Canada to End Hotel Funding for Asylum Seekers After $1.1B Spent

Canada 🇨🇦 has announced a major change in how it supports asylum seekers, with the government set to end funding for hotel rooms by September 30, 2025. This update affects thousands of people seeking protection in Canada 🇨🇦, as well as the provinces, cities, and organizations that help them. The shift comes after the federal government spent about $1.1 billion on hotel accommodations for asylum seekers since 2017. Here’s a detailed look at what’s changing, who is affected, what actions are required, and what this means for pending and future asylum applications.

Summary of What Changed

The most important change is that the Canadian federal government will stop paying for hotel rooms for asylum seekers after September 30, 2025. This marks the end of a policy that began in 2017, when a sharp rise in asylum claims led the government to use hotels as emergency housing. Over the years, this approach became very expensive and was never meant to be a permanent solution.

Instead, Canada 🇨🇦 is moving toward community-based housing, new reception centers, and other long-term options. The government is also changing how it funds provinces and cities, focusing on helping asylum seekers become more independent and better integrated into Canadian society.

Who Is Affected

This policy change affects several groups:

• Asylum seekers currently living in hotels: These individuals will need to find new housing, either in community programs, municipal shelters, or through government-supported relocation.
• Provinces and cities: Places like Ontario and Quebec, which have received the most asylum seekers, will see changes in how they get funding and support from the federal government.
• Other provinces: Newfoundland and Labrador and New Brunswick, for example, are preparing to receive more asylum seekers as part of a relocation program.
• Organizations and service providers: Groups that help asylum seekers with housing, legal support, and integration will need to adjust to the new system.
• Future asylum seekers: People planning to claim asylum in Canada 🇨🇦 after September 2025 will not have the option of federally funded hotel stays.

Effective Dates

• July 26, 2025: The government confirmed the end date for hotel funding.
• September 30, 2025: The last day the federal government will pay for hotel rooms for asylum seekers.
• 2024-2027: The new funding model for the Interim Housing Assistance Program (IHAP) will be in place, focusing on sustainable housing.

Required Actions

If you are an asylum seeker, service provider, or government partner, here’s what you need to do:

For Asylum Seekers Currently in Hotels:
– Prepare to move: You will receive a notice to vacate your hotel room. Start looking for community housing, shelters, or ask about relocation options.
– Contact local support services: Many cities have organizations that can help you find housing or connect you with programs funded by IHAP.
– Consider relocation: The government is offering voluntary relocation to provinces with more housing and job opportunities.

For Provinces and Municipalities:
– Plan for transition: Work with the federal government to shift from hotel-based housing to community-based solutions.
– Apply for IHAP funding: The new model allows for upfront funding, including money for building or improving reception centers and services that help asylum seekers become independent.

For Service Providers:
– Update your programs: Focus on helping asylum seekers find long-term housing and integrate into the community.
– Coordinate with government partners: Make sure you understand the new funding rules and how to access support for your clients.

For Pending and Future Asylum Applications:
– Understand the new housing rules: If you apply for asylum after September 2025, you will not be eligible for hotel accommodation funded by the federal government.
– Check for updates: The government may introduce more changes, especially if new laws about asylum eligibility are passed.

Background and Historical Context

Since 2017, Canada 🇨🇦 has faced a sharp increase in asylum claims, especially from people crossing the border irregularly. To handle this, the government set up the Interim Housing Assistance Program (IHAP), which reimbursed provinces and cities for the costs of housing asylum seekers. The most expensive part of this program was the use of hotels, with more than $1.1 billion spent on hotel rooms alone.

At the peak in late 2023, there were 46 hotels across the country being used to house asylum seekers, costing an average of $205 per night per person. Major cities like Toronto, Quebec City, and Ottawa received the most funding, with Toronto alone getting over $455 million.

However, experts and government officials agreed that hotels were only a temporary fix. They were expensive, did not help people settle into communities, and sometimes made it harder for asylum seekers to find work or access services.

Recent Developments and Policy Changes (2024-2025)

In Budget 2024, the government announced a new plan: it would spend another $1.1 billion over three years on IHAP, but this money would go toward more sustainable housing options. This includes:

• Upfront funding for provinces and cities, so they can build or improve reception centers and community housing.
• Support for services that help asylum seekers become independent, like job training and language classes.
• Relocation programs to move asylum seekers from crowded provinces like Ontario and Quebec to places with more housing and job opportunities, such as Newfoundland and Labrador and New Brunswick.

The government also started a needs-based case management approach. This means each asylum seeker’s situation is reviewed, and they are given help to find housing in the community. Notices to vacate hotel rooms are part of this strategy, encouraging people to move out and find more permanent homes. Since January 2024, over 13,000 people have left hotels as a result.

Current Status as of July 2025

As of March 14, 2025, only 1,474 asylum seekers were still living in hotels, down from tens of thousands at the peak. These remaining hotels are mostly in Quebec and Ontario. The government has now made it official: all hotel funding will end on September 30, 2025.

After that date, asylum seekers will need to use community-based housing, municipal shelters, or take part in relocation programs. The IHAP will continue to provide funding, but only for these more sustainable options.

Policy Implications and Practical Effects

This change is meant to:

• Save money: Hotel stays are very expensive. Moving to community housing and reception centers is cheaper in the long run.
• Help asylum seekers settle: Living in the community makes it easier for people to find jobs, go to school, and become part of Canadian society.
• Reduce pressure on big cities: By relocating asylum seekers to other provinces, the government hopes to ease the housing crisis in places like Toronto and Montreal.
• Encourage independence: The new system is designed to help asylum seekers find their own housing and become self-sufficient faster.

However, there are some challenges:

• Finding enough housing: Some cities already have housing shortages, so it may be hard for everyone to find a place to live.
• Financial barriers: Asylum seekers often have little money and may struggle to pay rent or deposits.
• Integration support: People moving to new provinces may need extra help to adjust, find work, and connect with local communities.

Related Legislative and Systemic Changes

On June 3, 2025, the government introduced a new bill in Parliament to tighten asylum eligibility. The bill would make it harder to claim asylum if you cross the border irregularly or wait more than a year after arriving in Canada 🇨🇦 to apply. If passed, this law could reduce the number of new asylum claims, which would also lower the demand for interim housing.

The government is also investing in modernizing the asylum system. This includes better technology and faster processing of claims, so people spend less time waiting in limbo.

Stakeholders and Official Positions

• Immigration, Refugees and Citizenship Canada (IRCC) is leading the transition away from hotels and toward community-based housing.
• Ontario and Quebec have been the main provinces affected by the surge in asylum seekers and are working closely with the federal government.
• Newfoundland and Labrador and New Brunswick are preparing to welcome more asylum seekers as part of the relocation plan.
• The Canadian Council for Refugees (CCR) has criticized the government for reducing immigration levels and making it harder for refugees and families to reunite.
• Government officials say the hotel program was always meant to be temporary, and the new approach is better for both asylum seekers and taxpayers.

Expert Analysis and Perspectives

Experts agree that while hotels provided quick shelter during emergencies, they were not a good long-term solution. Community-based housing and reception centers are seen as a better way to help asylum seekers settle and become part of Canadian society. However, this will only work if there is enough funding, good coordination between governments, and strong support services.

Some experts worry that the new asylum eligibility bill could make it harder for people in real need to get protection. There are also concerns that tighter rules could push more people to cross the border irregularly, which can be dangerous.

Future Outlook and Anticipated Developments

Looking ahead, the government will keep funding IHAP through 2027, with a focus on building new reception centers, supporting community partnerships, and helping asylum seekers become independent. The impact of these changes will be closely watched, especially to see if they help people find stable housing and integrate successfully.

The progress of the new asylum eligibility bill in Parliament will also be important. If it becomes law, it could change the number and type of people seeking asylum in Canada 🇨🇦, which would affect housing needs and support services.

The government may make more changes in the future, depending on how well the relocation programs and system modernization efforts work.

Practical Guidance and Next Steps

If you are an asylum seeker in Canada 🇨🇦:

• Start looking for community housing now if you are in a hotel. Ask local organizations for help.
• Consider relocation if offered. Some provinces have more housing and job opportunities.
• Stay informed about changes to asylum rules and housing programs by checking the official IRCC website.

If you are a service provider or government partner:

• Work with IRCC to understand the new funding model and how to access support for your clients.
• Help asylum seekers prepare for the transition by offering information, housing search assistance, and integration support.

If you are planning to apply for asylum:

• Be aware that hotel accommodation will not be available after September 30, 2025.
• Check for updates on eligibility rules, as new laws may affect your ability to make a claim.

Conclusion

The end of hotel funding for asylum seekers in Canada 🇨🇦 marks a big change in how the country supports people seeking protection. The government’s decision to stop spending on hotels—after more than $1.1 billion was used for this purpose—shows a move toward more sustainable, community-based solutions. While this change brings new opportunities for better integration and cost savings, it also creates challenges for those affected.

As reported by VisaVerge.com, the success of this transition will depend on strong coordination between all levels of government, enough funding for new housing options, and continued support for asylum seekers as they build new lives in Canada 🇨🇦. Everyone involved should stay informed, plan ahead, and work together to make this new approach work for all.

Learn Today

Interim Housing Assistance Program (IHAP) → A federal program that funds temporary and community housing support for asylum seekers in Canada.
Asylum seeker → A person seeking international protection in a country until their refugee status is determined.
Relocation program → A government initiative that transfers asylum seekers to provinces with more housing and job opportunities.
Eligibility bill → A proposed law in Canada to tighten rules for claiming asylum based on entry method and timing.
Community-based housing → Long-term housing solutions integrated within local communities rather than temporary shelters or hotels.

This Article in a Nutshell

Canada plans to stop funding hotels for asylum seekers by September 2025, shifting to sustainable community housing to improve integration and reduce costs effectively.
— By VisaVerge.com