The federal government has made good on its promise to withhold more than $350 million in Ontario funding earmarked for affordable housing and will send it directly to servicers after the province “failed to meet its obligations.”
The money was part of a bilateral housing agreement signed in 2018 and was intended to reimburse the province for investments in affordable housing.
Under this agreement, Ontario committed to delivering approximately 19,660 units of affordable housing. However, in March the federal government told the province its funding was in jeopardy.
In a letter sent to Ontario Housing Minister Paul Calandra on March 21, officials noted the province was far behind on its goal, with a forecast of 1,184 new units by the end of 2024-2025.
“This leaves 94 per cent of the target to be achieved over the final three years of the agreement, which is unrealistic,” Federal Housing Minister Fraser wrote to his provincial counterpart at the time.
Fraser noted that unless the province provides a revised plan showing how it intends to meet its goals, it would withhold $357 million in affordable housing funding.
Between March 21 and April 30, the federal government says it offered the province conditional approval for funding as long as some of the measures proposed in the revised action plan could be implemented by Sept. 30, 2024.
“Additional measures he has proposed include requiring annual supply targets for service managers, adopting a focus on creating new affordable housing units, and improving data collection and reporting related to these initiatives.
“These are good initiatives, but Ontario made a similar commitment last year. “They have not materialized yet.”
Fraser said if the province could make some progress by the fall, they would get the money.
A month later, the feds say there’s been no movement.
“Since our last exchange of letters, I have come to understand that a conditional approval was not acceptable to you and that Ontario is not willing to provide further details on how you will meet the agreed target,” Fraser wrote to Calandra. “I am disappointed that, by rejecting conditional approval, you have decided to forgo federal funding that would reimburse Ontario for the investments it makes under our agreement.”
“I cannot accept an Action Plan that requires funding for affordable housing that will never be built.”
Speaking in the legislature on Monday, Calandra said he was pleased the government agreed that service managers should be the ones managing the funds.
“We have been telling federal governments for weeks that we finance housing through service managers, that the province directs its funds through service managers in cooperation with municipalities.”
However, the minister says he disagrees with Ottawa bypassing the province in the process. Previously, Calandra called the decision “unacceptable” and said the affordable housing targets do not take into account the current economic landscape, nor the province’s work to repair and renovate the units.
Service providers should not be affected by the decision to withhold funding, the federal government said.
Fraser has said he hopes the province won’t pull funding in the coming years, but will meet with service providers to find a way to ensure funding is delivered.