Element Lifestyle Retirement : Q3 2021 MD&A

ELEMENT LIFESTYLE RETIREMENT INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS

For the Three and Nine Months Ended February 28, 2021

Dated as of April 22, 2021

Table of Contents
1. Corporate Background .............................................................................................................................	1
2.	Core Business...........................................................................................................................................	1
3.	Principal Services.....................................................................................................................................	1
4.	Business Highlights .................................................................................................................................	3
5.	Future Business Opportunities .................................................................................................................	4
6.	Financial Highlights.................................................................................................................................	4
7.	Subsequent Event.....................................................................................................................................	5
8.	Outlook and Strategy ...............................................................................................................................	5
9.	Selected Annual Information ...................................................................................................................	5
10.	Summary of Quarterly Results...............................................................................................................	5
11.	Financial Results for the Three and Nine Months Ended February 28, 2021 ........................................	6
12.	Investing Activities ................................................................................................................................	7
13.	Financing Activities ...............................................................................................................................	7
14.	Liquidity.................................................................................................................................................	7
15.	Capital Resources...................................................................................................................................	8
16.	Off-BalanceSheet Arrangements ..........................................................................................................	8
17.	Related Party Transactions.....................................................................................................................	8
18.	Adoption of New Accounting Standards ...............................................................................................	9
19.	Accounting Standards issued but not yet Effective................................................................................	9
20.	Corporate Governance ...........................................................................................................................	9
21.	Disclosure of Share Data as of April 22, 2021.....................................................................................	10
22.	Financial Instruments...........................................................................................................................	10
23.	Risks and Uncertainties........................................................................................................................	11
24.	Disclosure Controls and Internal Controls Over Financial Reporting .................................................	18
25.	Future Sales of Common Shares by Directors and Executive Officers ...............................................	18
26.	Conflicts of Interest..............................................................................................................................	18
27.	Cautionary Note Regarding Forward-LookingInformation ................................................................	19
28.	Approval ..............................................................................................................................................	19
29.	Additional Information ........................................................................................................................	19

ELEMENT LIFESTYLE RETIREMENT INC.

Management's Discussion and Analysis

For the Three and Nine Months Ended February 28, 2021

The Management's Discussion and Analysis ("MD&A") of Element Lifestyle Retirement Inc. ("Element" or the "Company"), has been prepared by management as of April 22, 2021 and provides information that management believes is relevant to assessing and understanding the financial condition of the Company and the results of its operation and cash flows for the three and nine months ended February 28, 2021. This MD&A provides information on the operations of the Company and should be read in conjunction with the unaudited condensed consolidated interim financial statements for the three and nine months ended February 28, 2021, and the audited consolidated financial statements and accompanying notes of the Company for the years ended May 31, 2020.

The Company's unaudited condensed consolidated interim financial statements and audited consolidated financial statements and the notes thereto have been prepared in accordance with International Financial Reporting Standards ("IFRS"), as issued by the International Accounting Standards Board ("IASB") and are reported in Canadian dollars. References to notes are to notes of the unaudited condensed consolidated interim financial statements for the three and nine months ended February 28, 2021, unless otherwise stated.

1. Corporate Background

The Company (formerly Sonoma Resources Inc., "Sonoma") was incorporated under the British Columbia Company Act on May 31, 2007. On December 2, 2015, the Company completed a Share Exchange Agreement with the security holders of Element Lifestyle Management Inc. (formerly known as Element Lifestyle Retirement Inc.), a private company which was incorporated under the Business Corporations Act (British Columbia) on June 12, 2013. Pursuant to which the Element Lifestyle Management Inc. (formerly known as Element Lifestyle Retirement Inc.) security holders transferred all of their common and preferred shares in exchange for common shares of Sonoma on a 1:1 basis.

These consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Element Lifestyle Management Inc. (formerly known as Element Lifestyle Retirement Inc.), Element Lifestyle (Vic Harbour West) Inc., Element Medical Equipment Inc., and Element Lifestyle Retirement (Hong Kong) Limited (formerly known as Team Host Development Ltd.) ("Element (Hong Kong)"). Element (Hong Kong) was incorporated in Hong Kong under the Companies Ordinance (Chapter 622 of the laws of Hong Kong) on February 23, 2016 and is a wholly-owned subsidiary of the Company. Element (Hong Kong) was incorporated to explore opportunities in Hong Kong and China.

The Company is a listed issuer on the TSX Venture Exchange ("TSXV") and its common shares trade under the symbol "ELM".

2. Core Business

Element is a retirement living specialist that exists to improve the quality of life for seniors and their families. Collectively, Element's leadership team has well over 100 years of experience in real estate and master-planned community development, with specialization in hospitality management, and retirement community development and operations. The Company has comprehensive development expertise and is a vertically integrated organization that operates the communities that it develops under management contracts for terms of twenty years or longer.

The core business of Element has been the development and management of third party assets in the "retirement community" space. Element's vibrant intergenerational aging-in-place model encompasses a seamless transition for older adults from independence to assisted living to complex care, while integrating both accommodation and activities for all ages. This enables older adults and their families to have peace of mind with the availability of adaptive personalized support services in a purpose-built community that will accommodate residents' changing needs. The Company is changing the perception and experience of aging with its innovative model.

3. Principal Services

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Element's key objective is providing two primary types of services to its client companies: (a) development services and (b) management services. Element is providing services to retirement communities owned by third parties. Element's strategy is to grow with fiscal prudence but seeks to minimize risk and investment in capital expenditures. To achieve this, Element's primary focus in the short term will be to offer its development and management expertise to third party owners and independent operators and to place asset ownership as a secondary priority. Element does not have an ownership interest in the three projects, OPAL by element, OASIS by element and Aquara by Element.

(a) Development Services

The Company's development consulting services include property selection, assembly and acquisition; building and community design; municipal approval and land entitlement processes; financing; marketing, sales and leasing, and construction project management.

The development stage of a seniors' residence project is critical to the success, reputation and long-term sustainability of the business. When a residence has an optimal blend of suite mixture, layout and design, the business operates more effectively and efficiently. Purpose-built design can contribute greatly to overall resident and family satisfaction which in turn may contribute to reduced vacancy and increased profitability.

(b) Management Services

The Company can also provide expertise in day-to-day operations that ensure growth, profitability and retention. With its extensive expertise, Element is skilled in addressing every aspect of the daily operations of a seniors' living community, with services tailored to meet a resident's needs. Once the development stage is completed, Element will be providing long-term management of the facilities. The Company manages the administration, operation and financing of retirement communities and physical facilities. Under its model, Element will provide care and supportive services, activities programming and extensive amenities for various lifestyles, from Independent Living, Assisted Living, Complex Care to End-of-Life Care. The model aims to enable holistic wellness (mind, body and spiritual) and quality of life for seniors.

In summary, the Company oversees the entire development process and commits for the long term to manage ongoing operations and administration once development is completed. This vertically integrated concept is unique and sets the Company apart from other retirement operators in the industry.

Continuum of Lifestyles (Adaptive, Customized Support and Care)

Underpinning all of these services is the concept of client needs and service. The Company customizes its services to the unique preferences and objectives of residents of local communities where they can choose from a comprehensive package or select individual services that best meet their needs. Management recognizes that the Company's success, reputation and continued business relationships depend on the success of this mandate.

Element will emphasize that the "Continuum of Lifestyles" model of retirement living brings a positive impact to the way older adults experience their hard-earned,work-optional later years of life. Element's retirement communities are not merely places where care services are administered in a hospital-like environment; rather, they embody the intimacy and warmth of home, along with carefree living that inspires a sense of pride, dignity and passion for life through intergenerational activities, services and accommodations resembling those typically found in exclusive clubhouses and resorts.

A breakdown of the various Continuum of Lifestyles available is noted as follows:

Independent Living Lifestyle - designed to meet the needs of seniors who can live independently and want the freedom and privacy of their own suite, along with the security, comfort and social activities of a seniors' residence.

Assisted Living Lifestyle - designed to meet the needs of seniors who seek housing with supportive care and services including assistance with daily activities.

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Complex Care - serves seniors that require higher levels of care and who have lost their independence. Care plans are carefully created in collaboration with the residents' care provider team to ensure the resident can enjoy activities of daily living in a safe and caring manner. It is staffed 24 hours a day/7 days per week by licensed nurses and care workers.

The Company takes the Continuum of Lifestyles model to the next level: the incorporation of intergenerational living so that not only seniors stay together, but all generations of family and community can be integrated in activities and programming, including child care and education involving seniors. This concept brings families together, creating the ability for seniors, their children, and grandchildren to all live and interact within the same community if they choose to. This model builds community and a quality of life that is unparalleled in the industry and enhances the lives of seniors and their families.

4. Business Highlights

The Company is currently engaged in the development of three seniors' retirement communities, "OPAL by Element" ("Opal") and "OASIS by Element" ("Oasis") and "AQUARA by Element" ("Aquara"). Opal, Oasis and Aquara are owned by related parties (see "Related Party Transactions").

Opal Project

Element is the development and operations consultant for Opal Retirement Inc. and, as such, Element has managed the development of the Opal Project to its completion and is currently managing its operation. The Opal Project is a lifestyle retirement community comprised of approximately 142,000 square feet with 44 seniors' residential condominium units, 56 seniors' rental units and 30 seniors' Licenced Care units. Opal by Element was open for operation in December 2019. It is currently engaged in leasing up the rental units and Licensed Care units.

Oasis Project

The project is a master-planned community on 17 acres of land in the Township of Langley, conveniently located across from the Langley Events Centre. It is the first property in the Township's Official Community Plan that supports high-density development. The development is expected to be completed in phases and to consist of approximately 721,000 square feet of gross floor area for residential use with 835 residential units and 26,000 square feet of gross floor area for commercial use. The rezoning application for the 17 acres of land and the development permit application for the first 20-storey lifestyle retirement community with 70 seniors' residential condominium units, 84 seniors' rental units and 42 seniors' licenced care units were submitted to the Township of Langley and third reading was given by council on February 5, 2018, currently working towards achieving the final reading. In addition to the lifestyle retirement community, a non-binding letter of intent has been executed to form a joint venture with a national residential developer to develop and build approximately 200 residential apartment units on the site.

Aquara Project

The Aquara Project is located 2 minutes' walk from Victoria Harbour's waterfront boardwalk and new Victoria International Marina, and 5 minutes drive to Downtown Victoria. It is part of a master planned community, which includes several existing highrise residential towers. Over the next years, this vibrant, progressive neighbourhood will see the development of a cultural hub, a hotel, retail stores, trails, and parks. Aquara is a five-storey development consisting of approximately 153,000 square feet of gross floor area with 157 units with a mixture of condo, rental, and licenced care units. Excavation has been completed. The project engaged in some value engineering to reduce the construction cost. A Delegated Development Permit application is being prepared to reflect the value-engineered items with a submission target to the City of Victoria before the end of April. Due to the Coronavirus, the marketing of sales and rentals has been temporarily suspended. Active marketing of Aquara has ceased as a result of the expiry of the project Disclosure Statement. Pursuant to provincial legislation, sales and rental deposits have been returned to buyers and potential renters. Public interest in the project remains high while the construction budget and financing is reviewed and amended.

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