Subject: Cost Factors to be used in 2004 fiscal year budgets for non-
profit/co-operative housing providers
 Legislation/Regulation Release 03-11
 Operational
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The cost factor is a regional inflationary/deflationary factor which is used in the calculation of operating subsidy in the budgets of municipal and private non-profit housing corporations. It is also used by co-operative housing providers to calculate the annual contribution required for their capital reserve fund. The cost factor for each region is reviewed annually and adjusted in accordance with changes in the Consumer Price Index for the costs of housing operations.
Non-Profit's/Co-Operative’s Responsibility
All municipal and private non-profit housing providers must use the cost factor specific to their region in the calculation of the operating subsidy for their fiscal year beginning 2004. The cost factor is used in Line 532 of the Private Non-Profit Operating Budget Form 810(01/95), and in Line 432 and Line 532 of the Municipal Non-Profit Operating Budget Form 819(01/95). When used in the budget form, the cost factor is expressed as 1 plus a decimal number (e.g., 2.30% would be expressed as 1.0230).
Co-operative housing providers are to use the cost factor specific to their region to calculate the annual capital reserve fund contribution amount for their fiscal year beginning 2004. The previous year’s approved capital reserve fund amount, Line 563 of the Co-operative Operating Budget Form 624(06/94), is inflated by the regional cost factor.
Further instructions on budget preparation are provided in the ministry’s publication “A Guide For Non-Profit Housing Corporations, Operating Budget and Annual Information Return, Non-Profit Housing Program”, which was released in January 1995, and in “A Guide For Co-operatives Operating Budget and Annual Information Return, Non-Profit Housing Program”, which was released in October 1994.
Cost Factors
Region Cost Factor for 2004
Northwestern 3.09%
Northern 3.12%
Eastern 3.15%
Central 3.02%
Metro 2.83%
Southern 3.03%
Southwestern 3.06%
PLEASE NOTE: This notification applies to municipal, private non-profit and co-operative excluded projects currently under administration by the Social Housing Branch and also will be used to create interim benchmarks for housing providers whose projects are now under current administration by local Service Managers until benchmarks have been approved and implemented.
The above cost factors reflect the hydro rebate amounts issued in December 2002 and April 2003 plus the 4.3 cents per kilowatt-hour rate cap. The Electricity Pricing Conservation and Supply Act initially did not identify non-profit housing providers as a “designated consumer”. The regulations published on December 28, 2002 include as a designated consumer “a residential complex as defined in the Tenant Protection Act.” Therefore, all non-profit housing providers are now eligible for the 4.3 cents kilowatt-hour rate cap.
Service Managers may wish to contact their non-profit housing providers and confirm if their providers have received the rebates.
If you have any questions, please contact your Service Manager or for excluded providers, please contact your Senior Risk Advisor in the Social Housing Branch.
Toni Farley
Director
Social Housing Branch
September 10, 2003