Ottawa projects $11.16 million year-end surplus despite $38.59 million midyear deficit
The city is forecasting a healthy finish to 2026 even though it was deeply in the red halfway through the year. Heavy snow and labour-market pressures created a $38.59 million shortfall by June.
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Ottawa's Finance and Corporate Services Committee received a 2026 budget status update Thursday showing the city ran a $38.59 million deficit through the first half of the year but is projecting to finish with an $11.16 million surplus.
The midyear shortfall was driven largely by a $41.6 million winter operations deficit. Ottawa received 49 snow days in 2026, compared with a five-year average of 38, straining budgets for plowing and salt. Tax-supported services and departments combined carried a $40.17 million deficit through June 30, though rate-supported programs like water and wastewater posted a $10.49 million surplus.
Chief Financial Officer Cyril Rogers told the committee the projected year-end surplus is "driven by continued revenue growth, strong performance in rate-supported programs and mitigation measures." The city maintains a spending and hiring freeze and enhanced financial monitoring.
Ottawa is also tracking financial impacts from the July 1 severe weather event, subsequent weather events, and recently announced U.S. tariffs. The federal government workforce is projected to decline 1.7 per cent annually through 2030, pressuring the city's tax base. Unemployment in Ottawa stood at 5.8 per cent in 2024, rose to 6.3 per cent in 2025, and is projected to reach 6.6 per cent by year-end 2026.
Rogers cited "unique labour market pressures" affecting revenues, service demand, procurement and overall costs. Despite headwinds, areas of economic strength include technology, defence, construction and manufacturing. Tourism showed exceptional performance: City Manager Wendy Stephanson said 2025 was "really the strongest year ever on record" for the tourism industry, with 2026 tracking similarly based on early indicators.
OC Transpo faces a projected $12.35 million deficit by year-end, driven by revenue shortfalls from underperforming ridership.
Which specific mitigation measures is the city implementing to close the remaining gap?
What is the updated ridership forecast for OC Transpo for the second half of 2026?
We'll update this story as answers emerge.
The facts
How much of a deficit did Ottawa run in the first half of 2026?
Ottawa ran a $38.59 million deficit through June 30, 2026, driven largely by a $41.6 million winter operations deficit after the city received 49 snow days compared with a five-year average of 38.
What year-end surplus is Ottawa projecting for 2026?
Ottawa is projecting an $11.16 million surplus by the end of 2026, driven by continued revenue growth, strong performance in rate-supported programs, and mitigation measures including a spending and hiring freeze.
What is the projected unemployment rate in Ottawa by year-end 2026?
Ottawa's unemployment is projected to reach 6.6 per cent by year-end 2026, up from 5.8 per cent in 2024 and 6.3 per cent in 2025.
How much of a deficit is OC Transpo facing by year-end 2026?
OC Transpo is facing a projected $12.35 million deficit by year-end 2026, driven by revenue shortfalls from underperforming ridership.
