Municipal Service Corporation (MSC)

MSC Consultation:

On April 21, 2026, Council supported moving forward with the legislated process for the creation of an MSC. As a first step, a draft business plan (available in 'documents' on the right) was presented and tabled at the June 16, 2026 Council meeting.

As a next step, the Township is gathering feedback from the public in order to evaluate whether an MSC is the best-suited governance and delivery model to support housing and future property development initiatives. No decision has been made to create an MSC at this time.

As required under Ontario Regulation 599/06 of the Municipal Act, 2001, a municipality must conduct a public consultation before incorporating an MSC. This public consultation framework is intended to inform residents and shareholders about the proposed MSC, gather meaningful input, and support transparent, Council-led decision-making before any decision is made to establish an MSC.

The public consultation period is proposed to begin June 25, 2026 and will end July 28, 2026. Members of the public will be able to submit feedback and questions to Township staff.

Please read the background information under 'What is an MSC?' and the Frequently Asked Questions to the right. Send remaining questions and feedback via email to communications@southfrontenac.net.

What is an MSC?

The Township of South Frontenac is exploring the creation of a Municipal Service Corporation (MSC) to develop, hold, and manage property, which includes municipal housing assets such as the Verona Housing Project (development of 92 new residential units - 48 townhouses and 44 apartments. All units are anticipated to be maintained at or below 100% of Median Market Rent (MMR), with more than 80% of them targeted at 80% MMR or less).

The proposed MSC would be established as a separate corporate entity responsible for advancing housing and other property development and holding property assets on behalf of the Township.

While the MSC would provide overall ownership, governance, and strategic oversight, operational functions such as property management, tenant services, maintenance, and day-to-day housing operations may be delivered directly by the MSC or through contracted service providers. As the Township advances the Verona Project and plans for future growth, it recognizes the need for a governance and delivery model that increases flexibility, reduces pressure on municipal capacity, and aligns with long-term financial objectives.

A Municipal Service Corporation (an MSC) can be created for several different reasons, the main reasons include:

  • Creating an autonomous body that will oversee the Verona Housing project and possible other housing projects in the future in South Frontenac.
  • Separating housing-related debt from the Township so that the project does not affect the Township’s long-term borrowing capacity and the Township is not directly responsible for repayment of the housing debt.

The proposed MSC structure has been designed to align with the Municipal Act, 2001 and Ontario Regulation 599/06 while providing the Township with a flexible governance framework that can evolve alongside its objectives. The structure also provides the ability to adapt over time, including the potential to introduce additional shareholders or expand the MSC's mandate should Council determine that such changes support the Township's long-term objectives. Overall, the proposed MSC represents a strategic approach to addressing housing needs in South Frontenac. It provides a scalable model that supports long-term growth, strengthens financial and operational flexibility, and enables the Township to play a more effective role in delivering housing while maintaining public accountability.

It is anticipated that, without a dedicated housing delivery corporation, the Township will continue to face challenges in meeting future demand for affordable and rental housing while balancing long-term financial sustainability and broader municipal service delivery responsibilities. The establishment of an MSC for housing is therefore expected to:

  1. Provide dedicated capacity and expertise to advance municipal housing priorities;
  2. Integrate the use of communal servicing solutions that enable compact growth in the Township including settlement areas such as Verona;
  3. Support the Township in achieving the housing expectations and population targets set out in its Official Plan.


Additional Resources:

The Municipal Act, 2001, S.O.2001, c 25, s. 203

Ontario Regulation 599/06: Municipal Services Corporations

MSC Consultation:

On April 21, 2026, Council supported moving forward with the legislated process for the creation of an MSC. As a first step, a draft business plan (available in 'documents' on the right) was presented and tabled at the June 16, 2026 Council meeting.

As a next step, the Township is gathering feedback from the public in order to evaluate whether an MSC is the best-suited governance and delivery model to support housing and future property development initiatives. No decision has been made to create an MSC at this time.

As required under Ontario Regulation 599/06 of the Municipal Act, 2001, a municipality must conduct a public consultation before incorporating an MSC. This public consultation framework is intended to inform residents and shareholders about the proposed MSC, gather meaningful input, and support transparent, Council-led decision-making before any decision is made to establish an MSC.

The public consultation period is proposed to begin June 25, 2026 and will end July 28, 2026. Members of the public will be able to submit feedback and questions to Township staff.

Please read the background information under 'What is an MSC?' and the Frequently Asked Questions to the right. Send remaining questions and feedback via email to communications@southfrontenac.net.

What is an MSC?

The Township of South Frontenac is exploring the creation of a Municipal Service Corporation (MSC) to develop, hold, and manage property, which includes municipal housing assets such as the Verona Housing Project (development of 92 new residential units - 48 townhouses and 44 apartments. All units are anticipated to be maintained at or below 100% of Median Market Rent (MMR), with more than 80% of them targeted at 80% MMR or less).

The proposed MSC would be established as a separate corporate entity responsible for advancing housing and other property development and holding property assets on behalf of the Township.

While the MSC would provide overall ownership, governance, and strategic oversight, operational functions such as property management, tenant services, maintenance, and day-to-day housing operations may be delivered directly by the MSC or through contracted service providers. As the Township advances the Verona Project and plans for future growth, it recognizes the need for a governance and delivery model that increases flexibility, reduces pressure on municipal capacity, and aligns with long-term financial objectives.

A Municipal Service Corporation (an MSC) can be created for several different reasons, the main reasons include:

  • Creating an autonomous body that will oversee the Verona Housing project and possible other housing projects in the future in South Frontenac.
  • Separating housing-related debt from the Township so that the project does not affect the Township’s long-term borrowing capacity and the Township is not directly responsible for repayment of the housing debt.

The proposed MSC structure has been designed to align with the Municipal Act, 2001 and Ontario Regulation 599/06 while providing the Township with a flexible governance framework that can evolve alongside its objectives. The structure also provides the ability to adapt over time, including the potential to introduce additional shareholders or expand the MSC's mandate should Council determine that such changes support the Township's long-term objectives. Overall, the proposed MSC represents a strategic approach to addressing housing needs in South Frontenac. It provides a scalable model that supports long-term growth, strengthens financial and operational flexibility, and enables the Township to play a more effective role in delivering housing while maintaining public accountability.

It is anticipated that, without a dedicated housing delivery corporation, the Township will continue to face challenges in meeting future demand for affordable and rental housing while balancing long-term financial sustainability and broader municipal service delivery responsibilities. The establishment of an MSC for housing is therefore expected to:

  1. Provide dedicated capacity and expertise to advance municipal housing priorities;
  2. Integrate the use of communal servicing solutions that enable compact growth in the Township including settlement areas such as Verona;
  3. Support the Township in achieving the housing expectations and population targets set out in its Official Plan.


Additional Resources:

The Municipal Act, 2001, S.O.2001, c 25, s. 203

Ontario Regulation 599/06: Municipal Services Corporations

  • Questions & Comments Received to Date (Published July 14, 2026)

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    Q1: How is the MSC funded?


    A1: The proposed MSC would be structured to be financially self-sustaining. For its first project, the Verona Housing, funding is planned to come from rental revenues. These revenues are expected to cover operating costs, maintenance, debt servicing, reserves, and the administrative costs of operating the MSC over the long term.



    Q2: Are taxes used to fund it? Is it designed to be profitable?


    A2: No, the MSC is being structured to ensure ongoing operations and capital requirements will be funded through project revenues, rather than municipal taxation. Further, the establishment of rent revenue is primarily based on different affordability levels as specified through CMHC. These are set to provide a cost recovery structure.

    Q3: Will the housing for the Verona Housing Project be funded through the provincial wastewater funding associated with the project, Township funds, or other funding sources?

    A3: Funding for this project is anticipated to come from a variety of sources, including provincial funding, federal funding, and local government funding contributions (through the County of Frontenac and City of Kingston). Any remaining project costs not covered by these sources would be financed.

    Q4: Why is the proposed MSC intended to separate housing-related finances from the Township, and what does this mean for future borrowing?

    A4: The proposed MSC is not being established simply to move liabilities or because the Township has a plan to increase borrowing. Housing is not a service currently provided by the Township both in relation to capital investment and operating housing. The purpose of the proposed MSC is to provide a governance and financial structure for delivering and managing housing projects, beginning with the 92-unit Verona Affordable Housing Project. This separates housing from the daily municipal operations and also helps preserve the Township's borrowing capacity for future municipal priorities, such as infrastructure and other community needs. There are currently no other identified borrowing needs by the Township.

    Q5: Why is the Township proposing to create an MSC instead of working through the Kingston and Frontenac Housing Corporation? Why is the Township proposing a new governance structure instead of using existing organizations and resources?

    A5: The Kingston and Frontenac Housing Corporation is a separate organization that is not governed or controlled by the Township of South Frontenac. It reports to the service manager for the area, the City of Kingston. The proposed MSC would allow the Township to retain ownership and strategic oversight of the housing project through a corporation that is aligned with the Township's housing priorities and long-term objectives. This approach would allow the Township to deliver and manage affordable housing through its own MSC while allowing the Township to maintain strategic oversight as the sole shareholder.

    Q6: Why does the Business Case evaluate multiple shareholder options if the recommended model is for the Township to be the sole shareholder? Could the ownership or shareholder structure of the proposed MSC change in the future?

    A6: The Business Case presents three shareholder structures (sole shareholder, multiple municipalities as shareholders, and a public sector entity as shareholder) because its purpose is to evaluate the governance options that are permitted under the Municipal Act, 2001 regulations before making a recommendation. Assessing reasonable alternatives is a standard part of developing a business case and helps Council and the public understand the advantages, disadvantages, and implications of each option.

    The proposed governance model recommended in the Business Case is for the Township of South Frontenac to remain the sole shareholder of the MSC. This is based on Council’s objective to maintain oversight and set the priorities of the MSC.

    Q7: How have residents been consulted on the proposed MSC and the Verona Housing Project?

    A7: The public consultation currently underway is intended to provide residents with an opportunity to review the proposed MSC, ask questions, and provide feedback before Council considers whether to proceed. All feedback received through the consultation process will be provided to Council as part of its decision-making.

    In relation to the Verona Housing Project, various public consultations have been undertaken going back to 2020. This includes the Verona Housing Master plan as well as the environmental assessment process.

    Q8: How does the proposed Verona Housing Project support affordable housing while remaining financially sustainable?

    A8: The Verona Housing Project will increase the supply and range of rental housing while operating on a cost-recovery basis. As identified in the Township's Official Plan, South Frontenac requires a broader mix of housing options, including housing that is affordable to low- and moderate-income households. The project is designed to support long-term financial sustainability by using rental revenues to cover operating, maintenance, and administration. Increasing the supply of housing across a range of price points is one of the strategies identified to help address local housing needs. The project currently has 82 affordable units set at 50% and 75% levels.

    Q9: Does the proposed MSC require ongoing financial support from the Township?

    A9: The proposed governance model is for the MSC to operate as a separate corporate entity at arm's length from the Township, with the expectation that it will be financially self-sufficient. As outlined in the Business Case, the Verona Housing Project is designed to operate on a cost-recovery basis, with rental revenues funding operating expenses, capital replacement, reserve contributions, debt servicing, and MSC administration costs. The MSC would be responsible for managing its own operating revenues, expenses, and financial obligations.

    Q1: How is the MSC funded?


    A1: The proposed MSC would be structured to be financially self-sustaining. For its first project, the Verona Housing, funding is planned to come from rental revenues. These revenues are expected to cover operating costs, maintenance, debt servicing, reserves, and the administrative costs of operating the MSC over the long term.



    Q2: Are taxes used to fund it? Is it designed to be profitable?


    A2: No, the MSC is being structured to ensure ongoing operations and capital requirements will be funded through project revenues, rather than municipal taxation. Further, the establishment of rent revenue is primarily based on different affordability levels as specified through CMHC. These are set to provide a cost recovery structure.

    Q3: Will the housing for the Verona Housing Project be funded through the provincial wastewater funding associated with the project, Township funds, or other funding sources?

    A3: Funding for this project is anticipated to come from a variety of sources, including provincial funding, federal funding, and local government funding contributions (through the County of Frontenac and City of Kingston). Any remaining project costs not covered by these sources would be financed.

    Q4: Why is the proposed MSC intended to separate housing-related finances from the Township, and what does this mean for future borrowing?

    A4: The proposed MSC is not being established simply to move liabilities or because the Township has a plan to increase borrowing. Housing is not a service currently provided by the Township both in relation to capital investment and operating housing. The purpose of the proposed MSC is to provide a governance and financial structure for delivering and managing housing projects, beginning with the 92-unit Verona Affordable Housing Project. This separates housing from the daily municipal operations and also helps preserve the Township's borrowing capacity for future municipal priorities, such as infrastructure and other community needs. There are currently no other identified borrowing needs by the Township.

    Q5: Why is the Township proposing to create an MSC instead of working through the Kingston and Frontenac Housing Corporation? Why is the Township proposing a new governance structure instead of using existing organizations and resources?

    A5: The Kingston and Frontenac Housing Corporation is a separate organization that is not governed or controlled by the Township of South Frontenac. It reports to the service manager for the area, the City of Kingston. The proposed MSC would allow the Township to retain ownership and strategic oversight of the housing project through a corporation that is aligned with the Township's housing priorities and long-term objectives. This approach would allow the Township to deliver and manage affordable housing through its own MSC while allowing the Township to maintain strategic oversight as the sole shareholder.

    Q6: Why does the Business Case evaluate multiple shareholder options if the recommended model is for the Township to be the sole shareholder? Could the ownership or shareholder structure of the proposed MSC change in the future?

    A6: The Business Case presents three shareholder structures (sole shareholder, multiple municipalities as shareholders, and a public sector entity as shareholder) because its purpose is to evaluate the governance options that are permitted under the Municipal Act, 2001 regulations before making a recommendation. Assessing reasonable alternatives is a standard part of developing a business case and helps Council and the public understand the advantages, disadvantages, and implications of each option.

    The proposed governance model recommended in the Business Case is for the Township of South Frontenac to remain the sole shareholder of the MSC. This is based on Council’s objective to maintain oversight and set the priorities of the MSC.

    Q7: How have residents been consulted on the proposed MSC and the Verona Housing Project?

    A7: The public consultation currently underway is intended to provide residents with an opportunity to review the proposed MSC, ask questions, and provide feedback before Council considers whether to proceed. All feedback received through the consultation process will be provided to Council as part of its decision-making.

    In relation to the Verona Housing Project, various public consultations have been undertaken going back to 2020. This includes the Verona Housing Master plan as well as the environmental assessment process.

    Q8: How does the proposed Verona Housing Project support affordable housing while remaining financially sustainable?

    A8: The Verona Housing Project will increase the supply and range of rental housing while operating on a cost-recovery basis. As identified in the Township's Official Plan, South Frontenac requires a broader mix of housing options, including housing that is affordable to low- and moderate-income households. The project is designed to support long-term financial sustainability by using rental revenues to cover operating, maintenance, and administration. Increasing the supply of housing across a range of price points is one of the strategies identified to help address local housing needs. The project currently has 82 affordable units set at 50% and 75% levels.

    Q9: Does the proposed MSC require ongoing financial support from the Township?

    A9: The proposed governance model is for the MSC to operate as a separate corporate entity at arm's length from the Township, with the expectation that it will be financially self-sufficient. As outlined in the Business Case, the Verona Housing Project is designed to operate on a cost-recovery basis, with rental revenues funding operating expenses, capital replacement, reserve contributions, debt servicing, and MSC administration costs. The MSC would be responsible for managing its own operating revenues, expenses, and financial obligations.

Page last updated: 14 Jul 2026, 01:14 PM