Item - 2019.BU4.5

The Budget Committee recommends to the Executive Committee that:

1. City Council receive the report (January 30, 2019) from the Chief Financial Officer and Treasurer for information.

Ontario Regulation 286/09 "Budget Matters - Expenses" (Regulation) allows the City of Toronto (City) to exclude amortization expense, post-employment benefit expenses and solid waste landfill closure and post-closure expenses when preparing its annual budget.  The Regulation requires that the City prepare a report which includes at a minimum, an estimate of the change in accumulated surplus resulting from the exclusion of the noted expenses from the budget and an analysis of the impact of the exclusion on future capital asset funding requirements.  The Regulation requires that this report be adopted by City Council (Council) prior to the adoption of its annual budget.

To meet the requirements of the Regulation, this report discusses the impact of excluding amortization expense, post-employment benefit expenses and solid waste landfill closure and post-closure expenses from the City's budget, along with the impact of the differences between how the City treats the purchase of tangible capital assets,  debt principal repayments, Government Business Enterprise (GBE) earnings, and expenses arising from contaminated site liabilities for budgeting and financial reporting purposes.  The treatment of the expenses beyond those identified in the Regulation is included to reflect the complete impact on estimated accumulated surplus for 2019.