Canada has spent more than $1.1 billion since 2017 on hotel accommodations for asylum seekers, a temporary solution that was never meant to become the norm. This expense comes in addition to $1.5 billion in federal transfers to provinces and municipalities under the Interim Housing Assistance Program (IHAP), a stopgap created to help local governments deal with the sharp rise in refugee claimants.
According to Immigration, Refugees and Citizenship Canada (IRCC), the country has seen a dramatic spike in asylum claims, from 50,365 in 2017 to over 173,000 in 2024. Ontario and Quebec continue to receive the largest share of newcomers, with Toronto, Peel Region, and Montreal facing the heaviest pressures.
In response to overwhelmed shelters, Ottawa began directly managing hotel stays in 2017. Today, it continues to cover room and board for around 500 asylum seekers in five hotels across Ontario and Quebec. Although daily costs have dropped to an average of $132 per claimant, they once reached $205 per night during peak periods in 2023, when IRCC had contracts with 46 hotels nationwide.
An internal IRCC briefing prepared earlier this year revealed the federal government is maintaining roughly 3,500 beds for emergency use, even as the number of housed claimants has decreased since March. Ottawa has also earmarked $66.6 million to sustain hotel operations through September 2025, though officials admit the program is not economically viable long-term.
“Hotels were always intended as a temporary support for overburdened shelter systems,” said Isabelle Dubois, spokesperson for IRCC. “Claimants receive guidance to find housing, work, education, and other supports and are expected to transition to independent living as soon as possible.”
To address concerns from provinces and municipalities, the federal government introduced IHAP in 2019. It has since become a major funding stream for cities struggling with asylum-related housing costs. The 2024 federal budget added $1.1 billion over three years to the program, with a renewed focus on affordable housing.
The City of Toronto, which faced public scrutiny last year after asylum seekers were left sleeping outside shelters, has received $669.7 million in federal funding since 2017. Quebec has been allocated $542.7 million, while Peel Region, now home to Canada’s largest reception centre for asylum seekers near Toronto Pearson Airport, has received nearly $98 million. The Peel facility, funded with over $22 million from IHAP, has space for 680 residents.
The City of Ottawa, meanwhile, has spent $54.7 million this year alone on asylum-related housing, almost all of which, $51.9 million, came through IHAP. Local spending has included hotel and motel rooms, shelters, and short-term housing leases.
Still, critics say the approach is unsustainable. Jenny Kwan, NDP immigration critic, argues that the federal government must shift its focus away from costly hotel rentals and invest in long-term, community-based housing strategies.
Meanwhile, the Liberals are pushing Bill C-2, which proposes tighter restrictions on who can make asylum claims, including limits for those who crossed the U.S.-Canada border irregularly or have been in the country longer than a year. If passed, the bill could significantly curb future demand for emergency housing support.
As pressures mount, the federal government continues to walk a fine line between humanitarian responsibility and fiscal constraint, a challenge unlikely to disappear anytime soon.
