Financials

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Financials

THE CANADIAN REAL ESTATE ASSOCIATION
MANAGEMENT'S DISCUSSION AND ANALYSIS
For the Year Ended December 31, 2014

The following discussion and analysis of financial condition,and results of operations of The Canadian Real Estate Association (CREA) should be read in conjunction with the audited consolidated financial statements for the fiscal year ended December 31, 2014.

Auditors' Report and Financial Statements

200 Catherine Street Building

Membership Fee and Revenue

The 2014 membership increased by 1.5 % over 2013.  Revenue is higher in 2014 than 2013 as a result of the increased membership.

Annual Information – Consolidated

Total revenue includes $904.4K from 200 Catherine Street. Total expenses also include Legal Defence Fund ($608.8K) and Futures Fund ($167.8K.)

Expenses

The chart below outlines the actual expenses compared against budget and the previous year. In August the Board approved the 2015 budget and a three year strategic plan, 2015 to 2017. As a result, some projects were either not undertaken in 2014 or delayed to 2015.

External Relations:

The actual expense increased over 2013 due to increased work conducted on the REALTOR® Action Network, GIS mapping and the Quality of Life Symposium. The 2014 expenses was under budget due to savings in consulting fees and delay in certain stakeholder outreach initiatives.

Communications:

There were various research and survey expenses that were not incurred within the communications budget resulting in savings on consulting fees and some of the budgeted items were handled internally rather than requiring external assistance such as video production, media training and direct member communication. The increase over 2013 is due to the Open Houses and the start of a REALTOR® Code on-line course.

Legal:

2014 expenses are slightly below budget as $120,000 for maintenance of the .mls domain name was not needed as the domain name was purchased near the end of the year on December 17. The expenses are below 2013 due to renegotiation of contracts with external counsel.

Committees/Task Forces:

The Committees now include the three Committees created from the previous Councils: Association Executive Network; Canadian Commercial Network and the Technology Committee. The 2014 expenses are below 2013 expenses due to fewer costs incurred for committee meetings and the elimination of the Special General Meeting.

Representation:

The 2014 expenses reflect a continued reduction in international expenses and increased member engagement.

The increase in salaries and benefits is related to the addition of staff resources and annual salary increases.

200 Catherine Street

CREA currently occupies 17,800 sq. ft. of the total 52,000 sq. ft. leasable space on the 4th, 5th , 6th and 7th floors.

There are no major variances of actual to budget to identify and there were no major capital expenditures undertaken in 2014.

Liquidity and Capital Resources

The Contingency Reserve Fund is being maintained in accord with the policy of maintaining the Fund up to four months operating expenses.

The Legal Defence Fund has been maintained at $2.0M this year and the Board approved a Building Reserve Capital Fund to provide for up to $1.5M for anticipated tenant turnover. In 2014, $500K was appropriated to this fund.

The Futures Fund had a balance of $156,000 at the end of December 31, 2014 which was appropriated back to the Operating Fund since the project is now complete.

Risk Management

With the approval of the By-Law changes required under the new Not-For-Profit Act at the Special General Meeting in October, CREA received a copy of its certificate of continuance from Industry Canada on January 6, 2014.