How they're calculated and what they mean for you

In order to better understand how the city makes and spends money, let's take a quick tour of the City of Toronto's audited statement of operations for the year ending December 31, 2015.

At its simplest level, the annual financial statement represents Toronto's revenues and expenses and shows whether there was a surplus for the year, where revenues exceed expenses, or a deficit, where expenses exceed revenues.

In 2015, revenues were higher than expenses, resulting in a surplus of $1.19 billion. According to City policy, 75% of this surplus ($893 million) will be allocated to infrastructure projects within the capital budget. The remaining 25% ($298 million) will be allocated to top up reserves to meet financial obligations.

billion in Revenue
billion in Expenses
billion in Surplus

2014: $889 million surplus

Source: City of Toronto website
(Backup Link)


Trends since 1998

The chart below tracks city revenues and expenses since 1998. As of 2015, city revenues have almost doubled from the $6.3 billion recorded in 2000.

Toronto has run sustained operating surpluses since 2009, when revenues reached $10.9 billion. The highest surplus recorded so far was $1.19 billion in 2015. Operating surpluses are shown in blue and deficits are shown in red.


How the city finances operations

Unlike a business, the City does not make the bulk of its money by selling goods and services. Taxes and funding transfers make up the majority of the funds used by the city to operate. The charts below show the largest revenue sources and their proportion relative to the total revenue base.

Hover over the bars (or touch the bars on mobile) to view the dollar amounts for each category.

The User Charges category includes a number of sub-categories that generate fees for the City. This includes transportation services such as the Toronto Transit Commission. It also includes recreational and cultural services such as parks, golf courses and museums.

The "Other" category under includes revenues from the following sources:

  • Government Business Enterprise Earnings
  • Investment Income
  • Development Charges
  • Rent and Concessions
  • Other expenses


What the money was spent on and how much

Expenditures in 2015 totaled $10.83 billion, a 3% increase over the $10.46 billion spent in 2014. The largest expenditure categories were Transportation, Social and Family Services and Protection to Persons and Property, which comprised 62% of total expenditure.


How are surpluses spent?

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.

Rafi Chaudhury

Rafi Chaudhury

Project Manager, Budgetpedia



Rafi Chaudhury is the Project Manager at Budgetpedia, focusing on web development and data visualization UX. Prior to this role, Rafi was a Product Manager at FeelingBetterNow, where he was responsible for customer analytics development and testing. Rafi holds a Master of Science degree in Global Health from McMaster University and is currently studying for his CPA at York University's Schulich School of Business.