Overview:
This is the first article in a series examining how people in Canada become homeless, why some never escape it, and what it will take to end it.
Last week, the federal government vowed to end homelessness in Canada within a decade.
“Homelessness is not inevitable,” says the 2026 Budget, which pledges $29 billion in new funding to achieve this goal.
“It is the result of gaps across housing, health, mental health, addictions, and social support systems.”
Much of this new funding will go towards building supportive and transitional housing and mental health and addictions facilities.
Experts say these investments are important, but Ottawa is underfunding one of the most effective tools for helping people avoid or escape homelessness: money to pay rent.
“More funding for the Canada Housing Benefit would have been a better investment and more evidence-based,” said Dr. Stephen Hwang, a researcher at Unity Health Toronto and Canada Research Chair in Homelessness, Housing, and Health.
“We know that a rent subsidy from the Canada Housing Benefit paired with supports can end chronic homelessness.”
‘Playing ball’
About 65,000 people experienced homelessness on a given night last year across 75 Canadian communities — up about 60 per cent since 2022, according to a federal Point-in-Time count.
But that snapshot misses many people “because there’s inflows and outflows,” says Alexi White, director of systems change at the anti-poverty organization Maytree.
A study by the Association of Municipalities of Ontario found about 85,000 Ontarians experienced homelessness in 2025. Extrapolating nationally, White estimates the true figure could be as high as 170,000 throughout the year.
The budget proposes $11.2 billion over four years starting in 2027-28, plus $17.8 billion in future years, to end homelessness within 10 years.
Of this, about $12 billion renews funding for existing programs. These include Reaching Home, the main federal homelessness program, the Veterans Homelessness Program, and the Canada Housing Benefit, which provides monthly rental assistance to low-income households.
Another $10 billion would build new supportive and transitional housing through the housing agency Build Canada Homes.
Separately, $5 billion would go to projects that combine housing with health and social services, and $2 billion would build community mental health and addictions facilities.
Ottawa will fund the construction, while provinces and territories are expected to cover the services, including staff, health and social services.
White says the plan hinges on the provinces and territories “com[ing] to the table with operating dollars.”
“The big question … is whether the provinces and territories will play ball,” he said.
Hwang, of Unity Health Toronto, says significant support will be required to keep people housed.
“It’s very difficult to transition people from being on the street to being in housing stably, unless you have intensive supports,” said Hwang.
Without such supports, the units are likely to go to people with relatively few mental health or substance use issues, he says.
White points to Manitoba as a positive early sign.
The day after the budget’s release, Prime Minister Mark Carney joined Manitoba Premier Wab Kinew, Winnipeg Mayor Scott Gillingham and Indigenous leaders in Winnipeg to announce plans for 2,000 new homes and a new mental health and addictions centre, with $1 billion in federal funding.
“It’s the first time in our country’s history where every level of government has come together to tackle homelessness, including First Nations and Métis governments,” Kinew reportedly said at the announcement.
Manitoba has committed $84 million annually for operations and maintenance to support the initiative.
“[In an] ideal world, every single province is like that,” said White.
Visible homelessness
The budget’s commitment to funding mental health and addictions facilities reflects an emphasis on ending the most visible forms of homelessness.
But this is only part of the problem, sources say.
“The visible homelessness we see is often heavily correlated with some of the most difficult cases and people who are struggling most and need more of that support,” White said.
That can create an incorrect “perception … of this one-to-one link between substance use or mental health challenges and visible homelessness,” he said, noting many people in fact simply struggle to afford rent.
Hwang agrees. “For every person on the street, there’s 10 people in a shelter who really just … need affordable housing,” he said.
Both White and Hwang say the most underused tool for addressing homelessness is simply helping people pay rent.
Federal Point-in-Time count surveys have asked people experiencing homelessness why they lost their housing.
“The number one reason that people report is that they don’t have enough money to pay rent,” White said.
When the government asked people who escaped homelessness how they got out, “the number one response there is, ‘I got more money’,” he said.
The Canada Housing Benefit, launched in 2020, provides rent assistance to low-income households.
Ottawa splits the cost of the program evenly with the provinces and territories, which each set their own eligibility rules and administer the payments.
Nationally, the average assistance was $187 a month. As of September 2025, the benefit had helped about 349,000 households since its launch.
Budget 2026 proposes renewing the benefit for another 10 years, but not expanding it.
Hwang calls this “the one major flaw in the plan.”
The budget does offer other affordability measures. Most notably, it expands the Canada Groceries and Essentials Benefit to give single adults up to $339 more next year, and couples with two children up to $679 more.
But because the benefit goes to 12 million Canadians, each person gets relatively little, says White.
“If we were to really target low-income renters, we could provide them with something closer to $1,200 a year instead of $300,” he said.
“That [amount] could actually keep people housed.”
Hwang says the budget’s emphasis on transitional housing is not the most effective use of funding.
“As the name suggests, [transitional housing] purchases a time-limited benefit, but not a durable one,” he said.
For White, a key concern is that the budget does not say how many of the homes planned will be supportive or transitional.
It is impossible to gauge the funding’s potential impact without details on how many new homes will be deeply affordable and suitable for people experiencing homelessness, he says.
“They don’t separate it into supportive and transitional versus generally non-market,” he said. The budget separately commits to building 200,000 non-market homes over the next decade.
Still, Hwang sees the budget as progress.
“It’s a wonderful step forward,” he said.
“It’s not enough to solve the problem completely, but it is really commendable and encouraging that we’re making a big step in the right direction.”
