In August, Brydges Property Management must prepare a draft budget for 2027. To facilitate this process, the OGHC board provides the Finance Committee with budgeting instructions.

Moved Second: The Finance Committee be instructed to draft a budget that includes:

1. A housing charge increase of 7 percent
2. Provision for the funding of a full-time maintenance position.
3. An increase in the 2026 budgeted contribution to the replacement reserve at the rate of inflation.
4. The following guest room rate increases: $60 (currently $55; last increased in 2025) for the south room; $25 (currently $20; last increased in 2023) for the north room.
5. The following room rate increase: $55 (no change) for private use; $115 for non-profits (currently $110) last changed in 2025; $300 for for-profit users (currently $220), last changed in 2025.

The executive is recommending a 7 percent increase in the housing charge to protect OGHC’s long-term financial sustainability. For several years, the co-op was able to meet operating costs and replacement reserve targets while absorbing government-imposed housing charge freezes. Still, the full-year impact of the mortgage renewal, the loss of the education property tax rebate, inflationary pressures, and the need to reduce reliance on volunteer maintenance work require a larger adjustment. Last year’s housing charge increase was the first in a two-step process that will allow OGHC to absorb these structural costs, begin rebuilding annual reserve contributions, fund a more sustainable maintenance model, and create a path toward more modest increases in future years.

While the budget details will be developed in the coming months, the executive recognizes that a 7 percent increase is significant and warrants a detailed explanation. These instructions are only a first step: the Finance Committee will review the Brydges draft budget and then present it to the Board. The Board will review and adopt a budget in principle that will be presented to the membership for comment. The Board will then meet to give the budget final approval and submit it to Manitoba Housing. Manitoba Housing has the right to approve or modify the requested housing charge increase.

Limits on Housing Charge Increases

Old Grace Housing Co-operative has two Financial Assistance Agreements with Manitoba Housing (1 for 200 Arlington and 1 for the four townhouses on Evanson). Under these agreements, Manitoba Housing provided a $2.8-million forgivable loan to construct 34 units (the Affordable Units). Among the stipulations of the agreement are requirements that we:

• Not increase housing charges for the Affordable Units at a rate above the rate set under the Residential Tenancies Act.
• Not increase housing charges above the province’s Affordable Housing Rental Program limit, which is based on median private-sector market rents.

In effect, Manitoba Housing rules impose two limits: a maximum charge for each unit type, and a separate annual limit on how quickly charges may rise toward that maximum.

The long-term financial sustainability of the co-op was based on the understanding that the co-op would be able to levy housing charges at the median market rate. When the co-op opened, it set its housing charges at the limit allowed by the Affordable Housing Rental Program limit. This paper will refer to this limit as the ceiling.

However, there has been a divergence in the annual increase in the ceiling and the annual allowable rent control increase.

	Annual average increase from 2018-26
Rent controls	1.59
Ceiling*	3.1

*This does not include four-bedroom units, where the average annual increase was 2.5 percent.

As a result, depending on the unit size, current OGHC housing charges range from 92 to 94 percent of the ceiling.

Our housing charge history

Over the past eight years, there were four years with no increase in housing charges at Old Grace Housing Co-op.

2019: No increase in recognition that, for much of the year, members had been living in a construction site. (The rent control limit was 2.2 percent.)

2020: a 2.25 percent housing charge. This took the 1- and 2-bedroom units to the ceiling and put the 3- and 4-bedroom units over the limit. Manitoba Housing ordered a rollback of the 3- and 4-bedroom charge to the ceiling. As a result, the increase in 3-bedroom units was 1.5 percent. (The rent control limit was 2.4 percent.)

2021: No increase because there was no increase in the ceiling. The rent control limit was 1.6 percent.)

2022: No increase. The rent control limit was 0 percent. Housing charges were frozen because the Manitoba government was phasing in a 50 percent rebate on the education property tax.

2023: No increase. The rent control limit was 0 percent. Housing charges were frozen because the Manitoba government was continuing to phase in a 50 percent rebate on the education property tax.

2024: a 3 percent increase. The rent control limit was 3 percent. It was not until 2024 that the government fully phased in the property tax rebate. At this point, the value of the increase was equivalent to approximately 2.8 percent of housing charges. (To address the fact that in 2021, the housing charge increase to the 3- and 4-bedroom units had been rolled back, in 2024, the increase for the 1- and 2-bedroom units was limited to 2.4 percent.)

2025: a 3 percent increase. The rent control limit was 1.7 percent. In 2024, the Manitoba Government announced that it was eliminating the 50 percent rebate on the education property tax. This had the impact of increasing OGHC costs by $28,000 (approximately 2.8 housing charge increase). OGHC successfully sought and received an above guideline increase to cushion the impact of the loss of the tax rebate.

2026: a 6 percent housing charge increase. The rent control limit was 1.8 percent. OGHC sought 7 percent increase and was granted a 6 percent increase based on the need to continue to make up for the loss of the property tax rebate and to allow the co-op to accommodate an anticipated increase in mortgage costs.

 

The following table outlines our housing charge history and compares it with the rent control limits for the period from 2018 to 2026.

 

	Rent controls	OGHC
2026	1.80%	6.00%	OGHC successfully sought above guideline increase to address new mortgage
2025	1.70%	3.00%	OGHC successfully sought an above guideline increase to address loss of property tax rebate
2024	3.00%	3.00%	To address the 2020 rollback to the 1 and 2 bedrooms, the increase to the 1- and 2-bedroom units was 2.4 percent
2023	0.00%	0.00%	Manitoba Government did not allow rent increases
2022	0.00%	0.00%	Manitoba Government did not allow rent increases
2021	1.60%	0.00%	Manitoba Government froze the ceiling
2020	2.40%	2.25%	2.25 for the 1 and 2 bedrooms. Manitoba Housing rolled back the increase to the 3s to 1.5 percent and the 4 bedrooms to a 0 percent increase.
2019	2.20%	0.00%	OGHC chose not to increase housing charges
Average annual increase	1.59%	1.78%

Overall, over the past eight years, OGHC housing charges have increased at slightly more than the amount allowed by Manitoba Housing.

Why a Larger Increase Is Needed Now

OGHC’s goal is to budget to meet current needs and make an annual contribution to the replacement reserve (money that will be used to fund future repairs). The co-op bases its contribution to the replacement reserve on Property Condition Assessments conducted by outside consultants and an Asset Management Plan prepared by the Co-operative Housing Federation. Up until 2026, the Co-op has been able to meet its operating costs and savings targets thanks to the following.

• In 2021, Assiniboine Credit Union allowed us to re-open our existing mortgage term and negotiate a lower interest rate. This reduced our monthly operating costs. It also meant we did not have to renegotiate the mortgage in the spring of 2023, when the Bank of Canada’s interest rates were at their peak.
• The education property tax rebate meant that our property tax bill declined for three consecutive years.
• We have relied heavily on our Maintenance Committee for volunteer labour. One of the five priorities of our 2023 strategic plan was to “Reduce the reliance on volunteers for maintenance work.”
• In 2025, the board instituted cuts to budgeted spending in accounting, board education, and member initiatives. It also increased parking and laundry fees by 10 percent. It protected the maintenance budget in recognition of the axiom that a dollar spent on maintenance today saves on future repairs.

The co-op refrained from seeking increases above the guidelines as long as it could meet operating costs and replacement reserve targets within the allowed housing charge increases. Such increases would have been difficult to justify to both Manitoba Housing and to our members.

The mortgage

In 2026, we renewed our mortgage for a five-year term. The rate went from 3.07 to 4.44 percent. This amounted to a 45 percent increase in interest costs. In 2026, our mortgage costs went up by $53,000. This was equivalent to approximately a 5.3% housing charge increase in a year in which we were allowed to increase housing charges by 6%. The mortgage costs will increase by an additional $26,000 in 2027. (While we have a fixed five-year term, we did not start paying at the new mortgage rate until May 1, 2026, which means that we are only paying for 8 months at the new rate in 2026. In 2027, we will be paying for 12 months at the new rate, hence the $26,000 increase.)

Replacement reserve contributions

Almost the entire amount of the 2026 housing charge increase is needed to cover this year’s increase in mortgage payments. The co-op also had to deal with general inflation and increased utility and property taxes of over three percent. To balance the budget, the co-op had to reduce its budgeted contribution to the replacement reserve at a time when the Property Condition Assessment and the Asset Management Plan recommend making significant increases to the reserve. The reserve is currently well-funded ($311,317 at the end of 2025, while the recommended Asset Management Plan target for the end of 2025 was $116,440. The expected contribution to the reserve from our operating revenue is likely to be $25,000, well below the recommended $70,000. The recommended 2031 contribution to the replacement reserves range from $116,100 (the Asset Management Plan) to $136,257 (the Property Condition Assessment).

Increases in taxes and utilities

Electricity rates increased by 4 percent in 2026, and the Public Utilities Board has approved a 3.5 percent increase in 2027 and a 3 percent increase in 2028. In 2025, the City introduced a new Waste Management Fee of $31.75 per unit per quarter for multifamily residential units. The City also increased the sewer rate by 27.1 percent. In addition, there was a small increase in the water rate. There could be further increases in 2026. In 2026, the water rate was increased by 2.6 percent. The City of Winnipeg is raising property taxes by 3.5 percent. In 2026 the Winnipeg School Board raised taxes by 9.5 percent. (OGHC has lessened the impact of the property tax increases through successful appeals of our property tax assessment.)

The loss of the property tax rebate

The 2025 housing charge increase of 3 percent essentially offset the loss of the property tax rebate, leaving the co-op with no additional funds to address inflationary increases that year. The three-percent increase does not reflect the fact that the co-op’s revenue base was frozen for two years. The erosion of the revenue base for two years severely impaired our financial capacity.

The need to address maintenance capacity

The Maintenance Committee is heavily involved in the building’s day-to-day maintenance. The reliance on volunteers is leading to burnout. This problem has been apparent since 2023. The co-op has delayed addressing it due to the challenges posed by the loss of the property tax rebate and the increase in mortgage payments. In order to have an orderly transfer to the maintenance staff person, we need to act proactively and budget for a full-time equivalent to be hired and managed by Brydges. The details of the number of hours and tasks to be undertaken are subject to further development in the budgeting process.

What would a seven percent increase do?

The seven percent was selected because in 2027 would bring our housing charges to the 2026 ceiling. Since the ceiling usually increases on January 1, we would, in fact, be slightly below the ceiling. The 2027 rent control limit has yet to be announced, but it will be below 7 percent. A strong argument can be made to Manitoba Housing that a 7 percent increase is required to protect the co-op’s long-term sustainability: Manitoba Housing understands the mortgage issue, the need to maintain contributions to the reserve, and to professionalize maintenance.

A lower increase in 2027 would not eliminate the need for additional revenue; it would defer it. Based on the five-year planning scenario, an increase below 7 percent would likely require OGHC to delay hiring for maintenance capacity, further underfund the replacement reserve, or seek additional above-guideline increases in 2028 and possibly 2029. In other words, a smaller increase in 2027 would reduce the immediate impact on members, but it would also make it harder to stabilize the budget and return to more modest increases in later years. For example, a 5 percent increase would produce approximately $20,000 less revenue in 2027 than a 7 percent increase, reducing the funds available for maintenance staffing and reserve contributions.

It must be stressed that any increase over the as-yet-unannounced rent control guideline will require approval by Manitoba Housing. OGHC has twice applied for above-guideline increases: in 2024 we asked for a 3 percent increase and were granted 3 percent, while in 2025, we asked for a 7 percent increase and received a 6 percent increase. The Board is convinced that it has assembled a strong case to support an above guideline increase that allows us to reach the ceiling.

The following table is a five-year planning scenario that assumes an average annual inflation rate of 2.5 percent (the Bank of Canada goal is 2 percent but taxes and utilities are raising at a higher rate) and a 7 percent housing charge increase in 2027, and 2 percent housing charge increases in the following four years (slightly above the average allowed rent increase of the past eight years, but that average included two years of 0 percent increases). In 2025, laundry and parking rates were increased by ten percent; this scenario projects another ten percent increase to these charges in 2030 (the equivalent of an annual two percent increase). This would allow the co-op funds to hire a full-time staff member in 2027 and gradually increase its contributions to the replacement reserve in subsequent years.

The final line in the following scenario (Additional revenue for maintenance and replacement reserve) represents the amount available, after projected operating expenses, to fund the new maintenance staffing model and increase contributions to the replacement reserve. How this amount is divided between staffing costs and reserve contributions will be determined as the budget process proceeds.

Five-year planning scenario

Inflation %	2.5	2.5	2.5	2.5	2.5
Housing charge increase %	7	2	2	2	2
Year	2027	2028	2029	2030	2031
Total housing charge revenue	$1,063,965	$1,085,245	$1,106,949	$1,129,088	$1,151,670
Total other	$76,145	$76,145	$76,145	$83,759.50	$92,135.45
Total revenue	$1,140,110	$1,161,390	$1,183,094	$1,212,848	$1,243,806
Total administration	$64,268	$65,874	$67,521	$69,209	$70,939
Total GST	$10,968	$11,242	$11,523	$11,811	$12,106
Total Mortgage	$549,500	$549,500	$549,500	$549,500	$549,500
Total Utilities	$135,100	$138,478	$141,940	$145,488	$149,125
Total insurance and tax	$178,555	$183,019	$187,594	$192,284	$197,091
Total maintenance	$142,070	$145,622	$149,262	$152,994	$156,819
Total expense	$1,080,460	$1,093,734	$1,107,340	$1,121,286	$1,135,581
Additional revenue for maintenance and replacement reserve	$59,650	$67,655	$75,754	$91,562	$108,225

The detailed 2027 budget will test these assumptions. If inflation, insurance, taxes, maintenance costs, the 2027 ceiling, or Manitoba Housing’s response differ from the forecast, the budget may need to be adjusted. But the forecast shows that the 7 percent increase is connected to a financial path that can be reviewed, challenged, and revised through the budget process.

What the increase would mean for housing charges

Bedrooms	Current	With 7% increase	2026 govt. ceiling	2018 rates increased at 2 percent a year
1	$1,056	$1,130	$1,153	$1,104
2	$1,340	$1,433	$1,439	$1,398
3	$1,425	$1,525	$1,513	$1,491
4	$1,619	$1,733	$1,723	$1,762

A 7 percent increase would technically put the 3- and 4-bedroom units over the 2026 ceiling. However, these ceilings are adjusted on the first of the year. As a result, the final budget instructions may need to be adjusted for any unit type if Manitoba Housing’s 2027 ceiling is lower than expected.

How do we compare after a 7 percent increase in the housing charge?

The following table shows what OGHC housing charges would be with a 7 percent increase and compares them with various online reports of average Winnipeg rents. (Rentals.ca presents Manitoba rents.)

Bedrooms	OGHC 7% increase	Apartments.com June 2026	Rentals.ca Manitoba June 2026	Zumper (June 2026)	CMHC (October 2025)
1	$1,130	$1,382	$1,465	$1,445	$1,232
2	$1,432	$1,685	$1,775	$1,727	$1,571
3	$1,525	$2,238	$2,006	$2,048	$1,862
4	$1,733			$2,795

 

Available market-rent comparisons suggest that, even after a 7 percent increase, OGHC housing charges would remain below the quoted average rents shown for comparable unit sizes.

The increase would have no impact on the 15 households receiving rent supplements unless their income changed. They would continue to pay 30 percent of their income on housing, with the government paying the remaining portion of the housing charge.

Conclusion

The executive recognizes that a 7 percent increase in housing charges is significant and will require careful review by the Finance Committee, the Board, the membership, and Manitoba Housing. The proposal is not being advanced as a routine increase, but as a necessary measure after several years in which OGHC held increases down while costs were managed through lower mortgage payments, reduced property taxes, volunteer maintenance labour, and budget restraint.

Those conditions have changed. The renewed mortgage, the loss of the education property tax rebate, inflationary pressure on utilities and operating costs, the need to reduce reliance on volunteer maintenance work, and the requirement to maintain adequate replacement reserve contributions all point in the same direction: OGHC needs additional ongoing revenue to protect the long-term condition and financial stability of the co-op. Last year’s increases were the first step in a two-step process to regain financial stability. When the process is complete our housing charges will be at a rate that would have been achieved if we had been allowed to increase our rates by slightly more than 2 percent a year since we opened.

A 7 percent increase would allow the co-op to absorb the full-year cost of the mortgage renewal, begin rebuilding annual reserve contributions, and create room for a more sustainable maintenance model. It would also support a path toward smaller projected increases in later years, provided the assumptions in the five-year forecast hold and the final budget complies with Manitoba Housing’s 2027 ceiling.

For these reasons, the executive recommends that Brydges be instructed to prepare the 2027 draft budget based on a 7 percent increase in the housing charge, together with provisions for full-time maintenance capacity, inflationary growth in the replacement reserve contribution, and the proposed adjustments to guest room and common room rates. The draft budget will provide the next opportunity to test these assumptions, review the detailed numbers, and ensure that the final proposal balances affordability for members with the co-op’s responsibility to maintain the property for the long term.