Mayor Olivia Chow is warning that Toronto residents could face an “at least two per cent” property tax increase unless the federal government steps up funding to cover the city’s mounting costs for housing asylum seekers.
Speaking at City Hall ahead of an executive committee meeting, Chow said Toronto has already depleted its reserve funds to keep refugee housing and shelter programs running.
“Because the federal government hasn’t been paying their bills, we’ve been taking money from the reserve funds in order to continue the services to shelter these refugee claimants,” Chow said. “We can either stop sheltering refugee claimants, leaving them on the street, or Torontonians will have to pay for it through their property taxes. Neither is fair.”
$107M Shortfall
A city staff report projects a $105.4 million year-end deficit, largely due to shortfalls in the federal Interim Housing Assistance Program (IHAP). Chow is urging council to request $107 million for 2025–2026 to support housing costs for refugees and asylum seekers already in Toronto’s shelter system.
The mayor warned that without new funding by October, the city will no longer be able to transition people out of shelters and into permanent housing—just as colder weather sets in.
Provincial Cuts Add Pressure
The situation is compounded by cuts to the Canada-Ontario Housing Benefit (COHB). Toronto’s allocation will fall to $7.95 million in 2026, down from $19.75 million this year and $38 million in 2024. The COHB provides rent supplements that Chow called “the single most effective tool we have for freeing up shelter beds.”
National Responsibility
Since 2017, Ottawa has provided municipalities with $1.5 billion to help offset refugee housing costs, including $670 million for Toronto. But Chow argued this is no longer sufficient, given the number of claimants arriving in the city.
“Toronto and Canada have a history of settling newcomers, and we’ve done well because of it,” Chow said. “But now, the federal government must fulfill its responsibility.”
Advocates Call Cuts a “Recipe for Disaster”
Local advocacy group Progress Toronto, which held a protest outside City Hall Monday, echoed Chow’s warning.
“The Canadian government must acknowledge its responsibility to cities and take immediate action to address the growing crisis of homelessness — a national human rights issue,” the group said, urging Ottawa to cover 95 per cent of refugee housing costs, lift the 90-day shelter stay limit, and establish a coordinated resettlement response.
The funding fight mirrors a 2023 crisis, when Toronto briefly stopped admitting asylum seekers to shelters, leaving many sleeping on sidewalks until federal funding was restored.