Ontario may lose $357M in federal funds for affordable housing

Ontario is at risk of losing $357 million in funding for affordable housing because the province has not done enough to meet federal targets under the National Housing Strategy (NHS) Action Plan, according to federal Housing Minister Sean Fraser.

At an announcement Wednesday, Fraser said if the government of Ontario does not have a clear path to satisfy its commitment under the plan, they shouldn't expect to receive the full amount of money.

"I don't think it's responsible for me to transfer funding for the purpose of home building for homes that are never going to be built," he said.

"We are going to finalize our assessment of their plan over the next couple of days."

The remarks come after a flurry of letters between the two levels of government, the first sent by Fraser to Ontario Minister of Municipal Affairs and Housing Paul Calandra last week.

It explains Ontario has fallen behind on its commitment made in the NHS, a 10-year bilateral housing agreement for the delivery of over $5.8 billion in cost-shared investments in Ontario.

The province committed to expanding the number of new affordable housing units by 19,660 as part of the agreement. In the letter, Fraser states Ontario's draft action plan for 2022-2025 only proposes to achieve 1,184 units by the end of 2024-2025, or 6 per cent of its goal.

Fraser said he's now received a supplementary plan from the province increasing that number to 28 per cent, but it's still not good enough, adding other provinces have reached two-thirds of their commitment.

Now, the federal government is deciding whether they will work with the Ontario government to build affordable housing in the province, or if they will forge ahead themselves, Fraser said.

"We are going to work to find a way to make sure that the money that we have budgeted for affordable housing in Ontario helps build affordable housing in Ontario."

Ontario's housing minister disagrees with assessment

In a response sent to Fraser last week, Calandra said the federal government is threatening the province's most vulnerable by withholding the funding.

He said the federal government's assessment doesn't take into account how the economic landscape has shifted since 2018, or how the province has tackled the repair backlog to ensure Ontario's existing aging housing stock — the oldest in the country, he says — doesn't disappear. 

In that regard, Calandra said Ontario has exceeded the overall nine-year repairs target by 170 per cent to date.

The province also has a unique way of delivering affordable housing, he said, working with 47 different Service Managers (SMs) and transferring funds to municipalities. 

"I'm not going to change laws. I'm not going to change decades worth of how we provide this type of housing. They knew that this was how we delivered housing when the agreement was signed," Calandra said Wednesday.

The province also disagrees with the number of affordable units being counted under the federal governments' tally.

"I have no indication from Minister Fraser that they are in any way, shape or form willing to accept what we have already done," he said. "They're changing the yardsticks every single day, and it's starting to get a bit frustrating."

Municipalities urge federal government to reconsider 

Ontario's municipalities sent a letter of their own Tuesday, saying the loss of funds would have devastating effects on low-income families and further exacerbate the housing crisis.

"AMO urges you to work with the provincial government to develop an NHS Action Plan that works for all parties without penalizing Ontario's most vulnerable," said President of the Association of Municipalities of Ontario (AMO) Colin Best.

"Ultimately, we need to fundamentally re-think the way we fund community housing in Ontario and in Canada. But the answer is not unexpected funding cuts in the middle of a homelessness crisis."

Several members of provincial Parliament also weighed in on the debate at Queen's Park Wednesday. NDP leader Marit Stiles repeatedly asked the Premier what the government would do to ensure the federal funding isn't lost.

"We are so far behind. We are letting Ontarians down," she said. "And so the government needs to go to the federal government and say what can we do to access this money? We need it."

Liberal MPP John Fraser compared the situation to the provincial government only rewarding money from its Building Faster Fund to municipalities meeting their housing targets.

Mike Schreiner, leader of the Green Party of Ontario, said the government has failed to deliver on affordable housing.

"The federal government is holding them accountable."