HomeMy WebLinkAboutFIN 01-26Report to Council
Report Number: FIN 01-26
Date: February 23, 2026
From: Stan Karwowski
Director, Finance & Treasurer
Subject: City of Pickering - Provincial Financial Indicator Review (2024) File: F-1000
Recommendation:
1. That Report FIN 01-26 regarding Provincial Financial Indicator Review from the Ministry ofMunicipal Affairs and Housing be received for information.
Executive Summary: The purpose of this report is to provide Council with the results of the 2024 Financial Indicator Review prepared by the Ministry of Municipal Affairs and Housing, as outlined in Attachment 1. The Province of Ontario publishes an annual Financial Indicator
Report through the Ministry of Municipal Affairs and Housing assessing the financial condition of all municipalities.
Relationship to the Pickering Strategic Plan: The recommendations in this report respond to the Pickering Strategic Plan Corporate Key: Good Governance/Customer Service
Excellence.
Financial Implications: There are no direct financial implications.
Discussion: The purpose of this report is to provide Council with the results of the 2024
Financial Indicator Review prepared by the Ministry of Municipal Affairs and Housing (MMAH),
as outlined in Attachment 1. The City received the province’s notification on January 12, 2026, and City staff met with provincial staff on January 27, 2026, to discuss the findings. The meeting confirmed that the City maintained a strong financial position in 2024. Each year, municipalities must submit their annual financial data to the MMAH through the Financial
Information Return (FIR). The province then compiles this information and provides key financial performance indicators for each municipal grouping, as shown in Attachment 1. These ratios allow municipalities to benchmark their performance against others within the same category; Pickering is classified as a lower‑tier municipality.
Based on the Provincial report provided by MMAH, the City of Pickering has a low level of risk across all financial indicators. The introduction of casino dollars is reflected in several
of the indicators when you compare the trends over time.
FIN 01-26 February 23, 2026
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Financial indicators are divided into two categories:
a) Financial Sustainability reflects the municipality’s ability to maintain service levels, meet
its financial obligations, and manage infrastructure and debt over the long term without
placing undue pressure on future taxpayers. b) Financial Flexibility refers to the municipality’s capacity to respond to changing economic conditions, service demands, and unforeseen pressures through adjustments to revenues, expenditures, borrowing, or reserves. Together, these indicators provide insight into the
municipality’s overall financial health, resilience, and ability to support growth while maintaining fiscal stability.
Below are detailed descriptions of each indicator as presented in Attachment 1 from the
MMAH.
Financial Sustainability Indicators:
1. Total Taxes Receivable less Allowance for Uncollectible as a Percentage of Total Taxes Levied
Taxes Receivable represent the amount of unpaid taxes owed to the municipality, often
referred to as tax arrears. This measure applies only to lower‑tier and single‑tier municipalities, as upper‑tier taxes are collected by the lower tiers. Elevated levels of outstanding taxes may indicate residents’ difficulty in meeting tax obligations or potential issues with the municipality’s tax collection processes. High tax arrears can also create cash flow challenges or lead to
increased tax rates to offset uncollectable amounts or write‑offs. A lower percentage is more
favourable.
Pickering’s actual results are slightly higher than the comparator groups, however, over the last few years, the trend has been improving. Taxation staff have begun collection activities in late fall 2025 that will hopefully translate into positive results for fiscal year 2026.
2. Net Financial Assets or Net Debt as Percentage of Own Source Revenues
Net financial assets (a positive balance) indicate that the municipality may have resources available to support future needs. This measure simply indicates how much property tax and user fee revenue is servicing the City’s debt. Conversely, net debt (a negative balance) reflects the amount of future revenue that will be required to fund past spending decisions. A declining indicator suggests that liabilities are growing faster than revenues, meaning
additional revenue or time will be needed to eliminate those obligations. A sustained downward
trend may not be financially sustainable. A higher percentage is more favourable.
Pickering’s financial results indicate a strong financial position by having the financial capacity
to meet its current debt obligations.
FIN 01-26 February 23, 2026
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3. Total Reserves and Discretionary Reserve Funds as a Percentage of Municipal
Expenses
Reserves are funds set aside to support planned future requirements (such as capital
projects), to stabilize operating costs (such as winter road maintenance), or to address unforeseen expenses (such as contingencies or emergencies). A high level of risk—defined as reserves below 10%—suggests the municipality may have limited capacity to manage unexpected revenue shortfalls or cost increases. Conversely, reserves above 20% indicate a lower level of risk and show that the municipality is proactively saving for future needs.
Reserves may be either discretionary or mandated by legislation. A higher percentage is more favourable.
Pickering results indicate a strong financial capacity to meet future needs. The 2025 financial
results may trend lower due to the fact, the City used some of its reserves to help fund the
Dorsay Community & Heritage Centre (DCHC).
4. Cash Ratio (Total Cash and Cash Equivalents as a Percentage of Current Liabilities)
The cash ratio measures how much money the municipality can access immediately, such as cash on hand or short‑term investments. Its purpose is to assess the municipality’s ability to meet current obligations using readily available resources. The ratio compares the amount of quickly accessible funds to the short‑term liabilities that must be settled. In other words, how much cash and liquid investments could be available to cover current obligations. A higher ratio is more favourable.
Pickering’s results are positive.
Financial Flexibility Indicators:
5. Debt Servicing Cost as a Percentage of Total Revenues (Less Donated TCAs)
Debt servicing reflects the portion of each revenue dollar that is used to repay existing debt,
including both principal and interest. This measure highlights how past borrowing decisions
affect the current municipal budget. As more current revenue is directed toward paying for past
debt, less is available to support day‑to‑day operations. A lower percentage is more favourable.
The City’s financial results from 2020 up to and including 2024 is trending in a positive direction. With the introduction of casino dollars, the City has avoided the need to debt finance lower cost capital projects.
6. Asset Consumption Ratio (Closing Amortization Balance as a Percentage of Total Cost of Capital Assets)
The asset consumption ratio indicates the extent to which a municipality’s physical assets have
been used or have depreciated. It reflects the portion of assets that may no longer be capable of delivering their intended level of service by comparing their written‑down value to their
FIN 01-26 February 23, 2026
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original cost. A rising ratio may signal the need for increased investment in capital repairs or asset replacement. A lower percentage is more favorable.
As stated previously, by the City’s Treasurer, there is a need for the City to invest in its existing
infrastructure.
7.Annual Surplus / (Deficit) (Less Donated TCAs) as a Percentage of Own SourceRevenues
The operating surplus ratio reflects the amount of municipal revenue remaining (or lacking) at
year‑end after accounting for municipal expenses, relative to own source revenue. It is
important to note that MMAH’s basis for calculating the annual surplus (deficit) is based on the
Public Sector Accounting Board (PSAB) full-accrual basis of accounting, rather than a cash-basis of accounting. The full-accrual basis excludes certain items such as tangible capital asset acquisitions from the annual surplus but will include items such as the amortization for these asset acquisitions. Please refer to the 2024 Current Budget (page 10) for a detailed explanation of the difference between full-accrual and cash-basis for municipalities. A higher
percentage is more favourable.
According to the MMAH financial indicator review, the City of Pickering is in an excellent position regarding its overall financial health. This strong standing enables the City to withstand potential financial challenges if they arise. These ratios are expected to shift in
2025—particularly the debt-related indicators—once the $24.89 million debt for the DCHC is
issued and incorporated into the 2025 calculations.
Summary: The City of Pickering’s 2024 Provincial Financial Indicator Review, prepared by the MMAH, finds that Pickering continues to demonstrate a low level of risk across all key financial metrics. These indicators spanning financial sustainability and flexibility—assess the City’s
capacity to maintain services, manage infrastructure and debt, and adapt to changing economic conditions. In the context of current ongoing economic uncertainty, this strong financial position is particularly significant and should be viewed as a strategic asset, as it means Pickering is well-placed to absorb potential fiscal pressures arising from external
economic shocks. This economic uncertainty was articulated by Prime Minister Mark Carney,
when he delivered his speech on January 20, 2026 at the World Economic Forum, where he stated the following:
“We are in the midst of a rupture not a transition.” He continued to say:
“Old comfortable assumptions that our geography and alliance memberships
automatically convey prosperity and security and that assumption is no longer valid.”
Over the short term and proven by the positive results of the key financial indicators, the City has the financial strength to absorb and adapt to the changing economic environment with resilience.
The annual review relies on data submitted through the FIR and allows Pickering to
benchmark itself against other lower-tier municipalities. The indicators include measures of tax arrears, net financial assets or debt, reserves, cash liquidity, debt servicing, asset
FIN 01-26 February 23, 2026
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consumption, and annual surplus/deficit. The City’s favorable outcomes—such as adequate reserves, positive net assets, and prudent debt servicing—suggest resilience in the face of
rising interest rates, inflation, or other economic headwinds affecting Canadian municipalities.
Attachments:
1. 2024 MMAH City of Pickering Financial Indicator Review2.Full Accrual Budget Explanation (2024 Budget – page 10)
Prepared By: Approved/Endorsed By:
Original signed by Original signed by
Jason Bekramchand, CPA Stan Karwowski, CPA, CMA, MBA Senior Financial & Budget Analyst Director, Finance & Treasurer
SK:jb
Recommended for the consideration
of Pickering City Council
Marisa Carpino, M.A. Chief Administrative Officer
Original signed by
F I N A N C I A L I N D I C A T O R R E V I E W
(Based on the 2024 Financial Information Return)
Pickering C (Durham R)
Date Prepared:22-Dec-25 2024 Households:35,820 Median Household Income: 118,000
MSO Office:Central 2024 Population 107,765 Taxable Residential Assessment as a
Prepared By:Colin Johnston 2025 MFCI Index n/a % of Total Taxable Assessment:80.4%
Tier:LT Own Purpose Taxation:92,323,446
S U S T A I N A B I L I T Y I N D I C A T O R S
Indicator Ranges Actuals Level of
Risk
Median Average
2020 10.6%5.6%6.5%MODERATE
2021 9.0%5.1%5.6%LOW
2022 8.9%5.4%5.8%LOW
2023 9.1%6.4%6.8%LOW
2024 8.8%7.8%7.9%LOW
2020 156.1%95.6%87.8%LOW
2021 149.4%90.2%88.5%LOW
2022 139.0%87.7%85.3%LOW
2023 143.7%75.3%81.2%LOW
2024 147.9%72.7%78.9%LOW
2020 84.3%65.5%70.4%LOW
2021 95.3%70.6%75.6%LOW
2022 105.2%70.4%75.4%LOW
2023 104.4%66.3%71.6%LOW
2024 111.0%64.7%73.8%LOW
2020 213.4%226.5%295.1%LOW
2021 247.7%249.8%312.5%LOW
2022 265.5%225.6%268.0%LOW
2023 316.5%135.9%199.6%LOW
2024 400.8%153.6%205.0%LOW
F L E X I B I L I T Y I N D I C A T O R S
2020 4.1%2.9%3.2%LOW
2021 3.9%2.9%3.0%LOW
2022 3.1%2.4%2.7%LOW
2023 2.9%2.6%2.7%LOW
2024 2.4%2.2%2.7%LOW
2020 47.9%38.7%37.8%LOW
2021 48.2%38.9%38.2%LOW
2022 47.9%39.0%38.4%LOW
2023 46.1%38.3%37.6%LOW
2024 46.8%39.8%37.7%LOW
2020 13.2%14.5%15.6%LOW
2021 19.9%17.9%14.1%LOW
2022 32.2%17.7%19.8%LOW
2023 23.5%17.4%19.5%LOW
2024 28.5%20.8%21.0%LOW
South - LT - Regions - Non-
Rural Comments
Total Taxes Receivable less
Allowance for Uncollectibles as a %
of Total Taxes Levied
Low: < 10%
Mod: 10% to 15%
High: > 15%
Net Financial Assets or Net Debt as %
of Own Source Revenues
Low: > -50%
Mod: -50% to -100%
High: < -100%
Total Reserves and Discretionary
Reserve Funds as a % of Municipal
Expenses
Low: > 20%
Mod: 10% to 20%
High: < 10%
Cash Ratio (Total Cash and Cash
Equivalents as a % of Current
Liabilities)
Low: > 50%
Mod: 50% to 25%
High: < 25%
Debt Servicing Cost as a % of Total
Revenues (Less Donated TCAs)
Low: < 5%
Mod: 5% to 10%
High: >10%
Closing Amortization Balance as a %
of Total Cost of Capital Assets (Asset
Consumption Ratio)
Low: < 50%
Mod: 50% to 75%
High: > 75%
Annual Surplus / (Deficit) (Less
Donated TCAs) as a % of Own Source
Revenues
Low: > -1%
Mod: -1% to -30%
High: < -30%
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The data and information contained in this document is for informational purposes only. It is not an opinion about a municipality and is not intended to be used on its own - it should be
used in conjunction with other financial information and resources available. It may be used, for example, to support a variety of strategic and policy discussions.
************************************************************************************************************************************************
F O L L O W - U P R E V I E W A N D C O M M E N T S
Printed: 2025-12-22 Ministry of Municipal Affairs 1 of 3
Attachment 1 to Report FIN 01-26
F I N A N C I A L I N D I C A T O R R E V I E W
(Based on the 2024 Financial Information Return)
Pickering C (Durham R)
Date Prepared:22-Dec-25 2024 Households:35,820 Median Household Income: 118,000
MSO Office:Central 2024 Population 107,765 Taxable Residential Assessment as a
Prepared By:Colin Johnston 2025 MFCI Index n/a % of Total Taxable Assessment:80.4%
Tier:LT Own Purpose Taxation:92,323,446
Supplementary Indicators of Sustainability and Flexibility
explain the government's financial statements.
respect of its service commitments to the public and financial commitments to creditors, employees and others without inappropriately
increasing the debt or tax burden relative to the economy within which it operates.
ability to manage its financial and service commitments and debt burden. It may also help to describe the impact that the level of debt
could have on service provision.
its existing financial obligations both in respect of its service commitments to the public and financial commitments to creditors,
employees and others.
flexibility to respond when adverse circumstances develop if the municipality approaches the limit that citizens and businesses are
willing to bear.
A municipality may temporarily use current borrowing, subject to the requirements set out in the Municipal Act to meet expenses
and certain other amounts required in the year, until taxes are collected and other revenues are received. Municipal current borrowing
cannot be carried over the long term or converted to long term borrowing except in very limited circumstances.
and municipality-related indicators. It may be useful to also include economy-wide information when discussing financial condition.
The following is a summary, adapted from the Chartered Professional Accountants of Canada Statement of Recommended Practice (SORP) 4.
F O L L O W - U P R E V I E W A N D C O M M E N T S
N O T E S
Financial Information Returns ("FIRs") are a standard set of year-end reports submitted by municipalities to the Province which capture certain financial
l A government (including a municipality) may choose to report supplementary information on financial condition, to expand on and help
l Supplementary assessment of a government's financial condition needs to consider the elements of sustainability and flexibility.
l Sustainability in this context may be seen as the degree to which a municipality can maintain its existing financial obligations both in
l Sustainability is an important element to include in an assessment of financial condition because it may help to describe a government's
l Flexibility is the degree to which a government can change its debt or tax level on the economy within which it operates to meet
l Flexibility provides insights into how a government manages its finances. Increasing taxation or user fees may reduce a municipality's
l For each element of financial condition, the report on indicators of financial condition should include municipality-specific indicators
Printed: 2025-12-22 Ministry of Municipal Affairs 2 of 3
F I N A N C I A L I N D I C A T O R R E V I E W
(Based on the 2024 Financial Information Return)
Pickering C (Durham R)
Date Prepared:22-Dec-25 2024 Households:35,820 Median Household Income: 118,000
MSO Office:Central 2024 Population 107,765 Taxable Residential Assessment as a
Prepared By:Colin Johnston 2025 MFCI Index n/a % of Total Taxable Assessment:80.4%
Tier:LT Own Purpose Taxation:92,323,446
Total Taxes Rec. less Allowance for Uncollectibles as % of Total Taxes Levied SLC 70 0699 01 / (SLC 26 9199 03 - SLC 72 2899 09)
Net Financial Assets or Net Debt as % of Own Source Revenues
Total Reserves and Reserve Funds as a % of Municipal Expenses (SLC 60 2099 02+SLC 60 2099 03)/(SLC 40 9910 11-SLC 12 9910 03-SLC 12 9910 07)
Cash Ratio (Total Cash and Cash Equivalents as a % of Current Liabilities)SLC 70 0299 01 / (SLC 70 2099 01 + SLC 70 2299 01)
Debt Servicing Cost as a % of Total Revenues (Less Donated TCAs)(SLC 74 3099 01 + SLC 74 3099 02) / (SLC 10 9910 01 - SLC 10 1831 01)
Closing Amortization Balance as a % or Total Cost of Capital Assets (Asset Consumption Ratio)SLC 51 9910 10 / SLC 51 9910 06
Annual Surplus / (Deficit) (Less Donated TCAs) as a % of Own Source Revenues
Cash Ratio (Total Cash and Cash Equivalents as a % of Current Liabilities) - Indicates how much cash and liquid investments could be available
to cover current obligations.
Additional Notes on what Financial Indicators may indicate:
Total Taxes Receivable less Allowance for Uncollectibles as a % of Total Taxes Levied - Shows how much of the taxes billed are not collected.
Net Financial Assets or Net Debt as % of Own Source Revenues - Indicates how much property tax and user fee revenue is servicing debt.
Reserves and Reserve Funds as a % of Municipal Expenses - Indicates how much money is set aside for future needs and contingencies.
(SLC 10 2099 01 - SLC 10 1831 01) / (SLC 10 9910 01 - SLC 10 0699 01 -
SLC 10 0899 01 - SLC 10 1098 01 - SLC 10 1099 01 - SLC 10 1811 01 - SLC 10 1812
01 - SLC 10 1813 01- SLC 10 1814 01 - SLC 10 1830 01 - SLC 10 1831 01 - SLC 12
1850 04)
Debt Servicing Cost as a % of Total Revenues (Less Donated TCAs) - Indicates how much of each dollar raised in revenue is spent on paying down
existing debt.
Closing Amortization Balance as a % or Total Cost of Capital Assets (Asset Consumption Ratio) - Indicates how much of the assets’ life
expectancy has been consumed.
Annual Surplus / (Deficit) (Less Donated TCAs) as a % of Own Source Revenues - Indicates the municipality's ability to cover its operational
costs and have funds available for other purposes (e.g. reserves, debt repayment, etc.)
The Northern and Rural Municipal Fiscal Circumstances Index (MFCI) is used by the Ministry of Finance to calculate the "Northern and Rural
Fiscal Circumstances Grant" aimed at northern as well as single and lower-tier rural municipalities. The index measures a municipality’s fiscal circumstances.
The MFCI is determined by six indicators: Weighted Assessment per Household, Median Household Income, Average Annual Change in Assessment (New
Construction), Employment Rate, Ratio of Working Age to Dependent Population, and Per Cent of Population Above Low-Income Threshold. A lower MFCI
corresponds to relatively positive fiscal circumstances, whereas a higher MFCI corresponds to more challenging fiscal circumstances. (Note: the MFCI index is
only available for northern and rural municipalities)
C A L C U L A T I O N S
SLC 70 9945 01 / (SLC 10 9910 01 - SLC 10 0699 01 - SLC 10 0899 01 -
SLC 10 1098 01 - SLC 10 1099 01 - SLC 10 1811 01 - SLC 10 1812 01 - SLC 10 1813
01- SLC 10 1814 01 - SLC 10 1830 01 - SLC 10 1831 01 - SLC 12 1850 04)
Printed: 2025-12-22 Ministry of Municipal Affairs 3 of 3
-C�0/PJCKERJNG
Average Daily Cost of Municipal Services:
23.2% $1.46 Fire Service�
4.2% $ 0.27 Debt Servicing Costs
1.4% $ 0.09 City * Development
0.7% $ 0.04 Animal (li) Services
1.1% $ 0.07 Arenas -�=-=�(ll._. . -�•J) �==�
20.7% $ 1.31 Roads & • Water Network
5.6% $ 0.35 Community 1 & Recreation Centres
1.6% $ 0.10 Mayor, Council & • Council Support
. 0.6% $ 0.04 Customer Care
0.8% $ 0.05 Community m·l' Grants --��(\\.':> • '·G.· (�·, ::! , ·-'"', .. ,ch.1 �.-:.:· \,1!°l!14'
23.2% Library
6.5% Corporate Services
1.2% Streetlights
1% Museum
0.1% By-law Services
2024 Budget
Average Daily Cost of
Municipal Services
$ 6.31
$ 0.45
[.. ]
$ 0.41
$ 0.08
$ 0.06 .-
$ 0.01 �ifii�v�� l PARKING ....... , . II --�· __ )
8.0% $ 0.51 Parks & IHI Property
4.1% $ 0.26 Culture & Recreation Other
1.2% $ 0.08 Recreation Programs tmf'tf·Y
0.7% $ 0.04 Crossing Guards
10.2% $ 0.65. All Other Areas
*Calculated based on the average assesed value of $612,000 for a residential property.
9
Attachment 2 to Report FIN 01-26