What Should Condo Boards Review Before Approving the 2027 Budget?

A 2027 condo budget can look reasonable on paper and still be built on numbers that stopped being realistic months ago. Perhaps utilities have been running over budget, the snow contract renewed at a higher price, insurance changed significantly, or repeated plumbing calls are still sitting under last year’s maintenance allowance. Good condo budget planning Ontario boards undertake should start with what the corporation is actually spending, not simply last year’s spreadsheet with a percentage added to each line.

Start With Actual Spending, Not Last Year’s Budget

Before approving the numbers, compare the 2026 budget with year-to-date actual expenses and the latest financial statements. The CAO Guide on Condo Finances explains how financial statements and annual budgets work together to show the corporation’s financial position.

Pay attention to accounts that repeatedly miss budget. One unusually expensive elevator repair may not justify increasing the entire maintenance line. Six months of utilities consistently exceeding projections deserve a different conversation. Treasurers should be asking what changed, whether the variance is temporary, and what management expects before the fiscal year ends. A recurring shortfall should not disappear simply because the new budget starts January 1.

Look Behind the Contract Numbers

Contracts deserve more than a quick check of the annual total. Review upcoming renewals for management, cleaning, landscaping, snow removal, security, mechanical maintenance and other major services. Has the 2027 price actually been confirmed, or is the budget using an estimate? Are increases already written into multi-year agreements? Have service levels changed?

Insurance belongs in the same discussion. Ontario condominium corporations have statutory insurance obligations under the Condominium Act, 1998, and the CAO provides an overview of the corporation’s required property and liability coverage. Rather than carrying forward the previous premium, boards should work from renewal information available from the corporation’s broker and understand material changes to premiums, deductibles or coverage.

Condo Budget Planning Ontario Boards Cannot Separate From the Reserve Fund

The reserve fund contribution is not a convenient number that can be reduced to soften a fee increase. Section 93 of the Condominium Act, 1998 requires condominium corporations to maintain reserve funds and collect contributions from owners as part of common expenses.

Boards should compare the proposed 2027 contribution with the corporation’s current reserve fund study and funding plan. The CAO’s reserve fund guidance explains that periodic studies are required to assess whether contributions are adequate for expected major repairs and replacements. The CAO’s financial guide also specifically cautions directors to check the Notice of Future Funding when setting the budget so the correct reserve contribution is used.

Ask What 2027 Already Has Waiting

A realistic budget should also reflect what the board already knows is coming. Are wage or staffing costs changing? Is a major inspection due? Has recurring water damage increased repair spending? Are there projects expected next year that belong in operating expenses rather than the reserve fund?

This is where budgeting becomes governance rather than arithmetic. Ontario condo fees fund everyday operations as well as required reserve contributions, and a significant budget shortfall can eventually lead to additional costs for owners. The CAO explains common expenses and budget shortfalls here.

A board does not need a perfect prediction of 2027. It needs a budget built from evidence, known commitments and reasonable assumptions. The most useful question before approving it may be simple: if this number turns out to be wrong, what information did the board already have that should have told it otherwise? -Stratastic Inc.

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