Peel’s emergency shelter overflow costs balloon to over $50 million 

With winter’s arrival hundreds of people across Peel Region without a roof over their head now find themselves in considerable danger. 

An overflowing shelter system, and botched plans for a new centre to offer widespread services for asylum claimants has forced many to live in temporary encampments which the Doug Ford PC government has moved to eradicate. 

Peel now has no other option but to pour millions of dollars into hotel spaces to house the growing number of people across the region in need of overnight or other short-term relief, to avoid sleeping on the streets. 

The collective amount Peel is allocating for these shelter overflow services has nearly doubled since projections outlined in 2023, to $50.2 million for a one-year period, according to a  December report by staff. This includes increases to existing contracts in the amount of approximately $8 million for M6 Argentia Hospitality Inc. and $7.8 million for M6 Brampton Hospitality Inc., bringing their total contracts to $14.8 million and $20.8 million respectively. Service providers are also receiving increased funding with $4.35 million more for The Salvation Army (serving adult singles), $2.97 million for Services and Housing in the Province (SHIP) to support family shelter spaces and $2 million for Our Place Peel to accommodate youth. Approximately $76,600 is being provided to OWO Management Inc. for maintenance services outside these overflow hotels. The additional funding for all of these service providers will extend their services throughout all of 2025. 

The staff report indicates these costs are placing “significant pressure” on the Region’s budget, and the increasing demand could drive an operating deficit in 2025. While federal grant funding for housing is expected to help with some of these costs, the Region and its taxpayers will be on the hook for a large portion of it. 

The Region of Peel currently has a contract in place with six hotels to support homeless individuals when the shelter systems are over capacity. According to the staff report, Peel is burdened with an average cost of $141 per night for each hotel room used as an emergency overflow shelter space. 

Peel provides 520 shelter beds through seven facilities, including Wilkinson, Cawthra, Dundas, Brampton Queen Street Youth, and Surveyor Shelters, as well as the Mississauga Youth Shelter and Ellen House.

With mounting capacity demands at emergency shelters—the system has been as much as 400 percent overcapacity during the last year—the beds and services are insufficient to address the worsening crisis, forcing the Region to rely on overflow hotels and third-party vendors.

Steve Jacques, Peel’s Commissioner of Human Services, explained to council last month that staff are exploring hotel acquisitions, shelter site expansions and increased capacity at existing facilities as feasible solutions due to community resistance to new shelter sites, with Brampton identified as a priority for a new family shelter.

"We've hired a consultant to look at our existing shelter sites to see what the density and capacity to expand those are and improve the number of services and beds that can be housed on those units as part of the strategy," he said. “Because it's always easier to expand the site that's already in existence, as opposed to finding a new site, due to the high level of nimbyism that occurs when you talk about anything around social services or hubs."

"Brampton, in particular, needs a new family shelter to meet growing demand," Jacques said.

Aileen Baird, Peel’s Director of Housing Services, acknowledged that hotels are an expensive and unsustainable method for mitigating the homelessness crisis, and noted staff are implementing other strategies to house vulnerable individuals.

"We've talked about this a lot around this table. There's no silver bullet to this problem, and so we really are implementing a number of strategies to try to get to better, more cost-effective solutions," she said, noting the 2026 budget includes measures to bolster programs to assist people with keeping their existing housing. "That starts, actually, with preventing homelessness in the first place, and so we do have a program to prevent eviction, to support families, to stop them from becoming homeless."

Baird said that homeless overflow is primarily driven by families, with efforts focused on expanding capacity at the Surveyor shelter and exploring a new family shelter in Brampton, which is currently unfunded. She highlighted plans for hotel acquisitions or new site development as part of the region’s Housing Master Plan and noted that subsidies have been increased to assist homeless families in transitioning from shelters to permanent housing more quickly.

"But we also have in our housing master plan a second family shelter site in Brampton. It's currently unfunded, but we're exploring how we might be able to move that forward. It's not in our 10-year capital plan," she told council members.

"As we prepare for 2026, we're getting ready to have that conversation with our CFO, our executive leadership team, and the council, and we could do that through a hotel acquisition or trying to build on a new site."

Peel expanded community housing with six projects in 2024, adding 381 units as part of a broader strategy to prioritize cost-effective, sustainable housing solutions over emergency measures.

Peel has relied heavily on hotels to accommodate the growing number of asylum claimants seeking shelter in the region.

(Alexis Wright/The Pointer files)

The December staff report indicated that while the region of Peel relies on six hotels to accommodate the needs of homeless individuals by providing them with overflow shelter spaces, excluding those used for asylum responses, this approach reflects a growing dependence on temporary accommodations amid an overburdened shelter system. Past reports have revealed alarming capacity issues, with shelter occupancy reaching 383 percent, forcing the Region to explore alternative solutions like dorm-style facilities and push for federal funding.

In a startling revelation at the start of last year, a staff report titled "Asylum Claimant Response" released by Sean Baird, who served as head of Human Services at the time, highlighted alarming statistics concerning the Peel shelter system. As of February 4, 2024, the report indicated that approximately 1,529 asylum claimants were living in the emergency shelter system. They accounted for 72 percent of the available shelter and overflow hotel beds in Peel, raising significant concerns about the region's ability to accommodate its most vulnerable residents.

The report indicated that, historically, asylum claimants represented only 5 percent of the shelter population in Peel. However, in 2023, due to escalating global conflicts and crises, Peel, like some other municipalities throughout Ontario, experienced an unprecedented increase, with asylum claimants accounting for more than 70 percent of the shelter population at that time. By October 2024, according to a staff report, the Region had managed to transition 78 percent of more than 1,000 asylum claimants in Peel into overflow hotel spaces, the remaining 22 percent were being housed at the Leanne Shelter. 

Due to the scarcity of space in Peel’s shelter system, the crisis turned tragic in November 2023, when an asylum seeker died while staying in an encampment right outside Dundas Shelter in Mississauga. Overcrowding had forced the individual to seek refuge in freezing conditions, as the shelter system in the region was operating at more than 350 percent of its capacity. Another similar heart-wrenching tragedy happened in February 2024, when a Kenyan woman, Delphina Ngigi, died outside the Mississauga shelter after she was told that there was no space left. After six hours passed, she was allowed to spend a night in a lobby, where she unfortunately collapsed. The cause of death of both casualties was unexplained by officials. Both incidents showed the dire consequences of an overburdened shelter network and inadequate funding to address Peel’s growing housing crisis.  

In January 2024, under the federal government’s Interim Housing Assistance Program (IHAP), Marc Miller, the Minister of Immigration, Refugees and Citizenship Canada (IRCC), announced the allocation of $362.4 million in funding for the 2023-2024 fiscal year. The funding would be distributed to provinces and municipalities on a cost-sharing basis to alleviate the significant housing pressures arising from the increased volume of asylum claimants.

The IRCC indicated that this amount is supplementary to the $212 million provided in July 2023 under the IHAP, which was extended through March 2024.

In late October last year, The Pointer reported that Ottawa planned to release $1.1 billion over three years, starting in 2024-2025, to the IRCC to extend the IHAP program as part of the federal government's 2024 budget plan. However, the federal government stated that to find a long-term solution for the increasing number of asylum claimants arriving in Canada, funding by 2026-2027 will be conditional on investments from provincial and municipal governments in permanent transitional housing solutions for asylum seekers.

Similar to the federal government, the Province announced on December 12, that it will invest $75 million to support long-term housing and temporary accommodations for individuals living in encampments, after its moves to get rid of tent communities in municipalities across Ontario. This investment includes $5.5 million allocated to the Canada-Ontario Housing Benefit, aimed at increasing emergency shelter space. The funding will help individuals currently in shelters transition to long-term housing, freeing up emergency shelter spots for those in encampments; $20 million to expand shelter capacity with modular units and climate-controlled spaces; and $50 million for near-completion affordable housing projects to accelerate their openings.

Christina Early, a Caledon and Peel Region Councillor, questioned Peel staff during the December 12 meeting about the provincial and federal financing.

"My question is, and maybe I've missed it, but what funding do we get from the province or the federal government?" she inquired.

Christina Early, Caledon and Peel Councillor, asked Peel staff about external funding from senior levels of government to tackle the homeless crisis.

(Peel Region)

"This is a huge issue, and it feels like we're shouldering it on our own, like, what kind of funding are we getting?"

Baird responded that Peel is shouldering the vast majority of the cost for housing services in Peel, including long-term subsidized accommodations which account for the bulk of the Region's overall investments into its housing and shelter system, with 80 percent of the operating budget funded locally. Federal and provincial contributions cover less than a quarter of what’s needed. She added that currently Peel is meeting just 20 percent of its community's need for these critical supports, and without proper funding from the two senior levels of government, the Region simply doesn't have the resources to keep up.

"We're constantly saying we are maybe meeting about 20 percent of our communities' need for these types of supports. So it's a very important part of our story, the fact that we just don't have the resources from the appropriate level of government, which is the federal and provincial government, to deal with this problem in our community."

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