City of Surrey's 2025 Annual Financial Report

REPORT FROM THE GENERAL MANAGER, FINANCE

MAY 12, 2026 To Mayor Brenda Locke and Members of City Council It is my pleasure to present the Annual Financial Report for the year ended December 31, 2025. The purpose of this report is to publish the Consolidated Financial Statements and the Independent Auditor’s Report for the City of Surrey, pursuant to Section 167 of the Community Charter. The following report provides a financial overview of the 2025 fiscal year along with a brief outlook to the future. The City of Surrey’s management are responsible for the preparation of the consolidated financial statements, which are approved by City Council. The financial statements and related information have been prepared in accordance with Canadian Public Sector Accounting Standards as prescribed by the Public Sector Accounting Board (“PSAB”) of the Chartered Professional Accountants of Canada (“CPA Canada”). Management is also responsible for ensuring that the City remains fiscally prudent and financially sustainable through the ongoing monitoring of all the City’s financial affairs. The City maintains a system of internal accounting controls designed to provide reasonable assurances for the safeguarding of assets and the reliability of financial records. In addition to the City of Surrey, the reporting entity comprises all organizations, boards, and enterprises financially accountable to the City of Surrey. This includes the Surrey Police Service (“SPS”), the Surrey Public Library, the Surrey Homelessness and Housing Society and the Surrey City Development Corporation. The public accounting firm of KPMG LLP (“KPMG’”), which was appointed by City Council as independent external auditor, has expressed that, in their professional opinion, the Consolidated Financial Statements present fairly, in all material respects, the consolidated financial position of the City of Surrey as at December 31, 2025, including its consolidated results of operations, its changes in net consolidated financial assets, and its consolidated cash flows for the year then ended in accordance with Canadian Public Sector Accounting Standards.

FINANCIAL OVERVIEW 2025 In Review

2025 was a transformative year for Surrey. Significant strides were made in expanding public services, investing in infrastructure, and fostering economic growth to create a thriving and inclusive environment and enhance the quality of life for all our residents. The 2025-2029 Capital Financial Plan represented a significant financial commitment, with $701 million allocated over five years, inclusive of 10 newly added projects totaling $27.5 million. Major capital investments included additional funding for the $310.6 million Newton Community Centre, the largest-ever capital project in the City’s history. This new world class facility will serve Newton and all of the City’s town centers for decades to come with expected completion in Spring 2030. Investments in Public Safety capital included an increased $30 million budget for the relocation of Fleetwood Firehall #6, which is required to facilitate future development along the new Surrey-Langley SkyTrain line on Fraser Highway. The new firehall will accommodate future needs, which will be crucial given the additional population growth expected in Fleetwood due to the SkyTrain expansion. The Unwin Community Park upgrades project also received additional funding, bringing the Phase 1 budget to $18.7 million. Featuring new and improved sports fields, facilities for cricket, volleyball and pickleball, as well as washrooms, parking, walking paths, the upgraded park will reflect the community’s needs and priorities as part of Council’s Focus Newton initiative. In Fall 2025, Council advanced its commitment to transparent budgeting with a fourth successive public-engagement campaign on the City’s Five-Year Financial Plan. Feedback gathered through six open houses, a bilingual (English and Punjabi) online survey, three focus groups and a dedicated webpage directly informed priorities for the 2026-2030 Financial Plan. The engagement process generated a combined total of 2,943 engagement interactions, including participation through the online survey, open houses, and focus groups. In addition, 99,923 community members were informed about the engagement process through the budget engagement webpage, e-newsletters, and the City’s social channels. During 2022 and 2023, the Bank of Canada (“BOC”) added 4.75% to their Target Overnight Rate, bringing the key interest rate to 5.00% in a bid to battle inflationary pressures. Once Consumer Price Index (“CPI”) levels returned to the BOC’s preferred target, the process of unwinding monetary stimulus took place between 2024 and 2025 with nine interest rate cuts totalling 2.75%. Since October 2025, the BOC has held its key rate at 2.25%. The BOC closely monitored uncertainties surrounding United States (“US”) trade policies and the potential impact of tariffs, which posed significant headwinds to Canada’s economic output in 2025. A slowing Canadian economy and labour market warranted two interest rate reductions of 0.25% each last Fall, with the central bank pausing on further rate adjustments since then. Uncertain trade relations with the US resulted in a drag on economic activity. As interest rates remained relatively flat throughout 2025, investment yields remained largely consistent year-over year for the City’s investment portfolio. Surrey continued to experience strong development activity in 2025; building permits with a construction value of $2.04 billion were issued during the year. The City provides a welcoming environment for businesses to grow and succeed. Business license revenue increased by 5.4% in

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