How we started

In 1996 the Co-operative Housing Federation of Canada (CHF Canada) presented the federal Minister Responsible for CMHC with a proposal for an independent agency that would assume responsibility for administering the federal government’s co-operative housing programs. The proposal gave the government an option other than devolving the co-op housing programs to the provinces.

The new agency promised to deliver client-centred service, taking a risk-based approach and making use of up-to-date information technology. It offered a range of benefits for housing co-ops and other stakeholders, including the government. Although members of Parliament and co-operatives alike supported the plan, over 1997 and 1998 CMHC signed agreements with the territories and several provinces to devolve “responsibility for” just over 10 per cent of federal-program housing co-ops.

In 1999 the Minister halted further transfers and set in motion an on-going process of study and discussion of the CHF Canada proposal. Slowly, with the support of later ministers responsible for CMHC, the idea gained acceptance. On May 7, 2004, a letter from President Karen Kinsley of CMHC approved the first steps toward the creation of the Agency. The Agency was incorporated as a co-operative on July 28, 2004 with a well-qualified board of directors guiding its formation and setting policies for its future operations.

On May 3, 2005 the Agency signed a service agreement with the federal government, through CMHC.

The Agency’s risk-based approach

The Agency takes a risk-based approach, focusing the majority of its attention on co-operatives that are not performing as well as they could. Following a unique model, the Agency rates each co-op’s risk level, drawing on current information provided by the co-op itself. The Agency then hones in on any co-ops at higher risk, intervening early to return them to financial health. Co-ops at low or moderate risk of default learn how the Agency has rated them, but are left to continue their effective practices. At a later time, these co-ops may be asked to share information with other co-ops about their successes.

Expected benefits of the Agency

Over time, the Agency’s management of the federal co-operative housing programs is expected to lead to better program outcomes and a more cost-effective use of federal funds. There will be benefits for

  • the federal government
  • the public
  • lenders to housing co-operatives
  • housing co-operatives and their members, and
  • the wider co-operative housing community.

These benefits will flow from

  • a new risk-based, data-driven and client-focused model for administering the programs
  • effective partnering with the co-operative housing sector, which increases co-ops’ trust in the administration of the programs and draws on the movement’s pooled knowledge
  • when the Agency has begun offering all the planned services, a new benchmarking and best-practices service to inspire housing co-operatives to superior performance.

The Agency’s work is data-driven

The Agency has developed a sophisticated information system that largely automates the process of receiving and evaluating financial data from housing co-operatives. Every co-op’s auditor completes an annual on-line information return (AIR), reporting financial and other information about the co-op. The Agency’s information system assesses these data and assigns a preliminary risk rating to the co-op.

The Agency also collects data on each co-op’s buildings by inspecting them every two years.The co-op’s relationship manager reviews the preliminary rating, adjusting it as necessary to take into account everything known about the co-op’s circumstances. Any co-op in poor physical condition or with liquidity problems or an unsatisfactory net income is rated as at risk, even if it has other strengths. The Agency sends each co-op a report comparing its performance with that of similar co-ops and showing any trends in the co-op’s operations over time. With the help of Agency staff and such sector organizations as CHF Canada or a local federation of housing co-ops, the co-op is invited to work to correct whatever has placed it at risk.

Documents to consult