How we do it

The Agency has a workbox full of special tools and techniques to use in administering co-op housing programs.

Tools and techniques

The Agency is using a number of special tools and techniques to administer the co-op housing programs. These include

The information system

The Agency has developed a sophisticated information system that collects data delivered over the Internet, combines it and tests it in various ways. Accessed through the Agency’s website, the information system has become a rich source of knowledge about federal co-op housing programs. In particular, housing co-ops now enjoy better access to information about many aspects of their operations.

The Agency’s risk-rating model

Co-operatives under the federal government’s housing programs finance their properties through loans held by Canada Mortgage and Housing Corporation (CMHC) or insured by CMHC’s Mortgage Insurance Fund. The Agency’s role is to manage housing co-operatives’ risk on behalf of CMHC. We evaluate each co-op’s risk level through a unique risk-rating model, report back to the co-op on its performance and advise CMHC on the successes, problems and trends of the federal co-op housing programs.

The risk-rating model combines different kinds of information:

Our information system uses these data to calculate a Liquidity Ratio and a Net-Income Ratio for each co-op.

Through an automated process, the Agency assesses this information and assigns the co-op a preliminary risk rating. The co-op’s relationship manager at the Agency reviews the rating and adjusts it in the light of all they know about the co-op. Any co-op in poor physical condition or with liquidity problems or unsatisfactory current income is rated as at risk, even if it has other strengths.

The four possible composite risk ratings are Low Risk, Moderate Risk, Above-Average Risk and High Risk. In addition, a co-op may be Strengthening, Stable or Weakening.

Once the risk assessment is complete, the Agency sends each co-op a report comparing its performance with that of other co-ops and showing how its operations are developing over time. With the help of Agency staff and the resources of the co-op housing sector, the co-op works to correct whatever has placed it at risk.


Low Composite Risk: A strong, well-managed housing co-operative. The combination of its excellent physical condition, accumulated earnings and reserves, position in the marketplace and current capacity to contribute to its replacement reserve make it resilient to adverse market and economic conditions. Provided it continues to be well managed, the co-operative should be able to fund needed repairs and replacements and meet its debt obligations for the foreseeable future, without external support.

Moderate Composite Risk: A sound, generally well-managed housing co-operative. It is in good or better physical condition, has access to adequate cash resources and is able to make a contribution from earnings to its replacement reserve, after covering its debt service and all normal operating expenses. No indicators of high risk are present. The co-operative should be able to remain in sound financial and physical condition, provided it continues to be well managed and economic or market conditions do not deteriorate significantly. It does not require external support or intervention.

Above-Average Composite Risk: The co-operative has issues that warn of emerging or potential financial difficulties. One or more of the following conditions is present: the co-operative is in fair, but not poor, physical condition; its earnings are sufficient to cover current expenses, but do not allow for an adequate contribution to the replacement reserve; its combined accumulated earnings and replacement reserve are low and access to other cash resources, such as member shares or deposits, is limited; or vacancy losses or housing charge arrears are significantly above the median level for its peers. No indicators of high risk are present, but the co-operative may be challenged in funding needed capital repairs or meeting its obligations in the future, especially if the market is weak or weakens. It will require very effective management and some ongoing monitoring and support.

High Composite Risk: The co-operative is in financial difficulty or is poorly managed. One or more of the following conditions is present: the co-operative’s earnings are insufficient to cover its debt service and current expenses, before a contribution to the replacement reserve; it has an accumulated operating deficit, a low or non-existent replacement reserve and limited access to other cash resources, such as member shares or deposits; vacancy losses or housing charge arrears are unusually high; the co-operative has urgent or major repair requirements that it is not able to fund; it is behind with its mortgage payment or property taxes; it has suffered a major loss of assets through fire or malfeasance against which it was not adequately insured; or it is suffering from a failure of governance. Without intervention and continuing support, and possibly a financial workout, the co-operative is at risk of failure.

Strengthening: A risk trend of Strengthening shows a co-operative that has worked hard to improve its operations. Even if the co-operative’s risk factors have not changed, there is evidence, such as fewer arrears and bad debts, that the co-operatives situation is improving.

Stable: A risk trend of Stable indicates little change in the co-operative’s situation. Depending on its risk rating, this can be good or bad. Where the risk rating is positive, so is a Stable trend, which shows that the co-operative is operating well. However, a Stable situation is not as good where a co-operative has a risk rating of Above Average or High. This rating could suggest that this co-op needs to do more to solve its problems or that it has kept its operation from worsening while it works on solutions.

Weakening: A risk trend of Weakening is a red flag for any co-operative with a positive risk rating, suggesting that it should look to the flaws in its management and governance before its problems grow. This trend is even more serious in a co-operative risk rated Above Average or High. It warns that the co-op’s management may not be effective enough for its challenging situation.

Co-op-focused service

The Agency is committed to serving all its stakeholders and client groups in a way that honours the ideals of the co-operative movement and keeps the Agency accountable. However, it is conscious of the value in putting housing co-ops and their needs and concerns at the centre of every operation. Recognizing the common interest of co-ops, federations of housing co-operatives, CMHC and the public in co-ops’ success, the Agency believes that increased collaboration with co-ops brings good results. Our focus on co-ops is helping them to meet their goals, comply with the rules of their program and stay financially healthy.

The Values adopted by the Agency provide a strong base for ever-improving service to housing co-operatives. These values support nine principles specific to client-centred service at the Agency.


The following principles guide the Agency’s approach to client-centred service:

  1. leadership by example from the Board and management within the organization and from the Agency in its relations with its clients
  2. mutual respect among individuals and organizations
    – honouring the contribution of all parties
    – demonstrating fairness, courtesy and professionalism
    – giving responsive and timely service
  3. co-operation, teamwork and reciprocity
  4. social responsibility
  5. meeting of obligations
  6. anticipation of client needs, which the Agency will try to meet when they fall within our mandate
  7. transparent communications that are straightforward, accessible, timely, clear and accurate, in both official languages
  8. consultation and feedback
  9. continuous learning and improvement of both processes and outcomes.

Benchmarking and best practices

Benchmarking and best practices is a new service. The Agency will begin to offer it once it is delivering all the services expected to be transferred from CMHC.

Using data collected from at least four provinces, the Agency’s information system will compare various lines in co-ops’ financial statements across many different clusters of housing co-operatives.

Co-ops will learn from the Agency’s reports whether they are earning or spending more or less than their peers, whether their operations are strengthening or weakening and what relationship the Agency sees between their income and expenses and their results.

Co-ops with a history of success will be asked to share their secrets and tell their stories. Their examples will inspire others and provide a practical guide to enhanced performance.