Fuller Landau's Real Estate & Construction Newsletter Summer/Fall 2015

SUMMER/FALL

REAL ESTATE AND CONSTRUCTION NEWSLETTER 2015

REAL ESTATE AND CONSTRUCTION NEWSLETTER

IN THIS EDITION In 1964 Bob Dylan recorded one of his most popular hits, The Times They Are A Changin’. Fifty one years later, the lyrics are still relevant. This is particularly true in the field of construction, where movement and change is a constant. In this newsletter we look at changes to the Construction Lien Act, how to protect your construction company from business fraud, and the changing face of construction technology.

The construction industry in the GTA is currently experiencing a time of growth and expansion. Regardless of how many projects are underway, the laws and regulations governing building are complex and must be understood in order to safeguard all players.

Interesting technological changes have led to many advancements in traditional excavation techniques.

Ontario Excavac Inc. is a significant player in this exciting new field, and CEO Barry Wood shares his vision in our Road to Success feature How Ontario Excavac Inc. is Digging Its Way to Success with Hydro-Excavation.

While the government provides safeguards with legislation, business must be on the lookout for internal fraud.

Billing fraud, corruption schemes and cheque tampering are all issues which affect the bottom line. In the article Protecting Your Construction Company from Fraud we look at potential red flags that indicate fraudulent practices.

That employee who never takes vacation? Maybe it’s not dedication to the company that is keeping him in the office.

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REAL ESTATE AND CONSTRUCTION NEWSLETTER SUMMER/FALL 2015

Legislative amendments are introduced to protect all of those doing business in the construction world. In the article Construction Lien Act Trust Claims in Bankruptcy Proceedings – A Changing Landscape we look at the Construction Lien Act, and the recent changes made, as well as the Bankruptcy and Insolvency Act. In that same Bob Dylan song, we hear, ‘For he that gets hurt/will be he who has stalled.’ Keeping up to date with legislation, protecting your company from fraud, and being on the lookout for new ways of doing old things, is a sign of the new times.

Mike Stoyan Practice Group Leader Real Estate and Construction

ROAD TO SUCCESS HOW ONTARIO EXCAVAC INC. IS DIGGING ITS WAY TO SUCCESS WITH HYDRO-EXCAVATION

A whole other world exists underground, and Barry Wood, CEO of Ontario Excavac Inc. (www.ontarioexcavac.ca), specialists in hydro-excavation, knows this better than anyone. “There’s all kinds of infrastructure underground.

If you could see all of it, you’d be shaking your head.”

That’s where Mississauga-based Ontario Excavac Inc. comes in. Established in 1996 and serving several regions within South-Central Ontario, it is not your typical excavation company. Wood explains that while traditional excavation services use backhoes and other types of mechanical digging, hydro-excavation uses highpressure water and vacuum suction to dig, which is much safer when underground infrastructure is encountered.

Hydro-excavation is also more precise, which is beneficial in urban settings because less ground is disturbed.

Hydro-excavation allows for what is called ‘keyhole repairs’ to be made. Explains Wood, “the hydro-excavation industry provides a really vital service, mainly focusing on safety, but also precision; we can dig very precise holes, called keyholes, as small as one foot wide. Where a backhoe might make a fairly large opening, we can very precisely and safely dig to locate underground infrastructure.”

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REAL ESTATE AND CONSTRUCTION NEWSLETTER SUMMER/FALL 2015

As underground mapping proved to be dated and inaccurate, there became an increased need for digging that focused on safety and hydro-excavation is responding to that need.

Wood says the benefits of hydro-excavation go beyond precision: “By digging a keyhole, we can do repairs on that buried utility infrastructure without destroying the surrounding landscape. There are no unsightly piles of debris, so it is very easy to repair and then restore that site to its original state.”

Ontario Excavac Inc. started with work on water and utility services, fixing water curb stop shut-offs, which are used to turn water on and off for residential homes. When they malfunction, it is necessary to dig down to reach the home service line or into the water main to perform the repair.

Using the hydro-excavation keyhole approach to fixing the shut-off made the process more precise, fast and safe.

Cost savings also flowed as a benefit of using hydro-excavation.

From this, they moved on to providing services for city service departments and then ten years ago, a major gas distribution company. This gas distributor was one of the first to use hydro-excavation for its utilities. “They liked the work that we provided. What set us apart was our responsiveness, our professionalism, our concern for safety and the quality of the people we hire. It wasn’t very long before this gas distributor decided to use us exclusively.” Wood says.

Although Ontario Excavac Inc. works primarily with businesses and government, they will respond to any call when needed.

Despite the efforts of Ontario One Call, the ‘call before you dig’ service that receives excavation locate requests and identifies underground infrastructure, mistakes still happen that can result in a natural gas line being hit. “People might dig up their driveways to re-asphalt them for example, only to find out the gas line is closer to the surface than they thought,” Wood explains.

The cold weather also causes problems, as seen last winter when Ontario Excavac Inc. responded to a number of incidents with hydro pole fires due to salt build-up causing shorting.

As pioneers in the field, it seems only right that Ontario Excavac Inc. is one of the founding members of the HydroVac Alliance of Ontario, known as HVAO. Wood also served as the first Chairperson of the HVAO. Wood explains how it came to be: “a group of us were talking about a year and a half ago at the Ontario Regional Common Ground Alliance. ORCGA is a consortium of utility owners, engineering firms, excavators and other interested stakeholders. The organization was formed in the summer of 2014 initially to respond to the 2014 provincial budget announcements that could seriously negatively impact the sector. The HVAO is also looking at being a best-practices advocate for this young industry with a view to foster a strong industry safety record of working on buried underground infrastructure.”

WHAT IS NEXT? Woods says expanding the business beyond its current geographical reach is a consideration, but the primary focus is regional. They are considering growth through acquisitions or joint ventures with ancillary business services.

The immediate focus is on dealing with the soil they remove when called to a job. “We have our fleet of vehicles out there every day and as we’re doing our hydro-excavations, we end up collecting soil mixed with some water in the debris tanks. 99% of the time the soil is benign because it’s soil from somebody’s front yard, but we have to dispose of it every day. We’re looking at what we can do about that part of our business. Whether we do it through acquisition or through a joint venture with another party, it’s an active area that I’m looking at right now with what we’re going to do.

We see it as being another important piece in our business.”

Ontario Excavac Inc. operates around the clock, every day of the year. With a staff of 80 people and growing, Wood sees good things in the future. “We’re not the cheapest hydro-excavator in town; we don’t pretend to be.

We like to think we’re among the best, if not the best, so as a result of that we don’t have the lowest price.”

Wood is proud of Ontario Excavac Inc.’s responsiveness, safety record, and of the committed and competent people they have. As underground infrastructure grows older, he sees an increasing need for hydro-excavation, lending growth to a dynamic industry.

REAL ESTATE AND CONSTRUCTION NEWSLETTER SUMMER/FALL 2015

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ADVISORS POINT OF VIEW PROTECTING YOUR CONSTRUCTION COMPANY FROM FRAUD

You will never be able to completely protect your company from fraud. Unfortunately, fraud is and has always been a reality of doing business. If, however, you are aware of the common risks and red flags related to occupational fraud, and implement proper controls within your business, you can significantly reduce your risk.

For example, if an analysis of excessive expenses uncovers invoices from one or more vendors for vague or non-descript products or services, then you might be the victim of billing fraud. Watch for entries like “consulting fee” or “special commission” on the invoices, particularly if they are not easily explained.

According to a recent study published by the Association of Certified Fraud Examiners (the ACFE), it is estimated that the typical organization loses 5% of its annual revenues to occupational fraud each year. Applied to the estimated 2013 Gross World Product, this figure translates to a potential projected global fraud loss of more than $3.7 trillion.

Corruption Schemes In a corruption scheme, an employee misuses his or her influence in a business transaction in a manner that violates their duty to the employer, resulting in a direct or indirect benefit.

The reported frauds lasted a median of 18 months before being detected. The median occupational fraud case cost companies $145,000, and more than one-fifth of these cases caused losses of at least $1 million.

RED FLAGS SIGNALING FRAUD IN THE CONSTRUCTION INDUSTRY According to the ACFE, the median loss in the construction industry was $245,000. The top three prevalent fraud risks in construction are billing fraud, corruption schemes, and cheque tampering.

Billing Fraud Billing Fraud is a misappropriation of a company’s cash by way of a fraudulent disbursement. There are primarily three specific types of billing fraud schemes: shell companies, non-accomplice vendors and personal purchases.

Billing fraud can be combatted by adhering to - and not deviating from - the approved vendor list, as well as management review and verification of vendors before payments are issued. Project managers must investigate budget overruns and unexplained increases in purchased quantities. A manual or computer software-assisted review for suspicious mailing addresses, PO box numbers, out-of-sequence invoice numbers and duplicate invoice numbers should be conducted on a periodic basis.

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REAL ESTATE AND CONSTRUCTION NEWSLETTER SUMMER/FALL 2015

Forms of corruption fraud include conflicts of interest (purchasing and sales schemes), bribery (invoice kickbacks and bid rigging), illegal gratuities and economic extortion.

Controls should include reference checks for new vendors, and an established (and never-deviated-from) process to review bids. For example, competitors in the same market could potentially collude to defeat competition or artificially raise the prices of goods and services. A winning bidder sub-contracting work to a losing bidder may be an indicator of bid-rigging.

Cheque Tampering The third most prevalent fraud risk in the construction industry is cheque tampering. It can take the following forms: 1. Forged maker: the cheque signature is forged; 2. Forged endorsement: the perpetrator intercepts the cheque and forges an endorsement; 3. An altered payee: the fraudster intercepts the cheque and converts the payee to self, another company, relative, etc.; 4. An authorized maker: an authorized employee fraudulently writes a company cheque out to him or herself; and 5. Concealed cheques: fraudulent cheques are submitted for signing and included with legitimate cheques.

Smaller organizations can protect themselves from cheque tampering by implementing basic controls, such as never signing blank cheques, as well as carefully reviewing invoices and original supporting documents. In addition, blank cheques should be locked away when they are not in use by your company’s designated cheque issuers. If the bank statements are sent to the office, and you suspect fraud, you could have the bank statements sent to your home address for a few months to ensure they are not intercepted at the office by fraudsters.

If you are part of a larger organization, you will want to ensure appropriate segregation of duties, as well as proper controls and a review process to monitor inconsistencies.

HOW CAN YOU HELP CATCH FRAUD?

LOOK OUT FOR RED FLAGS In 92% of cases examined by the ACFE, the fraudster displayed one or more behavioral red flags that are often associated with fraudulent conduct. Some warning signs of the most commonly observed behaviours include living beyond their means, financial difficulties, unusually close association with vendors or customers, excessive control issues and an unwillingness to share duties.

In summary, proactively monitoring and analyzing data (including bank statements, reconciliations and budgetsto-actuals), detecting red flags and following up on tips will reduce fraud and the resulting financial losses that could occur within your company.

In the ACFE study, the lack of internal controls was rated the most important contributing factor for fraud, followed by fraudsters overriding existing internal controls, and a lack of management review.

Providing individuals a means to report suspicious activity is a critical part of a successful anti-fraud program. For larger organizations, fraud reporting mechanisms such as hotlines can be set up to receive tips from both internal and external sources. To be successful resources in combatting fraud, reporting mechanisms must preserve the anonymity of tipsters and the confidentiality of reported information.

Management should actively encourage employees to report suspicious activity, as well as enact and emphasize an antiretaliation policy.

Occupational fraud is more likely to be detected by a tip than by any other method. The majority of tips reporting fraud come from employees. Therefore, even the most subtly expressed tip should be taken seriously and followed up.

If employees are aware that there are processes in place to investigate and reduce fraud, they are more likely to report suspicious activity.

BY PATRICIA HARRIS, CPA, CA-IFA, CBV, DIFA, CFF Patricia Harris is a partner with Fuller Landau’s Valuations practice. She focuses on business valuations and litigation support services, as well as investigative and forensic accounting. Patricia can be reached at (416) 645-6570 or pharris@fullerllp.com.

REAL ESTATE AND CONSTRUCTION NEWSLETTER SUMMER/FALL 2015

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ADVISORS POINT OF VIEW CONSTRUCTION LIEN ACT TRUST CLAIMS IN BANKRUPTCY PROCEEDINGS – A CHANGING LANDSCAPE

The old adage “nothing stays the same” seems particularly relevant today to those engaged in real estate and construction activities in Canada. Legislative updates and proposals need to be continually monitored to protect various stakeholders including owners, developers, lenders, employees and suppliers of materials and services. Often, the interaction of diverse legislation must be understood and considered to achieve expected results and avoid unwanted surprises.

Some recent examples of such legislative amendments (and proposals or initiatives) include: • The introduction of Canada’s Anti-Spam Legislation in 2014; • The 2014 amendments to Ontario’s Occupational Health and Safety Act to include the Occupational Health and Safety Awareness Training regulation; • The introduction of Bill 69 in 2013, the Prompt Payment Act and its subsequent abandonment in April 2014; • The announcement in March 2014 of an expert review of the Construction Lien Act (Ontario) (the “CLA”) which would include the examination of payment issues within the construction sector; • The May 2015 proposed amendments to the Condominium Act; • The current review by Industry Canada of the provisions of The Bankruptcy and Insolvency Act (the “BIA”); and • Changes effective in 2017 to financial reporting requirements for companies who have adopted International Financial Reporting Standards (“IFRS”), in particular with respect to IFRS 15, Revenue from Contracts with Customers.

To illustrate the interplay that exists between the CLA, the Builders’ Lien Act (Alberta) and the BIA, the remainder of this article will review and discuss recent legal decisions rendered in both Ontario and Alberta, and the current law as it relates to Construction Lien Trust claims (Builders’ Liens in Alberta) in bankruptcy proceedings. In particular, the Ontario decision Royal Bank of Canada v. Atlas Block Co. Limited 2014 ONSC 3062 (“Atlas Block”) will be reviewed, and to a lesser extent, the Alberta decision Iona Contractors Re. 2014 ABQB 347 (“Iona”).

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REAL ESTATE AND CONSTRUCTION NEWSLETTER SUMMER/FALL 2015

THE CONSTRUCTION LIEN ACT The CLA was enacted in 1983 and remained substantially unchanged through to 2010 when several changes were made pursuant to the Open for Business Act, 2010. Due to the reaction received to Bill 69 (the Prompt Payment Act) in February 2015, the Ontario Ministry of the Attorney General appointed an expert to review the CLA which is anticipated to be completed by December 2015. We understand the first phase of this review, to identify stakeholders, is complete and the distribution of an information package defining issues will be underway shortly.

While somewhat complex, in essence the provincially enacted CLA establishes lien and holdback rights, and trust provisions to provide financial protection to suppliers of services or materials to a construction project.

Pursuant to Section 8 of the CLA all amounts owing to, or received by, a contractor or subcontractor, on account of a contract or subcontract price, constitute a trust fund for the benefit of the subcontractors or suppliers of services who are owed amounts by the contractor or subcontractor.

THE BANKRUPTCY AND INSOLVENCY ACT The BIA has its roots in the early 1900’s with the last amendments to the BIA coming into force in 2009.

Industry Canada is in the process of conducting a further statutory review of the BIA, with its initial report having been presented in late 2014.

The BIA represents one of the two primary Acts (the other being the restructuring oriented Companies’ Creditors Arrangement Act) of federally enacted insolvency legislation which provides for among other things, the orderly realization and distribution of property that forms part of a bankrupt estate.

Section 67(1)(a) of the BIA excludes from the bankrupt’s estate, property divisible among the creditors of the bankrupt that is “property held by the bankrupt in trust for any other person.”

THE ATLAS BLOCK CASE Atlas Block was a group of companies that manufactured and sold concrete building and landscaping products such as concrete blocks and paving stones to contractors, residential builders and retailers including through a dealer network. The supplier in this matter provided Atlas with cement powder which was used to manufacture the vast majority of Atlas products. In October 2013, a Receiver was appointed over Atlas and subsequently, in December 2013, Atlas filed for bankruptcy. The Receiver brought a motion for directions as to whether the material supplier had a trust claim under Section 8 of the CLA and if so, whether the trust claim survived the bankruptcy of Atlas.

To establish a Section 8 CLA trust, the supplier had to establish: • Atlas was a contractor or subcontractor; • The supplier had supplied materials to projects for which Atlas was a contractor or subcontractor; • Atlas had received or was owed money for materials supplied; and • Atlas owed the supplier money for those materials.

In this regard the Court concluded that in principle the supplier had a Section 8 trust claim.

However, more importantly, the Court held that that even if the supplier had a trust claim under Section 8 of the CLA it did not survive Atlas’ bankruptcy.

This conclusion was reached pursuant to a long line of case law which has held that Section 67(1)(a) of the federally enacted BIA (referenced above) does not extend to assets subject to a provincially created deemed trust, where the deemed trust does not have all the attributes of a common law trust.

In GMAC Commercial Credit Corp. Canada v. TCT Logistics Inc. (2005) 7 C.B.R. (5TH) 202 The Ontario Court of Appeal summarized these cases as follows: … because bankruptcy is a matter under federal jurisdiction provincial statutory deemed trusts that do not conform to general trust principles cannot operate to reorder the priorities in bankruptcy….. upon bankruptcy the funds that are subject to a deemed trust, but are not held in accordance with general trust principles, will not be excluded from the property of the bankrupt under 67(1)(a) of the BIA and will be distributed in the priority prescribed by the BIA. Accordingly, the Court had to decide whether this supplier’s CLA claim met the requirements of a common law trust, being the certainties of intent, subject matter and object. The Court found that as the CLA did not place a specific statutory requirement on the debtor (or subsequently the Receiver

appointed) to segregate supposed CLA trust funds, as was found to be the case in TCT Logistics, pursuant to the current Highway Traffic Act (Ontario), that would survive the debtor’s bankruptcy, the certainty of subject matter requirement could not be met, the funds collected were not exempt property and the supplier’s right to assert a priority to the funds was lost.

Subsequently, in June 2014, in the Iona case the Queen’s Bench of Alberta held the trust created by Section 22 of the Builders’ Lien Act would not trump the BIA.

IMPLICATIONS While always difficult to balance the realities of business relationships with the implications of the failure of a customer, the Atlas and Iona cases need to be considered by stakeholders as they navigate construction activities. To this end, while appreciating that each circumstance is different, in order to minimize surprises: • Maintain open communication and timely draw and payment practices; • Use the reporting provisions found in Section 39 of the CLA to obtain information that may not be otherwise available; • Understand and abide by the lien, holdback and trust provisions of the CLA; • Establish appropriate lending reserves, attempt to obtain additional security such as guarantees and determine if a Director and Officer liability policy exists; • Consider requiring the use of segregated project bank accounts and other processes that would meet the common law certainties of a trust; and • In the event of a customer’s failure, consider the breach of trust provisions found in Section 13 of the CLA as against officers and directors and other persons.

Footnote: On July 16th, 2015 (as this edition of our publication was going to press) the Alberta Court of Appeal overturned the June 2014 decision finding there was no operational conflict between the Builders’ Lien Act and the BIA and that in this case a valid common law trust was created. We will monitor future developments in this area and provide an update at a later date.

BY GARY ABRAHAMSON, CPA, CA, CIRP Gary Abrahamson is a partner with Fuller Landau’s Restructuring and Insolvency practice. He can be reached at (416) 645-6524 or gabrahamson@fullerllp.com

REAL ESTATE AND CONSTRUCTION NEWSLETTER SUMMER/FALL 2015

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FAST FACTS, TRENDS AND RECENT NEWS In an effort to boost economic activity, The Bank of Canada once again decided to cut its benchmark lending rate. While the cost of borrowing may be at historic lows, the effects of another interest rate cut have put pressure on our weakening Canadian dollar. Fuller Landau is here to help you and your business succeed during these uncertain economic times.

RESIDENTIAL

For the second time in 2015, the Bank of Canada cut its key overnight lending rate by a quarter of a percentage point on July 15, 2015.

The lower interest rate is widely expected to continue to fuel a heated housing market in the GTA. This can be seen from the statistics published by the Toronto Real Estate Board (“TREB”) which was already hot as a result of previous interest rate cuts.

TREB reported very strong year-over-year increases in sales units and average sale prices in June 2015. Detached homes experienced the highest increase in average sale price between June 2014 and June 2015 of 14.2% in the City of Toronto and 14.3% for all regions reporting to the Toronto Real Estate Board. As well, condos reported the highest increase in the number of units changing hands of 21.3% in the City of Toronto and 25.2% for all regions reporting to the Toronto Real Estate Board.

The Toronto Real Estate Boards reports data on the number of sales by housing type and price range. Of noteworthy mention is the sharp increase in properties selling in the $1,000,000 + price range. With the exception of semi-detached and attached/ row/townhouses who saw their biggest year-to-date sales increase in the $700,000 to $799,999 price range, the remainder of property types saw their highest increases in the $1,000,000 + range.

RESIDENTIAL HOME SALES TRENDS1 YEAR-OVER YEAR SUMMARY FOR THE MONTH OF JUNE AVERAGE PRICE 2015

2014

% CHANGE

City of Toronto

$1,051,912

$921,127

14.2%

All TREB Regions2

$816,583

$714,526

14.3%

City of Toronto

$418,599

$390,569

7.2%

All TREB Regions2

$390,894

$367,343

6.4%

City of Toronto

$682,262

$617,854

10.4%

All TREB Regions2

$639,184

$569,174

12.3%

DETACHED

CONDOS

Source: Toronto Real Estate Board Market Watch June 2014 and June 2015.

All TREB regions include Halton, Peel, York, Durham, Dufferin, Simcoe and Toronto.

3 Includes row homes, co-operatives, co-ownerships, detached condominiums and link properties.

1 2

ALL HOME TYPES 3

SALES BY PRICE RANGE AND HOUSE TYPE1 ALL TREB REGIONS2 - JUNE 30TH YEAR-TO-DATE

ECONOMIC INDICATORS

DETACHED PRICE RANGE

2015

2014

2015

2014

5

9

-44.4%

44

56

-21.4%

$100,000 to $199,999

115

178

$200,000 to $299,999

584

948

-35.4%

835

1,095

-23.7%

-38.4%

3,958

3,507

12.9%

$300,000 to $399,999

1,984

2,507

-20.9%

4,004

3,353

19.4%

$400,000 to $499,999

3,381

3,907

-13.5%

1,890

1,527

23.8%

$500,000 to $599,999

4,203

4,138

1.6%

867

686

26.4%

$600,000 to $699,999

4,116

3,482

18.2%

397

354

12.1%

$700,000 to $799,999

3,068

2,442

25.6%

220

159

38.4%

$800,000 to $899,999

2,426

1,834

32.3%

94

56

67.9%

$900,000 to $999,999

1,653

1,159

42.6%

54

53

1.9%

$1,000,000 to $1,249,999

2,121

1,441

47.2%

89

66

34.8%

$1,250,000 to $1,499,999

1,310

788

66.2%

46

37

24.3%

$1,500,000 to $1,749,999

649

406

59.9%

26

18

44.4%

$1,750,000 to $1,999,999

424

257

65.0%

18

12

50.0%

$2,000,000+

847

575

47.3%

46

27

70.4%

$0 to $99,999

10

Q3 Real GDP Growth

CONDO

REAL ESTATE AND CONSTRUCTION NEWSLETTER SUMMER/FALL 2015

% CHANGE

% CHANGE

2015 -0.6%

2014 1.2%

Toronto Employment Growth As at May 30 0.9%

1.7%

Toronto Unemployment Rate As at May 30 7.1%

7.6%

Inflation (Yr/Yr CPI Growth) As at May 30 0.9%

2.3%

Bank of Canada Overnight Rate As at June 30 0.75% 1.0% Prime Rate As at June 30

2.85%

3.0%

Chartered Bank Fixed Mortgage Rates 1 Year

2.89% 3 Year

3.39% 5 Year

4.64%

3.14% 3.75% 4.79%

Source: Toronto Real Estate Board Market Watch June 2014 and June 2015.

BUILDING PERMITS

BUILDING PERMITS - MAY VALUE OF CONSTRUCTION (THOUSANDS OF DOLLARS)

According to Statistics Canada, the overall dollar value of building permits for the City of Toronto increased by approximately 26.98% during the period January to May 2015 compared to the same five month period in 2014. The most significant increase came from the dollar value of Institutional and governmental building permits issued. During the period January to May 2015, approximately $1.1 million dollars of building permits were issued in the City of Toronto, compared to approximately $267 thousand during the period January to May 2014, an increase of approximately 309%.

RESIDENTIAL

INDUSTRIAL

COMMERCIAL

INSTITUTIONAL AND GOVERNMENTAL

TOTAL

January to May 2014

$3,619,207

$224,457

$1,524,005

$267,083

$5,634,752

January to May 2015

$4,191,464

$344,721

$1,526,501

$1,092,294

$7,154,980

% Change

15.81%

53.58%

0.16%

308.97%

26.98%

VALUE OF BUILDING PERMITS1 TORONTO, ONTARIO ($000) $8,000,000 $7,000,000

DISCLAIMER: The information in this

section has been provided by external sources and is subject to change. Fuller Landau LLP is not responsible for the accuracy, reliability or timeliness of the information supplied by external sources. Readers wishing to rely upon this information should consult directly with the source of the information.

$6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $0

1

January to May 2014 January to May 2015 Residential

Industrial

Commercial Institutional and Governmental

Total

Source: Statistics Canada “Building Permits” April 2014 and April 2015 (Catalogue no. 64-001-X).

REAL ESTATE AND CONSTRUCTION NEWSLETTER SUMMER/FALL 2015

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QUESTIONS? COMMENTS? Please contact our Marketing Director: MARLA CHANG 416-645-6572 mchang@fullerllp.com

OUR REAL ESTATE & CONSTRUCTION TEAM MICHAEL STOYAN 416-645-6545 mstoyan@fullerllp.com GARY ABRAHAMSON 416-645-6524 gabrahamson@fullerllp.com PATRICIA HARRIS 416-645-6570 pharris@fullerllp.com BRIAN JOFFE 416-645-6516 bjoffe@fullerllp.com

ABOUT FULLER LANDAU Fuller Landau LLP is a leading mid-sized accounting, tax and advisory firm.

We are committed to helping owner-managers and entrepreneurs build value and grow their business. We are uniquely positioned to do just that because, as business advisors and entrepreneurs ourselves, we know first-hand what it takes to meet those challenges and succeed in any business environment.

KAREN JOHNSTON 416-645-6515 kjohnston@fullerllp.com ANDY YAP 416-645-6536 ayap@fullerllp.com

OUR REAL ESTATE AND CONSTRUCTION PRACTICE GROUP We know that companies within the construction and real estate sector are subject to many challenges ranging from rising material costs to cyclical demand.

We have hands-on experience helping construction and real estate-related companies like yours make sense of the business landscape.

FULLER LANDAU LLP 151 Bloor Street West 12th Floor Toronto, Ontario Canada M5S 1S4 www.fullerllp.com