Toronto homeowners could face higher property taxes in the coming year as the city grapples with reduced federal support for housing asylum seekers and refugees. Mayor Olivia Chow has warned that without additional funding, the city will be forced to either cut essential services or raise taxes.
The crux of the issue lies in significant reductions to two key funding programs. Firstly, the Canada-Ontario Housing Benefit (COHB) is facing a steep decline. Toronto’s allocation is set to plummet from $19.75 million between April 2025 and March 2026 to a mere $7.95 million between April 2026 and March 2027 – a nearly 60% year-over-year decrease. This program is crucial for helping vulnerable individuals transition from shelters to permanent housing by covering the difference between 30% of their income and the average market rent.
Secondly, funding for the Interim Housing Assistance Program (IHAP), a federal grant designed to assist with the costs of housing asylum claimants, is also being slashed. Toronto is projected to receive funding for only 26% of its anticipated expenses for sheltering refugees and asylum seekers this year. According to Mayor Chow, the city faces a staggering $107 million shortfall in this area.
The implications for the GTA real estate market are significant. A potential property tax hike could further strain affordability for homeowners, particularly at a time when interest rates remain elevated. Moreover, reduced funding for housing programs could exacerbate the existing homelessness crisis, potentially impacting property values in certain neighborhoods. Mayor Chow is advocating for $107 million in transitional funding from the federal government and an increase in Toronto’s COHB allocation to $54 million. These requests will be debated at the upcoming Toronto City Council session.
The situation underscores the complex interplay between government policy, social services, and the real estate market in Toronto. As the city continues to grow and attract newcomers, addressing the housing needs of all residents will be crucial to maintaining a vibrant and sustainable community.
