Report to Shareholders - Sienna Living

Q1 2021 Sienna Senior Living Inc.

Report to Shareholders

LETTER TO SHAREHOLDERS Dear Fellow Shareholders,

The COVID-19 pandemic continues to have a profound impact here in Canada and around the globe.

Ontario has been the hardest hit province during the third wave of the pandemic, which has stretched the

province’s healthcare system to its limits. At the same time, early vaccinations across the seniors living

sector ahead of the third wave of the pandemic provided crucial protection for both residents and team

members. We are incredibly thankful that our sector was made a priority for the vaccination rollout, and

encourage all Canadians who have not yet received their vaccine to get it as soon as they can.

At Sienna, vaccinations have steadily progressed with 95% of all residents having received their first dose

of the vaccine and 84% fully vaccinated in early May. In addition, 74% of Sienna’s team members have

received, at a minimum, their first dose. The early roll-out of vaccines among residents and team members

was a significant factor in the 99% decline of active COVID-19 resident cases since the beginning of the

year, supporting the Company’s return to a more stable operating environment.

While vaccinations proved to be crucial to limiting the spread of the virus in our residences, Sienna’s vigilant

infection prevention and control (“IPAC”) measures and COVID-19 infrastructure continue to play an

important role. From screening, on-site rapid antigen testing, maintaining elevated staffing levels and a

robust supply of personal protective equipment, and providing information on all aspects of the vaccine,

we have been using every tool at our disposal to maximize the safety of team members, our residents and

their families.

We are thankful for the ongoing support of our governments who made seniors a priority in their 2021/22

budgets announced earlier this spring. The Government of Ontario committed to make an additional $650

million available to protect long-term care residents and our Federal Government committed $3 billion over

the next five years to support the provinces and territories in their commitment to address the challenges

of the rising complexities of care, staffing shortages and outdated infrastructure.

Across both our long-term care and retirement portfolios, occupancy remains impacted, in particular at

residences located in COVID-19 hotspots. Sienna’s long-term care occupancy has been affected by the

temporary closures of residences to new resident admissions during an outbreak as well as capacity

limitations in multi-bed rooms to a maximum of two residents per room. We anticipate the gradual

resumption of new admissions in the coming months. The Government of Ontario extended its occupancy

protection funding for vacancies until August 31, 2021.

In our retirement portfolio, we are seeing strong interest from prospective residents. However, various

restrictions at many residences continued to impact occupancy during the first quarter. With the high

vaccination rate in seniors living residences, starting in April, the Governments of Ontario and British

Columbia have begun to ease restrictions, including the lifting of self-isolation requirements for new

residents and the resumption of social activities and communal dining at many residences. These gradual

changes, which are expected to accelerate admissions of new residents, will have a positive impact on

Sienna’s operations over time.

Throughout the pandemic, Sienna has maintained a solid financial position and an investment-grade credit

rating. We significantly reduced near-term debt maturities and improved our long-term debt maturity

ladder. At the end of Q1 2021, our liquidity was $213 million, further supported by an unencumbered asset

pool of approximately $840 million.

These strong financial fundamentals support our strategic plan to redevelop and expand our current long-

term care and retirement portfolios. Our development plans include over $600 million in capital

investments to redevelop Sienna’s Ontario long-term care portfolio over the next five to seven years, with

two long-term care projects in Ontario slated to start later this year.

We are also making good progress on our development of a new retirement residence in Niagara Falls with

construction scheduled to start in Q2 of 2021. Sienna’s share of this 150-suite greenfield retirement

development is 70%.

As part of our ongoing commitment to supporting to those who need it most, we finalized the formation of

the Sienna for Seniors Foundation (“Foundation”) in April 2021. The Foundation allows us to raise funds for

a variety of important causes in both Ontario and British Columbia. In connection with our enhanced focus

on mental health and wellness in the communities we serve, Sienna made a $250,000 donation to

Scarborough Health Network in support of its new mental health hub which will support quality care for

seniors.

Looking ahead, we will continue to draw on the strong relationships that have been formed between our

residences and care communities, local public health units, hospitals, governments and beyond. We have

renewed optimism for our sector and our Company. The anticipated economic recovery, an aging

demographic and the return to a more stable operating environment all support the outlook for our

Company.

In everything we do, we are guided by the belief that it is both a great privilege and a tremendous

responsibility to ensure that Canadian seniors can live with the utmost dignity and respect. I am incredibly

grateful for our team’s unwavering commitment to fulfill this important mission and acknowledge the many

stakeholders who have supported us throughout the pandemic, including the federal and provincial

governments, our sector associations, our hospital partners and our residents and their families.

On behalf of our management team and our Board of Directors, I want to thank all of you for your continued

support and commitment.

Sincerely,

Nitin Jain

President and Chief Executive Officer

Sienna Senior Living

Management’sDiscussion and Analysis

Q1 2021 Report to Shareholders

MANAGEMENT'SDISCUSSIONANDANALYSIS

BASISOFPRESENTATION............................... 1

ADDITIONALINFORMATION.......................... 1

REVIEWANDAPPROVALBYTHEBOARDOFDIRECTORS.................................................... 1

COMPANYPROFILE........................................ 2

OUROPERATIONSANDPANDEMICRECOVERYUPDATE........................................ 2

NON-IFRSPERFORMANCEMEASURES........... 9

KEYPERFORMANCEINDICATORS................... 10

FIRSTQUARTER2021SUMMARY................... 14

OUTLOOK...................................................... 17

OURVISION,MISSIONANDVALUES.............. 18

COMPANYSTRATEGYANDOBJECTIVES......... 20

ENVIRONMENTAL,SOCIALANDGOVERNANCE(ESG)RESPONSIBILITY............. 21

INDUSTRYOVERVIEW.................................... 22

BUSINESSOFTHECOMPANY......................... 22

QUARTERLYFINANCIALINFORMATION......... 23

OPERATINGRESULTS..................................... 25

NETOPERATINGINCOMECONSOLIDATED..... 26

NETOPERATINGINCOMEBYSEGMENT......... 27

RETIREMENT.............................................. 27

LONG-TERMCARE..................................... 28

DEPRECIATIONANDAMORTIZATION............. 29

ADMINISTRATIVEEXPENSES........................... 29

SHAREOFNETLOSSINJOINTVENTURE......... 29

NETFINANCECHARGES.................................. 30

TRANSACTIONCOSTS..................................... 30

INCOMETAXES............................................... 30

BUSINESSPERFORMANCE.............................. 31

ADJUSTEDFUNDSFROMOPERATIONS.......... 31

FIRSTQUARTER2021PERFORMANCE............ 31

CONSTRUCTIONFUNDING.............................. 32

MAINTENANCECAPITALEXPENDITURES........ 33

RECONCILIATIONOFCASHFLOWFROMOPERATIONSTOADJUSTEDFUNDSFROMOPERATIONS................................................... 34

FINANCIALPOSITIONANALYSIS..................... 35

LIQUIDITYANDCAPITALRESOURCES............. 36

LIQUIDITY........................................................ 36

DEBT............................................................... 36

CREDITRATINGS............................................. 40

FINANCIALCOVENANTS.................................. 40

EQUITY............................................................ 44

CAPITALDISCLOSURE..................................... 45

CONTRACTUALOBLIGATIONSANDOTHERCOMMITMENTS............................................. 46

CRITICALACCOUNTINGESTIMATESANDACCOUNTINGPOLICIES.................................. 46

SIGNIFICANTJUDGEMENTSANDESTIMATES. 46

RISKFACTORS................................................ 46

CONTROLSANDPROCEDURES....................... 46

FORWARD-LOOKINGSTATEMENTS................ 47

BasisofPresentation

ThefollowingManagement'sDiscussionandAnalysis("MD&A")forSiennaSeniorLivingInc.(the"Company"or"Sienna")providesasummaryofthefinancialresultsforthethreemonthsendedMarch31,2021.ThisMD&A should be read in conjunction with the Company's unaudited condensed interim consolidatedfinancialstatements ("interimconsolidatedfinancialstatements") for thethreemonthsendedMarch31,2021. Thismaterial is availableon theCompany'swebsite atwww.siennaliving.ca.Additional informationabouttheCompany,includingitsAnnualInformationForm("AIF")fortheyearendedDecember31,2020,canbefoundontheSystemforElectronicDocumentAnalysisandRetrieval("SEDAR")atwww.sedar.com.

Allreferencesto"we","our","us","Sienna",orthe"Company",unlessotherwiseindicatedorthecontextotherwise requires, refer to Sienna Senior Living Inc. and its direct and indirect subsidiaries. For ease ofreference,the"Company"isusedinreferencetotheownershipandoperationofseniors'livingresidencesanditsthirdpartymanagementbusiness.SubsidiariesoftheCompanyarethedirectownersandoperatorsofsuchresidences.

Financial information has been prepared in accordance with International Financial Reporting Standards("IFRS").Inthisdocument,"Q1"referstothethree-monthperiodendedMarch31;"Q2"referstothethree-monthperiodendedJune30;"Q3"referstothethree-monthperiodendedSeptember30;and"Q4"referstothethree-monthperiodendedDecember31.

Unless otherwise stated, all dollar amounts referred to in this MD&A, including tabular amounts, areexpressedinthousandsofCanadiandollars.

This MD&A contains forward-looking information based on management's expectations, estimates andprojectionsaboutthefutureresults,performance,achievements,prospectsoropportunitiesforSiennaandtheseniors' living industryasofthedateofthisMD&A.Pleaserefertothe"Forward-lookingStatements"sectionandthe"RiskFactors"sectionofthisMD&Aformoreinformation.

AdditionalInformation

Additional information relating to the Company can be found on the Company's website atwww.siennaliving.ca,byaccessingtheCompany'spublicfilingsonSEDAR,orbycontactingKarenHon,theCompany'sChiefFinancialOfficerandSeniorVicePresident,[email protected].

ReviewandApprovalbytheBoardofDirectors

ThisMD&AisdatedasofMay12,2021,thedatethisreportwasapprovedbytheBoardofDirectorsoftheCompany,andisbasedoninformationavailabletomanagementoftheCompanyasofthatdate.

SiennaSeniorLivingInc.–Q12021Management’sDiscussionandAnalysis 1

CompanyProfile

The Company and its predecessors have been operating since 1972. The Company is a seniors' livingproviderservingthecontinuumof independent living("IL"), independentsupportive living("ISL"),assistedliving("AL"),memorycare("MC")andlong-termcare("LTC"or"Long-termCare")throughtheownershipandoperationofseniors' livingresidences intheProvincesofBritishColumbiaandOntario.TheCompanyownsandoperatesatotalof70seniors'livingresidences:27retirementresidences("RRs"or"RetirementResidences");35 LTC residences;andeight seniors' living residencesprovidingbothprivate-pay IL/ALandfundedLTC(includingtheCompany'sjointownershipintworesidencesinBritishColumbia).TheCompanyalsoprovidesmanagementservicestoanadditional13seniors'livingresidencesintheProvincesofBritishColumbiaandOntario.

ThetablebelowrepresentsthenumberofsuitesorbedsownedandoperatedbytheCompany,bybusinesssegment.

Retirement(Suites)

Long-termCare(Beds) Total(1)

BusinessSegment Residences Private Private Funded Beds/Suites

Retirement 27 3,291 — — 3,291

Long-termCare(2) 43 — 180 6,688 6,868

Total 70 3,291 180 6,688 10,159

Notes:1. 82.6%and17.4%oftotalbeds/suitesarelocatedinOntarioandBritishColumbia,respectively.2. 5.4% of total LTC beds and suites are partially owned, of which the Company owns 40% of Nicola Lodge and 77% of Glenmore Lodge as at

March31,2021.

TheCompanyistradedontheTorontoStockExchange("TSX")underthesymbol"SIA".

The Company's business is carried on through a number ofwholly owned limited partnerships and jointventuresformedunderthelawsoftheProvinceofOntario.

AsatMay12,2021,theCompanyhad67,039,123commonsharesoutstanding.

OurOperationsandPandemicRecoveryUpdate

Foroverayear,wehavetakencriticalstepstofightthepandemicwhileprovidingthebestqualityofcareforourseniorsandpreparingfornewandevolvingchallenges.

Weenhancedourhealthcareexpertise,establishedaQualityCommitteethatincludesmembersofSienna'sBoardofDirectors, secureda robust supplyof personal protectiveequipment ("PPE") and reinforcedourinfectionpreventionandcontrol ("IPAC")practices.Wealsoput inplaceapandemicstaffingstrategyandincreasedfrontlinestaffing,joinedtheSeniorsQualityLeapInitiative("SQLI")tobenchmarkbestpracticesinthe sectorand strengthenedcommunicationswithourkey stakeholders. Inaddition,ourvaccination taskforce has been supporting the roll-out of vaccines across all of our residences in Ontario and BritishColumbia.


Thesecombinedefforts resulted in thecrucialdecline inactiveCOVID-19casesacrossSienna's83ownedandmanaged residencesaheadof the thirdwave. Since thebeginningof 2021, activeCOVID-19 residentcasesdeclinedby99%.Ata timewhenCanadahasbeenexperiencingamassivesurge inCOVID-19casesduring the third wave of the pandemic, our Company has been returning to a more stable operatingenvironment.

While Sienna's COVID-19 infrastructure remains in place to maximize the safety of team members andresidents, includingscreening,on-siterapidantigentesting,andmaintainingelevatedstaffing levelsandarobustsupplyofPPE,certainrestrictionsrelatingtotheseniorslivingsectorhaverecentlybeeneased.Mostnotably,theGovernmentsofOntarioandBritishColumbiahavestartedtoeaseself-isolationrequirementsinseniorslivingresidences,andcommunaldiningandsocialactivitiesinresidenceswithhighimmunizationrates are starting to resume. The Government of Ontario has also removed single-site orders for fullyimmunizedstaffmembers,allowingthemtoworkatmorethanonelocation.

Siennacontinuestoincuranincreasedlevelofexpensestosupportthecostsoffightingthepandemicandminimizingthe impactofoutbreaks.DuringQ12021,Sienna incurred$26.8millionofpandemicexpensesforwhichitreceived$21.4millioninpandemicfundingfortheperiod,excludingflow-throughpandemicpayforfrontlinestaff.

Inaddition, theCompanyreceivedretroactivegovernmentassistance in theamountof$15.3millionwithrespecttopandemicexpensesincurredin2020inexcessofavailablefunding.ThisamountwasrecognizedinQ12021andledtotherecoveryofasubstantialportionofthenetpandemicexpensesincurredin2020.Notwithstandingthisretroactivefunding,ourfinancialresultscontinuetobeimpactedbytheextraordinaryexpenses incurred to manage the pandemic, including investments in additional staffing, PPE, propertyinfrastructureandseniorhealthcareexpertise.Weexpectthiselevatedlevelofexpensetograduallydeclineasthepandemicsubsides.

Aswe are unable to predictwith certainty the duration and scopeof the pandemic, it is not possible toreliablyestimatethelengthandseverityofCOVID-19relatedimpactsonthefinancialresultsandoperationsoftheCompany.Pleaserefertothe"RiskFactors"sectionofthisMD&Aformoreinformation.

COVID-19CasesDuringandSubsequenttoQ12021COVID-19casesstarted to rise sharplyacrossCanada inMarch, inparticular in someof themostdenselypopulatedregions, includingtheGreaterTorontoArea("GTA")whereoverhalfofSienna's long-termcareportfolioislocated.

Atthesametime,activecasesacrossSienna'slong-termcareandretirementcommunitieshavedecreasedsignificantlysincethebeginningof2021andhaveremainedlowduringthethirdwaveofthepandemic.ThisislargelyattributedtohighvaccinationratesinourLTCandRetirementResidencesandcontinuedstringentIPACprotocols.AsofMay11,2021,10residencesofSienna's83ownedormanagedresidenceshaveactiveCOVID-19 cases, including one retirement and nine long-term care residences. Sienna has no activeCOVID-19casesacrossanyofitsresidencesinBC,andonlythreeactiveresidentcasesacrossitsportfolioinOntario.Thismarksasignificantimprovementandrepresentsa99%declinesincethebeginningof2021.


Vaccinations

Staff,residentsandfamilycaregiversinLTCandretirementhomeswereatthetopoftheprioritylistfortheroll-outofvaccinesinCanada.Overthepastmonths,wehaveseentheevidenceofthevaccinationefficacyfirsthandwithasignificantdeclineinCOVID-19outbreaksacrossourresidences.

Accordingtoourmostrecentvaccinationdata,95%ofourresidentsand74%ofourteammembersreceivedatleastonedoseofvaccine.

While we strongly believe that the vaccine is our best line of defense against this pandemic, its overalleffectiveness will ultimately depend on numerous factors, including vaccination rates across the widercommunity, the effectiveness of the vaccines with respect to new variants of the virus, and waning ofimmunity,tonameafew.

Vigilant IPAC measures and protocols will therefore remain in place across Sienna's residences for theforeseeablefuture.

ManagementofCOVID-19-Long-termCareIn Q1 2021, the Company's long-term care portfolio, which comprises 6,868 beds in Ontario and BritishColumbia, contributed approximately 59% to the Company's overall NOI, excluding the impact of netpandemicrecovery.

Over half of Sienna's LTCbeds are located in theGTA, themost densely populated andoneof themostseverely affected regions in Canada. Of these beds, approximately 1,643 beds are in older Class B/Cproperties,representingapproximately74%ofSienna’sClassB/CportfolioinOntario.

During Q1 2021, Sienna incurred $23.5 million of pandemic expenses in the LTC segment, for which itreceived $19.9 million in pandemic funding for the period, excluding flow-through pandemic pay forfrontline staff and the retroactive pandemic funding of $15.3million received in Q1 2021 for pandemicexpensesincurredduring2020.

GovernmentFundingTheGovernmentsofOntarioandBritishColumbiahaveprovidedfundingforincrementalCOVID-19costsinaddition to ongoing long-term care funding for nursing and personal care, programming, food andaccommodation.Exceptforaccommodation,allgovernmentfunding,includingCOVID-19pandemicrelatedfunding,isrequiredtobespententirelyonresidentcareandissubjecttoaperiodicreconciliationprocessprescribed by the applicable regulatory authorities. Any excess funding amounts not spent directly onresidentcareorpandemicexpensesarerequiredtobereturnedtothegovernment.

As outlined in detail under the "First Quarter 2021 Summary" section in this MD&A, certain pandemicexpenses are not funded or exceed the funding provided by the various governments and have beenreflectedintheCompany'sresults.

DuringQ12021,theGovernmentofOntariomadetwomajorfundingannouncements.OnJanuary5,2021,it announced an additional $398million in funding for costs related to enhanced staff and visitor testingrequirements and continued COVID-19 prevention and containment efforts. Furthermore, on March 24,


2021, it announced an additional $650million to protect long-term care residents as part of its 2021-22budget,increasingtotalfundingannouncedtodatetoapproximately$2.1billion.

In addition, the FederalGovernment announced$3billion in fundingover thenext five years to supportlong-termcareacrossCanada'sprovincesandterritories in itsbudgetonApril19,2021,withmoredetailsexpectedtofollow.

ForLTCresidencesinbothOntarioandBritishColumbia,theCompanycontinuestoreceivefullfundingforvacancies caused by the temporary closure of admissions due to an outbreak, including COVID-19. TheGovernmentofOntarioextendeditsoccupancyprotectionfundingforvacanciesandmulti-bedroomswithcapacitylimitationstoamaximumoftworesidentsperroomuntilAugust31,2021.

The current fundingprotectiondoesnot compensate for the lossofpreferredaccommodationpremiumsfromprivateandsemi-privateroomvacancies.Theimpactofthelossofpreferredaccommodationrevenueswas$1.1millionforthethreemonthsendedMarch31,2021.

Giventhelongwaitinglistofapproximately38,500forLTCbedsacrossOntario,weanticipatethegradualresumption of admissions and the achievement of occupancy targets required for full funding as theoccupancyprotectionfundingends.

ManagementAgreementswithHospitalsSiennahadenteredintovoluntarymanagementagreementswithhospitalpartnerstoprovideexpertiseandresourcesinmitigatingtheimpactofCOVID-19inanumberofLTCresidences,allofwhichhaveconcludedduringorsubsequenttotheendofQ12021.

Workingwiththehospitals,wehaveimplementedadditionalmeasures,processes,andprotocolspursuanttoprovincialandpublichealthdirectivesandrequirements,tocareforandprotectourresidentsandstaff.Weplantocontinueouractiveengagementwithourhospitalpartnerstoprovideenhancedintegratedcareforourresidents.

RecommendationsissuedbyOntario'sAuditorGeneralandOntario’sLong-termCareCOVID-19CommissionOnApril28,2021,Ontario'sAuditorGeneralissuedareportwhichincludedfindingsonpandemicreadinessand response in long-term care. Following on April 30, 2021, the Ontario Long-Term Care COVID-19Commission("Commission"),anindependentcommissioninvestigatingthepandemicinOntario'slong-termcare system, released its final report. Both reports highlight systemic issues theOntario's long-term caresectorhasbeenfacingformanyyears.

WewereabletoshareourexperienceandobservationsduringthepandemicwiththeCommission,whoserecommendationstotheGovernmentofOntarioareexpectedtohelpshapeandstrengthenthefutureoflong-term care. Recommendations include the need for additional staffing, enhanced IPAC training,continued prioritization of PPE, stronger medical leadership, enhanced collaboration with health carepartners,andtheurgentneedtoredevelopandexpandhomestomeetgrowingsocietalneed.

TheOntarioGovernmenthasalreadystartedtoimplementanumberoftherecommendedimprovements,including attracting, supporting and training new talent in theworkforce. At Sienna,we have also taken


numerousstepsrecommendedbytheCommission, includingstrongermedical leadership, increasedfocusonfamilycommunicationandenhancedIPACtraining.

ManagementofCOVID-19-RetirementWhileCOVID-19impactedtheCompany'sRetirementoperations,itsimpactontheCompanyhasbeenlesssevereacrossourRetirementportfoliothanourLTCportfoliosincetheonsetofthepandemic.

Sienna's Retirement portfolio, which comprises 3,287 suites across Ontario and British Columbia,contributedapproximately41%totheCompany'sNOI,excludingthe impactofnetpandemicexpenses, inQ12021.

DuringQ12021,Siennaincurred$2.2millionofpandemicexpensesintheRetirementsegment,forwhichitreceived$1.4millioninpandemicfundingfortheperiod,excludingflow-throughpandemicpayforfrontlinestaff.

RetirementOperationsUpdateDuringandsubsequenttoQ12021,oursalesandmarketingteamscontinuedwithintensifiedsalesactivitiesacross our Retirement portfolio, connectingwith thousands of prospective residents.We have also beenfocusedoncontinuedprocessimprovementswithrespecttoourmarketingandsalesplatformtoincreaseefficiencyandproductivity.

We made significant investments in online lead generation by increasing our social media visibility anddrivingmorequalifiedonlinetraffictoourwebsite.Theseeffortshaveresultedinasubstantialincreaseofouronlineleaddatabase.Duringthefirstquarterof2021,onlineleadshaveincreasedbyapproximately50%compared to Q1 2020. Initiatives to support occupancy also include a referral program in each of ourretirement residences, redesigned sales incentive programs and an enhanced outreach strategy tothousandsofprospectiveresidents.Marketingandsalesinitiativeshavebeenfurthersupportedbytheuseof virtual tours of our residences, enabling prospective residents to experience our communities amidrenewedaccessrestrictions.

Allof theseefforts resulted ina10% increase in rentdeposits compared toQ12020anda19% increasecomparedtoQ42020,supportingaslowingoccupancydecline.

Aswelookbeyondthepandemic,aslowdowninthefuturesupplyofretirementresidencescoupledwithanagingpopulationisexpectedtosupporttheretirementsector'soutlookgoingforward.

GovernmentFundingBoththeGovernmentsofOntarioandBritishColumbiahaveprovidedfundingfortheretirementsectortosupportcosts inconnectionwithsocialvisitations,singleworksites,additionalscreeningandstaffing,andIPACmeasures.

TheCompanyreceiveda$1.0millionallocationaspartofacommitmentannouncedbytheGovernmentofOntario inMarch2021toprovideanadditional$30milliontohelp theretirementsectorcoverCOVID-19relatedcostssuchashiring, training, testing,sanitizingresidencesandpurchasingsuppliestopreventandcontainthespreadofinfection.


StaffingUpdateThestaffingchallengesexperiencedbytheseniors'livingsectorpriortotheCOVID-19pandemichavebeenexacerbatedduringthepandemic.

Weenhancedourpandemicstaffingstrategytosupportourteammembersandensurecontinuityofcareforourresidents.Staffingneedsaremetinternallythroughregionallyfocused,centralizedtalentacquisitionteams and are further supported by external agencieswhoprovide short-term, ready-to-deploy qualifiedpersonnel.

OnApril23,2021,theGovernmentofOntarioannouncedthatfullyimmunizedfrontlinestaffwillbeabletoworkatmorethanonelocationtosafelysupportadditionalstaffingcapacityacrossthehealthcaresector.With45%ofourteammembersfullyvaccinated,thischangeshouldprovideasignificantimprovementwithrespecttoSienna'scurrentstaffingneeds.

Aspreviouslyannounced, theGovernmentofOntarioconfirmed in itsmost recentbudget inMarch2021that it will increase the hours of direct care for each LTC resident to an average of four hours per day,supportedbygovernmentfundingforLTCoperators,whichisexpectedtobefullyimplementedby2024/25.This represents a significant increase compared to the approximately 2.8 hours of direct care currentlymandated.

As part of our ongoing talent acquisition strategy, we continue to collaborate with educational andgovernment institutionsand intensifiedoursocialmediacampaigns.Wehavealso increasedour focusonteammembermentalhealth,includingmanagingstress,gainingresilienceandavoidingburnout.Weofferavariety of facilitated and self-paced programs in addition to providing resource materials and access toemployeeassistanceprograms.

Wecontinueto focusonworkplacediversityandbringing togetheramultitudeofperspectives throughadiverseleadershipteamthatreflectsouroverallworkforce.54%ofSienna’sleadershipteam,includingfiveof theCompany’s10executiveofficers,andonethirdof theCompany’s independentboardmembersarefemale.Inaddition,30%ofitsseniorexecutivesidentifyasBlack,IndigenousorPeopleofColour.

PandemicPayEffective October 1, 2020, the Government of Ontario committed support for personal support workersthrougha temporarywage increaseof $3/houruntil June30, 2021,which recognized their extraordinaryeffortsandhelpedtostabilizestaffingduringthesecondwaveofthepandemic.

For the quarter endedMarch 31, 2021, the temporary pandemic pay for front-line staff in Ontario andBritish Columbia amounted to $4.8 million for the Company's LTC residences and $0.5 million for theCompany's Retirement Residences, which was fully funded by the Governments of Ontario and BritishColumbia.

DevelopmentUpdateDevelopmentandRedevelopmentofLong-TermCareinOntarioThe Government of Ontario is committed to invest approximately $2.6 billion dollars over the next fouryearstobuildmorelong-termcarebedsinordertosupportitsgoaltoaddcapacityinhighneedareas,to


developcampusesofcareand for theredevelopmentofexistingbeds, includingtheeliminationof three-andfour-bedwardrooms.

The investment is tailored to account for regional differences in land and other construction costs. Inaddition,developmentgrantsof10%to17%,dependingongeographiclocationandhomesize,willfurtherhelpcoverupfrontcosts.

Sienna'sdevelopmentplansincludeover$600millionincapitalinvestmentstoredevelopitsOntarioClassClong-term care portfolio through new and upgraded facilities over the next five to seven years. This is amajoropportunityforSiennaanditsshareholderstoinvestwithpurposetoenhancethequalityoflifefortheseniorsweserveandenrichtheworkenvironmentofourteammembers. It isalsoanopportunitytoaddress climate change with both our existing residences and our development portfolio as we adoptenvironmentally-friendlydesignsandinstallenergy-efficientfeatures,allwiththegoaltosignificantlyreducetheenvironmentalfootprintofthesehomes.

The Company's development plans include a number of development projects in Ontario which are inadvancedstagesofplanningandapprovalwithregulatoryandlocalauthorities.Twooftheseprojects,whichwehaveprioritizedbasedon theneeds identified in these communities, are expected toproceed to theconstruction phase by the end of 2021, beginningwith a previously announced 160-bed development inNorth Bay to replace the existing 148 older Class C beds. The capital investment for this development isexpected to be approximately $52 million to $55 million, with an expected development yield ofapproximately8.0%.

DevelopmentofaJointVentureRetirementResidenceSienna's development of a retirement residence in Niagara Falls is progressing well with constructionscheduledtostartinQ22021.Theestimatedtotalcapitalinvestmentis$49millionto$51million,withanexpecteddevelopmentyieldofapproximately7.5%.Sienna’sshareofthis150-suitegreenfieldjointventuredevelopmentis70%.


Non-IFRSPerformanceMeasures

InthisMD&A,theCompanyusescertainsupplementalmeasuresofkeyperformancethatarenotmeasuresrecognized under IFRS and do not have standardized meanings prescribed by IFRS. These performancemeasuresarenetoperatingincome("NOI"),fundsfromoperations("FFO"),operatingfundsfromoperations("OFFO"), adjusted funds from operations ("AFFO"), earnings before interest, taxes, depreciation andamortization ("EBITDA") andmaintenance capital expenditures ("maintenance capital expenditures", andcollectivelywithNOI,FFO,OFFO,AFFOandEBITDA,the"Non-IFRSMeasures").

"NOI" isdefinedaspropertyrevenueandgovernmentassistancerelatedtothepandemicnetofpropertyoperatingexpenses.

"FFO"isdefinedasNOIlesscertainadjustmentsincludingfinancechargesandcurrentincometaxes.FFOisarecognizedearningsmeasurethatiswidelyusedbypublicrealestateentities,particularlybythoseentitiesthatownand/oroperate income-producingproperties. Theuseof FFO, combinedwith the required IFRSpresentations, has been included for the purpose of improving the understanding of the Company'soperating results.The IFRSmeasuremostdirectlycomparable toFFO is "net income".Please refer to the"BusinessPerformance"sectionofthisMD&AforareconciliationofnetincometoFFO.

"OFFO" is FFO adjusted for non-recurring items,which includes restructuring costs, and presents financecharges on a cash interest basis. Management of the Company is of the view that OFFO is a relevantmeasureoftheoperatingperformanceoftheCompany.

"AFFO"isdefinedasOFFOplustheprincipalportionofconstructionfundingreceivedandamountsreceivedfor revenue guarantees, less actual maintenance and unfunded pandemic capital expenditures.ManagementoftheCompanybelievesAFFOisacashflowmeasure,whichisrelevantinunderstandingtheCompany's ability to earn cash and pay dividends to shareholders. The IFRS measure most directlycomparable to AFFO is "cash flow from operating activities." Please refer to the "Business Performance"sectionofthisMD&AforareconciliationofcashflowfromoperatingactivitiestoAFFO.

"EBITDA" is defined as net income excluding interest, taxes, depreciation and amortization. EBITDA isrelevant in understanding the Company's ability to service its debt, finance capital expenditures and paydividendstoshareholders.

"Adjusted EBITDA" is defined as EBITDA, adjusted for construction funding proceeds and non-recurringitems.

"Maintenance capital expenditures" are defined as capital investmentsmade to sustain ormaintain theCompany's residences to meet residents' needs and enhance residents' experience. These expendituresincludebuildingimprovements,mechanicalandelectricalspend,suiterenovations,commonareaupgrades,communications and information systems, furniture, fixtures and equipment. Please refer to the"MaintenanceCapitalExpenditures"sectionofthisMD&Aforadditionalfinancialinformation.

"Pandemicexpenses"aredefinedasextraordinaryoperatingexpensesincurredinpreventionandcontrolofCOVID-19.


"Pandemic capital expenditures" are defined as capital improvements directly contributing to improvedIPACtomanagethepandemic.

NOI,FFO,OFFO,AFFO,EBITDAandAdjustedEBITDAshouldnotbeconstruedasalternativestonetincomeorcash flow fromoperatingactivitiesdetermined inaccordancewith IFRSas indicatorsof theCompany'sperformance.TheCompany'smethodofcalculatingthesemeasuresmaydifferfromotherissuers'methodsandaccordingly, thesemeasuresmaynotbecomparable tomeasurespresentedbyotherpublicly tradedentities.

KeyPerformanceIndicators

Management of the Company uses the following key performance indicators (the "Key PerformanceIndicators")toassesstheoverallperformanceoftheCompany'soperations:

• Occupancy:OccupancyisakeydriveroftheCompany'srevenues.• NOI:Thisvaluerepresentstheunderlyingperformanceoftheoperatingbusinesssegments.Please

refertothe"Non-IFRSPerformanceMeasures"sectionofthisMD&A.• OFFOandOFFOperShare:ManagementoftheCompanyusesOFFOasanoperatingperformance

measure.Pleaserefertothe"Non-IFRSPerformanceMeasures"sectionofthisMD&A.• AFFO and AFFO per Share:Management of the Company uses AFFO as a cash flowmeasure to

assess the Company's ability to earn cash and pay dividends. Please refer to the "Non-IFRSPerformanceMeasures"sectionofthisMD&A.

• PayoutRatio:Management of the Companymonitors the payout ratio,which is calculated usingdividendspersharedividedbybasicAFFOpershare,toensuretheCompanyadherestoitsdividendpolicy,inlinewiththeCompany'sobjectives.

• DebttoEnterpriseValueRatio:ThisratiomeasurestheCompany'stotaldebtagainstitsenterprisevalue, which is calculated as the Company's market capitalization and total debt net of theCompany'scashandcashequivalents.

• DebttoGrossBookValue:Inconjunctionwiththedebtservicecoverageratio,managementoftheCompanymonitorsthisratiotoensurecompliancewithcertainfinancialcovenants.

• Weighted Average Cost of Debt: This is a point in time calculationwhich is useful in comparinginterestrates,eitherperiodoverperiod,ortomarketrates.

• DebttoAdjustedEBITDARatio:Thisratiomeasuresthenumberofyearsrequiredforcurrentcashflowstorepayallindebtedness.

• Interest CoverageRatio: Interest coverage ratio is a commonmeasureused to assess an entity'sabilitytoserviceitsdebtobligations.

• DebtServiceCoverageRatio:ThisratioisusefulformanagementoftheCompanytoensureitisincompliancewithitsfinancialcovenants.

• Weighted Average Term toMaturity: This indicator is used bymanagement of the Company tomonitoritsdebtmaturities.

• SameProperty:Measureswith"sameproperty"aresimilarto"same-store"measuresused intheretailbusinessandareintendedtomeasuretheperiodoverperiodperformanceofthesameassetbase.Thesamepropertyportfolioexcludesacquiredpropertiesownedfor lessthanoneyearandassets undergoing new development, redevelopment or demolition. Properties undergoing new


development or redevelopment are considered "same property" once they are operating atstabilizedoccupancylevels.

• Development: The development portfolio includes properties undergoing new development orredevelopmentuntiltheyareoperatingatstabilizedoccupancylevels.

TheaboveKeyPerformanceIndicatorsusedbymanagementoftheCompanytoassesstheoverallfinancialperformanceof theCompany'soperations shouldnotbeconstruedasalternatives tonet incomeor cashflow from operating activities determined in accordance with IFRS as indicators of the Company'sperformance. TheCompany'suseof thesemeasures and itsmethodof calculationmaydiffer fromotherissuers' use andmethods and accordingly,may not be comparable to the key performance indicators ofotherpubliclytradedentities.

ThefollowingtablerepresentstheKeyPerformanceIndicatorsfortheperiodsendedMarch31:

ThreeMonthsEnded

ThousandsofCanadiandollars,exceptoccupancy,shareandratiodata 2021 2020 Change

OCCUPANCY

Retirement-Averagesamepropertyoccupancy(1)(2) 78.1% 85.1% (7.0%)

Retirement-Asatsamepropertyoccupancy(1)(2) 78.6% 84.5% (5.9%)

Retirement-Asattotaloccupancy(1)(2) 78.2% 83.6% (5.4%)

LTC-Averagetotaloccupancy(3) 80.3% 97.9% (17.6%)

LTC-Averageprivateoccupancy 78.2% 97.3% (19.1%)

FINANCIAL

Revenue 161,228 165,627 (4,399)

Operatingexpenses,net 116,961 129,116 (12,155)

SamepropertyNOI(4) 44,101 36,436 7,665

TotalNOI(4) 44,267 36,511 7,756

EBITDA(5) 35,948 33,737 2,211

Netincome(loss) 10,143 (2,496) 12,639

OFFO(6) 25,343 24,418 925

AFFO(7) 26,430 25,584 846

Totalassets(8) 1,616,357 1,718,716 (102,359)

PERSHAREINFORMATION

OFFOpershare(6) 0.378 0.365 0.013

AFFOpershare(7) 0.394 0.382 0.012

Dividendspershare 0.234 0.234 —

Payoutratio(9) 59.4% 61.3% (1.9)%


ThreeMonthsEnded


FINANCIALRATIOS

Debttoenterprisevalue(10) 50.1% 55.6% (5.5%)

Debttogrossbookvalueasatperiodend 46.0% 46.9% (0.9)%

Weightedaveragecostofdebtasatperiodend 3.3% 3.6% (0.3%)

DebttoAdjustedEBITDAasatperiodend 6.2 6.8 (0.6)

Interestcoverageratio 4.7 4.2 0.5

Debtservicecoverageratio 2.7 2.1 0.6

Weightedaveragetermtomaturityasatperiodend 4.5 4.4 0.1

CHANGEINSAMEPROPERTYNOI(4)

Retirement (19.4%)

LTC 52.2%

Total 21.0%

Notes:1. RetirementsamepropertyoccupancyexcludestheresultsfromtheexpansionatIslandParkRetirementResidence,whichopenedinJuly2019

andisinlease-up.Retirementtotalaverageoccupancyis77.7%forQ12021(2020-84.2%).2. Theyear-over-yeardeclinesinRetirementoccupancyareprimarilyrelatedtoadeclineinnewresidentsmovinginduetothegeneralimpactof

theCOVID-19pandemic,includingaccessrestrictions.3. Long-term care residences are receiving occupancy protection funding for vacancies caused by temporary closure of admissions due to an

outbreak,includingCOVID-19,andforcapacitylimitationsoftwobedsperroomasresidentscannotbeplacedinroomswiththreeorfourbeds.4. NOIforQ12021includesnetpandemic(recovery)expensesof$(11,027)(2020-$104),respectively(asdiscussedinthe"ImpactofCOVID-19

ontheCompany"sectionofthisMD&A).5. EBITDA forQ12021 increasedby$2,211 to$35,948compared toQ12020primarilydue to thenetpandemic recoveryof$9,907,offsetby

lowerRetirementrevenuesof$1,806andlowerLTCpreferredaccommodationrevenuesof$1,123primarilyduetooccupancy.6. OFFOforQ12021includesanafter-taxnetpandemic(recovery)expenseof$(7,275)(2020-$99)andmark-to-marketrecoveryonshare-based

compensationof$(25)(2020-$(2,541)).OFFOpershareforthethreemonthsendedMarch31,2021excludingafter-taxnetpandemicrecoveryandnetmark-to-marketrecoveryonshare-basedcompensationwilldecreaseby$0.109to$0.269(2020-decreaseby$0.037to$0.328).

7. AFFOforQ12021includesnetpandemiccapitalexpendituresof$417(2020-$nil),after-taxnetpandemic(recovery)expenseof$(7,275)(2020-$99)andmark-to-marketrecoveryonshare-basedcompensationof$(25)(2020-$(2,541)).AFFOpershareforthethreemonthsendedMarch31,2021excludingnetpandemiccapitalexpendituresandafter-taxnetpandemicrecoveryandnetmark-to-marketrecoveryonshare-basedcompensationwilldecreaseby$0.102to$0.292(2020-decreaseby$0.037to$0.345).

8. Propertyandequipmentandintangibleassetsincludedintotalassetsaremeasuredatcostlessaccumulateddepreciationandamortization.9. PayoutratioforQ12021excludingafter-taxnetpandemicrecoveryandnetmark-to-marketrecoveryonshare-basedcompensationwouldbe

80.1%(2020-61.3%).10. Debttoenterprisevaluedecreasedby550bpsto50.1%asatMarch31,2021from55.6%asatMarch31,2020.Theincreaseismainlydueto

theincreaseinSienna'sshareprice.


A significant number of Key Performance Indicators have been impacted by pandemic expenses, net ofgovernment assistance. The following table represents the Key Performance Indicators excluding netpandemic(recovery)expensesfortheperiodsendedMarch31:

ThreeMonthsEnded


FINANCIAL

Operatingexpenses,excludingnetpandemic(recovery)expenses(1) 127,988 129,012 (1,024)

SamepropertyNOI,excludingnetpandemic(recovery)expenses(1) 33,074 36,540 (3,466)

TotalNOI,excludingnetpandemic(recovery)expenses(1) 33,240 36,615 (3,375)

EBITDA,excludingnetpandemic(recovery)expenses(2) 26,041 33,872 (7,831)

Netincome(loss),excludingnetpandemic(recovery)expenses(3) 2,868 (2,397) 5,265

OFFO,excludingnetpandemic(recovery)expenses(3)(5) 18,068 24,517 (6,449)

AFFO,excludingnetpandemic(recovery)expenses(4)(5) 19,572 25,683 (6,111)

PERSHAREINFORMATION

OFFOpershare,excludingnetpandemic(recovery)expenses(3)(5)(6) 0.269 0.366 (0.097)

AFFOpershare,excludingnetpandemic(recovery)expensesandnetpandemiccapitalexpenditures(4)(5)(7) 0.292 0.383 (0.091)

Payoutratio,excludingnetpandemic(recovery)expensesandnetpandemiccapitalexpenditures(8) 80.1% 61.1% 19.0%

FINANCIALRATIOS

DebttoAdjustedEBITDAasatperiodend,excludingnetpandemic(recovery)expenses(9) 8.4 6.8 1.6

Interestcoverageratio,excludingnetpandemic(recovery)expenses(9) 3.5 4.3 (0.8)Debtservicecoverageratio,excludingnetpandemic(recovery)expensesandnetpandemiccapitalexpenditures(9) 2.1 2.1 —

CHANGEINSAMEPROPERTYNOI,excludingnetpandemic(recovery)expenses

Retirement (14.9%)

LTC (5.3%)

Total (9.5%)

Notes:1. Operatingexpenses,samepropertyNOIandtotalNOIforthethreemonthsendedMarch31,2021excludenetpandemic(recovery)expenses

of$(11,027)(2020-$104).2. EBITDAforthethreemonthsendedMarch31,2021excludesnetpandemic(recovery)expensesof$(9,907)(2020-$135).3. Netincome(loss)andOFFOforthethreemonthsendedMarch31,2021excludeafter-taxnetpandemic(recovery)expensesof$(7,275)(2020-

$99).4. AFFOforthethreemonthsendedMarch31,2021excludesafter-taxnetpandemic(recovery)expensesof$(7,275)andnetpandemiccapital

expendituresof$417(2020-$99and$nil,respectively).5. OFFOandAFFOfor thethreemonthsendedMarch31,2021 includeanafter-taxmark-to-marketrecoveryonshare-basedcompensationof

$(25)(2020-$(2,541)).6. OFFOpershareforthethreemonthsendedMarch31,2021excludingafter-taxnetpandemicrecoveryandmark-to-marketrecoveryonshare-

basedcompensationwilldecreaseby$0.109to$0.269(2020-decreaseby$0.037to$0.328).7. AFFOpershareforthethreemonthsendedMarch31,2021excludingnetpandemiccapitalexpendituresandafter-taxnetpandemicrecovery

andmark-to-marketrecoveryonshare-basedcompensationwilldecreaseby$0.102to$0.292(2020-decreaseby$0.037to$0.345).8. PayoutratioforQ12021excludingafter-taxnetpandemicimpactandmark-to-marketonshare-basedcompensationaftertaxwouldbe80.1%

(2020-61.3%).9. DebttoAdjustedEBITDA,interestcoverageratioanddebtcoverageratioforthethreemonthsendedMarch31,2021and2020excludenet

pandemic(recovery)expensesof$(9,907)and$135,respectively.


FirstQuarter2021Summary

SiennahastakenextensiveprecautionstomanagetheCOVID-19pandemic.Theimpactofthepandemiconouroperationalandfinancialperformancewilldependoncertaindevelopments,includingthedurationandscope of the outbreak, available government funding and impacts on our residents, employees andsuppliers, all ofwhich cannot be accurately predicted.We expect an increased level of expenses for theforeseeable future as we continue to fight COVID-19 and we expect that the incremental expenses willmoderate once the pandemic subsides. Although it is impossible to ascertain the ultimate impacts ofCOVID-19 at this time, with our financial profile including significant liquidity, we are well positioned tonavigate in the current environment. In addition, the rollout of vaccines to the general population isprogressing and overall fundamentals for seniors’ living remain strong. An aging population, longwaitinglists for long-termcareanda slowdown in the future supplyof retirement residencesareall expected tosupportoursector’soutlook.

Occupancy - Average occupancy in the LTC portfolio was 80.3% in Q1 2021. Long-term care residencesrepresent 58.8% of Sienna’s portfolio, based on Q1 2021 net operating income excluding net pandemicrecovery, which are fully funded for vacancies caused by temporary closure of admissions due to anoutbreak, including COVID-19, and for capacity limitations of two beds per room as residents cannot beplaced in roomswith threeor fourbeds. TheGovernmentofOntariohasannounced that theoccupancyprotectionfundingwillbeinplaceforlong-termcareresidencesuntilAugust31,2021.EffectiveSeptember1, 2021, as new admissions gradually resume, occupancy targets of 97% for long-stay beds and 90% forinterimshort-staybeds,excludingunavailablebedsasaresultofcapacitylimitationsinmulti-bedroomsandtheprovisionofisolationrooms,willbereinstated.

AveragesamepropertyoccupancyintheRetirementportfoliowas78.1%inQ12021andendedthequarterhigherat78.6%.

The following table provides an update on the monthly average same property occupancy and rentcollectionsinourRetirementportfolio.

January2021 February2021 March2021 April2021

Retirementsamepropertyoccupancy(average) 78.6% 78.1% 77.7% 77.9%

Retirementrentcollection(%) 99.3% 99.1% 99.0% 98.8%

ThedecreaseinoccupancyduringQ12021isprimarilyrelatedtoadeclineinnewresidentsmovinginduetothe impact of the COVID-19 pandemic, including access restrictions. Subsequent toQ1 2021, Retirementmonthly same property occupancy improvedmodestly from 77.7% inMarch to 77.9% in April, reflectingnumerous marketing and sales initiatives, offset by the impact of the third wave of COVID-19. Rentcollectionsremainedhighandconsistentwithpre-pandemiclevel.

Revenuedecreasedby2.7%inQ12021,or$4,399,to$161,228,comparedtoQ12020.IntheRetirementsegment,thedecreaseof$1,806inQ12021comparedtoQ12020wasmainlyaresultofloweroccupancy,partiallyoffsetbyannual rental rate increases in linewithmarketconditions. LTC's revenues forQ12021decreasedby$2,593comparedtoQ12020,asaresultof$716ofgovernmentfunding,whichwouldhavetypicallybeen included inLTCrevenues,beingrecordedagainsteligibleoperatingexpensesrelatedto the


pandemic, and lower LTC preferred accommodation revenue from lower occupancy in private and semi-privateroomsandtimingofflow-throughfunding,partiallyoffsetbyannualinflationaryfundingincreases.Q12021rentcollectionlevelshaveremainedsimilartopastexperience.

OperatingExpenses,netdecreasedby9.4%inQ12021,or$12,155,to$116,961,comparedtoQ12020.Thedecreasewasmainlya resultofnetpandemic recoveryof$11,759 in theLTCsegment,asa resultof thetimingofgovernmentassistancerelatedtopandemicexpenses incurredduringtheyearendedDecember31,2020,andtimingofexpensesassociatedwithflow-throughfundingintheLTCsegment,partiallyoffsetbyannualinflationarylabourcostincreasesandhigherpropertyexpenses.

Net Pandemic Expenses decreased by $10,042 to a net recovery of $9,907 inQ1 2021, compared toQ12020.ThenetpandemicrecoveryforQ12021wasmainlyduetogovernmentassistanceof$15,342intheLTC segment received inQ1 2021 to cover a portionof the pandemic expenses incurredduring the yearendedDecember31,2020,partiallyoffsetbyinvestmentsinhigherlevelsofstaffing,PPE,IPACsuppliesandadvisoryfeestosupportthemanagementofthepandemic.

There are various programs and financial assistance provided by the governments to support pandemicexpenses. The following table summarizes the government assistance to Sienna andexpenses recognizedrelated to COVID-19 included in net operating expenses in the Company's consolidated statements ofoperationsforthethreemonthsandyearendedMarch31,2021:

Threemonthsended Threemonthsended

ThousandsofCanadiandollars March31,2021 March31,2020

Retirement LTC Administrative Total Total

Governmentassistance-temporarypandemicpay 521 4,824 — 5,345 —

Governmentassistance 1,438 35,285 — 36,723 810

Totalgovernmentassistance 1,959 40,109 — 42,068 810

Pandemiclabour-temporarypandemicpay 521 4,824 — 5,345 —

Pandemiclabour 1,592 19,260 — 20,852 547

Personalprotectiveequipment 377 1,704 — 2,081 280

Other 201 2,562 1,120 3,883 118

Totalpandemicexpense 2,691 28,350 1,120 32,161 945

Totalnetpandemic(recovery)expenses 732 (11,759) 1,120 (9,907) 135

In addition to thegovernment assistanceandpandemicexpenses listed in the table above, for thethreemonthsendedMarch31,2021, theCompanyhas recognizedpandemiccapitalexpenditures in its interimconsolidatedstatementsoffinancialpositionof$9,422(2020-$nil),reducedbygovernmentassistanceof$9,005(2020-$nil).

Pandemicexpensesaremainly related toadditional staffing, temporarypandemicpayprograms for teammembersandPPE.OtherpandemicexpensesfortheRetirementandLTCresidencesincludeinvestmentsincleaning supplies for IPAC, meals and accommodations to support team members. Furthermore, otherpandemicexpenses recorded inadministrativecosts includeadvisory fees to support themanagementofthepandemic.


DuringQ12021,theGovernmentofOntarioannouncedadditionalpandemicfundingtosupportlong-termcarehomeswithinfectionpreventionandcontainmenteffortsfortheperiodApril1,2020toDecember31,2020, for which the Company received $15,342 in Q1 2021 to support the pandemic expenses incurredduringtheyearendedDecember31,2020.Ifthe$15,342ofretroactivepandemicfundingwasrecognizedinthe year ended December 31, 2020, the LTC segment's net pandemic expenses in 2020 would havedecreasedto$2,638.ThefollowingtablesummarizestheretroactivepandemicfundingreceivedinQ12021andtheimpactthereofifrecognizedintheyearendedDecember31,2020:

ThousandsofCanadiandollars

TotalnetpandemicexpensesinLTCsegmentincurredduringtheyearendedDecember31,2020 17,980

GovernmentassistancereceivedinQ12021forpandemicexpensesincurredduringtheyearendedDecember31,2020 15,342

TotalnetpandemicexpensesinLTCsegmentifgovernmentassistancereceivedinQ12021wasrecognizedintheyearendedDecember31,2020 2,638

NOI increased by 21.2% in Q1 2021, or $7,756, to $44,267, compared to Q1 2020, mainly due to netpandemic recovery of $11,027, as a result of $15,342 retroactive pandemic funding received inQ1 2021relatedtopandemicexpensesincurredinexcessofavailablefundingduringtheyearendedDecember31,2020.Excludingnetpandemicrecovery,NOIdecreasedby9.2% inQ12021,or$3,375, to$33,240mainlydue to lower Retirement occupancy levels, lower LTC preferred accommodation revenue from loweroccupancyinprivateandsemi-privaterooms,annualinflationarylabourcostincreasesandhigherpropertyexpenses, partially offset by annual rental rate increases in Retirement and annual inflationary fundingincreasesinLTC.

Net income was $10,143 for Q1 2021, representing an increase of $12,639 in net income over thecomparableprioryearperiod.The increasewasprimarilyrelatedtonetpandemicrecovery,annualrentalrateincreasesinRetirementandthefairvaluegainoninterestrateswapcontracts,partiallyoffsetbylowerRetirement occupancy levels, lower preferred accommodation revenues in LTC and higher income taxes.Excludingnetpandemicrecoveryaftertaxes,netincomewas$2,868forQ12021,representinganincreaseof$5,265innetincomecomparedtoQ12020.

OFFOincreasedby3.8%inQ12021,or$925,to$25,343overthecomparableprioryearperiod.OFFOpershare increased by 3.6% in Q1 2021, or $0.013, to $0.378 over the comparable prior year period. Theincreasewas primarily due to net pandemic recovery as a result of the timing of government assistancerelatedtopandemicexpenses,partiallyoffsetby,lowerRetirementoccupancy,annualinflationaryincreasesin labour costsandhigherpropertyexpenses.Excludingafter-taxnetpandemic recovery,OFFOwouldbelowerby26.3%inQ12021,or$6,448,to$24,517overthecomparableprioryearperiod.OFFOpershare,excluding net pandemic recovery, would be lower by 26.5% in Q1 2021, or $0.097, to $0.269 over thecomparableprioryearperiod.

AFFO increasedby3.3%inQ12021,or$846,to$26,430overthecomparableprioryearperiod.AFFOpershareincreased3.1%inQ12021,or$0.012,to$0.394overthecomparableprioryearperiod.TheincreasewasprimarilyrelatedtotheincreaseinOFFOnotedabove,timingofmaintenancecapitalexpendituresandnet pandemic capital expenditures. Excluding after-tax net impact from pandemic expenses and netpandemiccapitalexpenditures,AFFOwouldbelowerby23.1%inQ12021,or$6,111to$19,572inQ12021.


AFFOpershare,excludingnetpandemicrecoveryandnetpandemiccapitalexpenditures,woulddecreaseby23.9%inQ12021,or$0.092,to$0.292overthecomparableprioryearperiod.

Debt-TheCompany'sdebttogrossbookvaluedecreasedby90bpsto46.0%inQ12021from46.9%inQ12020; debt to adjusted EBITDA decreased to 6.2 years in Q1 2021 from 6.8 years in Q1 2020; interestcoverageratioincreasedto4.7timesinQ12021from4.2timesinQ12020;anddebtservicecoverageratioincreased to 2.7 times inQ1 2021 from2.1 times inQ1 2020. Excluding net pandemic recovery, debt toadjustedEBITDAincreasedto8.4yearsfrom6.8yearsinQ12020;interestcoverageratiodecreasedto3.5times inQ12021comparedto4.3 inQ12020;anddebtservicecoverageratioremainedthesameat2.1timesinQ12021.TheCompanylowereditsweightedaveragecostofdebtto3.3%inQ12021from3.6%inQ12020.

Our debt is well distributed between unsecured and secured debentures, credit facilities, conventionalmortgagesandCanadaMortgageandHousingCorporation("CMHC")insuredmortgages.

Equity-WithrespecttotheCompany’sequity,wecontinuetosuspendourdividendreinvestmentplaninordertopreventdilutionatthecurrentsharepricegivenincreasedstockmarketvolatility.

Outlook

SiennahastakenextensiveprecautionstomanagetheimpactoftheCOVID-19pandemic.Theextentoftheimpactonouroperationalandfinancialperformancein2021andbeyondwilldependonnumerousfactors,includingthespeedofthevaccineroll-outacrossthewiderpopulationinCanada,thearrivalandimpactofnewvariantsofthevirus,prolongedlock-downsresultingincontinuedaccessrestrictionsatourresidencesandthegeneraleconomicrecovery.Whileweanticipateanincreasedlevelofexpensesfortheforeseeablefuture,weexpectthatincrementalexpenseswillmoderateasthepandemicsubsides.

In Sienna'sRetirementportfolio,we forecastoccupancy in the firsthalfof2021 to remainbelowhistoriclevelsasCOVID-19accessrestrictionscontinuetoimpactoccupancy,inparticularwithrespecttoresidenceslocatedinCOVID-19hotspots.BasedonourassumptionthatrestrictionsatourRetirementResidenceswillease, we forecast gradual occupancy improvements during the second half of the year, supported byanticipatedpent-updemandandourcontinuedinvestmentinoursalesandmarketinginitiatives.

Occupancy inSienna'sLTCportfolio isexpectedtogradually improve inthecomingmonthsasadmissionsresume and occupancy protection funding expires. Excluding the impact of net pandemic expenses orrecoveries,weexpectthefinancialperformanceoftheCompany’sLTCportfolioin2021tobeslightlybelow2020.Our internal forecastsarebasedonthe impactofnewandprolongedaccessrestrictionsduringthethirdwaveof thepandemiconpreferredaccommodationrevenuesandadditional investmentstoelevateresidentexperience.

Given the long waiting list of approximately 38,500 for LTC beds across Ontario, we expect to achieveoccupancytargetsrequiredforfullfundingoverthenextfewmonthsasnewadmissionsgraduallyresumeand theoccupancyprotection funding expires.Our assumptions also include the continuedavailability offundingforvacantbedsinmulti-bedroomsasaresultofcapacitylimitationsandtheprovisionofisolationrooms.


Inadditiontoourdevelopmentandredevelopmentplans,wearealsocommittingtoupgradeourexistingresidenceswithIPACenhancementsandelevatetheexperienceofourresidentsandtheworkenvironmentforourteammembers.In2021,weplantoinvestanadditional$2millioninone-timecapitalupgradesontopofourregularannualmaintenancecapitalexpenditures.

AlthoughitisimpossibletoascertaintheultimateimpactsofCOVID-19ontheCompany’soperatingresultsatthistime,weremainoptimisticaswelookbeyondthepandemic.Theanticipatedeconomicrecovery,thepositive impactofearlyvaccinations intheseniors livingsectorandthereturntoamorestableoperatingenvironmentallsupporttheoutlookforourCompany.

OurVision,MissionandValues

OurVisionToawakenourcommunitiestothepositivepossibilitiesoflife'snextchapters.

OurMissionTohelpyoulivefully,everyday.

OurValues

RespectWe value each other. From our clients and residents to our co-workers, we take the time toappreciateeachperson'sstory,understandtheirperspective,andrecognizetheircontribution.

PassionThisjobisn'tforeverybody.Weloveworkingwitholderpeople.Wefeelit'saprivilegetohavetheminourlives,andthere'snothingmoreimportanttousthantheirsafetyandwell-being.

TeamworkTohonoursomeone'svoiceandadvocatefortheirchoice,it'suptoeveryoneofustocommunicate,collaborate, and support one another.We're in this together - co-workers, volunteers, physiciansandhealthcareproviders,suppliers,communities,families,clientsandresidents.

ResponsibilityHoldingourselves to thehigheststandardsofsafetyandquality isonly thebeginning. Ifweseeaproblemoranopportunity,weownit.Ifwesaywe'lldosomething,wedoit."Notmyjob"isnotinourvocabulary.

GrowthWearealwayspushingourselves-tolearn,todevelop,tofindabetterwayandwestrivetohelpourclients,residentsandstaffgrow,encouragingthemtostretchanddomorethantheymighthavethoughtpossible.

The Sienna team is dedicated to helping seniors live fully, every day with an aim to constantly improveresidentcareandexperience,anddevelopahigh-performingteamandworkplaceculturebuiltonsharedvalues and a commitment to quality and innovation,while focusingonpriorities that translate into long-


termaccretivegrowth for theCompany'sshareholders.A rangeofservicesandprogramsareprovidedattheseniors'livingresidencesbasedonanindividual'sneedsandlevelofindependence.Ageneralandbroaddescriptionoftheseservicesisdetailedbelow:

• Independent Living ("IL"): IL provides the privacy and freedom of home combined with theconvenience and security of on-call assistance and a maintenance-free environment. Residentstypicallyhavetheoptionofpurchasingà lacarteservices includingmealpackages,housekeeping,transportationandlaundry.Itistypicallyapartment-styleaccommodationwithafullkitchenetteandisprivate-pay.Tenuremayberentalorsomeformofownership,suchasownedcondominiums.

• IndependentSupportiveLiving("ISL"): ISLisdesignedforseniorswhopayforservicessuchas24-hourresponse,housekeeping,laundry,meals,transportationandaccommodationaspartofatotalmonthlyprivate-payfeeorrentalrate.Theseresidentsrequirelittleornoassistancewithdailylivingactivities but benefit from the social setting and meal preparation. Some residences include aminimumamountofdailycarebutprimarilythislevelofaccommodationisfortheseniorwhocanlivemoreindependentlywiththeoptionofadditionalcareandservicesavailableonanasneededbasis.Accommodationisstudio,oneortwobedroomunitswithkitchenettes.

• AssistedLiving("AL"):ALisintendedforfrailseniorswhoneedassistancewithdailylivingactivitiesbutdonotrequireskillednursingcare.WhilemostofALisprovidedasprivate-pay,someresidencesdeliverALservicesthroughprivate-payorgovernmentfundedhomecareservices.

• MemoryCare("MC"):MCservesseniorswithmemory impairment,Alzheimer'sorother formsofdementia.MildcasesofdementiaaretypicallysuitablyaddressedwithinsecureALaccommodationsuites in a dedicated area within the residence, or more broadly throughout the residence.Moderate to severe cases require dedicated accommodation suites and specialized and moreintensivecare.


• Long-termCare:LTCisforthosewhoarenotabletoliveindependentlyandrequireassistancewiththe activities of daily living and care, including skilled nursing care on a daily basis. Eligibility foraccess to a LTC home is based on a person's assessed care requirements and is determined andarranged through government agencies. The resident pays for the accommodation as set by thegovernmentandthegovernmenttypicallypaysforcare,programsandsupplies.Inmostprovinces,thereisawaitingperiodforaccesstoLTCaccommodations.Incertainprovinces,therearealsoLTChomes providing entirely private-pay accommodations and are subject to the same regulatoryoversight.

Source:NICInvestmentGuide.

CompanyStrategyandObjectives

Sienna's strategic objectives are summarized below.While many of the Company’s long-term objectivesremainunchanged,Sienna'skeyfocusisthehealthandsafetyofresidents,teammembersandtheirfamiliesduringtheCOVID-19pandemic.

StrongOperatingPlatform:Siennastrivestoprovidequalityresidentexperiencesandbuildandretainahighperformingteamandgreatculture. Siennahasalwaysprioritized thehealthand safetyofour residentsand teammembers, andhasbeenproactiveanddiligent in implementingmeasuresaimedat limitingthespreadofCOVID-19sincetheonsetofthepandemic:

• Strengthening the Company's healthcare expertise to enhance and implement the Company'sinfectionpreventionandotherprecautionarymeasuresaimedatminimizingthespreadofCOVID-19andotheroutbreaks,includingtheadditionofaChiefMedicalOfficertoSienna'sleadershipteam;

• Collaboratingwithalllevelsofgovernment,sectorassociations,regulatoryauthoritiesandotherstohelpshapeandimplementpoliciesandprotocolstomanageCOVID-19;

• Recruiting,retaininganddevelopingahighperformingandengagedteamwithan increasedfocusontrainingandre-educationofstaffmembers;and

• Increasing communication and improving transparency with residents, families and keystakeholders.


MaintainingSolidBalanceSheetandLiquidity:TheCompany’s long-termstrategyandobjectiveswithrespect toastrongandbeneficialcapital structureremain unchanged. In response to the current uncertainties with respect to COVID-19, a stable level ofliquidityremainsakeypriorityduringthepandemic.

• Maintaining liquidity(measuredasavailablefundsfromexistingcredit facilitiesplusavailablecashonhand)tomanagecashflowrequirementsintheforeseeablefuture;

• FinancingforLTCandRetirementdevelopmentprogramswhilemanagingtomaintainhealthydebtmetrics;

• Creating a 10-year debt maturity ladder to reduce refinancing risk and enhance the ability torefinanceatfavourablerates;

• Maintainingastableinvestmentgrade"BBB"creditratingforSienna;• Maintainingapoolofunencumberedassets;and• MaintainingadiversifieddebtportfoliotoprovidetheCompanywithadditionalfinancialflexibility

toachieveSienna'sgrowthobjectives.

GrowingtheCompany:Asweemergefromthepandemic,wewillgraduallyresumeeffortsinourlong-termgrowthplan.

OrganicGrowth:• GrowingSienna'sportfolioorganicallythroughimprovingoccupancyandexpandingservicestomeet

residentneeds;• Maintainingexistingassetswithpreventativemaintenanceandongoingcapitalimprovements;• Continuing to invest in Sienna's team culture and operating platform to deliver quality resident

experiences;and• Intensifyingbranding,communicationsandmarketingprograms.

AcquisitionandDevelopment:• RedevelopmentofolderLTChomesinkeyOntariomarketsthroughnewandupgradedfacilities;• Strategic and disciplined acquisitions of high-quality seniors' living residences in key markets in

Canada;• Developingfree-standingretirementresidenceswithjointventurepartnersincertainmarketswith

adequateprojecteddemand;and• Expandingseniors'livingcapacityinexistingRetirementResidenceswithexcessland.• EnteringintostrategicpartnershipstodevelopLTCcampusesprovidingintegratedcare.

Environmental,SocialandGovernance(ESG)Responsibility

Sienna's commitment to corporate social responsibility continued during the pandemic with a focus onprotectingandsupportingresidentsandstaffandinparticularthoseservingseniorsacrossthecountry,asoutlinedthroughout thisMD&A.Wecontinueour focusonbringingtogetheramultitudeofperspectives,andattractingandretainingadiverseleadershipteamthatreflectsouroverallworkforceisakeyobjective.54%ofSienna’sleadershipteam,includingfiveoftheCompany’s10executiveofficers,andonethirdoftheCompany’s independent boardmembers are female. In addition, 30% of its senior executives identify asBlack,IndigenousorPeopleofColour.


During Q1 2021, Sienna established an ESG Committee comprising senior leaders of the Company andpublisheditsfirstESGReport.FormoreinformationonSienna’sESGinitiatives,includingitsESGReportandESG Committee Charter, please refer to the ESG section on Sienna’s website under https://www.siennaliving.ca.While thismarked thebeginningof amore structuredandproactive approach, ESGpracticesacrossSienna’soperationshavelongbeenintegratedintoouroverallstrategyanddailybusinesspractices.

On April 7, 2021, as part of our ongoing commitment to supporting the communities we service acrossCanada, we formed our Sienna for Seniors Foundation ("Foundation"). The Foundation, an evolution ofSienna'scharitablegivingprogram,willfurtherexpandourongoingcommitmenttosupportthosewhoneeditmostandtopartnerwithotherswhoservethecommunitieswherewearelocated.TheFoundationwillallowustoraiseandgivefundsforavarietyofimportantcausesinbothOntarioandBritishColumbia.

In connectionwith an enhanced focus on supportingmental health andwellness in the communitiesweserve,Siennamadea$250thousanddonationtoScarboroughHealthNetwork("SHN")insupportofitsnewmentalhealthhubwhichwillprovidequalitycaretoseniors.

OnMay11,2021,theCompanymadeanadditional$0.1millioncontributiontotheCaRESFund,increasingits corporateandBoardofDirector's contributions toapproximately$0.7million. TheCaRESFund,whichprovides one-time financial grants to eligible employees of long-term care and retirement operators inCanadawhoarefacingextraordinarycircumstancesamidtheCOVID-19crisis,waslaunchedbySiennaandanumberofsectorpeers.TheFundhashelpednearly800frontlinestaffwithover$2.4millioninemergencyfinancialassistancetodate.

IndustryOverview

PleaserefertotheCompany'sMD&AandAIFfortheyearendedDecember31,2020foradiscussionoftheIndustryOverview.

BusinessoftheCompany

PleaserefertotheCompany'sAIF fortheyearendedDecember31,2020foradiscussionoftheBusinessOverview.


https://www.siennaliving.ca/investors/company-profile/sienna-social-responsibility

https://www.siennaliving.ca/investors/company-profile/sienna-social-responsibility

QuarterlyFinancialInformation

2021 2020 2019

ThousandsofCanadiandollars,exceptoccupancy,pershareandratiodata Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2

Revenue 161,228 168,834 166,850 162,922 165,627 172,160 167,947 165,957

Operatingexpenses,net 116,961 140,181 137,895 131,031 129,116 134,303 127,785 126,028

Income(loss)beforenetfinancecharges,transactioncostsandprovisionfor(recoveryof)incometaxes 18,599 (962) (295) 1,152 14,405 11,693 15,495 14,809

Netincome(loss) 10,143 (8,729) (6,484) (6,778) (2,496) 1,112 3,763 2,230

Persharebasicanddiluted 0.151 (0.130) (0.097) (0.101) (0.037) 0.017 0.057 0.034

OFFO 25,343 14,156 13,624 16,699 24,418 22,754 24,208 23,602

Persharebasic 0.378 0.211 0.203 0.249 0.365 0.340 0.364 0.356

OFFO,excludingnetpandemic(recovery)expenses 18,068 19,820 20,774 24,513 24,517 22,754 24,208 23,602

Pershare,excludingnetpandemic(recovery)expenses 0.269 0.296 0.310 0.366 0.366 0.340 0.364 0.356

AFFO 26,430 13,174 14,187 16,623 25,584 20,883 24,492 24,428

Persharebasic 0.394 0.196 0.212 0.248 0.382 0.313 0.368 0.368

AFFO,excludingnetpandemic(recovery)expenses 19,572 18,895 20,926 24,437 25,683 20,883 24,492 24,428

Pershare,excludingnetpandemic(recovery)expenses 0.292 0.281 0.313 0.365 0.383 0.313 0.368 0.368

Dividendsdeclared 15,687 15,687 15,687 15,687 15,671 15,626 15,483 15,241

Pershare 0.234 0.234 0.234 0.234 0.234 0.234 0.233 0.230

Occupancy

Retirement-Averagetotaloccupancy 77.7% 80.7% 80.7% 82.2% 84.2% 85.0% 85.8% 88.4%

Retirement-Asattotaloccupancy 78.2% 79.2% 82.8% 80.8% 83.6% 84.7% 85.1% 87.3%

LTC-Averagetotaloccupancy 80.3% 84.8% 87.4% 92.6% 97.9% 98.2% 98.2% 98.3%

LTC-Averageprivateoccupancy 78.2% 83.3% 86.3% 91.6% 97.3% 97.9% 98.0% 98.1%

Debttoenterprisevalueasatperiodend 50.1% 52.1% 57.8% 63.9% 55.6% 43.7% 43.0% 39.7%

Debttogrossbookvalueasatperiodend 46.0% 48.2% 47.3% 48.5% 46.9% 46.0% 46.5% 46.6%

DebttoAdjustedEBITDAasatperiodend 6.2 9.4 8.9 8.6 6.8 6.7 6.6 6.7

DebttoAdjustedEBITDA,excludingnetpandemic(recovery)expenses,asatperiodend 8.4 7.5 7.2 7.9 6.8 6.7 6.6 6.7

Interestcoverageratio 4.7 2.8 2.5 3.0 4.2 3.7 4.0 4.0

Interestcoverageratio,excludingnetpandemic(recovery)expenses,asatperiodend 3.5 3.7 3.6 4.1 4.3 3.7 4.0 4.0

Totalassets(1) 1,616,357 1,678,129 1,733,832 1,834,675 1,718,716 1,692,600 1,708,163 1,715,479

Totaldebt 964,873 1,032,624 1,028,854 1,096,902 996,126 956,312 965,113 962,742

Weightedaveragesharesoutstanding 67,039,123 67,039,123 67,039,123 67,039,123 66,940,538 66,749,273 66,566,747 66,384,395

Notes:1. Propertyandequipmentandintangibleassetsincludedintotalassetsaremeasuredatcostlessaccumulateddepreciationandamortization.


The Company's quarterly financial results are impacted by various factors including, but not limited to,pandemicrelatedfundingandexpenses,occupancy levels, timingofoperatingexpensesandmaintenancecapital expenditures, seasonality of utility expenses, timing of resident co-payment increases, timing offundingrateincreasesoradditionalfunding,thetimingofpastacquisitions,andcapitalmarketandfinancingactivities. For Q1 2021, the Company’s results have been impacted by timing of government assistancereceivedrelatedtopandemicexpensesandpandemiccapital, loweroccupancy,higherpropertyexpensesandthefairvalueadjustmentsoninterestrateswapcontracts.

TheCompany'stotalassetbasehasdecreasedfrom$1,718,716asatQ12020to$1,616,357asatQ12021,anditsdebttogrossbookvaluedecreasedfrom46.9%asatQ12020to46.0%asatQ12021.Duetonetpandemicrecovery,thedebttoadjustedEBITDAdecreasedto6.2yearsasatQ12021from6.8yearsasatQ12020,andtheinterestcoverageratioincreasedto4.7timesasatQ12021from4.2timesasatQ12020.

Adiscussionof theoperating results for the threemonthsendedMarch31,2021compared to the sameperiodintheprioryearisprovidedinthesection"OperatingResults".


OperatingResults

RetirementThe Company's Retirement portfolio consists of 27 Retirement Residences, five of which are located inBritishColumbiaand22ofwhicharelocatedinOntario.OurRetirementportfoliooperatesinwelllocatedmarkets and generated 22.4% of the Company's total revenues and 41.2% of its total NOI excluding netpandemicrecoveryinQ12021.

Long-termCareTheCompany'sLTCportfolioconsistsof43LTCResidences,8ofwhicharelocatedinBritishColumbiaand35ofwhicharelocatedinOntario.OurLTCportfoliocontributed77.6%oftheCompany'stotalrevenuesandgenerated58.8%ofitstotalNOIexcludingnetpandemicrecoveryinQ12021.

ThefollowingtablerepresentstheoperatingresultsfortheperiodsendedMarch31:

ThreeMonthsEnded

ThousandsofCanadiandollars 2021 2020 Change

Revenue 161,228 165,627 (4,399)

Expenses

Operating,net 116,961 129,116 (12,155)

Depreciationandamortization 17,349 19,332 (1,983)

Administrative 8,311 2,730 5,581

Shareofnetlossinjointventure 8 44 (36)

142,629 151,222 (8,593)

Incomebeforenetfinancecharges,transactioncostsandprovisionfor(recoveryof)incometaxes 18,599 14,405 4,194

Netfinancecharges 4,238 16,781 (12,543)

Transactioncosts 516 1,013 (497)

Totalnetfinancechargesandtransactioncosts 4,754 17,794 (13,040)

Income(loss)beforeprovisionfor(recoveryof)incometaxes 13,845 (3,389) 17,234

Provisionfor(recoveryof)incometaxes

Current 2,980 1,537 1,443

Deferred 722 (2,430) 3,152

3,702 (893) 4,595

Netincome(loss) 10,143 (2,496) 12,639

Totalassets 1,616,357 1,718,716 (102,359)

Totaldebt(netofprincipalreservefund) 964,873 996,126 (31,253)


NetOperatingIncomeConsolidated

The following table represents the Company's consolidated net operating income for the periods endedMarch31:

ThreeMonthsEnded


Revenue

Sameproperty 160,808 165,379 (4,571)

Development(1) 420 248 172

TotalRevenue 161,228 165,627 (4,399)

OperatingExpenses,net

Sameproperty 127,734 128,839 (1,105)

Sameproperty-netpandemic(recovery)expenses(2) (11,027) 104 (11,131)


TotalOperatingExpenses,net 116,961 129,116 (12,155)

NOI

Sameproperty(2) 44,101 36,436 7,665


TotalNOI 44,267 36,511 7,756

Notes:1. Includesthefinancialresultsofthe57-suiteexpansionatIslandParkRetirementResidence,whichopenedinJuly2019andisinlease-up.2. ForthethreemonthsendedMarch31,2021,includesgovernmentassistancerelatedtothepandemicof$42,068(2020-$810)andincremental

pandemic related expenses of $31,041 (2020 - $914), resulting in net pandemic (recovery) expense of $(11,027) (2020 - $104). Governmentassistancerelatedtothepandemicisrecognizedtotheextentthateligibleexpenseshavebeenincurredandfundingallocationsaredetermined.

FirstQuarter2021OperatingResultsTheCompany'stotalsamepropertyrevenuesforQ12021decreasedby$4,571to$160,808,comparedtoQ12020.Retirement'ssamepropertyrevenuesforQ12021decreasedby$1,978to$35,636,comparedtoQ1 2020, primarily due to lower occupancy, partially offset by annual rental rate increases in line withmarketconditions.Retirement'sdevelopmentrevenueswere$420forQ12021(2020-$248),representingtherevenuesfromthe57-suiteexpansionatIslandParkRetirementResidencecompletedduringQ32019.LTC'srevenuesforQ12021decreasedby$2,593to$125,172,comparedtoQ12020,as$716ofgovernmentfunding, which would have typically been included in LTC revenues, has been recorded against eligibleoperatingexpensesrelatedtothepandemic,lowerpreferredaccommodationrevenueof$1,123fromloweroccupancyinprivateandsemi-privateroomsandtimingofflow-throughfunding,partiallyoffsetbyannualinflationaryfundingincreases.

TheCompany'stotalsamepropertyoperatingexpenses,excludingnetpandemicrecoveryof$11,027,forQ12021 decreased by $1,105 to $127,734, compared to Q1 2020. Retirement same property operatingexpenses,excludingnetpandemicexpensesof$732,forQ12021increasedby$386to$22,111,comparedtoQ12020,primarilyduetohigherpropertyexpenses.Retirement'sdevelopmentoperatingexpenseswere$254forQ12021(2020-$173).LTC'soperatingexpenses,excludingnetpandemicrecoveryof$11,759,forQ1 2021 decreased by $1,491 to $105,623, compared to Q1 2020, mainly due to timing of expenses


associatedwithflow-throughfunding,partiallyoffsetbyannualinflationarylabourcostincreasesandhigherpropertyexpenses.

TheCompany'stotalsamepropertyNOIforQ12021increasedby$7,665to$44,101,comparedtoQ12020,mainly due to net pandemic recovery of $11,027, as a result of $15,342 retroactive pandemic fundingreceived inQ12021relatedtopandemicexpenses incurred inexcessofavailablefundingduringtheyearendedDecember31,2020.Retirement'ssamepropertyNOIforQ12021decreasedby$3,072to$12,793,comparedtoQ12020,mainlyduetonetpandemicexpensesof$732,loweroccupancyandhigherpropertyexpenses,partiallyoffsetbyannualrentalrateincreases.Retirement'sdevelopmentQ12021NOIwas$166(2020-$75).LTC'sNOIforQ12021increasedby$10,737to$31,308comparedtoQ12020,primarilyduetonetpandemicrecoveryof$11,759asaresultofthetimingofgovernmentassistancerelatedtopandemicexpenses, and annual inflationary funding increases, partially offset by annual inflationary labour costincreasesandhigherpropertyexpenses.

Duetothetimingorseasonalityofcertainoperatingexpensessuchasutilitiesandmaintenance,occupancylevels,governmentassistanceandannualadjustmentstogovernmentfunding,trendswhichmayappearinoperating margins may be merely coincidental, and readers should not rely on net operating margincalculationsherein.

NetOperatingIncomebySegment

TheCompany'sconsolidatednetoperatingincomeconsistsofitsRetirementandLTCbusinesssegments.

RetirementThefollowingtablerepresentstheresultsoftheRetirementsegmentfortheperiodsendedMarch31:

ThreeMonthsEnded


RetirementRevenue

Sameproperty 35,636 37,614 (1,978)


TotalRetirementRevenue 36,056 37,862 (1,806)

RetirementExpenses,net

Sameproperty 22,111 21,725 386

Sameproperty-netpandemicexpenses(2) 732 25 707


TotalRetirementExpenses,net 23,097 21,923 1,174

RetirementNOI

Sameproperty(2) 12,793 15,864 (3,071)


TotalRetirementNOI 12,959 15,939 (2,980)

Notes:1. Includesthefinancialresultsofthe57-suiteexpansionatIslandParkRetirementResidence,whichopenedinJuly2019andisinlease-up.2. Includesgovernmentassistance related to thepandemicof$1,959 (2020 -$75)and incrementalpandemic relatedexpensesof$2,691 (2020 -

$100),resultinginnetpandemicexpensesof$732(2020-$25)forthethreemonthsendedMarch31,2021.Governmentassistancerelatedtothepandemicisrecognizedtotheextentthateligibleexpenseshavebeenincurredandfundingallocationsaredetermined.


FirstQuarter2021RetirementResultsRetirement'ssamepropertyrevenuesforQ12021decreasedby$1,978to$35,636,comparedtoQ12020,primarilyattributabletoloweroccupancy,partiallyoffsetbyannualrentalrateincreasesinlinewithmarketconditions.

Retirement'ssamepropertyoperatingexpenses,excludingnetpandemicexpenses, forQ12021 increasedby $386 to $22,111, compared to Q1 2020, primarily due to higher property expenses. Net pandemicexpensesforQ12021were$732(2020-$25).

Retirement's same property NOI for Q1 2021 decreased by $2,980 to $12,959, compared to Q1 2020.Excluding net pandemic expenses, Retirement's same property NOI forQ1 2021 decreased by $2,365 to$13,524,comparedtoQ12020.

Long-termCareThefollowingtablerepresentstheresultsoftheLTCsegmentfortheperiodsendedMarch31:

ThreeMonthsEnded


Long-termCareRevenue

Sameproperty 125,172 127,765 (2,593)

TotalLong-termCareRevenue 125,172 127,765 (2,593)

Long-termCareExpenses,net

Sameproperty 105,623 107,114 (1,491)

Sameproperty-netpandemic(recovery)expenses(1) (11,759) 79 (11,838)

TotalLong-termCareExpenses,net 93,864 107,193 (13,329)

Long-termCareNOI

Sameproperty(1) 31,308 20,572 10,736

TotalLong-termCareNOI 31,308 20,572 10,736

Notes:1. Includesthegovernmentassistancerelatedtothepandemicof$40,109(2020-$735)andincrementalCOVID-19relatedoperatingexpensesof

$28,350 (2020 - $814), resulting in net pandemic (recovery) expense of $(11,759) (2020 - $79) for the threemonths endedMarch 31, 2021.Governmentassistancerelatedtothepandemicisrecognizedtotheextentthateligibleexpenseshavebeenincurredandfundingallocationsaredetermined.

FirstQuarter2021Long-termCareResultsLTC'srevenuesforQ12021decreasedby$2,593to$125,172,comparedtoQ12020,as$716ofgovernmentfunding, which would have typically been included in LTC revenues, has been recorded against eligibleoperatingexpensesrelatedtothepandemic,lowerpreferredaccommodationrevenueof$1,123fromloweroccupancyinprivateandsemi-privateroomsandtimingofflow-throughfunding,partiallyoffsetbyannualinflationaryfundingincreases.

Excludingnetpandemicrecovery,LTC'soperatingexpensesforQ12021decreasedby$1,491to$105,623,compared to Q1 2020,mainly due to timing of expenses associatedwith flow-through funding, partiallyoffset by annual inflationary labour cost increases andhigher property expenses.Net pandemic recovery(expenses)forQ12021were$11,759(2020-$(79)).


LTC'sNOI forQ12021 increasedby$10,736to$31,308,comparedtoQ12020.Excludingnet recoveryofpandemicexpenses,LTC'sNOIforQ12021decreasedby$1,102to$19,549,comparedtoQ12020.

DepreciationandAmortization

FirstQuarter2021DepreciationandamortizationforQ12021decreasedby$1,983to$17,349,comparedtoQ12020,duetocompletionoftheamortizationofresidentrelationships.

AdministrativeExpenses

ThreemonthsendedMarch31,


Generalandadministrativeexpenses 6,885 5,700 1,185Pandemicexpenses 1,120 31 1,089Share-basedcompensation 306 (3,001) 3,307Totaladministrativeexpenses 8,311 2,730 5,581

FirstQuarter2021AdministrativeexpensesforQ12021increasedby$5,581to$8,311,comparedtoQ12020,primarilyduetoanincreaseof$3,307inshare-basedcompensationexpensefrommark-to-marketadjustments,increaseinpandemicexpensesof $1,089,which includeadvisory fees to support themanagementof thepandemic,and an increase in employee costs to strengthen the Company's operating platform to deliver a qualityresidentexperience.

ShareofNetLossinJointVenture

FirstQuarter2021ForQ12021, theCompany's shareofnet loss ina jointventureof$8 is related to thedevelopmentofaretirementresidenceinNiagaraFalls,Ontario.


NetFinanceCharges

Threemonthsended

March31,


Financecosts

Interestexpenseonmortgages 3,986 4,659 (673)

Interestexpenseondebentures 2,588 3,645 (1,057)

Interestexpenseoncreditfacilities 929 283 646

Interestexpenseonright-of-useassets 17 23 (6)

Amortizationoffinancingchargesandfairvalueadjustmentsonacquireddebt 728 524 204

Amortizationoflossonbondforwardcontract — 217 (217)

Fairvalue(gain)lossoninterestrateswapcontracts (3,411) 8,400 (11,811)

4,837 17,751 (12,914)

Financeincome

Interestincomeonconstructionfundingreceivable 353 468 (115)

Otherinterestincome 246 502 (256)

599 970 (371)

Netfinancecharges 4,238 16,781 (12,543)

FirstQuarter2021Net finance charges for Q1 2021 decreased by $12,543 to $4,238, compared to Q1 2020, primarilyattributabletothefairvaluegainoninterestrateswapcontractsandadecreaseininterestexpenseonlong-termdebt.InQ12020,theBankofCanadadecreasedtheovernightratetosupporttheCanadianeconomyasaresultoftheCOVID-19pandemic.Asthecountrycontinuestonavigatethroughthepandemic,interestrateshavebeguntoriseinanticipationofanincreaseintheovernightratein2022.TheresultingincreaseininterestrateshadapositivefairvalueimpactonthevaluationoftheCompany'sinterestrateswapcontractsduringQ12021.

TransactionCosts

FirstQuarter2021Transactioncosts forQ12021decreasedby$497 to$516compared toQ12020primarilyattributable tofewertransactionactivities.

IncomeTaxes

FirstQuarter2021IncometaxexpenseforQ12021increasedby$4,595to$3,702,comparedtoQ12020.ThecurrentincometaxexpenseforQ12021increasedby$1,443to$2,980comparedtoQ12020,primarilyattributabletoanincrease in NOI due to timing of government assistance. The current income tax expense has beencalculatedat theweightedaveragecombinedcorporatetaxrateof26.57%(2020-26.57%).ThedeferredincometaxexpenseforQ12021increasedby$3,152to$722comparedtoQ12020,primarilyattributabletofairvalueadjustmentsoninterestrateswapcontracts.


BusinessPerformance

AdjustedFundsfromOperationsThe IFRS measure most directly comparable to FFO and OFFO is "net income". The following tablerepresents the reconciliation of "net income" to FFO and OFFO for the periods ended March 31. ThereconciliationfromFFOtoAFFOisprovidedassupplementaryinformation.

ThreeMonthsEnded

ThousandsofCanadiandollars,exceptshareandpersharedata 2021 2020 Change

Netincome(loss) 10,143 (2,496) 12,639

Deferredincometaxexpense(recovery) 722 (2,430) 3,152

Depreciationandamortization 16,422 18,399 (1,977)


Fairvaluelossoninterestrateswapcontracts (3,411) 8,400 (11,811)

Fundsfromoperations(FFO) 24,392 22,886 1,506

Depreciationandamortization-corporate 927 933 (6)

Amortizationoffinancingchargesandfairvalueadjustmentsonacquireddebt 728 524 204

Amortizationoflossonbondforwardcontract — 217 (217)

Netsettlementpaymentoninterestrateswapcontracts (704) (83) (621)

Taxshieldduetothesettlementofthebond-lockhedge — (59) 59

Restructuringcosts — — —

Otherinterestincome — — —

Operatingfundsfromoperations(OFFO) 25,343 24,418 925

Constructionfunding 2,707 2,690 17

Maintenancecapitalexpenditures (1,203) (1,524) 321

Netpandemiccapitalexpenditures (417) — (417)

Adjustedfundsfromoperations(AFFO) 26,430 25,584 846


Dividendsdeclared (15,687) (15,671) (16)

AFFOretained 10,743 9,913 830

FFOpershare 0.364 0.342 0.022

OFFOpershare 0.378 0.365 0.013

AFFOpershare 0.394 0.382 0.012

Weightedaveragecommonsharesoutstanding 67,039,123 66,940,538

FirstQuarter2021PerformanceForQ12021,FFOincreasedby$1,506to$24,392,comparedtoQ12020.Theincreasewasprimarilyduetonetpandemicrecovery,asaresultof thetimingofgovernmentassistancerelatedtopandemicexpenses,and annual rental rate increases in Retirement, partially offset by lower Retirement occupancy, lowerpreferred accommodation revenue in the LTC segment, annual inflationary increases in labour costs andhigherpropertyexpenses.

For Q1 2021, OFFO increased by $925 to $25,343, compared to Q1 2020. The increase was primarilyattributabletotheincreaseinFFOnotedabove.


For Q1 2021, AFFO increased by $846 to $26,430, compared to Q1 2020. The increase in AFFO wasprincipally related to the increase in OFFO noted above and pandemic capital expenditures in excess ofrelatedgovernmentassistanceandtimingofmaintenancecapitalexpenditures.

ConstructionFundingTheCompany receives construction funding subsidies from theGovernment ofOntario on a per bedperdiem basis to support the costs of developing or redeveloping an eligible LTC home. There are severaleligibilityrequirements,includingreceivingapprovalfromtheMinistryofLong-TermCare("MLTC")onthedevelopment or redevelopment and completing the construction in accordance with a developmentagreement signed with the MLTC. This funding is non-interest bearing, and is received subject to theconditionthattheresidencescontinuetooperateaslong-termcareresidencesfortheperiodforwhichtheyareentitledtotheconstructionfunding.AsatMarch31,2021,theconditionforfundinghasbeenmet.

TheconstructionfundingamounttoreconcilefromOFFOtoAFFOrepresentsthechangeintheconstructionfundingreceivablebalance,whichconsistsofthecashtobereceived,offsetbytheinterestincomeontheconstruction funding receivable recognized in "net income". For the years ending December 31, 2021through 2024, and thereafter, the Company estimates that the construction funding amount will be asfollows:

ThousandsofCanadiandollarsConstructionfunding

interestincome(1)Construction

fundingprincipal(2)Totalconstructionfunding

tobereceived

2021 1,284 9,779 11,063

2022 875 9,104 9,979

2023 553 6,236 6,789

2024 356 3,084 3,440

2025 263 1,879 2,142

Thereafter 854 5,916 6,770

4,185 35,998 40,183

Notes:1. Theinterestincomerelatestointerestaccretionresultingfromtheconstructionfundingreceivablethatwasinitiallymeasuredatfairvalueand

subsequentlymeasuredatamortizedcostusingtheeffectiveinterestmethod.2. TheconstructionfundingprincipalreceivedisanadjustmenttoreconcilefromOFFOtoAFFO.

ForthethreemonthsendedMarch31,2021,interestincomeonconstructionfundingof$353(2020-$468)wasrecognized,andanadjustmentof$2,707(2020-$2,690)wasmadetoAFFOforconstructionfundingprincipalreceived.


MaintenanceCapitalExpendituresTheCompanymonitorsallof itsproperties forongoingmaintenance requirements.Aspartof the capitalinvestments'monitoringprocess,itemsareassessedandprioritizedbasedontheurgencyandnecessityoftheexpendituretosustainormaintaintheconditionofbuildings,ortomeetresidents'needs.ThefollowingtablesummarizestheCompany'smaintenancecapitalexpendituresfortheperiodsendedMarch31:

ThreeMonthsEnded

ThousandsofCanadiandollars 2021 2020

Buildingimprovements 306 490

Mechanicalandelectrical 271 97

Suiterenovationsandcommonareamaintenance 314 578

Communicationsandinformationsystems 34 25

Furniture,fixturesandequipment 278 334

Totalmaintenancecapitalexpenditures 1,203 1,524

BuildingImprovementsBuildingimprovementsincludethecostsforstructures,roofing,exteriorgrounds,firesafetyandsprinklers.

MechanicalandElectricalMechanical and electrical expenditures include the costs for heating, air conditioning and ventilationsystems,generators,boilersandpumps.

SuiteRenovationsandCommonAreaMaintenanceSuite renovations and common areamaintenance are expenditures tomaintain themarketability of theCompany's properties. Flooring and carpeting replacements are often done in conjunction with suiterenovations.

CommunicationandInformationSystemsCommunication and information systems' expenditures include the costs for purchasing and installingcomputerequipment,softwareapplications,telecommunicationsystemsandwirelesssolutions.

Furniture,FixturesandEquipmentFurniture, fixtures andequipment expenditures include the costs for replacingormaintaining residences'furnishingsandequipment,includingthoseinresidents'rooms,aswellaskitchenfacilities,laundryfacilitiesanddiningfurnishings.


ReconciliationofCashFlowfromOperationstoAdjustedFundsfromOperationsTheIFRSmeasuremostdirectlycomparabletoAFFOis"cashflowfromoperatingactivities".Thefollowingtable represents thereconciliationofcashprovidedbyoperatingactivities toAFFOfor theperiodsendedMarch31:

ThreeMonthsEnded


Cashprovidedbyoperatingactivities 18,891 13,818 5,073

Constructionfundingprincipal 2,707 2,690 17


Taxshieldduetosettlementofthebond-lockhedge — (59) 59

Maintenancecapitalexpenditures (1,203) (1,524) 321

Netpandemiccapitalexpenditures (417) — (417)

Netchangeinworkingcapital,interestandtaxes 5,872 9,599 (3,727)

Restrictedshareunitsrecovery 64 47 17



Dividendsdeclared (15,687) (15,671) (16)


Dividendreinvestment — 3,393 (3,393)

AFFOretainedafterdividendreinvestment 10,743 13,306 (2,563)

The excess of AFFO retained over dividends declared for the three months ended March 31, 2021 isprimarilyduetonetpandemicrecovery,asaresultoftimingofgovernmentassistancereceivedrelatedtopandemicexpenses.

Refertothe"CashFlowAnalysis"sectionfordetailsonthechangefromQ12020toQ12021oncashflowusedinoperatingactivities.


FinancialPositionAnalysis

BalanceSheetAnalysisThe followingtablesummarizes thesignificantchanges inassets, liabilitiesandequity forMarch31,2021comparedtoDecember31,2020.


Totalassets 1,616,357 1,678,129 (61,772)

Totalliabilities 1,173,983 1,230,687 (56,704)

Totalequity 442,374 447,442 (5,068)

Totalassetsdecreasedby$61,772to$1,616,357primarilyduetoadecreaseincashandcashequivalents,depreciation of property and equipment and amortization of resident relationships, partially offset byincreaseingovernmentfundingreceivable.

Total liabilitiesdecreasedby$56,704 to$1,173,983primarilydueadecrease in long-termdebt, including$63,000ofrepaymentoncreditfacilities,andoffsetbyincreaseinaccountspayableandaccruedliabilities.

Totalequitydecreasedby$5,068to$442,374primarilyduetothepaymentofdividendsandpartiallyoffsetbytheCompany'snetincomeforthequarter.

CashFlowAnalysisThefollowingtablerepresentsthesummaryofcashflowsfortheperiodsendedMarch31,2021:

ThreeMonthsEnded


Cash(usedin)providedby:

Operatingactivities 18,891 13,818 5,073

Investingactivities (1,794) (640) (1,154)

Financingactivities (84,166) 27,028 (111,194)

(Decrease)increaseincashandcashequivalentsduringtheperiod (67,069) 40,206 (107,275)

Cashandcashequivalents,endofperiod 28,608 60,982 (32,374)

FirstQuarter2021CashflowsprovidedbyoperatingactivitiesforthethreemonthsendedMarch31,2021increasedby$5,073to$18,891primarilyduetotimingofgovernmentassistancerelatedtothepandemic,increaseinaccountspayableandaccruedliabilities,decreaseinaccountsreceivableandotherassetsandlowerinterestpaidonlong-termdebt.

Cashflowsusedin investingactivitiesforthethreemonthsendedMarch31,2021increasedby$1,154to$1,794 primarily due to property and equipment purchases net of disposals and related governmentassistance.

CashflowsusedinfinancingactivitiesforthethreemonthsendedMarch31,2021increasedby$111,194to$84,166primarilyduetorepaymentofcreditfacilities.


LiquidityandCapitalResources

LiquidityTheCompany'sprimary sourceof liquidity is cash flowgenerated fromoperatingactivities.TheCompanyexpectstomeetitsoperatingcashrequirementsthroughfiscal2021andbeyond,includingrequiredworkingcapital, capital expenditures, and currently scheduled interest payments on debt through fiscal 2021 andbeyond,fromcashonhand,cashflowfromoperations,proceedsfromrefinancingitsdebt,itscommitted,but unutilized borrowing capacity and, if necessary, will pursue debt or equity financing to provide theCompanywithadditionalfinancialflexibility.

AsatMarch31,2021,theCompany'sliquiditywas$213,108,asfollows:

ThousandsofCanadiandollars March31,2021 December31,2020

Cashandcashequivalents 28,608 95,677

Availablefundsfromcreditfacilities 184,500 121,500

Total 213,108 217,177

AsatMarch31, 2021, theCompanyhasdrawn$24,000 from its credit facilities toprovide theCompanyfinancialflexibility,whichisreflectedincashandcashequivalents.TheCompany'sliquiditywas$220,445asatMay12,2021.

The Company had a working capital deficiency (current liabilities less current assets) of $188,262 as atMarch31,2021,primarilyattributabletothecurrentportionoflong-termdebtof$141,730,whichincludesthe $100,000 SecuredCredit Facilitymaturing in the fourth quarter of 2021.We expect to refinance theSecuredCreditFacilitywith longer termfinancing.Tosupport itsworkingcapitaldeficiency, theCompanyplanstoutilizemeasuresdescribedabove.

TheCompanyhasanunencumberedassetpoolwithafairvalueofapproximately$840,000asatMarch31,2021thatcanprovidefinancialflexibility.

DebtTheCompany'sobjectivesaretoaccessandmaintainthelowestcostofdebtwiththemostflexibletermsavailable.TheCompany'sdebt strategy involvesprimarilyunsecureddebentures, conventionalandCMHCinsuredmortgages,andunsecuredandsecuredcreditfacilities.

TheCompany'sgoalistocontinuetooptimizeitsdebtmaturityscheduleovera10-yearperiodinordertomanageinterestrateandfinancialrisks.TheCompany'sstrategyistobuilda10-yeardebtmaturityladderbyrefinancingapproximately10%ofitsdebtannually,whichisequivalentto$96,487asatMarch31,2021.In2020,DBRSconfirmedthe"BBB"ratingfortheSeriesAUnsecuredDebenturesandSeriesBUnsecuredDebentures. In addition, DBRS issued a "BBB" investment grade credit rating for the Company with a"Stable"trend.


TheCompany'stotaldebtiscomprisedasfollows:


SeriesAUnsecuredDebentures 150,000 150,000

SeriesBUnsecuredDebentures 175,000 175,000

Creditfacilities 124,000 187,000

Mortgages 524,202 529,492

Leaseliability 1,665 1,817

974,867 1,043,309

Fairvalueadjustmentsonacquireddebt 3,053 3,177

Less:Deferredfinancingcosts (13,047) (13,862)

Totaldebt 964,873 1,032,624

The Company's total debt as at March 31, 2021 was $964,873 (December 31, 2020 - $1,032,624). Thedecrease of $67,751was primarily related to the repayments on theUnsecured Revolving Credit Facility(definedinthe"Creditfacilities"sectionofthisMD&A).SubsequenttoMarch31,2021,theCompanyrepaid$4,000ofitscreditfacilities.

The following table summarizes the scheduled principal maturities of the Company's long-term debtcommitmentsasatMarch31,2021:

ThousandsofCanadiandollars,exceptinterestrate Mortgages

Year

SeriesAUnsecured

Debentures(1)

SeriesBUnsecured

Debentures(2)Credit

Facilities(3)

CapitalizedLease

PrincipalPayments(4)

RegularPrincipal

RepaymentsPrincipalDueatMaturity

WeightedAverage

InterestRateonMaturingMortgages Total

ConsolidatedWeightedAverage

InterestRateonMaturing

Debt

2021 — — 100,000 373 15,854 16,339 2.95% 132,566 2.50%

2022 — — — 494 19,605 28,169 3.91% 48,268 3.91%

2023 — — — 435 17,837 60,824 3.38% 79,096 3.38%

2024 150,000 — — 363 16,049 50,104 4.10% 216,516 3.40%

2025 — — 24,000 — 12,511 41,065 3.78% 77,576 3.14%

2026 — 175,000 — — 12,544 — —% 187,544 3.45%

2027 — — — — 11,844 35,115 3.30% 46,959 3.30%

2028 — — — — 6,809 115,703 3.35% 122,512 3.35%

2029 — — — — 2,379 5,477 3.13% 7,856 3.13%

2030 — — — — 1,410 9,230 1.65% 10,640 1.65%

Thereafter — — — — 11,921 33,413 5.00% 45,334 5.00%

150,000 175,000 124,000 1,665 128,763 395,439 3.56% 974,867 3.31%

Fairvalueadjustmentsonacquireddebt 3,053

Less:Deferredfinancingcosts (13,047)

TotalDebt 964,873

Notes:1. TheinterestratefortheSeriesAUnsecuredDebenturesis3.109%.2. TheinterestratefortheSeriesBUnsecuredDebenturesis3.45%.3. Theweightedaverageinterestrateforcreditfacilitiesis1.86%.4. Theweightedaverageinterestrateforcapitalizedleaseprincipalpaymentsis3.87%foreachyear.


ThefollowinggraphprovidesabreakdownoftheCompany'sdebtmaturitiesasatMarch31,2021:

DebenturesTheSeriesASeniorUnsecuredDebentureswereissuedonNovember4,2019,andbearinterestatarateof3.109%perannum,payablesemi-annuallyinMayandNovemberofeachyearandmatureonNovember4,2024(the"SeriesAUnsecuredDebentures").

TheSeriesBSeniorUnsecuredDebentureswere issuedonOctober2,2020,andbear interestatarateof3.45%perannum,payablesemi-annuallyinFebruaryandAugustofeachyearandmatureonFebruary27,2026(the"SeriesBUnsecuredDebentures").

Thebalancesrelatedtothedebenturesareasfollows:



SeriesBUnsecuredDebentures 175,000 175,000


322,974 322,863

CreditFacilitiesTheCompanyhasacombinedtotalborrowingcapacityof$208,500pursuanttoitscreditfacilitiesand,asatMarch31,2021,hasdrawn$24,000fromthefacilitiesprovidingtheCompanyfinancialflexibility.

OnMarch 19, 2020, the Company entered into a credit agreement for a $200million senior unsecuredrevolvingcreditfacility(the"UnsecuredRevolvingCreditFacility").TheUnsecuredRevolvingCreditFacility


matures on March 19, 2025 and may be extended for additional one-year terms, subject to certainconditions.Thecapacityof theUnsecuredRevolvingCreditFacilitymaybe increasedbyupto$50millionduring the term of the facility, subject to certain conditions. Borrowings under the Unsecured RevolvingCredit Facility can take place by way of BAs at 145 bps per annum over the floating BA rate, or at theCanadianprime rateplus45bpsperannum.TheUnsecuredRevolvingCredit Facility is subject tocertaincustomaryfinancialandnon-financialcovenants.

TheCompanyhasotherpropertycreditfacilitiestotaling$8,500thatcanbeaccessedforgeneralcorporatepurposes.

AsatMarch31,2021,theCompanyhaddrawn$24,000undertheUnsecuredRevolvingCreditFacility(2020-$87,000).Subsequenttothequarter,theCompanyrepaid$4,000ofitscreditfacilities.

ThebalancesrelatedtotheCompany'sunsecuredcreditfacilitiesareasfollows:


Creditfacilitiesdrawn 24,000 87,000

Less:Deferredfinancingcosts (830) (1,092)

23,170 85,908

AsatMay12,2021, theCompany'sborrowingcapacitywas$208,500andamountsdrawn from its creditfacilitieswere$20,000.

OnOctober2,2020,theCompanyenteredintoacreditagreementfora$100,000securedcreditfacility(the"SecuredCreditFacility").TheSecuredCreditFacilitymaturesonOctober2,2021andmaybeextendedforanadditionalone-yearterm,subjecttocertainconditions.BorrowingsundertheSecuredCreditFacilitycantakeplacebywayofBAsat225bpsperannumoverthefloatingBArate,orattheCanadianprimerateplus125bpsperannum.Thecreditfacilityissecuredbytheassetsofthreeretirementresidences,andissubjecttocertaincustomaryfinancialandnon-financialcovenants.TheSecuredCreditFacilityhasbeenfullydrawnasatMarch31,2021andDecember31,2020.

MortgagesTheCompanyhasbothfixedandvariableratemortgageswithvariousfinancialinstitutions.TheCompanyissubject to interest rate risk on mortgages at variable rates associated with certain residences, which ispartially offset by interest rate swap contracts. Property-level mortgages are secured by each of theunderlyingproperties' assets, guaranteedby theCompanyand subject to certain customary financial andnon-financialcovenants.

TheCompanyhas low-costmortgage financingwithCMHC.AsatMarch31,2021,56%of theCompany'stotalproperty-levelmortgageswereinsuredbyCMHC,whichisayear-overyearincreaseof5%.


Thebalancesrelatedtoproperty-levelmortgagesareasfollows:


Mortgagesatfixedrates 370,521 374,248

Mortgagesatvariablerates 153,681 155,244



517,064 522,036

ThefollowingtablesummarizessomemetricsontheCompany'sproperty-levelmortgages:

March31,2021 December31,2020

FixedRate(1) VariableRate Total Total

Weightedaverageinterestrate 3.58% 1.67% 3.56% 3.56%

Weightedaveragetermtomaturity(years) 5.5 0.2 5.4 5.6

Note:1. Includesfloatingratemortgagesthathavebeenfixedthroughinterestrateswaps.

LeaseLiabilityThe lease liabilityasatMarch31,2021of$1,665representstheCompany's leaseon itsofficeequipmentandMarkhamcorporateofficespace.

CreditRatingsTheCompany'screditratingsforitsdebenturesaresummarizedbelow:

Debt RatingAgency CreditRating Outlook

SeriesAUnsecuredDebentures DBRS BBB Stable

SeriesBUnsecuredDebentures DBRS BBB Stable

OnSeptember14, 2020, Sienna confirmed its "BBB" investment grade credit ratingwith a "Stable" trendfromDBRS for theSeriesAUnsecuredDebentures.OnOctober2,2020,DBRS issueda "BBB" investmentgradecreditratingwith"Stable"trendfortheSeriesBUnsecuredDebentures.

FinancialCovenantsTheCompanyisincompliancewithallfinancialcovenantsonitsborrowingsasatMarch31,2021.However,therecanbenoassurance that covenant requirementswillbemetatall times. If theCompanydoesnotremainincompliance,itsabilitytoamendthecovenantsorrefinanceitsdebtcouldbeadverselyaffected.

TheCompanyhasadopted interestcoverageguidelineswhichareconsistentwiththecoveragecovenantscontainedin itsbankcreditfacilityagreements. InterestcoverageratiosareusedtoassesstheCompany'sabilitytoservice itsdebtobligations.The interestcoverageratiocalculationsmaydifferdependingonthelender.

The Company's interest coverage ratio, debt service coverage ratio and debt to Adjusted EBITDA ratioincludesnetpandemicrecovery(expenses)of$9,907forthethreemonthsendedMarch31,2021(2020-$(135)).


InterestCoverageRatioThe Interest Coverage Ratio is a common measure used to assess an entity's ability to service its debtobligations.Ingeneral,higherratiosindicatealowerriskofdefault.TheinterestcoverageratioiscalculatedasfollowsfortheperiodsendedMarch31:

ThreeMonthsEnded

ThousandsofCanadiandollars,exceptratio 2021 2020

Netfinancecharges 4,238 16,781

Add(deduct):

Amortizationoffinancingchargesandfairvalueadjustmentsonacquireddebt (728) (524)

Amortizationoflossonbondforwardcontract — (217)

Interestincomeonconstructionfundingreceivable 353 468

Otherinterestincome 246 502

Fairvaluegain(loss)oninterestrateswapcontracts 4,115 (8,317)

Netfinancecharges,adjusted 8,224 8,693

AdjustedEBITDA 39,008 36,895

Interestcoverageratio 4.7 4.2

Interestcoverageratio,excludingnetpandemic(recovery)expenses 3.5 4.3

Thefollowingtablerepresentsthereconciliationofnet incometoAdjustedEBITDAfortheperiodsendedMarch31:

ThreeMonthsEnded

ThousandsofCanadiandollars 2021 2020

Netincome(loss) 10,143 (2,496)


Provisionfor(recoveryof)incometaxes 3,702 (893)

Depreciationandamortization 17,349 19,332

Transactioncosts 516 1,013

Proceedsfromconstructionfunding 3,060 3,158


AdjustedEBITDA,excludingnetpandemic(recovery)expenses 29,101 36,999


DebtServiceCoverageRatioTheDebtServiceCoverageRatioisacommonmeasureusedtoassessanentity'sabilitytoserviceitsdebtobligations. Maintaining the debt service coverage ratio forms part of the Company's debt covenantrequirements. In general, higher ratios indicate a lower risk of default. Adjusted EBITDA as referencedbelow,ispresentedinaccordancewithdefinedtermsincertaincovenantcalculations.ThefollowingisthecalculationfortheperiodsendedMarch31:

ThreeMonthsEnded


Netfinancecharges,adjusted 8,224 8,693

Principalrepayments(1) 5,442 5,476

Principalreservefund — 1,716

Totaldebtservice 13,666 15,885


Deduct:

Maintenancecapitalexpenditures (1,203) (1,524)

Netpandemiccapitalexpenditures (417) —

Cashincometaxrefunded(paid) 169 (1,800)

AdjustedEBITDA(forcovenantcalculations) 37,557 33,571

Debtservicecoverageratio 2.7 2.1

Debtservicecoverageratio,excludingnetpandemic(recovery)expensesandnetpandemiccapitalexpenditures 2.1 2.1

Note:1. DuringthethreemonthsendedMarch31,2021,theCompanymadevoluntarypaymentsof$63,000(2020-$37,000)towardsitscreditfacilities,

whichhavebeenexcludedfromthedebtservicecoverageratiocalculation.Debtrepaymentsonmaturityhavealsobeenexcludedfromthedebtservicecoverageratiocalculation.


DebttoAdjustedEBITDARatioTheDebttoAdjustedEBITDAratioisanindicatoroftheapproximatenumberofyearsrequiredforcurrentcashflowstorepayall indebtedness.TheAdjustedEBITDAbelowisannualizedusingtheAdjustedEBITDAforthethreemonthsended March31,2021.

March31


Totalindebtedness


SeriesBUnsecuredDebentures 175,000 —

SeriesBSecuredDebentures — 287,000

SeriesBSecuredDebentures-Principalreservefund — (37,168)


Mortgages 524,202 536,789


974,867 1,006,027


DebttoAdjustedEBITDA 6.2 6.8

DebttoAdjustedEBITDA,excludingnetpandemic(recovery)expenses 8.4 6.8

DebttoGrossBookValueDebttogrossbookvalueindicatestheleverageappliedagainstthetotalgrossbookvalue(originalcosts)oftheentity.

March31

ThousandsofCanadiandollars,exceptratio 2021 2020Totalindebtedness


SeriesBUnsecuredDebentures 175,000 —

SeriesBSecuredDebentures — 287,000

SeriesBSecuredDebentures-Principalreservefund — (37,168)


Mortgages 524,202 536,789


Totalindebtedness 974,867 1,006,027

Totalassets 1,616,357 1,718,716

Accumulateddepreciationonpropertyandequipment 315,539 269,764

Accumulatedamortizationonintangibleassets 187,510 157,609

Grossbookvalue 2,119,406 2,146,089

Debttogrossbookvalue 46.0% 46.9%

Subsequent to March31, 2021, theCompany repaid$4,000of its credit facilities. Thepro formadebt togrossbookvalueincludingthissubsequentrepaymentis45.8%asatMarch31,2021.


Equity

ShareCapitalTheCompanyisauthorizedtoissueanunlimitednumberofcommonsharesorpreferredshares,withoutnominalorparvalue.Thefollowingtablesummarizesthecommonsharesissuedandoutstanding:

ThousandsofCanadiandollars,exceptshares Commonshares Amount

Balance,January1,2020 66,839,013 875,051

Dividendreinvestmentplan 200,110 3,393

Long-termincentiveplan,netofloansreceivable — 46

Share-basedcompensation — 26

Balance,December31,2020 67,039,123 878,516



Balance,March31,2021 67,039,123 878,992

OnMarch31,2021,theCompanyreceivedapprovalfromtheTSXtorenewitsnoticeofintentiontomakeanormalcourse issuerbid("NCIB") foraportionoftheCompany'scommonshares.Pursuanttothenotice,the Company has the authority to acquire up to a maximum of 3,351,956 of its common shares forcancellationoverthenext12months.PurchasesbytheCompanyundertheNCIBwillbemadethroughthefacilities of the TSX or through a Canadian alternative trading system and in accordancewith applicableregulatoryrequirementsatapricepercommonshareequaltothemarketpriceatthetimeofacquisition.Thenumberof common shares that canbepurchasedpursuant to theNCIB is subject to a current dailymaximumof 88,089 common shares, subject to theCompany’s ability tomakeoneblockpurchaseof itscommonsharespercalendarweekthatexceedssuchlimits.AllcommonsharespurchasedbytheCompanyunder theNCIBwill be cancelleduponpurchase. TheCompanymaybegin topurchase sharesonApril 5,2021 and the NCIB will terminate on April 4, 2022, or such earlier time as the Company completes itspurchasespursuanttotheNCIBorprovidesnoticeofintention.

NocommonshareswerepurchasedpursuanttotheCompany'snormalcourseissuerbids.

DividendsTheBoardofDirectorsoftheCompanydeterminestheappropriatedividendlevelsbasedonitsassessmentof cashprovidedbyoperationsnormalized forunusual items,expectedworkingcapital requirementsandactualandprojectedcapitalexpenditures.

OnMarch 18, 2020, the Company temporarily suspended the Dividend Reinvestment Plan ("DRIP") untilfurthernotice.Shareholdersenrolled in theDRIPreceiveddividendpayments incash, insteadofcommonshares, starting with the dividend payable to shareholders of record as at March 31, 2020. The DRIP issubjecttoreinstatementatthediscretionoftheBoardofDirectorsoftheCompany.


ThefollowingtablesummarizesthedividendsdeclaredinrelationtocashflowsfromoperatingactivitiesandAFFOfortheperiodsendedMarch31:

ThreeMonthsEnded

ThousandsofCanadiandollars 2021 2020 ChangeCashflowsfromoperatingactivities 18,891 13,818 5,073AFFO 26,430 25,584 846Dividendsdeclared (15,687) (15,671) (16)

Cashflowsfromoperatingactivitiesover(under)dividendsdeclared 3,204 (1,853) 5,057


The excess of cash flows from operating activities over dividends declared for the three months endedMarch31,2021 isprimarilyattributabletotimingofgovernmentassistancereceivedrelatedtopandemicexpenses,andseasonalityintheCompany'soperatingresultsandchangesinworkingcapitalbalanceswhichareexpected tonormalizeduring the courseof the year. TheCompanybelieves that its currentdividendlevelissustainable.However,cashdividendsarenotguaranteedandmayfluctuatewiththeperformanceoftheCompany.

CapitalDisclosureTheCompanydefinesitscapitalasthetotalofitslong-termdebtandshareholders'equitylesscashandcashequivalents.

TheCompany'sobjectiveswhenmanagingcapitalareto:

(i) maintain a capital structure that provides options to the Company for accessing capital oncommerciallyreasonableterms,withoutexceedingitsdebtcapacity,orthelimitationsinitscreditfacilities,ortakingonunduerisks;

(ii) maintainfinancialflexibilityinordertomeetfinancialobligations,includingdebtservicepaymentsandregulardividendpayments;and

(iii) deploycapitaltoprovideanappropriateinvestmentreturntoitsshareholders.

The Company's financial strategy is designed to maintain a flexible capital structure consistent with theobjectivesstatedaboveandtorespondtochangesineconomicconditions.Inordertomaintainoradjustitscapitalstructure,theCompanymayissueadditionalshares,additionallong-termdebt,orlong-termdebttoreplaceexisting long-termdebtwithsimilarordifferentcharacteristics,oradjusttheamountofdividendspaid to the Company's shareholders. The Company's financing and refinancing decisions are made on aspecifictransactionbasisanddependonfactorssuchastheCompany'sfinancialneedsandthemarketandeconomicconditionsatthetimeofthetransaction.

The Board of Directors of the Company determines and approves monthly dividends in advance on aquarterlybasis.

TherewerenochangesintheCompany'sapproachtocapitalmanagementduringtheperiod.


ContractualObligationsandOtherCommitments

LeasesTheCompanyhasa10-year leasewithrespecttoitsMarkhamcorporateoffice,whichexpiresonOctober31,2024.Aswell,theCompanyhasvariousleasesforofficeandotherequipmentthatexpireoverthenextfouryears.

CriticalAccountingEstimatesandAccountingPolicies

The accounting policies and estimates that are critical to the understanding of the Company's businessoperationsandresultsofoperationsareidentifiedinNote3oftheCompany'sannualauditedconsolidatedfinancial statements for the year ended December 31, 2020. New or changes in accounting policies areidentifiedinNote3oftheCompany'sinterimconsolidatedfinancialstatementsforthethreemonthsendedMarch31,2021.Pleaserefertothoseinterimconsolidatedfinancialstatementsforfurtherdetails.

SignificantJudgmentsandEstimates

Thecriticalaccountingestimatesusedbymanagement inapplyingtheCompany'saccountingpoliciesandthe key sources of estimation uncertainty are identified in Note 3 of the Company's annual auditedconsolidatedfinancialstatementsfortheyearendedDecember31,2020.Changesinsignificantjudgmentsandestimatesare identified inNote3of theCompany's interimconsolidatedfinancialstatements for thethreemonths endedMarch 31, 2021. Please refer to those interim consolidated financial statements forfurtherdetails.

RiskFactors

PleaserefertothelatestAIFforadiscussionoftheCompany'sriskfactors.

ControlsandProcedures

Managementisresponsibleforestablishingandmaintainingasystemofdisclosurecontrolsandproceduresto provide reasonable assurance that all material information relating to the Company, inclusive of itssubsidiaries,isgatheredandreportedtoseniormanagementonatimelybasissothatappropriatedecisionscanbemaderegardingpublicdisclosure.

Management isalsoresponsible forestablishingandmaintainingadequate internalcontrolsover financialreportingtoprovidereasonableassuranceregardingthereliabilityoffinancialreportingandthepreparationoffinancialreportsforexternalpurposesinaccordancewithIFRS.

Indesigningsuchcontrols,itshouldberecognizedthatduetoinherentlimitations,anycontrols,nomatterhowwelldesignedandoperated, canprovideonly reasonableassuranceof achieving thedesired controlobjectivesandmaynotpreventordetectmisstatements.Additionally,managementisnecessarilyrequiredtousejudgmentinevaluatingcontrolsandprocedures.


TherewerenomaterialchangesintheCompany'sdisclosurecontrolsandproceduresandinternalcontrolsoverfinancialreportingsinceyear-endthathaveamaterialeffect,orarereasonablylikelytohaveamaterialeffect,ontheCompany'scontrolenvironment.

Forward-LookingStatements

ThisMD&A,andthedocumentsincorporatedbyreferenceherein,containforward-lookinginformationthatreflects management's current expectations, estimates and projections about the future results,performance, achievements, prospects or opportunities for the Company, the seniors’ living sector andgovernmentfundingasofthedateofthisMD&A.Forward-lookingstatementsarebaseduponanumberofassumptionsandinvolvesignificantknownandunknownrisksanduncertainties,manyofwhicharebeyondourcontrol,includingtheimpactoftheCOVID-19pandemiconSienna'soperationsandfinancialcondition,theseniors' livingsector,thepotentialefficacyandavailabilityofCOVID-19vaccines,andstatementswithrespecttotheCompany'sabilitytorefinancedebtmaturities,thatcouldcauseactualresultstodifferfromthose that are disclosed in or implied by such forward-looking statements. The words "plan","expect","schedule","estimates","intends","budgets","anticipate","projects","forecasts","believes","continue",orvariations of such words and phrases or statements to the effect that certain actions, events or results"may", "will", "could","should", "would","might" occur and other similar expressions, identify forward-lookingstatements.Whileweanticipatethatsubsequenteventsanddevelopmentsmaycauseourviewstochange, we do not intend to update this forward-looking information, except as required by applicablesecuritieslaws.Thisforward-lookinginformationrepresentsourviewsasofthedateofthisMD&Aandsuchinformationshouldnotberelieduponasrepresentingourviewsasofanydatesubsequenttothedateofthis document. We have based the forward-looking statements in this MD&A on information currentlyavailabletousandthatwecurrentlybelievearebasedonreasonableassumptions.However,theremaybefactorsthatcauseresults,performanceorachievementsnottobeasexpectedorestimatedandthatcouldcauseactualresults,performanceorachievementstodiffermateriallyfromcurrentexpectations.Therecanbenoassurancethatforward-lookinginformationwillprovetobeaccurate.Accordingly,readersshouldnotplace undue reliance on forward-looking information. These factors are not intended to represent acompletelistofthefactorsthatcouldaffecttheCompany.SeeriskfactorshighlightedinmaterialsfiledwiththesecuritiesregulatorsinCanadafromtimetotime,includingtheCompany’slatestAIF.


Q1 2021 Report to Shareholders

ConsolidatedFinancial Statements

CondensedInterimConsolidatedFinancialStatements

CondensedInterimConsolidatedStatementsofFinancialPosition(Unaudited)...................... 2

CondensedInterimConsolidatedStatementsofChangesinEquity(Unaudited)...................... 3

CondensedInterimConsolidatedStatementsofOperations(Unaudited)................................ 4

CondensedInterimConsolidatedStatementsofComprehensive(Loss)Income(Unaudited).. 5

CondensedInterimConsolidatedStatementsofCashFlows(Unaudited)................................. 6

NotestotheCondensedInterimConsolidatedFinancialStatements(Unaudited):

1 Organization.............................................. 7

2 Basisofpreparation.................................. 7

3 Summaryofsignificantaccountingpolicies,judgmentsandestimationuncertainty................................................ 7

4 ImpactofCOVID-19ontheCompany....... 8

5 Financialinstruments................................. 10

6 Restrictedcash.......................................... 11

7 Constructionfundingreceivable............... 11

8 Propertyandequipment........................... 12

9 Intangibleassets........................................ 12

10 Accountspayableandaccruedliabilities. 12

11 Long-termdebt......................................... 13

12 Netfinancecharges................................... 14

13 Incometaxes............................................. 15

14 Sharecapital.............................................. 16

15 Dividends................................................... 17

16 Share-basedcompensation....................... 17

17 Keymanagementcompensation.............. 18

18 Economicdependence.............................. 19

19 Administrativeexpenses........................... 19

20 Expensesbycategory................................ 19

21 Segmentedinformation............................ 20

22 Jointarrangements................................... 23

Notes March31,2021 December31,2020

ASSETS

CurrentassetsCashandcashequivalents 28,608 95,677Accountsreceivableandotherassets 17,179 18,092Prepaidexpensesanddeposits 6,821 6,950Governmentfundingreceivable 5 20,563 5,732Constructionfundingreceivable 5,7 9,313 9,667Interestrateswapcontracts 5 22 —Incometaxesreceivable 4,353 7,503

86,859 143,621

Non-currentassetsGovernmentfundingreceivable 5 10,413 908Interestrateswapcontracts 5 95 —Restrictedcash 6 3,683 3,411Constructionfundingreceivable 5,7 23,978 26,331Investmentinjointventure 22 4,779 2,323Propertyandequipment 8 1,122,803 1,132,071Intangibleassets 9 196,081 201,798

Goodwill 167,666 167,666

Totalassets 1,616,357 1,678,129

LIABILITIES

CurrentliabilitiesAccountspayableandaccruedliabilities 10 119,176 108,692Governmentfundingpayable 5 12,719 18,540Currentportionoflong-termdebt 5,11 141,730 135,707

Interestrateswapcontracts 5 1,496 2,226 275,121 265,165

Non-currentliabilitiesLong-termdebt 5,11 823,143 896,917Deferredincometaxes 13 48,707 47,985Governmentfundingpayable 5 13,503 2,671Share-basedcompensationliability 16 8,627 9,682

Interestrateswapcontracts 5 4,882 8,267

Totalliabilities 1,173,983 1,230,687

EQUITY

Shareholders'equity 442,374 447,442

Totalequity 442,374 447,442

Totalliabilitiesandequity 1,616,357 1,678,129

Contingencies(Note4)

Seeaccompanyingnotes.

ApprovedbytheBoardofDirectorsofSiennaSeniorLivingInc.

"DinoChiesa" "JanetGraham"DinoChiesa JanetGrahamChairandDirector Director

CondensedInterimConsolidatedStatementsofFinancialPosition(Unaudited)ThousandsofCanadiandollars

SiennaSeniorLivingInc.-Q12021CondensedInterimConsolidatedFinancialStatements 2

Notes SharecapitalContributed

surplusShareholders'

deficit

Accumulatedother

comprehensiveincome(loss)

Totalshareholders'

equity

Balance,January1,2021 878,516 203 (431,277) — 447,442

Issuanceofshares 14 — — — — —

Netincome — — 10,143 — 10,143

Othercomprehensiveloss — — — — —

Long-termincentiveplan 14 151 — — — 151

Sharepurchaseloan 14 325 — — — 325

Dividends 14,15 — — (15,687) — (15,687)

Balance,March31,2021 878,992 203 (436,821) — 442,374

Notes SharecapitalContributed

surplusShareholders'

deficit

Accumulatedother

comprehensiveincome(loss)

Totalshareholders'

equity

Balance,January1,2020 875,051 203 (344,058) (711) 530,485

Issuanceofshares 14 3,393 — — — 3,393

Netloss — — (2,496) — (2,496)

Othercomprehensiveincome — — — 152 152

Long-termincentiveplan 14 12 — — — 12

Sharepurchaseloan 14 7 — — — 7

Dividends 14,15 — — (15,671) — (15,671)

Balance,March31,2020 878,463 203 (362,225) (559) 515,882


CondensedInterimConsolidatedStatementsofChangesinEquity(Unaudited)ThousandsofCanadiandollars


Threemonthsended

March31,

Notes 2021 2020

Revenue 18,21 161,228 165,627

ExpensesOperating,net 4 116,961 129,116Depreciationandamortization 17,349 19,332Administrative 19 8,311 2,730Shareofnetlossinjointventure 22 8 44

20 142,629 151,222

Incomebeforenetfinancecharges,transactioncosts

andprovisionfor(recoveryof)incometaxes 18,599 14,405

Netfinancecharges 12 4,238 16,781

Transactioncosts 516 1,013

Totalnetfinancechargesandtransactioncosts 4,754 17,794

Income(loss)beforeprovisionfor(recoveryof)incometaxes 13,845 (3,389)

Provisionfor(recoveryof)incometaxesCurrent 2,980 1,537

Deferred 722 (2,430)

13 3,702 (893)


Netincome(loss)pershare 14 $0.15 ($0.04)

Weightedaveragenumberofcommonsharesoutstanding 14 67,039,123 66,940,538


CondensedInterimConsolidatedStatementsofOperations(Unaudited)ThousandsofCanadiandollars,exceptshareandpersharedata


Threemonthsended

March31,

Notes 2021 2020


Othercomprehensiveincome

Itemsthatmaybesubsequentlyreclassifiedtotheconsolidatedstatementsofoperations:

Amortizationoflossonbondforwardcontracts,netoftax — 152

Totalcomprehensiveincome(loss) 10,143 (2,344)


CondensedInterimConsolidatedStatementsofComprehensiveIncome(Loss)(Unaudited)

ThousandsofCanadiandollars


ThreemonthsendedMarch31,

Notes 2021 2020

OPERATINGACTIVITIESNetincome(loss) 10,143 (2,496)Add(deduct)itemsnotaffectingcash

Depreciationofpropertyandequipment 8 11,437 10,950Amortizationofintangibleassets 9 5,912 8,382Currentincometaxexpense 2,980 1,537Deferredincometaxexpense(recovery) 722 (2,430)Shareofnetlossinjointventure 22 8 44Share-basedcompensationexpense(recovery) 16 306 (3,001)Netfinancecharges 12 4,238 16,781Gainondisposalofpropertyandequipment 8 — (102)

35,746 29,665Non-cashchangesinworkingcapital

Accountsreceivableandotherassets 1,436 (1,466)Prepaidexpensesanddeposits 129 (1,105)Accountspayableandaccruedliabilities 8,806 (4,816)Governmentfunding,net (44,944) 1,114

(34,573) (6,273)Interestpaidonlong-termdebt (7,366) (10,241)Netsettlementpaymentoninterestrateswapcontracts (704) (83)Incometaxesrefunded(paid) 169 (1,800)Governmentassistancerelatedtopandemicexpenses 4 25,619 2,550Cashprovidedbyoperatingactivities 18,891 13,818

INVESTINGACTIVITIESPurchaseofpropertyandequipment 4,8 (11,174) (2,281)Governmentassistancerelatedtopandemiccapitalexpenditures 8 9,005 —Proceedsfromdisposalofpropertyandequipment 8 — 861Purchaseofintangibleassets 9 (195) (111)Amountsreceivedfromconstructionfunding 7 3,060 3,158Interestreceivedfromcash 12 246 199Investmentinjointventure 22 (2,464) (2,405)Changeinrestrictedcash 6 (272) (61)Cashusedininvestingactivities (1,794) (640)

FINANCINGACTIVITIESRepaymentoflong-termdebt 11 (68,442) (62,301)Proceedsfromlong-termdebt 11 — 104,112Deferredfinancingcosts (37) (803)Changeinprincipalreservefund — (1,716)Dividendspaid 15 (15,687) (12,264)Cash(usedin)providedbyfinancingactivities (84,166) 27,028

(Decrease)increaseincashandcashequivalentsduringtheperiod (67,069) 40,206

Cashandcashequivalents,beginningofperiod 95,677 20,776Cashandcashequivalents,endofperiod 28,608 60,982


CondensedInterimConsolidatedStatementsofCashFlows(Unaudited)ThousandsofCanadiandollars


1Organization

SiennaSenior Living Inc. (the "Company")and itspredecessorshavebeenoperating since1972.TheCompanyisaseniors' livingproviderservingthecontinuumof independent living("IL"), independentsupportiveliving("ISL"),assistedliving("AL"),memorycare("MC")andlong-termcare("LTC"or"Long-term Care") through the ownership and operation of seniors' living residences in the Provinces ofBritish Columbia andOntario. As atMarch 31, 2021, the Company owns and operates a total of 70seniors' living residences: 27 retirement residences ("RRs" or "Retirement Residences"); 35 LTCresidences; andeight seniors' living residencesprovidingbothprivate-pay IL andAL and funded LTC(including the Company's joint ownership in two residences in British Columbia). The Company alsoprovidesmanagementservicesto13seniors'livingresidencesinBritishColumbiaandOntario.

TheCompanywas incorporatedunder theBusinessCorporationsAct (Ontario)onFebruary10,2010andwassubsequentlycontinuedundertheBusinessCorporationsAct(BritishColumbia)onMarch18,2010.TheCompanyclosedthe initialpublicofferingof itscommonsharesonMarch23,2010and istradedontheTorontoStockExchange("TSX")underthesymbol"SIA".

TheCompany'sbusinessiscarriedonthroughanumberofwhollyownedlimitedpartnershipsandjointventuresformedunderthelawsoftheProvinceofOntario.TheheadofficeoftheCompanyislocatedat302TownCentreBlvd.,Suite300,Markham,Ontario,L3R0E8.TheregisteredofficeoftheCompanyislocatedat1900-355BurrardStreet,Vancouver,BritishColumbia,V6C2G8.

AsatMarch31,2021,theCompanyhadoutstanding67,039,123commonshares.

2 Basisofpreparation

Theseunauditedcondensedinterimconsolidatedfinancialstatements("interimconsolidatedfinancialstatements") have been prepared in accordance with International Accounting Standard ("IAS") 34,Interim Financial Reporting. The interim consolidated financial statements should be read inconjunctionwiththeCompany'sannualauditedconsolidatedfinancialstatementsfortheyearendedDecember31, 2020,whichhavebeenprepared in accordancewith International Financial ReportingStandards("IFRS")asissuedbytheInternationalAccountingStandardsBoard("IASB").

The interim consolidated financial statementswere approved by the Board of Directors onMay 12,2021.

3 Summaryofsignificantaccountingpolicies,judgmentsandestimationuncertainty

In preparing these interim consolidated financial statements, the accounting policies utilized areconsistent with those utilized in the preparation of the annual audited consolidated financialstatementsfortheyearendedDecember31,2020.

NotestotheCondensedInterimConsolidatedFinancialStatements(Unaudited)ThreemonthsendedMarch31,2021

AllamountsareinthousandsofCanadiandollars,exceptshareandpersharedata,orunlessotherwisenoted


4 ImpactofCOVID-19ontheCompany

Foroverayear,wehavetakencriticalstepstofightthepandemicwhileprovidingthebestqualityofcareforourseniorsandpreparingfornewandevolvingchallenges.

We enhanced our healthcare expertise, established a Quality Committee that includesmembers ofSienna'sBoardofDirectors,securedarobustsupplyofpersonalprotectiveequipmentandreinforcedour infectionpreventionandcontrolpractices.Wealsoput inplaceapandemicstaffingstrategyandincreasedfrontlinestaffing,joinedtheSeniorsQualityLeapInitiativetobenchmarkbestpracticesinthesectorandstrengthenedcommunicationswithourkeystakeholders. Inaddition,ourvaccinationtaskforcehasbeen supporting the roll-outof vaccinesacrossall ofour residences inOntarioandBritishColumbia.

Siennacontinuestoincuranincreasedlevelofexpensestosupportthecostsoffightingthepandemicandminimizing the impactof outbreaks. The following table summarizes the government assistanceandexpensesrelatedtotheCOVID-19pandemicintheRetirementandLTCbusinesssegments,whichare recognized net in the Company's operating expenses, in its interim consolidated statement ofoperations. Other corporate pandemic expenses are recognized in administrative expenses in theinterimconsolidatedstatementofoperations.

Threemonthsended Threemonthsended

March31,2021 March31,2020

ThousandsofCanadiandollars Retirement LTC Administrative Total Total

Governmentassistance-temporarypandemicpay 521 4,824 — 5,345 —

Governmentassistance 1,438 35,285 — 36,723 810

Totalgovernmentassistance 1,959 40,109 — 42,068 810

Pandemiclabour-temporarypandemicpay 521 4,824 — 5,345 —

Pandemiclabour 1,592 19,260 — 20,852 547

Personalprotectiveequipment 377 1,704 — 2,081 280

Other 201 2,562 1,120 3,883 118

Totalpandemicexpenses 2,691 28,350 1,120 32,161 945

Totalnetpandemic(recovery)expenses 732 (11,759) 1,120 (9,907) 135

During the threemonths endedMarch 31, 2021, the Government of Ontario announced additionalpandemicfundingtosupportlong-termcarehomeswithinfectionpreventionandcontainmenteffortsfor the period April 1, 2020 to December 31, 2020. The Company received $15,342 as part of thisfundinginQ12021tocoveraportionofthepandemicexpensesincurredinexcessofavailablefundingduringtheyearendedDecember31,2020,whichresultedinanetpandemicrecoveryof$11,759intheLTCsegmentduringthethreemonthsendedMarch31,2021.

Inaddition,forthethreemonthsendedMarch31,2021,theCompanyhasrecognizedpandemiccapitalexpendituresinitsinterimconsolidatedstatementsoffinancialpositionof$9,422(2020-$nil),reducedby related government assistanceof $9,005 (2020 - $nil)whichhavenotbeen included in the tableabove.




FundingforincrementalCOVID-19costsisprovidedinadditiontotheongoinglong-termcarefundingfor nursing and personal care, programming, food and accommodation, all of which are subject toannual reconciliation inOntario.With theexceptionofaccommodation,all funding is "flow-through"funding required to be spent entirely on residents,with any excess amounts not allocated to directresidentcareorpandemicexpensesrequiredtobereturnedtotheMinistryofLongTermCare.

Rent collections from resident payments since COVID-19 up to the month of March 2021 haveremained similar to past experience, with no significant change to the Company's expected creditlosses.

TheCompanyanditsconsolidatedsubsidiariesaredefendantsinvariousactionsandproceedings.

InMay2020,theCompanybecameawareofastatementofclaiminrespectofaproposedclassactionalleging,amongotherthings,negligence,breachofcontractandbreachoffiduciarydutiesinrespectofthecareandtreatmentofresidentsattheCompany'sresidencesduringtheCOVID-19pandemic.TheclaimisbroughtagainsttheCompanyandcertainofitssubsidiariesonbehalfofresidentsresidingatalloftheCompany'sownedandmanagedlong-termcareresidences inOntarioduringthepandemic,aswellasthefamiliesofthoseresidents,andseeksdamagesintheaggregateamountof$120,000.TheclaimisajointclaimagainsttheCompanyandanotherseniorlivingoperator.

Between June and September 2020, the Company became aware of statements of claim in fourproposed class actions alleging, among other things, negligence, breach of contract and breach offiduciary duties in respect of the care and treatment of residents at Altamont Care Community,Woodbridge Vista Care Community,Weston Terrace Care Community and Camilla Care Community,during the COVID-19 pandemic. These claims are brought against the Company and certain of itssubsidiaries on behalf of all residents residing at each of these respective residences during thepandemic,aswellas the familiesof thoseresidents,andseeksdamages in theaggregateamountof$20,000,$16,000,$16,000and$25,000respectively.

InSeptember2020,theCompanybecameawareofastatementofclaiminrespectofaproposedclassactionalleging,amongotherthings,negligenceandbreachoffiduciarydutiesinrespectofthecareandtreatmentofresidentsresidingatvarious long-termcareresidences inOntario, includingnineSiennaowned andmanaged residences, during the COVID-19 pandemic. This claim is a joint claim againstSienna,certainofitssubsidiariesaswellasotherdefendants,includingtheProvinceofOntario,theCityof Toronto and other senior living operators, on behalf of residents and their families and seeksdamagesintheaggregateamountof$600,000.

None of these claims have been certified as a class action. The Company is currently reviewing theproposedclassactionsandwillrespondinduecoursethroughtheappropriatecourtprocess.Giventhestatus of the proceedings, management is unable to assess the potential impact of any of theseproposedclassactionsontheCompany’sfinancialresults,ifany.

OnNovember 20, 2020, theGovernment ofOntario enacted the SupportingOntario's Recovery Act(the"RecoveryAct").TheRecoveryActprovidescivil liabilityprotectiontoorganizationsthatmadeagoodfaithefforttofollowpublichealthguidanceandCOVID-19relatedlaws,anddidnotactwithgross




negligence.TheRecoveryActalsodeemsexistingcivilproceedingsrelatedtoCOVID-19exposuretobedismissedwithoutcostsandwillbarfutureproceedingsfrombeingbrought,aslongasthedefendantactedingoodfaithandnotwithgrossnegligence.

5 Financialinstruments

Fairvalueoffinancialinstruments

TheCompanyusesafairvaluehierarchytocategorizethetypeofvaluationtechniquesfromwhichfairvaluesarederived.Financial instrumentsarevaluedusingunadjustedquotedprices inactivemarketsfor identicalassetsor liabilities (Level1), inputs thatareobservable for theassetsor liabilitieseitherdirectlyorindirectly(Level2)andinputsforassetsorliabilitiesthatarenotbasedonobservablemarketdata (Level 3). Interest rate swap contracts and total return swap contracts are carried at fair valuethrough profit or loss and are considered to be Level 2 instruments. The carrying value of thegovernment funding receivables and payables approximates fair value. The fair value of the leaseliability is determined by discounting the cash flows using applicable Level 3 inputs based on theCompany’sinterestrateassumptionsandtheresidualleaseterm.

ThefollowingfinancialinstrumentsareatamortizedcostandthefairvalueisdisclosedasfollowsasatMarch31,2021andDecember31,2020:

AsatMarch31,2021 AsatDecember31,2020

CarryingValue FairValue CarryingValue FairValue

FinancialAssets:

Constructionfundingreceivable 33,291 34,889 35,998 38,337

FinancialLiabilities:

Currentandlong-termportionofdebt 964,873 989,025 1,032,624 1,064,913

LiquidityriskLiquidity risk is the risk theCompanymayencounterdifficulties inmeeting its obligations associatedwith financial liabilitiesandcommitments.TheCompanyhascreditagreements inplacerelatedto itslong-termdebt.Thesecreditagreementscontainanumberofstandardfinancialandothercovenants.TheCompanywasincompliancewithallcovenantsonitsborrowingsasatMarch31,2021.AfailurebytheCompanytocomplywiththeobligationsinthesecreditagreementscouldresultinadefaultthat,ifnotrectifiedorwaived,couldpermitaccelerationoftherelevantindebtedness.

AsatMarch31,2021,theCompanyhadnegativeworkingcapital(currentliabilitieslesscurrentassets)of$188,262(December31,2020-$121,544),withtheincreaseprimarilyduetothe$63,000repaymentofthecreditfacilities.TosupporttheCompany’sworkingcapitaldeficiency,theCompanyhasavailablecashfromoperations,accesstomultiplesourcesoffinancing,andahistoryofsuccessfullyrefinancingdebt.




6 Restrictedcash

Restricted cash comprises the capitalmaintenance reserve funds required for certain property-levelmortgages.AsatMarch31,2021,theCompany'shas$3,683 inrestrictedcash(December31,2020-$3,411).

7 Constructionfundingreceivable

AsatMarch31,2021,theCompanyiseligibletoreceivefundingfromtheGovernmentofOntarioofapproximately $33,291 (December 31, 2020 - $35,998) related to the costs of developing orredeveloping eligible LTC residences. The receipt of this funding is subject to the condition that theresidencescontinuetooperateaslong-termcareresidencesfortheperiodforwhichtheresidencesareentitledtotheconstructionfunding.AsatMarch31,2021,theconditionforthefundinghasbeenmet.

As at March 31, 2021, the weighted average remaining term of the construction funding isapproximately 6.4 years. The fair value of the construction funding receivable is determined bydiscounting the expected future cash flows of the receivable using the applicable Government ofOntariobondrates.

Thefollowingtablesummarizestheconstructionfundingactivity:

AsatJanuary1,2020 46,887

Add:Interestincomeearned 1,710

Less:Constructionfundingpaymentsreceived (12,599)

AsatDecember31,2020 35,998

Add:Interestincomeearned 353

Less:Constructionfundingpaymentsreceived (3,060)

AsatMarch31,2021 33,291




8 Propertyandequipment

Land Buildings

Furnitureand

fixtures AutomobilesComputerhardware

Circulatingequipment

Constructioninprogress

Right-of-usebuildingandequipment(1) Total

Cost

AsatJanuary1,2021 138,563 1,203,316 74,684 2,283 11,574 1,265 1,439 3,049 1,436,173

Additions(2) — 1,259 678 — 232 — — — 2,169

AsatMarch31,2021 138,563 1,204,575 75,362 2,283 11,806 1,265 1,439 3,049 1,438,342

Accumulateddepreciation

AsatJanuary1,2021 — 261,618 34,185 965 5,385 612 — 1,337 304,102

Chargesfortheperiod — 8,508 2,089 82 502 104 — 152 11,437

AsatMarch31,2021 — 270,126 36,274 1,047 5,887 716 — 1,489 315,539

NetbookvalueasatMarch31,2021 138,563 934,449 39,088 1,236 5,919 549 1,439 1,560 1,122,803

NetbookvalueasatDecember31,2020 138,563 941,698 40,499 1,318 6,189 653 1,439 1,712 1,132,071(1) Includes right-of-use building and related depreciation as at and for the three months ended March 31, 2021 of $2,250 and $868,respectively(December31,2020-$2,250and$771,respectively)andtheright-of-useequipmentandrelateddepreciationasatandforthethreemonthsendedMarch31,2021of$799and$621,respectively(December31,2020-$799and$566,respectively).(2)IncludespandemiccapitalexpendituresforthethreemonthsendedMarch31,2021of$9,422(2020-$nil),reducedbyrelatedgovernmentassistanceforthethreemonthsendedMarch31,2021of$9,005(2020-$nil).

9 Intangibleassets

LicencesResident

relationshipsService

contractsComputersoftware Total

Cost

AsatJanuary1,2021 190,945 167,572 10,968 13,911 383,396

Additions — — — 195 195

AsatMarch31,2021 190,945 167,572 10,968 14,106 383,591

Accumulatedamortization

AsatJanuary1,2021 — 162,883 10,148 8,567 181,598

Chargesfortheperiod — 4,689 137 1,086 5,912

AsatMarch31,2021 — 167,572 10,285 9,653 187,510

NetbookvalueasatMarch31,2021 190,945 — 683 4,453 196,081

NetbookvalueasatDecember31,2020 190,945 4,689 820 5,344 201,798

10 Accountspayableandaccruedliabilities


Accountspayableandotherliabilities 45,223 38,492

Accruedwagesandbenefits 65,138 61,539

Accruedinterestpayable 3,586 3,432

Dividendspayable(Note15) 5,229 5,229

Total 119,176 108,692




11 Long-termdebt

Interestrate Maturitydate March31,2021 December31,2020

SeriesAUnsecuredDebentures 3.109% November4,2024 150,000 150,000

SeriesBUnsecuredDebentures 3.450% February27,2026 175,000 175,000

Creditfacilities Floating 2021-2025 124,000 187,000

Mortgagesatfixedrates 1.65%-5.80% 2021-2041 370,521 374,248

Mortgagesatvariablerates Floating 2021-2029 153,681 155,244

Leaseliability 3.87% 2021-2024 1,665 1,817

974,867 1,043,309



Totaldebt 964,873 1,032,624

Less:Currentportion 141,730 135,707

823,143 896,917

CreditfacilitiesThefollowingtablesummarizestheCompany'sunsecuredcreditfacilitiesactivity:


Creditfacilitiesavailable 208,500 208,500

Amountsdrawnundercreditfacilities 24,000 87,000

Remainingavailablebalanceundercreditfacilities 184,500 121,500

SubsequenttoMarch31,2021,theCompanyrepaid$4,000ofitsunsecuredcreditfacilities.

TheCompanyalsohasacreditagreement fora$100,000securedcredit facilitywhichhasbeenfullydrawnasatMarch31,2021andDecember31,2020.

Mortgages

ThefollowingtablesummarizesthescheduledmaturitiesoftheCompany'sproperty-levelmortgagesasatMarch31,2021:

Mortgages

YearRegularprincipal

paymentsPrincipaldueat

maturity Total %ofTotal

2021 15,854 16,339 32,193 6.2%

2022 19,605 28,169 47,774 9.1%

2023 17,837 60,824 78,661 15.0%

2024 16,049 50,104 66,153 12.6%

2025 12,511 41,065 53,576 10.2%

2026 12,544 — 12,544 2.4%

2027 11,844 35,115 46,959 9.0%

2028 6,809 115,703 122,512 23.4%

2029 2,379 5,477 7,856 1.5%

2030 1,410 9,230 10,640 2.0%

Thereafter 11,921 33,413 45,334 8.6%

128,763 395,439 524,202 100.0%




12 Netfinancecharges

Threemonthsended

March31,

2021 2020

Financecosts

Interestexpenseonmortgages 3,986 4,659

Interestexpenseondebentures 2,588 3,645

Interestexpenseoncreditfacilities 929 283

Interestexpenseonright-of-useassets 17 23

Amortizationoffinancingchargesandfairvalueadjustmentsonacquireddebt 728 524

Amortizationoflossonbondforwardcontract — 217

Fairvalue(gain)lossoninterestrateswapcontracts(1) (3,411) 8,400

4,837 17,751

Financeincome

Interestincomeonconstructionfundingreceivable 353 468

Otherinterestincome 246 502

599 970


(1)InQ12020,theBankofCanadadecreasedtheovernightratetosupporttheCanadianeconomyasaresultoftheCOVID-19pandemic.Asthecountrycontinuestonavigatethroughthepandemic,interestrateshavebeguntoincrease.TheresultingincreaseininterestrateshadapositivefairvalueimpactonthevaluationoftheCompany'sinterestrateswapcontractsduringthethreemonthsendedMarch31,2021.




13 Incometaxes

Total income tax expense (recovery) for the period can be reconciled to the interim consolidatedstatementsofoperationsasfollows:

Threemonthsended

March31,

2021 2020

Income(loss)beforeprovisionfor(recoveryof)incometaxes 13,845 (3,389)

Canadiancombinedincometaxrate 26.57% 26.57%

Incometaxexpense(recovery) 3,679 (900)

Adjustmentstoincometaxprovision(recovery):

Non-deductibleitems 24 3

Otheritemschargedtoequity (1) 4

Provisionfor(recoveryof)incometaxes 3,702 (893)

The following are the deferred tax assets (liabilities) recognized by the Company and movementsthereonduringthethreemonthsendedMarch31,2021:

Depreciabletangibleand

intangibleassets ShareissuanceConstruction

fundinginterest Other Total

AsatJanuary1,2020 (58,621) 2,156 1,837 2,606 (52,022)

Credit(charge)tonetincome 4,626 (1,016) (601) 1,031 4,040

Booktofilingadjustment 545 4 — (299) 250

Chargetoothercomprehensiveincome — — — (253) (253)

AsatDecember31,2020 (53,450) 1,144 1,236 3,085 (47,985)

Credit(charge)tonetincome 1,038 (175) (94) (1,491) (722)

AsatMarch31,2021 (52,412) 969 1,142 1,594 (48,707)




14 Sharecapital

AuthorizedUnlimitednumberofcommonshares,withoutnominalorparvalueUnlimitednumberofpreferredshares,withoutnominalorparvalue

IssuedandoutstandingCommonshares

Commonshares Amount

Balance,January1,2020 66,839,013 875,051

Dividendreinvestmentplan 200,110 3,393



Balance,December31,2020 67,039,123 878,516



Balance,March31,2021 67,039,123 878,992

DividendreinvestmentplanTheCompanyhas established a dividend reinvestment plan ("DRIP") for eligible holders of commonshares,whichallowsparticipantstoreinvestcashdividendspaidinrespectoftheircommonsharesinadditionalcommonsharesata3%discount.OnMarch18,2020,theCompanytemporarilysuspendedtheDRIPuntil furthernotice. Shareholdersenrolled in theDRIP receiveddividendpayments in cash,insteadofcommonshares,startingwiththedividendpayabletoshareholdersofrecordasatMarch31,2020.TheDRIPissubjecttoreinstatementatthediscretionoftheBoardofDirectorsoftheCompany.

NormalcourseissuerbidOnMarch31,2021,theCompanyreceivedapproval fromtheTSXtorenewitsnoticeof intentiontomakeanormalcourseissuerbid("NCIB")foraportionoftheCompany'scommonshares.Pursuanttothenotice, theCompanyhas theauthority toacquireup toamaximumof3,351,956of its commonshares for cancellationover thenext 12months. Purchasesby theCompanyunder theNCIBwill bemade through the facilities of the TSX or through a Canadian alternative trading system and inaccordancewithapplicableregulatoryrequirementsatapricepercommonshareequaltothemarketpriceatthetimeofacquisition.ThenumberofcommonsharesthatcanbepurchasedpursuanttotheNCIBissubjecttoacurrentdailymaximumof88,089commonshares,subjecttotheCompany’sabilitytomake one block purchase of its common shares per calendar week that exceeds such limits. Allcommon shares purchased by the Company under the NCIB will be cancelled upon purchase. TheCompanymaybegintopurchasesharesonApril5,2021andtheNCIBwillterminateonApril4,2022,orsuchearliertimeastheCompanycompletesitspurchasespursuanttotheNCIBorprovidesnoticeofintention.

NocommonshareswerepurchasedpursuanttotheCompany'snormalcourseissuerbids.

Netincome(loss)pershareNet income (loss) per share is calculated using the weighted average number of common sharesoutstandingduringtheyear.




15 Dividends

For the three months ended March 31, 2021, the Company paid monthly dividends of $0.078 percommonsharetotaling$15,687(2020-$12,264).Dividendspayableof$5,229areincludedinaccountspayable and accrued liabilities as atMarch 31, 2021 (December 31, 2020 - $5,229). Subsequent toMarch31,2021,theBoardofDirectorsdeclareddividendsof$0.078percommonshareforAprilandMaytotaling$10,458.

16 Share-basedcompensation

TheCompanyhasshare-basedcompensationplans,whicharedescribedbelow.

Restrictedshareunitplan("RSUP")DuringthethreemonthsendedMarch31,2021,52,485restrictedshareunits("RSUs")(2020-9,839)weregrantedpursuanttotheRSUP.TotalexpensesrelatedtotheRSUPforthethreemonthsendedMarch31,2021were$64(2020-$47),includingmark-to-marketadjustments,whichwererecognizedin administrativeexpenses.During the threemonthsendedMarch31, 2021, 9,712RSUs vestedandweresettledincash,resultinginadecreaseof$135intheshare-basedcompensationliability.Thetotalliability recorded as part of the share-based compensation liability as atMarch 31, 2021 was $280(December31,2020-$351).

AsummaryofthemovementoftheRSUsgrantedisasfollows:

NumberofRSUs

Outstanding,January1,2020 23,159

Granted 19,551

Dividendequivalents 2,151

Settledincash (1,318)

Outstanding,December31,2020 43,543

Granted 52,485

Dividendequivalents 808


Outstanding,March31,2021 87,124

Deferredshareunitplan("DSUP")DuringthethreemonthsendedMarch31,2021,10,196deferredshareunits("DSUs")(2020-12,861)were granted pursuant to the DSUP. Total expenses (recoveries) related to the DSUP for the threemonths endedMarch 31, 2021were $312 (2020 - $(1,662)), includingmark-to-market adjustments,whichwererecognizedinadministrativeexpenses.ThetotalliabilityrecordedrelatedtotheDSUPasapartoftheshare-basedcompensationliabilityasatMarch31,2021was$5,770(December31,2020-$5,458).Thevalueofeachdeferredshareunitismeasuredateachreportingdateandisequivalenttothefairvalueofacommonshareatthereportingdate.




AsummaryofthemovementoftheDSUsgrantedisasfollows:

NumberofDSUs


Granted 49,190

Dividendsreinvested 25,918


Granted 10,196



Executivedeferredshareunitplan("EDSUP")DuringthethreemonthsendedMarch31,2021,30,672(2020-83,530)executivedeferredshareunits("EDSUs")weregranted.Totalexpenses(recoveries)relatedtotheEDSUPforthethreemonthsendedMarch 31, 2021 were $94 (2020 - $(1,292)), including mark-to-market adjustments, which wererecognizedinadministrativeexpenses. DuringthethreemonthsendedMarch31,2021,103,948EDSUsvested andwere settled in cash, resulting in a decreaseof $1,390 in the share-based compensationliability.The total liability recorded related to theEDSUPasapartof the share-basedcompensationliabilityasatMarch31,2021was$2,577(December31,2020-$3,873).ThevalueofeachvestedEDSUis measured at each reporting date and is equivalent to the fair value of a common share at thereportingdate.

AsummaryofthemovementoftheEDSUsgrantedisasfollows:

NumberofEDSUs


Granted 88,796

Forfeited (1,858)




Granted 30,672

Dividendsreinvested 942



17 Keymanagementcompensation

Theremunerationofkeymanagementissetoutinaggregateforeachofthecategoriesbelow:

Threemonthsended

March31,

2021 2020Salariesandshort-termemployeebenefits 1,312 1,131

Share-basedcompensationexpense(recovery)(Note16) 306 (3,001) 1,618 (1,870)




18 Economicdependence

The Company holds licences related to each of its LTC residences and receives funding from theapplicablehealthauthoritiesrelatedtothoselicences,whichareincludedinrevenues.Inaddition,theCompany has received government assistance to support pandemic related expenses for LTC andRetirementResidenceswhichisrecordedagainstoperatingexpenses.DuringthethreemonthsendedMarch31,2021, theCompany receivedapproximately$142,757 (2020 -$91,307) in respectof theselicencesandpandemicrelatedfunding.

19 Administrativeexpenses

Threemonthsended

March31,

2021 2020

Generalandadministrativeexpenses 6,885 5,700

Pandemicrelatedexpenses 1,120 31

Share-basedcompensationexpense(recovery)(1) 306 (3,001)

Totaladministrativeexpenses 8,311 2,730(1)Includestotalreturnswapnet(gain)of$(164)(2020-$nil),andmark-to-marketadjustmentsonshare-basedcompensationforthethreemonthsendedMarch31,2021of$340(2020-$(3,459)).

20 Expensesbycategory

Threemonthsended

March31,

2021 2020

Salaries,benefitsandotherpeoplecosts 99,409 100,104

Depreciationandamortization 17,349 19,332

Food 7,048 7,670

Purchasedservicesandnon-medicalsupplies 5,791 6,022

Utilities 5,206 4,753

Propertytaxes 3,876 3,796

Other 13,857 9,410

Totalexpensesbeforenetpandemic(recovery)expenses 152,536 151,087

Pandemiclabour 26,197 548

Personalprotectiveequipment 2,081 280

Otherpandemicrelatedexpenses(1) 3,883 118

Governmentassistance(2) (42,068) (811)

Netpandemic(recovery)expenses (9,907) 135

Totalexpenses 142,629 151,222(1)Otherpandemicexpensesareprimarilycleaningsuppliesforinfectionpreventionandcontrol,mealsandaccommodationstosupportteammembers,andadvisoryfeestosupportthemanagementofthepandemic.(2)There are various programs and financial assistance provided by the government to support COVID-19 related expenses. For the threemonthsendedMarch31,2021,theLTCsegmentreceivedretroactivepandemicfundingof$15,342relatedtopandemicexpensesincurredinexcessofavailablefundingduringtheyearendedDecember31,2020.




21Segmentedinformation

Segmented information is presented in respect of the Company’s business segments. The businesssegments are based on the Company’smanagement and internal reporting structure. The Companyoperates solely within Canada, hence no geographical segment disclosures are presented. Inter-segment pricing is determined on an arm’s length basis. Segment results and assets include itemsdirectlyattributabletoasegmentaswellasthosethatcanbeallocatedonareasonablebasis.

TheCompanyiscomprisedofthefollowingmainbusinesssegments:

• Retirement-thissegmentconsistsof27RRs,fiveofwhicharelocatedintheBritishColumbiaand22ofwhicharelocatedintheOntario,andtheRRmanagementservicesbusiness;

• LTC - this segment consists of 35 LTC residences located in Ontario, eight seniors' livingresidenceslocatedinBritishColumbiaandtheLTCmanagementservicesbusiness;and

• Corporate, Eliminations and Other - this segment represents the results of head office,intercompanyeliminationsandotheritemsthatarenotallocabletothesegments.




ThreemonthsendedMarch31,2021

Retirement(1) LTC

Corporate,eliminations

andother TotalGrossrevenue 36,056 129,388 15,886 181,330Less:Internalrevenue — 4,216 15,886 20,102Netrevenue 36,056 125,172 — 161,228

Operatingexpense,net(2) 23,097 93,864 — 116,961Depreciationandamortization 10,730 6,124 495 17,349Administrativeexpense(2) — — 8,311 8,311Shareofnetlossinjointventure — — 8 8

Income(loss)beforenetfinancecharges,transactioncostsandprovisionforincometaxes 2,229 25,184 (8,814) 18,599

Financecosts (367) 1,261 3,943 4,837Financeincome — (392) (207) (599)Transactioncosts — — 516 516Provisionforincometaxes — — 3,702 3,702Netincome(loss) 2,596 24,315 (16,768) 10,143Purchaseofpropertyandequipment(3) 816 1,124 229 2,169Purchaseofintangibleassets 1 2 192 195(1)ForthethreemonthsendedMarch31,2021,theRetirementsegmentrecognizedaccommodationrevenuesof$17,667andservicerevenuesof$18,389.(2)Includesnetpandemicexpense(recovery)of$732forRetirement,$(11,759)forLTCand$1,120forcorporate,eliminationsandother.(3)Excludespandemiccapitalexpenditures for thethreemonthsendedMarch31,2021of$9,422, reducedbyrelatedgovernmentassistancefor thethreemonthsendedMarch31,2021of$9,005.

NotestotheCondensedInterimConsolidatedFinancialStatementsThreemonthsendedMarch31,2021AllamountsareinthousandsofCanadiandollars,exceptshareandpersharedata,orunlessotherwisenoted


ThreemonthsendedMarch31,2020

Retirement(1) LTC

Corporate,eliminationsandother Total

Grossrevenue 37,862 131,871 16,354 186,087Less:Internalrevenue — 4,106 16,354 20,460Netrevenue 37,862 127,765 — 165,627

Operatingexpense,net(2) 21,923 107,193 — 129,116Depreciationandamortization 12,753 5,530 1,049 19,332Shareofnetlossinjointventure — — 44 44Administrativeexpense — — 2,730 2,730Income(loss)beforenetfinancecharges,transactioncostsandrecoveryofincometaxes 3,186 15,042 (3,823) 14,405

Financecosts 11,242 5,182 1,327 17,751Financeincome — (893) (77) (970)

Transactioncosts — — 1,013 1,013Recoveryofincometaxes — — (893) (893)Net(loss)income (8,056) 10,753 (5,193) (2,496)Purchaseofpropertyandequipment 1,362 778 141 2,281Purchaseofintangibleassets (5) — 116 111(1)ForthethreemonthsendedMarch31,2020,theRetirementsegmentrecognizedaccommodationrevenuesof$17,179andservicerevenuesof$20,758.(2)Includesnetpandemicexpenseof$25forRetirement,$79forLTCand$31forcorporate,eliminationsandother.

AsatMarch31,2021

Retirement LTC

Corporate,eliminations

andother TotalTotalassets 745,988 848,698 21,671 1,616,357

AsatDecember31,2020

Retirement LTC

Corporate,eliminationsandother Total

Totalassets 759,540 837,923 80,666 1,678,129

NotestotheCondensedInterimConsolidatedFinancialStatementsThreemonthsendedMarch31,2021AllamountsareinthousandsofCanadiandollars,exceptshareandpersharedata,orunlessotherwisenoted


22Jointarrangements

JointventureOn February 7, 2020, the Company formed a joint venture with a third party for the purpose ofdevelopingaretirementresidenceinNiagaraFalls,Ontario.TheCompanyownsa70%interestinthisjointventure.TheCompanyaccounted for this jointventureusing theequitymethodofaccounting,sincethisjointarrangementisstructuredthroughaseparatelegalvehicle,andtheCompanyhasrightstothenetassetsofthearrangement.

ThefollowingtablesoutlinetheCompany'sinvestmentinthejointventure,andtheCompany'sshareofthejointventure'snetloss.

InvestmentinNiagaraFallsJointVentureasatJanuary1,2020 —

Contributionstojointventure 2,888

Shareofnetlossfromjointventure (565)

InvestmentinNiagaraFallsJointVentureasatDecember31,2020 2,323

Contributionstojointventure 2,464

Shareofnetlossfromjointventure (8)

InvestmentinNiagaraFallsJointVentureasatMarch31,2021 4,779


Currentassets 222 167

Long-termassets 6,959 3,448

Totalassets 7,181 3,615

Currentliabilities 354 297

Totalliabilities 354 297

Netassets 6,827 3,318

Netinvestmentinjointventure 4,779 2,323

Threemonthsended

March31

2021 2020

Expenses 11 63

Netloss 11 63

Shareofnetloss 8 44

NotestotheCondensedInterimConsolidatedFinancialStatements(Unaudited)ThreemonthsendedMarch31,2021AllamountsareinthousandsofCanadiandollars,exceptshareandpersharedata,orunlessotherwisenoted


JointoperationsThe Company has accounted for its joint arrangement in Nicola Lodge Care Community ("NicolaLodge") andGlenmore LodgeCareCommunity ("Glenmore Lodge") as a jointoperation, since it hasrightstotheassetsandobligationsfortheliabilitiesrelatedtoNicolaLodgeandGlenmoreLodge.

ThefollowingtablesoutlinethenetassetsandnetincomeforNicolaLodgeandGlenmoreLodge,andtheCompany’sshareof40%ofNicolaLodgeand77%ofGlenmoreLodgethathasbeenrecognizedintheinterimconsolidatedfinancialstatements.


Currentassets 3,156 3,318

Long-termassets 99,038 99,745

Totalassets 102,194 103,063

Currentliabilities 6,680 6,725

Long-termliabilities 63,300 63,633

Totalliabilities 69,980 70,358

Netassets 32,214 32,705

Shareofnetassets 16,374 16,667

As atMarch 31, 2021, the Company's share of net assets inNicola Lodge andGlenmore Lodgewas$9,139and$7,235,respectively(December31,2020-$9,233and$7,434,respectively).

Threemonthsended

March31,

2021 2020

Revenue 7,110 7,666

Expenses

Operating,net(1) 5,922 5,628

Depreciationandamortization 671 664

6,593 6,292

Incomebeforenetfinancecharges 517 1,374

Netfinancecharges 720 721

Net(loss)income (203) 653

Shareofnet(loss)income (87) 302(1)IncludesnetpandemicexpensesforthethreemonthsendedMarch31,2021of$708(2020-$23).

ForthethreemonthsendedMarch31,2021,theCompany'sshareofnet(loss)incomeinNicolaLodgeandGlenmoreLodgewas$(75)and$(12),respectively(2020-$218and$84),respectively.

NotestotheCondensedInterimConsolidatedFinancialStatements(Unaudited)ThreemonthsendedMarch31,2021AllamountsareinthousandsofCanadiandollars,exceptshareandpersharedata,orunlessotherwisenoted


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