City Reserves Drop into the Red Zone

Reserves are the black box of Ottawa city finances. Budget 2025 shows them dropping below recommended levels.

This is the second of some short commentaries on the 2025 Ottawa Budget that I will be publishing for paid subscribers. If you are not already a paid subscriber but value this work, I would be grateful for your support.

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Since Mark Sutcliffe’s first budget, I have been banging the drum about the level of reserves at the City of Ottawa.

Reserves are our “rainy day funds”, to cushion us against unexpected shortfalls in revenues or increases in costs.

The table below is what our reserve balance will look like, according to the latest budget documents. Total reserves will drop from $663 million when Mark came to office to $466 million by the end of 2025 — a 30% drop.

What level of reserves is required?

How much do you hold in a rainy day fund? Financial advisors would suggest 3-6 months worth of expenses.

How much should a city hold?