shsc 2007 annual report

8/9/2019 SHSC 2007 Annual Report

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Our Growth2007 Annual Report


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3/382007 Annual Report 1

Message From Our Chair

With growth in our capabilities, our services and our value to thesector, SHSC advanced in many ways in 2007. It was truly atremendous year o progress or us.

Our value to our participants continued to grow, with excellentper ormance in our core programsSHSC insurance, SHSC FinanciaInc. and our natural gas program. These provided a much-neededelement o sa ety and stability or providers in volatile times.

Moreover, our contribution to research and comprehensive planningin the sector grew exponentially. We created very signi cant researchreports and papers that have been delivered to the Association oMunicipalities o Ontario (AMO) and the Fiscal Review Committees.This built our credibility with the provincial and ederal governmentsand will allow us to infuence policy or the long-term good o socialhousing in this province.

Perhaps most importantly, we prepared the ground or real change,

by pulling all the players together. Working in partnership with theOntario Non-Pro t Housing Association (ONPHA), the Co-op HousingFederation (CHF) and the Service Manager Housing Network, weraised awareness o crucial issues in non-pro t housing, especiallythe lack o capital reserves and unding, succession planning and thegrowing needs o an aging population.

SHSC is playing a central role in a sector that was splintered bydevolution, and there are encouraging signs that the province isbeginning to hear our message. At a time when there is an urgentneed to look or better ways to manage the very valuable asset

Roger MaloneySocial Housing Services Corporation,

Chair


4/38Social Housing Services Corporation

Roger MaloneySocial Housing Services Corporation,Chair

that social housing stock represents, SHSCs commitment to research,capacity building and sector revitalization is helping the sector ndcreative solutions to its most challenging issues.

In 2007, I began my new role as SHSC Chair a ter having been vice-chair since 2002. It has been a great opportunity to take my yearso experience in housing and municipal management and apply it toSHSCs continued growth. SHSC has grown signi cantly in its capacityto e ectively deliver its mandate and provide signi cant value to socialhousing providers and Ontarios municipalities.

This past year also saw eight service manager representatives, some owhom were re-appointees, named to the SHSC Board o Directors or atwo and hal year term. These highly-quali ed individuals were selectedby our diverse municipal service managers and DSSABs rom acrossOntario. Selected by their council or DSSAB board, each representativebrings their unique skills and background to the bene t o SHSC.

Finally, 2007 saw the ormation o the Social Housing AssetManagement Group, a sector-wide group that is working to create asound asset management ramework, develop streamlined and consistentstandards, and address issues rom preventative maintenance to thecreation o capital plans. SHSC, which acts as the Secretariat, is anactive member o the Asset Management Group and is excited about its

uture growth and potential.



Research: Growing Our Capabilities andInfuence on the Sector

2007 was the year we made substantialprogress in our research e orts and came to berespected or providing in-depth and unbiasedin ormation on issues a ecting our sector. SHSCgrew its capabilities and those o the sectorwith papers and con erences that stimulatedinnovative thinking about how to improve thestate o social housing. It is air to say that SHSCnow conducts and commissions some o the bestresearch available on important issues a ectingsocial housing today.

This years research excellence began withthe release o the paper,Sustaining the New Partnership: Social Housing and the Provincial- Municipal Fiscal and Service Delivery Review,February 2007 , which laid out current socialhousing issues and a proposed set o guiding

principles or the ProvincialMunicipal Fiscaland Service Delivery Review. It discussed howwe can turn social housing into a valued publicasset. SHSC worked closely with municipalservice managers and housing providersto tackle this issue and developed ve keyprinciples or the sustainability o social housing.

We then prepared the ground or a vitaldiscussion withCapital Ideas, How to Extend the Health and Sa ety o Social Housing, a paperdiscussing the provincial capital reserve andmaintenance unding problem, and suggestingsolutions or the uture. The paper analyzes



the scope o the capital reserve problem andargues or a capital in usion to revitalize an assetwhich materially a ects both tenants and ourcommunities. Borrowing options are reviewedand suggestions made to remove unnecessarybarriers or legislative impediments. Once undsare secured, they must be paid back, and thepaper reviews a series o measures which willallow a provider to manage new debt. Lastly, itdiscusses other tax and revenue measures.

Another paper,Snakes and Ladders: EndingPoverty Traps by Rebuilding Livelihoods in Social Housing, discussed income redistribution issues,hidden municipal subsidies and disincentivesto nding work or social housing residents.When many residents are ensnared by workdisincentives, such as RGI clawbacks, infexible

trans er and re-entry rules, and weak integrationwith employment programs, social housingno longer unctions as a ladder to success. Itis in our sel -interest to replace the obstaclessprinkled through our public policies with laddersto individual success and community health.Designing the right set o community conditionsand work incentives or residents in socialhousing communities will release a labour poolto communities acing shortages. Ontario canlead the way in trans orming social housing tocommunities o hope and livelihood.

SHSC research comes rom leadinghousing experts and we regularly partner

with governments and other social housingorganizations to explore the ull spectrum oissues and ideas. In July, Raising the Bar onSector Revitalization, a two-day con erencehosted by SHSC, planted the seeds to revitalizeand pro essionalize the sector. Social housingleaders and international experts gathered todiscuss current sector issues and explored long-term solutions, including e ective successionplanning, and per ormance management as ameans to grow best practices and accountability.

In addition, SHSC supported the response tocity initiatives such as licensing apartment units,investigating the experience o Los Angeles, a citywhich undertook a similar initiative. Another paper,In a Fix , discussed the need to tackle the backlogo maintenance issues, to help ensure a bright

uture or social housing in the City o Toronto.

Finally, our intern program helped to nurturenew researchers in the eld. Our internscompleted eight papers in 2007 aloneand presented their ndings at the OntarioMunicipal Social Services Association andService Manager Housing Network con erence.Run in partnership with the Canadian PolicyResearch Networks (CPRN), SHSCs internshipprogram success ully attracted bright graduate-level students to conduct independent researchon a number o social housing issues and aimsto nurture the next generation o researchers inthe social housing eld.

Research: Growing Our Capabilities and Infuence on the Sector(continued)



Overall, SHSC research grew in 2007 to urtherthe strategic discussion on important sectorissues, ensured there was a consistent andunbiased overview o the issues and outlinedsolutions or consideration. Working with sectorexperts, we provided insight ul perspectivesand innovative solutions on topics that matterto housing providers, municipalities and socialhousing residents.

Raising the Bar on Sector Revitalization

SHSC hosted an important two-day con erencein July 2007 Raising the Bar on SectorRevitalization. More than 130 people, includingsocial housing leaders, representatives andinternational experts, gathered to discuss revitalizingour sector and raising the bar on per ormance.

The overall message was clear: housing is a keysystem in our economy and requires long-termstrategy, planning and innovative thinking. Acombination o presentations, panels and small-group discussions tackled sector issues, including

the demographic shi ts caused by an agingpopulation and the reduced social mobility oimmigrants that will a ect our tenants, sta , boardsand volunteers. Speakers discussed

long-term strategies to ensure we raise the bar,including succession planning, and per ormancemanagement as a means to grow best practicesand accountability.

Keynote speaker, Duncan MacLennan, a housingacademic and consultant, issued a challengeto re rame the argument or social housing. Heillustrated how decent, a ordable homes andan e ective supply o accessible housing raiseCanadian competitiveness in attracting skilledimmigrants and in producing goods and services.

Overall, it was a valuable orum that emphasizedthe need to co-operate, collaborate, maximizeand optimize our sectors energy and resources.



For many years housing providers andmunicipal service managers have identi edunder unding and growing capital reservede cits as the most critical issues acingOntarios social housing sector. To helpimprove the situation, SHSC participated inthe ormation o an Asset Management Group(AMG). The AMGs intention is to play a keyrole in assisting all stakeholders on their asset

management issues by developing consistentstandards and tools. It has three main goals:

To create an accurate assessment of thecapital repair needs and gap

To ensure the reserves that are in placeare spent wisely based on sound research

To help ensure the long-term viability ofsocial housing

To ensure the AMG has direct and current ront-line housing administration experience and canbring technical skills and practical knowledgeto the table, it includes two representatives romeach o the ollowing organizations:

Service Manager Network Ontario Non-Pro t Housing Association

Cooperative Housing Federation Ontario Region Social Housing Services Corporation SHSC Financial Inc. Ministry of Municipal Affairs and Housing Local Housing Corporations Canada Mortgage and Housing Corporation The Agency for Cooperative Housing

This multi-sector group represents the rstinitiative in Ontario that brings together allthe partners in the sector to discuss the criticalissues o capital needs and asset management

Growing Better Asset Management



practices. The overall goal is to standardizeand pro essionalize asset managementpractices and to improve planning and capitalmaintenance among providers. The AMGhopes to improve the quality and reliabilityo reserve und orecasts and to implementstandardization o building condition studies,so everyone uses the same standard buildingcondition audit process. Such accurate buildingcondition reports can be used to better planpreventative maintenance.

The end result will hope ully be:

Practical educational programs for staff andboard members

A common building audit template A central repository for information, including

a reliable database to help us do comparisonso each buildings condition, as well as anonline resource centre or housing providers

A technical resource pool of experts providerscan access with con dence. These experts canvet reports

A pool of pre-approved contractors, createdby providers sharing their knowledge ocontractors

Partnering non-pro t housing corporationstogether to tender or building conditionaudits as well as or maintenance andrepairs, to ensure money is spent wisely.

Working together will help us get thebest prices

The our committees o the AMG are Finance,Education, Technical and Policy.

In late 2007, the Asset Management Groupissued surveys to housing providers and servicemanagers to assess the extent o capitalissues and examine how the sector is coping.We gathered valuable in ormation about thecapital de cit and needs through this largeData Veri cation Survey, and are grate ul orthe wide-scale participation we received. Onbehal o the AMG, SHSC began analysis othe survey data in early 2008.

The AMG recognizes the act that social

housing stock is a valuable public asset (worth$40 billion) that is in need o repair, andmunicipalities simply do not have the undingto pay or this work. The work o the AssetManagement Group is being looked at closelyby the Federal/Provincial/Territorial WorkingCommittee on Asset Management. It is alsosetting the stage or the involvement o the

ederal government on this issue.



Growing a Training Program That WillHelp Our Clients Flourish

Following its mandate to deliver and support thedevelopment o best practices, SHSC beganto grow a new Training Program in 2007 to

coordinate training within the sector. The goalwas to break new ground and deliver innovativetraining with exceptional content to socialhousing providers, service managers and residents.

Our rst goal was to nd the right niche orSHSC training activities. The board approveda Training Strategy to ensure we providecomprehensive training supporting ourprograms and services, enabling us to providethe highest quality o service relating to theseprograms, while also working with other sectororganizations to coordinate training initiatives.The strategy set out to develop high-qualitytraining based on adult education principles

or SHSCs diverse client groups, taking intoaccount the courses requested by providersand using external experts to provide content.A special e ort was made to ocus delivery onknown gap areas. Growing the right trainingprograms will take time, as the knowledge andskill development requirements within the sectorare both broad and deep.

By the end o 2007, we had prepared thegroundwork or what will be a ull range olearning opportunities, rom workshops onEmergency Response Planningand BusinessContinuity Planning, to Privacy IssuesandGovernance . Once courses were developed,they went through a vetting process usingindustry leaders and specialists, such as PriceWaterhouse Cooper.

Two courses were piloted in the all o 2007 Managing Risk , and Preventing and ManagingClaims. Both courses were met with acclaim andwill roll-out in 2008. Another course which hadbeen developed in 2006,Mould Awareness,continued to be o ered throughout 2007. Wealso developed a workshop onOperational Reviews or service managers.

Training is an area that is growing very rapidlywithin SHSC, and much o the preplanningwhich was undertaken in 2007 is expected tocome to ruition in 2008.



SHSCs Global Reach is Blossoming

Late in 2007, SHSC established a globaloutreach department, charged with researchingpractices in other jurisdictions and sharingin ormation on what works. The idea is to identi yand share best practices to acilitate learningand growth in the sector, and to develop ourprograms into centres o excellence.

SHSC has already created networks at themunicipal level, and has ound that sharingin ormation is o great value. For example,in 2007, we arranged an in ormal partnershipbetween SHSC and Roo tops Canada, theinternational development arm o non-pro thousing. SHSC expects to trade technical expertisewith Roo tops international housing contacts.

As part o this role, SHSC hosted two sessionswith a Dutch delegation. The rst was onBalancing Out, and discussed the resultso the Dutch governments withdrawal romadministering social housing in the early 1990s.An economist amiliar with the withdrawal

discussed the independence o social housingorganizations and how housing providers havebeen able to creatively use their assets to supportredevelopment and the creation o new housing.

The second session was on Housing Access,and detailed the e ects o setting up a or-pro t company as an umbrella organization, in

charge o deciding who gets access to socialhousing units.

SHSC has a key role to play in internationaloutreach because it is a sector-wide organizationand has a relationship with service managers,the province and housing providers. SHSC alsomaintains linkages with the ederal governmentand other sector organizations. We will continueto keep this type o discussion alive, sincelearning what works in other jurisdictions helpsus to promote sector renewal in Ontario. Thesewere only rst o many global outreach e ortsto come, rom what will be a ast-growing andexciting area o SHSC.



Growing the Per ormance Indicator System

As part o its continuous improvement mandate,SHSC supports a voluntary per ormanceindicator system or both service managers andhousing providers. Through the collection andmeasurement o key social housing indicators,system users are able to compare results againstpeers and against their own per ormance

year over year. This in ormation is intended tohelp support more in ormed decision-making,improve per ormance and the identi cation andsharing o best practices.

At the core o the system is an integrated web-based tool. This in ormation system supportsreal-time collection and comparison o resultsamong system users. Graphing tools in thesystem are particularly help ul or users andinclude exporting capability.

The development and growth o the Per ormanceIndicator (PI) system has been guided by SHSCthrough two expert panels; one or housingproviders and one or service managers.

In 2007, the service manager expert panelwas active in advancing user participationand system development. Some key activitiesincluded:

Development of data report on 20032005data results or service managers

Launch of survey to gather key service mancontext in ormation or interpreting data



Re nement of system tools for gathering andreporting on data as well as preparationwork or upcoming data calls

Continued coordination of efforts with theOntario Municipal Benchmarking Initiativeregarding the service manager component othe system

Dialogue with the Ministry of MunicipalA airs and Housing on the provincialper ormance management initiative and withthe Association o Municipalities o Ontarioon related municipal data in ormation systems

Promotion of the SHSC performance indicatorsystem among stakeholders through SHSCsRaising the Bar con erence, the OntarioMunicipal Social Services Association andService Manager Housing Network Forumand Ontario Non-Pro t Housing Association

con erence A series of presentations and systemdemonstrations at regional meetings ohousing provider and service managergroups throughout the province.

A housing provider expert panel was notable to be ormed in 2007 due to lack oparticipation. Levels o participation are anongoing concern or both the housing providerand service manager systems. Capacity togather and enter data is requently cited asan impediment to participation by non-users,given the range o other duties they alreadyper orm. Lack o participation reduces the utility

o the systems as the ability to nd meaning ulcomparisons or those who do enter data intothe system is hampered. Indicator value is a keyconcern among all users and there is a keendesire to ensure that measures (existing or new)add real value to decision-making processes.

The e orts o the respective expert panelscontinue to ocus on building value in the PIsystem, thereby increasing user con denceand broadening system participation. Witha more complete data set and robust suite oindicators, the good practice component o thesystem can urther develop, enabling the systemto ully mature to an essential business tool thatsupports continuous improvement.



Resource Groups Help SHSC StrengthenOur Connection With The Sector

In 2007, SHSC continued to run the ProviderResource Group (PRG) and the PropertyManagers Resource Group (PMRG). Thesecommittees represent a diverse section o providersand property managers, both large and small,

rom many locations across the province.

Both committees provide invaluable eedback toSHSC about how our programs are working orthem and how we can grow urther to serve theirneeds. They provide a two-way orum, as well ascreating opportunities or providers and property

managers to speak on a peer to peer basis.The PRG met our times in 2007, and consultedwith us on possible changes to SHSC FinancialInvestments; on the capacity o the housingsector; and on research papers being compiled.The PMRG also met our times.

Both groups were consulted on the developmento the SHSC training programs curriculum.

The PMRG is developing an RFP document orproviders to use when looking at hiring a PropertyManagement Company. They have also beendeveloping per ormance level standards orproperty management companies and or Boardso Directors to use as a re erence when evaluatingthe work they are doing or a provider.

Both these committees are very important tohow SHSC and its subsidiaries develop newprograms and business ideas. We make everye ort to listen to their needs, since they representour members/clients and provide valuable inputand eedback on how to make our business avalue-added service.

In 2007, SHSC also provided administrativeand technical support to the province-wide rentarrears database. The database helps accesscentres check applicants or RGI assistance orprior arrears in social housing. By the end o2007, 29 service manager access centres wereparticipating in and using the database.



SHSC Insurance Program Grows Stronger

In 2007, the SHSC Insurance Program ocusedon growing our capabilities and enhancing thecoverage available or our providers.

We continued with AIG as the lead insurerand AON as the principal broker or our groupinsurance program. This decision led to a urtherdecrease in our premium rates, which have gonedown a total o 23% since 2003. Premiumswent down in 2007 or all providers with goodclaims experience. Overall, we grew the value oour Insurance Program with better monitoring oprovider claims and improved service.

We announced a new type o coverage orassisted care providers Errors and OmissionsCoverage (medical malpractice), which was madeavailable as o the November 1, 2007 insurance

term. All pro essional sta members providingassisted care services are now insurable, with theexception o doctors and psychiatrists.

Growing our communications and trainingcapabilities to better serve our clients, wecontinued the well-receivedRisky Business newsletter and worked with the SHSC Trainingdepartment to develop theEmergency Response Planningand Business Continuity workshops,which are anticipated to be delivered in 2008.

The role o our wholly-owned insurance brokerage,SoHo Insurance Inc., continued to grow. SoHoassumed the role o sub-broker on SHSCinsurance, which included handling invoicing andcollecting premiums rom providers.

SoHo Insurance grew its o erings by setting upthe groundwork or a Tenant Insurance Program.We secured an insurer or this Program andcompleted the wording or the Tenant policy. Wealso ound two providers who will work with us topilot the Program in 2008.

SOHO Board of DirectorsDon McCausland (Chair)Linda Stephenson (Treasurer)Gerry MossCarol ConradGord MontgomeryGary ChampagneLindsey Reed



SHSC Financial Inc. Continues Strong Growth

SHSC Financial Inc. had a positive year in2007, despite a very volatile investment climate.We continued to use Phillips, Hager & NorthInvestment Funds Ltd. as our investment port olioadvisor, and they were recognized or excellenceat the 2007 Lipper Fund Awards, an industryevent that rewards unds that deliver consistentlystrong risk-adjusted per ormance relative totheir peers.

SHSC Financial continues to remain ocused onmanaging investment unds e ectively, addressespotential depletion o provider reserves, and o ersinnovative solutions.

In 2007, our Social Housing Investment Fundsgrew from $345.7 million to $367.2 million, anincrease of $21.5 million or 6.22%. Over 800

providers now invest with us.

Education and Outreach: A Growth Area

We provided use ul education to undholdersthrough ourCapital Ideasnewsletter, includingarticles on the relationship between Risk andReturn, Choosing the Right Fund Mix, and onRebalancing or Investors. We also providedcase studies o housing providers and theirinvestment strategies.

To help our undholders grow their knowledge,two new tools were developed that are easier to

usethe Asset Mix Calculator and the ModelPort olio selectorto replace the Fund SelectionWorksheets. Final versions o these new toolswere planned or release in March 2008. Our outreach e orts continued to grow in 2007.Program representatives met in small groups orindividually with 125 providers to give practicainsights based on their needs and to help them



make better investment decisions. In addition,SHSC Financial attended various local co-op

ederation meetings, as well as various annualmeetings, trade shows and workshops organizedby the Ontario Non-Pro t Housing Associationand the Co-op Housing Federation o Canada.

Ontario Securities Commission (OSC) Audit

The OSC conducted a compliance audit oSHSCFI in the late spring o 2007. This was aroutine audit the OSC periodically conducts oinvestment und managers in Ontario and was notprompted by any identi ed issues or concerns.The audit was a thorough examination o recordsand compliance and oversight policies andprocedures o SHSCFI in its management o theSocial Housing Investment Fund.

Some additional policies and procedures wererecommended by the OSC, which SHSCFIpromptly developed or review and approvalby the OSC. In addition, SHSCFI took thisopportunity to develop a comprehensivecompliance policies and procedures manual.This manual was developed in anticipation oregulatory changes expected in late 2008 thatwould increase compliance responsibilities. Thismanual was also reviewed by the OSC prior to

nal approval by the SHSCFI Board o Directorsin February 2008.

SHSCFI later received a letter rom the OSCindicating its audit o SHSCFI had beensatis actorily completed.

Establishment of an Independent ReviewCommittee (IRC)

In accordance with new securities regulations,SHSC Financial Inc. established anIndependent Review Committee (IRC). TheCommittee is composed o three individualswho are independent o the Funds, SHSCFIand its a liates. Their mandate is to considerand provide recommendations on conficts ointerest. SHSCFI is required to identi y confictso interest inherent in its management o theFunds, and request input rom the IRC on how itmanages those conficts. The IRC became ully

operational on October 24, 2007.

SHSC Financial Board of DirectorsNicholas Gazzard (Chair)Keith Ward (Vice Chair)Len Brittain (Treasurer)Don ArmstrongDerek BallantyneDino ChiesaBrian Coleman

James DoneganDan LabrecqueLindsey Reed



Natural Gas Bulk Purchasing Program:Stability and Consistency

Growth in domestic natural gas production,record high lique ed natural gas (LNG) imports,and storage volumes that exceeded the 5-year(20022006) average throughout the yearbrought reduced market volatility to the naturalgas market in 2007.

This means that in 2007, we protected ourclients rom a 61.6% market price fuctuation,down rom the very extreme volatility o 2006,but still substantial. There were no events suchas the hurricanes that triggered the 2006 wildride o 82% price swings. The SHSC GasProgram was able to keep the same committedprice o 32 cents per cubic metre despite theprice fuctuations in the market.

SHSC protects our clients rom volatility, so

they are better able to plan monthly expenseswith much greater con dence, and avoidunexpected price rises that can disruptestablished nancial plans.

Natural gas storage inventories were relativelyhigh throughout 2007. High storage inventoriesat the onset o 2007 led to above-averagestocks during the year, and high supply ledto lower overall market prices (though theexpectation was that prices would recover andrise again, as they have in 2008.)

As prices rose at the end o 2007, SHSCcommitted to a three-year xed price o 33 centsper cubic meter, in the ace o dramatically risingprices or 2008. As announced by some largeretailers, 2008 will likely bring as much as a20% increase in consumer end-use costs.



Growing an Energy Conservation Program toHelp Providers Go Green

In spring 2007, SHSC created and incorporatedGLOBE: Green Light on a Better Environment.GLOBE grew out o SHSCs Green Light Initiative(GLI), and is a uni ed program to support social

housing providers in conservation e orts and helpthem navigate the world o energy. It builds on theexpertise developed by the GLI, a pilot projectsupported by government agencies and utilitycompanies that demonstrated how an energyconservation program could succeed in the sector.

The rst GLOBE Board o Directors was chosen,with all members having environmental, municipal,and/or housing experience, and the Board heldtheir initial meeting in October 2007. Led by acommitted and hands-on board, GLOBE will growto become a leader in housing conservation.

The establishment o GLOBE is very timely, sinceutility costs already represent $450 million in

annual expenditures or social housing providersin Ontario, and that number is rising quickly.Todays volatile energy prices contribute to thepoverty o low-income amilies in social housing.GLOBE hopes to combat that, as well as toreduce the carbon ootprint o social housingprojects. Many service managers and socialhousing providers require pro essional expertiseto undertake truly success ul conservationprojects, including retro tting with energy-e cienequipment, and GLOBE will grow into anenvironmental leader or the social housing sectorby providing that expertise.

Also in spring 2007, SHSC wrapped up allthe retro t activities associated with the GLI.We helped housing providers complete theirenergy- and water-conservation projects in time

to take advantage o all the available nancialincentives. SHSCs GLI pilot saved over 6,200tonnes o greenhouse gases, reduced electricitydemands by 2.2 megawatts and reducedenergy consumption by 578,000 cubic meterso natural gas and 18.9 million kilowatts oelectricity. These savings were achieved in 189

acilities with a totalo 12,000 housingunits. The programdemonstrated thatcapital improvementsthat are strategic andenergy-e cient cansigni cantly reduceoperating costs.



Growing an Energy Conservation Program to Help Providers Go Green(continued)

A new initiative was undertaken in the all o 2007with Toronto Hydro, which involved switching overthe light bulbs in 5,000 social housing suites fromincandescent to energy-saving compact fuorescent.This meant changing over 25,000 light bulbs,which will result in 1.1 megawatts o energysavings each year. Youth living in social housingwere trained in how to install the new bulbsproperly and employed to do the actual work.We also trained housing provider sta in energye ciency, with the assistance o Seneca College.

Other energy e ciency projects were undertakenin 2007 with PowerStream and NewmarketHydro. We coordinated energy audits, providedcustomer care and o ered support to enablehousing providers to complete retro ts and accessincentives through all avenues.

2007 also saw the piloting o new conservationtraining, in partnership with Seneca College.We created two one-day workshops, one onstructural conservation activities and the other onbehavioral changes that lead to conservation.These workshops were initially piloted in ourlocations across the province. Later we did vemore workshops in Toronto, in partnership withToronto Hydro. Training can help participatingservice managers and housing providers achievea 20% overall reduction in utility consumption.These energy e ciency and behavioral workshopswill grow into a ull-scale energy- and water-

conservation curriculum or providers and residents,o ered in partnership with Seneca College.

Overall, in 2007 GLOBE clearly grew its

capabilities in both training and preparingto market energy-e ciency expertise. We arenurturing a culture o conservation by taking thereins on the social housing conservation agenda.

GLOBE Board of DirectorsColin Gage (Chair)Brian Denney (Vice-Chair)Barbara Fawcett (Treasurer)D. Paul AyotteSylvia PattersonAndrew PrideDon ThorneLindsey Reed



Good Governance Leads to Healthy Growth

In 2007, our rst Chair, Gordon Chong,completed his tenure and our new Chair, RogerMaloney, took over. Maloney had been vice-chairo SHSC since our inception in 2002. He wasalso the Chie Administrative O cer o the Regiono Peel, and the ormer Commissioner o Housingand General Manager o Peel Living. In addition,he served on the boards o the Ontario Non-Pro tHousing Association and the Canadian Housing

and Renewal Association.

With his extensive housing experience and in-depth understanding o our business and values,Maloney is well-suited to manage the continuedgrowth o SHSC.

The term or our service manager representativesalso ended, and we had a record number oapplications or these positions. This is a testimonyto the growth o interest in social housing amongmunicipalities. As a result, we were able to createa well-balanced board, with a strong cross-sectiono representatives rom across the province.

SHSC Board of DirectorsAt the end o 2007, these were the members othe SHSC Board:

Roger Maloney (Chair)Colin Gage (Vice Chair)Derek Ballantyne (Treasurer)Gary ChampagneLarry OConnor

Pam CrippsDiane DeansMichael FeldmanMichael HardingMerv HughesTrevor LesterBob MacDonaldAdelina UrbanskiDick VerripsLindsey Reed



Auditors Report

To the Members oSocial Housing Services Corporation

I have audited the consolidated balance sheet o Social Housing ServiceCorporation as at December 31, 2007 and the consolidated statementso revenue and expenses and cash fow or the year then ended. These

nancial statements are the responsibility o the corporations managemeMy responsibility is to express an opinion on these nancial statementsbased on my audit.

I conducted my audit in accordance with Canadian generally acceptedauditing standards. Those standards require that I plan and per orm anaudit to obtain reasonable assurance whether the nancial statementsare ree o material misstatement. An audit includes examining, on a tesbasis, evidence supporting the amounts and disclosures in the nancialstatements. An audit also includes assessing the accounting principlesused and signi cant estimates made by management, as well asevaluating the overall nancial statement presentation.

In my opinion, these consolidated nancial statements present airly, in material respects, the consolidated nancial position o the corporationas at December 31, 2007 and the results o its consolidated operationsand the changes in its consolidated cash fow or the year then ended, inaccordance with Canadian generally accepted accounting principles.

Gordon HardcastleLicensed Public Accountant

Dorchester, OntarioApril 2, 2008



Consolidated Financial Report

AssetsCashInvestments(note 3) Accounts receivable:

Gas program(note 12) Other

Gas inventory(note 2) De erred development expenses(note 2) Due rom insurance trust und(note 15) Insurance program und(note 13) Other investments(note 4)

Liabilities Accounts payable:

Gas program(note 12) Gas utures contracts liability(note 2) Other

Net assets

Represented by:Fund balances:

Revenue und

Reserves(note 7) Gas und

Accumulated other comprehensive income

2007$

1,130,4794,864,412

1,731,3011,818,4641,088,300

193,302619,217

2,188,129282,444

13,916,048

3,704,8302,131,500

1,863,9427,700,272

6,215,776

(2,529,522)

7,750,0003,007,3728,227,850

(2,012,074) 6,215,776

2006$

3,662,8073,987,398

2,725,305951,292

226,1009,645

-2,918,397

-14,480,944

4,724,775-

725,9265,450,7019,030,243

(1,334,271)

7,750,0002,614,514

9,030,243-

9,030,243

Consolidated Balance SheetDecember 31, 2007

The accompanying notes are an integral part o this fnancial statement.




RevenueGas programEnergy programBenchmarking and best practices

Group insurance programCapital reserves pooling programInvestment income

Expenses Gas programGas program rebateEnergy programBenchmarking and best practicesGroup insurance programCapital reserves pooling programCapital equipment purchases

(De ciency) of revenue over expenses

Fund balances, beginning o year

Fund balances, end of year

Consolidated Statement of Revenue and ExpensesYear ended December 31, 2007


2007$

48,279,042605,149445,519

903,3312,556,812159,931

52,949,784

46,617,096-

1,143,9011,934,3941,587,2962,406,558

62,93253,752,177

(802,393)

9,030,243

8,227,850

2006$

51,787,808878,770

66,805

635,0052,490,305-

55,858,693

48,984,3901,050,000

1,970,122948,667

1,027,4102,305,254

123,95256,409,795

(551,102)

9,581,345

9,030,243



Operating activities(De ciency) o revenue over expensesItems not requiring cash outlay:

De erred energy program expenses Changes in non-cash working capital(note 16)

Financing activitiesInvestments

Other investments

Increase to cashCash, beginning o yearCash, end of year

(De ciency) o revenue over expensesUnrealized net gains (losses) arising during the yearRealized net gains (losses) trans erred to net excess during the yearComprehensive income

Change in accounting policyUnrealized net gains (losses) arising during the yearRealized net gains (losses) trans erred to net excess during the yearBalance, end of year

Consolidated Statement of Comprehensive IncomeYear ended December 31, 2007

Consolidated Statement of Accumulated Other Comprehensive IncomeYear ended December 31, 2007

Consolidated Statement of Cash FlowYear ended December 31, 2007

2007

$(802,393)

-(802,393)(689,903)

(1,492,296)

(757,588)

(282,444)(1,040,032)(2,532,328)3,662,8071,130,479

2006

$(551,102)

515,150(35,952)

541,197505,245

334,562

-334,562839,807

2,823,0003,662,807

$

(802,393)(596,054)

2,019(1,396,428)

$

(1,418,039)(596,054)

2,019(2,012,074)





1. Purpose of the organization

The Social Housing Services Corporation(SHSC) was established under the provisionso the Social Housing Re orm Act, 2000. Itsmembership includes all Service Managers,Local Housing Corporations, and all prescribedNonPro t and Cooperative Housing Providers.

The Corporations mandate includes:

coordination and management of insuranceprograms;

pooling of capital reserve funds; schemes for joint purchase of goods and

services; and, advice to the province and its members with

respect to the establishment o benchmarks

and best practices to achieve the e cientand e ective provision o housing.

2. Signi cant accounting policies

(a) ConsolidationThe consolidated nancial statements refectthe assets, liabilities, revenues and expenseso the corporation and its wholly-ownedsubsidiaries SHSC Financial Inc., SoHoInsurance Inc. and Green Light on a BetterEnvironment (GLOBE) Inc. All intercompanyassets and liabilities, and revenues and expenseshave been eliminated on consolidation.

(b)Financial instrumentsFinancial instruments consist o cash,investments, accounts receivable, due rominsurance trust und, insurance program und,other investments and accounts payable.

Cash, accounts receivable, due rominsurance trust und, insurance program

und and accounts payable (Gas programand Other) are reported at their air valueon the balance sheet. The air values are thesame as their carrying values due to theirshort term nature.

Investments and accounts payable (Gasutures contracts liability) are reported at theirair values on the balance sheet. Unrealized

holding gains and losses related to these

instruments are excluded rom net incomeand included in other comprehensive incomeuntil such gains or losses are realized or another than temporary impairment isdetermined to have occurred. The air valueo investments was estimated at the quotedmarket price. The air value o gas uturecontracts was estimated based on the marketprice o contracts at December 31, 2007with similar delivery dates.

The air value o other investments has not beendisclosed as they are not readily determinable.

Notes to the Consolidated Financial Statements


27/38




o a change in accounting policy in openingaccumulated other comprehensive income on

January 1, 2007.

The Corporation contracts or uture delivery onatural gas. At any time, the Corporation maybe in a long position (owning gas inventory)or a short position (a liability to purchaseadditional gas). Concurrent with the adoption

3. Investments

Investments are comprised o :

Fixed incomeCanadian equity

Short term

4. Other investments

Other investments represent advances toInnoServ Inc. These advances are secured by ageneral security agreement, are repayable ondemand and bear interest at bank prime plusone percent per annum.

o the Financial Instruments provisions describedin the preceding paragraph, the Corporationhas adopted a policy o recording its gasposition in the nancial statements. This changehas been reported retrospectively. Accordingly,the und balances at January 1, 2006 havebeen increased by $1,143,600 and thecomparative gures or 2006 amendedappropriately.

2007$

3,460,5271,403,885

-4,864,412

2006$

3,170,555724,507

92,3363,987,398



5. Investment funds

SHSC Financial Inc. manages our investmentunds. The net assets o these unds remain

the property o the housing providers andconsequently are not recorded in these nancialstatements.

Canadian Money Market FundCanadian ShortTerm Bond FundCanadian Bond FundCanadian Equity Fund

6. Revenue fund

Revenue und is comprised o :

Social Housing Services CorporationSHSC Financial Inc.SoHo Insurance Inc.Green Light on a Better Environment (GLOBE) Inc.

The SHSC Financial Inc. revenue und de cit o$894,497 will be recovered rom uture yearsrevenue earned rom management ees.

The our investment unds are audited by anotherrm o chartered accountants. The auditednancial statements o the unds refect net assets

(at market value) as ollows:

The SoHo Insurance Inc. revenue und de cit o$562,529 will be recovered from future yearsbrokerage ees paid by the insurance programs.

2007$

(1,072,496)(894,497)(562,529)

-(2,529,522)

2006$

44,233(964,361)(414,143)

92,336(1,334,271)

2007$

108,016,000118,017,000

80,495,00060,451,000

2006$

107,768,000113,571,00076,162,00048,210,000



Consolidated Financial Report7. Reserves

Reserves are comprised o :

Gas programGroup insurance programContingencyCapital reserves pooling program

Energy program

8. Interfund transfer

Inter und trans ers were made between undsduring the year as ollows:

From Revenue Fund to Energy FundFrom Gas Fund to Revenue FundFrom Revenue Fund to Capital Fund

9. Income taxes

SHSC Financial Inc., SoHo Insurance Inc. andGreen Light on a Better Environment (GLOBE) Inc.are subject to income taxes.

SHSC Financial Inc. can carry orward lossestotaling $893,000 or income tax purposes. Theexpiration date or using these losses to reduceincome taxes begins in 2009.

SoHo Insurance Inc. can carry orward lossestotaling $545,000 for income tax purposes. Theexpiration date or using these losses to reduceincome taxes begins in 2015.

Green Light on a Better Environment (GLOBE)Inc. can carry orward losses totaling $193,000

or income tax purposes. The expiration date orusing these losses to reduce income taxes beginsin 2022.

2007$

4,200,0002,100,0001,150,000

-

300,0007,750,000

2006$

4,200,0002,100,0001,150,000

-

300,0007,750,000

531,7911,775,366

62,9322,370,089



10. Commitments

As part o its bulk purchasing plan o natural gasor its members, the Corporation has entered into

contracts to purchase natural gas at xed andmarket rates, as ollows:

Period:

January 1 to December 31, 2008 January 1 to December 31, 2009 January 1 to December 31, 2010 January 1 to December 31, 2011

These contracts are considered to be nancialinstruments and have been valued as describedin Note 2.

In addition to these gas supply commitments,the Corporation is nancially responsibleunder its delivery contracts with Enbridge GasDistribution and Union Gas or the xed costsunder assignments o pipeline capacity rom

11. Pension agreement

The corporation participates in the OntarioMunicipal Employees Retirement Fund (OMERS),which is a multi-employer plan. The plan is ade ned bene t plan which speci es the amount

TransCanada Pipelines (TCPL) to transportnatural gas supply rom Alberta to Ontario.These current transportation assignments romthe gas utilities expire on October 31, 2008.The xed cost associated with these contracts

or January 1, 2008 to October 31, 2008 is$798,117, based on TCPLs January 1, 2008Current Interim tolls.

o retirement bene t to be received by theemployees based on the length o service andrates o pay.

Fixed$

25,887,00013,510,00012,838,00010,716,000

Market$

3,147,000



Consolidated Financial Report12. Gas program

The corporation operates a gas program or itsparticipating members. It purchases natural gasin bulk and resells it to its members. Any excessrevenue derived rom this program is periodicallydistributed to the program participants.

13. Insurance program fund

The Corporation is required to coordinate andadminister group insurance programs or itsmembers. SHSC roles include advocating,negotiating, coordinating, managing,administrating, data tracking and communicating.

The Insurance Program Fund is comprised o :

CashAccounts receivable

Accounts payable

14. Social Housing Energy Management Program

The SHSC Energy Management Program (EMP)

was developed to assist social housing providersto identi y energy savings opportunities and undenergy management solutions in their buildings.

Accounts receivable gas program andaccounts payable gas program representamounts owing rom program participants andamounts owing to gas suppliers respectively.

During the year the Corporation trans erred themanagement o its group insurance programs toits wholly-owned subsidiary, SoHo Insurance Inc.

SHSCs role includes accessing quali ed energy

auditors and providing standardized auditrequirements; accessing unding and productsor energy retro ts; and providing education and

tools or tracking energy savings.

2007$

2,335,458-

2,335,458147,329

2,188,129

2006$

5,493,6346,300,204

11,793,8388,875,441

2,918,397



15. Insurance trust fund

SoHo Insurance Inc. is required, under theRegistered Insurance Brokers Act o Ontario, toaccount or its trust position.

Due rom insurance trust und represents the nettrust position and is comprised as ollows:

CashAccounts receivableDue to insurance companies

16. Changes in noncash working capital

Changes to noncash working capital in theConsolidated Statement o Cash Flow arecomprised as ollows:

Accounts receivableDe erred development expensesDue rom insurance trust undInsurance program und

Gas inventoryAccounts payable

2007$

4,813,9921,687,216(5,881,991)

619,217

2006$

50,989-

(41,344)9,645

2007$

126,832(193,302)(609,572)730,268

(862,200)118,071(689,903)

2006$

(1,616,569)129,373

(9,645)(587,625)

917,4001,708,263541,197



Consolidated Financial Report17. Expenses by object

Gas programInvestment manager eesSalaries and bene ts

Program consultantsCommunicationDirectors expenses and strategic planningCapital o equipment purchasesOccupancyO cePro essional eesIn ormation technologyInterestAmortizationEducation and training program

2007$

45,409,6061,774,6762,514,138

1,750,235141,950453,808

218,092281,475253,433237,57073,848

8,25511,318

623,77353,752,177

2006$

49,225,7501,564,816

1,468,761

2,210,638117,124378,045175,572

292,234187,222185,77469,102

6,385156,554

371,81856,409,795



18. Comparative guresCertain prior year gures have been restated tocon orm with the current year presentation.

RevenueFund

$

--

445,519903,331

2,556,81239,550

3,945,212

--

1,934,3941,587,2962,406,558

- 5,928,248 (1,983,036)

787,785

(1,195,251)(1,334,271) (2,529,522)

CapitalFund

$

-------

-----

62,932 62,932

(62,932)62,932

---

ReservesFund

$

-------

---------

-7,750,000

7,750,000

GasFund

$

48,279,042----

113,420 48,392,462

46,617,096-----

46,617,0961,775,366(1,382,508)

392,8582,614,514

3,007,372

EnergyFund

$

-605,149

---

6,961612,110

-1,143,901

----

1,143,901 (531,791)

531,791

---

Total$

48,279,042605,149445,519

903,3312,556,812

159,93152,949,784

46,617,0961,143,9011,934,3941,587,2962,406,558

62,93253,752,177

(802,393

(802,3939,030,2438,227,850

RevenueGas programEnergy programBench-marking and best practicesGroup insurance programCapital reserves pooling programInvestment income

ExpensesGas programEnergy programBench-marking and best practicesGroup insurance programCapital reserves pooling programCapital equipment purchases

Net operating incomeTrans ers between unds (note 8)Excess (de ciency) of revenue over expensesFund balances, beginning o yearFund balances, end of year

Consolidated Schedule of Revenue and ExpensesYear ended December 31, 2007

Bulk Purchasing Fund




Excess (de ciency) of revenueover expenses

Unrealized net gains (losses)arising during the year

Realized net gains (losses)trans erred to net excessduring the year

Comprehensive income

Change in accounting policyUnrealized net gains (losses)

arising during the yearRealized net gains (losses)

trans erred to net excessduring the year

Balance, end of year

Schedule of Comprehensive IncomeYear ended December 31, 2007

Schedule of Accumulated Other Comprehensive Income

Year ended December 31, 2007

RevenueFund

$

(1,195,251)

(36,954)

2,019(1,230,186)

CapitalFund

$

-

-

--

ReservesFund

$

-

-

--

GasFund

$

392,858

(559,100)

-(166,242)

EnergyFund

$

-

-

--

Total$

(802,393)

(596,054

2,019(1,396,428)

RevenueFund

$

154,361

(31,913)

2,019124,467

CapitalFund

$

-

-

--

ReservesFund

$

-

-

--

GasFund

$

(1,572,400)

(559,100)

-(2,131,500)

EnergyFund

$

-

-

--

Total$

(1,418,039)

(591,013

2,019(2,007,033)




37/38


38/38

390 Bay Street, Suite 710Toronto, Ontario

M5H 2Y2

416.594.9325

The sixTh annual reporT of The social housing services

corporaTion for The year ending december 31, 2007

shsc 2007 annual report

Documents