April 9, 1999

To:Budget Committee

From:Chief Financial Officer and Treasurer

Commissioner of Community and Neighbourhood Services

Subject:Impact of Recent Provincial Announcements on the 1999 Budget for the Shelter, Housing and Support Division

Purpose:

To report on recently announced provincial initiatives to address homelessness and their impact on the 1999 budget for the Shelter, Housing and Support Division of the Community and Neighbourhood Services Department.

Funding Sources, Financial Implications and Impact Statement:

Based on a preliminary analysis of recent provincial announcements regarding homeless initiatives, no additional funding will be required to implement the Council approved recommendations of the Mayor's Homelessness Action Task Force.

Recommendations:

It is recommended that this report be received for information and forwarded to the Community and Neighbourhood Services Committee for information.

Comments and/or Discussion and/or Justification:

Provincial Homelessness Announcements:

On March 23, 1999 there were some significant provincial announcements in response to the Mayor's Homelessness Action Task Force report. A copy of the provincial announcement is attached as an appendix to this report. In summary, the announcement included the following:

(A)A commitment to invest $50 million in new rent supplements, using the extra federal funds that will be available after the province signs a federal-provincial housing devolution agreement;

(B)$45 million in new provincial funding for housing and supports for people with mental illness;

(C)Grants to offset the Provincial Sales Tax (PST) on new rental construction;

(D)Selected provincial sites and related demonstration projects for affordable housing;

(E)An additional $2 million to increase the Community Start Up benefit for families moving out of hostels;

(F)The addition of $6 million to the provincial Homeless Initiatives Fund of which an estimated $3.7 million will flow to Toronto, bringing the total fund to $4.7 million in 1999 and each year thereafter);

(G)$2.5 million for new rent supplements for at-risk people with special needs;

(H)$1 million to divert ex-offenders from the hostel system;

(I)Transferring the delivery of the Community Partners program and the associated funding to municipalities (involving approximately $900,000 in Toronto which supports housing help centres);

(J)Downloading, with on-going annual funding, the Ministry of Community and Social Services (MCSS) Supports to Daily Living Program (estimated at $3 million in Toronto). The program provides funding for support services for homeless/hard-to-house people in housing.);

(K)Permitting a redirection of up to 15% of a municipality's hostel funding to new prevention programs (80:20 cost sharing with municipalities).

The initiatives will provide some new provincial resources to support programs and services for those who are homeless or at risk of homelessness. The new funding for supportive housing, the provincial Homeless Initiatives Fund, increased Community Start Up Allowance benefits for families leaving hostels and the diversion of ex-offenders from hostels, will allow additional support for a range of front-line services, in keeping with many of the recommendations of the Mayor's Homelessness Action Task Force Report.

The province also announced the transfer of some new administrative responsibilities to municipalities (e.g Community Partners Program, Supports to Daily Living Program) along with the current provincial funding associated with these responsibilities. In a report to the Community and Neighbourhood Services Committee entitled "The Mayor's Homelessness Action Task Force Report: Policy Directions related to Community and Neighbourhood Services, the Commissioner recommended that the City urge the province to maintain administrative responsibility of the Supports to Daily Living Program in recognition of the provincial responsibility for supportive housing. Responsibility for the Community Partners Program will, however, provide the City with a broader range of tools to address issues of homelessness and the opportunity to better co-ordinate the delivery of services, although it does not provide any new resources.

The Redirection of Emergency Hostel Funding is intended to allow greater flexibility in the use of existing hostel dollars, providing funding for initiatives which assist in moving people from hostels to longer term housing options. The City has already developed a number of hostel diversion programs; however, these cannot be supported through the hostel redirection funds as only new initiatives are eligible for funding under this new program.

Although the provincial announcements do not fully respond to the recommendations made to the Province by the Mayor's Homelessness Action Task Force report, they do represent some concrete assistance in addressing the issues. As further program details become available, staff will report on their implications for the City.

Impact of Provincial Announcements on Budget for Hostel Services:

As noted in earlier reports to the Budget Committee and Council, hostel per diems are cost shared at 80:20 between the province and municipalities, based on a maximum per diem of $34.50 per bed night. In light of the higher cost of providing hostel services in Toronto, the provincial cost sharing has slipped from the intended 80 percent to 73 percent, for an increased cost to the municipality of $6.9 million estimated for 1999.

The City has requested that the provincial government redress this subsidy shortfall and pay the full 80 percent subsidy for expenditures for hostel operations. The Chief Administrative Officer's (CAO) report to the Budget Committee regarding the 1999 Preliminary Operating Budget recommended a $2 million reduction to the budget for the Shelter, Housing and Support Division, based on anticipated increased hostel subsidy. The remaining potential savings were intended to be used to implement some of the recommendations of the Mayor's Homelessness Action Task Force.

It was hoped that recent provincial announcements would address the issue of the full 80 per cent subsidy. The was not the case. However, in view of the additional provincial funding provided in the Homeless Initiatives Fund and the potential to redirect hostel funds, it may be possible to absorb this recommended $2 million reduction in the budget for hostel services. It should also be noted that discussions are still on-going with provincial officials to ascertain how the redirection of hostel funds can be used to fund existing non-bedded programs such as the Housing Contacts Program and the Adelaide Resource Centre for Women.

Impact of Provincial Announcements on the Implementation of the Recommendations of the Mayor's Homelessness Action Task Force:

The CAO's recommendations regarding the implementation of the Homelessness Action Task Force report ("Response to the Mayor's Homelessness Action Task Force Final Report: February 17, 1999) included the following impacts on the 1999 budget for the Shelter, Housing and Support Division.

(A)a $2.2 million expenditure for a hostel follow up program, to be funded through anticipated savings from a return to 80/20 cost sharing on hostel operations;

(B)$200,000 for a rent bank, to be funded through the City and Provincial Homelessness Initiatives Funds;

(C)$50,000 for a feasibility study for a 24 hour Homeless Services Information System, with funding from hostel savings; operating costs for the service were to be sought from Human Resources Development Canada (HRDC);

(D)$50,000 for a facilities audit of drop-ins with funds from hostel savings;

(E)$150,000 expenditure on community economic development (CED) initiatives, to be funded through the existing Municipal Grants and Homeless Initiatives Fund budgets.

As previously indicated, there have been no announcements from the provincial government in response to recommendations to provide full 80 percent funding for Toronto's hostels. However, a preliminary analysis of the recent provincial announcements suggests that the funds that will be made available from the programs that have been announced will be sufficient to implement the proposed initiatives.

It should also be noted that Human Resources Development Canada (HRDC) has already committed funds to Community Information Toronto to develop the 24-hour Homeless Service Information System.

Conclusion:

The provincial government has not yet released detailed information related to the new initiatives to allow a full analysis of their impact on the City. These changes are not, however, expected to impact on the 1999 budget for the Shelter, Housing and Support Division.

Contact Name:

Joanne Campbell

Tel: (416) 392-7885

Fax: (416) 392-0548

Commissioner of CommunityChief Financial Officer and Treasurer

and Neighbourhood Services