Well, good morning, everyone, and welcome to the 2024 Annual Meeting of the Shareholders of Extendicare. Before we begin, we acknowledge the land we are meeting on is the traditional territory of many nations, including the Mississaugas of the Credit, the Anishinaabe, the Chippewa, the Haudenosaunee, and the Wendat peoples, and is now home to many diverse First Nations, Inuit, and Métis peoples. We also acknowledge that Toronto is covered by Treaty 13 with the Mississaugas of the Credit. Thank you. I'm Alan Torrie, your Chairman, and joining me today at the podium are Michael Guerriere, your President and Chief Executive Officer. Beside him, David Bacon, Senior Vice President and Chief Financial Officer. Beside David is John Toffoletto, your Senior Vice President, Chief Legal Officer, and Corporate Secretary.
Also here with me today are my fellow directors, Norma Beauchamp, Sandra Hanington, Brent Houlden, Donna Kingelin, Samir Manji, and Alan Hibben is attending online. With that, we're about to commence the formal business portion of this meeting. But before we do so, we would like to remind you that our remarks today, including answers to your questions, may contain forward-looking information. By its nature, this information contains forecast assumptions and expectations about future outcomes, which are subject to the risks and uncertainties discussed more fully in our public disclosed filings. I will now call the meeting to order. I will act as chair as today's meeting, and I will ask that John Toffoletto act as secretary of the meeting. For the purposes of today's meeting, I appoint Computershare Trust Company to act as scrutineer through its representatives, Josée Kaufenberg and Heather Rose.
We are constituted this morning as the annual meeting of the shareholders of Extendicare Inc. Under the articles of the company, the common shares have attached to them a single vote per share. In order to facilitate the proceedings for today's meeting, I will present and move the proposals related to the items of business identified in the notice of the meeting. This is in no way intended to influence or discourage any comments or questions from the floor. On the contrary, should any shareholder or duly appointed proxy holder wish to speak on any matter, please do so. In that regard, I would ask that shareholders or proxy holders identify themselves by stating their name prior to speaking. If you have a question that relates to a specific motion, please ask it at the time that the matter of business is before the meeting.
Any questions that are not in respect to a particular motion should be asked during the general question and answer session following the formal business of the meeting. So now we will proceed with the formal business of the meeting. The secretary has provided me with a declaration affirming that the notice of this meeting was properly given to all shareholders entitled to receive notice and was accompanied by the Management Information Circular and form of proxy, or voting instruction form. Accordingly, with the consent of the meeting, the reading of this notice of the meeting will be dispensed with. The preliminary scrutineer's report on common share representation at today's meeting has been received, and it shows that there are more than 25% of all outstanding voting shares present, and therefore a quorum is present. A final report will be prepared following the meeting.
I therefore declare the meeting regularly called and properly constituted for the transaction of business. I direct the secretary to attach the declaration of mailing and the scrutineer's final report to the minutes of this meeting. So now we will proceed with the first item of business, which is the presentation of the consolidated financial statements for Extendicare for the year ended December 31st, 2023, and the report of the auditors thereon. A copy of the 2023 annual report containing the financial statements and the auditor's report was mailed to each shareholder that requested a copy. This report was also filed on SEDAR and posted on our website. Apart from presenting the financial statements, no further action is required to be taken by the shareholders on these financial statements.
David will be pleased to deal with any questions you may have at this time concerning the financial statements. So if any shareholder or proxy holder has a question, would you please rise, and if possible, use one of the microphones provided. I would also ask that you begin to please indicate whether you are a shareholder or a proxy holder and state your name. I'm going to pause here to see if there are any questions. I see no questions, so I'm going to carry on. I will now proceed with the next item of business, which is the appointment of Extendicare's auditors. As indicated in the Management Information Circular, KPMG LLP are the present auditors of the company, and the board, on advice of the Audit Committee, recommends their reappointment.
Therefore, I move that KPMG LLP be appointed as auditors for Extendicare at such remuneration as shall be fixed by the board until the next annual meeting of the company. As proxy holder, I am advised that sufficient votes in favor of this motion were cast prior to the meeting. We will now proceed to vote by a show of hands. All those in favors, please raise your hand. Any of those opposed? I see none, and I declare therefore, the motion carried. So now I want to proceed with the next item of business, which is the election of directors for the ensuing year. All nine directors are standing for re-election, and the number of directors to be elected today has been fixed at nine by the board.
The nominees for election as directors, in addition to myself, are Norma Beauchamp, Michael Guerriere, Sandra Hanington, Alan Hibben, Brent Houlden, Donna Kingelin, Samir Manji, and Al Mawani. There having been no further nominations received in advance of this meeting, in accordance with Extendicare's advance notice bylaw, I declare the nominations closed. I move that each of the individuals so nominated be elected as directors of Extendicare to hold office until the next annual meeting of the company or until their respective successors are elected or appointed. The vote for this item of business will be conducted by ballot. The scrutineers distributed ballots to shareholders and proxy holders as they entered the meeting, and the ballots for this item are green. If you have already voted by proxy and did not revoke your proxy prior to the commencement of this meeting, you should not cast a ballot.
If you have not received a ballot and require one, please raise your hand now. I will now instruct you on the completion of the ballot. In the space provided on the ballot, please inscribe an X to indicate whether you are voting for or against, as the case may be. Please sign and print your name at the bottom of the ballot. When you have finished, please hold up the completed ballot for collection by the scrutineers. I'm going to pause while ballots are completed and collected, if there are any. It appears as if we have completed that, and any ballots have been collected, if there were any. As there are no more ballots to be cast, I declare the poll closed.
The last scheduled item of business is an advisory resolution on the board of directors' approach to executive compensation, commonly called Say on Pay. This is an advisory role, the results of which are non-binding. However, it gives the shareholders an opportunity to provide important input on the company's executive compensation practices. The board, and in particular, the Human Resource Committee, will consider the outcome of the advisory vote as part of its ongoing review of executive compensation and when considering future compensation policies, procedures, and decisions. At this time, I would invite you to ask questions with respect to the company's approach to executive compensation. Again, if you do have a question, please rise, and if possible, use one of the microphones provided.
I would ask that before you begin, again, to please indicate whether you are a shareholder or a proxy holder and to state your name. Okay, I don't see any further questions on the matter. So I move on an advisory basis, not to diminish the role and responsibility of the board of directors, that the shareholders accept the approach to executive compensation disclosed in the company's Management Information Circular, delivered in advance of this meeting of shareholders. For your information, I've been advised by the scrutineers, based on the proxies received in advance of the meeting, we've received greater than 90% of the votes in favor of this item of business. Accordingly, we will now proceed with a vote of hand-by hands. All those in favor, raise your hands. Any opposed? There be none. I declare the motion carried.
In respect to the election of directors, I have been advised by the scrutineer on the ballots and proxies deposited for this item of business, eight of the nine nominees have received a majority of votes cast. As such, I declare, with the exception of Alan Hibben, the remaining eight proposed director nominees have been duly elected to hold office until the next annual meeting of shareholders or until they resign or their successors are duly elected or appointed. As Chair and speaking on behalf of the board, I'd like to acknowledge Alan for his significant contribution to the success of Extendicare, for his applied intelligence, his steadfast independence, and for his collaborative and forthright voice as a board member who always placed the interests of shareholders and our patients above all else. The company will, in due course, commence the process to address the vacancy.
This concludes the proposals to be voted on at today's meeting. The exact number of votes cast in respect of all this and all matters will be announced by way of a press release and filed in SEDAR, as well as made available on our website. Having completed all of the business for which this annual meeting of shareholders was called, I move and declare the meeting to be terminated. On behalf of the management and the board, I'd like to thank you all for your strong show of support, your interest, and your continued loyalty by attending today's meeting. I have the pleasure and the opportunity now to make some chair's remarks, with the formal part of this business meeting completed.
I'll try to keep them brief, but my comments regarding the past year, I'd like to highlight, including some of our ESG initiatives before, excuse me, handing it over to Michael for comments from our CEO. The past few years have presented unprecedented challenges for the entire healthcare system and for senior care in particular. We've used that time to continue to make changes needed to drive our business forward. Today and in the future, we believe Extendicare is very well positioned to expand its capacity to deliver high-quality care for the aging population. We marked a significant milestone in the life of Extendicare when we completed a series of strategic transactions that positioned the company to drive growth and value creation using a less capital-intensive, higher-margin business model.
This multi-year transformation process took a strong strategic vision, an unwavering focus on the finish line, and an enormous effort from many people to bring the significant change to fruition. But the effort has paid off. In our new corporate structure, we are in even a better position to address the healthcare needs of the growing seniors population in Canada. We are also starting to see the benefits of our financial results and in the key performance indicators across all of our business segments. Michael will talk more about the specifics of this transformation later in the meeting. As mentioned, I'd also like to take a moment to highlight some of the ESG initiatives that we have undertaken over the past year that align with our commitment to care.
Our goal is to focus our attention on those elements that are most meaningful to our operations and have the most impact on all our stakeholders. The full extent of the various initiatives is explained more fully in this year's Management Information Circular. We are a healthcare company, first and foremost. The social benefits we are delivering through care where it is needed have always been central to the purpose of our organization. We are investing in building safe, comfortable spaces where we can offer residents high quality and compassionate care to help improve their quality of life. At the same time, increasing our capacity to deliver more care in the home to allow seniors to age in place is critical towards alleviating pressures on the healthcare system and creating a better patient experience. Within the organization, we are investing in our people.
By prioritizing team growth, training, and leadership development, we are not only able to attract and retain high-quality talent, but also build expertise to amplify the quality of care we provide. For the third consecutive year, we were honored to be recognized by The Globe and Mail through the 2024 Women Lead Here list of companies. This list recognizes those organizations that exceed the benchmark for executive gender diversity in corporate Canada. By emphasizing diversity throughout the company, we ensure that we have access to the full range of diverse and talent- diverse talent available. So I want to thank the shareholders for your support and partnership as we continue to execute on this exciting strategic agenda. We have seen the effects of this transformation in our recent financial results and look forward to sharing our continued success with you in the future.
I would like to thank my fellow directors for their wise counsel and oversight during the past year. Finally, on behalf of the full board, I thank all our dedicated team, our advisors, and all of you for your continued support of Extendicare as we continue to serve communities right across Canada. With that said, I'd now like to turn the mic over to Michael, the mic to Michael, Extendicare's CEO, who will provide some remarks and conduct a general question and answer period for the meeting. Michael?
Thanks, Alan, and good morning, everybody. Thank you very much for joining us this morning. As Alan made clear, 2023 was a very rewarding year for all of us at Extendicare as we completed the series of strategic initiatives that Alan mentioned.... So let's take a few minutes just to review our progress. Our transformation really began in 2022, with the sale of our retirement operations, and culminated last year with the Revera and Axiom transactions. Concluding these significant transactions has positioned us to address the growing market opportunity in seniors care, as Alan said, using a less capital-intensive approach. Services now represent more than half of our operating income. The impact of this transformation is already showing up in our results, beginning in the second half of last year, with significant growth across all of our business segments.
The positive momentum carried into the first quarter of this year, with double-digit growth across our home health care and managed services segments. During the year, we also made strides with technology investments across the organization to optimize processes and increase operational efficiency. These investments are starting to show in our operating results in the form of expanding margins. Over time, these investments will also improve customer service, driving top-line growth, especially in our services segment. 2023 brought a recovery in occupancy and improvement in long-term care margins. While inflation drove higher costs, they eased somewhat in the second half of the year as cost management initiatives helped our margins to begin to improve. For the past few years, we have spoken about the need to address the funding gap that arose as a result of the significant inflationary pressures on our operating costs.
Fortunately, the Government of Ontario's spring budget announced increased long-term care funding to help catch up to inflation. This funding will go a long way to restoring the financial stability of the sector and supporting our redevelopment program. Looking ahead, we face a rapidly aging population that is creating real challenges for the healthcare system and driving increased need for long-term care. Together with Axiom Infrastructure, our joint venture partner, we are building new homes to address this growing demand. In March of this year, we opened Extendicare Countryside in Sudbury, our newly built 256-bed long-term care home. We currently have five other redevelopment projects under construction in Ontario, held in the joint ventures with Axiom. We are on track to open two of these homes later this year.
As the new replacement homes open, we are selling the vacated Class C properties they replace, allowing us to recycle capital into new development. We continue to advance another 15 redevelopment projects that are in various stages of design and planning across Ontario. With the new capital funding subsidy announced this year, we're going to be able to offset some rising construction costs, and we hope to begin construction on up to 4 new projects in 2024. But despite all of this construction activity, we're still facing significant undercapacity in the long-term care sector for the foreseeable future. Home health care is the answer to filling that gap. As seniors live longer, they understandably want to age in their own homes. Last year, we delivered a 10% increase in home care services.
This momentum continued into 2024, as we delivered 10.2 million hours of care in the trailing twelve months, ending in March. Last year, the Government of Ontario provided a significant rate increase for home health care to support compensation increases, training, recruitment and retention, and technology investments. We welcome this increase, which is an endorsement of the investments that we've made in our people and technology over the past several years. This funding has enabled a significant expansion in the ParaMed workforce, which will support continued volume growth in future quarters. In our managed services segment, we can see the full impact of the Axiom and Revera transactions on our Q4 and Q1 results. They added 7,000 beds to our Extendicare Assist and SGP group purchasing customer base.
At the end of March this year, Extendicare Assist had management contracts with 71 homes and provided a further 52 homes with consulting and other services. In addition to serving our owned and assist homes, SGP has broadened its market reach across Canada to provide services to more than 138,000 beds at the end of the first quarter. With the benefit of the past transactions, we're well positioned for continued expansion of our client base and service offerings to a growing market, supported by demographic trends. This past February, we assembled in this room to mark 50 years of trading on the Toronto Stock Exchange by ringing the opening bell. Many of you in the room today were there.... And I want to take a moment to thank you for your many invaluable contributions over the past few years.
I'm very proud of the outstanding management team we have assembled. We have recently been enriched by welcoming Revera's talented and capable long-term care leadership to bring the most experienced operators in Canada together in one organization. Thank you for sharing your expertise and for your tireless dedication to our mission. It is truly my great privilege to work with each and every one of you each day. I want to extend that thank you to the whole team, to every one of our over 22,000 team members working in our long-term care homes and our home health care districts across the country, and also to those working to support them in our head office and our boardrooms. Our team is the driving force behind the high-quality care that we deliver every day. The need for the critical services we deliver has never been more apparent.
The shift we have made has helped Extendicare transform into a growth platform to meet the critical and increasing care needs of seniors, Canada's seniors demographic. Finally, I want to extend my gratitude to our shareholders for their continuing support. With our strategy firmly in place, we look forward to sharing more positive developments with you in the quarters and years to come. Now, I'd like to direct your attention to a short video that gives you a feel for the work that our team of 22,000 does every day. It was produced to recognize being named to The Globe and Mail's Women Lead Here list for the third consecutive year. Please join me now in watching how our women leaders embrace challenges, build partnerships, and make a difference in the lives of those in our care.
I came from an administrative position, so this was all brand new. It's a constant growth of a position, and I think it's a very important role. Some people are bed-bound, some people are there on their own, and just even to see another face and someone who's interested, it means the world.
Hi, welcome. Hello, Shirley. How are you today? Oh, nice to see you. Yeah, you too.
Just under two years, I was a supervisor. Being that support person, that they don't feel alone in the client's home, and that they can turn to somebody for support. Yes, these patients are less acute. Yes, they're stable enough to be at home, but they still need that critical care that's in the home.
I started as a PSW supervisor. I moved from PSW supervisor to nursing supervisor to educator. I have had my hands in a lot of different pots here at ParaMed, but I'm in the role that I, I enjoy.
Such a big company that's so supportive and wants to see their staff grow and become bigger things in their career. We have an HSW and PSW bridging program, which is funded by ParaMed. It supports HSWs to expand their role and expand their tasks and what they can do.
It has given me a space where I can empower myself as a woman who is working full-time, who is studying at the same time.
While they're working, we give them time off for school to make sure that they're focused on their PSW studies. Once they graduate and complete the course, they're full functioning PSWs.
The flexible class schedule, the unwavering support of the instructor, and the opportunity given by the organization came as a true blessing for me.
Being a woman at ParaMed and being in a leadership role is fantastic. It shows that women are not just compassionate, but we're also very strong and strong-willed.
Well, you can tell I love what I do.
Yeah, that
Second career, and I couldn't have chosen anything better, so-
Nice.
Yeah. Yeah.
You know, there's several things that I like about that video. One is that none of those people were scripted. So we just filmed them, asked them some questions, and that is what their answers were. And it's just wonderful to feel their enthusiasm. But you also see the enthusiasm in the growing team. I talked about the 10% growth in our ParaMed volumes last year. That was 800,000 additional visits last year. And you look at that reaction of that person knocking on the door, and the door opens, and, "Hi, come on in!" And you think about that times 800,000.
That's just the growth part, and that growth part is enabled by the training and the development programs that we've set up to be able to increase the number of caregivers that are available to help to deal with that shortage that we have. Anyway, I look at that, and it just gets me out of bed every morning thinking we're not doing enough, like, let's get to it. And I'm looking at a lot of people in this room who are responsible for making this happen. And I really do—I mean, I thanked you before, but I really want to thank you, and again, say what a privilege it is. Like, I feel so privileged to work with all of you people. It's really the privilege of my life to be able to do this work.
And so with that, we're pleased to respond to questions from our shareholders or duly appointed proxy holders. So if you have a question, please rise, and if possible, use one of the microphones provided. And as Alan mentioned, please indicate if you're a shareholder or proxy holder and state your name. Any questions? I love this. This is the quietest I've ever seen this group. Ever! The board included. All right. So look, thanks for coming and attending the meeting with us. We have lunch served in the foyer, so hopefully, everybody can stay for a little bit and mingle. And I do encourage all of you in the management team to spend a little bit of time talking to our board members and just kind of sharing your experience a little bit.
So thank you again for joining us this morning.