City of Toronto 2025 Audited Financial Statements; Solid Waste Contract Audit

Audit Committee · 2026-07-10 · 2026.AU13.7

City of Toronto 2025 Audited Financial Statements; Solid Waste Contract Audit

The Audit Committee received and approved the 2025 consolidated financial statements showing a $1.7 billion accounting surplus and a $108 million operating surplus, alongside findings from an independent audit of Solid Waste Management Services' contract management practices. The statements reflect the city's $67 billion asset base and $6 billion in new capital investments, while the waste audit identified opportunities to strengthen contract monitoring and payment controls.

adoptedAudit Committee · Fri, Jul 10On the Toronto City Council agenda for 2026-07-29provincial decision

Who did what

Councillor Jamaal Myers (Ward 23) movedMoved adoption of AU13.7 waste audit recommendation

From the floor

“Population growth and evolving community needs created rising demand for both direct city services and services delivered on behalf of the federal and provincial governments. This was reflected in a $1.88 billion operating cost increase in 2025.”Speaker not identified

“A modest operating surplus of 108 million was achieved through active cost control and discipline and privatization.”Speaker not identified

“The city had an operating surplus of $108 million, which really reflects the performance of the city's tax-up supported operating activities. From an accounting standpoint, however, that surplus balance needs to be adjusted to account for not just the public sector accounting standard related requirements, but also the impacts of our capital budget.”Speaker not identified

“What happens when we carve a big chunk out of the capital plan and we suddenly get some elbow room? So what's our plan to deal with that? Does cost go up?”Councillor Stephen Holyday (Ward 2)

“We've done quite well in 2025 in terms of our overall capital spend. It is the highest capital spend we've had at least since amalgamation here in the city. But you're absolutely right, the higher capital spend, the more cash that is going out the door to be able to support those capital expenditures. It does put a pressure on our cash flow.”Speaker not identified

Also in this item

• Tangible capital assets increased 81% over ten years (from $27B in 2015 to $48.7B in 2025), creating long-term infrastructure maintenance pressures

• Reserves of $5.5 billion are 94% committed; combined with deferred revenues totaling $12 billion against $40 billion in commitments, city has limited financial flexibility for new priorities

• City achieved AA+ credit rating from rating agencies and successfully implemented new SAP S4 Hannah accounting system in November 2025 without extra time or budget

• Solid Waste Management Services oversees portfolio of 300+ contracts valued at $1.8 billion; audit identified gaps in performance monitoring and payment verification processes

The journey

Fri, Jul 10 · Audit Committee · adopted

Wed, Jul 29 · Toronto City Council · scheduled, not yet heard

You can still act

On the Toronto City Council agenda for 2026-07-29

Decision

AU13.1 approved (audited financial statements). AU13.7 approved (waste audit recommendations adopted).

Watch it happen

Jump to this item in the meeting video

Why is this story here?

Big deal at city hallThe approval of $67 billion in consolidated assets and $6 billion in new capital investments represents a hard-to-reverse multi-year commitment. The waste audit findings identify systemic contract management weaknesses affecting $1.8 billion in procurement, requiring enhanced controls. A future council cannot easily unwind these infrastructure investments or deprioritize the control improvements without real cost and political capital. The financial statements establish the baseline for all future budget decisions.Felt nowEvery Toronto resident experiences the outcomes: property taxes fund the $19.7 billion in revenues and $18 billion in expenses. The $108 million operating surplus directly affects tax policy and reserve capacity for the next budget cycle, which residents will feel through service levels and levy changes. The waste contract findings affect collection services and cost management touching all households. Capital investments in roads, transit, water infrastructure are visible and material to daily life (commute, safety, utilities). The 94% reserve commitment means less capacity to respond to emergencies or new pressures on services residents rely on.

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Official title: Audit of Solid Waste Management Services - Contract Management for Solid Waste Collections, Organics Processing Services and Construction Projects · meeting video