Toronto recorded an annual surplus of $1.19 billion in 2015 and has an accumulated surplus of $21.24 billion. Does that mean that $21 billion is available for spending on public services?
Not exactly. As per provincial law, Toronto is required to balance its budget, i.e. ensure that budgeted expenses in a financial year do not exceed budgeted revenues. In practice, this results in operating surpluses due to conservative budgeting practices. Of that surplus, 75% is allocated to spending on projects in the capital budget with the remainder allocated to city reserves to meet various other financial obligations.
The accumulated surplus number is arrived at by first adding up the amounts that the city has invested in capital assets (such as land and buildings) and has in operating fund reserves and other types of reserves. Then, the total of expected future payouts and allocations related to the capital fund, mortgages and debt repayments are subtracted. The chart on the right displays how the numbers work out.
For 2015, $2.73 billion of the accumulated surplus is allocated to funding services in the operating budget.