The City uses debt to help finance large capital projects. This provides the City with more affordable financing by matching the repayment term to the economic useful life of the project, instead of funding the entire cost from current revenues.

The City’s capital projects are funded by a variety of sources including the issuance of debt.

Debt provides the City with affordable financing and matches the repayment term to the economic useful life of the project. Without debt financing, the City may be hindered from taking on large capital projects. Also, present taxpayers would be funding projects that provide long-term benefit to future residents.

An Ontario municipality may issue long-term debt only for capital purposes and cannot borrow for operations. The only exception is issuing promissory notes that must be repaid with the current year’s tax levy. Repayment of municipal debt is amortized over the term of the debenture with regular contributions being made to the sinking fund. The city auditor certifies the sinking fund balance annually. If the balance certified is less than the amount required in the year for the repayment of the sinking fund, the City will pay an amount sufficient to make up the deficiency into the sinking fund.

The City of Toronto is a respected participant in the global capital markets. Adherence to the Financing of Capital Works Policy and Goals maintains the City’s reputation and affords continued efficient and cost-effective access to capital markets.

The City’s debt issuance guidelines and policies are outlined in the following documents:

City of Toronto Long-Term Debt ($000s)



2017 2016
Debentures Issued by the City (Total Outstanding)



6,264,192 5,824,726
Debt issued by Toronto Community Housing Corp.



1,324,291 955,976
Build Toronto Inc. Loan



12,306 33,407
Debentures Issued by the City on behalf of TDSB



0 75,846
Loans Payable to the Province 0 0 0 0
Loans Payable 0 0 148 336
Debt Issued by Lakeshore Arena Corporation 25,298 26,011 26,700 19,259
Sony Centre Loans Payable 85 170 255 340
Toronto Atmospheric Fund 594 657 2,881 0
Sinking Fund Deposits – City (1,604,962) (1,601,378) (1,680,843) (1,766,234)
Sinking Fund Deposits – TDSB 0 0 0 (71,246)
Total Net Long Term Debt 7,104,455  6,501,534           5,949,930           5,072,410
City of Toronto’s Net Long-Term Debt are to be recovered from the following sources ($000s)
2019 2018 2017 2016
Property Taxes and User Charges 5,685,030 5,156,852 4,582,646 4,057,913
Toronto Community Housing Corp (TCHC) 1,392,678 1,304,727 1,324,291 955,976
Build Toronto 0 12,306 12,306 33,407
Lakeshore Arena 25,298 26,011 26,700 19,259
Toronto Atmospheric Fund 594 657 2,881 0
Toronto District School Board (TDSB) 0 0 0 4,600
Leaside – Infrastructure Ontario 770 811 851 915
Sony Centre 85 170 255 340
Total Net Long Term Debt           7,104,455 6,501,534           5,949,930           5,072,410

The City issues debt to support funding for capital projects with a priority on state-of-good-repair of key infrastructure.

The debt requirement for the next three years is approximately $2.5 billion. In 2020, the City plans to borrow up to $1 billion to fund capital expenditures.

Forecasted Debt Issuance

The City typically issues sinking fund debentures with bullet maturity in terms of 10, 20 & 30 years.

Annual contributions to the sinking funds are held in an investment fund for repayment of the original amount of the debt at maturity.

The City often re-opens deals to build benchmark-sized offerings and enhance liquidity.

Long-Term Short-Term Outlook
Moody’s Investor Service Aa1 P-1 Stable
Standard & Poor’s AA A-1+ Positive
Dominion Bond Rating Service AA Stable


“We believe that Toronto’s prudent financial management, strong financial support from senior levels of government, and a deep and diversified economy have sustained the city’s fiscal performance over the past two years. As the largest city in Canada and operator of the most heavily used urban mass transit system in the country, Toronto has been significantly affected by the COVID-19 pandemic. The city will remain under pressure to keep delivering essential services, including transit, to its residents. However, as restrictions ease, we expect Toronto will demonstrate its ability to retrieve its pre-pandemic revenue generation capacity and absorb increased public health expenditures while preserving its creditworthiness in the long term”

– Standard & Poor’s, October 20, 2021


“The Aa1 rating reflects Toronto’s economic importance as the largest city in Canada, high levels of cash and investments, and sound fiscal management, while reflecting pressures relating to transit ridership and growing deferred maintenance backlog….City’s credit profile will remain resilient to near term operating pressures from the coronavirus pandemic given the resilience of the majority of revenue sources, continued expense controls and federal and provincial COVID-related funding support. The stable outlook also reflects managed and predictable increases in debt levels in line with peers, and continued strong debt affordability.”

– Moody’s Investor Services, August 11, 2021


“The ratings are supported by the City’s large and diversified economy, capacity to raise taxes, and requirement to present balanced budgets. The Stable trends reflect DBRS Morningstar’s expectation that the City’s fiscal outlook will gradually stabilize as a majority of the population is vaccinated and as global and local economies reopen. This view is further supported by the significant amount of Coronavirus Disease (COVID-19) pandemic relief funding that has been provided to Ontario municipalities.”

– DBRS, October 7, 2021