Our Growth

2007 Annual Report

 Message From Our Chair
With growth in our capabilities, our services and our value to the
sector, SHSC advanced in many ways in 2007. It was truly a
tremendous year of progress for us.

Our value to our participants continued to grow, with excellent

performance in our core programs—SHSC insurance, SHSC Financial
Inc. and our natural gas program. These provided a much-needed
element of safety and stability for providers in volatile times.

Moreover, our contribution to research and comprehensive planning

in the sector grew exponentially. We created very significant research
Roger Maloney reports and papers that have been delivered to the Association of
Social Housing Services Corporation, Municipalities of Ontario (AMO) and the Fiscal Review Committees.
Chair This built our credibility with the provincial and federal governments
and will allow us to influence policy for the long-term good of social
housing in this province.

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

by pulling all the players together. Working in partnership with the
Ontario Non-Profit Housing Association (ONPHA), the Co-op Housing
Federation (CHF) and the Service Manager Housing Network, we
raised awareness of crucial issues in non-profit housing, especially
the lack of capital reserves and funding, succession planning and the
growing needs of an aging population.

SHSC is playing a central role in a sector that was splintered by

devolution, and there are encouraging signs that the province is
beginning to hear our message. At a time when there is an urgent
need to look for better ways to manage the very valuable asset

2007 Annual Report 1

that social housing stock represents, SHSC’s commitment to research,
capacity building and sector revitalization is helping the sector find
creative solutions to its most challenging issues.

In 2007, I began my new role as SHSC Chair after having been vice-
chair since 2002. It has been a great opportunity to take my years
of experience in housing and municipal management and apply it to
SHSC’s continued growth. SHSC has grown significantly in its capacity
to effectively deliver its mandate and provide significant value to social
housing providers and Ontario’s municipalities.

This past year also saw eight service manager representatives, some of
whom were re-appointees, named to the SHSC Board of Directors for a
two and half year term. These highly-qualified individuals were selected
by our diverse municipal service managers and DSSABs from across
Ontario. Selected by their council or DSSAB board, each representative
brings their unique skills and background to the benefit of SHSC.

Finally, 2007 saw the formation of the Social Housing Asset

Management Group, a sector-wide group that is working to create a
sound asset management framework, develop streamlined and consistent
standards, and address issues from preventative maintenance to the
creation of capital plans. SHSC, which acts as the Secretariat, is an
active member of the Asset Management Group and is excited about its
future growth and potential.

Roger Maloney
Social Housing Services Corporation,
Chair

Social Housing Services Corporation

Research: Growing Our Capabilities and
Influence on the Sector

2007 was the year we made substantial

progress in our research efforts and came to be
respected for providing in-depth and unbiased
information on issues affecting our sector. SHSC
grew its capabilities and those of the sector
with papers and conferences that stimulated
innovative thinking about how to improve the
state of social housing. It is fair to say that SHSC
now conducts and commissions some of the best
research available on important issues affecting
social housing today.

This year’s research excellence began with

the release of the paper, Sustaining the New
Partnership: Social Housing and the Provincial-
Municipal Fiscal and Service Delivery Review,
February 2007, which laid out current social
housing issues and a proposed set of guiding
principles for the Provincial–Municipal Fiscal
and Service Delivery Review. It discussed how
we can turn social housing into a valued public
asset. SHSC worked closely with municipal
service managers and housing providers
to tackle this issue and developed five key
principles for the sustainability of social housing.

We then prepared the ground for a vital

discussion with Capital Ideas, How to Extend the
Health and Safety of Social Housing, a paper
discussing the provincial capital reserve and
maintenance funding problem, and suggesting
solutions for the future. The paper analyzes

2007 Annual Report 3

Research: Growing Our Capabilities and Influence on the Sector (continued)
the scope of the capital reserve problem and
argues for a capital infusion to revitalize an asset
which materially affects both tenants and our
communities. Borrowing options are reviewed
and suggestions made to remove unnecessary
barriers or legislative impediments. Once funds
are secured, they must be paid back, and the
paper reviews a series of measures which will
allow a provider to manage new debt. Lastly, it
discusses other tax and revenue measures.
Another paper, Snakes and Ladders: Ending
Poverty Traps by Rebuilding Livelihoods in Social
Housing, discussed income redistribution issues,
hidden municipal subsidies and disincentives
to finding work for social housing residents.
When many residents are ensnared by work
disincentives, such as RGI clawbacks, inflexible
transfer and re-entry rules, and weak integration
with employment programs, social housing
no longer functions as a ladder to success. It
is in our self-interest to replace the obstacles
sprinkled through our public policies with ladders
to individual success and community health.
Designing the right set of community conditions
and work incentives for residents in social
housing communities will release a labour pool
to communities facing shortages. Ontario can
lead the way in transforming social housing to
communities of hope and livelihood.
SHSC research comes from leading
housing experts and we regularly partner
Social Housing Services Corporation
with governments and other social housing
organizations to explore the full spectrum of
issues and ideas. In July, “Raising the Bar on
Sector Revitalization,” a two-day conference
hosted by SHSC, planted the seeds to revitalize
and professionalize the sector. Social housing
leaders and international experts gathered to
discuss current sector issues and explored long-
term solutions, including effective succession
planning, and performance management as a
means to grow best practices and accountability.
In addition, SHSC supported the response to
city initiatives such as licensing apartment units,
investigating the experience of Los Angeles, a city
which undertook a similar initiative. Another paper,
In a Fix, discussed the need to tackle the backlog
of maintenance issues, to help ensure a bright
future for social housing in the City of Toronto.
Finally, our intern program helped to nurture
new researchers in the field. Our interns
completed eight papers in 2007 alone
and presented their findings at the Ontario
Municipal Social Services Association and
Service Manager Housing Network conference.
Run in partnership with the Canadian Policy
Research Networks (CPRN), SHSC’s internship
program successfully attracted bright graduate-
level students to conduct independent research
on a number of social housing issues and aims
to nurture the next generation of researchers in
the social housing field.
Overall, SHSC research grew in 2007 to further
the strategic discussion on important sector
issues, ensured there was a consistent and
unbiased overview of the issues and outlined
solutions for consideration. Working with sector
experts, we provided insightful perspectives
and innovative solutions on topics that matter
to housing providers, municipalities and social
housing residents.

Raising the Bar on Sector Revitalization

SHSC hosted an important two-day conference
in July 2007 – “Raising the Bar on Sector
Revitalization.” More than 130 people, including
social housing leaders, representatives and
international experts, gathered to discuss revitalizing
our sector and raising the bar on performance.
The overall message was clear: housing is a key
system in our economy and requires long-term
strategy, planning and innovative thinking. A
combination of presentations, panels and small-
group discussions tackled sector issues, including
the demographic shifts caused by an aging
population and the reduced social mobility of
immigrants that will affect our tenants, staff, boards
and volunteers. Speakers discussed
long-term strategies to ensure we raise the bar,
including succession planning, and performance
management as a means to grow best practices
and accountability.
Keynote speaker, Duncan MacLennan, a housing
academic and consultant, issued a challenge
to reframe the argument for social housing. He
illustrated how decent, affordable homes and
an effective supply of accessible housing raise
Canadian competitiveness in attracting skilled
immigrants and in producing goods and services.
Overall, it was a valuable forum that emphasized
the need to co-operate, collaborate, maximize
and optimize our sector’s energy and resources.

2007 Annual Report 5

Growing Better Asset Management
For many years housing providers and
municipal service managers have identified
underfunding and growing capital reserve
deficits as the most critical issues facing
Ontario’s social housing sector. To help
improve the situation, SHSC participated in
the formation of an Asset Management Group
(AMG). The AMG’s intention is to play a key
role in assisting all stakeholders on their asset
Social Housing Services Corporation
management issues by developing consistent
standards and tools. It has three main goals:
• To create an accurate assessment of the
capital repair needs and gap
• To ensure the reserves that are in place
are spent wisely based on sound research
• To help ensure the long-term viability of
social housing
To ensure the AMG has direct and current front-
line housing administration experience and can
bring technical skills and practical knowledge
to the table, it includes two representatives from
each of the following organizations:
• Service Manager Network
• Ontario Non-Profit 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 first
initiative in Ontario that brings together all
the partners in the sector to discuss the critical
issues of capital needs and asset management
practices. The overall goal is to standardize Working together will help us get the
and professionalize asset management best prices
practices and to improve planning and capital
maintenance among providers. The AMG The four committees of the AMG are Finance,
hopes to improve the quality and reliability Education, Technical and Policy.
of reserve fund forecasts and to implement
standardization of building condition studies, In late 2007, the Asset Management Group
so everyone uses the same standard building issued surveys to housing providers and service
condition audit process. Such accurate building managers to assess the extent of capital
condition reports can be used to better plan issues and examine how the sector is coping.
preventative maintenance. We gathered valuable information about the
capital deficit and needs through this large
The end result will hopefully be: Data Verification Survey, and are grateful for
the wide-scale participation we received. On
• Practical educational programs for staff and behalf of the AMG, SHSC began analysis of
board members the survey data in early 2008.
• A common building audit template
• A central repository for information, including The AMG recognizes the fact that social
a reliable database to help us do comparisons housing stock is a valuable public asset (worth
of each building’s condition, as well as an $40 billion) that is in need of repair, and
online resource centre for housing providers municipalities simply do not have the funding
• A technical resource pool of experts providers to pay for this work. The work of the Asset
can access with confidence. These experts can Management Group is being looked at closely
vet reports by the Federal/Provincial/Territorial Working
• A pool of pre-approved contractors, created Committee on Asset Management. It is also
by providers sharing their knowledge of setting the stage for the involvement of the
contractors federal government on this issue.
• Partnering non-profit housing corporations
together to tender for building condition
audits as well as for maintenance and
repairs, to ensure money is spent wisely.

2007 Annual Report 7

Growing a Training Program That Will
Help Our Clients Flourish
Following its mandate to deliver and support the
development of best practices, SHSC began
to grow a new Training Program in 2007 to
coordinate training within the sector. The goal
was to break new ground and deliver innovative
training with exceptional content to social
housing providers, service managers and residents.
Our first goal was to find the right niche for
SHSC training activities. The board approved
a Training Strategy to ensure we provide
comprehensive training supporting our
programs and services, enabling us to provide
the highest quality of service relating to these
programs, while also working with other sector
organizations to coordinate training initiatives.
The strategy set out to develop high-quality
training based on adult education principles
Social Housing Services Corporation
for SHSC’s diverse client groups, taking into
account the courses requested by providers
and using external experts to provide content.
A special effort was made to focus delivery on
known gap areas. Growing the right training
programs will take time, as the knowledge and
skill development requirements within the sector
are both broad and deep.
By the end of 2007, we had prepared the
groundwork for what will be a full range of
learning opportunities, from workshops on
Emergency Response Planning and Business
Continuity Planning, to Privacy Issues and
Governance. Once courses were developed,
they went through a vetting process using
industry leaders and specialists, such as Price
Waterhouse Cooper.
Two courses were piloted in the fall of 2007 –
Managing Risk, and Preventing and Managing
Claims. Both courses were met with acclaim and
will roll-out in 2008. Another course which had
been developed in 2006, Mould Awareness,
continued to be offered throughout 2007. We
also developed a workshop on Operational
Reviews for service managers.
Training is an area that is growing very rapidly
within SHSC, and much of the preplanning
which was undertaken in 2007 is expected to
come to fruition in 2008.
SHSC’s Global Reach is Blossoming
Late in 2007, SHSC established a global
outreach department, charged with researching
practices in other jurisdictions and sharing
information on what works. The idea is to identify
and share best practices to facilitate learning
and growth in the sector, and to develop our
programs into centres of excellence.
SHSC has already created networks at the
municipal level, and has found that sharing
information is of great value. For example,
in 2007, we arranged an informal partnership
between SHSC and Rooftops Canada, the
international development arm of non-profit
housing. SHSC expects to trade technical expertise
with Rooftops’ international housing contacts.
As part of this role, SHSC hosted two sessions
with a Dutch delegation. The first was on
“Balancing Out”, and discussed the results
of the Dutch government’s withdrawal from
administering social housing in the early 1990s.
An economist familiar with the withdrawal
discussed the independence of social housing
organizations and how housing providers have
been able to creatively use their assets to support
redevelopment and the creation of new housing.
The second session was on “Housing Access”,
and detailed the effects of setting up a for-
profit company as an umbrella organization, in
charge of deciding who gets access to social
housing units.
SHSC has a key role to play in international
outreach because it is a sector-wide organization
and has a relationship with service managers,
the province and housing providers. SHSC also
maintains linkages with the federal government
and other sector organizations. We will continue
to keep this type of discussion alive, since
learning what works in other jurisdictions helps
us to promote sector renewal in Ontario. These
were only first of many global outreach efforts
to come, from what will be a fast-growing and
exciting area of SHSC.
2007 Annual Report 9
Growing the Performance Indicator System

As part of its continuous improvement mandate,

SHSC supports a voluntary performance
indicator system for both service managers and
housing providers. Through the collection and
measurement of key social housing indicators,
system users are able to compare results against
peers and against their own performance
year over year. This information is intended to
help support more informed decision-making,
improve performance and the identification and
sharing of best practices.

At the core of the system is an integrated web-

based tool. This information system supports
real-time collection and comparison of results
among system users. Graphing tools in the
system are particularly helpful for users and
include exporting capability.

The development and growth of the Performance

Indicator (PI) system has been guided by SHSC
through two expert panels; one for housing
providers and one for service managers.

In 2007, the service manager expert panel

was active in advancing user participation
and system development. Some key activities
included:

• Development of data report on 2003–2005

data results for service managers
• Launch of survey to gather key service manager
context information for interpreting data

Social Housing Services Corporation

• Refinement of system tools for gathering and of the systems as the ability to find meaningful
reporting on data as well as preparation comparisons for those who do enter data into
work for upcoming data calls the system is hampered. Indicator value is a key
• Continued coordination of efforts with the concern among all users and there is a keen
Ontario Municipal Benchmarking Initiative desire to ensure that measures (existing or new)
regarding the service manager component of add real value to decision-making processes.
the system
• Dialogue with the Ministry of Municipal The efforts of the respective expert panels
Affairs and Housing on the provincial continue to focus on building value in the PI
performance management initiative and with system, thereby increasing user confidence
the Association of Municipalities of Ontario and broadening system participation. With
on related municipal data information systems a more complete data set and robust suite of
• Promotion of the SHSC performance indicator indicators, the good practice component of the
system among stakeholders through SHSC’s system can further develop, enabling the system
‘Raising the Bar’ conference, the Ontario to fully mature to an essential business tool that
Municipal Social Services Association and supports continuous improvement.
Service Manager Housing Network Forum
and Ontario Non-Profit Housing Association
conference
• A series of presentations and system
demonstrations at regional meetings of
housing provider and service manager
groups throughout the province.

A housing provider expert panel was not

able to be formed in 2007 due to lack of
participation. Levels of participation are an
ongoing concern for both the housing provider
and service manager systems. Capacity to
gather and enter data is frequently cited as
an impediment to participation by non-users,
given the range of other duties they already
perform. Lack of participation reduces the utility

2007 Annual Report 11

Resource Groups Help SHSC Strengthen
Our Connection With The Sector
In 2007, SHSC continued to run the Provider
Resource Group (PRG) and the Property
Managers Resource Group (PMRG). These
committees represent a diverse section of providers
and property managers, both large and small,
from many locations across the province.
Both committees provide invaluable feedback to
SHSC about how our programs are working for
them and how we can grow further to serve their
needs. They provide a two-way forum, as well as
creating opportunities for providers and property
Social Housing Services Corporation
managers to speak on a peer to peer basis.
The PRG met four times in 2007, and consulted
with us on possible changes to SHSC Financial
Investments; on the capacity of the housing
sector; and on research papers being compiled.
The PMRG also met four times.
Both groups were consulted on the development
of the SHSC training program’s curriculum.
The PMRG is developing an RFP document for
providers to use when looking at hiring a Property
Management Company. They have also been
developing performance level standards for
property management companies and for Boards
of Directors to use as a reference when evaluating
the work they are doing for a provider.
Both these committees are very important to
how SHSC and its subsidiaries develop new
programs and business ideas. We make every
effort to listen to their needs, since they represent
our members/clients and provide valuable input
and feedback on how to make our business a
value-added service.
In 2007, SHSC also provided administrative
and technical support to the province-wide rent
arrears database. The database helps access
centres check applicants for RGI assistance for
prior arrears in social housing. By the end of
2007, 29 service manager access centres were
participating in and using the database.
SHSC Insurance Program Grows Stronger
In 2007, the SHSC Insurance Program focused
on growing our capabilities and enhancing the
coverage available for our providers.
We continued with AIG as the lead insurer
and AON as the principal broker for our group
insurance program. This decision led to a further
decrease in our premium rates, which have gone
down a total of 23% since 2003. Premiums
went down in 2007 for all providers with good
claims experience. Overall, we grew the value of
our Insurance Program with better monitoring of
provider claims and improved service.
We announced a new type of coverage for
assisted care providers— Errors and Omissions
Coverage (medical malpractice), which was made
available as of the November 1, 2007 insurance
term. All professional staff members providing
assisted care services are now insurable, with the
exception of doctors and psychiatrists.
Growing our communications and training
capabilities to better serve our clients, we
continued the well-received Risky Business
newsletter and worked with the SHSC Training
department to develop the Emergency Response
Planning and Business Continuity workshops,
which are anticipated to be delivered in 2008.
The role of our wholly-owned insurance brokerage,
SoHo Insurance Inc., continued to grow. SoHo
assumed the role of sub-broker on SHSC
insurance, which included handling invoicing and
collecting premiums from providers.
SoHo Insurance grew its offerings by setting up
the groundwork for a Tenant Insurance Program.
We secured an insurer for this Program and
completed the wording for the Tenant policy. We
also found two providers who will work with us to
pilot the Program in 2008.
SOHO Board of Directors
Don McCausland (Chair)
Linda Stephenson (Treasurer)
Gerry Moss
Carol Conrad
Gord Montgomery
Gary Champagne
Lindsey Reed
2007 Annual Report 13
SHSC Financial Inc. Continues Strong Growth

SHSC Financial Inc. had a positive year in

2007, despite a very volatile investment climate.
We continued to use Phillips, Hager & North
Investment Funds Ltd. as our investment portfolio
advisor, and they were recognized for excellence
at the 2007 Lipper Fund Awards, an industry
event that rewards funds that deliver consistently
strong risk-adjusted performance relative to
their peers.

SHSC Financial continues to remain focused on

managing investment funds effectively, addresses
potential depletion of provider reserves, and offers
innovative solutions.

In 2007, our Social Housing Investment Funds

grew from $345.7 million to $367.2 million, an
increase of $21.5 million or 6.22%. Over 800
providers now invest with us.

Education and Outreach: A Growth Area

We provided useful education to fundholders

through our Capital Ideas newsletter, including
articles on the relationship between Risk and
Return, Choosing the Right Fund Mix, and on
Rebalancing for Investors. We also provided
case studies of housing providers and their
investment strategies.
To help our fundholders grow their knowledge,
two new tools were developed that are easier to
use—the Asset Mix Calculator and the Model
Portfolio selector—to replace the Fund Selection
Worksheets. Final versions of these new tools
were planned for release in March 2008.
Our outreach efforts continued to grow in 2007.
Program representatives met in small groups or
individually with 125 providers to give practical
insights based on their needs and to help them

Social Housing Services Corporation

make better investment decisions. In addition,
SHSC Financial attended various local co-op
federation meetings, as well as various annual
meetings, trade shows and workshops organized
by the Ontario Non-Profit Housing Association
and the Co-op Housing Federation of Canada.
Ontario Securities Commission (OSC) Audit
The OSC conducted a compliance audit of
SHSCFI in the late spring of 2007. This was a
routine audit the OSC periodically conducts of
investment fund managers in Ontario and was not
prompted by any identified issues or concerns.
The audit was a thorough examination of records
and compliance and oversight policies and
procedures of SHSCFI in its management of the
Social Housing Investment Fund.
Some additional policies and procedures were
recommended by the OSC, which SHSCFI
promptly developed for review and approval
by the OSC. In addition, SHSCFI took this
opportunity to develop a comprehensive
compliance policies and procedures manual.
This manual was developed in anticipation of
regulatory changes expected in late 2008 that
would increase compliance responsibilities. This
manual was also reviewed by the OSC prior to
final approval by the SHSCFI Board of Directors
in February 2008.
SHSCFI later received a letter from the OSC
indicating its audit of SHSCFI had been
satisfactorily completed.
Establishment of an Independent Review
Committee (IRC)
In accordance with new securities regulations,
SHSC Financial Inc. established an
Independent Review Committee (IRC). The
Committee is composed of three individuals
who are independent of the Funds, SHSCFI
and its affiliates. Their mandate is to consider
and provide recommendations on conflicts of
interest. SHSCFI is required to identify conflicts
of interest inherent in its management of the
Funds, and request input from the IRC on how it
manages those conflicts. The IRC became fully
operational on October 24, 2007.
SHSC Financial Board of Directors
Nicholas Gazzard (Chair)
Keith Ward (Vice Chair)
Len Brittain (Treasurer)
Don Armstrong
Derek Ballantyne
Dino Chiesa
Brian Coleman
James Donegan
Dan Labrecque
Lindsey Reed
2007 Annual Report 15
Natural Gas Bulk Purchasing Program:
Stability and Consistency

Growth in domestic natural gas production,

record high liquefied natural gas (LNG) imports,
and storage volumes that exceeded the 5-year
(2002–2006) average throughout the year
brought reduced market volatility to the natural
gas market in 2007.

This means that in 2007, we protected our

clients from a 61.6% market price fluctuation,
down from the very extreme volatility of 2006,
but still substantial. There were no events such
as the hurricanes that triggered the 2006 wild
ride of 82% price swings. The SHSC Gas
Program was able to keep the same committed
price of 32 cents per cubic metre despite the
price fluctuations in the market.

SHSC protects our clients from volatility, so

they are better able to plan monthly expenses
with much greater confidence, and avoid
unexpected price rises that can disrupt
established financial plans.

Natural gas storage inventories were relatively

high throughout 2007. High storage inventories
at the onset of 2007 led to above-average
stocks during the year, and high supply led
to lower overall market prices (though the
expectation was that prices would recover and
rise again, as they have in 2008.)
As prices rose at the end of 2007, SHSC
committed to a three-year fixed price of 33 cents
per cubic meter, in the face of dramatically rising
prices for 2008. As announced by some large
retailers, 2008 will likely bring as much as a
20% increase in consumer end-use costs.

Social Housing Services Corporation

Growing an Energy Conservation Program to
Help Providers Go Green
In spring 2007, SHSC created and incorporated
GLOBE: Green Light on a Better Environment.
GLOBE grew out of SHSC’s Green Light Initiative
(GLI), and is a unified program to support social
housing providers in conservation efforts and help
them navigate the world of energy. It builds on the
expertise developed by the GLI, a pilot project
supported by government agencies and utility
companies that demonstrated how an energy
conservation program could succeed in the sector.
The first GLOBE Board of Directors was chosen,
with all members having environmental, municipal,
and/or housing experience, and the Board held
their initial meeting in October 2007. Led by a
committed and hands-on board, GLOBE will grow
to become a leader in housing conservation.
The establishment of GLOBE is very timely, since
utility costs already represent $450 million in
annual expenditures for social housing providers
in Ontario, and that number is rising quickly.
Today’s volatile energy prices contribute to the
poverty of low-income families in social housing.
GLOBE hopes to combat that, as well as to
reduce the carbon footprint of social housing
projects. Many service managers and social
housing providers require professional expertise
to undertake truly successful conservation
projects, including retrofitting with energy-efficient
equipment, and GLOBE will grow into an
environmental leader for the social housing sector
by providing that expertise.
Also in spring 2007, SHSC wrapped up all
the retrofit activities associated with the GLI.
We helped housing providers complete their
energy- and water-conservation projects in time
to take advantage of all the available financial
incentives. SHSC’s GLI pilot saved over 6,200
tonnes of greenhouse gases, reduced electricity
demands by 2.2 megawatts and reduced
energy consumption by 578,000 cubic meters
of natural gas and 18.9 million kilowatts of
electricity. These savings were achieved in 189
facilities with a total
of 12,000 housing
units. The program
demonstrated that
capital improvements
that are strategic and
energy-efficient can
significantly reduce
operating costs.
2007 Annual Report 17
Growing an Energy Conservation Program to Help Providers Go Green
(continued)

A new initiative was undertaken in the fall of 2007

with Toronto Hydro, which involved switching over
the light bulbs in 5,000 social housing suites from
incandescent to energy-saving compact fluorescent.
This meant changing over 25,000 light bulbs,
which will result in 1.1 megawatts of energy
savings each year. Youth living in social housing
were trained in how to install the new bulbs
properly and employed to do the actual work.
We also trained housing provider staff in energy
efficiency, with the assistance of Seneca College.

Other energy efficiency projects were undertaken

in 2007 with PowerStream and Newmarket
Hydro. We coordinated energy audits, provided conservation curriculum for providers and residents,
customer care and offered support to enable offered in partnership with Seneca College.
housing providers to complete retrofits and access
incentives through all avenues. Overall, in 2007 GLOBE clearly grew its
capabilities in both training and preparing
2007 also saw the piloting of new conservation to market energy-efficiency expertise. We are
training, in partnership with Seneca College. nurturing a culture of conservation by taking the
We created two one-day workshops, one on reins on the social housing conservation agenda.
structural conservation activities and the other on
behavioral changes that lead to conservation. GLOBE Board of Directors
These workshops were initially piloted in four Colin Gage (Chair)
locations across the province. Later we did five Brian Denney (Vice-Chair)
more workshops in Toronto, in partnership with Barbara Fawcett (Treasurer)
Toronto Hydro. Training can help participating D. Paul Ayotte
service managers and housing providers achieve Sylvia Patterson
a 20% overall reduction in utility consumption. Andrew Pride
These energy efficiency and behavioral workshops Don Thorne
will grow into a full-scale energy- and water- Lindsey Reed

Social Housing Services Corporation

Good Governance Leads to Healthy Growth

In 2007, our first Chair, Gordon Chong, SHSC Board of Directors

completed his tenure and our new Chair, Roger At the end of 2007, these were the members of
Maloney, took over. Maloney had been vice-chair the SHSC Board:
of SHSC since our inception in 2002. He was
also the Chief Administrative Officer of the Region Roger Maloney (Chair)
of Peel, and the former Commissioner of Housing Colin Gage (Vice Chair)
and General Manager of Peel Living. In addition, Derek Ballantyne (Treasurer)
he served on the boards of the Ontario Non-Profit Gary Champagne
Housing Association and the Canadian Housing Larry O’Connor
and Renewal Association. Pam Cripps
Diane Deans
With his extensive housing experience and in- Michael Feldman
depth understanding of our business and values, Michael Harding
Maloney is well-suited to manage the continued Merv Hughes
growth of SHSC. Trevor Lester
Bob MacDonald
The term for our service manager representatives Adelina Urbanski
also ended, and we had a record number of Dick Verrips
applications for these positions. This is a testimony Lindsey Reed
to the growth of interest in social housing among
municipalities. As a result, we were able to create
a well-balanced board, with a strong cross-section
of representatives from across the province.

2007 Annual Report 19

Auditor’s Report

To the Members of
Social Housing Services Corporation

I have audited the consolidated balance sheet of Social Housing Services

Corporation as at December 31, 2007 and the consolidated statements
of revenue and expenses and cash flow for the year then ended. These
financial statements are the responsibility of the corporation’s management.
My responsibility is to express an opinion on these financial statements
based on my audit.

I conducted my audit in accordance with Canadian generally accepted

auditing standards. Those standards require that I plan and perform an
audit to obtain reasonable assurance whether the financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as
evaluating the overall financial statement presentation.

In my opinion, these consolidated financial statements present fairly, in all

material respects, the consolidated financial position of the corporation
as at December 31, 2007 and the results of its consolidated operations
and the changes in its consolidated cash flow for the year then ended, in
accordance with Canadian generally accepted accounting principles.

Gordon Hardcastle
Licensed Public Accountant

Dorchester, Ontario
April 2, 2008

Social Housing Services Corporation

Consolidated Financial Report

Consolidated Balance Sheet

December 31, 2007

2007 2006
$ $
Assets
Cash 1,130,479 3,662,807
Investments (note 3) 4,864,412 3,987,398
Accounts receivable:
Gas program (note 12) 1,731,301 2,725,305
Other 1,818,464 951,292
Gas inventory (note 2) 1,088,300 226,100
Deferred development expenses (note 2) 193,302 9,645
Due from insurance trust fund (note 15) 619,217 -
Insurance program fund (note 13) 2,188,129 2,918,397
Other investments (note 4) 282,444 -
13,916,048 14,480,944
Liabilities
Accounts payable:
Gas program (note 12) 3,704,830 4,724,775
Gas futures contracts liability (note 2) 2,131,500 -
Other 1,863,942 725,926
7,700,272 5,450,701
Net assets 6,215,776 9,030,243

Represented by:
Fund balances:
Revenue fund (2,529,522) (1,334,271)
Reserves (note 7) 7,750,000 7,750,000
Gas fund 3,007,372 2,614,514
8,227,850 9,030,243
Accumulated other comprehensive income (2,012,074) -
6,215,776 9,030,243

The accompanying notes are an integral part of this financial statement.

2007 Annual Report 21

Consolidated Financial Report

Consolidated Statement of Revenue and Expenses

Year ended December 31, 2007

2007 2006
$ $
Revenue
Gas program 48,279,042 51,787,808
Energy program 605,149 878,770
Benchmarking and best practices 445,519 66,805
Group insurance program 903,331 635,005
Capital reserves pooling program 2,556,812 2,490,305
Investment income 159,931 -
52,949,784 55,858,693

Expenses
Gas program 46,617,096 48,984,390
Gas program rebate - 1,050,000
Energy program 1,143,901 1,970,122
Benchmarking and best practices 1,934,394 948,667
Group insurance program 1,587,296 1,027,410
Capital reserves pooling program 2,406,558 2,305,254
Capital equipment purchases 62,932 123,952
53,752,177 56,409,795

(Deficiency) of revenue over expenses (802,393) (551,102)

Fund balances, beginning of year 9,030,243 9,581,345

Fund balances, end of year 8,227,850 9,030,243

The accompanying notes are an integral part of this financial statement.

Social Housing Services Corporation

Consolidated Statement of Comprehensive Income
Year ended December 31, 2007
$

(Deficiency) of revenue over expenses (802,393)

Unrealized net gains (losses) arising during the year (596,054)
Realized net gains (losses) transferred to net excess during the year 2,019
Comprehensive income (1,396,428)

Consolidated Statement of Accumulated Other Comprehensive Income

Year ended December 31, 2007
$

Change in accounting policy (1,418,039)

Unrealized net gains (losses) arising during the year (596,054)
Realized net gains (losses) transferred to net excess during the year 2,019
Balance, end of year (2,012,074)

Consolidated Statement of Cash Flow

Year ended December 31, 2007
2007 2006
$ $
Operating activities
(Deficiency) of revenue over expenses (802,393) (551,102)
Items not requiring cash outlay:
Deferred energy program expenses - 515,150
(802,393) (35,952)
Changes in non-cash working capital (note 16) (689,903) 541,197
(1,492,296) 505,245
Financing activities
Investments (757,588) 334,562
Other investments (282,444) -
(1,040,032) 334,562
Increase to cash (2,532,328) 839,807
Cash, beginning of year 3,662,807 2,823,000
Cash, end of year 1,130,479 3,662,807

The accompanying notes are an integral part of this financial statement.

2007 Annual Report 23

Consolidated Financial Report
Notes to the Consolidated Financial Statements

1. Purpose of the organization (b) Financial instruments

Financial instruments consist of cash,
The Social Housing Services Corporation investments, accounts receivable, due from
(SHSC) was established under the provisions insurance trust fund, insurance program fund,
of the Social Housing Reform Act, 2000. Its other investments and accounts payable.
membership includes all Service Managers,
Local Housing Corporations, and all prescribed Cash, accounts receivable, due from
NonProfit and Cooperative Housing Providers. insurance trust fund, insurance program
fund and accounts payable (Gas program
The Corporation’s mandate includes: and Other) are reported at their fair value
on the balance sheet. The fair values are the
• coordination and management of insurance same as their carrying values due to their
programs; short term nature.
• pooling of capital reserve funds;
• schemes for joint purchase of goods and Investments and accounts payable (Gas
services; and, futures contracts liability) are reported at their
• advice to the province and its members with fair values on the balance sheet. Unrealized
respect to the establishment of benchmarks holding gains and losses related to these
and best practices to achieve the efficient instruments are excluded from net income
and effective provision of housing. and included in other comprehensive income
until such gains or losses are realized or an
2. Significant accounting policies other than temporary impairment is
determined to have occurred. The fair value
(a) Consolidation of investments was estimated at the quoted
The consolidated financial statements reflect market price. The fair value of gas future
the assets, liabilities, revenues and expenses contracts was estimated based on the market
of the corporation and its wholly-owned price of contracts at December 31, 2007
subsidiaries SHSC Financial Inc., SoHo with similar delivery dates.
Insurance Inc. and Green Light on a Better
Environment (GLOBE) Inc. All intercompany The fair value of other investments has not been
assets and liabilities, and revenues and expenses disclosed as they are not readily determinable.
have been eliminated on consolidation.

Social Housing Services Corporation

(c) Gas inventory (h) Deferred development expenses
Gas inventory is valued at the lower of cost The Corporation caused Green Light
or fair value at the end of the year. on a Better Environment (GLOBE) Inc. to be
incorporated during the year. Expenses
(d) Capital assets related to it incorporation and startup costs
Capital assets are recorded as expenses in have been deferred and will be expensed
the year they are acquired. when operations commence in 2008.

(e) Insurance program (i) Use of estimates

The Corporation treats assets and liabilities The preparation of the financial statements in
related to its operation of the insurance conformity with Canadian generally accepted
program as trust funds. accounting principles requires management
to make estimates and assumptions that
The net balance is shown on the Balance affect the amounts reported in the financial
Sheet as Insurance Program Fund. Revenue statements. By their nature, these estimates
from insurance is recognized at the later of are subject to measurement uncertainty and
the effective date of the insurance or the actual results could differ.
billing date.
(j) Changes in accounting policy
(f) Revenue recognition The Corporation adopted the Financial
Revenue is recognized on the accrual basis Instruments provisions of the CICA on
as goods and services are delivered. January 1, 2007. These provisions address
the classification, recognition and
(g) Income taxes measurement of financial instruments in
The Corporation claims exemption from the financial statements and the inclusion
income taxes as a not-for-profit Corporation of other comprehensive income. As a
under Paragraph 149(1)(l) of the Income result of adopting these new standards,
Tax Act. the Corporation recorded a noncash debit
of $1,434,217 for the change in
The Corporation’s subsidiaries are all subject accounting for financial assets measured
to income taxes. at fair value instead of cost. This charge
is recorded as a onetime cumulative effect

2007 Annual Report 25

Consolidated Financial Report

of a change in accounting policy in opening of the Financial Instruments provisions described

accumulated other comprehensive income on
January 1, 2007.
The Corporation contracts for future delivery of
natural gas. At any time, the Corporation may
be in a “long” position (owning gas inventory)
or a “short” position (a liability to purchase
additional gas). Concurrent with the adoption
in the preceding paragraph, the Corporation
has adopted a policy of recording its gas
position in the financial statements. This change
has been reported retrospectively. Accordingly,
the fund balances at January 1, 2006 have
been increased by $1,143,600 and the
comparative figures for 2006 amended
appropriately.

3. Investments

Investments are comprised of: 2007 2006

$ $

Fixed income 3,460,527 3,170,555

Canadian equity 1,403,885 724,507
Short term - 92,336
4,864,412 3,987,398

4. Other investments

Other investments represent advances to

InnoServ Inc. These advances are secured by a
general security agreement, are repayable on
demand and bear interest at bank prime plus
one percent per annum.

Social Housing Services Corporation

5. Investment funds

SHSC Financial Inc. manages four investment
funds. The net assets of these funds remain
the property of the housing providers and
consequently are not recorded in these financial
statements.
The four investment funds are audited by another
firm of chartered accountants. The audited
financial statements of the funds reflect net assets
(at market value) as follows:
2007 2006
$ $

Canadian Money Market Fund 108,016,000 107,768,000

Canadian ShortTerm Bond Fund 118,017,000 113,571,000
Canadian Bond Fund 80,495,000 76,162,000
Canadian Equity Fund 60,451,000 48,210,000

6. Revenue fund

Revenue fund is comprised of: 2007 2006

$ $

Social Housing Services Corporation (1,072,496) 44,233

SHSC Financial Inc. (894,497) (964,361)
SoHo Insurance Inc. (562,529) (414,143)
Green Light on a Better Environment (GLOBE) Inc. - 92,336
(2,529,522) (1,334,271)

The SHSC Financial Inc. revenue fund deficit of The SoHo Insurance Inc. revenue fund deficit of
$894,497 will be recovered from future years’ $562,529 will be recovered from future years’
revenue earned from management fees. brokerage fees paid by the insurance programs.

2007 Annual Report 27

Consolidated Financial Report
7. Reserves

Reserves are comprised of: 2007 2006

$ $

Gas program 4,200,000 4,200,000

Group insurance program 2,100,000 2,100,000
Contingency 1,150,000 1,150,000
Capital reserves pooling program - -
Energy program 300,000 300,000
7,750,000 7,750,000

8. Interfund transfer

Interfund transfers were made between funds

during the year as follows:

From Revenue Fund to Energy Fund 531,791

From Gas Fund to Revenue Fund 1,775,366
From Revenue Fund to Capital Fund 62,932
2,370,089

9. Income taxes

SHSC Financial Inc., SoHo Insurance Inc. and
Green Light on a Better Environment (GLOBE) Inc.
are subject to income taxes.
SHSC Financial Inc. can carry forward losses
totaling $893,000 for income tax purposes. The
expiration date for using these losses to reduce
income taxes begins in 2009.
SoHo Insurance Inc. can carry forward losses
totaling $545,000 for income tax purposes. The
expiration date for using these losses to reduce
income taxes begins in 2015.
Green Light on a Better Environment (GLOBE)
Inc. can carry forward losses totaling $193,000
for income tax purposes. The expiration date for
using these losses to reduce income taxes begins
in 2022.

Social Housing Services Corporation

10. Commitments

As part of its bulk purchasing plan of natural gas

for its members, the Corporation has entered into
contracts to purchase natural gas at fixed and
market rates, as follows:
Fixed Market
$ $
Period:
January 1 to December 31, 2008 25,887,000 3,147,000
January 1 to December 31, 2009 13,510,000
January 1 to December 31, 2010 12,838,000
January 1 to December 31, 2011 10,716,000

These contracts are considered to be financial TransCanada Pipelines (TCPL) to transport

instruments and have been valued as described
in Note 2.
In addition to these gas supply commitments,
the Corporation is financially responsible
under its delivery contracts with Enbridge Gas
Distribution and Union Gas for the fixed costs
under assignments of pipeline capacity from
natural gas supply from Alberta to Ontario.
These current transportation assignments from
the gas utilities expire on October 31, 2008.
The fixed cost associated with these contracts
for January 1, 2008 to October 31, 2008 is
$798,117, based on TCPL’s January 1, 2008
Current Interim tolls.

11. Pension agreement

The corporation participates in the Ontario of retirement benefit to be received by the

Municipal Employees Retirement Fund (OMERS), employees based on the length of service and
which is a multi-employer plan. The plan is a rates of pay.
defined benefit plan which specifies the amount

2007 Annual Report 29

Consolidated Financial Report
12. Gas program
The corporation operates a gas program for its
participating members. It purchases natural gas
in bulk and resells it to its members. Any excess
revenue derived from this program is periodically
distributed to the program participants.
13. Insurance program fund
The Corporation is required to coordinate and
administer group insurance programs for its
members. SHSC roles include advocating,
negotiating, coordinating, managing,
administrating, data tracking and communicating.
The Insurance Program Fund is comprised of:
Cash
Accounts receivable
Accounts payable
14. Social Housing Energy Management Program
The SHSC Energy Management Program (EMP)
was developed to assist social housing providers
to identify energy savings opportunities and fund
energy management solutions in their buildings.
Social Housing Services Corporation
Accounts receivable gas program and
accounts payable gas program represent
amounts owing from program participants and
amounts owing to gas suppliers respectively.
During the year the Corporation transferred the
management of its group insurance programs to
its wholly-owned subsidiary, SoHo Insurance Inc.
2007 2006
$ $
2,335,458 5,493,634
- 6,300,204
2,335,458 11,793,838
147,329 8,875,441
2,188,129 2,918,397
SHSC’s role includes accessing qualified energy
auditors and providing standardized audit
requirements; accessing funding and products
for energy retrofits; and providing education and
tools for tracking energy savings.
15. Insurance trust fund

SoHo Insurance Inc. is required, under the

Registered Insurance Brokers Act of Ontario, to
account for its trust position.

Due from insurance trust fund represents the net

trust position and is comprised as follows: 2007 2006
$ $

Cash 4,813,992 50,989

Accounts receivable 1,687,216 -
Due to insurance companies (5,881,991) (41,344)
619 , 217 9,645

16. Changes in noncash working capital

Changes to noncash working capital in the

Consolidated Statement of Cash Flow are
comprised as follows: 2007 2006
$ $

Accounts receivable 126,832 (1,616,569)

Deferred development expenses (193,302) 129,373
Due from insurance trust fund (609,572) (9,645)
Insurance program fund 730,268 (587,625)
Gas inventory (862,200) 917,400
Accounts payable 118,071 1,708,263
(689,903) 541,197

2007 Annual Report 31

Consolidated Financial Report
17. Expenses by object

2007 2006
$ $

Gas program 45,409,606 49,225,750

Investment manager fees 1,774,676 1,564,816
Salaries and benefits 2,514,138 1,468,761
Program consultants 1,750,235 2,210,638
Communication 141,950 117,124
Directors’ expenses and strategic planning 453,808 378,045
Capital of equipment purchases 218,092 175,572
Occupancy 281,475 292,234
Office 253,433 187,222
Professional fees 237,570 185,774
Information technology 73,848 69,102
Interest 8,255 6,385
Amortization 11,318 156,554
Education and training program 623,773 371,818
53,752,177 56,409,795

Social Housing Services Corporation

18. Comparative figures
Certain prior year figures have been restated to
conform with the current year presentation.

Consolidated Schedule of Revenue and Expenses

Year ended December 31, 2007

Bulk Purchasing Fund

Revenue Capital Reserves Gas Energy
Fund Fund Fund Fund Fund Total
$ $ $ $ $ $
Revenue
Gas program - - - 48,279,042 - 48,279,042
Energy program - - - - 605,149 605,149
Bench-marking and best practices 445,519 - - - - 445,519
Group insurance program 903,331 - - - - 903,331
Capital reserves pooling program 2,556,812 - - - - 2,556,812
Investment income 39,550 - - 113,420 6,961 159,931
3,945,212 - - 48,392,462 612,110 52,949,784
Expenses
Gas program - - - 46,617,096 - 46,617,096
Energy program - - - - 1,143,901 1,143,901
Bench-marking and best practices 1,934,394 - - - - 1,934,394
Group insurance program 1,587,296 - - - - 1,587,296
Capital reserves pooling program 2,406,558 - - - - 2,406,558
Capital equipment purchases - 62,932 - - - 62,932
5,928,248 62,932 - 46,617,096 1,143,901 53,752,177
Net operating income (1,983,036) (62,932) - 1,775,366 (531,791) (802,393)
Transfers between funds (note 8) 787,785 62,932 - (1,382,508) 531,791 -
Excess (deficiency) of revenue
over expenses ( 1,195,251) - - 392,858 - (802,393)
Fund balances, beginning of year (1,334,271) - 7,750,000 2,614,514 - 9,030,243
Fund balances, end of year (2,529,522) - 7,750,000 3,007,372 - 8,227,850

2007 Annual Report 33

Consolidated Financial Report
Schedule of Comprehensive Income
Year ended December 31, 2007

Bulk Purchasing Fund

Revenue Capital Reserves Gas Energy
Fund Fund Fund Fund Fund Total
$ $ $ $ $ $
Excess (deficiency) of revenue
over expenses (1,195,251) - - 392,858 - (802,393)
Unrealized net gains (losses)
arising during the year (36,954) - - (559,100) - (596,054)
Realized net gains (losses)
transferred to net excess
during the year 2,019 - - - - 2,019
Comprehensive income (1,230,186) - - (166,242) - (1,396,428)

Schedule of Accumulated Other Comprehensive Income

Year ended December 31, 2007
Bulk Purchasing Fund
Revenue Capital Reserves Gas Energy
Fund Fund Fund Fund Fund Total
$ $ $ $ $ $

Change in accounting policy 154,361 - - (1,572,400) - (1,418,039)

Unrealized net gains (losses)
arising during the year (31,913) - - (559,100) - (591,013)
Realized net gains (losses)
transferred to net excess
during the year 2,019 - - - - 2,019
Balance, end of year 124,467 - - (2,131,500) - (2,007,033)

Social Housing Services Corporation

The sixth annual report of the Social Housing Services
Corporation for the year ending December 31, 2007

390 Bay Street, Suite 710

Toronto, Ontario
M5H 2Y2

416.594.9325
www.shscorp.ca

Copyright © 2008 Social Housing Ser vices Corporation. All rights reser ved.