Item - 2026.TTC15.13

The TTC Board:

1. Approved the appended Draft Consolidated Financial Statements of Toronto Transit Commission for the year ended December 31, 2025.

2. Forwarded this report and the appended Draft TTC Consolidated Financial Statements to the City Clerk for submission to the next City Audit Committee meeting.

The TTC is required to prepare audited annual financial statements under Public Sector Accounting Standards and to forward them to City Council for information through the City’s Audit Committee.

Effective January 1, 2025, the TTC adopted Canadian public sector accounting guideline amendments to PSG-2 Leased Tangible Capital Assets. The amendments update references within the standard, rename Appendix A as the glossary, and add paragraphs PSG‑2.4A to PSG‑2.4C, which establish minimum requirements for lessee accounting for operating leases of tangible capital assets. As at December 31, 2025, the TTC determined that the adoption of these amendments did not have an impact on the amounts presented in the financial statements.

The 2025 accounting surplus is $758.1 million, which reflects an increase of $254.9 million over the 2024 accounting surplus and is comprised mainly of the value of subsidy revenue earned on capital asset additions, and other expenses funded through capital programs, such as environmental liabilities and asset retirement obligations, partially offset by the depreciation of assets in use. Operating activities do not generally contribute to the accounting surplus or shortfall, as operating expenses are funded in full by operating revenues and subsidies received.