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Release 02-09
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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 in the calculation of their replacement/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 2003. 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 replacement/capital reserve fund for their fiscal year beginning 2003. The previous year’s approved replacement/capital reserve fund, 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 "Guide For Non-Profit Housing Corporations, Operating Budget and Annual Information Return, Non-Profit Housing Program", which was released in January 1995, and the "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 2003
Northwestern 4.67%
Northern 5.14%
Eastern 4.36%
Central 4.92%
Metro 5.00%
Southern 4.50%
Southwestern 4.56%

Please contact your service manager if you have any questions.

Toni Farley
Director
Social Housing Branch

October 10, 2002