#1Region of Peel working with you Region of Peel Investor Presentation January 2020 Julie Pittini Director | Treasury Services | Finance Region of Peel#22 Meet the Region of Peel Table of Contents Overview............. 2 Economic Highlights......... 8 Financial Overview...... Debt Financing...... Contact Details............. 14 19 26 Region of Peel working with you#3Overview OVIVO#44 2nd Largest Municipality in Ontario and Growing The Region of Peel is the 2nd largest municipality in Ontario. It is located in the GTA with 1.48 million residents and growing. Consisting of the Town of Caledon, and the Cities of Brampton and Mississauga, it has undergone a major transition during the past few decades. Rapid growth and commercial development have transformed the Region of Peel into a dynamic urban community with a vibrant economic base. Chicago Detroit⚫ CANADA Ontario Greater Toronto Area (GTA) Boston Region of Peel USA New York Citys Philadelphia Washington, DC. Region of Peel Town of Caledon City of Brampton + Halton- Region City-of Mississauga City of Toronto/ York Región Legend Lake Ontario Durham Region Major Highway Toronto Pearson International Airport Region of Peel working with you#55 Corporate Governance Structure Peel Residents 1.48 million residents Regional Council Regional Chair and 24 Councillors Executive Leadership Team Chief Administrative Officer and 6 Commissioners Six Operating Departments Corporate Services Finance Health Services Human Services Public Works Digital and Information Services Region of Peel working with you#66 2015-2035 Strategic Plan Our 20-year vision for the Region of Peel is "Community for Life." Vision: Community for life Mission: Working with You to create a healthy, safe and connected community Values: Our Regional Values define how we work together and drive our daily interactions and decisions. Living People's lives are improved in their time of need Thriving Communities are integrated, safe and complete Leading Government is future- oriented and accountable Region of Peel working with you#77 Service and Program Responsibilities Living Thriving Leading TransHelp Paramedics Long Term Care Adult Care Income Support Employee Support Region of Peel Operating and Capital Services Early Growth and Development Chronic Disease Prevention Infectious Disease Prevention Enterprise Programs and Services Community Investment Housing Support Homelessness Support Child Care Water Supply Wastewater Waste Management Roads and Transportation Land Use Planning Heritage, Arts and Culture Region of Peel Financed External Programs Police Conservation Authorities Assessment Services Local Municipality Operating and Capital Services Storm Water, Local Roads, Parks & Recreation, Fire, Transit Region of Peel working with you#8解 Economic Highlights#9Strategic Advantages of the Region of Peel We are strategically located Within Canada's largest economic hub (the GTA) (1) Close to large United States markets Bordering Lake Ontario We are a transportation hub A $1.8B Estimated daily value of goods movement 5 Major highways & regional / national rail Home to Canada's largest airport 6 We are highly educated (2) We are a young population (2) 83% Have at least a high school education 65% Have a post-secondary education 38 Years old is youngest average age in the GTA 18% 2nd highest ratio of children in the GTA (1) GTA Greater Toronto Area (2) Statistics Canada, 2016 Census Region of Peel working with you#1010 Strong Population Growth and Labour Market Population Growth In Millions of People 1976 2018 | 2041 (Forecast) 1.97 Employment Growth In Thousands of Jobs 2013 2018 1.43 1.48 1.21 0.88 0.62 0.38 +33% 793 813 842 755 616 614 1976 1986 1996 2006 2016 2018 By 2041 2013 2014 2015 2016 2017 2018 Population by Local Municipality People 2018 Unemployment Rate Percentage 2013 | 2015 | 2017 | 2018 -Caledon -Brampton 656,900 44% -Mississauga 754,200 51% 73,300 5% 8.9% 7.7% 6.9% 6.8% 2013 2015 2017 2018 Region of Peel working with you#11Strong and Diverse Business Sector Business Establishments In Thousands 2014-2018 Services Sector = Goods Producing Sector 135.7 124.3 108.4 113.9 117.1 17.7 18.2 18.7 19.2 20.0 2014 2015 2016 2017 2018 11 Over 155,000 Business Establishments, with growth of over 5% CAGR (compound annual growth rate) in last 5 years ✓ Services Sector stable at ~85% of total ✓ Top Employers are Royal Bank of Canada, Suncor Energy, Rogers Communications and Hewlett Packard Lowest water/wastewater rates in Greater Toronto Area attract businesses like Coca-Cola, Pepsi and Cott Beverages Distribution of Business Sectors Percentages 2018 Strong Year-over-Year Growth Transportation & Warehousing Finance, Insurance, Real Estate & Leasing Professional, Scientific & Technical Services 20.3% 20.2% 14.7% ★ Trade 10.1% ★ Construction 9.2% Other Services 6.0% Management, Administrative & Other Support 5.3% Healthcare & Social Assistance 5.1% Manufacturing & Other Goods Producing 3.7% Accomodation & Food Services 2.6% Information & Culture 1.9% Educational Services 1.0% Region of Peel working with you#12Stable Housing Sector and Strong Household Income Building Permits In Billions of Dollars 2014-2018 4.4 12 12 3.6 Housing Starts In Thousands 2014-2018 8,100 3.5 3.0 2.8 4,607 6,739 5,362 4,978 Household Income (Median After-Tax) In Thousands of Dollars Statistics Canada, 2016 Census 76 69 65 61 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 Region Toronto CMA Ontario Canada of Peel Building Permits began to rebound in 2018 after new government measures implemented in 2016 and 2017 to cool over-heated housing market 2019 Housing Starts rebounding to historical 10 year average of ~5,700 25% higher than Canada ✓ 17% higher than Ontario ✓ 10% higher than Toronto CMA Region of Peel working with you#13Sustainable Growth in Taxable Assessment Taxable Assessment In Billions of Dollars 1998 | 2008 | 2013 | 2018 | 2019 Residential Non-Residential $277(1) 1 Year Growth 10 Year Average Brampton 2.9% 2.9% 218 221 Caledon 2.0% 2.2% 201 183 Mississauga 0.8% 0.8% 133 Residential 1.8% 1.7% Non-Residential 0.9% 1.1% 48 37 52 52 55 55 1998 2008 2013 2018 2019 Source: Municipal Property Assessment Corporation (MPAC) and Region of Peel 13 (1) Does not add due to rounding Total 1.6% 1.6% Region of Peel working with you#14Financial Overview INU#15Financial Strengths Focus on Long-Term Financial Planning Strategy with a 10-year Operating Budget Model Commitment to planning and funding infrastructure replacement / state of good repair Tax rate: +1% average annual increase to reserves since 2008 - Utility rate: +4% average annual increase to reserves since 2009 Integrated approach to managing growth - Growth Management Committee overseeing 2041 growth forecasts - Earlier and more integrated consultation with local municipalities, Province and building industry Development Charges (DCs) By-Law updated in 2015 Resulting in the earlier collection of residential DCs to offset $100M in borrowing Financial flexibility for additional revenue generation due to lowest utility rates in Greater Toronto Area 15 AAA Credit Rating and Strong Liquidity Region of Peel working with you#1616 2020 Budget Highlights $3.7 billion invested in services that advance and support Council's current term priorities and longer term outcomes Living: People's lives are improved in their time of need. Thriving: Communities are integrated, safe and complete. Leading: Government is future-oriented and accountable. $2.6 billion $902 million Operating Budget $1.47 billion $199 million $1.1 billion Capital Budget $43 million $982 million $33 million Region of Peel working with you#1717 10 Year Capital Plan Highlights Utility-Rate Supported $5,368M Water Supply $1,959M, 20% Wastewater $3,409M, 37% Tax-Rate Supported $4,045M Living: Housing Support, $1,210M, 13% Long-Term Care, Paramedics Leading: Office Technology and $197M, 2% State of Good Repair, Climate Change Thriving: Roads and Transportation, $2,638M, 28% Police Services, Waste Management (1) Based on 2020-2029 Capital Plan Expenditures $9.4 Billion Financing $9.4 Billion Capital Reserves $4,324M, 46% Development Charges $4,230M, 45% Debt $282M, 3% External $564M, 6% Region of Peel working with you#1818 Development Charges (DCs) Overview Levy DCs against new development to fund growth-related infrastructure (Provincial legislation) A "growth pays for growth" philosophy to ensure existing tax base not affected by cost of development DC rates must be updated at least every 5 years - Last by-law updated in 2015 with a new by-law scheduled for 2020 Borrowing needs are for long life projects Water, wastewater, roads are major programs funded by DCs COUNTY OF WELLINGTON MUNICIPALITY Water and Wastewater Infrastructure Investments 2019-2041 (Forecast) Town of Caledon City of Brampton REGIONAL City of Mississauga SITY OF TORONTO Region of Peel vorking with you Komete Future Master Plan water intrastructure 2013-2041 • Proposed Water Facility Proposed Watermain Future Master Plan Wastewater infrastructure 2019-2041 Proposed Wastewater Facility Proposed Sewer Munidpal Boundary Lake Ontario Region of Peel working with you#19Debt Financing 圓圓#20Borrowing Strategy 20 20 Benchmark Size Issuer For Large Capital Projects Smaller Size Issuer For Small Capital Projects at Region and Local Municipalities C$150+ million 10 - 40 year Bullet with sinking fund C$25 to C$100 million 10 year Serial or Bullet with sinking fund Debt issuance for capital projects, primarily growth related for water, wastewater and roads Continued focus on liquid benchmark issuance All debt is general obligation Region of Peel working with you#21Historical Public Debt Issuance Public Debt Issuance In Millions of Dollars 2010-2019 ■Serial ■Bullet 310 400 300 333 ilu 37 40 191 Issued in the last 10 years = $1.778 billion Anticipated future issuance ~$275 million in 2020 ✓ ~$375 million in 2021 75 53 39 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 24 21 Source: Region of Peel Region of Peel working with you#22Public Debt Maturity Profile Public Debt Maturity Profile In Millions of Dollars 2019-2053 ■Serial Bullet 230 169 250 Weighted Average Maturity = 15 years 500 323 31 31 29 24 21 15 2 11 5 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2033 // 2040 // 2042 Source: Bloomberg (October 2019) 22 22 33 2053 Region of Peel working with you#23Strong Regulatory Framework Supports Debt Issuance Ontario Municipal Act, 2001 Municipal Debentures Rank Pari Passu s.408(7) Annual Budgeting Requirements (Debt Provision and No Operating Deficits) s.289 and s.290 Limitations on Use of Proceeds s.413(1) and s.408(2.1) Debenture By-Law Permanence s.414(1) Doctrine of Ultra Vires Municipal Officer Guilty of an Offense s.9 and s.17 S.422 23 No Bankruptcy Allowed (No Equivalent of Chapter 9 in USA) Member of Council Diversion of Funds Liability S.424 Region of Peel working with you#24AAA Credit Ratings, Strong Liquidity Position and Compelling Investor Returns Credit Ratings MOODY'S Aaa (Stable) since 2011 ".....a track record of consistent, positive fiscal outcomes supported by prudent, forward-looking fiscal and budget policies, and the region's growing, diversified economy with strong population growth." $ Liquidity C$2.5 Billion in investments S&P Global | AAA (Stable) since 2001 "Peel continues to benefit from a strong economy, which helps the region to generate strong revenues, exceptional liquidity, and a declining debt burden." Highly liquid portfolio with strong credit quality ✓ Large annual budget contributions to reserves for state of good repair Historical Yield Pick-Up vs. Ontario(¹) 40 35 30 222225050 15 10 24 24 Region of Peel working with you 2010 2011 2012 2013 2014 2015 2016 2017 2018 (1) Indicative credit spread comparison 2019#2525 25 Investing to build our Community for Life Living Thriving | Leading Region of Peel working with you