Ottawa's Audit Committee Approves 2025 Financial Statements and Reviews OC Transpo Service Issues

Ottawa's Audit Committee approved the city's 2025 consolidated financial statements and sinking fund statements after KPMG said it was prepared to issue a clean audit opinion. The committee also spent much of the meeting on the Auditor General's audit of OC Transpo bus service planning and scheduling, where councillors, auditors and transit representatives focused on outdated run-time data, unclear service priorities and the use of "operator shortage" to explain cancelled trips. The committee also received follow-up reports on job evaluation and cyber security, with part of the cyber security discussion held in camera.

Topics Discussed

1. 2025 FINANCIAL STATEMENTS AND AUDIT OPINION

Deputy City Treasurer Isabelle Jasmine presented the 2025 consolidated financial statements and said, "So we're reporting an annual surplus for the year ended December 31st, 2025 of 750 million, which is different from the 20.9 million deficit reported at the end of 2025 for budget purposes."

KPMG's Rebecca McDonald told the committee: "We are prepared to issue a clean and unqualified audit opinion on both the city of Ottawa's consolidated financial statements as well as the sinking fund which is included in your package."

The meeting also included technical amendments to the 2025 statements, including corrections to accounts receivable of $575,871 and accounts payable of $1,575,100. KPMG also reported several uncorrected misstatements related to Ottawa Community Housing consolidation and one corrected $19.7 million reclassification error in realized investment gains, but said they were not material to the audit opinion.

2. CITY FINANCIAL POSITION, CAPITAL SPENDING, AND DEBT

Staff reported that revenues increased by $459 million and expenses by $503 million year over year. Major capital spending included $547 million for Stage 2 LRT, $462 million for water and wastewater infrastructure and $225 million for road projects.

Councillor David Hill asked staff, "With regard to the sustainability indebt, given the increase in net long-term debt and overall net debt in 2025, can staff explain how the city is assessing long-term debt affordability and whether capital commitments could constrain future council's ability to respond to emerging priorities or unexpected financial pressures."

Staff also reported $4.9 billion in net debt and $25.4 billion in non-financial assets, while developers contributed $474 million in infrastructure assets.

3. AUDITOR GENERAL'S AUDIT OF BUS SERVICE PLANNING AND SCHEDULING

The Auditor General's office said the audit was intended to clarify the causes of ongoing service problems. Auditor General David Cooper said, "Our hopes with this report is that it will provide clarity on the root causes of some of the issues, key issues I should say, that OC Transpo has been facing, enable a transparent discussion of these issues, and of course to provide management with recommendations both short-term and long-term focused."

Deputy Auditor General Joanne Gorenstein reported that bus run times had not kept pace with changing traffic conditions. Corey Richardson said, "The audit found that run times were last comprehensively updated as part of the planning for new ways to bus using data collected in 2023. However, due to delays in launching new ways to bus in 2025, run times have become inaccurate as traffic patterns have changed."

The audit found 35 routes with runtime deviations over 10 per cent. It also found only 14 per cent of work blocks met the standard 10 to 20 per cent recovery-time buffer, while 90 per cent of blocks used interlining. In January 2026, AJ Ramachandran reported, "start times were late 37% of the time with 24% starting over 10 minutes late. Late start times means delays in earlier trips are causing cascading delays throughout the day."

Councillors repeatedly returned to the lack of updated service standards. Councillor Clarke Kelly said, "I don't think we should have undertaken a citywide network redesign before updating modern service standards." Councillor Glen Gower added that once priorities are set, there should be "formal monitoring and reporting of those KPIs against the service standards so you actually know where you are in light of them."

4. TRANSIT MANAGEMENT RESPONSE AND PUBLIC DELEGATIONS

Transit union representatives strongly objected to management's past use of "operator shortage" to explain cancelled trips. Noah Vineberg said, "It was misleading. It was wrong. And it was insulting. Every time someone stood up and blamed a shortage of drivers, they were pointing at the people who showed up every single day to serve this city."

He also told the committee, "Can we do it with the exact amount of operators that we have today? Yeah, we've been keeping this system alive for 20 plus years because they put in the overtime and they put in the extra work to help. … Is it wise to go that route? No."

Transit management said reliability improvements require realistic schedules, staffing and vehicle availability. The committee heard that schedule changes are planned for 30 routes in summer and September, affecting about half of riders, and that an agreement with a school board would return 20 buses to OC Transpo service.

Councillor Marty Carr questioned whether the "new ways to bus" redesign had been framed too narrowly around savings, saying, "Do you think it's fair that the new ways to bus is couched primarily as a cost cutting exercise? … it removed 45 routes, introduced 18 and modified 63."

5. FOLLOW-UP AUDITS: JOB EVALUATION AND CYBER SECURITY

The committee received a follow-up on the June 2022 job evaluation review. The Auditor General's office reported that 7 of 9 recommendations remain partially complete. One update stated, "With the rating committee on hiatus since Q2 of 2025, interim rated jobs are not being evaluated and the service standard is not being met."

The committee also considered two cyber security items, one on critical infrastructure and one follow-up report. Those matters were handled partly in camera because of security concerns.

The meeting also marked the departure of Deputy Auditor General Joanne Gorenstein, who is leaving for the provincial Auditor General's office.

Motions

• Approval of technical amendments to the 2025 consolidated financial statements — Passed
• 2025 City of Ottawa Consolidated Financial Statements — Passed
• 2025 Sinking Fund Financial Statements — Passed
• Office of the Auditor General Audit of Bus Service Planning and Scheduling — Received
• June 2022 Job Evaluation Review Follow-up — Received
• Item 6.1: Office of the Auditor General Audit of Cyber Security Critical Infrastructure — Recommended for council approval
• Item 6.2: Office of the Auditor General Follow-up Report on Audit of Cyber Security — Recommended for council approval

Attendees

Councillors identified in the discussion as present: - Glen Gower - David Hill - Sean Devine - Cathy Curry - Rawlson King - Laine Johnson - Tim Tierney - Theresa Kavanagh - Riley Brockington - Wilson Lo - Marty Carr - Steve Desroches - Allan Hubley - Catherine Kitts - Clarke Kelly

City and other officials/speakers identified in the meeting notes: - Isabelle Jasmine, Deputy City Treasurer - Rebecca McDonald, KPMG - Joanne Gorenstein, Deputy Auditor General - David Cooper, Auditor General - Noah Vineberg, ATU Local 279 representative