TORONTO – A new housing tax increase is looming over the city of Toronto. The percentage of the increase is also looming: 3%. The news was first aired directly by Toronto’s Mayor, Olivia Chow. The reason: the need to fill the gap in housing funding from the provincial and federal governments. 

According to Mayor Chow, Ontario will allocate less than $8 million to Toronto next year under the Canada-Ontario Housing Benefit (COHB), a figure far below the nearly $20 million the City received in 2025. “This means the single most effective tool to free up shelter spaces, to take people off the streets and into homes, are being undermined by other levels of government because they’re not stepping up” Chow said. The COHB subsidizes rent, allowing those in shelters to move more quickly into rental housing and free up space in the shelter system.

This reduction comes on top of the federal government’s latest offer of shelter funding, which leaves the city $107 million short of this year’s needs. “We can either stop sheltering refugee claimants, leave them on the street, which would love homelessness worse … or Torontonians will have to pay for it through their property taxes. Neither is fair” Chow explained.

The Mayor says that Toronto will have a total deficit of approximately $153 million next year due to these cuts and estimates that a property tax increase of approximately 3% would be needed to fill the gap, although she and the City’s budget director emphasize that they want to avoid this and would prefer action from both levels of government.

A couple of responses, however, have already arrived. And they are negative. The Office of the Minister of Municipal Affairs and Housing told CityNews that “Funding from the province, through the Canada-Ontario Housing Benefit, including Toronto, is calculated each year, through the standard formula – that formula is unchanged, and our investment remains whole” and Ottawa, in turn, claims its funding reflects the lower number of refugees arriving. In short: the usual buck-passing. City tax increases on the way?

In the pic above: Toronto Mayor Olivia Chow, in a screenshot from a video on her Twitter page X – @MayorOliviaChow