Losing millions in federal funding forces rethink of London’s homelessness strategy even as number of unhoused Londoners growing

The number of Londoners experiencing homelessness continues to climb each year, so a looming reduction in federal funding is forcing city hall to rethink its approach.

On March 31, 2026 the federal government will stop providing the City of London with $4.2 million from the Unsheltered Homeless Encampment Initiative (UHEI) and the Emergency Treatment Fund (ETF) when the programs expire.

A report to the Community and Protective Services (CAPS) Committee warns, “While additional municipal investment to support continued emergency shelter supports are added, beginning in 2026–2027, the HSS (Housing Stability Services) system will experience a [net] decrease of approximately $2.3 million in available resources.”

The expiry of the federal funding will reduce the annual budget for Housing Stability Services (HSS) to $44.1 million.

Most of the funds are deployed through partnerships with frontline agencies.

“We need to have the senior levels of government treating this issue seriously,” Deputy Mayor Shawn Lewis told members of the CAPS Committee on Monday.

He emphasized that the city must continue to lobby for appropriate funding, “I think that there is an advocacy piece that’s needed here. The city absolutely cannot just backfill because the federal government decides they’re going to back out some of their funding.”

City staff recommend a multi-year procurement framework that will evolve the homelessness response system into four interconnected areas.

The four interconnected areas

• Supports for those living unsheltered to move indoors
• Emergency Shelters and Hubs
• Highly Supportive, Transitional, and Other Supportive Affordable Housing
• Housing Supports (community housing, affordable rental, portable benefits)

The report explains, “To maintain stability during the transition, Civic Administration will extend existing service agreements for up to two years, enabling continuity of service while modernizing expectations.”

However, five frontline agencies that receive municipal funding sent a letter warning, “This procurement framework maintains existing services at effectively a reduced level of support against increasing costs.”

The letter is co-signed by the leaders of London Cares Homeless Response Services, Ark Aid Street Mission, Atlosha Family Healing Services, Unity Project for Relief of Homelessness, and 519 Pursuit.

“A two year extension of current agreements does not create stability; it prolongs uncertainty for service providers and the City itself,” the agencies write.

Their letter calls on city hall to lead, “a coordinated effort with community partners, the Province, and the Federal Government to secure the funding required.”

“We need to look at the impact on some of the broader spending across our community,” said Sarah Campbell, executive director of Ark Aid Street Mission. “My colleagues in this work, and certainly the board of Ark Aid Street Mission, wanted to make it very clear to you as councillors the challenge that’s before us all when we look at this reduction in funding.”

The number of people experiencing homelessness in London has grown by about 5 per cent each year, and by mid-2025 exceeded 2,000 individuals on the By-Name List.

The CAPS Committee unanimously supported the proposed framework (4-0).