City council got a full look at St. Thomas’s 2025 finances on Monday night, and one councillor asked the question a lot of residents might ask too. How can the city post a deficit and a $134 million surplus in the very same set of books?
Auditor Christene Scrimgeour of Scrimgeour & Company walked council through the city’s 2025 consolidated financial statements, the year-end books every Ontario municipality must have independently audited. Her opinion is clean, meaning the firm found nothing materially wrong. The statements are still marked draft, and Monday’s motion both approves them and authorizes staff to finish the audit.
Here is the puzzle. On the operating side, the side that pays for roads, staff and day-to-day services, the city ended 2025 with a $748,675 deficit. That is actually better news than it sounds: staff had forecast a $1,022,821 deficit in the city’s Q4 budget monitoring report, and the gap closed once year-end paperwork for provincial social services and Valleyview Home funding was finalized. But on the full audited statements, built to a different accounting standard, the city shows an annual surplus of $134,658,216.
One councillor asked Treasurer Adam Boylan to square the two numbers for the room. “We incurred a budget deficit that we drew from a tax funded reserve to resolve,” Boylan told council. “But on the financial statements, we had a large surplus that was in relation to Yarmouth Yards. We secured over $800 million in grants and private sector agreements, and that’s why the financial statements show a budget deficit and a very large surplus for the city simultaneously.” Asked whether the two numbers offset each other, Boylan said they are simply used for different purposes. “The money for Yarmouth Yards is for Yarmouth Yards. It’s not to build a road or pay staff. It’s just a very specific purpose. The money that is used for general city operations, we did have a modest deficit, as reported in Q4.”
In other words, most of that $134.7 million surplus is money the city can only spend on Yarmouth Yards, the industrial park being built around the PowerCo battery plant, and mainly on the Dalewood Water Reclamation Facility, the roughly $440 million wastewater plant Yarmouth Yards needs by 2030. LocVox reported Monday on the separate plan for financing the last $167 million of that project. A note buried in this week’s audited statements repeats that same $167 million figure, and adds something the financing report did not: the city has agreed to pay a neighbouring municipality $15 million for land needed for the development, $10 million of it already paid and $5 million still to come.
Five transfers tied to the 2025 results were folded into that same motion, each one recommended in Boylan’s report:
- $748,675 out of the Infrastructure Reserve, to cover the operating deficit
- $540,484 out of the Water Reserve, to cover a water-side deficit
- $1,227,437 of wastewater surplus into the Wastewater Reserve
- $100,217 in bingo revenue over and above the first $300,000, into the Community Centre Reserve
- $26,759,245, the biggest by far, into the Industrial Servicing Reserve, earmarked for Dalewood. This is development-side money the report calls “2025 operating surplus,” not part of the tax-supported operations that ran the $748,675 deficit above.
All five passed together with the statements in a single vote, with no opposition voiced.
Scrimgeour called the overall results “a good news story,” pointing to the city’s shrinking debt load and a big jump in net financial assets, up to $24.2 million from $1.5 million the year before. In the same breath, though, she pointed council back to Note 20, the commitment note covering the Yarmouth Yards land payments and the Dalewood project, as the one to keep in mind. Asked later how St. Thomas compares to the other municipalities she audits, she said the city has “a lot of upcoming capital expenditures,” not just Dalewood but the city’s other capital assets, which still need repairing and replacing, and urged council to keep its reserves healthy enough to cover it. “Just making sure you keep your eye on that ball,” she said.
Earlier the same meeting, discussing the separate report on financing Yarmouth Yards, city staff told council a plan to explain the city’s Yarmouth Yards finances to residents in plainer language is rolling out this fall, an acknowledgment that documents like these are not exactly light reading. Until then, the short version residents can hold onto is this: day-to-day city operations came in close to balanced in 2025, and the big number attached to the city’s name is mostly a construction fund for a wastewater plant that has not been built yet.
Earlier coverage: St. Thomas Lays Out a Plan to Borrow $167 Million for Yarmouth Yards
By Anthony Zruna · About the LocVox Newsroom
Update - August 19, 2026, 3:09 p.m. ET: The city’s official minutes for the August 10 meeting are now posted and confirm the vote and transfers described above; removed the earlier note that minutes were not yet available.
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