Municipalities Under Pressure One Year Later: An Update on the Human and Financial Cost of Ontario’s Homelessness Crisis
Municipalities Under Pressure was published in January 2025 to establish a province-wide baseline of homelessness in Ontario using data from 2016 to 2024. The report showed that homelessness was rising faster than housing and homelessness-serving systems could respond, even as municipalities increased funding and expanded services, and identified the need for sustained investment in housing supply, prevention, supportive housing, and exit capacity, a need that remains today.
Since the release of that report, the socioeconomic environment and policy priorities at both the provincial and federal levels have changed, while housing affordability pressures, economic risks, and fiscal constraints remain elevated and continue to pose significant challenges, despite some easing from recent peak conditions(OECD, 2025; Bank of Canada, 2025).
More people are experiencing prolonged periods without housing, affecting community health, safety, and stability, while municipalities face growing operational, financial, and service-delivery pressures. These pressures reflect not only rising demand, but persistent limits in housing availability and exit capacity across the system.
With the addition of 2025 data, this update builds on the 2024 findings and provides an opportunity to step back from a period of rapid change following the pandemic and consider what options exist to reverse homelessness when housing and support capacity remains constrained and fiscal conditions are tightening.
This report provides updated estimates of homelessness in Ontario, examines chronic homelessness, community housing waitlists, and housing and homelessness funding and expenditures, and presents projections of homelessness to 2035.
1. Homelessness increased in 2025.
In 2025, an estimated 84,973 people experienced known homelessness in Ontario, a 7.8% increase (6,171 people) from 2024, an increase that followed several consecutive years of growth.
While the rate of growth has moderated compared to the peak between 2021 and 2023, this past year’s increase confirms that homelessness has not yet stabilized or decreased.
2. Homelessness growth accelerated sharply after 2021 and has not been reversed.
Between 2016 and 2020, known homelessness in Ontario increased gradually, by approximately 6.3% over four years. From 2021 to 2025, known homelessness increased by approximately 49.1%.
This acceleration coincides with the COVID-19 pandemic period. Homelessness has not returned to pre-2020 levels, even as housing and homelessness funding increased and services expanded. This indicates that the availability of housing and supports has not kept pace with the scale or persistence of homelessness following the pandemic.
3. Homelessness is growing fastest in northern communities.
Homelessness is increasing more rapidly in Northern Ontario than elsewhere in the province. From 2024 to 2025, known homelessness in Northern Ontario increased by 37.3%. Since 2021, homelessness in the north has increased by approximately 117.5%, compared to 49.1% provincially over the same period. Northern communities, which account for approximately 5% of Ontario’s total population, now account for nearly 10% of all known homelessness.
4. Homelessness is also increasing rapidly in mostly rural communities.
Homelessness growth is also significantly higher in mostly rural Service Manager areas than the provincial average. In 2025, known homelessness in mostly rural communities increased by approximately 31.0% from 2024, compared to 7.8% provincially. Communities with a mix of rural and urban characteristics experienced growth of approximately 15.1% over the same period.
5. Indigenous people are significantly overrepresented among people experiencing homelessness.
Indigenous people in Ontario remain significantly overrepresented among those experiencing homelessness. Representing approximately 2.9% of the population (Statistics Canada, 2022), they account for an estimated 13.2% of people experiencing homelessness province-wide and 40.7% in northern communities.
The number of Indigenous people experiencing homelessness reported by Service Managers increased from approximately 6,100 in 2021 to over 11,000 in 2025. As homelessness grows, structural inequities, including racism and discrimination that drive the overrepresentation of Indigenous people are reproduced at a larger scale (Thistle, 2017).
6. Encampments exist in most areas of Ontario in 2025.
Forty-two of 47 Service Managers reported at least one encampment, with nearly 2,000 site-based encampments estimated across the province. Most encampments are small, typically involving fewer than 10 people per site.
Service Manager reporting indicates that enforcement and site-management activities tend to change where encampments are located and how visible they are, often resulting in movement into vehicles, more hidden locations, or smaller, short-lived sites, rather than reducing the number of people experiencing homelessness.
7. Lack of housing is increasing the duration and chronicity of homelessness.
In 2025, an estimated 45,111 people were experiencing chronic homelessness, representing 53% of all known homelessness in Ontario. Growth in chronic homelessness in-part reflects the limited availability of appropriate and affordable housing, with many people cycling through shelters, temporary accommodations, and other emergency responses because there are few options to exit into stable housing.
Homelessness in Ontario is increasingly characterized by conditions consistent with high inflow into homelessness and limited exit capacity, particularly limited access to affordable housing options that support timely exits.
In 2025, the community housing (RGI) waitlist reached an estimated 301,340 households, with an average wait time of 65 months and some households waiting more than 16 years. While RGI serves a broader population beyond people experiencing homelessness, these wait times point to limited system capacity to support exits from homelessness. As a result, more people remain homeless for longer periods.
In 2025, an estimated 45,111 people were experiencing chronic homelessness, representing 53% of all known homelessness in Ontario. Growth in chronic homelessness is consistent with an imbalance between the number of people entering homelessness and the availability of affordable housing options to support exits, with many people cycling through shelters, temporary accommodations, and other emergency responses because there are few options to exit into stable housing.
8. Housing and homelessness funding has increased, but homelessness grows faster.
Public funding for housing and homelessness in Ontario has increased substantially while homelessness continues to rise. In 2025, combined housing and homelessness funding is estimated at just over $4.0 billion, more than double the level reported in 2018. However, while the number of people experiencing homelessness increased by 49.1% between 2021 and 2025, total funding increased by 32.1% over the same period, with municipal funding increasing by 48.2%.
Over the same period, program expenditures increased by 75.4% overall—rising by 88.0% for homelessness programs and 66.1% for housing programs—indicating that municipalities are increasingly absorbing the cost of managing higher and more persistent levels of homelessness through local service delivery.
Emergency shelters have remained the largest area of homelessness-related expenditure, increasing by 51.6% since 2021. Community housing has remained the largest area of housing program expenditure, but spending declined by 0.6% over the same period, highlighting limited growth in deeply affordable housing despite rising need.
9. Homelessness is projected to more than double by 2035.
Factoring in updated assumptions about economic conditions, housing affordability, population change, and related drivers, homelessness in Ontario is projected to continue increasing through 2035.
Under steady conditions, known homelessness is projected to reach approximately 177,000 people province-wide by 2035. Under an economic downturn scenario, projected homelessness exceeds 297,000 people.
In Northern Ontario, homelessness is projected to increase from current levels to approximately 16,900 people under steady conditions and to more than 27,500 people under a downturn scenario by 2035. This reflects an amplified version of the broader provincial trend, with homelessness in the north growing much faster than funding and system capacity because of a lack of housing and limited service infrastructure.
10. Post-pandemic homelessness appears increasingly difficult to reverse.
The projections in this report show homelessness continuing to increase through 2035 under all modelled conditions. Observed trends since 2021 indicate that after homelessness rose above pre-pandemic levels, it did not return to those earlier levels, even after emergency responses expanded and short-term crisis conditions eased. Under current conditions, the system has not demonstrated the ability to reduce overall homelessness after increases occur.
With access to permanent housing constrained, more people remain unhoused for longer periods and spend extended time within homelessness-serving systems. This sustains pressure on services and increases costs over time.
Taken together, these trends indicate that homelessness in Ontario is not a temporary crisis. Instead, growth is being sustained by ongoing system conditions that affect how many people enter homelessness, how long they remain unhoused, and whether sufficient housing capacity exists to support exits at scale.
Key implications and direction.
Public spending has grown, yet homelessness continues to rise, indicating that existing approaches are not consistently translating into improved outcomes at the scale required.
Much of the effort has focused on managing crises. This is necessary to address immediate harm, but it does not prevent or support timely access to affordable and appropriate housing. As a result, spending is often directed toward stabilizing conditions as needs arise, requiring increasing investment.
Homelessness does not occur within a single program, ministry, or level of government. It is shaped by how housing, healthcare, income supports, justice, child welfare, education, and other systems operate and interact over time. Outcomes depend on how these systems are designed, coordinated, sequenced, and governed across ministries and levels of government. Treating homelessness as an outcome produced across systems, rather than as a challenge to be managed within a single policy or program, is essential to reducing homelessness and limiting costs.
Because pressures move between systems, progress depends on a whole-of-government approach, rather than isolated action. Decisions made in one system can either increase or reduce homelessness pressures elsewhere. A coordinated, whole-of-government approach—operating horizontally across provincial services and mandates delivered through Service Managers, and vertically through federal, provincial, and municipal systems—helps ensure that effort in one area supports outcomes in another. This requires reconsidering how social spending is planned, targeted, and evaluated, based on outcomes across systems.
Yet, housing availability remains a central constraint. Increasing the supply of housing, particularly deeply affordable housing, is essential to reducing homelessness and requires an expanded federal role, alongside provincial and municipal action.
The previous Municipalities Under Pressure report modelled two investment approaches:
a longer-term investment of approximately $11 billion over 10 years to achieve functional zero chronic homelessness, including capital investment to substantially expand deeply affordable and supportive housing, alongside ongoing operating funding for prevention, housing stability, and supports; or
a targeted near-term investment of approximately $2 billion to reduce acute pressures such as encampments and stabilize conditions while longer-term housing supply is developed.
These infrastructure investments remain needed to improve stability for individuals, families, and communities and reduce homelessness over the medium and long term.
At the same time, given the projected growth in homelessness and the persistence of underlying drivers, housing investment alone will not be sufficient. To be effective, investments must be paired with better integration of policy, data, activities, outcomes, accountability, and decision-making across ministries, mandates, and levels of government.
This integration is necessary to ensure that housing investments translate into sustained reductions in homelessness, do not shift pressures between systems, and support a response that remains affordable over time.
