Toronto Mayor Olivia Chow is warning that recent funding cuts by the provincial and federal governments will severely strain the city’s already overburdened shelter system, potentially forcing higher property taxes or reductions in services.
Cuts to Housing Support
The Ford government has informed Toronto that its allocation under the Canada-Ontario Housing Benefit (COHB) will be slashed to $8 million in 2026, down from $20 million this year and $38 million in 2024. The COHB provides rent supplements that help people transition out of shelters and into permanent housing.
Chow said the program is the “single most effective tool” for freeing up shelter beds and urged the province to boost funding to $54 million, which would allow 300 people each month to move into permanent housing.
A spokesperson for Municipal Affairs and Housing Minister Rob Flack defended the decision, saying provincial investment remains intact but that Toronto did not receive a federal top-up this year.
Federal Funding Shortfalls
The city is also facing steep cuts from Ottawa. In February, Toronto requested $671 million to cover refugee shelter costs between January 2025 and March 2027. The federal government has pledged just $262 million, covering only 39 per cent of the city’s request.
This leaves Toronto responsible for $107 million this year alone to house nearly 3,500 refugees, which Chow insists is a federal responsibility.
“Now, the federal government won’t pay their bills,” 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.”
City staff estimate that filling the gap would require at least a 2 per cent property tax increase, or force delays in expanding the shelter system, jeopardizing 250 planned new beds and slowing the transition from hotel programs to purpose-built facilities.
Wider Impact
Toronto currently plans to build 20 new shelters by 2033, with six expected by 2030. Cuts could delay those timelines and hinder the rollout of a new case management system designed to help refugees move through shelters more quickly.
The situation mirrors a 2023 funding standoff, when Ottawa’s refusal to cover refugee housing costs led to refugee claimants sleeping on downtown Toronto streets until additional federal money was secured.
Calls for Federal Leadership
Chow is rallying support from other municipalities and Toronto’s business community. The Ontario Big City Mayors caucus recently passed a motion urging the federal government to cover refugee housing costs, while the Toronto Region Board of Trade wrote to Immigration Minister Lena Diab echoing the city’s demand.
Advocates are also raising the alarm.
“Cuts to refugee funding are a shirking of federal responsibility. They are a broken promise to the City of Toronto,” said Diana Chan McNally, a housing rights advocate and member of the city’s advisory committee.
Chow said she remains hopeful that discussions with Ottawa, now led by Prime Minister Mark Carney, will yield more support:
“There might be some miscommunication because of the change in government. But I will keep pressing, because Toronto cannot do this alone.”