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Subject:  Cost Factors to be used in 2005 fiscal year budgets for
non-profit/co-operative housing providers

This item is NOT selected / Cette item n'est pas selectéLegislation/Regulation                                                        Release 04-08

This item is selected / cette item est selectéOperational

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. Co-operative housing providers will use these cost factors 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 2005. 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 2005. 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 the 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 2005

Northwestern                                       3.42%

Northern                                              3.54%

Eastern                                                3.23%

Central                                                3.29%

Metro Toronto                                       3.66%

Southern                                              3.41%

Southwestern                                       3.37%

PLEASE NOTE:  This notification applies to municipal, private non-profit and co-operative excluded projects currently under administration by the Social Housing Branch. These cost factors will also be used to create interim benchmark calculations for housing providers whose projects are now administered by local Service Managers until final benchmarks have been approved and implemented.

If you require further information 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 17, 2004