Well, you can’t say they weren’t warned. Like a fed-up parent, Prime Minister Justin Trudeau's cabinet is bypassing Doug Ford’s government and sending housing funding straight to Ontario municipalities.

According to a letter from federal housing minister Sean Fraser sent to Ontario Housing Minister Paul Calandra and obtained by STOREYS, the federal government will now send $357 million in affordable housing funding directly to municipalities rather than to the province after Ford’s government failed to demonstrate how it would meet its target of 19,660 affordable new homes by 2028.

The move comes after Trudeau’s government warned the Province that this could be a consequence if Ford and his cabinet didn’t show exactly how they planned to meet the target. It also comes after the Province was granted an extension from an initial September 2023 deadline.

In a letter dated March 31, Fraser, who was appointed Canada's new housing minister in a July 2023 cabinet shuffle, outlined to Calandra – in no uncertain terms – that he was granting a conditional approval for Ontario’s Action Plan for 2022-2025 under the Canada Ontario Bilateral Agreement for the National Housing Strategy. The conditional approval was offered after a correspondence with the Province that outlined additional measures that Ontario will adopt to meet affordable housing targets required by the agreement.

“However, before receiving the funding from the agreement, Ontario must provide the federal government with the outstanding information from the Action Plan detailing how the targets will be met,” wrote Fraser. “As you know, Action Plans are a requirement of the $5.8 billion dollar 10-year bilateral housing agreement our governments signed. Action Plans are meant to detail your progress on the most fundamental component of the agreement, being Ontario’s commitment to create an additional 19,660 affordable homes.”

Ontario municipalities Federal Housing Minister, Sean Fraser storeys.com

The March 31 letter outlines how the initial draft of the 2022-2025 Action Plan, Ontario was achieving only 6% of this target by 2025. However, a resubmitted plan demonstrated a “marked improvement” from the first one. But it’s not exactly something to celebrate. “By way of comparison, other provinces and territories are projecting to reach at least 66% or more of their goal over the same time period,” writes Fraser. “A dramatic improvement to the Action Plan, and more progress is required to demonstrate that Ontario will meet its target by the end of the agreement.”

In the scathing letter, Fraser outlined five counter arguments to the Province’s reasoning for its lack of action. These range from an unfound claim that withholding funding would “wreak havoc” on service workers (the funding to be provided would be a reimbursement for expenses experienced throughout the year, so service workers wouldn’t be impacted) and timing of funding (the Province cited a September fund delivery as problematic, but that’s when it was dished out in the past), and a comparison to other provinces.

While the March letter gave Calandra a deadline of September 2024 to provide this information, it appears Minister Fraser's had a change of heart. In short, he’s seen no progress and the feds, frankly, sound like they’re at the end of their rope with Ford’s government’s antics. In another letter sent last week, Fraser basically says that time’s up and that they’ve had enough.

As a result, Ottawa now has the authority to decide how the money is spent. Furthermore, the Province won’t receive anticipated reimbursements from the federal government for money allocated to affordable housing already given to its municipalities.The change of heart appears to come after Fraser got wind of the fact that Calandra wasn’t too happy about the conditional offer.

“The only condition was that Ontario show how it would meet the target in the agreement of 19,660 new affordable housing units by 2028,” writes Fraser. “Ontario had already received a one-year extension to provide this information. We were willing to provide a further extension until September 30, 2024. Since our last exchange of letters, I have come to understand that a conditional approval was not acceptable to you and that Ontario is unwilling to provide further details as to how it will meet the target it agreed to.”

Ontario municipalities Ontario Housing Minister Paul Calandra.

Like a frustrated parent, Fraser goes on to express his disappointment. "The federal government has made every effort to reach an agreement with Ontario,” he writes. “I am disappointed that through your rejection of the conditional approval you have decided to forego the federal funding that would reimburse Ontario for investments it makes under our agreement.”

To round it out, Fraser concludes on a hard-hitting note. “Ontario can and must step up and meet the moment, and I will continue to seek this collaboration with your government,” he writes. “However, I cannot accept an Action Plan that demands funding for affordable housing that will never be built.”

That’s not to say that municipalities will have to pay the price, however. In a letter obtained by STOREYS addressed to Ontario’s service managers, Fraser stressed that the bad blood shouldn’t effect reimbursements to the municipalities and that the feds would deal with the transactions directly.

Affordable Housing