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The federal government is calling on Ontario to “do more” to support the homelessness crisis after the province failed to strike a deal to match funding to help with encampments before the winter.
The comments were made by Canada’s housing minister, Nate Erskine-Smith, at a Wednesday news conference announcing deals with Ontario and Saskatchewan municipalities.
“In Ontario … it's just over $85 million that would have been cost matched. These aren't huge sums of money,” Erskine-Smith told reporters in Ottawa. “I mean, Ontario should come to the table.”
Ottawa announced last October it would bypass the two provincial governments and work directly with cities after the provinces failed to commit to matching the funding dollar-for-dollar. At the time, Ontario Housing Minister Paul Calandra said he was under the impression that negotiations with the federal government were still underway.
In a statement Wednesday, the minister’s press secretary Emma Testani said the office was discussing the funding with Erskine-Smith’s predecessor Sean Fraser when Ottawa “suddenly decided to refuse to partner with the province, with no consideration for the conversations in progress.”
“We have been more than ready to reach an agreement with the federal government for several weeks now.”
The province reiterated that it is investing $3 billion over three years in homelessness prevention, including money for the new addiction and recovery hubs. Testani also said the federal government is “underfunding Ontario by more than $400 million for housing and homelessness programs.”
As part of Wednesday’s announcements, nine Ontario municipalities — Durham, Toronto, Peel, York, Hamilton, Niagara, Waterloo, Ottawa, and Sudbury — will divvy up about $88 million in funding, money that will be used to implement “Community Encampment Response plans” and provide additional support to unhoused people.
The funding is part of a $250 million commitment made by the Liberal government in their 2024 budget with the intent of helping provinces address encampments and homelessness.
Erskine-Smith, who took on the role of housing minister in December, acknowledged that “our collective efforts are not at a scale they need to be at.”
“We need to put our politics aside when it comes to a crisis, and seeing our neighbours struggle on our streets, community members denied safe access to our main streets and parks, the growth of homelessness and encampments in communities big and small across our country, it is a crisis.”
The Association of Municipalities of Ontario recently released a report suggesting over 80,000 people were homeless in Ontario in 2024, a 25 per cent increase from just two years earlier.
The data does not include individuals who are not known to the social services system, which means the total number of homeless Ontarians is much larger.
While Erskine-Smith acknowledged that Ontario has boosted its homeless supports, he also said they’ve reduced the amount they spend on community housing.
“I want to call on Ontario specifically to do more,” he said.
This isn’t the first time the federal government has threatened to go around provincial jurisdiction and provide funding directly to municipalities.
The $357 million earmarked by the federal government for affordable housing was originally withheld because the province was drastically behind in its target of building almost 20,000 units.
“I cannot accept an action plan that demands funding for affordable housing that will never be built,” Fraser, who was the housing minister at the time, wrote in a letter to the province.
However, a few weeks later, the two governments were able to come to an understanding, with Ontario providing Ottawa with a revised action plan showcasing how they would meet their goals.
