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Liberal government threatens to withhold Ontario funding due to lack of affordable housing

The Justin Trudeau government is threatening to withhold Ontario funding earmarked for affordable housing, claiming that “almost no progress” has been made by the province.

In a letter sent on March 21, Housing Minister Sean Fraser wrote that Ontario had pledged to deliver 19,660 affordable housing units as part of a 10-year bilateral deal signed in 2018.

As it stands, Ontario is expected to have 1,184 new units by the end of 2024-2025.

“This leaves 94 per cent of the target to be achieved during the last three years of the agreement, which is not realistic,” Fraser wrote to his provincial counterpart, Ontario Housing Minister Paul Calandra.

“Ontario is lagging desperately behind all other provinces and territories. The lack of progress jeopardizes the completion of both Ontario’s housing targets, and Canada’s national target.”

Fraser noted that unless Ontario provides a revised plan that shows how it intends to meet its targets, it will not receive a promised $357 million in funding from the federal government.

“As you are aware, the current deadline already factors in a one year extension. No further extensions are possible,” Fraser said.

“My officials have extended the deadline for a re-submitted action plan several times. If Ontario fails to submit a revised plan by end of day on March 22nd – allowing us time to analyze and respond by the final deadline of March 31s– bilateral funding will lapse, and the impact this will have on Ontarians in housing need will be devastating.”

Calandra called the government’s decision to withhold funding “unacceptable,” responding in a letter of his own saying, “Ontario respectfully expects to be treated by the federal government as the true and equal partner.”

He noted the targets do not take the current economic landscape into account, nor the province’s work to repair and renovate units. Ontario, he said, has one of the oldest housing stocks in the country and if these units were counted, the province would hit nearly 60 per cent of its goal.

He said that if they did not invest in repairs, it would “amount to gross negligence.”

“While it is important to grow the stock, it is equally, if not more crucial, to ensure it does not shrink due to units that cannot continue to be offered because of deferred repairs and renovations.”

The Ford government has been using the same tactic for its Building Faster Fund to encourage development, withholding funding from municipalities who have not met their goals.

The City of Mississauga lost out on about $30 million because it did not have enough housing starts for 2023. Local officials noted they had more permits awaiting approval than housing starts, but the province has refused to allow that data to count towards Mississauga’s goal.

“We want to get people moving into homes and, as I’ve said, a permit doesn’t mean they’re moving into a home,” Calandra said at the time.