2016 Municipal Budget Preview: Shelter Support and Housing

With decreasing funds from federal and provincial governments, the City's Shelter Support and Housing budget faces an increasingly difficult task.

By Megan Marrelli

This article is part of Torontoist’s special 2016 municipal budget coverage. If you value journalism like this and want to see it year-round, then subscribe now. You’ll help fund a staff writer to hold City Hall accountable, and be a part of Raccoon Nation.

Photo by Neil Ta from Torontoist Flickr Pool.

Here’s a tough problem: grapple with a series of on-going fiscal setbacks, including shrinking provincial and federal funding dollars, while maintaining service levels for a problem that grows larger each year. This isn’t just a hypothetical—it’s the task slated for the team at the City of Toronto’s Shelter Support and Housing Administration (SSHA), and it has important consequences for some of the city’s most vulnerable residents.

Ontario’s provincial government has been gradually scaling back funding for Toronto’s shelter and housing services. Over the next three years, the SSHA will lose $114 million in funding from the province. By 2030 federal funding for Toronto’s shelter services will also expire, and the City will receive zero dollars.

As funding from other orders of government shrinks, the City absorbs the pressure to support Toronto’s high demand for shelter and housing. Between 2013 and 2017 the City is spending an extra $162 million to replace the loss of $113 million funding from the Province, and $48 million from the federal government.

“I would say we don’t have hard and fast solutions before us today,” says city councillor Kristyn Wong-Tam (Ward 27, Toronto Centre-Rosedale) on dealing with the social housing divestment and resulting service gaps. However, she says that in ongoing discussions with the federal and provincial governments there has been a gradual shift. “The climate is open for dialogue. There seems to be good political will to start our discussion.”

Until 2013 the SSHA had program reserves—kind of like the government’s version of a piggy bank or savings account—that could be used to offset some of the pressures caused by the federal and provincial governments’ funding divestments. But using the reserves to cover ongoing budget pressures was only a stopgap solution, and now the funds have been depleted.

Other than provincial funding, federal funding and reserve draws, the SSHA gets its funding from city taxes. In order to alleviate this year’s budget pressures Wong-Tam says property taxes would have to increase at least five per cent. In a political climate where any property tax revenue increase greater than inflation is difficult, this is unlikely.

The alternative in situations like this is cutting services. For example, the 2013 gross operating budget decrease of 17.5 per cent was made possible by reducing funds for several grants. Funding to the Toronto Community Housing Corporation for property tax payments on rent-geared-to-income units was reduced by over $55 million. Over $40 million was reduced in grants for construction of affordable housing units and another $35 million was reduced in grants to upgrade social housing units.

Experts agree that Toronto needs more social housing resources. So in 2014 the service gap was partially filled by funding a new women’s shelter. Recommendations in the 2015 Operating Budget were similar: the City funded 127 new beds for adult shelters and 54 new beds for youth, including a brand new shelter for LGBQT2S youth, and two new women’s drop-in centres.

Wong-Tam mentions the need to be “strategically investing in housing,” meaning that for each shelter investment there needs to be parallel investments in long-term affordable housing. “I’m of the school of thought that we need to renovate the resources we have, and get as many people into affordable housing options, so that they can become thriving members of our community,” she says.

Some of the service gap in recent years has also been ameliorated with funding from a three-year-old provincial fund called the Community Homelessness Prevention Initiative (CHPI). In 2015 base budget pressures were offset in part thanks to an additional $7.75 million in CHPI funding.

There is scheduled to be another pressure for 2016’s SSHA budget in the amount of about $85 million, most of which is from the final year loss of provincial funding, as well as increasing social housing costs of about $16 million.

But with a new Liberal government at the helm things could be looking up for the Shelter Support and Housing Administration. Wong-Tam mentions that the new federal Liberals are aware of Toronto’s needs for housing. The City could even benefit from a national housing strategy soon.

There are likely going to be “[federal] resources coming in trying to eliminate poverty,” says Wong-Tam. She adds that while there’s room for optimism, “certainly we like to see action.”