Surpluses & Deficits

How they're calculated and what they mean for you

by Rafi Chaudhury

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 shows whether there was a surplus for the year, in which revenues exceeded expenses, or a deficit, in which expenses exceeded 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.

$1.19 Billion

Toronto's 2015 Operating Surplus. In 2014, the reported surplus was $889 million.


The Historical Picture

Trends since 1998

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

Tap on points on the chart (or hover your mouse) to see the dollar amount for that year. Move your finger across the chart to see values for each year.

Operating Balance Trends

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.

Hover (or touch) data points to see actual amounts. Click the ☰ icon for chart download options.


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.

Tap the legend labels to remove them from the series. Tap again to add them back. This lets you view individual numbers in isolation.

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

City 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.

Tap the legend labels to remove them from the series. Tap again to add them back. This lets you view individual numbers in isolation.

Spending Implications

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.

Click or tap the individual bars to drill down into the sub-categories.

Rafi Chaudhury

Rafi Chaudhury



Rafi Chaudhury is the Web Designer at Budgetpedia, focusing on data visualization UX and JavaScript charting. 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.