Download the “Time is Ripe” report here.
This blog is cross-posted on the Prof. Nina-Marie Lister’s Ecological Design Lab website.
“Amsterdam is known for its canals. Why can’t Toronto be known for its ravines?”, asks Philip Jessup, ex-Executive Director of The Atmospheric Fund. Many have sought refuge in parks during the closures and public health restrictions of the pandemic. The social, financial and health benefits of nature are being increasingly documented in academic and scientific literature.
Parks and Development
City of Toronto (the City) officials estimate that there will be less than 12 m2 of parkland per person in Toronto by 2033 – a 130% drop from 2016. Real estate construction in Toronto has continued during COVID-19 and is likely to keep going as we exit the pandemic. In a May 2020 Toronto Star article, Fadi Masoud, a University of Toronto professor of Landscape Architecture and Urbanism, said: “As the city continues to grow and as people are cooped up in their tiny condos in the middle of a pandemic, people need outdoor relief.” Park People recently released its “The Canadian City Parks Report: Centring Equity & Resilience” report found an 82% increase in park use during the pandemic by people surveyed.
However, 86% of the cities surveyed by Park People said that protecting/enhancing biodiversity and the natural environment is a challenge. Toronto had 2.7 hectares (ha) of parkland per 1,000 people, which was below the 4.4 ha national average. Unless new parkland is acquired in Toronto, parkland provision is expected to decrease by 14% by 2033. (Figure 1) To reverse this decline, it is essential to prioritize sites with biodiversity conservation potential and that increase access for equity-seeking groups. As X University School of Urban and Regional Planning professor Nina-Marie Lister states: “Equitable and safe access to public parks and urban green space is a human right.”
Figure 1 – Parkland Acquisition Priority Map
Background and Methodology
I spent the summer of 2021 researching new financial tools for biodiversity conservation that can be applied at the City of Toronto. In my role, I explored three questions: 1) How to make a planning argument to explore how parkland acquisition funds are used / not used and where there may be opportunities to unlock these and deploy for biodiversity conservation goals under Canada’s commitment as part of the Convention on Biodiversity Targets, 2) Catalogue and investigate new opportunities for parkland acquisition funding, and 3) Explore new opportunities to partner with Indigenous community members. I interviewed 21 individuals in the financial, government, and non-profit sectors in Canada, Costa Rica, the U.K. and the U.S. My research also highlighted barriers that exist for the City to use the funds it currently has towards acquiring parkland. The internship was supported by X University Professor Nina-Marie Lister’s Ecological Design Lab and the Consecon Foundation, a charitable foundation based in Eastern Ontario.
Ontario’s Section 42 and City of Toronto Funds
Under Section 42 of Ontario’s Planning Act developers must either convey parkland or provide cash-in-lieu (CIL) for their projects. When it is not possible to convey parkland on a site, a parkland dedication rate applies with funds collected by the City through a CIL mechanism. The City has a complicated formula for apportioning funds into reserve funds and rules on how the funds can be spent. (Figure 2) Between 2016 and 2019, the City received $439,891,231 in CIL in parkland dedication payments. City of Toronto staff reported in July 2021 that funds collected when CIL payments exceed 5% led to an uncommitted balance of $207,460,572 in its Parkland Reserve Funds. A significant portion of this can be used towards parkland acquisition in Toronto.
Figure 2 – City of Toronto Cash-in-lieu of Parkland Allocation Policy
While the City has significant funds available for parkland acquisition, we believe that it must better utilize its available tools and go beyond them to address its biodiversity needs. We estimate that Toronto has an annual funding gap of USD$1.16-1.56 bn (CDN$1.51-2.03 bn) (1) This is based on an estimated national annual biodiversity funding gap of USD$15-20 bn (CDN$19.5-26 bn) calculated by the Nature Conservancy of Canada and Rally Assets.
Financial Tools for Biodiversity Conservation
I researched over 25 private and public sector financial tools that can be used for parkland acquisition or for parks’ operating funding. These are among the top tools:
- Resilience Bonds: Resilience bonds link insurance premia to resilience projects to monetize avoided losses through a rebate structure. (re:focus, 2019) The “resilience rebate” can fund risk reduction projects, e.g. NBS or parkland acquisition.
- Environmental impact bonds (EIBs): A pay-for-performance tool, where partners make-up for the financing gap between government and philanthropy. E.g. the Black Rhino Conservation Performance Bond is worth US $50 mn and has targets to increase this species’ numbers in Kenya, South Africa and Zimbabwe.
- Parametric Insurance: Designed to payout when a pre-defined event occurs, this product can fund restoration of natural infrastructure. The Municipal Natural Assets Initiative, the Insurance Bureau of Canada and Swiss Re are working on a pilot project.
To implement these tools and others, here are our top recommendations:
- Remove barriers to parkland acquisition. This process can be accelerated if the City’s Parks, Forestry and Recreation’s (PFR) implemented management approaches used in nimbler city agencies or at provincial agencies and crown corporations.
- Amend the cash-in-lieu allocation policy. The City can free up reserve fund money towards area with the greatest need for parkland acquisition
- Prepare for natural disasters with novel insurance products. Parametric insurance and resilience bonds can make infrastructure more resilient to increasing flood risks.
- Centre equity. To ensure biodiversity conservation has wider appeal through parkland acquisition, it needs to centre the needs of equity-seeking groups, especially since they may live close to prime sites.
- Engage institutional investor community. Financial interest in nature is unlikely to go away as the G7 and multi-stakeholder groups signal their interest in financing nature-based solutions. The City’s PFR staff should prepare for a rise in interest in biodiversity and for opportunities related to this.
You Can Thank Us Later
The City has been directed by the Province of Ontario to get a new alternative park dedication rate before Toronto City Council by September 18, 2022. The time is now for the City to rethink its CIL allocation policy and to use additional financial tools to prioritize biodiversity conservation. Canals helped cities like Amsterdam manage their flooding risks and have become a part of its identity. Toronto can make its ravines and parks a part of its own identity through this policy update. We should take inspiration from the swagger of the athletes and musicians that have put Toronto on the map – think of how Drake popularized the Toronto Raptors – and make bold moves on biodiversity conservation.
- Assumed $ 1.30 to USD 1 exchange rate in mid-November 2020. We accounted for the city’s share of Canada’s population (7.75%).