Reducing homelessness will cost Ottawa billions more to hit targets: PBO

In order to reduce chronic homelessness in Canada by 50 per cent in the 2027/28 fiscal year, the Parliamentary Budget Officer (PBO) estimates it would cost the federal government an additional $3.5 billion annually.

This comes as the PBO estimates the amount of Canadians experiencing chronic homelessness has increased by 20 per cent since 2018, reaching 34,270 people.

Meanwhile, the PBO estimates that Infrastructure Canada’s Reaching Home program has helped 6,000 people escape chronic homelessness. Without this program, the PBO estimates the homeless population would be about 15 per cent higher.

Still, the PBO analysis says the “best available evidence” suggests that homelessness has increased despite Reaching Home.

For direct homelessness support, the PBO says Canada puts up approximately $561 million annually with almost all of it going to the Reaching Home program, which helps provide emergency support for people without shelter, including those living in encampments.

“The truth is that we can’t just support homelessness initiatives at a community level and to actually end homelessness, which needs to be the goal,” Housing Minister Sean Fraser said on his way out of the weekly Liberal caucus meeting Wednesday.

“We need to build the affordable housing stock so people have a place to go, not just receive temporary support.”

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The 2024 budget puts an emphasis on housing programs, with around $8.5 billion in spending tied to housing initiatives, with the goal of building nearly four million more homes in Canada by 2024.

Referencing the PBO report, Conservative Leader Pierre Poilievre asked Prime Minister Justin Trudeau about the rising rates of homelessness in Canada on Wednesday.

“Why is it that the more he spends, the worse things get?” Poilievre asked.

“What the leader of the opposition is proposing is austerity and cuts to programs exactly at the time when Canadians need them most,” Trudeau replied.

Prior to question period, NDP Leader Jagmeet Singh said more action is needed and not just announcing programs to get more people into stable housing.

“What they need to do is start building homes that people can afford, invest in, and then build homes to address the housing crisis, the homelessness crisis,” Singh said. “This government does a lot of announcements but doesn’t do a lot of action. We need to see action to take the seriousness of what we’re going through right now.”

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The PBO analysis of the Reaching Home program found that around $1.6 billion has been put into the initiative between the 2019/20 and 2022/23 fiscal years. The latest budget proposes an additional $1 billion over the next four years, with an emergency $250 million top-up over the next two years.

The report suggests federal spending is not making a sizeable dent in homelessness and funding from Ottawa represents only a small portion of total spending to address the issue. The PBO points to a 2015/16 fiscal year analysis that found for every dollar of federal funding for homelessness, provinces and municipalities contribute $13.02.

The PBO also says that housing placements do not prevent future instances of homelessness on a “one-for-one basis” as people’s situations can change. However, the report indicates that placing a person experiencing homelessness in stable housing increases the odds of them remaining housed.

“To address homelessness, you have to go upstream without affordable housing stock to find a roof over the head for everyone in this country we will never end homelessness,” Fraser said. “So at the same time, we have to provide those emergency supports to communities through the Reaching Home program or otherwise. We really do need to build a new ecosystem of affordable housing if we want to bring homelessness to an end.”