Ontario’s 2011 budget is serving up significant cuts in both operating and capital funding when it comes to affordable housing, following the lead set by the federal government that has also offered significant cuts. In a recent submission to the provincial Legislature, the Wellesley Institute has noted that when the feds cut and download, the province follows suit and cuts and downloads. When the federal government makes new investments, the province tends to follow – though sometimes taking several years to cost-share federal dollars.
On the operating side, the annual budget of the Ontario Ministry of Municipal Affairs and Housing is slated to drop by 10% in the coming year to a total of $602 million; and capital investments will be cut from $660.7 million to $95.1 million. A significant portion of housing spending in Ontario on both the capital and operating sides comes from federal transfers – and as federal housing investments erode, then overall provincial spending declines. In addition, on the capital side, the federal government announced a two-year housing investment plan as part of its 2009 stimulus budget and, as of 31 March 2011, most of that money has either been committed to projects, or will be lost to the province.
The Wellesley Institute has noted that the Ontario government has tended to follow the federal lead on housing issues for much of the past two decades. In 1993, the federal government stopped funding new affordable homes, and Ontario stopped its funding in 1995. In 1996, the federal government announced plans to transfer most of its affordable housing programs to provinces and territories, and the Ontario government set in place its housing download starting in 1998. In 2001, 2006 and 2009, the federal government announced a variety of short-term funding initiatives, and the Ontario government agreed to cost-share these programs – although it took as long as four years to provide its share.
Ontario budget 2011 says that the province is continuing to negotiate with the federal government for significant new housing funding (most major federal housing programs are scheduled to expire by 2014, and funding for existing affordable housing funded under federal housing programs will drop sharply in the coming years.