Types of City surplus
The City has three types of surpluses:
- Operating
- Annual
- Accumulated
The Operating Surplus can be used to cover unexpected costs. However, the Annual and Accumulated surplus amounts reported don’t represent funds available for use.
The tables below explain where each surplus type comes from and the areas it can support. The content below the table expands on each surplus type.
Operating Surplus
Operating Surplus
| Balance | What it is and where it comes from | Areas it can support |
|---|---|---|
| $259 million for the year ended Dec. 31, 2025 |
The City doesn’t budget for an operational surplus but is directed by Council to not run a deficit. Through our commitment to reduce costs and grow revenues, while avoiding a deficit, it’s likely every year there will be an operational surplus. |
The Operating Surplus is used to help with unexpected costs such as fixing infrastructure. The surplus is transferred to the Fiscal Stability Reserve (FSR). |
At The City, operating expenses include costs of delivering services as well as operation and maintenance of facilities, infrastructure, equipment, systems and vehicles. The City has an operating budget for these costs and it’s largely funded by property tax and user fees. The City is legislated to prepare a balanced budget each year. In other words, we don’t budget for a deficit or a surplus. Achieving an Operating Surplus (also referred to as Favourable Operating Variance) is reflective of The City’s commitment to reduce costs.
The 2025 Operating Surplus of $259 million is a result of multiple factors including The City’s strategic decision-making, reduction of expenses and intentional workforce management, as well as returns on financial investments.
These operating savings (the surplus) are used to help Calgarians. The surplus is transferred to the Fiscal Stability Reserve (FSR), which serves as a contingency fund for operational emergencies, urgent or contingency capital expenditures, and to compensate for unplanned revenue reductions with significant financial impacts.
As the Operating Surplus may not be a re-occurring surplus it cannot be used in perpetuity to reduce the annual operating budget.
Annual Surplus
Annual Surplus
| Balance | What it is and where it comes from | Areas it can support |
|---|---|---|
| $1.91 billion for the year ended Dec. 31, 2025 |
Annual surplus accumulates due to accounting standards that require capital funding received from government grants or developers to be recognized as revenue when an infrastructure asset is constructed. These infrastructure assets are then depreciated over their useful life and realized as expenses in future years. |
As an indicator only, the Annual Surplus includes the Operating Surplus but does not necessarily create further availability of funds. Therefore, it partially supports budget requirements. |
The majority of the Annual Surplus of $1.91 billion is due to accounting standards that require capital funding received from government grants or developers to be recognized as revenue when an infrastructure asset is constructed. These infrastructure assets are then depreciated over their useful life and realized as expenses in future years. The amount reported is used as an indicator to represent whether The City was able to generate enough revenue to cover expenses in the year.
As a hypothetical example, if a $50 million grant is received for the construction of a bridge that has a 50-year life, we would recognize $50 million in revenue but only $1 million in expense, creating a $49 million surplus (even though The City spent the full $50 million). The remaining $49 million is realized as an expense each year over the life of the bridge.
As an indicator only, the Annual Surplus does not necessarily create an availability of funds. Therefore, it’s not used to support budget requirements or reduce tax impacts.
Accumulated Surplus
Accumulated Surplus
| Balance | What it is and where it comes from | Areas it can support |
|---|---|---|
| $28.05 billion balance at Dec. 31, 2025 |
This indicator represents The City’s total net economic resources, both financial and non-financial and it is the sum of net financial performance since inception. Approximately 82 per cent of the Accumulated Surplus is represented by Tangible Capital Assets, which are those infrastructure assets developed to provide services to citizens. |
This is the equity in The City comprising mainly of the value of infrastructure and equity holdings in ENMAX. The value from this holding cannot be realized as funds to support other areas unless the asset, such as infrastructure (roads, bridges, ENMAX) is sold. |
The Accumulated Surplus of $28.05 billion represents The City’s total net economic resources, both financial and non-financial. It is the sum of net financial performance since inception. It is the equity in The City comprising mainly of the value of infrastructure and equity holdings in ENMAX. The value from this holding cannot be realized as funds to support other areas unless the asset, such as infrastructure (roads, bridges, ENMAX) is sold.
This Accumulated Surplus also represents amounts indicated in both the Annual Report Surplus and Operating Surplus.
All surplus amounts and details are shared in the Annual Report. The Annual Report provides a comprehensive view of The City’s financial statements. It also includes The City’s efforts to ensure practical cost management, savings and positive operating cash flows.