TABLE OF CONTENTS
REPORTS OF THE STANDING COMMITTEES
AND OTHER COMMITTEES
As Considered by
The Council of the City of Toronto
on December 16 and 17, 1998
STRATEGIC POLICIES AND PRIORITIES COMMITTEE
REPORT No. 27
1Future of the Hummingbird Centre - Enactment of theProposed Hummingbird Legislation
City of Toronto
REPORT No. 27
OF THE STRATEGIC POLICIES AND PRIORITIES COMMITTEE
(from its meeting on December 15, 1998,
submitted by Councillor Case Ootes, Chair Pro Tem)
As Considered by
The Council of the City of Toronto
on December 16 and 17, 1998
Future of the Hummingbird Centre - Enactment of the
Proposed Hummingbird Legislation
(City Council on December 16 and 17, 1998, adopted this Clause, without amendment.)
The Committee recommends the adoption of the recommendations of the Board of Directors of the Hummingbird
Centre for the Performing Arts contained in the following report (December 11, 1998) from the City Clerk:
The Board of Directors of the Hummingbird Centre for the Performing Arts, on December 11, 1998, unanimously
recommended to the Strategic Policies and Priorities Committee and Council:
(1)adoption of the report (December 10, 1998) from the City Solicitor wherein it is recommended that authority be
granted to continue to pursue the process now engaged in by City and Board staff with the Province which would lead to
the enactment of the proposed Hummingbird Centre legislation, based on the proposed model of legislation previously
approved by the Council of the former Municipality of Metropolitan Toronto, subject to the modifications outlined in this
(2)having regard that the Provincial Legislature will be considering the proposed legislation for the new Hummingbird
Centre on the morning of Thursday, December 17, 1998, that the matter be considered by Council as the first item of
Business on Wednesday, December16,1998.
The Board of Directors of the Hummingbird Centre for the Performing Arts, at its meeting held on December 11, 1998,
had before it a copy of a report (December 10, 1998) from the City Solicitor addressed to the Strategic Policies and
The Strategic Policies and Priorities Committee also submits the following report (December10, 1998) from the City
(1)to provide a progress report respecting the requested enactment of the proposed Hummingbird Centre legislation,
previously approved by the Council of the former Municipality of Metropolitan Toronto;
(2)to obtain authority to make the changes outlined below to the proposed Hummingbird Centre legislation, from those
terms previously approved by the Council of the former Municipality of Metropolitan Toronto.
Funding Sources, Financial Implications and Impact Statement:
The proposed change to the realty tax status of the Hummingbird Centre, as outlined below, should the Centre not meet the
requirements of the tax exemption provisions of the Assessment Act, also outlined below, could potentially result in the
imposition of a tax liability on the City should the new Hummingbird Corporation, created by the enactment of the
proposed Hummingbird Centre legislation, default in payment of any realty taxes assessed under its lease with the City.
Authority be granted to continue to pursue the process now engaged in by City and Board staff with the Province which
would lead to the enactment of the proposed Hummingbird Centre legislation, based on the proposed model of legislation
previously approved by the Council of the former Municipality of Metropolitan Toronto, subject to the modifications
outlined in this report. At its meeting of December 11, 1998, the Board of Directors of the Hummingbird Centre for the
Performing Arts unanimously approved this recommendation.
By its adoption, as amended, of Clause No. 1 of Report No. 6 of the Environment and Public Space Committee at its
meeting of April 24, 1996, the Council of the former Municipality of Metropolitan Toronto adopted the proposal for the
restructuring of the relationship between the former Metropolitan Corporation and the Board of Management of the (then)
O'Keefe Centre as set out in the document entitled "Report and Business Plan for the Board of Management of the
O'Keefe Centre for the Performing Arts (December, 1995)" (the "Business Plan"), as amended by the transitional steps
outlined in the body of the report, to be implemented substantially in accordance with the model described in the draft
legislation attached to that report. Authority was granted for a request to be made to the Province of Ontario to enact
legislation in accordance with that model and substantially in the form of the draft legislation appended to such report.
The Business Plan was premised on several fundamental conditions, including the continuation of the municipal property
tax exemption, and the draft legislation incorporated a provision which would grant municipal tax exemption to any
property to be vested in or leased by the new corporation created by the legislation.
The draft model of legislation also incorporated a provision whereby the new Hummingbird Corporation would be deemed
to be an employer for the purposes of the Ontario Municipal Employees Retirement System Act ("OMERS"), thereby
permitting the employees of the new corporation to continue to participate in the OMERS plan.
The Private member's bill incorporating the changes suggested by the Ministry as set out in this report, was tabled on
December 10, 1998, and is scheduled for first reading in the Ontario Legislative Assembly on December 17, 1998. A copy
of the bill is attached as Appendix "A".
Comments and/or Discussion and/or Justification:
Mr. Tony Silipo, MPP for Dovercourt, has agreed to sponsor, as a private member's public bill, the proposed legislation for
the new Hummingbird Centre. Proposed draft legislation was forwarded by this office to Mr. Silipo who in turn forwarded
it to the Ministry of Municipal Affairs and Housing (the "Ministry"), for review and comment by appropriate Ministry
Overall, a favourable response was received from the Ministry to the proposed enactment of the legislation, with the
The Centre is currently exempt from municipal taxation pursuant to section 66(2) of the City of Toronto Act, 1997 (No. 2)
which provides that the Hummingbird Board's occupation and management and control of the Hummingbird Centre is
deemed, for the purposes of paragraph 9 of section 3 (now section 3(1)) of the Assessment Act ("the Act") to be occupation,
management and control by the City. Paragraph 9 of section 3(1) of the Act provides for an exemption from taxation for
municipally owned property. Accordingly, the Centre is currently exempt and is not subject to municipal taxation, subject
to the following.
Pursuant to recent amendments contained in section 27.1 of the Act, the Centre could potentially be liable to make certain
payments in lieu of taxes. This section provides that the owner of a large commercial theatre that is located in the City of
Toronto and that is not liable to taxation, shall pay the City of Toronto an amount calculated in accordance with the
formula set out therein. "Large commercial theatre" is defined in that section of the Act such that it would include the
Hummingbird Centre, if the Centre were used, other than by a charitable or non-profit organization, on a total of a least 183
days in the taxation year to present live performances with the intention of generating a profit. It is my understanding from
Hummingbird staff that the Centre currently does not fall into that category and, therefore, does not currently make the
prescribed payments in lieu of taxes. However, the potential that the Centre would have to make such payments exists
should the mix of programming change in the future so as to bring the Centre within the definition of "large commercial
theatre". A copy of all relevant legislation is attached as Appendix "B"
This new section of the Act also provides that the City of Toronto shall pass a by-law permitting a deduction from the
above payments of all or a portion of the revenue from the use of the theatre other than by non-charitable or non profit
organization that is used to fund not for profit activities in the theatre.
Staff in the Ministry have indicated that the Ministry is not prepared to support the enactment of a provision granting the
Hummingbird Centre an exemption from municipal taxation, as set out in the draft legislation. The Ministry has however
indicated that it would be willing to support the inclusion of a provision in the legislation such that the Centre could
become tax exempt if it met the conditions set out in paragraph 27 of subsection 3(1) of the Act, which provides that land
used as a theatre that contains 1,000 seats or more and that is used to present, on a total of at least 183 days in the taxation
year, live performances of drama, comedy, music or dance, including opera or ballet, that are not presented with the
intention of generating profit, shall be exempt from taxation. This provision of the Act provides that this exemption applies
only if the theatre is owned and operated by a non-profit corporation without share capital. The provision the Ministry has
suggested be included in the draft legislation would deem any property leased to the new Hummingbird Corporation and
occupied for its purposes as set out in the draft legislation, to be owned by the Hummingbird for the purposes of that
provision of the Act. The Centre would therefore become tax exempt should it meet the requirements of the above
provision. The General Manager and Chief Administrative Officer, Hummingbird Centre for the Performing Arts, has
advised that the Business Plan would still be viable should the Centre's tax liability change to that proposed by the
Under the new structure, the proposal is that the Hummingbird Board would be a tenant of the City, having severed most of
its financial and legal ties to the City. The risk therefore to the City in adopting the Ministry's proposal is that, should the
Hummingbird Centre not meet the requirements of the tax exemption in any given year, and should the new Hummingbird
Corporation default in the payment of its taxes, the City would be fully liable for the payment of those taxes. In order to
minimize this risk to the City, it is recommended that provisions be incorporated in the lease agreement with the new
Hummingbird Corporation, as follows:
(1)The new Corporation would be responsible for payment of any and all realty taxes, and that, upon failure by the new
Corporation to make such payment, the lease may be terminated by the City and the City would regain possession of the
Centre. As municipally owned property, the Centre would then become tax exempt pursuant to the provisions of the Act,
unless and until it was leased to another tenant who would not be otherwise tax exempt if the tenant owned the property.
(2)The affairs and management of the new Corporation be structured such that any net income from operations of the
Corporation be required to be placed into reserve funds, so that in fact the Corporation does not make a profit and the
Centre would therefore be captured by the tax exemption provision outlined above. The Hummingbird currently has two
reserve funds, the Stabilization Reserve Fund where operating surpluses are held in the event they are required to offset
operating losses, and the Capital Reserve Fund, where ticket surcharges are held for capital improvements.
The current Board of Directors of the Hummingbird Centre is eligible to participate in OMERS pursuant to subsection
66(6) of the City of Toronto Act.
Recent changes to the OMERS legislation by the enactment of Bill 35 have resulted in the addition of a provision to that
act whereby the Lieutenant Governor in Council could designate a person or association of persons as an "associated
employer". An associated employer so designated is eligible to participate in the OMERS plan pursuant to the provisions of
the OMERS Act.
As part of the Ministry's review of the draft Hummingbird legislation referred to above, staff have indicated that it is the
Ministry's position that there be no reference to participation in OMERS in the Hummingbird legislation, but rather, the
matter be dealt with by way of the above mentioned designation. Staff in the Ministry have indicated that Ministry staff
would be willing to recommend that the designation be made. However, the decision whether or not to make the
designation is a decision of Cabinet and not the Ministry. Although obtaining such a designation would have the same
effect as the enactment of the provision incorporated in the Hummingbird draft legislation respecting participation in
OMERS, the risk to the new Hummingbird Corporation is that the Lieutenant Governor in Council would ultimately not
make the required designation. It should be noted however, that staff of the Ministry have indicated that in their opinion the
risk is not great. However, if the designation were not made and the Hummingbird legislation were enacted without the
pension provision, the new Hummingbird Corporation would not be eligible to participate in OMERS and those
Hummingbird employees currently enrolled in OMERS would no longer be eligible to participate.
Adoption of the above recommendations will result in the City being able to give effect to the Business Plan by proceeding
with enactment of the required legislation.
Alison Fowles, Solicitor, 392-8434.
(Copies of Appendix A respecting the Private member's bill and Appendix B respecting all relevant legislation mentioned
in the foregoing report, were circulated to all Members of Council with the agenda of the Strategic Policies and Priorities
Report for its meeting of December 15, 1998, and copies thereof are on file in the office of the City Clerk).
Chair Pro Tem
Toronto, December 15, 1998
(Report No. 27 of The Strategic Policies and Priorities Committee was adopted, without amendment, by City Council on
December 16 and 17, 1998.)