Ottawa is phasing out hotel subsidies for illegal immigrants and refugees, with local authorities being given the responsibility of finding “permanent, sustainable” housing for foreigners by 2026.
“Funding in 2026 will be conditional on provincial and municipal investments in permanent transitional housing solutions for asylum claimants,” the immigration department wrote the Senate national finance committee, as first covered by Blacklock’s Reporter.
Immigration, Refugees and Citizenship Canada (IRCC) said the move will “transition the department’s response towards more effective and sustainable solutions.” It did not mention where local authorities could find permanent shelter for foreigners.
Since 2017, IRCC has spent more than a billion dollars in direct subsidies for temporary shelter, including hotel rooms, the document noted. It said that historically, asylum claimants were expected to either find their own housing or access provincial and municipal shelters.
“Since 2017, however, due to the higher volume of claimants arriving in Canada, the government has expended approximately $1.76 billion to help address the interim housing needs of asylum claimants,” said IRCC.
The spending included $960 million in shelter subsidies paid to municipalities and provinces through an Interim Housing Assistance Program, with another $796.5 million paid directly to hotels.
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Managers wrote that the subsidies would be extended by $1.1 billion beginning in 2024, but end in three years. From 2026 on, subsidies would be paid for permanent housing. “In Budget 2024 the federal government indicated its intent to continue to support jurisdictions while shifting focus towards permanent approaches,” said the document.
Federal funding of hotel rooms and meals for refugee applicants and illegal immigrants cost $769 million in 2023, according to government data. Various municipalities in Canada are able to submit requests for reimbursement and the department assesses the requests to provide reimbursements up to $212 million.
Supply Challenges for Housing
According to the Canada Mortgage and Housing Corporation’s “Housing Market Outlook” released on May 1, ongoing housing shortages in the country are expected to continue for several years amid growing demand.
“Supply challenges, notably the lagged effects of higher interest rates, mean new construction in 2025-2026 will not reach 2021-2023 levels,” it said.
“Growing demand for rental homes will not be met because the cost of home ownership will lead households to stay in rental housing ... rents will rise and vacancy rates will fall.”
Analysts counted 240,267 housing starts in 2023 compared to 261,849 in 2022. It said the rates are less than a third the number of yearly starts required to reach an “affordability” target of 3.5 million new homes by 2030 in addition to ordinary construction rates, according to a 2022 CMHC forecast “Canada’s Housing Supply Shortages: Estimating What Is Needed To Solve Canada’s Housing Affordability Crisis By 2030.”
No federal auditor to date has calculated the total costs of illegal immigration in Canada. In a May 3 Inquiry Of Ministry tabled in the House of Commons, room and board for illegal immigrants was estimated to cost an average of $224 per day.
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