Toronto Community

Housin9 Corporation
931 Yonge Street
ToronLo, ON
M4W 2H2

Toronto
March 17, 2017 Community
Housing

Giuliana Carbone
Deputy City Manager
Toronto City Hall
8th
fJ, E., 100 Queen St, W
Toronto ON
M5H 2N2

Dear Giuliana,

Re: Tenants First July Report to Council

As you are aware, we have been working with a number of members of your staff on the
emerging report to Executive Committee and City Council on step 1 ol implementing the
Tenants First Report. As I understand it, there will likely be a second report toward year
end that will deal with the mechanics of implementing whatever City Council approves in
July. Our management team at TCHC fully supports the intent 01 Tenants first, to:

improve the lived experience and quality of life for tenants,

improve the social housing system in Toronto, and
move to financial and social sustainability for TCHC and the wider social housing
system.
In support of that process, I have attached a summary and outline of a number of items
that we feel ought to be considered in this initial report, without which there may be a
real risk to the intended outcomes. To be clear, these points have not been vetted with
our Board of Directors given that we are working with your staff on this matter, we felt it

reasonable to bring these matters forward at the staff level for discussion at this time.

I look forward to discussing them with you.

Greg Spea
President & Chief Executive Officer (Interim)

cc: Peter Wallace, City Manager

Chris Brillinger, Executive Director, SDFA
Chris Phibbs, Project Manager, SDFA
 Toronto
Community
Housing
March 21, 2017
Strategic Considerations for Tenants First Implementation
Report

Executive Summary
The Tenants First report has three main objectives. They are to:

improve the lived experience and quality of life for tenants;

improve the social housing system in Toronto; and,
improve the financial and social sustainability of TCHC and the wider social
housing system.
Management staff at Toronto Community Housing strongly support these objectives,
and believe that the Board of Directors of TCHC does as well. In that spirit, we support
the transformation and change process of Tenants First. A great deal of effort has been
invested to date between City staff and TCHC with common goals and aspirations from
both teams.
Having given a great deal of thought to the process thus far, we are recommending that
we pause for a moment to step back and assess our progress to date, as we both need
to get this right. We fully appreciate City staffs need to respect Council timelines and
expectations, but at the same time we need to be realistic and respectful about the
potential for informed and meaningful dialogue that might need a bit more time.
We recommend that City staff delay the June report and prepare a single
comprehensive report in September or October that addresses all of the risks and
makes recommendations for implementation. We believe that this approach has the
potential to be much more powerful, instructive and effective.
We, as TCHC management, feel we have an obligation to review the risks associated
with the current path, and share them with you. This way, it will help us both maintain
the services we currently provide and support any successful transition process.
In the spirit of the above, the attached strategic considerations have been prepared to
assist City staff in the development of the report to Council. TCHC is concerned that
some of the recommendations, as formulated so far, have not fully considered all of the
potential risks. This can be mitigated going forward by working more closely with TCHC
staff as it is unrealistic for City staff to have an intimate knowledge of TCHC operations.
Key risks, in part outlined in the attached document, include:

the current delicate financial state of TCHC and the proposals potential negative
financial impact on TCHC i.e. possible impact on credit rating and ability to

borrow; loss of $4.4 million/year in commercial lease revenue; drop in net

adjusted operating income by $22 million per year; disproportionate balance of
capital repair backlog, etc.;
the risk of advancing change without connecting it back to the policy rationale
identified in the Task Force recommendations and subsequent Tenants First
report, both of which form the basis for community expectations. It is critical that
we take the time to connect the plan to transfer units and services to the goals
and objectives of both reports;
asset transfers at the scale proposed triggers a default of our Master Covenant
Agreement with a potential $712 million cost ($262 million in penalties and $450
million principle owed);
estimated legal fees of $10 million as every contract, lease and warranty
associated with the assets will need to be reviewed and potentially renegotiated;
potential employment and labour issues and associated costs based on past

staff transfers potential of up to 20% increase in salaries if staff are transferred to

a City division; impacts related to OMERS pensions, collective agreements,
WSIB claims and litigation;
possible loss of key management personnel due to continued instability and from
years of imposed change without being empowered to be part of the solution.
This also risks loss of corporate and institutional knowledge that is crucial to the
successful implementation of any new proposal. It would also have major
operational impacts; and tenant satisfaction issues.
We all know and acknowledge that the root issue is resources financial and human.

We also know the basic model is uneconomic, and 30 years in the making. Our efforts
need to be based on this reality and deal with proposed sustainable funding
mechanisms a model for future operating and capital flows for both the newer, smaller

TCHC and all of the contemplated successor enterprises. For example, the proposed
move of the seniors portfolio is a relatively strong financial asset to its new home, but a
corresponding further source of damage to TCHC finances.
The attached document focuses on the proposed asset transfers only. Contextually,
would be helpful to our joint efforts if TCHC could have a more continuous insight into
the Citys evolving thinking regarding our future mandate. In that way, we can be more
helpful in achieving our joint success. With that in mind, we recommend that any
considerations the City is proposing include evidence on how the removal of certain

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Toronto Community Housing
functions will improve the quality of life of tenants and their tenancies. Without a proper
evaluation, there may be harmful unintended consequences from eliminating certain
functions that TCHC has experienced with past corporate reviews. A careful
consideration of the capacity of partners to develop relationships with tenants, connect
them to and then actually provide services should be undertaken. Having said that,
there is, in our view, the strong likelihood that transferring some buildings with high
numbers of vulnerable persons to supportive housing providers would be beneficial for
those tenants. While we fully support this, as a cautionary note, it will only work if there
is considerable additional funding for these providers.
Moving ahead at this time without a more detailed analysis of the financial, operational
and tenant impacts could pose significant risks for both the City, and TCHC, and

especially for tenants. These risks include:

expectations that might not be met once the financial analysis is complete;
tenant dissatisfaction if there is not a fulsome consultation;
potential higher costs from vendors and contractors because of uncertainty;
financial institutions becoming wary of involvement with TCHC; and
continuous disruption in TCHCs ability to manage and improve the organization
due to uncertainty about investment and employment.
To reiterate, TCHC staff strongly support the objectives of the City in the Tenants First
report. We believe neither of us want to lose the opportunity to make these
improvements. Ultimately, this is about service and support to vulnerable families and
individuals. They need a voice, and this cannot be rushed. Careful provision of
information, consultation and meaningful responses are necessary, and as such we feel
this cannot be achieved in the time frame outlined.
Finally, we fully appreciate that the risks outlined above could apply to almost any new
model; however, we need to recognize that TCHC is not only vital as well, but also at
risk. Together we should step back, get this right, and make some real progress.

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Toronto Community Housing
Introduction
The City of Torontos (the City) Project Management Team has identified seven
recommendations that will likely be part of the Q2 Implementation Report for Tenants
First. Toronto Community Housing Corporation (TCHC) management staff have
prepared this document to provide our Board of Directors and City shareholder with a
list of strategic considerations to inform portions of the emerging report. The seven
recommendations identified by the Citys Project Management Team include:
1. The potential transfer of the seniors portfolio (14,000 households) to a new
entity with linkages to the Citys Long Term Care Division;
2. The potential transfer of up to 5,000 units to the existing non-profit sector;
3. An approach to scattered homes that may include transfers or sale;
4. A pilot project using the proposed portable housing benefit to increase
marketfRGl income mix;
5. A local service delivery pilot in one Operating Unit (OUC);
6. A review and update of the mandate of TCHC; and
7. A financial analysis of TCHC.
In order to support City staffs efforts to draft this report to Council, TCHC staff are
providing some preliminary analysis regarding recommendations 1, 2, and 3 related to
the transfer of assets. Staff have identified general considerations that relate to all three
asset transfer recommendations as well as specific considerations for each of the three
recommendations.

Considerations for all Contemplated Asset Transfers

The following considerations would apply to the implementation of all three asset
transfer recommendations, recognizing that any substantive transfer or change will
trigger many, if not all of, the risks and costs identified. Change will be difficult and
costly, and will draw resources away from everyday needs. Any change, while perhaps
necessary in these circumstances, still needs to be managed as carefully and as
realistically as possible.
Implementation Costs
Any asset transfer of this size will result in significant legal fees. All existing TCHC
contracts associated with the affected buildings would have to be reviewed to
determine whether TCHC would need consent to assign the contracts to the new
entity and to ensure all warranties for work completed in these buildings are
assignable. Given the complexity of asset and staff transfers currently proposed, as
well as the complexities related to bond holders, realistic early estimates of legal
fees is in the order of $10 million.

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Toronto Community Housing
 Transfer of assets at the scale proposed without obtaining consent from the TCHC
Issuer Trust (a separate entity from TCHC) will trigger a default of those covenants.
This default has a potential cost of $712 million ($262 million in penalties plus the
$450 million principal owed). To avoid the default, the TCHC Issuer Trust would
need to obtain the consent of at least two-thirds of the monetary value of various
holders of the debentures under each of the two offerings. There are currently 209
holders of the debentures, of which TCHC has a partial list of 55 of those holders.
Work would need to be done through the TCHC Issuer Trust to identify and contact
all holders to obtain appropriate consents.
There will be costs associated with the transfer of mortgages and loans, including
those with Canada Mortgage and Housing Corporation, Infrastructure Ontario and
various commercial banks. Consents would be required from these entities as well.
If TCHCs debt rating were to decrease as a result of the transfer, the pricing of
TCHCs facility with the Bank of Nova Scotia will increase.
Unless waived, the provincial and City Land Transfer Tax would need to be paid for
each building.
If TCHC were to continue providing capital repair projects (or other services) to
these buildings, it could trigger the provisions of the Excise Tax Act with respect to
the collection and remittance of GST/HST and any corresponding public service
body tax rebate claims.

Other Legal Impacts

All major contracts (loan agreements, development partnership agreements, etc.)
will need to be reviewed to ensure that they do not have restrictive covenants or
other provisions associated with the transfer of TCHC properties.
Due to different historical and legacy issues, there are specific conditions attached
to certain assets related to the Rent-Geared-to-Income (RGI) program,
mortgages, tenant demographic, energy management, shared facilities, etc. that
must be considered when assessing the viability of specific asset transfers.
The terms of all commercial leases entered into by TCHC as the landlord would
need to be reviewed to determine whether there are any consent, notice and/or
assumption agreement requirements. TCHC currently holds over 400 commercial
leases, over 100 of which are in buildings in the seniors portfolio alone. The
proposed transfer would significantly reduce recurring commercial income to TCHC.
All registered and unregistered agreements affecting the properties would need to
be located and reviewed to determine if there are any consent, notice, and/or
assumption agreements requirements. These agreements would include all City
development agreements such as subdivision, section 37 and site plan agreements,
as well as easement agreements or agreements with any adjoining landowners.
City development approvals may also be affected and would need to be reviewed.

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Toronto Community Housing
 Where certain TCHC properties are subject to expropriations, any agreements that
TCHC has entered into in connection with the expropriations would need to be
considered, as well as any claims to the expropriation proceeds.
Litigation associated with any buildings proposed to be transferred (e.g., slips and
falls) may be assigned to a new landlord, but would require consent from the other
party.
Litigation associated with tenancies (e.g., evictions of tenants at the Landlord
Tenant Board) would have to be assigned from TCHC to the new landlord, thus
triggering potential delays in proceedings. This includes delays in eviction
proceedings for tenants engaged in anti-social behaviour or criminal activity such as
guns and/or drug related disruptions in our communities.

Financial Impact on TCHC

Vendors, contractors, development partners and lenders may see the proposed
changes as increasing their risk and, as a result, adjust their pricing or involvement
with TCHC, resulting in increased costs for the organization.
As of December31, 2016, TCHCs debt was approximately Si .4 billion. Although
some of the debt (mortgages) are tied to specific buildings, most of the debt is not.
Having to service this debt with lower levels of disproportionately reduced net
revenues will further strain TCHCs financial resources.
General
The operational impact of any asset transfer on the remaining portfolio should be
considered.
A mechanism would be needed to address TCHCs need for four-, five- and six-
bedroom homes to accommodate large RGI households, particularly for tenant
relocation under TCHCs revitalization program. Considered in this context,
removing units with four or more bedrooms from TCHCs portfolio should be avoided
if at all possible.
Tenant engagement
Tenant consultations are not planned until the month prior to delivery of the
proposed phase one report to Executive Committee. At face value, this does not
seem to give adequate time to both project a commitment to robust consultation and
then adjust the recommendations. The finalization of the written report predating the
consultation could appear to undermine the consultation process. TCHCs
experience is that tenants want to be engaged in decisions where there will be
significant changes to their communities. The engagement plan, as outlined, should
potentially be reconsidered given the tight timelines proposed.
Many tenants will likely request that they be given a choice to move to a new entity
and the City will need to consider this along with how it would respond if individual

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Toronto Community Housing
 tenants do not agree or refuse to move to a new entity or housing provider. If the
proposed solution includes the option to transfer to alternative TCHC buildings, the
City will need to consider Housing Services Act restrictions, such as the impacts on
the social housing waitlist and on TCHCs capacity to accommodate these transfers
on a large scale.
Human Resources
The transfer of the seniors portfolio would directly impact 191 staff (working in the
operating units) and upwards of an estimated 150 additional staff in other support
functions, estimated based on the proportion of units transferred.
Using OUC (consisting of 4,271 units) as an example, transferring 5,000 units would
directly impact 49 staff and another 57 staff in other support functions.
Divesting the scattered housing portfolio would impact 25 staff (19 directly and 6
indirectly).
If the seniors portfolio and associated staff are transferred to the City, there is an
embedded risk of higher salary and benefits costs. This was the case when Housing
Connections (AHCI) employees were transferred to the City to administer the Citys
social housing waitlist in 2015. The transferred employees were guaranteed not to
have their wages reduced, and generally had an increase in salary, in some cases
as much as 19%. Further, certain aspects of this seemingly simple transfer are still
ongoing and likely will not be completed for at least another six months (more than
three years total transaction time).
Depending on the nature of the transfer and type of entity that will absorb the
employees, the following issues must be considered:

o OMERS pension
Employees may lose OMERS eligibility if transferred to an ineligible
entity. Eligibility depends on whether the new employer will be
considered an associated employer under the Pension Benefits Act.

o Collective Agreements
Pursuant to section 69 of the Ontario Labour Relations Act, collective
agreements would remain in place after the transfer until notice to
bargain is provided (90 days prior to expiry) and a new agreement is
negotiated. The same successor rights would likely apply for the
transfer of 5,000 units to third parties.
If the entity receiving the employees has its own collective agreements,
or is not unionized, there would likely be intermingling, or overlap of
staff. This could necessitate a vote by the Ontario Labour Relations
Board and existing bargaining units may lose their bargaining rights.
The new entity would be responsible for all outstanding union
grievances prior to the transfer unless the parties agree otherwise.

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Toronto Community Housing
 There may be additional considerations pursuant to the Public Sector
Labour Relations Transition Act, 1997.
The new entity would have to consider job evaluation and pay equity
liabilities.
If any unionized employees are not transferred, this may trigger
termination/severance obligations of the collective agreements, the
Employment Standards Act (ESA) and/or common law.

o Building Service Providers

The new entity should be mindful of the ESA provisions related to
building services providers (Part XV of the ESA). This section applies
to employees providing cleaning, security, and food services on the
premise and potentially applies to property managers in the building.
The new entity would need to retain these employees or pay them their
termination and severance (if applicable) entitlement under the ESA.

o Non-Unionized Employees
Transferring non-unionized employees will likely require employee
consent.
The new entity would have to consider job evaluation and pay equity
liabilities.
If the employment contract is terminated or an employee is deemed to
have been constructively dismissed (e.g., a substantial change in job
description, reporting structure, salary, etc.), all such employees will be
eligible for termination and severance (if applicable) based on the
terms of their employment contract.
Mass terminations (defined by the ESA as more than 50 employees)
could trigger section 58 of the ESA. Under this scenario, employees
would be entitled to longer notice periods and more severance pay (if
applicable).

o Workplace Safety and Insurance Act

The new entity will likely be responsible for all liability of the
predecessor employer.

o Accrued Vacation and Sick Leave

The new entity would be responsible for accrued vacation and sick
leave. When the 44 ACHI employees were transferred to the City, this
liability was more than $700,000.

o Occupational Health and Safety Act

The new entity will be responsible for complying with any outstanding
orders.

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Toronto Community Housing
For a more detailed outline of Human Resources considerations, please see
Appendices A, B and C.

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Toronto Community Housing
Transfer of Seniors Portfolio defined as 67 buildings and
nearly 14,000 units
In addition to the considerations outlined for all proposed transfers, the following are
specific to transfer of the seniors portfolio.

Asset Considerations
Some seniors buildings are part of larger TCHC communities and have shared
facilities with other non-seniors buildings or facilities. There is a need to explore the
challenges associated with removing buildings with shared or interconnected
facilities (e.g., heating, parking, district energy, shared common spaces, etc.) from
the portfolio. A quick overview demonstrates that there are at least 8 of these
buildings in the seniors portfolio. One example is 252 Sackville, where the common
spaces, parking, heating and cooling, and superintendents office are all
interconnected and shared with 246 Sackville, a family building.
There are 26 other buildings, representing about 5,500 units that were formerly
designated as seniors buildings. Some City Councillors have advocated for these
buildings to be converted back. This proposal might resurrect this debate.
The capital repair needs of the existing TCHC portfolio is about S57,000 per unit
over 10 years. The portfolio without the 14,000 seniors units would have capital
repair needs of about $59,000 per unit for the same period. Of the 67 seniors
buildings that would be transferred, 39 of them need major capital repairs to avoid
falling into a critical state of disrepair and risk being boarded up by 2022.
With the seniors portfolio separated from TCHC, economies of scale associated
with centralized repairs would be reduced for both the new seniors entity and for
TCHC.
Existing Programs and Vulnerability Issues in these buildings
Unit condition data shows that clutter and pest issues are much higher in TCHCs
seniors buildings. About 1,000 of the 14,000 seniors units have moderate to high
clutter scale scores (between levels 4 and 9).
Due to high vulnerability in seniors buildings, the staffing ratio of Resident Access
and Support staff in these buildings is much higher compared with the rest of the
portfolio.
Within its seniors portfolio, TCHC has more than 200 partnership agreements with
tenant-led groups and community agencies that are renting space at rates well
below market. These agreements range from short-term, non-exclusive use
arrangements (e.g., weekly exercise programs) to long-term, exclusive use leases
(e.g., office space for seniors support services). These agreements would need to
be reviewed and appropriately renegotiated or assigned, in any transfer.

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Toronto Community Housing
Tenant Impact/Possible Tenant Perceptions
More than 27,000 seniors live in TCHC; therefore at least half of them (a cohort that
is growing at significant rates) do not live in seniors buildings. If the intent of
transferring the seniors portfolio is to improve supports to seniors, the results may
be perceived as a two-tiered service model. It may also trigger an increase in
transfer requests to relocate to the seniors portfolio prior to the creation of the new
entity, resulting in frustration when said requests are not accommodated due to
lengthy waiting list for transfer requests. Tenant transfer requests will likely rise after
the transition.
Tenants in seniors buildings identify strongly with the surrounding community, and
not necessarily to the building. Tenant consultations in each of the seniors buildings
would be the best way to uncover these kinds of community ties.
Any changes to staffing models or changes to staff will likely create numerous
complaints as many seniors have developed strong bonds with site and support
staff.
Impact on Financial Sustainability of TCHC
Removal of seniors portfolio leaves TCHC in a worse financial position. For
example:
o These units represent 25% of the asset base and 38% of TCHCs net
operating income (excluding administration).
o One would hope that a reduction in the number of units in the portfolio
would result in proportionately equal reduction in net operating income.
Unfortunately, this is not the case, as TOt-IC would be proportionately
$22,000,000 per year worse off than it is now.
o Seniors generally have less arrears than the tenants in the non-seniors
portfolio. The average arrears rate for the seniors portfolio is $141 per
unit, compared to a rate of S262 per unit in the rest of the portfolio.
o TCHC would lose $4.4 million a year in ongoing stable cash flow from
commercial revenues.
Removal of these assets without substantive improvements to the current funding
model will have significant negative consequences for the remaining portfolio that is
already strained.

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Toronto Community Housing
Transfer of 5,000 Units to Existing Non-Profits
In addition to the considerations outlined for all proposed transfers, the following are
specific to transfers to the non-profit sector.
Asset Considerations
Depending on which buildings are identified to be transferred, there will be operating
and capital financial impacts that have not yet been modelled, as well as significant
capital repair backlogs associated with the assets identified.
Existing Programs & Vulnerability Issues in these buildings
There is no provision in the Residential Tenancies Act or the Housing Services Act
for eviction of existing tenants upon sale of assets. Given the range of tenant needs
and demographics within any individual building, it may be challenging to secure a
housing provider that will be willing, able and funded to meet all of these needs.
Tenant ImpactlPossible Tenant Perceptions
Some tenants might not want to continue living in a building that is transferred to a
supportive housing provider or non-profit provider. The Citys process will need to
consider and address these concerns.
GovernancelLegal
There is a need to consider the best way to transfer an asset sale, head lease,
referral agreements etc. and to analyse the financial, labour and governance

implications of each approach.

Impact on Financial Sustainability of TCHC
Depending on how head leases are developed by the CityITCHC and the obligation
of the new provider, TCHC could see a loss in possible capital funding to address its
backlog. For example, currently a typical TCHC head lease sees the new provider
taking on the capital repair work in exchange for low rent over a long period of time.
Capacity of the Sector
Social housing providers in Toronto average around 120 units each with the largest
of them being under 900 units. Consideration should be given to whether existing
non-profit entities will actually be able or willing to develop business cases for
funding; or be able to project manage large scale capital repair projects.

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Toronto Community Housing
Divestment of Scattered Home Portfolio
In addition to the considerations outlined for all proposed transfers, the following are
specific to the transfer or sale of the scattered home portfolio.

Cost of Implementation
The average transaction cost to TCHC of a single non-complex home sale is
approximately $44,000. This includes brokerage fees, tenant relocation costs and
staff resources.
Asset Considerations
Consideration should be given to the impact of removing units from rent supplement
pool (many scattered houses and rooming houses are in this pool) and the need to
replace them with like units from within that same small (5000 units) pool.
Tenant Impact/Possible Tenant Perceptions
As per previous City Council and Ministry of Municipal Affairs and Housing direction,
TCHC was prevented from evicting any tenants to facilitate sale of houses. Tenants
in scattered homes were strongly opposed to the sale/transfer of assets when it was
proposed previously. While some houses were approved for sale, some tenants still
remain as they did not agree to move. As such, those units have not been sold.
Impact on Financial Sustainability of TCHC
TCHC has been working to identify houses that could be converted to market rent.
These homes represent a significant income stream to fund the rest of the portfolio
and strengthen the balance sheet of the corporation. For example, in 2016 TCHC
converted 13 houses in the Beaches and Dufferin Grove areas to market rent. These
houses now provide TCHC with $39,000 additional revenue per month or $468,000
per year. While the value of this program may seem small, the program could be
expanded to 35 additional houses this year. On a pro-rata basis, growing this
approach has the potential of increasing TCHC net income by up to $2 million per
year.

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Toronto Community Housing
Toronto Community
Housing Corporation
931 Yonge Street
Toronto, ON
M4W 2H2
Toronto
Community
Housing
PRIVATE AND CONFIDENTIAL

MEMORANDUM

DATE: March 17, 2017

TO: Greg Spearn

President and Chief Executive Officer (Interim)

Cathy Barker
Vice President, Human Resources

FROM: Jennifer Bond

Director, Labour Relations & Legal Counsel

Employment Law Considerations of Tenants First Report

This opinion is provided pursuant to the recommendations in the Tenants First: A Way
Forward for Toronto Community Housing and Social Housing in Toronto.

More specifically, I understand the City of Toronto (wCityfl) will be recommending the
following:

The seniors portfolio of more than 65 buildings (14,000 units) in operating units
(OU) A and B be turned into a City division, a new non-profit or some other type
of entity;

The transfer of 5,000 additional units to other non-profit entities; and/or

Divestment of the scattered housing portfolio.

The following will advise on the potential employment law considerations for the
aforementioned transactions. These considerations will need to be assessed more
thoroughly as transaction details are solidified.

Please note that labour relations considerations are provided under separate cover.

Employment Law Considerations

Termination of Employment

If any management/exempt employees are terminated from their employment with

Toronto Community Housing (TCH) as a result of the aforementioned transactions,
TCH would need to provide the requisite amount of notice or pay in lieu of notice to the
affected employees (the Notice Period) including any required benefit continuation.

The Notice Period required depends upon the content of individual employment
contracts. Therefore, if any management/exempt employees are terminated as a result
of the aforementioned transactions, each employment contracts will need to be
examined to determine the notice entitlements.

At TCH, an employment contract contains one of three types of termination provisions:

(1) A clause limiting entitlement to the Ontario, Employment Standards Act, 2000
rESA)

The notice to which an employee is entitled is limited to the minimum set out in the ESA.
An employee in Ontario is entitled to notice of termination (or termination pay in lieu of
notice) if he or she has been continuously employed for at least three months. The
amount of notice depends on the employees service as set out in the following chart:

Period of Employment Notice Required

Less than one year One week
One year or more but less than three years Two weeks
Three years or more but less than four years Three weeks
Four years or more but less than five years Four weeks
Five years or more but less than six years Five weeks
Six years or more but less than seven years Six weeks
Seven years or more but less than eight years Seven weeks
Eight years or more Eight weeks

Under the ESA, an employer must continue the employees compensation and
contributions to benefit plans during the ESA Notice Period. TCH should therefore be

7
prepared to continue each employees participation in benefit programs and the OMERS
pension plan during the ESA Notice Period.

In addition to termination pay, an employee may be entitled to severance pay pursuant

to the ESA. An employee qualifies for severance pay if his or her employment is
severed and he or she:

has worked for the employer for five or more years

and
his or her employer:
o has a payroll in Ontario of at least $2.5 million;
or
o severed the employment of 50 or more employees in a six-month period
because all or part of the business permanently closed.

If the employee qualifies, he or she is entitled to an additional week per year of service
(including prorated amount for partial years of service) to a maximum of 26 weeks.

(2) A clause providing for entitlement pursuant to the common law or the absence of a
clause entirely in which case there is a presumption of common law notice.

If an employment contract does not clearly limit an employees entitlement to the ESA
minimums (or the employee has no employment contract) an employee will be entitled
to notice or pay in lieu of notice under the common law as determined by the courts,
Common law notice is significantly higher than the ESA. Furthermore, the courts have
held that an employee is entitled to all other compensation during the applicable Notice
Period, including but not limited to, benefit and pension plan participation the employee
would have continued to receive had they remained an employee with the organization.

In determining the appropriate amount of common law notice, the courts consider
several factors including but not limited to:

years of service
age
level of the position
salary
inducement

The courts have confirmed there is no standard formula for calculating the notice
period. In assessing the appropriate amount of notice, the courts will examine each case
individuafly based on the above noted factors. This can result in a debate between an
employer and the employee regarding the appropriate period of notice.

The courts will often apply a maximum of 12 months notice for lower level positions
(e.g., clerical and general labour), with a maximum of 24 months notice for higher level
positions (e.g., senior management).

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Please note the common law notice period is inclusive of, and not in addition to, the ESA
Notice Period and severance pay.

(3) A clause that contains a fixed notice period or a formula for calculating a notice
period which is greater than the amount set out in the ESA.

To eliminate the debate regarding the appropriate period of common law notice, an
employment contract can specify another notice period or a formula for calculating the
common law Notice Period which is greater than the ESA Notice Period.

Mitigation

The duty to mitigate requires the former employee who has suffered a loss or damages
as a result of the employers breach of contract to take reasonable steps to lessen or
alleviate that loss or damages. In the employment context, this means that an employee
who has suffered a termination of employment has a legal obligation to take reasonable
steps to attempt to find new employment and accept reasonable offers of alternate
employment.

Where an employee has a legal obligation to mitigate, the employer bears the
evidentiary burden of proving that the employee did not take reasonable steps to
attempt to mitigate his or her damages.

The duty to mitigate applies differently depending on the type of termination clause
contained in the employment contract:

(1) A clause limiting entitlement to the ESA.

Termination pay and severance play (if applicable) are not subject to mitigation.

(2) A clause providing for entitlement pursuant to the common law or the absence of a
clause entirely in which case there is a presumption of common law notice.

As previously mentioned, the common law Notice Period is inclusive of, not in addition
to, ESA termination and severance pay (if applicable). As such, the ESA portion is not
subject to mitigation; however, the balance of the notice period will be subject to the
obligation to mitigate.

This means that the common law Notice Period will be reduced by the amount of
employment income the former employee earned from other sources during the
common law notice period, and is also subject to reduction should the employee not
take adequate steps to locate alternate employment income.

(3) A clause that contains a fixed notice period or a formula for calculating the notice
period which is greater than amount set out in the ESA.

4
An employment contract that contains a termination clause that sets out a fixed notice
period or a formula for calculating the notice period wiH not be subject to the duty to
mitigate unless the employment contract explicitly states that the termination payments
are subject to the duty to mitigate. For example, some TCH employment contracts
contain a proviso that employment income and benefit continuation from other sources
will be deducted from the amounts and benefit continuation in the employment contract
which exceed the ESA amounts.

An employees duty to mitigate may require him or her to accept a comparable position
with the new entity should a position be offered. With this in mind, once further details of
the transaction are finalized, the organization can review strategies to mitigate the risk of
higher common law Notice Periods and any corresponding obligation to continue
benefits during the Notice Period.

Mass Terminations

The ESA has special provisions, at section 58, that apply to mass terminations entitling
employees to a higher minimum ESA Notice Period. These provisions take precedent
over the normal requirement for notice, or pay in lieu of notice. The basis for the
increase in entitlement is that it will be more difficult for a large number of employees to
locate alternate employment in or around the same time period.

The mass termination provisions apply where an employer terminates the employment
of 50 or more employees in the same four-week period. The notice requirements under
these provisions are as follows:

Period of Employment Notice Required

The number of employees whose employment Eight weeks
is terminated is 50 or more but fewer than 200
The number of employees whose employment Twelve Weeks
is terminated is 200 or more but fewer than 500
The number of employees whose employment Sixteen Weeks
is terminated is 500 or more

Should section 58 of the ESA be triggered, the ESA also requires that notice be given to
the Ministry of Labour and imposes posting obligations within the workplace.

Please note section 58 does not apply if the number of employees whose em ployment is
terminated is ten percent or less (of employees who have been employed there for at
least three months) and the terminations were not caused by the permanent
discontinuance of part of the employers business.

5
The transactions contemplated by the City may result in terminations of this magnitude if
combined with bargaining unit downsizing and should be considered further as
transaction details are solidified. Once further details of the transaction are finalized, the
organization can review strategies, if any, to mitigate the risk of exceeding the 50
employee in the four week period threshold.

Continuity of Service

Section s. 9(1) and (3) of the ESA speak to the continuity of employee service upon the
sale of business. As is the case with the Labour Relations Act, the ESA defines sale of a
business very broadly, including a lease, transfer, or disposal of a business in any
manner.

The ESA deems the employees employment with the vendor to have been with the
purchaser for the purpose of calculating the length of employment. This means that if an
employee sells the business or part of the business and the purchaser subsequently
employs the employee, the employment of the employee is deemed not to have been
terminated or severed under the ESA, and the service with the vendor will be counted
when calculating the applicable ESA Notice Period, as summarized in the first chart.

There is an exception to this rule. If the purchaser does not actually hire the employee
until more than 13 weeks have passed (since the earlier of the sale of the business and
the employees last day with the vendor) there is a break in service for the purpose of
this provision and employment with the vendor will not be deemed to be employment
with the purchaser for the purposes of the ESA.

Assignment of Employment Contracts

The standard TCH employment agreement contains an assignment clause that allows
TCH to assign employment agreements to any affiliate of TCH (including a subsidiary or
parent) without consent and without advance notice. The clause further provides that
TCH may assign the agreement to any non-affiliated organization upon obtaining the
employees written consent to such assignment.

In employment law, where there is an asset purchase rather than a share purchase, the
courts are more reluctant to conclude that all terms of a written employment agreement
are binding on the purchaser. Nonetheless, this provision may provide TCH with some
flexibility in employee movement upon sale of business.

Constructive Dismissal

Assuming the transaction takes the form of an asset sale similar to that of Access
Housing Connections, the purchaser has two options:

(1) offer employment to the vendors employees, or

(2) not offer employment to all or some of the vendors employees.

6
In circumstances where the purchaser does not offer employment to the vendors
employees, such employees will be either terminated by operation of law on closing of
the sale or, will remain employees of the vendor if the vendor continues to operate. In
the latter, TCH either may not have an alternate position for the employee, or the
alternate position is not comparable to their existing job in terms of type, salary, benefits,
or reporting structure.

A constructive dismissal occurs where the employer unilaterally makes a substantial

change to an essential term of the contract of employment. The damages upon
constructive dismissal is the same as an employees entitlement upon termination of
employment. In the circumstances outlined in the preceding paragraph, there is a
significant risk that a constructive dismissal would result.

In order to avoid any constructive dismissal risk, management/exempt employees

should be offered either a new employment agreement with the purchaser under
comparable terms, or be given notice of termination or pay in lieu of notice pursuant to
their written employment contract with TCH. As noted above, an employees duty to
mitigate may require him or her to accept a comparable position with the purchaser
should a position be available. If an employee is offered employment by the purchaser
on substantially similar terms as the employees enjoyed prior to the transaction, TCH
can argue that the employees ought to have accepted the offer in mitigation of any
damages and, at minimum, reduce the damages which the employee may otherwise be
entitled to.

If an alternate position is being offered with TCH which is not comparable to their
existing job, the employee should still be given notice of termination or pay in lieu of
notice pursuant to their written employment contract with TCH, and offered re
employment on fresh terms in order to mitigate the constructive dismissal risk. Should
the offer of re-employment not be accepted by the employee, TCH would have fulfilled
their obligations to the employee in accordance with the employment contract.

If the new contract with the purchaser contains a change to a term of employment such
as a change in salary, the case law supports the employees obligation to mitigate their
damages by accepting the new contract with the purchaser despite the change. The
reason being, the duty to mitigate includes accepting a less comparable position to
reduce their damages while they search for alternative employment. Should an
employee accept the position, the employees damages would be limited to the
difference in salary. In other words, should the employee begin a claim for wrongful
dismissal against TCH, the court would deduct the employment income they earned at
the purchaser during the applicable Notice Period.

Please note the constructive dismissal risk is likely higher in the transfer of 5,000
additional units to other social housing providers, than it would be with the transfer of the
seniors portfolio to the City or a new entity. The reason being these providers will likely
not be in a position to offer a comparable pension and benefit plan, such as OMERS.

7
Pension Considerations

There are important considerations arising out of the Pension Benefits Act (PBA). One
of the mare serious issues has been litigated and concerns the wind-up of a pension
plan after the sale of a business. In this case, an employer with a pension plan far its
employees sold its assets to a purchaser, who in turn hired most of the employers
employees and initiated a new pension plan. The purchaser then ceased business
approximately two years after the purchase. The ceasing of business by the purchaser
was interpreted by the Pension Commission as the ceasing of business of the original
employer, and thereby triggered the potential partial wind-up of the original employers
pension plan. Despite the fact that the original employer had personally ceased
conducting business for more than two years, the subsequent cease by the purchaser
created liabilities and obligations for the original employer.1

It is also important to consider that employees may lose OMERS eligibility if transferred
to an ineligible entity. Eligibility depends on whether the new employer will be
considered an associated employer under the PBA.

Workplace Safety and Insurance Act (WSIA)

All of the aforementioned transactions will also need to consider Workplace Safety and
Insurance Board (WSIB) implications. Section 146 of the WSIA provides that in the
case of a sale, a successor employer is liable for all amounts owing by a predecessor
employer immediately prior to the sale. Accordingly, the Purchaser could become liable
for the outstanding account held by the WSIB in respect of claims and casts incurred by
the vendor with respect to any impacted employees.

In order to provide parties to a transaction with necessary assurances in respect of

outstanding accounts, the WSIB will issue a Purchasers Certificate. In issuing a
Purchasers Certificate, the WSIB waives any potential for purchasers liability with
respect to the disposal by an original employer whose account is in good standing.

Accordingly, should the vendor obtain a Purchasers Certificate from the WSIB and
produce same to the Purchaser at the time of the closing of the transaction, the
Purchaser will not become liable for the vendors financial liability related to the WSIB
costs associated with impacted employees. A Purchasers Certificate is valid for 30
days. It will be effective so long as the sale occurs within thirty days of its date of issue.

Additional Considerations

In addition to all the foregoing considerations, in the context of an asset sale, a

purchaser may also be responsible for:

GenCorp Canada Inc. v. Ontario (Superintendent of Pensions), 1995 CarswellOnt 1038, [1995J O.J. No. 3768

8
 Complying with any outstanding orders issued pursuant to occupational health
and safety legislation
Accrued vacation pay or lieu time owing by the vendor to its employees, an
entitlement which may be significant if employees are permitted to carry over
these entitlements from year to year
Funds owing for leaves of absence at the time of the sale of business
Complying with any pay equity plans established by the vendor and making any
necessary pay equity adjustments
Future termination and severance obligations

9
Toronto Community
Housing Corporation
931 Yonge Street
Toronto, ON
M4W 2H2

Toronto
PRIVATE AND CONFIDENTIAL Community
Housing

MEMORANDUM
DATE: March 17, 2017

TO: Greg Spearn

President and Chief Executive Officer (Interim)

Cathy Barker
Vice President, Human Resources

FROM: Jennifer Bond

Director, Labour Relations & Legal Counsel

Labour Relations Considerations for Tenants First Report

This opinion is provided pursuant to the recommendations in the Tenants First: A Way
Forward for Toronto Community Housing and Social Housing in Toronto.

More specifically, I understand the City of Toronto (City) will be recommending the
following:

The seniors portfolio of more than 65 buildings (14,000 units) in operating units
(OU) A and B be turned into a City division, a new non-profit or some other type
of entity;

The transfer of 5,000 additional units to other non-profit entities; and/or

Divestment of the scattered housing portfolio.

The foflowing analysis will advise on the potential labour relations considerations of each
of the aforementioned transactions in the non-construction industry. These
considerations will need to be considered and assessed more thoroughly as transaction
details are solidified.
Please note that employment law considerations for management/exempt staff are
included under separate cover.

(1) The seniors portfolio of more than 65 buildings (14,000 units) in OUA and
OtiS be turned into a City division, a new non-profit or some other type of entity.

Assuming the transaction takes the form of an asset sale similar to that of Access
Housing Connections, the transaction would likely constitute a sale of business pursuant
to section 69 of the Ontario Labour Relations Act (LRA). The term sale is broadly
defined in the LRA and includes leases, transfers and any other manner of disposition.
Cases under section 69 of the LRA are determined by the Ontario Labour Relations
Board (OLRB).

In the event the OLRB determines the transaction constitutes a sale of business within
the meaning of section 69 of the LRA, the City or new entity (referred to as the
Purchaser for the purposes of this section) would be declared the successor employer
and be bound to the existing collective agreement(s) as if it had been a party thereto as
of the effective date of the sale. Therefore, the collective agreement would remain in
place with the Purchaser until such time as the parties can give notice to bargain (90
days before the expiry of the existing collective agreement) and a new collective
agreement is negotiated.

As part of the Purchasers responsibility under the old collective agreement(s), the
Purchaser is responsible for all outstanding union grievances filed prior to the sale
unless the parties agree otherwise. Recent case law confirms that being bound by the
collective agreement also makes the successor liable for unpaid obligations of the
predecessor employer that arose under that collective agreement prior to the sale.1

Where Toronto Community Housing (TCH) has or is entitled to give notice to bargain,
the collective agreement will continue to apply to the Purchaser and the union is entitled
to give notice to the Purchaser.

Change of Character

Section 69(5) of the LRA permits the Purchaser to apply to the OLRB to terminate the
unions bargaining rights after a sale of business if the Purchaser changes the character
of the business such that it is substantially different from the business of TCH. In such
a situation, the Purchaser can bring an application within 60 days of the sale. While this
might be a risk if the City transfers DUA and OUB into its long-term care division or if the
new entity operates akin to a long-term care facility, it is unlikely that such a substantial
change could be made within 60 days of the transaction so as to meet the conditions set
out in this section.

It should be noted that a long term care facility is considered a hospital under the
Hospital Labour Disputes Arbitration Act (HLDAA) and hospital employees, including

Seneca, 2016 Carsw&IQnt 11070

employees of long-term care homes, do not have the right to strike. As such, any
unresolved bargaining issues are settled through binding arbitration pursuant to HLDAA.

Pub/ic Sector Labour Re/ations Transition Act

There may also be additional considerations pursuant to the Public Sector Labour
Relations Transition Act, 1997 (PSLRTA). PSLRTA was created, inter alia, to facilitate
the establishment of effective and rationalized bargaining unit structures in restructured
broader public sector organizations.

The PSLRTA applies upon:

(a) the amalgamation of two or more municipalities or two or more local boards;

(b) the dissolution of two or more municipalities and the incorporation of their
inhabitants into a new municipality;

(c) the dissolution of two or more local boards and the establishment of a new local
board that assumes the powers and authority of the dissolved local boards; or

(d) the dissolution of an upper-tier municipality if, as part of that restructuring, two or
more municipalities that form part of the upper-tier municipality for municipal
purposes are amalgamated or are dissolved and their inhabitants incorporated into a
new municipality.

This transaction may fall within the purview of the PSLRTA. Section 19.1 defines partial
integrations:

partial integration means an event to which PSLRTA applies where,

(a) some or all of the programs, services or functions performed by employees in a

particular bargaining unit at a predecessor employer are transferred to or
otherwise integrated with a successor employer, and

(b) on and after the changeover date, the predecessor employer continues to
operate.

This definition may render the amalgamation a partial integration under PSLRTA even
though the predecessor board still exists.

In any event, even if the transaction does not constitute a partial amalgamation, sections
12 and 36, which requires the Purchaser to recognize seniority with all predecessor
employers upon sale of business, may apply because the Purchaser is a municipality or
local board. This consideration will need to be considered more thoroughly as
transaction details are solidified.

3
(2) The transfer of 5,000 additional units to other social housing providers

There is an argument to be made that the transfer of 5,000 units from TCH to other
social housing providers (the Provider) with whom the City contracts is not a sale of
business within the meaning of section 69 of the LRA, if TCH does not contract directly
with the Provider to effect the sale.

In Ottawa-Carleton Lifeskills Inc (2014 CanLIl 75042), the arbitrator found that the
intervention of a third-party intermediary through which the transfer is affected does not
preclude a finding of a sale of business. However, the arbitrator further noted that
whether or not there is an intermediary in the transaction, in order to find a sale of
business, the transfer must still be from the predecessor to the successor, and the fact
that the alleged purchaser may wind up with a similar business to the predecessor does
not constitute a sale if the business did not actually come from the predecessor.

That said, given the expansive definition that the OLRB has provided to the definition of
a business, particularly in the public sector, it is likely the transfer will constitute a sale of
business within the meaning of the LRA. This is because the essential business of
providing social housing would be continued after the transfer has occurred. If there is a
sale of business within the meaning of the LRA, the aforementioned successor rights
under section 69 of the LRA would apply. Where the parties disagree on whether the
business has been sold pursuant to the LRA, any party can make an application to the
OLRB.

It is important to note that union certification is not based on the identity of particular
employees; rather, it is based on the identity of the employer, geographic parameters,
and on job functions. Therefore, if the same job functions are performed within the same
geographic parameters that were previously covered by the collective agreement, the
union and the collective agreement remain in place even if the Provider does not hire
the old employees.

Existing Collective Agreement

If the Provider is bound to a different bargaining unit, there would likely be

intermingling, or overlap, of the two separate bargaining units that may necessitate a
vote by the CLRB. Intermingling refers to operational mixing of the businesses and
integration in terms of structure, policy, and managerial reporting.

In these circumstances, both collective agreements initially remain in force. Either of the
unions or the Provider can make an application to the OLRB. The OLRB will decide
what bargaining unit or units are appropriate. The Provider cannot assume that the
larger union will prevail, and must adhere to both collective agreements. The OLRB has
ordered representation votes even where more than 80% of the employees were
represented by one union.2 Since both collective agreements remain in force until the

2 Perth & Smith Falls District Hospital [2001] OLRB Rep

419

4
OLRB makes a declaration otherwise, the Provider must cope with the fragmentation of
labour relations in the interim which can be challenging.

Please note that if the PSLRTA is deemed applicable, the Ministry of Labour passed a
regulation on July 1, 2016 instituting a mandatory takeover if a bargaining unit
represents more than 80% of employees.

No Collective Agreement

If the Provider is not unionized, the bargaining status of both the transferred and existing
employees can be precarious. The unions original certification will generally either cover
all employees except managers and confidential employees or cover employees who
perform certain functions. If the Provider intermingles union and non-union employees,
the union or the Provider can make an application to the OLRB. It is important to note
the OLRB will likely only address significant intermingling.

Upon receiving the application, the OLRB can determine whether the employees are
represented by the union and the appropriate composition of the bargaining unit, which
will in turn determine which employees are represented by the union. If there is a
change to the bargaining unit, the union will typically need to win the support of the
employees. If, in the combination of the two workforces, there are many more unionized
employees in the relevant group than there are non-unionized employees, the OLRB will
often just declare that the union represents all the employees. Otherwise, the OLRB will
order a representation vote. If the majority of the employees vote against the union, the
union will no longer represent any of the employees. If they vote in favour, it will
represent all employees.

(3) Divestment of the scattered housing portfolio

If the divestment of the scattered housing portfolio takes the form of a private sale, it is
unlikely to be considered a sale of business pursuant to section 69 of the LRA. These
circumstances tend to be those where the purchaser bought the land, buildings or
equipment, but not the accounts receivable, inventory, licences, managerial expertise
etc. The OLRB has held that a mere transfer or disposition of assets does not constitute
a sale of a business within the meaning of section 69 of the LRA.

In any event, following the divestment, it is unlikely the work falling within the scope of
any existing collective agreements will be performed rendering the issue moot. As such,
the existing complement of staff servicing the scattered housing portfolio would likely be
laid off upon sale. This will trigger termination/severance obligations (i.e. payment of sick
pay gratuity) under the applicable collective agreement, under the ESA and theoretically
under common law as well if not displaced by the collective agreement. Please note the
ESA has special provisions that apply to mass terminations and provide greater notice
requirements and reporting obligations to the Ministry of Labour.

5
If there is a transfer of assets to another non-profit or third party without a change in
mandate, this would likely constitute a sale of business within the meaning of the CRA
and the aforementioned successor rights would appy.

Building Services Providers

All of the aforementioned transactions need to consider the implications for building
services providers pursuant to the ESA.

A building services provider is a person or company that provides cleaning, security, or

food services for a premise. A provider can also offer property management, parking
garage, parking lot and concession stand services related only to a building, its
occupants and visitors.

The owner or manager of a building is considered a building services provider if that

owner or manager provides these services to the building that they own or manage.

If a building services provider is replaced by a new provider for the same general
category of building services at the premises, the new provider may choose not to hire
the employees of the former provider. However, the new provider must then, in most
cases, comply with the Termination and Severance of Employment sections (Part XV) of
the ESA as if these employees had been terminated and/or severed by the new
provider. In these narrow circumstances, and subject to the building services provider
qualifying criteria set out in the ESA and other termination entitlements as set out in the
collective agreement, TCH may be relieved of any ESA severance or termination pay
obligations towards terminated staff.

For the building services definition to be engaged, both providers, (i.e. the replaced
provider and the new provider) must be providing the same general category of building
services at the premises. For example, cleaning services would have to be replaced by
other cleaning services. However, since the provision has been interpreted by courts
and tribunals on only a few rare occasions, there are no cases that contemplate how the
provisions are to be interpreted in a situation similar to the current asset purchase,
where the nature of the business carried out at the premises changes, but building
services functions remain.

The Termination and Severance of Employment sections of the ESA apply where an
employee in Ontario has been continuously employed for at least three months. The
amount of notice to which an employee is entitled depends on his or her years of
service.

6
The following chart specifies the amount of notice required:

Period of Employment Notice Required

Less than one year One week
One year or more but less than three years Two weeks
Three years or more but less than four years Three weeks
Four years or more but less than five years Four weeks
Five years or more but less than six years Five weeks
Six years or more but less than seven years Six weeks
Seven years or more but less than eight years Seven weeks
Eight years or more Eight weeks

In addition to termination pay, an employee may be entitled to severance pay pursuant

to the ESA. An employee qualifies for severance pay if his or her employment is severed
and he or she:

has worked for the employer for five or more years

and
his or her employer:
o has a payroll in Ontario of at least S2.5 million;
or
o severed the employment of 50 or more employees in a six-month period
because all or part of the business permanently closed.

If the employee qualifies, he or she is entitled to an additional week per year of service
(including prorated amount for partial years of service) to a maximum of 26 weeks.

Pension Considerations

There are important considerations arising out of the Pension Benefits Act QPBA9. One
of the more serious issues has been litigated and concerns the wind-up of a pension
plan after the sale of a business. In this case, an employer with a pension plan for its
employees sold its assets to a purchaser, who in turn hired most of the employers
employees and initiated a new pension plan. The purchaser then ceased business
approximately two years after the purchase. The ceasing of business by the purchaser
was interpreted by the Pension Commission as the ceasing of business of the original
employer, and thereby triggered the potential partial wind-up of the original employers
pension plan. Despite the fact that the original employer had personally ceased
conducting business for more than two years, the subsequent cease by the purchaser
created liabilities and obligations for the original employer.3

GonCorp Canada Inc. v. Ontario (Superintendent of Pensions), 1995 CarswellOn( 1038, [1995] 0.1 ND 3768

7
It is also important to consider that employees may lose OMERS eligibility if transferred
to an ineligible entity. Eligibility depends on whether the new employer will be
considered an associated employer under the PBA.

Workplace Safety and Insurance Act (WSIA)

All of the aforementioned transactions will also need to consider Workplace Safety and
Insurance Board (WSIB) implications. Section 146 of the WSIA provides that in the
case of a sale, a successor employer is liable for all amounts owing by a predecessor
employer immediately prior to the sale. Accordingly, the purchaser could become liable
for the outstanding account held by the WSIB in respect of claims and costs incurred by
the vendor with respect to any impacted employees.

In order to provide parties to a transaction with necessary assurances in respect of

outstanding accounts, the WSIB will issue a Purchasers Certificate. In issuing a
Purchasers Certificate, the WSIB waives any potential for purchasers liability with
respect to the disposal by an original employer whose account is in good standing.

Accordingly, should the vendor obtain a Purchasers Certificate from the WSIB and
produce same to the purchaser at the time of the closing of the transaction, the
purchaser will not become liable for the vendors financial liability related to the WSIB
costs associated with impacted employees. A Purchasers Certificate is valid for 30
days. It will be effective so long as the sale occurs within thirty days of its date of issue.

8
Toronto Community
Housing Corporation
931 Yonge Street
Toronto, ON
M4W 2H2

Toronto
Community
PRIVATE AND CONFIDENTIAL Housing

MEMORANDUM

DATE: March 17, 2017

TO: Greg Spearn

President and Chief Executive Officer (Interim)

Cathy Barker
Vice President, Human Resources

FROM: Jennifer Bond

Director, Labour Relations & Legal Counsel

Staffing Considerations for Tenants First Report

The enclosed employee information is provided pursuant to the recommendation in the

Tenants First: A Way Forward for Toronto Community Housing and Social Housing in
Toronto. More specifically, I understand the City of Toronto may be recommending the
following:

The seniors portfolio of more than 65 buildings (14,000 units) in operating

units (CU) A and B be turned into a City of Toronto division, a new non
profit or some other type of entity;

The transfer of 5,000 additional units to other non-profit entities; andfor

Divestment of the scattered housing portfolio.

Transfer the Seniors Portfolio

The following is the breakdown of the 2017 budgeted complement of QUA and CUB as
at March 10, 2017.
Position OUA OUB Total

Operating Unit Manager 1 1 2

Community Housing Supervisor 2 2 4
Tenant Service Coordinator 13 12 25
CU Clerks 2 2 4
Senior Superintendent 12 15 27
Superintendent 23 12 35
Custodial Maintenance Person 7 14 21
Custodian 13 9 22
Cleaners 11 11 22
Community Service Coordinator 7 7 14
Building and Community Facilitator 8 7 15
TOTAL 99 92 191

The transfer of these OUs will likely result in a reduction in the 2017 budgeted
Complement fl the following support functions.1
Position OUA OUB Total

Facilities Management 32 32 64
Human Resources 7 7 14
Finance 8 8 16
Legal 7 7 14
IT 8 8 16
Communications 3 3 6
Procurement 3 3 6
Program Services 5 5 10
Dispatch 1 1 2
OCHE 1 1 2
CSU 18 18 36
TOTAL 75 75 150

Calculations based on budgeted number of employees in the department as a ratio of the units transferred to the overall portfolio.
No development projects are in the affected OUs and as such, were not included in the calculation.
Transfer of 5,000 Additional Units

Toronto Community Housing has a total of 2,236 budgeted employees as at March 10,
2017. The City of Toronto has not specified which units will be considered for transfer;
however, to aid in the analysis, we have included a breakdown of the 2017 budgeted
complement in OUC which contains 4,271 units as an approximation of the number of
affected staff.
Positions OUC

Operating Unit Manager 1

community Housing Supervisor 1
Tenant Service coordinator 6
ou clerks 2
Senior Superintendent 9
Superintendent 0
custodial Maintenance Person 14
custodian 3
cleaners 5
community Service Coordinator 3
Building and community Facilitator 5
TOTAL 49

Please note that the numbers of staff in DUC is proportionately less than those in QUA
and DUB due to the fact that QUA and DUB have higher staff ratios to meet vulnerability
needs.

As previously mentioned, the transfer of this DU will likely result in a reduction in 2017
budgeted complement in the following support functions:2

Positions OUC

Facilities Management 19
Human Resources 4
Finance 5
Legal 4
IT 5
Communications 2
Procurement 2
Program Services 3
Dispatch 1
OCHE 1
CSU 11
TOTAL 57

2
Please see calculation rationale in footnote 1.

3
Divestment of Scattered Housing Portfolio

The following is the breakdown of the 2017 budgeted complement in the scattered
housing portfolio as at March 10, 2017. The budgeted complement of the rooming
houses in South St. Jamestown (OUK) are also included as this rooming house has
been highly visible to the City of Toronto:

Scattered South St.

Position Total
Houses Jamestown

Employees
Operating Unit Manager 0 0.09 0.09
Community Housing Supervisor 1 0.2 6.2
Tenant Service Coordinator 1 0.8 7.8
OU Clerks 0 0.2 0.2
Senior Superintendent 4 1 5
Superintendent 0 0.2 0.2
Custodial Maintenance Person 0 1 1
Custodian 0 0.6 0.6
Cleaners 4 1.5 5.5
Community Service Coordinator 1 1 2
Building and community Facilitator 1 1 2
TOTAL 12 7.59 19.59

The transfer of these OUs will likely result in a reduction in 2017 budgeted complement
in the following support functions:3

Scattered South St.

Position Total
Houses Jamestown

Facilities Management 0.81 1 1.81

Human Resources 0.17 0.30 0.47
Finance 0.20 0.36 0.56
Legal 0.18 0.32 0.50
IT 0.20 0.36 0.56
Communications 0.07 0.12 0.19
Procurement 0.08 0.15 0.23
Program Services 0.14 0.25 0.39
Dispatch 0.04 0.06 0.10
OCHE 0.02 0.04 0.06
CSU 0.47 0.84 1 .31
TOTAL 2.38 4 6.38

Please see calculation rationale in footnote 1.