers






$3.7M Community partnerships **

As at December 31, 2015. Dollar figures in US$

* Includes federal, state, property, sales and other taxes

** CDN$


Abbott, Illinois


Arcadia

Sioux City

OmahaChicagoEast Peoria

Springfield

East St. Louis

Memphis

Jackson

MobilePascagoula

Gulfport New Orleans

Baton Rouge

Conneaut

Auburn

Worcester

New LondonNew York

Pittsburgh

Buffalo

Toledo

Duluth

Green Bay

Fonddu Lac

Stevens Point

Detroit

CN’s extensive network in the United States runs north-south from the northern border of Minnesota down to New Orleans, through the Chicago area, with lines extending west to Nebraska and east through Michigan. About one-third of our rail network and employees are located in the U.S. CN directly serves industrial, petrochemical, coal, grain, fertilizer, automotive and consumer goods markets in 16 states. Our resource-rich, manufacturing-intensive network reaches 75 per cent of consumers across North America.

CN’s substantial investments in our U.S. Midwest operations, particularly the former Elgin, Joliet and Eastern Railway (EJ&E), are keeping our network fluid, helping us accommodate increased demand for freight services, and freeing up rail capacity inside Chicago. CN’s sizable presence in the U.S. Midwest is the product of a series of rail acquisitions and investments that have

extended our network reach south, north and west of Chicago, as well as around the city. In the past five years, CN has invested well over $1 billion in our Midwest operations.

Today, CN has 5,400 employees in the Midwest, roughly 1,400 of whom live and work in the Chicago region. With about 25 per cent of our freight traffic touching the city, CN’s Chicago focus is on network efficiencies, close collaboration with other freight and passenger carriers, and delivering solid customer service.

CN’s acquisition of the EJ&E (the “J”) in 2009 has transformed our operations in Chicago, North America’s rail hub. The “J” allows us to seamlessly connect our five rail lines entering Chicago and avoid congested inner city corridors. This is a clear gain for CN, but it also frees up capacity for other carriers on the Belt Railway of Chicago and the Indiana Harbor Belt – a benefit for the entire greater Chicago rail network.

Community PartnershipsCN contributed to the following national non-profit organizations in the United States in 2015:

America in Bloom

Ducks Unlimited

Operation Lifesaver

United Way

CN is a member of federal, state and local chambers of commerce all along our network.



Southern Region

Minneapolis-Saint Paul

Duluth

Two Harbors

Minnesota is an important gateway from Canada into the United States via Ranier and then south to the port city of Duluth on Lake Superior. Major commodities for CN through this area are coal, iron ore and grain. Turning west near Longwood, WI, CN’s track heads towards the Twin Cities of Minneapolis-Saint Paul, the largest city in Minnesota and state capital, respectively, and one of the top 15 markets in the U.S.

The North Star State is home to CN’s Iron Ore Supply Chain which brings taconite pellets from the Minnesota Iron Range mines to the CN docks in Duluth and Two Harbors. There, the pellets are loaded onto Great Lakes ships for transport to the lower Great Lakes. CN’s major facilities in Minnesota include a rail classification yard and mechanical facility in Proctor, a yard near the Two Harbors iron ore dock, and the Duluth iron ore dock itself. There is also a yard in Ranier where CN trains cross the U.S.-Canadian border.

Community PartnershipsCommunity Action Duluth – Stream Corps

CN continued its support of Stream Corps, which works with the City of Duluth to restore stream-side habitat after the record-breaking flood in 2012.

Two Harbors Kayak Festival

CN supported the 18th annual Two Harbors Kayak Festival held at Burlington Bay. The event runs three long-distance races for both kayaks and stand up paddle boards.

Gary New Duluth Community Alliance

CN contributed funds to renovate and expand a community center and recreation area in Duluth. The center’s theme is PLAY (Promoting Lifetime Activities for Youth) which encourages people of all ages to adopt an active lifestyle.


mINNesota

MiNNesota iN NuMbers






$341k Community partnerships **


* Includes state, property, sales and other taxes

** CDN$

Chippewa Falls

Superior

ArcadiaGreen Bay

Fonddu Lac

StevensPoint

Wisconsin is a central part of CN’s core route between Western Canada and Chicago, IL. CN serves a number of local forest product and general merchandise customers around the state, most notably from Milwaukee and Green Bay on Lake Michigan. We also have intermodal terminals in Chippewa Falls and Arcadia. In recent years, Wisconsin has become an important source of frac sand which CN delivers to shale energy producers across North America.

CN’s rail operations in the Badger State are mainly made up of those of the former Wisconsin Central, acquired in 2001. Our two biggest rail facilities in the state are classification yards in Stevens Point and North Fond du Lac. Stevens Point is the heart of CN’s North Division and a key location on CN’s core route between the U.S.-Canadian border and Chicago. North Fond du Lac is a second major facility that serves as the gateway to Green Bay where CN has another rail yard. Additionally, CN has made significant reinvestment in two CN subdivisions: Barron and Whitehall.

Community PartnershipsWaupaca County Fair

The Waupaca County Fair is a family-friendly event that promotes education, family and fun, including over 6,500 youth exhibits and 2,800 adult exhibits, events that honor senior citizens and veterans, a new interactive “Ag Venture Area” that features Wisconsin agriculture and careers, as well as music, food, rides, motor sports and other family-based events.

Lucius Woods Performing Art Center

The Center presents family-oriented concerts in a beautiful outdoor setting. They offer free admission to groups that would ordinarily not be able to attend. Currently, these include several senior organizations, the Challenge Center for the mentally or physically disabled, and a regional hospice grief support group.


wIsCoNsIN

WisCoNsiN iN NuMbers









** CDN$

Detroit

Flat Rock

LansingFlint

Port Huron

BattleCreek

Escanaba

Munising

Gladstone

CN is the largest of three Class I railroads operating in Michigan. CN’s operations cross the state’s Lower Peninsula with rail yards in Battle Creek, Flint, Port Huron and Flat Rock. CN also has a mechanical shop in Battle Creek. One in four finished automobiles built in Michigan is moved on a CN train. CN has two automotive distribution facilities in the state, including at Cory Yard outside Lansing at the Delta Township General Motors plant, two CN CargoFlo® bulk handling centres as well as forest products and metals distribution facilities.

Michigan is home to the Paul Tellier tunnel between Port Huron and Sarnia which serves as the border crossing for CN train traffic moving between Eastern Canada and the U.S. Midwest. CN also has an intermodal facility in Ferndale, in suburban Detroit. CN hosts several Michigan Amtrak trains, including trains terminating in Port Huron and Pontiac. In the Upper Peninsula of the Wolverine State, CN has rail yards in Escanaba and Gladstone. CN has another international rail crossing at Sault Ste. Marie.

Community PartnershipsMichigan Technological University

CN supports the Rail Transportation Program which provides funding for education, research and program development, including providing student funding to undergraduate and graduate students for rail-related projects and research.

Grand Haven Area Community Foundation – Coal Tipple Restoration Project

The Coal Tipple is a major feature of Grand Haven’s skyline. The State Historic Preservation Office has verified that Grand Haven’s tipple is the only one in Michigan that the public can readily access. Funding from CN is helping to preserve the tipple as well as make it safe for the community to get up close and learn about how these structures functioned many years ago.


mIChIgaN

MiChigaN iN NuMbers



$94M Local spending






** CDN$

Sioux CityDubuque

Waterloo

Council Bluffs

Through our subsidiary, the Chicago, Central & Pacific Railroad, CN’s rails stretch the breadth of Iowa, from the Missouri River in the west to the Mississippi in the east. We carry a wide variety of manufactured and industrial products like food, machinery, electrical equipment, chemical products and primary metals. In addition to serving local businesses, CN’s ethanol franchise is centred in the Hawkeye State with several plants along the route between Dubuque and Sioux City and Council Bluffs. The largest rail yard and facility on CN’s Iowa network is located in Waterloo.

Community PartnershipsNortheast Iowa Food Bank

Through its Perishable Program, NIFB provides nutritious foods, such as produce, dairy and meat, to families in need. On average, NIFB distributes 118,000 pounds of food per month.

The Salvation Army

The Salvation Army provides the largest Compassion Kitchen Feeding Program in North Central Iowa. Services include a large food bank, medical assistance, transportation, lodging, help with utility bills, and specific assistance based on the client’s personal crisis situation.


Iowa

ioWa iN NuMbers



$22M Local spending






** CDN$

Chicago

Decatur

Joliet

Rockford

East Peoria

Springfield

East St. Louis Centralia

Champaign-Urbana

The home of Illinois Central, acquired by CN in 1998, the Prairie State is CN’s largest in terms of operations and employees. CN has major rail switching yards in Markham and Joliet. Our routes from the north, west, south and east converge at the Chicago Terminal and link to the former Elgin, Joliet & Eastern railroad, acquired in 2009, which today forms CN’s core route around Chicago.

Homewood, a Chicago suburb, is home to CN’s U.S. corporate headquarters and a US$25-million state-of-the-art training centre which opened in 2014. This CN Campus delivers our enhanced railroader training program focused on instilling a strong safety culture in new employees and reinforcing it among current employees who are learning new skills or upgrading existing ones. The facility features a consistent, modern training curriculum, key equipment such as locomotive simulators, outside training grounds and dedicated rolling stock to effectively train some 250 students a week from across the U.S.

Adjacent to Markham Yard and the CN Campus is the Woodcrest mechanical shop, the centre of CN’s mechanical function in the U.S. We have significant facilities in Centralia as well. To the north is CN’s Chicago Intermodal Terminal which handles traffic from both the west and east coasts. Smaller intermodal facilities are located in Joliet and Decatur. South of the Chicago area, CN has a classification yard in Champaign-Urbana, the rail yard that handles traffic moving around Illinois and between Chicago and Memphis. The Chicago area also boasts three CN CargoFlo® bulk handling centres as well as forest products and metals

distribution centres and a logistics park. CN’s Illinois network serves some of the state’s biggest cities with rail yards and operations in Carbondale, Decatur, Springfield, Rockford, near Peoria and suburban St. Louis. CN also hosts Amtrak intercity passenger trains in Illinois and Metra commuter trains in suburban Chicago.

Community PartnershipsAdvocate South Suburban Hospital – Young Hearts for Life®

The Young Hearts for Life® program is committed to providing ECG screenings for hypertrophic cardiomyopathy (HCM) free of charge to high school students. HCM is a genetic abnormality present in approximately one in 500 people that can lead to sudden cardiac death.

Forest Park Community Center

CN’s funding serves to enrich the lives of the community through health and wellness programs, workforce development training, GED/ESL classes, computer access and training, leadership development training for youth and adults, youth tutoring, mentorship programs, and scholarships.

Restoration Ministries

Restoration Ministries helps at-risk youth. The organization serves more than 5,000 individuals annually through 21 different programs including the Harvey Boxing Club, a component of Project Intercept.


ILLINoIs

illiNois iN NuMbers









** CDN$

Indianapolis

Gary

CN’s main line from the Detroit area to our main U.S. hub in Chicago passes through the north-west corner of Indiana. While the number of track-miles CN operates in Indiana is relatively small, the impact of the state could not be more significant. Gary is home to Kirk Yard, CN’s largest rail yard in the U.S. Located on the former Elgin, Joliet & Eastern railroad, CN is investing US$165 million to modernize and expand Kirk Yard. Track construction was completed in 2014 and some utility and demolition work continued in 2015. Kirk Yard is one of two CN hump yards in the U.S. and one of only four on the CN network. In collaboration with the Indiana Railroad, CN opened an intermodal facility in Indianapolis in 2013.

Community PartnershipsCity Life Center

City Life provides a holistic model for reaching students in the inner city. Its programs are designed to help students with their education by addressing their spiritual, moral, health, safety, economic, and civic literacy.

Tri Town Safety Village

Tri Town Safety Village, in partnership with Operation Lifesaver, educates school age children about railroad safety, fire prevention and personal safety initiatives.


INdIaNa

iNdiaNa iN NuMbers



$66M Local spending






** CDN$

Memphis

Western Tennessee is CN’s gateway to the south. CN’s yard in Memphis is a major freight handling point and the centre of CN’s U.S. operations south of Chicago. It is one of only two hump yards in the U.S. and serves as an interchange point with four other Class I railroads. The Memphis yard is also the location of a major CN mechanical shop. An important CN intermodal terminal is located in Memphis in the Frank Pigeon Industrial Park. CN also serves President’s Island, a centre of industry in Memphis. The birthplace of rock ‘n’ roll also boasts distribution facilities for forest products, metals and automobiles as well as a CN CargoFlo® bulk handling centre and a logistics park. Amtrak’s City of New Orleans service operates on CN tracks and stops in Memphis. In the last decade CN has invested more than $140 million in our yards in Memphis.

In 2015, CN held its Annual General Meeting of shareholders at The Peabody Hotel in Memphis.

Community PartnershipsMemphis in May International Festival

A feature at every major museum and gallery in the Memphis area, International Week includes breathtaking visual arts exhibits, delicious food samplings, culinary programs as well as musical and dance performances by artists from a selected country.

Le Bonheur Children’s Hospital Foundation – The FedexFamilyHouse

CN provided a $100,000 gift to support the FedExFamilyHouse, a home-away-from-home for families traveling to Le Bonheur Children’s Hospital in Memphis for treatment.


teNNessee

teNNessee iN NuMbers



$34M Local spending






** CDN$

Jackson

Canton

PascagoulaGulfport

Natchez


mIssIssIPPI

CN’s rail network criss-crosses the Magnolia State, with a major classification yard in Jackson serving as an important hub for petroleum headed to the western part of the state, coal moving east to Alabama, grain shipping south to the Gulf Coast for export, chemical products headed north to the Midwest, and intermodal products destined throughout North America. Amtrak’s City of New Orleans service stops in Jackson at CN’s rail yard. CN also has an automotive distribution facility serving the Nissan assembly plant in Canton.

Community PartnershipsHinds Community College Foundation

The largest community college in the state, Hinds Community College serves almost 30,000 students in academic, technical, secondary and adult programs on six campuses. With CN’s support, the Foundation provides student scholarships, faculty and staff development programs, community cultural enrichment opportunities, and other vital college programs.

Museum of Mississippi Delta

The Museum has an extensive collection of artifacts related to the Delta, including Native American, military and Civil War, paleontology, political, musical, civil rights, transportation and regional art. The Museum works closely with school districts to provide educational resources and experiences for students.

Mississippi iN NuMbers



$78M Local spending






** CDN$

New Orleans

Baton RougeHammond

At the southern terminus of CN’s North American network, Louisiana originates and terminates growing volumes of petrochemical, coal and grain rail traffic, most notably in the triangle formed by Hammond, Baton Rouge and the Port of New Orleans. CN’s major yards are in Baton Rouge, Geismar and Harrahan (Mays Yard) outside of New Orleans. At Mays Yard, CN connects to the New Orleans Public Belt Railroad (NOPBR) which links the city’s six Class I railroads. New Orleans also has a modern intermodal facility that receives consumer goods via containers for distribution across North America. Amtrak’s City of New Orleans service terminates in New Orleans, south of Mays Yard. In Louisiana, CN has two bridges over the Bonnet Carré Spillway.

In 2015, CN signed a memorandum of understanding with the Port of New Orleans and the NOPBR that will see the parties develop greater supply chain efficiencies aimed at drawing more container traffic over the port to North American markets. The Port of New Orleans has an intermodal rail terminal adjacent to its Napoleon Avenue Container Terminal providing on-dock access for all rail shipments. The new Mississippi River Intermodal Terminal is now under construction. The US$25 million project, when completed in the first quarter of 2016, will result in a modern, efficient intermodal transfer terminal located within the container yard, offering on-dock access and improving CN’s link to the terminal and helping to grow our container volumes.

Community PartnershipsKnock Knock Children’s Museum

The aim of the Knock Knock Children’s Museum is to deliver extraordinary play experiences and programs to inspire young children and promote their intellectual curiosity, self-expression and early literacy development.

Ochsner Hospital for Children

Through CN Miracle Match, CN helped raise over $625,000 for children’s health in support of the Ochsner’s programs.


LouIsIaNa

louisiaNa iN NuMbers



$35M Local spending






** CDN$


other states

Extending Our ReachCN has extensive facilities in several other U.S. states, including:

alabama

In addition to access to the Port of Mobile, CN’s network connects to CargoFlo® bulk handling and forest products distribution facilities in Mobile, which handle most notably petroleum products from Western Canada and coal from the Midwest.

In 2015, CN signed a memorandum of understanding with the Alabama State Port Authority, which owns the public terminals at the Port of Mobile, intended to drive increased supply chain efficiency and a greater share of transportation markets in North America.

ohio

CN’s track extends to a yard in Toledo for interchange with eastern railroads. With a focus on local interests and the ability to link industries, extending our reach and providing flexibility, we count on our subsidiaries, the Bessemer and Lake Erie Railroad (BLE) and Grand Trunk Western Railroad (GTW), to help us deliver in Ohio. The BLE connects at Conneaut docks.

Pennsylvania

CN’s main line runs from our marine bulk facilities in Conneaut, OH, on Lake Erie, moving iron ore to steel plants in the Pittsburgh area. We also have a forest products distribution centre in DuBois.

New York

CN’s network includes two forest products distribution centres, one in North Buffalo, NY, and another in North Bergen, NJ, just north of New York City.

kentucky

CN has two main line corridors running through Kentucky, linking CN’s network in Illinois to Tennessee and points south to the Gulf Coast.

Our resource-rich, manufacturing-intensive network reaches 75 per cent of consumers across North America.

At CN, we take pride in how we do our job of moving customers’ goods safely and efficiently. We are also proud of what the company stands for: a set of core beliefs that drive how we conduct our business every day and that support our continuing transformational journey.

CN recognizes our responsibility to the communities in which we operate – not only in our commitment to safety, but also in making communities better places to live and work. This spirit of caring is expressed in the CN Stronger Communities Fund, a community partnership program that focuses on five core areas:

• CaringandSolidarity/UnitedWay

• SafetyandSustainability

• Diversity

• TransportationEducation

• CNRailroadersintheCommunity

Caring and Solidarity/United Way We believe that one of the best ways to build stronger communities is to actively contribute to organizations, programs and initiatives that promote caring and solidarity.

CN miracle match

CN encourages individuals and corporations to make charitable donations in support of children’s hospitals by matching funds raised through the fundraising campaigns of three selected hospitals each year. CN has helped raise close to $13 million for pediatric care since CN Miracle Match was launched in London, ON, in 2006. Through Miracle Match, CN enables children’s hospitals to purchase much-needed equipment, expand their programs and facilities and continue to make an important difference to families and communities. The following three foundations were selected in 2015 to each receive CN-matched contributions of up to $300,000:

• Children’sHospitalFoundationofManitoba, Winnipeg, MB

• CHUDumontFoundation, Moncton, NB

• OchsnerHospitalforChildren, New Orleans, LA

united way

CN donated over $1.5 million to the United Way in 2015 to support communities all along our network, in both Canada and the U.S.

CN Stronger Communities Fund

how to apply for sponsorship or donation from the CN stronger Communities Fund:

Please visit our website at www.cn.ca/community for more information on our eligibility requirements and community partnership areas of focus.


“CN is very active in helping to build stronger communities.”

robert Pace, Chairman of the Board of Directors of CN

In 2015, through CN Miracle Match, CN helped raise over $625,000 for the Ochsner Hospital for Children in New Orleans, Louisiana

Safety and Sustainability We are focused on conducting our operations safely and in a manner that protects the natural environment.

all aboard for safety Program

All Aboard for Safety is our flagship community education program to help prevent accidents on or near railroad property. We promote safety to children using our safety train, Little Obie, and host safety blitzes and Safe Crossing weeks. These events actively engage CN police officers and our employees in promoting safety, and involve partnerships with like-minded community groups such as Operation Lifesaver.

4-h Canada

Made possible through a commitment from CN of $600,000, the new annual 4-H Canada Leadership Excellence Award of Distinction (L.E.A.D.) recognizes exceptional 4-H senior youth members and showcases their accomplishments in the area of leadership excellence. The CN commitment also allows 4-H Canada to establish a 4-H Farm Safety Fund that will support 4-H clubs, districts, regions and provincial organizations across Canada with farm and community safety initiatives.

Canadian agricultural safety association

CN joined CASA to promote farm safety during Canadian Agricultural Safety Week from March 13-19. CN and Canadian farmers share a common commitment to safety. Maintaining a constant focus on working safely is absolutely essential when working with heavy machinery, which is part of daily life on both farm and railway. CN is proud to join CASA in its work to keep farm families safe.

FCm/raC Proximity Initiative

CN works with the Federation of Canadian Municipalities (FCM) and the Railway Association of Canada (RAC) to prevent and resolve issues that may arise when people live and work in close proximity to railway operations. The FCM/RAC Proximity Initiative was established in 2003 and is co-chaired by Sean Finn, EVP of Corporate Services and Chief Legal Officer at CN and Jenelle Saskiw, Mayor of Marwayne, AB. By developing proximity guidelines and improving stakeholder awareness, the Initiative aims to address railway-community issues, including safety, noise and vibration.

In May 2013, the Initiative published Guidelines for New Development in Proximity to Railway Operations for use by municipalities, provincial governments, developers and property owners when new developments close to rail operations are proposed. In 2015, Montreal, QC, became the first major city in Canada to adopt these guidelines into its long-term development plan. Other cities, including Edmonton, Calgary, Winnipeg, Ottawa and Toronto, will also be implementing best practices for land development in proximity to railways. The guidelines recommend setback distances, fencing and other safety measures as well as acoustic studies and mitigation – which must be met if sensitive land uses are proposed in proximity to a railway line or yard.

Provinces and municipalities need to properly guide and regulate development in proximity to railways. Preventing proximity issues is a shared responsibility.

For more information, go to: www.proximityissues.caLooking Out For Each Other is an integral part of

CN’s safety culture.



DiversityHaving a workforce with unique talents that reflects the diversity of the communities in which we operate is a key contributor to CN’s success. We invest significant efforts in attracting and hiring a diverse workforce. CN’s policy of inclusion, diversity and tolerance also provides support to organizations that promote the advancement of women, Aboriginal communities and other groups. For example:

Partners for mental health

CN’s support has been key to the improvement of mental health in Canada. Through campaigns like Not Myself Today and Right By You, we have catalyzed actions among everyday people to help make much-needed change happen in our workplaces, schools and homes. In less than five years, we have:

• Ralliedover85,000Canadianstosupportthe movement

• Inspiredover25,000peopletospeakoutand share their experiences

• Developedover700volunteerleaders

• Heldover1,200volunteer-ledevents

welcome Fund for syrian refugees

CN led the way in 2015 among Canada’s business community by pledging $5 million to assist Syrian refugees resettling in Canada. CN’s support of the Community Foundation of Canada – Welcome Fund for Syrian Refugees is helping address the immediate needs of thousands of refugees so that communities and newcomers are set up for long-term success.

Transportation EducationBy supporting transportation education, CN is inspiring and helping today’s youth to become tomorrow’s railroaders – and leaders. We promote and support transportation-related education in the following areas:

• Tradeandapprenticeshipprograms

• Collegeanduniversityprograms

• Scholarshipandbursaryprograms

wilfrid Laurier university

In 2015, CN donated $500,000 to support research and education programs at the Centre for Supply Chain Management in the School of Business & Economics at Wilfrid Laurier University in Waterloo, ON. CN’s donation will support internships and a cooperative education program, providing experience and summer employment to students. CN managers will also work with the Centre to provide an industry perspective and the company will help organize annual conferences attended by international experts.

CN Railroaders in the CommunityWe are proud of our employees, retirees and their families who volunteer their time to make their communities stronger and better places to live and work. The CN Railroaders in the Community program recognizes these acts of kindness by providing grants to the community-based charitable organizations they choose to support through their volunteer efforts.

gerald Jones: Five inspiring decades of devotion to his community

In his 48 years as a volunteer firefighter with the Petitcodiac Fire Department in New Brunswick, CN Railroader in the Community Gerald Jones has experienced many life-changing moments. “When we help save people, it’s a wonderful feeling,” says Gerald, who retired from CN in 1996 as a Transportation Officer after 33 years of service.

Gerald has received several awards in recent years. In 2013, he was awarded the Queen’s Diamond Jubilee Medal. In 2014, he was named Volunteer Fire Chief of the Year by the Canadian Association of Fire Chiefs. In 2015, he was recognized by CN under a special

CN Railroaders in the Community Award for exceptional volunteers. Gerald is the first recipient of this award, earning an additional $12,500 for the Petitcodiac Fire Department. “That was truly overwhelming,” he says, adding that the fire department will use the funds to purchase much-needed equipment and help local youth organizations.

ginger v. harris: Life lessons on and off the field

When CN Railroader in the Community Ginger V. Harris was given custody of her 8-year-old nephew, Orion, in 2014, one of the first things she did was get him involved in soccer. “Orion had never played sports; he comes from foster care and had been at six different schools,” explains Ginger, a Utility Clerk in Jackson, MS, who joined CN in 2005.

Ginger, who played basketball growing up, knows that important life lessons, such as discipline, leadership and teamwork, are learned through sports. She spent about 100 hours last year volunteering as a Team Parent for the Southwest Jackson Soccer League. Ginger communicates with other parents regarding the scheduling of practices and games, coordinating snacks and whatever else needs doing. “It’s important to give back, because when I was growing up, people gave to me,” says Ginger.

Ginger’s soccer league received a CN Railroaders in the Community Employee Volunteer grant, which will help offset registration and tournament fees. “I get self-satisfaction seeing the kids grow and knowing I did good for someone else by contributing my time.”


“Whatever success I’ve been credited with belongs to my mentors in the fire department, as well as to my supervisors and co-workers at CN, and to my family.” – Gerald Jones


“CN’s generosity helps us be the change in the world we’d like to see, as Ghandi said.” – Ginger V. Harris


CN employees “going the distance” for the Weekend to End Women’s Cancer.

CN Employees’ and Pensioners’ Community Fund


CN’s Employees’ and Pensioners’ Community Fund, in existence for more than 50 years, is one of the largest and most successful funds of its kind in Canada. Run by volunteer CN employees and pensioners, the Fund is a non-profit organization that organizes fundraising activities in support of various charities.

Last year’s campaigns met with unprecedented success, raising more than $1.8 million. Over the past 10 years, the Fund has raised more than $13.5 million. The fund:

• Supportsmorethan500healthcare,research, and charitable groups

• Directseverydollardonateddirectlytothedesignated organizations

weekend to end women’s Cancer

A group of CN employees headed by Fiona Murray, VP Marketing at CN, have rallied four years in a row to fight against cancer and take part in the “Weekend to End Women’s Cancer” in Montreal. This popular event highlights a two-day 60 kilometre (37.3 mile) walk. In 2015, to achieve their fundraising goal, the team organized various activities such as a bake sale, a fresh-brewed cappuccino sale and a Zumbathon! Through these efforts and other innovative initiatives, the team raised a total of $40,782 for the Jewish General Hospital Foundation, enabling advances in women’s cancer research.

CN Canadiens alumni Challenge:

In November, 2015, in Winnipeg, CN employees suited up for the 11th edition of the CN Canadiens Alumni Challenge against former Canadiens legends. The Canadiens Alumni, coached by two CN employees, included great hockey players such as Chris Nilan, Gilbert Delorme, Stéphane Richer and Steve Shutt. The crowd-pleasing game and benefit dinner raised $435,000 for charitable organizations in Winnipeg supported by the Fund, notably the Children’s Hospital Foundation of Manitoba, The Dream Factory, Winnipeg Harvest and Rossbrook House, as well as The Cancer Support Center in Homewood, IL. Since its first edition in 2002, the CN Canadiens Alumni Challenge has raised $3,010,535 for charity.

“We are very proud to make a significant contribution that will help make a difference for the organizations selected this year.”

Olivier Chouc, CN Vice-President, Law,

and Chairman of the CN Employees’ and Pensioners’ Community Fund

“The CN Community Fund would like to thank their pensioners, employees and volunteers, for without their continuing and devoted help, we would not be so strong.”

Chantale Lauzon, CN Employees’ and Pensioners’ Community Fund

CN employees’ and Pensioners’ Community Fund

935 de La Gauchetière Street West, 2nd Floor Montreal, Quebec H3B 2M9


www.communityfundcn.com

CN employees face off with Habs all-stars to raise funds for charities in Winnipeg, MB, and Homewood, IL.


The following questions address the most frequently raised concerns on the CN Public Inquiry Line. For information about any other aspect of CN’s business and operations, we encourage you to contact our Public Inquiry Line at 1.888.888.5909.

Trains blocking roadways for extended periods are a real concern in my community and residents find them inconvenient. What can be done to reduce the number of blocked crossings?

According to Canadian Rail Operating Rule (CROR) 103(d), no part of a train or engine may stand on any part of a public crossing for longer than five minutes when vehicular or pedestrian traffic requires passage. However, this does not apply to private crossings. When emergency vehicles require passage, railways must clear both public and private crossings as quickly as possible.

While CN makes every effort not to block crossings, there are unforeseen instances such as weather, mechanical failure or loss of air pressure that can cause a train to stop, which may result in a blocked crossing. CN crews are immediately aware when a train is blocking a road crossing and make every effort to clear the passage as soon as possible.

In case of emergency, motorists are encouraged to contact the CN Police Service emergency number – 1.800.465.9239 – which is posted at every public crossing on our network. In addition to the phone number, the sign includes the CN subdivision name and mileage point. This information may be used by emergency responders as well as the public to report an emergency. This phone number is staffed 24 hours a day, seven days a week.

For further rules surrounding blocked crossings, please visit the Transport Canada website (www.tc.gc.ca) where this information can be found under the Rail heading.

Railroads are federally regulated in the U.S., however the Federal Railroad Administration does not regulate the length of time a train may block an at-grade crossing.

The crossings in my community are in poor condition. What is CN doing to address this?

We recognize the importance of maintaining the condition of all crossings for which we are responsible and inspect our public crossings on a regular basis. Should you have any concerns about the condition of a particular crossing, please call our Public Inquiry Line at 1.888.888.5909. We will refer your call to the local track supervisors who will assess the crossing and make the necessary repairs. CN also works in partnership with road authorities to maintain crossings and brings to their attention those crossings that require maintenance for which they are responsible.

Residents in my community are complaining about trains whistling at all hours. Can CN stop using whistles?

While we understand that whistling may be disturbing at times, CN is federally regulated and governed by Canadian Rail Operating Rules (CROR) which mandate whistling regulations.

Under CROR, Rule 14 (l), train crews are required to whistle at all public crossings. Train whistles are safety devices that alert motorists and pedestrians to the presence of an approaching train and warn trespassers away from the rail right-of-way. Locomotive engineers follow a detailed set of instructions under the CROR that outline when a whistle must be sounded and the whistling sequence to be used. Train crews will also use the whistle if there is a work project in the area to notify the work gang on or near the track that a train is approaching.

Frequently Asked Questions


In certain circumstances, a particular crossing may be exempt from whistling requirements. In order to obtain this exemption, a municipality must take a number of steps:

1) The municipality needs to submit a request to the railway including a detailed crossing safety assessment on the conditions at the crossing by a qualified external consultant.

2) If it is determined that safety will not be compromised and that the crossing meets the prescribed conditions of Transport Canada, the municipality must then give public notice and notify each relevant association of its intent to pass a resolution declaring that it agrees that whistles should not be used at the crossing.

3) Finally, the municipality must pass the resolution.

The complete application procedure to pursue anti-whistling measures can be found on the Transport Canada website (www.tc.gc.ca) under Rail Safety.

In the United States, CN is federally regulated and governed by the Train Horn Rule issued by the Federal Railroad Administration. Locomotive engineers must begin to sound train horns at least 15 seconds, and no more than 20 seconds, in advance of all public at-grade crossings. Further information on the process surrounding the establishment of Quiet Zones can be found on the Federal Railroad Administration website at: www.fra.dot.gov.

What can be done about idling trains? My community has raised concerns about the noise and/or diesel fumes.

CN crews are trained on fuel conservation practices to reduce our carbon footprint, including locomotive shutdowns in our yards. However, locomotives may need to be left idling due to various operating requirements such as weather and maintaining air pressure for braking and starting systems.

Where possible, many CN locomotives make use of SmartStart technology, which is an Automatic Engine Start Stop system for locomotives. Over half of the locomotives in our active fleet are equipped with SmartStart technology. This system automatically triggers the locomotive to either safely shut down or restart when certain parameters have been met.

Should you have concerns regarding idling or diesel fumes, please call our Public Inquiry Line at 1.888.888.5909. We will ensure our Operations personnel are aware of your concerns. They will assess the location to determine if options exist.

The CN property in my community is not being maintained adequately. Who should I contact?

CN makes every effort to maintain our property and is committed to business practices that protect the natural environment, prevent pollution, reduce our greenhouse gas emissions and conserve natural resources. Waste management is important to us and we are addressing this issue with two key initiatives: removing old rail ties from our rights-of-way and establishing an aggressive waste reduction program for our buildings and yards. Should you have concerns regarding property maintenance, please call our Public Inquiry Line at 1.888.888.5909. A member of the team will communicate your concerns to our Engineering personnel.

How do I stay connected with CN?

935 de La Gauchetière Street West Montreal, Quebec H3B 2M9


www.cn.ca

facebook.com/CNrail

linkedin.com/company/cn

twitter.com/CN_Comm

www.facebook.com/CNrail

www.linkedin.com/company/cn

https://twitter.com/CN_Comm

At CN, we take pride in how we do our jobs to move customers’ goods safely and efficiently. We are also proud of what our company stands for: a set of five core beliefs that drive how we conduct our business every day and support our commitment to be the best railway in North America.

www.cn.ca/community

what CN stands For

delivering operational and service excellence

Creating value for Customers

Creating value for

shareholders

playing our role as a

backbone of the economy

delivering safely and

responsibly

04/2

016

Ontario Provincial Police

Police provinciale de l’Ontario

Municipal Policing Bureau Bureau des services policiers des municipalités

777 Memorial Ave. 777, avenue Memorial Orillia ON L3V 7V3 Orillia ON L3V 7V3

Tel: 705 329-6200 Tél. : 705 329-6200 Fax: 705 330-4191 Téléc.: 705 330-4191

File Reference: 612-20

June 7, 2016

Attn: Municipal CAOs and Mayors

RE: New Report Available Related to Current Billable Calls for Service (CFS)

In follow-up to the 2016 initiatives letter dated June 1st, 2016, the Ontario Provincial Police (OPP) Municipal Policing Bureau has rolled out a new report called the Calls for Service (CFS) Billing Summary Report. Under the OPP billing model, the number of billable occurrences has an impact on the amount a municipality pays on the CFS portion of their annual billing statement.

Police officers perform a variety of duties and respond to many different types of situations. Only a portion of these duties, deemed to be reactive in nature, are included in the CFS portion of a municipality’s annual billing statement.

The CFS Billing Summary Report captures current activity for billable occurrences grouped and weighted by their respective time standard in a manner similar to the annual statement. With the CFS Billing Summary Report, Detachment Commanders are able to view current activity, comparing it to the same period in the previous year to take a quick snapshot of “billable” CFS in the municipality.

This report is meant to be shared by detachment representatives with OPP-policed municipalities through their Police Services Boards (PSB), Community Policing Advisory Committees (CPAC) and/or municipal councils. It must be recognized that this is only one of several tools and/or reports available to understand policing activity in a municipality. On the back side of this memo you will find some Frequently Asked Questions about the CFS Billing Summary Report.

This report, combined with other tools and/or reports, can assist detachment commanders in identifying the types of calls that may be contributing to reactive CFS and impacting policing costs. The development of this report supports the OPP’s commitment to provide clear and transparent information to municipalities about the delivery of OPP municipal policing services.

Yours truly,

M.M. (Marc) Bedard Superintendent Commander, Municipal Policing Bureau

ald/

Frequently Asked Questions

8(b)

Q. What is the difference between the CFS Billing Summary report and the Police Services

Board report?

The PSB report consists of four components, one of which being crime data from Niche RMS.

The crime report is similar to the CFS Billing summary but different. Billable occurrence

reporting has unique characteristics unlike any of the OPP’s other statistical methods including:

Count of reported occurrences instead of actual occurrences (reported in the Police

Services Board Crime report).

Excludes occurrences reported through on‐line reporting methods.

Offences included in the billing categories vary from traditional reporting categories

(originating from Statistics Canada) despite similar naming conventions.

Does not include ALL occurrences municipal officers attend.

Does not include occurrences in First Nations, provincial areas or unorganized

territories.

The PSB Report is managed and supported by Business Management Bureau. The CFS

Billing Summary Report is managed and supported by Municipal Policing Bureau.

Q. Why are reported occurrences used instead of actual occurrences? Reported occurrences are the sum of all actual and unfounded occurrences reported to police. Reported occurrences invoke police resources, whether the reported offence was actually committed or not. As police are still required to investigate ‘unfounded’ occurrences and still invoke a police response, they are counted for billing purposes. Q. Where can I get this report from? CFS Billing Summary reports can be requested from your Detachment Commander. Q. Are calls for service in First Nation or provincial areas (Provincial parks, highways) included in the counts? The CFS Billing Summary report counts only occurrences that occur in one of the 323 municipalities policed by the OPP. It does not include occurrences in provincial areas (including First Nation, unincorporated territories or provincial park areas) that OPP members are mandated to police. Location of the occurrence is determined by the occurrence address.

IESO 2015 ANNUAL REPORT

Powering a Connected World

OUR VISION

Powering a reliable and sustainable energy future for OntarioOUR MISSION

We will do this by:

> Operating and shaping the electricity system and market in an effective and transparent manner

> Planning for and competitively procuring the resources that meet Ontario’s electricity needs today and tomorrow

> Leading a culture of conservation

> Seeking and acting on input from our communities, customers and stakeholders

> Sharing relevant and valued information, data, analysis and expertise

> Attracting, retaining and developing a highly skilled and professional workforce

2015 Annual Report Table of Contents

1Letter from the President & CEO and the Chair

2The Plan to Secure Ontario’s Energy Future

⁄ Regional Plans to Suit Regional Needs

⁄ Ontario’s Evolving Climate Agenda

⁄ Refurbishments Secure Ontario’s Nuclear Future

10Enabling a Culture of Conservation: The Next Phase for Ontario

⁄ Collaborating for Success

⁄ Save on Energy Powers a Bright Future for Ontario

⁄ The Drive to Energy Efficiency

⁄ The Race to Reduce Energy Consumption

18Operating for Today while Preparing for Tomorrow

⁄ Microgrids Bring the Promise of Tomorrow Closer

⁄ Defending Against Cyber Threats

⁄ DR Auction Expands Consumer Role in the Market

26Executive Leadership Team, Board of Directors and Advisory Committees to the Board

Managing change is nothing new for Ontario’s electricity sector. The province has been undergoing a deep-rooted and broad-based transformation for at least the past decade, if not longer. Now more than ever before, it’s time to actively leverage some of these changes to ensure the province and its residents, businesses, utilities, institutions and other organiza-tions are well positioned for decades to come.

A lot has changed since the Hydro-Electric Power Commission of Ontario was created in 1906, but electricity continues to be generated, transmitted and distributed to end-use consumers who expect a high degree of reliability.

Now, however, we’re asking consumers to become more informed and more engaged by giving them the tools they need to use electricity wisely. These efforts are paying off.

Letter from the President & CEO and the Chair

Through the collective actions of electricity consumers, Ontario has achieved over 3,600 megawatts in peak demand savings since 2006.

In an increasingly connected world, where our devices, appliances, thermostats, vehicles and many other items are capable of sending, receiving and acting on data related to energy consumption, we’re at a pivotal point in revisiting the way we think about electricity and the value it provides.

Through a number of measures aimed at including new voices in the energy dialogue, the Independent Electricity System Operator (IESO) is hoping to drive a shared understanding of the value proposition for a commodity that’s become essential to modern life. This value continues to grow and change as new entrants bring new products, services,

Bruce B. Campbell

President and Chief

Executive Officer

Independent Electricity

System Operator

Tim O’Neill

Chairman of the Board

Independent Electricity

System Operator

solutions and business models to the market, building on the innovation and foresight that Sir Adam Beck and his counterparts displayed more than a century ago.

Over the 12 months since the merger between the IESO and the Ontario Power Authority (OPA) created a new and expanded IESO, the company has made good progress in addressing the challenges of integration while delivering on our expanded mandate. As we move forward, the IESO remains focused on its prio-rities, which include enabling conservation and energy efficiency, planning and oper-ating Ontario’s power system, procuring supply, as well as

administering and evolving the province’s wholesale electricity market – all with a view to en-suring the province continues to benefit from a sustainable and reliable electricity system.

We’d like to thank our stakeholders, employees, sector partners and other groups for the input they’ve provided as we collectively develop a roadmap for the future. Engaging with the people, businesses and com-munities that are most affected by our decisions is a priority for the IESO. The decisions we make in the coming years will be far-reaching in scope and impact. We hope you’ll work with us to help unlock Ontario’s economic potential and power what’s next.

POWERING A CONNECTED WORLD 1

2015 ANNUAL REPORT

Power system planning involves many moving pieces and not-yet-known future requirements

L ike every other power system, Ontario’s grid is planned and operated with a view to delivering

a reliable supply of electricity to users today, tomorrow and for years to come. Reliability, in this context, has two key components: adequacy (is there enough energy to meet users’ needs?) and security (is the system sufficiently robust that it can withstand unexpected events?).

Meeting these criteria comes down to one basic principle: having the right resources, with the right characteristics, in the right place, at the right time.

This takes planning, a core IESO responsibility undertaken through a broad engagement framework that includes those individuals, organizations and institutions most impacted by our decisions. It’s a highly iterative process that must consider short-, medium- and long-range electricity needs as well as impacts on cost, reliability, the environment and other considerations.

With a broad view of Ontario’s electricity landscape, and relationships that span the sector, identifying the optimal solution is not something the IESO does in isolation. It’s a task that requires discussion and input from multiple sources at different points in the process. Getting the right resource mix requires consideration of a range of options, which may include generation, conservation, energy storage, transmission and/or distribution, emerging communi-cation and control technologies – or some combination of these alternatives. In all cases, a balance is sought to meet customer needs, system needs and sector needs.

In October 2015, the government tabled Bill 135, the Energy Statute Law Amendment Act, 2015. If enacted, it will enshrine a new approach to long-term energy planning that requires the IESO to produce a technical report that considers anticipated electricity supply, capacity, storage, reliability and demand, among other factors. The planning process for the Long-Term Energy Plan (LTEP) will also involve

Planning a power system to meet the needs of the many constituencies impacted by its operation – generators, transmitters, distributors, traders, energy service providers, consumers, communities, system operators and others – is like trying to solve a complex jigsaw puzzle.

But unlike the more familiar version, this puzzle comes with moving pieces instead of static ones, multiple options to fit the pieces together, and an evolving picture of what the end state should actually look like.

The Plan to Secure Ontario’s Energy Future


2015 ANNUAL REPORT

FUTURE-PROOFING THE GRID

Planning for the future when the present is in a state of flux is no easy task. In recent years, the IESO has worked closely with both industry and local communities to identify viable options that support reliability and adapt the power system to meet changing conditions.

For electrical planning purposes, the province has been divided into 21 regions. Each region has specific needs depending on the age and condition of its existing electrical infrastructure, its demand profile, its prospects for economic and/or population growth, its conservation and energy-efficiency potential, and other planning criteria. Working closely with trans-mitters and distributors of electricity, as well as muni-cipalities, First Nations and Métis communities, the IESO has developed and published Integrated Regional Resource

extensive consultation with consumers, distributors, gener-ators, transmitters, Aboriginal peoples and others.

Ontario’s power system has undergone a significant trans-formation in recent years, and the province has made great strides towards a lower carbon future. Eliminating coal-fired generation and integrating renewable resources such as wind, solar and biomass are two of the most important steps in the process, but supply mix changes aren’t the only way to achieve a more sustain-able sector. Other developments that don’t involve generation assets have occurred in parallel. These include conservation, the installation of smart meters, the implementation of time-of-use pricing, and the introduction of smart grid technologies that leverage automation, connectivity and control systems to reshape the way consumers interact with the power system – and vice versa.

Ontario’s nuclear fleet produced

60%

of the electricity generated in 2015.

Renewable sources of supply,

like these wind turbines, are

playing a greater role in meeting

Ontario’s energy needs and

helping the province transition

to a lower carbon future.

Plans (IRRPs) addressing the reliability requirements for eight high priority areas (see page 6).

On a provincial basis, the rate of change is unlikely to slow in any material way over the coming decade. One of the most complex challenges will be managing planned outages to the province’s nuclear fleet while units at the Bruce and Darlington Nuclear Generating Stations are refurbished (see page 9).

The refurbishments are an important step in securing reliable baseload power at a reasonable rate and provide a measure of certainty in fundamentally uncertain times. The amended Bruce contract adheres to the 2013 LTEP refurbishment principles and ensures that execution and operational risks will reside with the private sector operator. Similarly, Ontario Power Generation (OPG)’s execution of the

INDEPENDENT ELECTRICITY SYSTEM OPERATOR4

REGIONAL PLANS TO SUIT REGIONAL NEEDS

What you see when you’re on top of a mountain looking down can be completely different from what you see when you’re at the base looking up. It’s all a matter of perspective.

Perspective plays a central role in the IESO’s regional planning process, which tries to reconcile province-wide electricity needs with community-level requirements, priorities and preferences. By including municipalities, First Nations, Métis, community and business leaders, and the general public in the dialogue, the IESO hopes to ensure the electricity solutions that emerge suit local circumstances to the greatest extent possible.

Although community engagement is not new, in recent years the IESO has brought increased rigour and a consistent, province-wide approach to its outreach efforts by bringing new players to the table, offering greater transparency about the planning process and engaging communities early and often. Going outside the electricity sector for advice means the IESO hears directly from the people most impacted by decisions about regional and local perspectives.

An integral part of the regional engagement process is the formation of a local advisory committee (LAC), which provides input and recom-mendations used to develop medium- and long-term regional plans. LACs typically comprise up to 18 members, representing municipalities, First Nations, Métis, consumers and citizens, the business community, and environmental and conservation groups. They play a vital role in helping the IESO and local transmission and distribution companies understand the community context. Energy is top of mind for most municipalities, especially those that are managing population growth, demographic change, industrial restructuring, increased emphasis on environmental sustainability and other factors.

An Integrated Regional Resource Plan (IRRP) is intended to identify solutions to meet near-, medium- and long-term needs. When electrical needs, defined based on a forecast that includes the impacts of targeted conservation, are considered urgent and substantial, a “wires” solution involving new transmission and/or generation infrastructure may be the only viable option in the near term.

Over a longer horizon, however, an IRRP may explore other innovative, community-based options, including distribution improvements, enhanced conservation and demand management, district heating, local (embedded) generation, storage and other emerging technologies. Although it is generally quite specific in its short-term recommendations, an IRRP must also account for the inherent uncertainty of a 20-year forecast, the expectation of technological change, the potential for broad economic shifts and other trends that may impact demand for electricity, as well as local perspectives about how that electricity is produced, delivered and consumed.

Darlington refurbishment will ensure that its contractors are held accountable to deliver on the project. The arrange-ments also include appropriate off-ramps to protect ratepayers, should circumstances change as the projects proceed.

The Bruce and Darlington refurbishments will benefit from close coordination and planning between Bruce Power and OPG.

The proposal to continue operations at the Pickering station until 2024 would help ensure reliability during the refurbishment period, during which there are other planned retirements within Ontario’s generation fleet.

Balancing supply and demand is an activity that spans mul tiple timeframes, from

second-by-second fine-tuning in real time to 20-year plans reflected in the regional and provincial long-term energy planning processes. Power systems must have the right combination of baseload generation – which runs pretty much all the time, with limited variability in its output – and other types of supply that are more flexible and more capable of responding to changing conditions on the grid. They must also have transmission and distribution networks that can deliver energy when and where it’s required. More and more, they also rely on engaged consumers, incented to make informed decisions about their energy consumption.

0

500

1000

1500

2500

2000

3000

2011 2012 2013 2014 2015

MW

OtherSolar

BiofuelWind

GasHydroelectric

GROWTH OF EMBEDDED GENERATION

Like many other jurisdictions, Ontario is experiencing rapid growth

in embedded (or distribution-connected) generation, most of which

is wind and solar.

York Region Local Advisory Committee (LAC) members

(from left to right) Jennifer Wong, Teresa Cline and Norm

Vézina discuss future energy options for their region.

POWERING A CONNECTED WORLD

2015 ANNUAL REPORT

5

GROWTH IN DISTRIBUTED ENERGY RESOURCES

Like many jurisdictions, Ontario is managing a number of factors impacting the shape and structure of its electricity sector. On the supply side, there has been substantial growth in renewable gener-ation in recent years. At the end of 2015, Ontario had 3,234 megawatts (MW) of transmission-connected wind generation as well as 140 MW of transmission-connected solar generation.

But these figures only tell part of the story. Ontario also had nearly 3,000 MW of IESO-contracted embedded generation at the end of 2015, largely driven by participation in the Feed-in Tariff (FIT) and microFIT programs. While these resources make

important contributions to meeting Ontario’s demand for electricity, they can also pose some unique challenges in the operating environment.

Connected as they are at the distribution level, the hourly operations of some of these resources are not known by the IESO. Although telemetry data are available for approxi-mately 1,000 MW of embedded generation, they do not provide the full picture on output from embedded generation.

Despite this lack of broad visibility, these resources are starting to have a material impact on the bulk power system – especially when it comes to forecasting demand for electricity in real time. The IESO incorporates the impacts of embedded gener-ation into both the operational and planning timeframes.

For the operational timeframe, a forecast of embedded solar and wind output is incorpo-rated into the demand forecast. For the planning timeframe, the impact of embedded generation is incor-porated based on historical production by fuel type.

This absence of information about some distribution- connected resources can impair the IESO’s situational awareness and result in undesirable outcomes, inclu-ding the over-commitment (or under-commitment) of gen-eration units. For this reason, the IESO continues to closely monitor developments at the distribution level – and will be working with local distribution companies (LDCs) to enhance co-ordination of operations.

Despite the added complexities, embedded generation is a valuable addition to the power

system and can improve the efficiency of power delivery to the people and businesses that need it. Generation assets located closer to end-users can significantly reduce the amount of transmission infrastructure required to satisfy their energy needs. Furthermore, embedded generation can also minimize line losses and lower the construction costs, lead times and environmental impacts associated with large-scale transmission expansion.

As noted, much of the generation that’s being built in Ontario today is renewable in nature, primarily wind and solar. Whether connected at the high-voltage transmission level or the low-voltage distri-bution level, variable generation affects the way power systems are planned, designed, built and operated.

By 2025, renewable resources like wind, solar, bioenergy and

hydro facilities are expected to make up nearly 50 percent

of Ontario’s installed generating capacity.

ONTARIO'S SUPPLY MIX

Demand ResponseCoal Wind/Solar/BioenergyHydroGasNuclear

Installed Capacity

41GW

Installed Capacity

39GW

Installed Capacity

31GW

202520152005

21% 37%

16%26%

<1%

33%

25%22%

18%2%

20%

26%23%

26%5%


Some distributed generation creates two important challenges for Ontario’s electricity system: variability and uncertainty. The output from these units changes according to the availability of the primary fuel: wind and sunlight. Furthermore, the magnitude and timing of output from these units is less predictable than that of conventional generation.

While operating the power system has always been a balancing act, maintaining that balance presents new challenges in a number of areas, including generation commit-ment and intertie scheduling, frequency regulation, voltage control, ramping and load following, as well as operating reserve requirements.

The IESO’s Renewables Integration Initiative (RII) introduced a set of tools in 2013 to address both variability (through dispatch and visibility) and uncertainty (through

centralized forecasting) of the transmission-connected variable generation fleet. As Ontario moves towards implementing the 2013 LTEP target of having 20,000 MW of renewable capacity online by 2025, it will become increa singly important for the IESO to have enhanced capabilities to respond to changing situations quickly and flexibly.

Ontario’s cap-and-trade regime is another factor with the potential to influence Ontario’s power system plan-ning processes, particularly if it results in greater electrification of industry sectors that are currently dependent on green-house gas (GHG) emitting fossil fuels, including transportation. A change of this magnitude will not happen overnight, and the IESO will need to con-sider climate policy outcomes in its demand forecasts, as well as its planning models and operational requirements.

ONTARIO’S EVOLVING CLIMATE AGENDA

It’s been a long and winding road but Ontario has one of the lowest carbon electricity systems in North America.

With a grid that’s dominated by clean energy resources, including nuclear, hydroelectric and other renewables, Ontario has already made great strides towards a sustainable energy future. After decades of cost-effective, reliable operation, the province shuttered its last coal-fired power plant in 2014. Although it had complex operability implications for the IESO, removing coal-fired power plants from Ontario’s supply mix is the single largest greenhouse gas (GHG) reduction initiative in North America.

The closure eliminated more than 30 megatonnes of annual GHG emissions, equivalent to taking seven million vehicles off the road. To affirm its long-term support for cleaner sources of electricity, in the lead-up to the United Nations’ Conference of the Parties in Paris during the fall of 2015, Ontario passed legislation to permanently ban coal-fired electricity generation in the province.

In a series of announcements in the spring and summer of 2015, the government unveiled its Climate Change Strategy, which is designed to reduce GHG emissions to 80 percent below 1990 levels by 2050, and support the transition to a prosperous, low-carbon economy. Ontario plans to impose a limit on GHG emissions through a cap-and-trade program that aligns with the Western Climate Initiative and participating jurisdictions, which include Quebec and California.

Although specific program details are still being finalized, the design principles that underpin Ontario’s cap-and-trade regime span a number of areas, including environmental feasibility, competitiveness and economic growth, administrative efficiency, equitability and transparency, among others. The proposed implementation date is January 1, 2017.

To ensure the impacts on the province’s electricity sector are fully understood and considered as the cap-and-trade program is designed, the IESO has provided advice, information and analysis to the government. The IESO’s priorities in providing input reflect its broad mandate and its expertise in areas such as market administration, system operations, contract management, long-term planning and economic analysis.

The IESO has several overlapping objectives related to implementation of a cap-and-trade system in Ontario. They include ensuring that an effective, efficient and transparent price of carbon is reflected in the market price for electricity; impacts on generation supply contracts are minimized and result in efficient operations; negative impacts on system reliability are avoided; ratepayer impacts are minimized to the extent possible; and domestic generation and imports are not disadvantaged compared to generators operating in jurisdictions that lack a carbon pricing mechanism.

Distributed energy resources are playing a growing role in meeting Ontario’s energy needs but pose some unique operational challenges

to the IESO and local distribution companies.

Ontario’s proposed cap-and-trade program is expected to

impact the price of carbon-based fuels, which may drive

greater interest in alternatives, including electric vehicles.


2015 ANNUAL REPORT

7

Nuclear energy is the backbone of Ontario’s electricity system. The province’s nuclear fleet accounts for one-third of Ontario’s total installed capacity of approximately 39,000 megawatts (MW) and produced 60 percent of all the electricity generated in Ontario in 2015. Its steady supply of baseload energy comple-ments both Ontario’s renewable fleet, which is inherently more variable in its output, and the natural gas and hydroelectric fleets, which can provide peaking power that matches fluctuations in demand.

Recent government decisions to refurbish several nuclear units mean that nuclear will continue to play a foundational role for decades to come. These refurbishments will also mean reduced carbon emissions, given reduced production from natural gas-fired resources.

REFURBISHMENTS SECURE ONTARIO’S NUCLEAR FUTURE

Unit 6 will be

the first unit

refurbished at the

Bruce nuclear plant,

starting in 2020.


In December 2015, the Government of Ontario announced that an agreement had been reached between the IESO and Bruce Power to refurbish the six remaining units at the Bruce Nuclear Generating Station, thereby securing 6,300 MW of electricity from the site (including Bruce A units 1 and 2, which completed refurbishment in 2012).

As part of the agreement with the IESO, Bruce Power will continue to provide 2,400 MW of flexible nuclear generation. Although nuclear units are generally designed to run flat-out for extended periods of time, the units at the Bruce facility are equipped with condenser steam discharge valves that enable their output to be curtailed when conditions warrant reductions in generator output – a valuable attribute when the IESO needs to manage surplus conditions. The agreement with Bruce Power is

the product of two years of negotiations, as well as extensive analysis, due diligence, and independent fairness and technical review.

Cost was an important consideration. The initial price for Bruce Power’s generation was set at $65.73 per megawatt-hour (MWh) starting January 1, 2016. The average price over the life of the contract is estimated to be $77/MWh, or 7.7 cents per kilowatt-hour (kWh). This is some of the lowest-cost power the IESO has under contract.

Under the contract, virtually all the execution risk lies with Bruce Power. Moreover, if the cost of future refurbishments is uneconomic, the IESO can elect not to proceed with those refurbishments. However, if actual refur-bishment costs are less than the estimates, the savings are shared between electricity consumers and Bruce Power.

The government has also announced the refurbishment of all four units at Ontario Power Generation’s Darlington Nuclear Generating Station (for a total of 3,500 MW) and the ongoing operation of six units (totalling 3,100 MW) at the Pickering Nuclear Generating Station to between 2022 and 2024, pending regulatory approvals.

OPG estimates that refurbishing Darlington and extending the service life of the Pickering units to 2022/2024 offers the best combination of low cost and low emissions.

The IESO provided support for the government’s decisions with respect to the Darlington refurbishment and the ongoing operation at Pickering. These investments will be an important step in providing long-term, lower-cost, emissions-free and reliable baseload power for several generations, making the best use of existing assets, including transmission facilities.

The OPG refurbishments also have protection mechanisms including “off-ramps” – provisions that allow the province to re-assess the value to ratepayers before proceeding to the next stage.

The first refurbishment outage will begin at Darlington in late 2016 and outages will continue over the next decade. The IESO will carefully manage all outages to ensure continued reliability throughout the refurbishment period.

Ontario has three nuclear facilities –

Darlington, Pickering and Bruce – that

provide reliable baseload electricity and,

in the case of the Bruce units, valuable

operational flexibility.

CRED

IT: P

hoto

cou

rtes

y of

Bru

ce P

ower

CRED

IT: P

hoto

cou

rtes

y of

Ont

ario

Pow

er G

ener

atio

n

PickeringDarlingtonBruce

INSTALLED NUCLEAR CAPACITY IN ONTARIO

6.3GW

3.5GW

3.1GW

Ontario Power Generation’s $12.8 billion

investment in the Darlington refurbishment will

provide more than 30 years of clean, reliable,

baseload power, at a cost lower than other

alternatives considered.


2015 ANNUAL REPORT

9

Access to data about energy consumption is one factor enabling Ontario’s electricity users to derive increased value from conservation

E nergy efficiency, demand management and load displacement

have proven to be cost- effective resources that are being leveraged in a variety of ways to benefit individuals, sectors of the economy and the province as a whole. And building on Ontario’s smart meter infrastructure, data-driven apps and solutions are already delivering new insights into consumption patterns and supporting better decision-making about how and when to use electricity.

In the residential context, energy efficiency can both lower household electricity bills and improve home comfort. In commercial and industrial settings, where bigger projects deliver bigger energy savings, energy conservation can boost the competitiveness of Ontario’s businesses by optimizing oper-ational processes and systems, improving working conditions, and increasing employee productivity and retention. Furthermore, as Ontario moves towards a low carbon future, saving energy and the associ-ated reductions in greenhouse gas emissions has taken on a new urgency.

Over the past 10 years, Ontario has seen a complex and fundamental restructuring of the ways in which electricity is generated, transported, monitored, managed, regulated and consumed. During this period, conservation in Ontario has evolved to a strategic, multi-dimensional framework with an emphasis on technology-driven solutions that deliver enduring, verifiable results.

Enabling a Culture of Conservation: The Next Phase for Ontario


2015 ANNUAL REPORT

CONSERVATION SUPPORTS RELIABILITY

Conservation and energy efficiency are already making a difference. As important as they are in reducing peak demand and minimizing the costs associated with meeting those peaks, conservation and energy efficiency contribute a great deal more to the pro-vince’s reliability picture. Over the past five years, Ontario’s conservation efforts have become increasingly visible, and increasingly material, for the IESO’s planners, forecasters and operators. Conservation has become an important con-sideration not just in long-term planning, but over the entire time horizon for which the IESO is now responsible.

For the IESO, conservation is considered on the macro scale as well as the micro scale. It can take a variety of forms. If an automotive manufacturer scales back production when the grid is strained, that’s con-servation. Similarly, a decision by a small industrial consumer to install behind-the-meter generation reduces demand on the existing power system. The conservation umbrella also includes municipalities that optimize the performance of their water treatment plants, as well as commercial property owners who install motion- sensitive lighting systems.

Although the scale may be different, energy efficiency is not limited to the industrial, commercial and institutional realms. A residential consumer who buys an energy-efficient washer and dryer, or redeems

a coupon and installs high- efficiency LED lighting, or adds weatherstripping around leaky doors and windows, is also driving the province’s conservation results. All of these decisions are creating a conservation culture that is increasingly factored into the IESO’s planning forecasts and models.

Ontario has a highly diverse customer base comprising residential, commercial, industrial, institutional and other electricity users. Over the past decade, the province has successfully engaged con-sumers in the dialogue centered on the value of energy efficiency through a variety of means, including the suite of programs launched in 2011 under the Save on Energy brand. Through these programs, as well as changes to codes and standards, Ontario has saved 9.9 billion kilowatt-hours (kWh) of elec-tricity in the past 10 years.

The 2011-2014 conservation results show just how powerful and effective a broad commit-ment to conserve can be in helping Ontario reduce its demand for electricity. Between 2011 and 2014, the Save on Energy suite of pro-grams reduced total electricity consumption in the province by 6,553 gigawatt-hours (GWh), exceeding the energy-savings target set by the government by nearly 10 percent.

Capability-building remains an important contributor to the sector’s conservation successes, ensuring that a skilled network of professionals exists to deliver energy-efficiency and conser-

Energy savings achieved through the local distribution

company (LDC) Business Program stream outpaced all

other Save on Energy program categories between

2011 and 2014.

Industrial Accelerator Program

Non-LDC DR

Other LDC Industrial Program

LDC Aboriginal Program

LDC Home Assistance Program

LDC Consumer Program

LDC Business Program

2011 2012 2013 2014

2011-2014 INCREMENTAL ANNUAL ENERGY SAVINGS

Energy Savings (GWh)

0

100

200

300

400

500

600

700

800

In addition to participating in

the Save on Energy suite of

conservation programs, Vision

Extrusions is also part of the

Industrial Conservation Initiative,

through which the company

proactively manages its peak

demand on a real-time basis.


vation services where and when they’re needed. In that way, they can support system reliability, help businesses manage their energy use and stay competitive, and help families improve the comfort and efficiency of their homes.

Ensuring those individuals involved in conservation- oriented activities are aware of industry-identified, tested and proven best practices is an important success factor. More than 5,000 people participated in IESO-supported training programs between 2011 and 2014. Spanning a number of areas related to energy efficiency, these programs and courses included Certified Energy Manager training; building operator certification; HVAC installation optimization;

Certified Measurement & Verification Professional training; and low-rise residen-tial builder and construction trades training, among others.

Training is just one aspect of the IESO’s multi-dimensional efforts to foster and promote a culture of conservation. By the time the 2011-2014 framework ended, 2,100 energy audits had been executed, 30,000 retrofit projects had been completed, 81,000 small business lighting projects had been completed and 9.9 million Save on Energy coupons had been redeemed to purchase energy-saving products such as ENERGY STAR certified light bulbs and ceiling fans, programmable thermostats, lighting control devices, advanced power bars and outdoor clotheslines.

COLLABORATING FOR SUCCESS

Ontario’s 70+ local distribution companies (LDCs) are learning that tackling common issues together can resultin better solutions.

LDCs have collaborated on marketing and promo-tional activities in the past, and the IESO is actively encouraging them to broaden their collaborative efforts to achievegreater efficiencies in administration as well as program design and delivery. Launched in 2015, the LDC Collaboration Fund has a total budget of $25 million, which will be committed over the six-year duration of the Conservation First Framework. The fund is designed to encourage deeper collaboration on program delivery among two or more LDCs and support LDC-led working groups’ efforts to design new province-wide conservation and demand management (CDM) programs.

By the end of 2015, the IESO had approved 14 projects involving 35 LDCs on the basis of six key funding principles: accountability, fairness and con-sistency, transparency, ratepayer value, actionability and innovation. With this funding, LDCs will be able to better mitigate the risks involved in the first years of delivering new training and educational content to their customers and channel partners, engaging new energy managers across multiple service territories, and undertaking joint procurements for legal, consulting and engineering services. In addition, province-wide working groups will be able to engage professional support to help them design new initiatives.

LDCs may also use Collaboration Fund support to work with partners in the natural gas sector in an effort to find new ways to deliver services efficiently to shared customers, whether they are residential, mid-sized and large industrial, or commercial and institutional consumers.

In this way, collaboration among LDCs and between electric and gas utilities is expected to drive greater administrative efficiencies, enhance information sharing and foster stronger working relationships across the sector, leading to measurable results and desired outcomes.


2015 ANNUAL REPORT

A NEW FRAMEWORK FOR CONSERVATION

With the conclusion of the earlier framework and the introduction of the six-year Conservation First Framework (CFF), 2015 was a year of transition – not just for the IESO, the lead agency charged with delivering on the govern-ment’s conservation agenda. It was also transitional for local distribution companies (LDCs), retailers, contractors and other partners involved in the design, development, implementation and evaluation of Ontario’s conservation programs.

The CFF implementation resulted from extensive consultations between the various agencies involved in the sector, LDCs, gas utilities and others. It’s intended to provide utilities with long-term stable funding and budgets; encou-rage cost-effective electric

utility conservation plans; enable greater electric utility autonomy; make province- wide programs available for delivery; ensure sufficient flexibility to align conservation programs with local needs; support streamlined approvals and administrative require-ments; encourage innovation; and drive regional and natural gas utility collaboration.

By the end of 2015, the IESO had reviewed and conditionally approved all but one of the 42 conservation and demand management (CDM) plans submitted by Ontario’s LDCs. Through these plans, LDCs describe how they plan to achieve their individual CDM targets, which are assessed on the basis of each LDC’s share of total demand. By the time the CFF sunsets on December 31, 2020, total consumption in the province is targeted to have dropped

by seven terawatt-hours (TWh) through LDC-delivered programs, and an additional 1.7 TWh of savings achieved through the Industrial Accelerator Program for large, transmission- connected customers.

Through the CFF, the IESO aims to reach electricity consumers of all stripes to help them understand the full value of conservation. While it’s easy for consumers to see how conservation can benefit them personally, it’s often less clear to end-users that conservation now plays an essential role in the IESO’s grid-related planning and operational functions – such as the potential for conser-vation to meet local system needs and defer investments in other, potentially more costly infrastructure. More than that, conservation is also an important consideration

as communities in many parts of the province deal with rapid population growth coupled with increased demand from the energy-consuming devices, appliances and systems that make up the ever more connected home.

For residential users, conservation behaviours can be motivated by a number of factors – financial, environ-mental and social. For most business owners, managers and operators, saving money is the main driver behind saving energy. But as they’re learning, energy efficiency doesn’t just reduce consumption, it can also enhance building performance, reduce maintenance costs and lost productivity resulting from equipment downtime, and support improved oper-ational outcomes – all while contributing to a more sustainable society.

SAVE ON ENERGY POWERS A BRIGHT FUTURE FOR ONTARIO

It’s time to reframe the conversation about conservation. In recent years, most Ontarians have focused on the financial benefits of energy efficiency. But as people will soon be reminded, saving energy means a lot more than just saving money.

A multi-channel media campaign involving traditional and social media will focus, instead, on demonstrating some of the other, unexpected benefits of energy performance improvement, such as more comfortable homes; more efficient, competitive businesses; and more sustainable communities.

After years spent building awareness and support for the Save on Energy (SOE) suite of programs, the IESO will be working with local distribution companies (LDCs) and other sector partners over the coming months to explore how electricity users of all types can leverage energy savings to power what’s next – however they define “next.”

At the core of the Conservation First Framework is the idea of optimizing the use of existing resources to ensure Ontario’s energy needs are met in the most cost-effective ways possible. By avoiding the costs associated with building new generation, transmission and/or distribution infrastructure, demand-side measures including conservation, energy efficiency and demand response will help Ontario achieve the ambitious conservation targets of 30 terawatt-hours by 2032 set out in the 2013 Long-Term Energy Plan.

Both collectively and individually, Ontario’s electricity consumers stand to benefit from more energy-efficient homes, businesses, arenas, hospitals, schools, water treatment plants and other public buildings. And with the help of LDCs, which are responsible for local efforts and promoting SOE incentives within their respective service territories, they’ll be able to start visualizing what comes next.

CRED

IT: P

hoto

cou

rtes

y of

Wey

erha

euse

r C

ompa

ny L

imit

ed


THE DRIVE TO ENERGY EFFICIENCY

For many of Ontario’s large industrial electricity consumers, reducing or shifting their usage can provide a big boost to the bottom line. To help achieve their objectives, a growing number are looking to the IESO’s Industrial Accelerator Program (IAP), which is designed to help eligible transmission-connected companies fast-track major energy-efficiency projects.

Weyerhaeuser Company Limited, a global forest products company specializing in timberlands, wood products and cellulose fibre, is a case in point. At the company’s mill in Kenora, Weyerhaeuser employees make every effort to help the company remain competitive by reducing costs and improving operating efficiencies in the laminated strand lumber manufacturing process.

TimberStrand® is a unique engineered lumber product used to make framing and structural materials for residential construction and in commercial applications such as millwork and concrete forms. The Kenora press can produce billets of TimberStrand® that are eight feet wide by 64 feet long and up to 3.5 inches thick. The billet can then be sawn into any combination of widths and lengths for sale to customers.

As part of the IAP-funded project, variable frequency drives were installed on 10 fan motors, allowing the flow to be controlled by adjusting the fan speed to meet process requirements, as opposed to running the fans at full speed and adjusting the flow with dampers.

Running fans at different speeds resulted in substantial savings at the Kenora plant. Cumulative annual energy savings have exceeded 6,500 megawatt-hours (MWh) for the 4,160-volt motors ranging from 350 to 500 horsepower. Weyerhaeuser tapped into an IAP incentive that approached $1.5 million, which included a detailed engineering study that was completed before equipment upgrades began.

To further control its energy costs, Weyerhaeuser was also the first transmission-connected participant to hire an IAP-funded energy manager – a new element of the program that came into effect in June 2015. Energy managers are on-the-ground resources who can identify conservation opportunities and champion strategic energy management practices within one or more organizations.

Within the first three months alone, Weyerhaeuser’s energy manager had identified potential electrical energy savings in excess of 2,000 MWh for each of the next two years. The money and energy saved through these projects will help support the organization as it builds on the conservation successes it has already realized, not just with electricity but also with natural gas, diesel and propane.

CONSERVATION AND THE NEW ENERGY ECOSYSTEM

Going forward, the conser-vation landscape in Ontario will be defined by a number of converging factors, including connectivity, collaboration, decentralization, flexibility and analytics. Social bench-marking, for example, has already become an important tool in helping users under-stand – and change – their energy consumption patterns.

Given the breadth of its mandate and its relationships, the IESO already plays a crit-ical integrative role, bringing individuals and institutions together. Since 2005, the IESO has also played a leading role in funding research and develop-ment into new, innovative technologies, energy manage-ment practices and programs, through the Conservation Fund (see pages 17-18). The IESO will continue to invest in technologies and solutions that have the potential to deliver cost-effective energy-efficiency solutions for Ontarians, and will go even further to make energy efficiency and con-servation standard business practices and common household norms.

Although the Conservation Fund is the most visible of of its programs, the IESO offers a range of funding programs to help make Ontario’s electricity system cleaner, greener and smarter. With a focus on education, capacity building and com-munity energy planning, these programs support Aboriginal communities, municipalities, public sector entities and co-operatives in the design and delivery of renewable energy and conservation initiatives.

Going forward, the IESO will continue to engage a broad spectrum of stakeholders, including First Nations and Métis communities, through formal as well as informal mechanisms. It will also encourage Ontarians to share their ideas, experiences and opinions. In doing so, the IESO hopes to ensure that conser-vation programs and initiatives are well designed and effective, and evolve in lockstep with new technologies and new market mechanisms.

With the help of the IESO’s Industrial Accelerator Program,

Weyerhaeuser installed variable frequency drives on 10 fan

motors at its mill in Kenora, resulting in cumulative annual

energy savings in excess of 6,500 megawatt-hours.

Through the Conservation First Framework, the IESO is working

with local utilities to reduce electricity consumption in

Ontario by

7 terawatt-hours

by the end of 2020.


2015 ANNUAL REPORT

The Race to Reduce became one of the largest regional energy challenges in the world, with 196 buildings participating in the program, representing more than 69 million square feet or 42 percent of the commercial office space in the GTHA. Twenty-one of these buildings reduced their energy use by more than 20 percent, with Oxford Properties Group’s Richmond-Adelaide Centre in Toronto – home to the IESO’s corporate offices – cutting its energy consumption by 35 percent over the span of the race.

Early on in the process, CivicAction identified the four most common barriers to energy efficiency in office buildings. They include a lack of good data to understand a building’s energy use and where it stands in relation to others and industry standards; a lack of knowledge of what buildings are capable of and what others have done successfully; a lack of information on the tenant business case for energy-efficiency investments; and a lack of effective communication among landlords and tenants concerning energy efficiency.

Although it delivered other important benefits, the greatest legacy of the Race to Reduce is the establishment of a baseline for measurement and comparison going forward. As part of the initiative, the IESO required the use of ENERGY STAR Portfolio Manager, an established online tool for energy manage-ment created by the U.S. Environmental Protection Agency to measure and track energy and water consumption, as well as greenhouse gas (GHG) emissions. The platform can be used to benchmark the performance of one building or a portfolio of buildings, all in a secure online environment. It can be used for buildings of all types – whether they’re industrial, commercial, institutional, multi- unit residential or social housing.

Having all the information that was compiled during the Race to Reduce in one central, accessible location will take on increasing importance as energy-related reporting requirements spread to Ontario’s commercial building sector – something broader public sector organizations have had to do since July 1, 2013, when they were required to submit and publish their first annual energy use and GHG report, as per O. Reg. 397/11.

The Race to Reduce, one of the largest regional

energy challenges in the world, involved:

196 BUILDINGS

69 MILLION SQUARE FEET

A little friendly competition – and some bragging rights – can go a long way in motivating people to reduce their electricity usage. It can also support the creation of benchmarks against which others can compare their own consumption, and drive a deeper understanding of energy-related usage patterns.

With seed funding from the IESO’s Conservation Fund in 2009, CivicAction’s Race to Reduce kicked off in 2011 and concluded in 2014. The energy reduction competition challenged landlords and tenants in the Greater Toronto and Hamilton Area (GTHA) to work together to collectively reduce energy use in office buildings by at least 10 percent over a four-year period. The initiative offered annual awards, supported a focus on results-based performance, and encouraged competing participants to share their experiences of what worked.

When final results were revealed in November 2015, it became apparent the program was a huge hit. There was a drop of close to 193 million equivalent kilowatt-hours (ekWh) or 12.1 percent in collective energy use over four years, far surpassing the initial stretch target. By CivicAction’s estimates, that’s equivalent to taking more than 4,200 cars off the road and putting $13.7 million back into office landlords’ and tenants’ pockets.

THE RACE TO REDUCE ENERGY CONSUMPTION

CRED

IT: P

hoto

cou

rtes

y of

Oxf

ord

Pro

pert

ies

Gro

up


With a broad mandate to enable innovation in electricity conservation and demand management (CDM), the IESO’s Conservation Fund supports work in the residential arena as well as the industrial and commercial space. With an annual budget of $9.5 million and a program management approach that’s coordinated with other funding bodies and industry experts, the Conservation Fund and its projects continue to influence the evolution of CDM efforts across Ontario.

One of the most successful of these efforts is residential social benchmarking, the goal of which is to cost-effectively reduce total residential electricity consumption by providing consumers with information-based tools that enable them to compare their home’s energy performance to that of another home or group of homes. Social benchmarking was identified in the government’s 2013 Long-Term Energy Plan, as well as its 2014 conservation discussion document, Conservation First: A renewed vision for energy conservation in Ontario, as an idea with great potential.

Initially, three local distribution companies (LDCs) took part in separate projects testing separate concepts. Along with their private

sector partners – Opower and Simple Energy – Hydro One, Horizon Utilities and Milton Hydro enrolled 110,000 customers in three unique benchmarking projects. To address Ontarians’ varying access to technology, as well as the variety of approaches that can motivate resi-dential conservation behaviour, several service approaches were tested. Each project was designed to leverage electricity consumption data and motivate measureable changes in consumption behaviour.

While final, verified results are not yet available, early results showed sufficient promise that more than 20 LDCs included social benchmarking as one element of their respective CDM plans under the 2015-2020 Conservation First Framework.

Competition is certainly not limited to the commercial sector. A growing number of residential customers are learning that it pays to pay attention to energy consumption. With the proliferation of real-time (or near-real-time) data related to other aspects of day-to-day living, it’s no wonder electricity consumption is coming under increased scrutiny. Whether you’re measuring progress towards health goals with a physical activity tracker, avoiding traffic with a GPS device, monitoring your home security with a wireless alarm system, or viewing yesterday’s electric-ity usage at your home, the common thread is data – and the information it provides.

On a societal level, our access to data is unprecedented. It offers the promise of intel-ligence. Engaged electricity consumers can monitor a broad array of variables, not just about their own consumption but about conditions on the power system as a whole. In some cases, they can even compare them-selves to their neighbours to see who runs the more energy-efficient household. This informa-tion, in turn, has led to better decision making about when and how to use electricity.

CREDIT: Photo courtesy of Simple EnergyThe IESO’s Toronto office is located at 120 Adelaide Street

West, a highly energy-efficient building within Oxford Properties’

portfolio and one of the winners of the Race to Reduce.

The Ghosal family participated in the

Community Energy Challenge, a social

benchmarking program delivered by Milton

Hydro and Simple Energy designed to

encourage behaviour-based energy

conservation results.


2015 ANNUAL REPORT

New players, new technologies and new market mechanisms are transforming the electricity sector

As in many jurisdictions, the IESO and its industry partners are dealing with the confluence of several simultaneous developments related to how electricity is produced, transported and consumed.

Operating for Today while Preparing for Tomorrow

O n the supply side, significant investments are being made in renewable resources, both

transmission-connected and distribution- connected. The growth in distributed energy resources is coming under increasing scrutiny as system operators and local utilities address the complexities associated with facilitating and managing two-way flows of electricity on transmission and distribution lines that were designed for one-way flows. Adding to the challenge is the need for re-investment as the system ages.

The IESO now manages more than 25,000 contracts worth in excess of $61 billion in private investment. Under currently directed procurements and other procurement initia-tives, over 2016 the IESO expects to start managing more than 1,000 additional contracts for renewable resources, including a large number of potentialmicroFIT contracts, and potential Energy from Waste projects. Both the IESO andits counterparts expect the IESO’s contract management teams to administer all gener ation, conservation, demand response, ancillary service and capacity contracts ina consistent and fair fashion, respecting the obligations arising from these contractual relationships.

On the demand side, electricity consumers are becoming more engaged — an engagement that’s being enabled by a broad range of emerging technologies that allow them to monitor, control and change their energy consumption behaviour. There’s a wealth of energy data to be leveraged, and many new players have developed products, services and business models premised on the intelligence that big (and small) data can offer.

And then there’s the market through which supply and demand are optimized. While the existing market design has generally served Ontario well for the past 13 years, and has enabled the integration and reliable manage-ment of all the new forms of supply, there is room for improvement.


2015 ANNUAL REPORT

LEVERAGING DEMAND-SIDE RESOURCES

January 1, 2015, marked the start of the IESO’s expanded mandate. The IESO is now responsible for 20-year planning outlooks as well as real-time operations – and every timeframe in between. In an effort to ensure the continued reliability of Ontario’s power system, and the efficiency of the wholesale market in which the price of electricity is set, the IESO took several important steps in 2015 to prepare the province for the future.

One such step was the further integration of demand-side re-sources. Over the past few years, the IESO has made a concerted effort to broaden the role of demand-side participants in meeting Ontario’s evolving energy needs. One of the most effective ways is through demand response (DR), which involves end-users changing

(usually reducing and/or shifting) their electricity consumption in response to market prices and/or signals from the system operator, whether directly or through an aggregator.

Transitioning DR from a contract-based approach to a market-based mechanism began with the conversion of the DR3 program to the Capacity-Based Demand Response program. But that was just the first step of a multi-phase process that could evolve into a broader capacity auction through which demand-side resources would have the opportunity to compete against other capacity providers.

With active engagement from across the sector, the IESO conducted its first-ever annual DR auction in December 2015 (see pages 25-26). This was another competitive process through which demand-side resources were selected to

be available to reduce their electricity consumption in response to changing grid conditions. The auction successfully secured approxi-mately 400 megawatts (MW) for the summer and winter seasons at clearing prices that are lower than previous DR programs. DR auctions will now run every year, providing an ongoing opportunity for new entrants to participate and compete against existing suppliers, and ensuring the best value for electricity consumers.

The auction also lays the foundation to meet the govern-ment’s objective – laid out in the 2013 Long-Term Energy Plan – for DR to meet 10 percent of Ontario’s peak demand by 2025. In undertaking the changes to DR, the IESO worked closely and collaboratively with the sector to evolve the current market and adapt to future needs, an effective model that will be used to implement other market development initiatives.

In 2015, the IESO ran a competitive process to procure up to 80 MW of DR through an innovative pilot program intended to yield some valuable new insights into how demand-side resources behave. Eligible respondents included medium to large wholesale and embedded electricity consumers as well as DR aggregators representing smaller industrial, commercial, institutional and/or residential consumers.

The successful proponents – a mix of existing and new entrants to the market – include five companies representing 20 projects ranging from one to 35 megawatts, located in communities around the province. Once they are in service, these projects will yield a better understanding of DR resources’ ability to provide real-time responses to changes in demand during the day.

Conestoga Cold Storage will be

providing one megawatt of demand

response in the DR Pilot, curtailed

through the automated modulation

of refrigeration equipment

temperature, lighting and other

plant load.

CRED

IT: P

hoto

by

Dav

id B

rigg

s


POTENTIAL BENEFITS AND OPPORTUNITIES OF COMMUNITY MICROGRIDS*

ResilienceMitigating the impact of power outages due to extreme weather events

ReliabilitySupport for overall electrical grid reliability and maximum customer

“up time” can be offered through microgrids, at a cost

Sustainable EnergyIncreased ability to connect and manage intermittent local renew-able generation resources, such as solar or wind with energy storage

EconomicLeveraging on-site distributed generation may have the potential to reduce customer costs and boost overall system efficiency

Grid SupportProvision of system ancil-lary services if controlled, owned or operated by utility or system operator

Asset OptimizationAbility to connect and optimize diverse distri-buted energy resources as an integrated system with local control

MICROGRIDS BRING THE PROMISE OF TOMORROW CLOSER

Americans are often known for their bold, entrepreneurial, “go big or go home” attitude. In the case of an initiative underway in Philadelphia, that attitude is propelling a highly ambitious, forward-looking energy project that many industry observers

– including some here in Ontario – are watching with great interest.

The Navy Yard is a 1,200-acre urban development with a centrally located waterfront business campus that is home to more than 12,000 employees and 152 companies in the office, industrial, manufacturing, and research and development sectors. It is intended to serve as a catalyst for energy innovation and a model for sustainability.

Announced in 2013 and expected to be fully operational in 2016, the Navy Yard microgrid is part of the community’s 10-year energy master plan. With the support of major utility partners, as well as technology providers, the plan includes alterna-tive and clean power generation and storage projects; dynamic time-of-use tariffs; energy efficiency and demand reduction incentives – all of which directly benefit the individual electric customers of the Navy Yard. The plan also includes the potential to provide access to regional energy markets managed by PJM Interconnection, a regional transmission operator whose functions are similar to those of the IESO.

At its simplest, a microgrid is an integrated, self-contained network of assets on a smaller scale than those found on the bulk power system. Microgrids generally comprise small-scale generation (often wind, solar or gas); end-use consumers that may

also offer other services including conservation, energy efficiency and demand response; energy storage devices; stations, lines, transformers and related infrastructure; plus sophis-ticated monitoring and control systems. A microgrid can usually operate in one of two modes: connected to the elec-tricity system or disconnected from the grid, in what’s known as island mode.

In Ontario, microgrids are increa-singly being developed by LDCs and their tech partners, and, in some cases, by non-utility third parties, for their ability to increase local resilience and support added reliability, especially during destructive and damaging storms. In addition, IESO analysis indicates that for remote communities where it is not economically feasible to connect to the grid, renewable generation that is integrated into community microgrids can help to avoid diesel generation.

Microgrids may also provide an opportunity for price arbitrage, through which energy may be withdrawn from the grid and stored when prices are low and reinjected when prices are high. From the system operator’s perspective, microgrids have the potential to regulate variations in voltage, frequency and power quality. And finally, they may also allow costly investments in other large-scale assets to be deferred.

Pilot projects and other tests are underway in many parts of the province, as LDCs as diverse as PowerStream, Hydro Ottawa, Veridian Connections, Oshawa PUC, Hydro One Remote Communities, Guelph Hydro and others seek to test microgrids’ capabilities and capitalize on their inherent promise.

For reliability purposes, two timeframes are of particular interest to the IESO: the morn-ing ramp-up, when demand for electricity accelerates quickly, and the ramp-down period later in the day, when demand slackens following the afternoon or evening peaks The IESO will evaluate the pilot projects’ performance to determine if DR can meet these requirements, which could avoid the need to dispatch generation to meet demand.

Leveraging the inherent responsiveness of electricity customers, and capturing the value of existing assets and infrastructure, will support the continued evolution of Ontario’s market and system during this period of industry-wide refocusing and reinvention. The IESO hopes to expand residential DR going forward, in an effort to amplify and expand the role that retail customers can play in supporting reliability and efficiency.

* Courtesy of the MaRS Advanced Energy Centre,

www.marsdd.com/wp-content/uploads/2014/11/Future-of-Microgrids.pdf

Demand response is expected to meet

10%of Ontario’s electricity

needs by 2025.


2015 ANNUAL REPORT

http://www.marsdd.com/wp-content/uploads/2014/11/Future-of-Microgrids.pdf

STORAGE AND FLEXIBILITY

Another technology that could compete to meet capacity and other system needs is energy storage, often described as the Swiss Army knife of energy resources because of its multifunctional nature. Storage can serve a variety of functions and deliver a range of benefits, depending on the technology used and the location of the storage resource.

Each storage technology has different operating character-istics but across the various applications, storage has the potential to reduce congestion on transmission and distribu-tion networks, allowing utilities to defer, or even avoid, expen-sive system upgrades; smooth out fluctuations of variable resources and bring added stability to the grid; provide reliability services that support voltage and frequency on the system; and absorb surplus generation when demand for electricity is low, re-injecting it into the system when demand is higher.

To better understand the role(s) storage could play in the future, the IESO undertook a two-phase procurement of storage resources. Once oper-ational, phase one projects are expected to provide ancillary services, including frequency regulation and/or reactive support and voltage control, which are needed to maintain voltages and support the flow of electricity along power lines. By contrast, the projects selected in the second phase of the initiative are expected to have the ability to store energy during times when demand for electricity and prices are low and re-inject it into the grid during periods of greater need and higher prices.

The IESO is not alone in exploring the potential of storage in Ontario. Many of the planned storage projects will be connected to the distribution system, where they may be managed or controlled by one of Ontario’s 70+ local distribution companies.

DEFENDING AGAINST CYBER THREATS

History has shown that when you’re trying to protect your most valuable assets, you want to put up strong walls and have a good view of the surrounding landscape. This thinking seems to apply whether the assets are castles and fortresses, or systems and data.

To protect North America’s integrated power system against emerging cyber threats, the North American Electric Reliability Corporation (NERC) surveyed the digital landscape and introduced reliability standards related to critical infrastructure protection. Now in their fifth iteration, these standards are known as CIP Version 5, or CIP5, and cover a range of cyber subjects, including security awareness, access controls, employee and contractor training, incident reporting and recovery planning.

In general terms, reliability standards are obligations imposed on certain market participants that own and/or operate infrastructure connected to North America’s bulk power system, including system operators, transmission operators, generators, transmitters, distributors, large consumers and others. Reliability standards define the reliability requirements for planning, designing, building, operating and securing the high-voltage power system.

Over the past few years, the IESO has worked closely with market participants and other stakeholders – including national and international security agencies – to deepen the sector’s understanding of cyber risks. The interconnected nature of the sector, and its physical and cyber assets, requires ongoing collaboration to achieve a holistic, consistent approach to securing Ontario’s electricity infrastructure.

As the variety, volume and velocity of cyber threats continue to ramp up, organizations across North America are investing significant resources to assess and strengthen the measures taken to protect not just their information but also their operations and reputations.

With CIP5 standards coming into force on July 1, 2016, the IESO has invested in new processes, controls and technologies to ensure the company is compliant with the new standards. To support the sector as the in-force date approaches, the IESO also convened the CIP Standards Transition Forum, a peer-to-peer forum designed to provide all attendees with an opportu-nity to freely and confidentially discuss transition issues, and minimize the risk of cyber incidents.

When properly sized and sited, energy storage

can serve a number of functions, including

frequency regulation, a contracted service

provided by RES Canada’s battery storage

facility in Central Strathroy.


MARKET DEVELOPMENT PRINCIPLES

Working closely with the stakeholder community, the IESO has identified the need to evolve Ontario’s electricity market to address known inefficiencies and lay the foundation for a more dynamic market that better serves the province going forward.

Meeting future needs efficiently – with a level playing field for all resources, whether providing energy, capacity, ancillary services, or opera-tional flexibility – is one of the primary objectives spurring market development initiatives. And the province’s current strong supply situation makes this an ideal time to consider market changes.

In working with its stakeholders, the IESO’s market development initiatives will be underpinned by clear principles:

1. Stability Eliminate the need for ongoing “band-aid” solutions by addressing underlying design issues and providing enduring solutions

2. Transparency

Work together with our stakeholders to continue to evolve the market in a practical manner

3. Flexibility

Enhance ability to realize efficiencies and provide new opportu-nities for participants to help meet evolving system needs

4. Efficiency

Reduce out-of- market payments and focus on delivering efficient outcomes through transparent competition

5. Certainty

Provide clear, efficient price signals through stable, long-term, market-based mechanisms

1 4

2 5

3

Both private and public buildings in Hamilton, including the Hamilton Public

Library, benefit from heating and cooling through eco-friendly district energy.

As part of the DR Pilot program, HCE Energy will run its natural-gas burning

cogeneration unit to displace the LDC-supplied power at the Hamilton

Central Utilities Plant. The waste heat produced from the engine will also

generate hot water used for building and domestic water heating.


2015 ANNUAL REPORT

Ontario’s electricity consumers already play an important role in helping to meet the prov-ince’s need for flexible, responsive resources, but the mechanism through which some of their contributions are managed has taken on a new form.

The IESO announced the results of the province’s first demand response (DR) auction in December 2015. DR involves changes in electricity consumption by end-use customers in response to high market prices or other signals, and is an essential element of Ontario’s diverse supply mix. The auction was just the latest phase in the ongoing evolution of Ontario’s electricity market and system – and marks an important transition from a multi-year, contract-based mechanism for procuring DR to an annual competitive, market-based solution. The culmination of several years of preparation and collaboration by the IESO, market participants and other stakeholders, the auction is a critical milestone in the evolution of Ontario’s power system.

Like many other system operators – not just in North America but around the world – the IESO wants to leverage the inherent flexibility in consumption behaviour to meet Ontario’s evolving energy needs. Competitive market mechanisms have proven to be a transparent and cost-effective way to select the least expensive DR providers while ensuring that all providers are held to the same performance obligations.

Seventeen organizations registered as DR auction participants in the months leading up to the auction. This diverse group of pro-ponents included high-volume transmission- connected industrial, commercial and institutional users, and smaller consumers whose facilities are connected to low-voltage distribution systems and whose DR contribu-tions are managed by an aggregator.

DR AUCTION EXPANDS CONSUMER ROLE IN THE MARKET

Through the DR auction, the IESO procured approximately

400 MWof demand response from a mix of aggregators and direct providers.

CRED

IT: P

hoto

cou

rtes

y of

Ger

dau


companies with a financial incentive to consider making changes to their operations and processes in order to become more efficient. It’s a positive development for electricity consumers, too. They now have access to a cheaper, cleaner resource and suppliers that can monetize their ability to respond to system needs in real time.

The IESO spent much of 2015 meeting with stakeholders to design a DR product that could be integrated into the real-time energy market. This process involved representatives from across the electricity sector, including large industrial/commercial/institutional consumers, aggregators, generators, energy service providers, municipalities and local distribution companies, coming together to identify options.

Designing, testing and implementing the auction – with all the required changes to market rules, market manuals and market tools – in a compressed period of time took commitment on all sides. Employees from across the IESO, with specialists in market

development, operations, settlements, customer relations, finance and IT (among others), came together with the industry to collaboratively explore the potential impacts of different solutions. The objective of these discussions was to identify a market design, and market processes, that would deliver desired outcomes in a timely, transparent and cost-effective manner.

Through a competitive RFP process, experts at the University of Waterloo were engaged to help design the auction engine, a computa-tional tool that processes the offers submitted by auction participants, selects the most economical offers based on predefined parameters or constraints, and then deter-mines the auction results, including the DR auction clearing price and quantity.

Gerdau is one of the participants

in the IESO’s first demand

response (DR) auction, which ran

in December 2015 and represents

an important milestone in the

transition from contract-based DR

to market-based mechanisms.

Demand response provides much

needed flexibility to respond to changing

system conditions and needs.

Through the auction, demand-side resources were selected to be available to reduce their electricity consumption, as needed, during the summer of 2016 and winter of 2016/17 commitment periods. The successful auction participants include three aggregators, each of which will manage an integrated virtual network of smaller consumers, and four direct providers capable of modulating their respec-tive energy consumption on demand. Total DR procured in each of the two periods is approxi-mately 400 MW, which is roughly equivalent to the installed capacity of a peaking generator.

By reducing the output required from existing generators, and limiting the need to build new infrastructure, DR can lessen the overall impact of the electricity system on the envi-ronment – an important consideration as the province moves even further towards a lower carbon future.

For participants, funds earned through the auction are a welcome source of revenue, enhancing the competitiveness of Ontario firms. In addition, the auction provides


2015 ANNUAL REPORT

EXECUTIVE LEADERSHIP TEAM

Bruce Campbell

President and Chief

Executive Officer

JoAnne Butler

Vice-President,

Market and Resource

Development

Michael Lyle

Vice-President,

Planning, Law and

Aboriginal Relations

Kimberly Marshall

Vice-President,

Corporate Services

and Chief Financial

Officer

Doug Thomas

Vice-President,

Information

and Technology

Services and Chief

Information Officer

Kim Warren

Vice-President,

Market and System

Operations and Chief

Operating Officer

Terry Young

Vice-President,

Conservation and

Corporate Relations

BOARD OF DIRECTORS

Tim O’Neill

Chairman of

the Board

Retired from BMO

Financial Group,

where he served as

Executive Vice-

President and Chief

Economist; President

of O’Neill Strategic

Economics

Bruce Campbell

President and Chief

Executive Officer

Independent

Electricity System

Operator

Cynthia Chaplin

Director

Former Vice-Chair

of the Ontario

Energy Board

Murray Elston

Director

Former Chair of

the Electricity

Distribution Panel;

former President of

the Canadian Nuclear

Association; former

Ontario Minister

of Health

Susanna Han

Director

Chief Financial

Officer

LiUNA Local 183

Ronald L. Jamieson

Director and Chair,

Audit Committee

Retired from BMO

Financial Group,

where he was Senior

Vice-President,

Aboriginal Banking;

Director, Nuclear

Waste Management

Organization

and Denendeh

Investments Inc.;

Member, Order of

Canada; Appointee,

Order of Ontario

Margaret Kelch

Director and Chair,

Human Resources

and Governance

Committee

Chair of the

Conservation

Committee, Nature

Conservancy of

Canada; former

Board member of

the Electrical Safety

Authority and Guelph

Hydro Electric

Systems Inc.

Bruce Lourie

Director

President of Ivey

Foundation; Director

of the Consultative

Group on Biological

Diversity (San

Francisco)

William Museler

Director

Former President

and Chief Executive

Officer of the New York

Independent System

Operator

Deborah S. Whale

Director

Vice-President,

Clovermead

Farms; Vice-Chair

of Ontario Farm

Products Marketing

Commission

Carole Workman

Director

Chair of Ottawa

Hospital Board of

Directors; Board

member of Allstate

Insurance of Canada;

former Director of

Hydro Ottawa

and several other

organizations

IESO ENGAGEMENT PRINCIPLES

1. Analyze Opportunities for Engagement

2. Ensure Inclusive and Adequate Representation

3. Provide Effective Communication and Information

4. Promote Openness and Transparency

5. Provide Effective Facilitation

6. Communicate Outcomes

7. Measure Satisfaction

1

5

6

7

2

3

4

Executive Leadership Team, Board of Directors and Advisory Committees to the Board


TECHNICAL PANEL (TP)

Chuck Farmer

(Chair)

Director,

Conservation and

Demand Planning

Independent

Electricity System

Operator

Shelly Cunningham

Senior Vice-President,

Engineering Services

PowerStream Inc.

REPRESENTING:

Distributors

David Dent

Manager, Strategic

and Power Markets

Union Gas Limited

REPRESENTING:

Natural Gas

Barbara Ellard

Director, Markets

Independent

Electricity System

Operator

REPRESENTING:

IESO

Paul Huebener

Managing Director

DIF Management

REPRESENTING:

Financial Industry

Brian Kelly

Manager, Market

Affairs

TransCanada

Energy Ltd.

REPRESENTING:

Generators

Robert Lake

REPRESENTING:

Residential

Consumers

Martin Longlade

REPRESENTING:

Industrial Consumers

Luis Marti

Director, Reliability

Studies, Strategy

and Compliance

Hydro One Networks

REPRESENTING:

Transmitters

Peter Rowles

Principal

ICF Marbek

REPRESENTING:

Commercial

Consumers

Yannick Vennes

Deputy Compliance

Officer – Wholesale

Markets,

Legal Affairs

Department

Hydro-Québec

Production

REPRESENTING:

Retailers and

Wholesalers

Bill Wilbur

Director, Generation

and Revenue

Planning

Ontario Power

Generation

REPRESENTING:

Generators

ONTARIO ENERGY BOARD LIAISON:

David Brown

Senior Policy Advisor,

Wholesale Power

Policy, Regulatory

Policy Development

Ontario Energy Board

TECHNICAL PANEL SECRETARIAT:

John Rattray

Susan Harrison

STAKEHOLDER ADVISORY COMMITTEE (SAC)

Brian Bentz (Chair)

President and

Chief Executive

Officer

PowerStream

REPRESENTING:

Distributors and

Transmitters

Steve Baker

President

Union Gas Limited

REPRESENTING:

Related Businesses/

Services

John Beaucage

Principal

Counsel Public

Affairs Inc.

REPRESENTING:

Ontario Communities

Darlene Bradley

Director,

Technical Services

Hydro One

Networks Inc.

REPRESENTING:

Distributors and

Transmitters

Jack Burkom

Senior Vice President,

Commercial

Development

Brookfield Energy

Marketing Inc.

REPRESENTING:

Related Businesses/

Services

David Butters

President and

Chief Executive

Officer

Association of Power

Producers of Ontario

REPRESENTING:

Generators

Jared Donald

President

Synergist Energy

REPRESENTING:

Generators

Julie Girvan

Consumers Council

of Canada

REPRESENTING:

Consumers

Valerie Helbronner

Partner

Torys LLP -

Infrastructure

and Energy Practice

REPRESENTING:

Generators

Geoff Lupton

Director, Energy

Fleet and Traffic

City of Hamilton

REPRESENTING:

Ontario Communities

Rob Mace

President and

Chief Executive

Officer

Thunder Bay Hydro

Electricity

Distribution Inc.

REPRESENTING:

Distributors and

Transmitters

Mark Schembri

Vice President,

Supermarket

Systems and

Store Maintenance

Loblaw Properties

Limited

REPRESENTING:

Consumers

James Scongack

Vice President,

Corporate Affairs

Bruce Power

REPRESENTING:

Generators

Ersilia Serafini

(Vice Chair)

President

Summerhill

REPRESENTING:

Ontario Communities

Paul Shervill

Vice President,

Strategic Initiatives

Rodan Energy

REPRESENTING:

Related Businesses/

Services

Adam White

President

Association of

Major Power

Consumers of Ontario

REPRESENTING:

Consumers

Todd Wilcox

Chief Operating

Officer

North Bay Hydro

REPRESENTING:

Distributors and

Transmitters

Terry Young

Vice President,

Conservation and

Corporate Relations

Independent

Electricity

System Operator

REPRESENTING:

IESO


2015 ANNUAL REPORT

27

Independent Electricity System Operator

1600–120 Adelaide Street West

Toronto, ON M5H 1T1

Phone: 905.403.6900

Toll-free: 1.888.448.7777

Email: [email protected]

ieso.ca

@IESO_Tweets

OntarioIESO

linkedin.com/company/ieso

mailto:customer.relations%40ieso.ca?subject=

http://www.ieso.ca/

https://twitter.com/ieso_tweets

https://www.facebook.com/OntarioIESO/

https://www.linkedin.com/company/ieso

2015 ANNUAL REPORT

Financial Statements

1 Management Report

2 Independent Auditors’ Report

3 Statement of Financial Position

4 Statement of Operations and Accumulated Deficit

5 Statement of Remeasurement Gains and Losses

6 Statement of Change in Net Debt

7 Statement of Cash Flows

8 Notes to Financial Statements

24 Executive Compensation at the IESO

Management’s Responsibility for Financial Reporting

The accompanying financial statements of the Independent Electricity System Operator are the responsibility of management and have been prepared in accordance with Canadian public sector accounting standards. The significant accounting policies followed by the Independent Electricity System Operator are described in the Summary of Significant Accounting Policies contained in Note 2 in the financial statements. The preparation of financial statements necessarily involves the use of estimates based on management’s judgement, particu-larly when transactions affecting the current accounting period cannot be finalized with certainty until future periods. The financial statements have been prepared within reasonable limits of materiality and in light of information available up to March 9, 2016.

Management maintained a system of internal controls designed to provide reasonable assurance that the assets were safeguarded and that reliable information was available on a timely basis. The system included formal policies and procedures and an organizational structure that provided for the appropriate delegation of authority and segregation of responsibilities.

These financial statements have been examined by KPMG LLP, a firm of independent external auditors appointed by the Board of Directors. The external auditors’ responsibility is to express their opinion on whether the financial statements are fairly presented in accordance with generally accepted accounting principles in Canada. The Auditors’ Report, which follows, outlines the scope of their examination and their opinion.

INDEPENDENT ELECTRICITY SYSTEM OPERATOR

On behalf of management,

Bruce Campbell Kimberly Marshall

President, Chief Executive Officer Vice-President, Corporate Services Toronto, Canada and Chief Financial Officer March 9, 2016 Toronto, Canada March 9, 2016

Management Report

FINANCIAL STATEMENTS 1

Independent Auditors’ Report

To the Board of Directors of the Independent Electricity System Operator (IESO)

We have audited the accompanying financial statements of IESO, which comprise the statement of financial position as at December 31, 2015, the statements of operations and accumulated deficit, remeasurement gains and losses, change in net debt and cash flows for the year then ended, and notes, comprising a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with Canadian public sector accounting standards, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements present fairly, in all material respects, the financial position of IESO as at December 31, 2015, and its results of operations and the changes in its net debt and its cash flows for the year then ended in accordance with Canadian public sector accounting standards.

Chartered Professional Accountants, Licensed Public Accountants

March 9, 2016 Waterloo, Canada


As at (in thousands of Canadian dollars) December 31, 2015 December 31, 2014

$ $

FINANCIAL ASSETSCash and cash equivalents 14,715 31,340 Accounts receivable 33,199 23,054 Long-term investments (Note 3) 37,318 33,979

TOTAL FINANCIAL ASSETS 85,232 88,373

LIABILITIES Accounts payable and accrued liabilities (Note 4) 48,868 51,163 Accrued interest on debt 315 364 Rebates due to market participants (Note 5) 9,595 –Debt (Note 6) 90,000 129,000 Accrued pension liability (Note 7) 36,062 36,943 Accrued liability for employee future benefits other than pension (Note 7) 84,501 79,914

TOTAL LIABILITIES 269,341 297,384

NET DEBT (184,109) (209,011)

NON-FINANCIAL ASSETSNet tangible capital assets (Note 8) 103,716 99,549 Prepaid expenses 6,197 6,170

TOTAL NON-FINANCIAL ASSETS 109,913 105,719

ACCUMULATED SURPLUS/(DEFICIT) Accumulated deficit from operations (Note 5) (81,854) (109,654)Accumulated remeasurement gains 7,658 6,362

ACCUMULATED DEFICIT (74,196) (103,292)

On behalf of the Board:

Tim O’Neill Ron Jamieson Chair Director Toronto, Canada Toronto, Canada

Statement of Financial Position


Statement of Operations and Accumulated Deficit

For the year ended December 31 (in thousands of Canadian dollars) 2015 2015 2014

Budget $

Actual $

Actual $

IESO CORE OPERATIONSSystem fees 181,200 180,504 160,968Other revenue (Note 9) 3,000 5,377 6,272Interest and investment income 1,000 1,430 2,798

Core operation revenues 185,200 187,311 170,038

Compensation and benefits (105,212) (104,994) (115,225)Professional and consulting (22,117) (21,555) (19,101)Operating and administration (33,661) (34,911) (34,352)Core operating expenses (160,990) (161,460) (168,678)Amortization (18,700) (17,933) (16,583)Net interest (1,388) (1,610) (832)

Core expenses (181,078) (181,003) (186,093)IESO-OPA amalgamation expenses – – (10,883)

Core operations annual surplus/(deficit) 4,122 6,308 (26,938)

MARKET SANCTIONS AND PAYMENT ADJUSTMENTSMarket sanctions and payment adjustments – 6,021 2,687Compensation and benefits (2,984) (3,094) (2,554)Professional and consulting (1,515) (1,351) (1,677)Operating and administration (73) (114) (132)Customer education and market enforcement expenses (4,572) (4,559) (4,363)

Market sanctions and payment adjustments annual surplus/(deficit) (4,572) 1,462 (1,676)

SMART METERING ENTITY

Smart metering charge 45,207 46,215 45,735Compensation and benefits (3,463) (2,607) (2,882)Professional and consulting (19,242) (14,902) (16,169)Operating and administration (2,386) (4,200) (2,958)

Smart metering operating expenses (25,091) (21,709) (22,009)Amortization (3,716) (3,524) (4,543)Net interest (3,048) (952) (1,317)

Smart metering expenses (31,855) (26,185) (27,869)

Smart metering entity annual surplus 13,352 20,030 17,866

ANNUAL SURPLUS/(DEFICIT) 12,902 27,800 (10,748)

ACCUMULATED DEFICIT FROM OPERATIONS, BEGINNING OF PERIOD (109,654) (109,654) (98,906)

ACCUMULATED DEFICIT FROM OPERATIONS, END OF PERIOD (96,752) (81,854) (109,654)


Statement of Remeasurement Gains and Losses

For the year ended December 31 (in thousands of Canadian dollars) 2015 2014

Actual $

Actual $

ACCUMULATED REMEASUREMENT GAINS, BEGINNING OF PERIOD 6,362 4,144

UNREALIZED GAINS ATTRIBUTABLE TO: Foreign exchange – other 515 591 Portfolio investments (Note 3) 1,372 2,622

AMOUNTS RECLASSIFIED TO THE STATEMENT OF OPERATIONS: Foreign exchange – other (591) (178)Portfolio investments – (817)

NET REMEASUREMENT GAINS FOR THE PERIOD 1,296 2,218

ACCUMULATED REMEASUREMENT GAINS, END OF PERIOD 7,658 6,362


Statement of Change in Net Debt

For the year ended December 31 (in thousands of Canadian dollars) 2015 2015 2014

Budget $

Actual $

Actual $

ANNUAL SURPLUS/(DEFICIT) 12,902 27,800 (10,748)

CHANGE IN NON-FINANCIAL ASSETS Acquisition of tangible capital assets (29,395) (25,624) (24,575)Amortization of tangible capital assets 22,416 21,457 21,125 Change in prepaid expenses – (27) (1,356)

TOTAL CHANGE IN NON-FINANCIAL ASSETS (6,979) (4,194) (4,806)

NET REMEASUREMENT GAINS FOR THE PERIOD 1,023 1,296 2,218

CHANGE IN NET DEBT 6,946 24,902 (13,336)

NET DEBT, BEGINNING OF PERIOD (209,011) (209,011) (195,675)

NET DEBT, END OF PERIOD (202,065) (184,109) (209,011)


Statement of Cash Flows

For the year ended December 31 (in thousands of Canadian dollars) 2015 2014

$ $

OPERATING TRANSACTIONSChange in accumulated deficitAnnual surplus/(deficit) 27,800 (10,748)

27,800 (10,748)Changes in non-cash items:Amortization 21,457 21,125 Pension expense 11,970 13,777 Other employee future benefits expense 6,901 8,166 Change in fair value of long-term investments – (1,100)

40,328 41,968

Changes in non-cash balances related to operations:Change in accounts payable and accrued liabilities (775) (3,124)Change in accounts receivable (10,145) 1,870 Change in rebates due to market participants 9,595 (25,755)Change in prepaid expenses (27) (1,356)

(1,352) (28,365)

Other:Contribution to pension fund (12,851) (11,973)Payment of employee future benefits (2,314) (2,321)

(15,165) (14,294)

Cash provided by/(applied to) operating transactions 51,611 (11,439)

CAPITAL TRANSACTIONSAcquisition of tangible capital assets (25,624) (24,575)Change in accounts payable & accrued liabilities (1,569) (152)

Cash applied to capital transactions (27,193) (24,727)

INVESTING TRANSACTIONSSale/(purchase) of long-term investments (1,967) 727

Cash provided by/(applied to) investing transactions (1,967) 727

FINANCING TRANSACTIONSIssue/(retire) debt (39,000) 4,800

Cash provided by/(applied to) financing transactions (39,000) 4,800

INCREASE IN CASH AND CASH EQUIVALENTS (16,549) (30,639)CASH AND CASH EQUIVALENTS – BEGINNING OF PERIOD 31,340 61,566 Unrealized foreign exchange gains/(losses) for the period (76) 413

CASH AND CASH EQUIVALENTS – END OF PERIOD 14,715 31,340


Notes to Financial Statements

1. NATURE OF OPERATIONSa) The Independent Electricity System Operator (IESO) is a not-for-profit, non-taxable, corporation established pursuant to Part II of the Electricity Act, 1998. The predecessor Independent Electricity System Operator and the Ontario Power Authority (OPA) were amalgamated by statute effective on January 1, 2015, and continued as the Independent Electricity System Operator. As set out in the Electricity Act, 1998, the IESO operates pursuant to a licence granted by the Ontario Energy Board (OEB). The amalgamation was effected pursuant to Bill 14, Building Opportunity and Securing Our Future Act (Budget Measures), 2014, which received Royal Assent on July 24, 2014. Schedule 7 of the Bill amended the Electricity Act, 1998, by amalgamating the two predecessor corporations and by continuing them as the Independent Electricity System Operator. The transitional provi-sion, dealing with corporate matters, provides, among other things, that the predecessor IESO and OPA cease to exist as entities separate from the amalgamated IESO and all their rights, properties and assets become the rights, properties and assets of the amalgamated IESO, as do all outstanding debts, liabilities and obligations of the predecessor IESO and OPA. Schedule 7 of Bill 14 came into force on January 1, 2015. The objects of the IESO as contained in the Electricity Act, 1998, and Ontario Regulation 288/14 are as follows:• to exercise the powers and perform the duties assigned to it under this Act, the regulations, directions,

the market rules and its licence;• to enter into agreements with transmitters to give it authority to direct the operation of their

transmission systems;• to direct the operation and maintain the reliability of the IESO-controlled grid to promote the purposes

of this Act;• to participate in the development by any standards authority of criteria and standards relating to the

reliability of the integrated power system;• to establish and enforce criteria and standards relating to the reliability of the integrated power system;• to work with the responsible authorities outside of Ontario to co-ordinate the IESO’s activities with the

activities of those authorities;• to operate the IESO-administered markets to promote the purposes of this Act;• to engage in activities related to contracting for the procurement of electricity supply, electricity capacity

and conservation resources;• to engage in activities related to settlements, payments under a contract entered into under the authority

of this Act and payments provided for under this Act or the Ontario Energy Board Act, 1998;• to engage in activities in support of the goal of ensuring adequate, reliable and secure electricity supply

and resources in Ontario;• to forecast electricity demand and the adequacy and reliability of electricity resources for Ontario for the

short term, medium term and long term;• to conduct independent planning for electricity generation, demand management, conservation

and transmission;• to engage in activities to facilitate the diversification of sources of electricity supply by promoting the use of

cleaner energy sources and technologies, including alternative energy sources and renewable energy sources;• to engage in activities in support of system-wide goals for the amount of electricity to be produced from

different energy sources;


• to engage in activities that facilitate load management;• to engage in activities that promote electricity conservation and the efficient use of electricity;• to assist the Board by facilitating stability in rates for certain types of consumers;• to collect and make public information relating to the short term, medium term and long term electricity

needs of Ontario and the adequacy and reliability of the integrated power system to meet those needs; and• to engage in such other objects as may be prescribed by the regulations.

b) The IESO was designated the Smart Metering Entity (SME) by Ontario Regulation 393/07 under the Electricity Act, 1998, on March 28, 2007. The regulation came into effect on July 26, 2007.

The objects of the Smart Metering Entity, as contained in the Electricity Act, 1998, are as follows:

• to plan and implement and, on an ongoing basis, oversee, administer and deliver any part of the smart metering initiative as required by regulation under this or any Act or directive made pursuant to sections 28.3 or 28.4 of the Ontario Energy Board Act, 1998, and, if so authorized, to have the exclusive authority to conduct these activities;

• to collect and manage and to facilitate the collection and management of information and data and to store the information and data related to the metering of consumers’ consumption or use of electricity in Ontario, including data collected from distributors and, if so authorized, to have the exclusive authority to collect, manage and store the data;

• to establish, to own or lease and to operate one or more databases to facilitate collecting, managing, storing and retrieving smart metering data;

• to provide and promote non-discriminatory access, on appropriate terms and subject to any conditions in its licence relating to the protection of privacy, by distributors, retailers and other persons, i. to the information and data referred to above, and ii. to the telecommunication system that permits the Smart Metering Entity to transfer data about the

consumption or use of electricity to and from its databases, including access to its telecommunication equipment, systems and technology and associated equipment, systems and technologies

• to own or to lease and to operate equipment, systems and technology, including telecommunication equip-ment, systems and technology that permit the Smart Metering Entity to transfer data about the consump-tion or use of electricity to and from its databases, including owning, leasing or operating such equipment, systems and technology and associated equipment, systems and technologies, directly or indirectly, including through one or more subsidiaries, if the Smart Metering Entity is a corporation;

• to engage in such competitive procurement activities as are necessary to fulfill its objects or business activities;

• to procure, as and when necessary, meters, metering equipment, systems and technology and any associ-ated equipment, systems and technologies on behalf of distributors, as an agent or otherwise, directly or indirectly, including through one or more subsidiaries, if the Smart Metering Entity is a corporation;

• to recover, through just and reasonable rates, the costs and an appropriate return approved by the Ontario Energy Board associated with the conduct of its activities; and

• to undertake any other objects that are prescribed by associated regulation.

c) The IESO is required to submit its proposed expenditures, revenue requirements and fees for the coming year to the OEB for review and approval. The submission may be made only with the approval or deemed approval of the IESO business plan by the Minister of Energy (Minister).


2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a) Basis of financial statement preparation

The accompanying financial statements have been prepared on a going concern basis and in accordance with Canadian public sector accounting standards (PSAB) and reflect the following significant accounting policies.

The statements of financial position, operations and accumulated deficit, remeasurement gains and losses, changes in net debt, and cash flows for the year ended December 31, 2015, represent the activities of the IESO since inception on January 1, 2015. The comparative figures represent the pro-forma combined finan-cial position and operations of the former IESO and OPA, as prepared under the accounting policies used in preparing the 2015 financial statements, as if the two entities had always operated as a single entity.

b) Revenue recognition

System fees earned by the IESO are based on approved rates for each megawatt of electricity withdrawn from the IESO-controlled grid (including scheduled exports) and embedded generation. System fees are recognized as revenue at the time the electricity is withdrawn. Rebates are recognized in the year in which the regulatory deferral account, before such rebates, exceeds regulated limits.

For 2015, the system fee for the newly amalgamated IESO was comprised of the combined rate calculations of the respective pre-amalgamation entities. Specifically, the former IESO rate base was calculated on electricity withdrawn from the IESO-controlled grid (including scheduled exports and embedded generation), whereas the former OPA rate base only considered Ontario electricity consumers. The IESO has submitted a rate case to the OEB for 2016 that proposes the use of one, consistent rate, based on electricity withdrawn from the IESO-controlled grid that includes scheduled exports and embedded generation.

These financial statements do not include the financial transactions of market participants within the IESO-administered markets.

Other revenue represents amounts that accrue to the IESO relating to investment income on funds passing through market settlement accounts, as well as application fees. Such revenue is recognized as it is earned.

Interest and investment income represents realized interest income and investment gains or losses on cash, cash equivalents, short-term investments and long-term investments.

Market sanctions represent funds received to offset payments disbursed related to penalties, damages, fines and payment adjustments arising from resolved settlement disputes.

c) Financial instruments

The IESO records cash and cash equivalents, investment portfolio and foreign currency exchange forward contracts at fair value. The cumulative change in fair value of these financial instruments is recorded in accumulated surplus as remeasurement gains and losses and is included in the value of the respective financial instrument shown in the statement of financial position and the statement of remeasurement gains and losses. Upon disposition of the financial instruments, the cumulative remeasurement gains and losses are reclassified to the statement of operations and all other gains and losses associated with the disposition of the financial instrument are recorded in the statement of operations. Transaction costs are charged to operations as incurred.

Cash and cash equivalents comprise cash, term deposits and other short-term, highly rated investments with original maturity dates of less than 90 days.

The IESO records accounts receivable, accounts payable and debt at amortized cost.


d) Tangible capital assets

Tangible capital assets are recorded at cost, which includes all amounts directly attributable to the acquisition, construction, development or betterment of the asset. The IESO capitalizes applicable interest as part of the cost of tangible capital assets.

e) Assets under construction

Assets under construction generally relates to the costs of physical facilities, hardware and software, and includes costs paid to vendors, internal and external labour, consultants and interest related to funds borrowed to finance the project. Costs relating to assets under construction are transferred to tangible capital assets when the asset under construction is deemed to be ready for use.

f) Amortization

The capital cost of tangible capital assets in service is amortized on a straight-line basis over their estimated service lives.

The estimated service lives in years, from the date the assets were acquired, are:

ClassEstimated Average Service Life 2015

Estimated Average Service Life 2014

Facilities 37 37

Market systems and applications 4 to 12 4 to 12

Infrastructure and other assets 4 to 7 4 to 7

Meter data management/repository 10 10

Gains and losses on sales or premature retirements of tangible capital assets are charged to operations.

The estimated service lives of tangible capital assets are subject to periodic review. The effects of changes in the estimated lives are amortized on a prospective basis. The most recent review was completed in fiscal 2015.

g) Pension, other post-employment benefits and compensated absences

The IESO’s post-employment benefit programs include pension, group life insurance, health care, long-term disability and workers’ compensation benefits.

The IESO accrues obligations under pension and other post-employment benefit (OPEB) plans and the related costs, net of plan assets. Pension and OPEB expenses and obligations are determined annually by independent actuaries using the projected benefit method and management’s best estimate of expected return on plan assets, salary escalation, retirement ages of employees, mortality and expected health-care costs. The discount rate used to value liabilities is based on the expected rate of return on plan assets as at the measurement date of September 30.

The expected return on plan assets is based on management’s long-term best estimate using a market-related value of plan assets. The market-related value of plan assets is determined using the average value of assets over three years as at the measurement date of September 30.

Pension and OPEB expenses are recorded during the year in which employees render services. Pension and OPEB expenses consist of current service costs, interest expense on liabilities, expected return on plan assets and the cost of plan amendments in the period. Actuarial gains/(losses) arise from, among other things, the difference between the actual rate of return on plan assets for a period and the expected long-term rate of return on plan assets for that period or from changes in actuarial assumptions used to determine the accrued benefit obligations. Actuarial gains/(losses) are amortized over the expected average remaining service life of the employees covered by the plan.


The expected average remaining service life of employees covered by the pension plans is 15 years (2014 – 13 years) and OPEB plans is 14.7 years (2014 – 14 years).

The IESO sick pay benefits accumulate but do not vest. The IESO accrues sick pay benefits based on the expectation of future utilization and records the accrual within accounts payable and accrued liabilities.

h) Foreign currency exchange

Transactions denominated in foreign currencies are translated into Canadian dollars at the rate of exchange prevailing on the date of the transaction. Items on the statement of financial position denominated in foreign currency are translated to Canadian dollars at the rate of exchange as of the financial statements date. The cumulative unrealized foreign currency exchange gains and losses of items continuing to be recognized on the statement of financial position are recorded in accumulated deficit as remeasurement gains and losses and shown in the statement of financial position and the statement of remeasurement gains and losses. Upon settlement of the item denominated in a foreign currency, the cumulative remeasurement gains and losses are reclassified to the statement of operations, and all other gains and losses associated with the disposition of the financial instrument are recorded in the statement of operations.

i) Use of estimates

The preparation of the financial statements in conformity with Canadian public sector accounting standards requires management to make estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent assets and liabilities as at the date of the finan-cial statements. The IESO’s accounts that involve a greater degree of uncertainty include the carrying values of tangible capital assets, rebates to market participants, accrued pension liability and accrual for employee future benefits other than pensions. Actual results could differ from those estimates.


3. LONG-TERM INVESTMENTS Long-term investments in a balanced portfolio of pooled funds are valued by the pooled funds manager based on published price quotations and amount to $37,019 thousand (2014 – $33,758 thousand). As at December 31, the market value allocation of these long-term investments was 56.0% equity securities and 44.0% debt securities (2014 – 59.7% and 40.3% respectively).

Balanced portfolio of pooled funds

As at December 31 (in thousands of Canadian dollars) 2015 2014

$ $

Opening balance 33,758 31,683

Purchase/(sale) of investments 1,889 (830)

Change in fair value 1,372 2,905

Closing balance 37,019 33,758

In addition to the balanced portfolio of pooled funds, the IESO has a long-term deposit with Canada Revenue Agency in the amount of $299 thousand (2014 – $221 thousand) pertaining to the Retirement Compensation Arrangements Trust (Note 6).

4. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES


$ $

Relating to operations 43,125 43,851

Relating to tangible capital assets 5,743 7,312

48,868 51,163


5. REBATES DUE TO MARKET PARTICIPANTS AND ACCUMULATED DEFICIT

In 2015, the IESO recognized $9,595 thousand in rebates due to market participants of system fees (2014 – $28,786). As at December 31, 2015, rebates due to market participants were $9,595 thousand (2014 – $nil).

Historically, the IESO’s approved regulatory deferral account balance has been maintained at a maximum of $10.0 million ($5.0 million each of the former IESO and OPA for a combined $10.0 million). The 2015 approved regulatory deferral account balance will be established at the time of the 2016 rate case with the OEB, which is expected to be in the spring of 2016.

Prior to 2014, unrealized gains and losses from portfolio investments and foreign exchange were included in the balance of the regulatory deferral account (life-to-date total $4,144 thousand). As of January 1, 2014, only realized gains and losses are included in this balance.

As at December 31, the components of the accumulated deficit were as follows:

Accumulated Deficit


$ $

Regulatory deferral account (a) 10,000 7,604

Accumulated market sanctions and payment adjustments (b) 492 (970)

Smart metering entity – accumulated deficit (c) (40,849) (60,879)

PSAB transition items (d) (47,353) (51,265)

Remeasurement gains/(losses) 3,514 2,218

Accumulated deficit – end of year (74,196) (103,292)

a) Regulatory Deferral Account


$ $

Accumulated surplus – beginning of year 7,604 38,792

Revenues (before rebates due to market participants) 196,906 198,824

Rebates due to market participants (9,595) (28,786)

Core operation expenses (181,003) (186,093)

IESO – OPA amalgamation expenses – (10,883)

Recovery of PSAB transition items (3,912) (4,250)

Accumulated surplus – end of year 10,000 7,604


b) Accumulated Market Sanctions and Payment Adjustments


$ $

Accumulated surplus – beginning of year (970) 706

Market sanctions and payment adjustments 6,021 2,687

Customer education and market enforcement expenses (4,559) (4,363)

Accumulated surplus/(deficit) – end of year 492 (970)

c) Smart Metering Entity – Accumulated Deficit


$ $

Accumulated deficit – beginning of year (60,879) (78,745)

Smart metering charge 46,215 45,735

Smart metering expenses (26,185) (27,869)


d) PSAB Transition Item - Accumulated Deficit


$ $

Accumulated deficit – beginning of year (51,265) (55,515)

Recovery of PSAB transition items 3,912 4,250


Effective January 1, 2011, the IESO adopted Canadian public sector accounting standards with a transition date of January 1, 2010. The adoption of PSAB was accounted for by retroactive application with restatement of prior periods subject to the requirements in Section PS 2125, First-time Adoption by Government Organizations. The corresponding change to pension and other-post employment benefits resulted in previously unrecog-nized actuarial losses and past service costs of $80,617 thousand at the date of transition being charged to the accumulated deficit.

The IESO includes a portion of the accumulated deficit resulting from the PSAB transition items in the annual proposed expenditures to the OEB for recovery through system fees.


6. DEBT

Note payable to Ontario Electricity Financial Corporation (OEFC)In April 2014, the IESO entered into a three-year note payable with the OEFC. The note payable is unsecured, bears interest at a fixed rate of 2.046% per annum and is repayable in full on April 30, 2017. Interest accrues daily and is payable in arrears semi-annually in April and October of each year. As at December 31, 2015, the note payable to the OEFC was $90.0 million (December 31, 2014 – $90.0 million).

For the year ended December 31, 2015, the interest expense on the note payable was $1,841 thousand (2014 – $1,650 thousand).

Credit facilityThe IESO has an unsecured credit facility agreement with the OEFC, which will make available to the IESO an amount up to $95.0 million. Advances are payable at a variable interest rate equal to the Province of Ontario’s cost of borrowing for a 30-day term plus 0.50% per annum, with draws, repayments and interest payments due monthly. The credit facility expires April 30, 2017. As at December 31, 2015, no amount was drawn on the credit facility (December 31, 2014 – $39.0 million).

For the year ended December 31, 2015, the interest expense on the credit facility was $279 thousand (2014 – $664 thousand).

Retirement Compensation Arrangements TrustIn July 2013, the IESO established a Retirement Compensation Arrangements (RCA) Trust to provide security for the IESO’s obligations under the terms of the supplemental employee retirement plan for its employees. As at December 31, 2015, the IESO has provided the RCA trustee with a bank letter of credit of $28,408 thousand (2014 – $23,370 thousand) the trustee can draw on if the IESO is in default under the terms of this plan.


7. POST-EMPLOYMENT BENEFIT PLANS The IESO provides pension and other employee post-employment benefits, comprising group life insurance, long-term disability and group medical and dental plans, for the benefit of current and retired employees.

Pension plansThe IESO provides a contributory defined benefit, indexed, registered pension plan. In addition to the funded, registered, pension plan, the IESO provides certain non-registered defined benefit pensions through an unfunded, indexed, non-registered plan.

Other employee future benefitsThe group life insurance, long-term disability and group medical and dental benefits are provided through unfunded, non-registered defined benefit plans.

Summary of accrued benefit obligations and plan assets

(in thousands of Canadian dollars)2015

Pension Benefits2014


Other Benefits2014

Other Benefits

$ $ $ $

Accrued benefit obligation 482,994 452,466 83,455 69,427

Fair value of plan assets 475,714 455,229 – –

Funded status as of measurement date (7,280) 2,763 (83,455) (69,427)

Employer contribution/other benefits payments after measurement date 427 207 582 586

Unrecognized actuarial (gain)/loss (29,209) (39,913) (1,628) (11,073)

Accrued liability recognized in the statement of financial position (36,062) (36,943) (84,501) (79,914)

Registered pension plan assetsAs at the measurement date of September 30, the proportion of the fair value of registered pension plan assets held in each asset class was as follows:

2015 2014

Canadian equity securities 19.9% 20.6%

Foreign equity securities 41.8% 40.7%

Canadian debt securities 39.0% 37.9%

Cash equivalents 0.6% 1.1%

Forward foreign exchange contracts (1.3%) (0.3%)

100.0% 100.0%


Principal assumptions used to calculate benefit obligations at the end of the year are determined at that time and are as follows:

2015 Pension Benefits


2015 Other Benefits

2014 Other Benefits

Discount rate at the end of the period 6.00% 6.15% 6.00% 6.15%

Rate of compensation increase 3.75% 3.75% 3.75% 3.75%

Rate of indexing 2.25% 2.25% 2.25% 2.25%

The assumed prescription drug inflation was 8.25% for 2015, grading down to an ultimate rate 4.75% per year in 2029. Dental costs are assumed to increase by 4.25% per year.

Benefit costs and plan contributions for pension and other plans are summarized as follows:




Other Benefits2014

Other Benefits

$ $ $ $

Current service cost (employer) 10,547 7,707 2,857 2,339

Interest cost 28,143 27,787 4,797 5,241

Expected return on plan assets (26,053) (23,630) – –

Amortization of net actuarial loss (667) 1,913 (753) 586

Benefit cost 11,970 13,777 6,901 8,166




Other Benefits2014

Other Benefits

$ $ $ $

Employer contribution/other benefit payments 12,851 11,973 2,314 2,321

Plan participants’ contributions 5,162 3,722 – –

Benefits paid 21,155 20,862 2,314 2,321

The most recent actuarial valuation of the registered pension plan for funding purposes was at January 1, 2014, and the date of the next required valuation is January 1, 2017. In 2015, a cost certificate was filed with Financial Services Commission of Ontario.

Principal assumptions used to calculate benefit costs for the year are determined at the beginning of the period and are as follows:



2015 Other Benefits

2014 Other Benefits

Discount rate at the beginning of the period 6.15% 6.25% 6.15% 6.25%

Rate of compensation increase 3.75% 3.75% 3.75% 3.75%

Rate of indexing 2.25% 2.25% 2.25% 2.25%


8. TANGIBLE CAPITAL ASSETS Net tangible capital assets consist of the following:

Tangible Capital Assets

(in thousands of Canadian dollars)As at

Dec. 31, 2014 Additions DisposalsAs at

Dec. 31, 2015

$ $ $ $

Facilities 55,818 116 (3,653) 52,281

Market systems and applications 262,840 16,364 (746) 278,458

Infrastructure and other assets 56,910 6,731 (3,461) 60,180

Meter data management/repository 35,434 466 – 35,900

Total cost 411,002 23,677 (7,860) 426,819

Accumulated Amortization


Dec. 31, 2014Amortization

Expense DisposalsAs at

Dec. 31, 2015

$ $ $ $

Facilities (23,970) (2,287) 3,653 (22,604)

Market systems and applications (241,287) (10,669) 746 (251,210)

Infrastructure and other assets (45,712) (4,977) 3,461 (47,228)

Meter data management/repository (21,805) (3,524) – (25,329)

Total accumulated amortization (332,774) (21,457) 7,860 (346,371)

Net Book Value


December 31, 2014As at

December 31, 2015

$ $

Facilities 31,848 29,677

Market systems and applications 21,553 27,248

Infrastructure and other assets 11,198 12,952

Meter data management/repository 13,629 10,571

Total net book value 78,228 80,448

Assets under construction 21,321 23,268

Net tangible capital assets 99,549 103,716

In 2015, the impact of adjustments to management’s estimates of remaining asset service lives was a decrease in amortization expense of $653 thousand (2014 – decrease of $665 thousand).

Interest capitalized to assets under construction during 2015 was $263 thousand (2014 – $165 thousand).


9. OTHER REVENUE In its administration of the IESO-administered markets, the IESO directs the investment of market funds in highly rated, short-term investments throughout the settlement cycle. The IESO is entitled to receive the invest-ment interest and investment gains, net of investment losses earned on funds passing through the real-time market settlement accounts. The IESO is not entitled to the principal on real-time market investments.

The IESO recognized investment income earned in the market settlement accounts of $3,212 thousand in 2015 (2014 – $1,724 thousand).

10. RELATED PARTY TRANSACTIONS The Province of Ontario is a related party as it is the controlling entity of the IESO. The OEFC, OEB, Hydro One and Ontario Power Generation Inc. (OPG) are related parties of the IESO, through the common control of the Province of Ontario. Transactions between these parties and the IESO were as follows:

The IESO holds a note payable and an unsecured credit facility agreement with the OEFC (Note 6). Interest payments made by the IESO in 2015 for the note payable were $1,841 thousand (2014 – $1,545 thousand) and for the credit facility were $328 thousand (2014 – $671 thousand). As of December 31, 2015, the IESO had an accrued interest payable balance with the OEFC of $315 thousand (2014 – $364 thousand).

Under the Ontario Energy Board Act, 1998, the IESO incurs registration and license fees. The total of the trans-actions with the OEB was $1,671 thousand in 2015 (2014 – $1,642 thousand).

The IESO performed connection and bulk electric system exception assessments for Hydro One in 2015. In 2015, the IESO invoiced Hydro One $310 thousand (2014 – $437 thousand).

The IESO procures short circuit studies and protection impact assessments as part of connection assessments, approvals and meter services on IESO-owned interconnected revenue meters from Hydro One. Additionally, the IESO paid Hydro One for the removal of the microwave tower at the Clarkson location. In 2015, the IESO incurred costs of $525 thousand (2014 – $144 thousand) for these services. As of December 31, 2015, the IESO had a net payable balance with Hydro One of $149 thousand (2014 – $121 thousand).

The IESO performed connection assessment and approvals for OPG, administered telecommunication services to market participants to connect to the real-time market systems and provides market-related training courses. In 2015, OPG was invoiced $137 thousand (2014 – $54 thousand). As of December 31, 2015, the IESO had a net receivable balance with OPG of $4 thousand (2014 – $4 thousand).


11. FINANCIAL RISK MANAGEMENT The IESO is exposed to financial risks in the normal course of its business operations, including market risks resulting from volatilities in equity, debt and foreign currency exchange markets, as well as credit risk and liquidity risk. The nature of the financial risks and the IESO’s strategy for managing these risks have not changed significantly from the prior year.

a) Market Risk

Market risk refers to the risk that the fair value or future cash flows of a financial instrument will fluctuate to cause changes in market prices. The IESO is primarily exposed to three types of market risk: currency risk, interest rate risk and equity risk. The IESO monitors its exposure to market risk fluctuations and may use finan-cial instruments to manage these risks as it considers appropriate. The IESO does not use derivative instruments for trading or speculative purposes.

i) Currency Risk

The IESO conducts certain transactions in U.S. dollars, primarily related to vendors’ payments, and maintains a U.S. dollar-denominated bank account. From time to time, the IESO may utilize forward purchase contracts to purchase U.S. dollars for delivery at a specified date in the future at a fixed exchange rate. In addition, the IESO utilizes U.S. dollar spot rate purchases in order to satisfy any current accounts. As at December 31, 2015, the IESO did not have any outstanding forward purchase contracts.

ii) Interest Rate Risk

The IESO is exposed to movements or changes in interest rates primarily through its short-term variable rate credit facility, cash equivalents’ securities and long-term investments. Long-term investments include investments in a pooled Canadian bond fund. The potential impact to the securities’ value had the prevailing interest rates changed by 25 basis points, assuming a parallel shift in the yield curve with all other variables held constant, is estimated at $0.6 million as at December 31, 2015 (2014 – $0.5 million).

iii) Equity Risk

The IESO is exposed to changes in equity prices through its long-term investments. Long-term investments include investments in pooled equity funds. A 30% change in the valuation of equities as at December 31, 2015, would have resulted in a change for the year (before the impact of adjustments to the approved regula-tory deferral account (Note 5) of approximately $6.8 million (2014 – $6.0 million). The fair values of all financial instruments measured at fair value are derived from quoted prices (unadjusted) in active markets for identical assets.

b) Credit Risk

Credit risk refers to the risk that one party to a financial instrument may cause a financial loss for the other party by failing to meet its obligations under the terms of the financial instrument. The IESO is exposed directly to credit risk related to cash equivalents’ securities and accounts receivable, and indirectly through its exposure to the long-term investments in a Canadian bond pooled fund. The IESO manages credit risk associated with cash equivalents’ securities through an approved management policy that limits investments to investment-grade investments with counterparty-specific limits. The accounts receivable balance as at December 31, 2015, included no material items past due and substantially all of the balance was collected within 30 days from December 31, 2015. The long-term Canadian bond pooled fund is comprised of primarily investment-grade securities.


c) Liquidity Risk

Liquidity risk refers to the risk that the IESO will encounter financial difficulty in meeting obligations associated with its financial liabilities when due. The IESO manages liquidity risk by forecasting cash flows to identify cash flows and financing requirements. Cash flows from operations, short-term investments, long-term investments and maintaining appropriate credit facilities help to reduce liquidity risk. The IESO’s long-term investments are normally able to be redeemed within three business days; however, the investment manager of the pooled funds has the authority to require a redemption in-kind rather than cash and has the ability to suspend redemptions if deemed necessary.

12. COMMITMENTS

Operating commitments The obligations of the IESO with respect to non-cancellable operating leases over the next five years are as follows:

As at December 31 (thousands of Canadian dollars)

$

2016 5,616

2017 5,288

2018 4,793

2019 3,724

2020 3,051

The above figures include lease payments up to July 2017 which have also been included in the 2014 IESO-OPA amalgamation expenses ($1,700 thousand). As of December 31, 2015 this balance is $1,120 thousand.


13. CONTINGENCIES AND GUARANTEES

ContingenciesThe IESO is subject to various claims, legal actions and investigations that arise in the normal course of business. While the final outcome of such matters cannot be predicted with certainty, management believes that the resolution of such claims, actions and investigations will not have a material impact on the IESO’s financial position or results of operations.

GuaranteesThe IESO enters into contracts with suppliers of electricity as part of its normal business operations. In some cases, these contracts require the IESO to support obligations with these entities. In 2012, the IESO entered into a letter of credit amounting to $1,349 thousand in support of a contracted obligation. As at December 31, 2015, no amounts have been drawn on the balance.


Program ObjectivesThe IESO compensation program for executives was designed to attract, retain and motivate the calibre of executives required to support the achievement of the IESO’s statutory mandate, business objectives and corporate vision. Accordingly, the compensation philosophy and programs were built on the following objectives:• To focus executives on meeting the IESO’s business objectives;• To attract qualified and talented staff needed to carry out the IESO’s mandate;• To be able to retain valued staff;• To have the flexibility to reward results and demonstrated competencies, and;• To have compensation levels that are responsible and defensible to stakeholders and customers.

The philosophy underlying these objectives is that total compensation for executives should be sufficient, but not overly sufficient, to attract and retain the skills and competencies necessary to carry out the IESO’s mandate.

Program GovernanceThe IESO Board establishes the compensation objectives for the following year’s program. They delegate the responsibility to thoroughly review the compensation objectives, policies and programs to the Human Resources and Governance Committee (HRGC) of the Board, which make recommendations to the full Board for approval.

The Board is composed of 10 independent, external Directors, appointed by the Minister of Energy, with broad experience in the electricity industry and public sector organizations, plus the President and Chief Executive Officer. Their experience includes many years of dealing with human resource matters including the setting and implementation of compensation policies and programs.

In carrying out their mandate, the Board members have access to management’s analysis and recommendations as well as those of expert consultants in the compensation field. These programs are reviewed annually with regard to business needs, program objectives and design, industry compensation trends, internal compensation relativities and external market relativities.

The Board also assesses risks associated with the establishment and implementation of compensation policies and programs. Annually the Board presides over and approves the IESO’s Business Plan. An important compo-nent of this process is consideration of, and the implementation of, mitigating actions associated with enterprise risk management. This latter overarching process includes the assessment of all significant risks to the IESO, including risks associated with its compensation policies and programs.

In addition to the formal governance and oversight structure in place for compensation matters, the IESO discloses compensation levels annually for staff earning $100,000 or more as part of its public sector salary disclosure. For the IESO, a further level of public review and assurance is provided through a statutorily required annual review of the IESO’s expenditures, revenue requirements and fees. Information related to compensation matters, including executive/management compensation and market relativities, is subject to Ontario Energy Board review. A range of small and large consumers, assisted by their legal and professional advisors, are represented in these public proceedings.

Executive Compensation at the IESO


Market ComparisonsThe IESO reviews the competitiveness of the executive compensation levels in relation to a peer group of Canadian organizations and general industry companies every other year at a minimum. The objective is to compare IESO executive compensation levels to those in the marketplace, particularly in relation to the median of the market.

Prior to the amalgamation of the IESO with the OPA, the Ministry of Energy had retained the Hay Group, a global management consulting firm, to evaluate and market price the CEO position for the new organization. Following Mr. Campbell’s appointment to the CEO position on January 1, 2015, the decision was made to adopt a similar approach to evaluate and market price all other executive roles using the Hay point system.

As part of this process, the comparator group was redefined and is now comprised of 13 public sector and 11 private sector organizations, with the comparator data weighted on a 50/50 public/private sector basis. The comparator group represents a range of industries, core business activities and roles that are similar to the IESO: electricity, energy, asset management, financial services, infrastructure procurement, engineering and large-scale, complex IT functions.

The following 24 organizations were used as executive comparators within the analysis:

Public (13) Private (11)

1. Business Development Bank of Canada 1. Capgemini Canada

2. CPP Investment Board 2. Enbridge

3. Enersource Hydro Mississauga 3. Fortis Inc.

4. Horizon Utilities Corporation 4. Manulife Financial

5. Hydro Ottawa 5. Navtech Systems Support Inc.

6. Metrolinx 6. Newfoundland Power Inc.

7. NB Power Holding Corporation 7. Rogers Communications

8. Ontario Teachers’ Pension Plan Board 8. Siemens Canada Limited

9. PowerStream 9. Sun Life Financial Canada

10. SaskEnergy Incorporated 10. Suncor Energy

11. Toronto Hydro-Electric System Limited 11. Telus Communications Inc.

12. Veridian Corporation

13. Workplace Safety and Insurance Board

The job evaluation was independently conducted by the Hay Group using its point system and the following executive positions were covered by this review:• President & CEO;• VP Corporate Services & CFO;• VP Market & Resource Development;• VP Market & System Operations & COO;• VP Conservation & Corporate Relations;• VP Information and Technology Services and CIO; • VP Planning, Law & Aboriginal Relations.

The Hay Group evaluated the Vice-President positions based on the job documents and additional information gathered from the CEO. Based on the evaluation points, a new salary structure was developed. The executive positions were then mapped into the new structure based upon their evaluated points.

Using the market information from the above peer group, the mid-point of the range of points for each executive salary grade was determined as the market price point for comparison purposes.


The mid-points of the new salary ranges were defined as the total direct cash compensation (annual base salaries plus annual short-term and long-term target incentive awards) of the hybrid market’s price point at the 50th percentile for each salary grade.

The minimums and maximums of each salary range were calculated using typical salary range spreads at executive levels.

Program DescriptionThe IESO program includes fixed and variable compensation, core and flex benefit plans, and pension provisions. IESO Human Resources staff participate in and review results from various compensation surveys and monitor internal compensation relativities and economic trends, such as gross domestic product trends, inflation and unemployment rates, which impact compensation. Based on this data and the IESO business priorities, Human Resources staff develop recommendations on compensation programs. External specialized compensation, benefit and pension consultants are utilized to ensure accurate, representative market compensa-tion data is obtained, that current industry compensation trends are being utilized, as well as to provide insight and recommend adjustments to current programs.

Program Description – Fixed CompensationWithin the IESO salary ranges, individuals are assessed relative to an established competency model. This model consists of behavioural competencies such as strategic agility, building effective teams, command skills, sizing up people, political savvy and managing vision and purpose. Assessments are based upon demonstrated competency. Each individual is awarded a fixed compensation level within his or her band based upon his or her assessed competency.

Program Description – Variable Compensation In order to promote a results orientation in the executive team, the variable pay plan forms part of the total compensation of executives. The IESO Board annually establishes a robust set of performance measures, which are evaluated each year.

The IESO Board assesses the corporate performance results and the CEO’s individual performance results. Under the plan, having assessed the results against target, the Board has the ability to use some discretion in determining the final performance rating.

The variable compensation awards for the CEO and Vice-Presidents are capped at 10% of fixed compensation. The plan provides for awards below the capped amount depending on the performance results achieved. The 2015 annual award was paid on December 31, 2015.

Program Description – Group BenefitsThe group benefit plan provides a core level of health and dental benefits, life insurance, disability coverage and vacation, which can be adjusted by individual executives through a flexible component within the plan. The flexible element provides executives the option of adjusting their benefits to meet their individual/family needs, including vacation above core amounts, levels of life insurance, health coverage and other components.


Program Description – Pension PlanA defined benefit pension plan provides annual retirement income calculated as 2% of pensionable earnings during the highest paid 60 consecutive months of service multiplied by years of service (36 months for the pension earned prior to January 1, 2017, by the former IESO executives), to a maximum of 35 years. The pension formula is integrated with the Canada Pension Plan (CPP) to provide a level income stream before and after age 65, when the IESO pension is reduced to reflect benefits from CPP. The plan also has early retirement provisions as well as commuted value, pension deferral and reciprocal transfer options.

The plan provides a maximum benefit of 70% of highest paid, pre-retirement pensionable earnings. As the Canadian Revenue Agency limits the amount of pension payable from a registered plan, the IESO has a secured supplemental employee retirement plan to provide required pension income to meet the commitments of the plan above that payable from the registered plan.

The plan also provides several options including member’s life only or joint and survivor pensions, as well as pre-retirement death benefits, to provide benefits to surviving spouses or beneficiaries.

Performance Measures & Impact on CompensationThe IESO annually establishes corporate performance measures relating to its business priorities during the business planning process. These are approved, monitored and assessed by the IESO Board of Directors each year. Individual performance measures supporting one or more corporate performance measures are also devel-oped for each executive. As outlined above, the corporate results achieved each year impact on each executive’s variable pay.

For 2015, the Board assessed the corporate results and determined that the IESO met all expectations. In addition to the corporate measures, each executive also had an individual set of measures and targets for the year, which aligned with the corporate performance objectives and IESO’s business priorities, and these were similarly assessed. The Board assessed the results of the CEO’s performance and the CEO assessed the performance of the Vice-Presidents, which were also reviewed with the Board.

Other ConsiderationsCompensation decisions may at times be impacted by market factors – such as the recruitment of an executive with specialized skills/competencies or possessing unique talents within the industry. To this end, individual incumbent arrangements are sometimes established relating to terms of employment and the possibility of future termination.

The CEO has an employment agreement that outlines terms and conditions for a 30-month period of employment ending on June 30, 2017, with a potential renewal at least six months prior to the end of the term. The agreement also provides up to 24 months of severance for termination without cause.

Compensation RestraintsThe IESO executive compensation has been significantly impacted by the compensation restraint legislation in Ontario since 2010. The Broader Public Sector Accountability Act (BPSAA) imposes a general freeze on designated executives’ salary, variable pay, benefits and perquisites subject to very limited exceptions.

Following the amalgamation of the two former organizations (IESO and OPA) on January 1, 2015, the total 2015 variable performance pay amount awarded to all employees and office holders became the cap for total variable performance pay to be paid out in future years. In other words, the total performance pay paid to all employees and office holders at the IESO in any subsequent year cannot be greater than the amount paid in 2015, as long as the BPSAA remains in effect.


Alignment of the Executive Compensation Plan with the Structure Established for the new CEO With the appointment on January 1, 2015, of Mr. Campbell as the CEO of the merged organization, the IESO aligned the compensation plan for its Vice-Presidents with the structure established for the new CEO. Accordingly, in both cases, the variable pay component was capped at 10% of fixed compensation with no deferral. In order to align individual pay with the new salary structure, two executives received salary adjustments.

The figures reported as 2015 “Salary Paid” in the 2015 Public Sector Salary Disclosure for the executives include the 2015 earned variable compensation that was paid on December 31, 2015.

Executive Compensation Statements The table below details the annual compensation for the year ended December 31, 2015, for the executives listed.

2015 Summary Compensation Table

Name & Position Salary Variable Pay1

Other Annual Compensation2

Total Cash Compensation3

Bruce Campbell President & CEO $545,953 $53,636 $22,315 $621,904

Kimberly Marshall VP Corporate Services & CFO $268,425 $25,772 $13,817 $308,014

JoAnne Butler VP Market & Resource Development $353,044 $32,977 $26 $386,047

Kim WarrenVP Market & System Operations & COO $326,248 $30,965 $11,098 $368,311

Terence YoungVP Conservation & Corporate Relations $313,790 $30,090 $21,832 $365,712

1. 2015 earned variable compensation was paid in December 20152. Represents remaining flex credits paid out at year end as taxable income3. These amounts will be reported as “Salary Paid” under the annual Public Sector Salary Disclosure (PSSD)


Back cover design to come

Independent Electricity System Operator 1600-120 Adelaide Street West Toronto, Ontario M5H 1T1

Phone: 905.403.6900 Toll-free: 1.888.448.7777 E-mail: [email protected]

ieso.ca @IESO_Tweets facebook.com/OntarioIESO linkedin.com/company/ieso

saveonenergy.ca @saveonenergyOnt facebook.com/saveonenergyFORHOME linkedin.com/company/saveonenergy-ontario

mailto:customer.relations%40ieso.ca?subject=

http://www.ieso.ca

https://twitter.com/ieso_tweets

http://facebook.com/OntarioIESO

http://linkedin.com/company/ieso

http://saveonenergy.ca

https://twitter.com/saveonenergyont

http://facebook.com/saveonenergyFORHOME

http://linkedin.com/company/saveonenergy-ontario


BY-LAW NO. 24-16

BEING A BY-LAW TO CONFIRM THE PROCEEDINGS OF THE COUNCIL OF THE TOWNSHIP OF ZORRA AT A

COUNCIL MEETING HELD ON JUNE 21, 2016

WHEREAS Section 5(3) of the Municipal Act, 2001, Chapter 25, provides that a municipal power, including a municipality’s capacity, rights, powers and privileges under section 9, shall be exercised by by-law unless the municipality is specifically authorized to do otherwise. NOW THEREFORE THE COUNCIL OF THE CORPORATION OF THE TOWNSHIP OF ZORRA ENACTS AS FOLLOWS: 1. That the actions of the Council of the Township of Zorra, at a meeting held on June

21, 2016, in respect to each report, motion, resolution or other action passed and taken by the Council at its meeting, is hereby adopted, ratified and confirmed, as if each resolution or other action was adopted, ratified and confirmed by its separate by-law.

2. That the Mayor and the proper officers of the Corporation are hereby authorized

and directed to do all things necessary to give effect to the said action, or obtain approvals, where required, and, except where otherwise provided, the Mayor and the Clerk are hereby directed to execute all documents necessary in that behalf and to affix the Corporate Seal of the Township of Zorra to all such documents.

READ A FIRST AND SECOND TIME THIS 21st DAY OF JUNE, 2016.

READ A THIRD TIME AND FINALLY PASSED THIS 21st DAY OF JUNE, 2016.

MAYOR CLERK MARGARET LUPTON ASHLEY SAGE

COUNCIL MEETING AGENDA CORPORATION OF THE TOWNSHIP ...

Documents

Transcript of COUNCIL MEETING AGENDA CORPORATION OF THE TOWNSHIP ...