Federal Liberals & Ontario PCs accused each other of sabotaging affordable housing plans as Ford’s cat & mouse game continues

“Dear service manager, I understand that there may be some concern relating to the $357 Million dollars which the federal government hoped to flow through the Province of Ontario under the National Housing Strategy to support your work.

“I was disappointed to learn that Ontario has rejected the conditional approval of their most recent Action Plan, and is choosing to forego the funding.

“I want to assure you that the full amount of this funding which was meant to flow through the Province will nevertheless be used to make investments in affordable housing and housing supports for the most vulnerable in Ontario, and will be delivered directly by the federal government.” — Sean Fraser, federal Minister of Housing, Infrastructure & Communities, May 1 letter to the Region of Peel.

“Dear service manager, I know there have been concerns raised about the future of the National Housing Strategy (NHS) following the federal government’s previous decision to withhold both its funding over the remaining term and the funds already spent by the province through service managers on the federal government’s behalf.

“I want to assure you that the Province of Ontario will continue to fund the provincial portion of the NHS. We believe that service managers are best positioned to understand the needs of their local communities and this is why we have fought so hard to retain your role in the program.

“I am aware that you have recently received a letter from Minister Fraser. After weeks of discussion, the minister has finally agreed with us on the important role service managers play in delivering housing programs on behalf of the province and our municipal partners.” — Paul Calandra, Ontario Minister of Municipal Affairs & Housing, May 6 letter to the Region of Peel.

Two separate letters featured on the Region of Peel’s agenda Thursday provided an inside look at the lack of cooperation between the federal and provincial governments amid the ongoing affordable housing crisis.

Doug Ford’s PC government continues to find ways to avoid building the type of affordable housing more and more Ontarians desperately need. Instead, his forays into the Greenbelt and determination to get the controversial 413 Highway built, follow direction from the powerful residential development lobby in the province, whose members Ford promised to reward in 2018, if they helped get him elected.

When they did, he began pushing policies such as the Greenbelt land swap debacle and the previously cancelled 413 Highway plan, to help the same developers move forward with sprawling construction projects on lands they acquired.

Meanwhile, allotments for affordable housing, mostly in dense, complete community designs, next to major transit corridors, have been an afterthought since Ford was first elected.

The developers who helped him have openly pushed for the construction of sprawling subdivisions instead, housing that is not needed, but has provided immense profits to builders in the past.

Meanwhile, over the last year, amid the Greenbelt scandal, Justin Trudeau’s Liberals have pushed back against developer-driven policies which have set cities across the country behind, with mismatched housing stock that has created much of the supply and demand problem.

Ottawa has decided to deal directly with municipalities to get the right type of housing built: affordable, still large enough to accommodate families and next to jobs and transit.

The two letters gave taxpayers who expect their money to be used responsibly and effectively by the stewards of the public purse, a taste of how elected officials are handling the ongoing affordability crisis.

The political in-fighting leaves Peel in a precarious position as it tries to help build desperately needed housing for tens of thousands of residents in need.

The letters from federal Housing Minister Sean Fraser and provincial Housing Minister Paul Calandra relating to funding from the National Housing Strategy — meant to provide more affordable housing over ten years — included several contradicting statements scattered throughout the separate correspondences.

The letters followed statements made by Minister Fraser in March which criticized the PCs’ draft 2022-2025 Action Plan for failing to reach a joint agreement with the federal government. Minister Fraser said the draft strategy “seemingly does not recognize the scale of the crisis playing out in the province” and called the proposed plan “a disappointment.” According to the Minister, the initial blueprint showed almost no progress toward reaching the PC government’s own housing target, proposing to only achieve 1,184 of the 19,660 units required under the agreement by the end of 2024-2025. The lackluster effort would leave 94 percent of the target unmet, with only three years left to fulfill the terms of the agreement, which Fraser said “is not realistic.”

According to the federal government, an additional 1.48 million units are needed in Ontario “to restore a level of affordability that existed two decades ago” as more than 12 percent of households in the province are living in core housing need. Peel Region alone has more than 90,000 residents living in core housing need, meaning they are having to spend far too much of their income on housing, leaving other necessities out of reach.

The federal government attributed its decision to withhold funding from Ontario to the lack of progress by the PCs to meet their affordable housing targets set out in the bilateral agreement, which was reached and signed by the two governments in 2018. Minister Fraser warned that should Ontario fail to provide a revised plan demonstrating how it intends to meet its housing targets under the agreement, the provincial government would not receive the hundreds of millions intended for affordable housing.

Among the commitments made in the 2018 agreement, the Province has been tasked with expanding the number of new affordable housing units in Ontario by 19,660, setting annual targets through publicly available three-year action plans and reporting on progress on both the annual and overall target.

While the PCs, under Ford, have largely ignored the target for affordable housing, the government has aggressively pushed a number of pieces of legislation in support of Bill 23, enacted to trigger the construction of 1.5 million homes across Ontario by 2031.

A series of scandals and ongoing controversies linked to the PCs’ developer-driven legislative push — the Greenbelt land swaps that saw preferred builders get the go ahead to construct houses in the supposedly protected corridor that arcs around the GTHA; the proposed 413 Highway and another new one in Bradford; a snap proposal to approve 35,000 new homes in mostly rural parts of Caledon; numerous MZOs to trigger sprawl development — have coincided with the federal Liberal government’s recent pushback against the reckless planning policies of Doug Ford.

After Ottawa began striking deals directly with municipalities, rewarding them with money from the federal Housing Accelerator Fund, if plans for density, transit oriented design and affordable housing were approved, Ford demanded Trudeau stay out of the planning arena.

Meanwhile, more and more municipalities welcomed Ottawa’s support, as Ford continued his developer-led takeover of local planning.

At stake is the allocation of housing targets.

Certain builders want as many houses built under the various provincial and federal plans to be constructed on lands they have assembled, where subdivisions featuring larger single-family houses offer much easier pathways to profitability, untangled by layers of planning approvals, increasing labour problems, financing challenges and other complications and delays related to building more dense, complex projects in urban settings, where units have much smaller margins.

Unlike Ford, Ottawa is less interested in the demands of developers. The federal government recognizes that housing allocations need to be filled by the types of units that will address the crisis: affordable, in the right places and the right size for what families and individuals need.

In his letter that appeared on the Region’s agenda Thursday, Minister Fraser stated it was the Province that rejected the conditional approval of the most recent Action Plan to get affordable housing built.

Minister Calandra pointed to the expenditure of allocated funds by the Province and warned that, “Undoubtedly, the federal refusal to reimburse the $357 million that we have spent on their behalf will have a negative impact on service delivery.”

But what the provincial housing minister failed to address was the terms of the agreement, which requires “affordable housing” units to be built. Instead, the data on new housing starts shows the PCs have all but ignored the very intention of the agreement, to fund the most critically needed types of housing.

While the contradictory remarks highlighted the differences between the two upper levels of government, Regional staff directed The Pointer to a joint statement by the two ministers released quietly at the end of May, just weeks after the letters were distributed. According to it, the federal government and the Province, recognizing that “collaboration is imperative to solving the housing crisis,” had reached an agreement on a revised action plan that would unlock the $357 million in federal funding laid out under Ottawa’s National Housing Strategy.

The statement noted the PC government had submitted a revised Action Plan under the two government’s bilateral agreement, which the federal Housing Minister said provided “more robust… insights” on which housing projects have been benefitting from the Province’s funding. According to Minister Fraser, the PCs have included new measures in its Action Plan including the establishment of provincial supply targets with service managers who oversee affordable housing projects in their area, directing funding toward new projects, setting annual goals, and implementing data collection and reporting mechanisms. The Province is expected to submit an Action Plan for 2025-2028 by December 31 to continue to secure federal funding for the remainder of the 10-year National Housing Strategy agreement.

What this latest settlement will mean for Peel remains to be seen.

“While we’re pleased that an agreement has been reached between the federal and provincial governments, Peel Region will continue to advocate for more equitable funding from all levels of government so residents can get and keep affordable housing,” a spokesperson from the Region told The Pointer. “Currently, only a quarter of funding comes from the federal and provincial governments combined.” The spokesperson said staff could not “comment on any additional details regarding funding breakdowns.”

In an emailed statement, Bianca Meta, spokesperson for Minister Calandra’s office, said municipalities can expect to receive letters confirming their funding allocations shortly. She said the first quarterly payments will be issued by July and “subsequent payments will be made in accordance with the program guidelines.” No details were provided on what funding for Peel will look like.

Regional staff and elected officials have stressed the critical need for affordable housing in Peel. A report presented to councillors in July last year found over 90,000 residents are living in core housing need. It has also been estimated the Region of Peel is only helping 30 percent of residents who are in grave need of housing assistance. Meanwhile, the Region’s centralized waitlist climbed to 28,000 households in 2020, a 115 percent increase from the 13,000 that were reported on the list in 2018. Staff previously estimated the Region is facing a funding gap of approximately $858 million over the next ten years that will need to be filled to keep its affordable housing units in livable condition.

This is just some of the data that highlights how dire the affordable housing landscape is in Peel.

Pleas for Ottawa and Queen’s Park to provide support often fall on deaf ears. And now, as the federal government faces an election and has finally opened up the funding taps, the PCs are trying to obstruct the construction of anything but what select developers want to build, making the housing crisis even worse.

The Association of Ontario Municipalities (AMO) previously underlined the risks associated with losing National Housing Strategy funding in March when the federal government was contemplating withholding the more than $350 million from the province (which is supposed to go right to municipalities, the “service managers”). The Association said this would have “devastating impacts on low-income families and individuals, and further exacerbate the housing and homelessness crisis across the province.”

Last year there were 255 makeshift encampments across Mississauga and Brampton, more than double the number a year prior.

A letter from AMO said members were “deeply concerned” to learn the federal government was considering withholding the funds due to the PC failure to meet the agreement. The Association said municipalities rely heavily on the money to “make critical investments to both preserve the existing social housing stock and create new supply.”

In November, as the federal government was rolling out funding to municipalities across the Province who made a clear commitment to building housing through its Housing Accelerator Fund — meant to incentivize municipalities to boost their supply of dense housing around transit — Premier Ford stepped in, calling the move “jurisdictional creep” and told the federal government to end the program. Meanwhile, his government was ignoring the types of housing Ontarians desperately need.

Mississauga and Brampton received $112.9 million and $114 million, respectively, from the federal fund.

Meanwhile, Ontario’s municipalities are scrambling to balance the need for more housing with the billions of dollars in infrastructure required to support new homes. The developer-driven plan of the PCs will mean cities could be on the hook for two-to-four-times the costs for sprawl (according to professional planners), compared to much lower infrastructure costs to build compact, complete communities Ottawa is pushing.

Early in 2024, Ford and members of his PC government were seen popping up in communities across Ontario as they handed out envelopes of funding through the Province’s Building Faster Fund as a reward to municipalities for exceeding the PC housing targets imposed as part of Bill 23. As the announcements poured out, the coffers at Mississauga’s City Hall were left empty. A letter from the City in February revealed the municipality was denied the much-needed funding “due to insufficient housing starts” — a measurement the City and other stakeholders have argued is completely outside the control of municipalities. Mississauga — which has been asked to add 120,000 new homes by 2031 — had higher rates of development application approvals compared to some cities that received money under the PCs’ incentive scheme.

Mississauga officials explained that City Hall has no control over developers once building approvals are granted, and that the PC government should not use housing “starts” as the criteria.

Regional data showed that in the third quarter of 2023, the most recent figures available when Ford claimed Mississauga was failing to do its part, Mississauga had 1,319 housing starts; more than Brampton which had 1,238; and more than all of Durham Region which had 753. A spokesperson from Minister Calandra’s office previously told The Pointer the Province is using housing starts as a measurement “because, simply put, a permit is not a shovel in the ground or a home to live in.”

Recently, Mayor-elect Carolyn Parrish seemed to be using the PC claims to suggest Mississauga has failed to meet its obligation to get homes built fast enough, ignoring the data and the fact that City Hall officials explained why “starts” have been slower to materialize, due to the number of high-rise projects with hundreds of units which take much longer to qualify as a housing start.

The Pointer reported earlier this year that the PCs are nowhere near the benchmark of 150,000 homes per year needed to achieve the target of 1.5 million by 2031. A policy report from the Ontario Real Estate Association showed housing starts were down in 2023 and that housing construction has “slipped” in recent years, with the province only reaching 96,000 housing starts in 2022 and an estimated 90,000 in 2023. The annual pace of construction would need to nearly double by 2025 to have any hope of achieving the PCs’ targets.

The City of Mississauga and AMO have requested the decision on the incentive funding to municipalities be based on building permit approvals, which the municipality controls, rather than housing starts, which are wholly up to developers. This would incentivize more dense housing, instead of sprawl, which is much easier to get started.

The Province’s decision, which has been heavily criticized for having flawed criteria, left Mississauga without tens of millions of dollars in infrastructure funding. Critics saw it as a political move by Ford as an attack on former Mississauga mayor Bonnie Crombie, the Ontario Liberal leader.

Parrish, who will be officially sworn into office next week, made it clear during her victory speech last week that she plans to have a better relationship with Ford.

Email: paige.peacock@thepointer.com

Twitter: @mcpaigepeacock

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Paige Peacock, Local Journalism Initiative Reporter, The Pointer