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 93,171
Loans Payable 0 148 336 509
Debt Issued by Lakeshore Arena Corporation 26,011 26,700 19,259 19,602
Sony Centre Loans Payable 170 255 340 425
Toronto Atmospheric Fund 657 2,881 0 0
Sinking Fund Deposits – City (1,601,378) (1,680,843) (1,766,234) (1,934,095)
Sinking Fund Deposits – TDSB 0 0 (71,246) (64,872)
Total Net Long Term Debt  6,501,534           5,949,930           5,072,410           4,745,954
City of Toronto’s Net Long-Term Debt are to be recovered from the following sources ($000s)
2018 2017 2016 2015
Property Taxes and User Charges 5,156,852 4,582,646 4,057,913 3,776,013
Toronto Community Housing Corp (TCHC) 1,304,727 1,324,291 955,976 904,576
Build Toronto 12,306 12,306 33,407 33,407
Lakeshore Arena 26,011 26,700 19,259 19,602
Toronto Atmospheric Fund 657 2,881 0 0
Toronto District School Board (TDSB) 0 0 4,600 10,975
Leaside – Infrastructure Ontario 811 851 915 956
Sony Centre 170 255 340 425
Total Net Long Term Debt 6,501,534           5,949,930           5,072,410           4,745,954

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

Forecasted Debt issuance graph (2020 = $1M; 2021 = $950,000; 2022 = $600,000

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+ Stable
Dominion Bond Rating Service AA Stable


“The credit profile of the City of Toronto (Aa1 stable) reflects a large and diversified economic base, an ability to generate surpluses despite fiscal pressures, high debt affordability and strong liquidity… The credit profile also benefits from the city’s unique taxation powers, which allow it to access additional revenue sources besides property taxes and user charges, including the municipal land transfer tax.”
– Moody’s Investor Services, January 14, 2020

“Toronto’s debt burden is expected to remain lower than that of many similarly rated peers… We expect Toronto will maintain robust liquidity levels over the next two years despite the substantial cash-funding of capital expenditures.”
– Standard & Poor’s, October 21, 2019

“The ratings are supported by the City’s large and diversified economy, capacity to raise taxes and requirement to present balanced budgets.”
– DBRS, October 3, 2019