Protecting Northern Ontario for 1.3 cents on the dollar: Housing and health integration to support a $34.6 billion economy

This report examines how housing investment, when delivered alongside targeted investment in health—specifically mental health and substance use supports—can better stabilize homelessness in Northern Ontario and support the conditions required to sustain the region’s economic base, with an effective investment of approximately $435 million per year, or about 1.3 cents on every dollar of Northern Ontario’s GDP.

Northern Ontario contributes an estimated $34.6 billion in annual GDP and is anchored by export-oriented resource industries (FedNor, 2025b). The region is also the focus of significant planned investment in critical minerals, clean energy, and advanced manufacturing (Ontario Ministry of Economic Development, Job Creation and Trade, 2025; Ontario Ministry of Finance, 2025). Sustaining this growth depends on housing availability and health infrastructure that support workforce stability.

Housing instability and unmet health needs have intensified rapidly across the region. Known homelessness increased from 5,930 people in 2024 to 8,142 in 2025, a one-year increase of 37.3% (Donaldson et al., 2026a), reflecting limited housing supply, high construction and operating costs, and shortages of deeply affordable and supportive housing (CMHC, 2021; Parsons, 2022). Within these constraints, Indigenous people are disproportionately affected due to persistent gaps in Indigenous-led, culturally appropriate housing and support (OAHS, 2025).

As homelessness grows, pressure increasingly concentrates in emergency and institutional systems. Northern Ontario experiences mental health- and substance use-related emergency department visit rates two to four times higher than provincial averages, alongside higher rates of substance-related harms (IC/ES, 2025; Public Health Ontario, 2025). These responses are necessary, but they are costly and limited in their ability to support long-term housing stability.

The analysis that follows examines how these housing and health pressures are expected to evolve over time, and how different investment approaches influence future outcomes.

Homelessness projections

This report examines how different investment approaches perform over time under Northern Ontario conditions, using homelessness projections and scenario modelling from Municipalities Under Pressure: One Year Later (Donaldson et al., 2026a). These projections are driven by housing affordability pressures, income instability, and limited exits into permanent housing. 

Under a steady economic scenario, homelessness in Northern Ontario is projected to more than double, from 8,142 in 2025 to 16,900 in 2035. 

Under weaker economic conditions, projected homelessness will exceed 27,500 people by 2035. At this scale, housing and health instability would place significant pressure on workforce stability and economic productivity, while families and communities experience preventable harm.

Investment scenarios

This analysis builds on Municipalities Under Pressure (2025, 2026), which identified the scale of housing investment required to reduce homelessness across Ontario—approximately $11 billion over 10 years.

This report focuses specifically on Northern Ontario and examines how housing investment performs when it is delivered alongside dedicated funding for community-based mental health and addictions services.

One scenario involves investments of around $2.0 billion over 10 years, with a focus on high-acuity situations, including intensive housing and treatment for people with the most complex needs, such as treatment- and recovery-focused models including Homelessness and Addiction Recovery Treatment (HART) Hubs.

Under this scenario, outcomes for the targeted population improve substantially, with high-acuity homelessness declining sharply over time. This approach helps a small, high-acuity group and supports community well-being, but on its own is not enough to materially change overall homelessness, because it does not create enough pathways into stable housing for the broader population.

A second scenario includes integrated housing and health investments of around $5.1 billion over 10 years, combining housing capital, operating funding for mental-health and substance-use supports, and sustained prevention.

With this scenario, homelessness continues to grow in the early years, but as housing capacity and prevention programs take effect, homelessness inflows and outflows begin to balance. By 2035, total homelessness declines to approximately 3,770 people, representing a 78% reduction relative to the status quo projection.

A third scenario involves integrated investment with stronger support of around $4.36 billion over 10 years, and delivers fewer housing units but higher levels of mental-health and substance-use support across the housing continuum.

This scenario provides improved housing stability and reduces returns to homelessness. As a result, exits from homelessness exceed entries sooner than under the second scenario. By 2035, homelessness declines to approximately 3,680 people, with comparable outcomes to the second scenario and around 15% less total investment.

Social infrastructure as economic infrastructure

Northern Ontario’s economic performance depends on whether communities can support and retain the workforce required to deliver planned and ongoing investment. Housing availability and health infrastructure shape whether economic activity can be sustained under Northern Ontario conditions.

The modelling shows that outcomes are driven not only by the scale of housing investment, but by whether housing is delivered alongside sufficient operating funding, homelessness prevention, and access to mental health and substance use services. Where these elements are aligned, housing stability improves, returns to homelessness decline, and pressure on emergency and institutional systems eases sooner, allowing communities to stabilize earlier.

From an economic perspective, integration protects the performance of existing and future investment. Capital invested in housing, infrastructure, and resource development delivers stronger and more durable returns when communities can house and support the people needed to operate them. Where housing and health systems are not aligned, pressures persist despite significant investment, constraining workforce participation.

Under the most effective scenarios, achieving this level of integration requires an average annual investment of approximately $435 million, equivalent to about 1.3 cents on every dollar of Northern Ontario’s $34.6 billion annual GDP. This level of investment is proportionate to the scale of the regional economy and reflects the operating capacity needed to protect its economic base.

Housing and health infrastructure function as economic infrastructure in Northern Ontario. Aligning housing supply with health infrastructure, including mental health and substance use services, is a condition for sustaining growth and ensuring that public investment delivers durable returns.