New funding lets City of Ottawa shore up homelessness shortfall

The City of Ottawa has learned it will receive more than $24 million in provincial funding for an Ottawa Community Housing project, helping staff fill a surprise shortfall in its budget for tackling homelessness. 

The mayor and city council expressed dismay last month after learning Ottawa would receive only $845,100 of the $190.5 million in new money for homelessness under the Homelessness Prevention Program — a paltry 0.4 per cent increase that's far below money given to other municipalities, especially in northeastern Ontario.

It was also far less than city staff had expected.

• Ottawa shortchanged by province's new homelessness plan, councillors say

More than a month later, after the mayor had several talks with Ontario Premier Doug Ford and other provincial officials, a solution: a contribution for an Ottawa Community Housing project at Wateridge Village that the City of Ottawa had pledged to spend millions on.

"Normally we would get somewhere in the range of $16 to 18 million and this is more than that, so I think it shows commitment on the part of the province," Sutcliffe told CBC.

"We're grateful for the fact that they found a solution and that we have some more resources now that we can put to good use in addressing homelessness in our community."

Housing minister, mayor herald cooperation

The new funding will go toward a three-building complex that's currently being constructed on the site of the former CFB Rockcliffe lot and will help to underwrite the cost of up to 138 affordable housing units, the province said at a Wednesday news conference.

The City of Ottawa will then divert its previously committed funding to other projects under the homelessness and housing umbrella.

Sutcliffe said the announcement came as a result of "productive and healthy dialogue" between the city and the province. Minister of Municipal Affairs and Housing Steve Clark likewise described "good conversations" and quipped that he's now spoken more with Sutcliffe than any other mayor but his own.

"It's an important step in our ongoing discussion about fair and appropriate funding for homelessness prevention," Sutcliffe said.

The funding will only make up for the current shortfall, meaning there will need to be further discussions about how to ensure Ottawa doesn't face the same issue in the future.

"I don't think he's going to stop calling me," Clark joked. "I'm a realist. I think we're going to continue this."

Somerset Coun. Ariel Troster said this sort of funding is a "big deal" that could help the city address a critical and overwhelming need.

But, she added, it raises a "frustrating" funding issue that routinely forces Ottawa to go "cap-in-hand" to the province.

Ontario defended decision

The announcement does not change Ottawa's original allocation under the Homelessness Prevention Program, which will see the city get a total of $48,464,600 annually for a three-year period starting April 1, 2023.

When Ottawa raised concerns about the initial funding shortfall, the Ontario government said it was meant to balance out a previous overpayment.

Sutcliffe and city staff then began a public campaign, which led Clark to send a letter explaining the province's decision and pointing to concerns raised by the province's auditor general.

He wrote that a 2021 audit had revealed previous funding allocations had been outdated and sometimes lacked the data to justify decisions on spending.

"The revised funding model ensures that all Ontario residents will have equal access to the province's substantially increased homelessness prevention funding, rather than advantaging any one community at the expense of the others," Clark wrote on April 28.

Complex housing needs

Running Ontario's second most populous city, municipal staff were unconvinced and said the money was needed to tackle the increasingly complex housing crisis.

Ottawa's shelters are over-capacity and under particular strain, staff said, and the inadequate provincial funding would add to the pressure. A quarter of those in shelter are newcomers to Canada, staff said.

Homeless families are a particular concern. The City of Ottawa has three times more families in need of shelter than the units it has available, and 300 families are currently in overflow spaces in motels, as well as post-secondary buildings.

That includes 21 homeless families deemed large, with seven or more people, and require larger units that are hard to find. 

Meanwhile, 11,065 households were waiting on the city's centralized list for subsidized housing at the end of 2022, which had only seen 1,230 households find a home over the course of the year.

Just hours before the mayor learned the city would receive more funding, the city's director of housing services Paul Lavigne had outlined the need to get people out of shelters and in homes during a meeting of the community services committee.

"If people are housed, we want to do everything we can to keep them housed. Because this is not a friendly housing market," said Lavigne.

Councillors approved the city's investment plan on Wednesday and gave Lavigne discretion on how to spend any additional provincial funding.