Toronto could spend $68M to house refugees in hotel — weeks after scathing AG report on shelter costs

City of Toronto staff have unveiled a plan to lease a North York hotel for more than $68 million and convert it into a temporary home for refugees — just weeks after an auditor's report slammed the city's handling of contracts with local hotels it uses as shelters.

Coun. John Filion, who represents the area and is also vice chair of the city's audit committee, said he only found out about the plan to lease the 17-storey Hotel Novotel from city staff less than two weeks ago. Even so, he said he's committed to ensuring the red flags pointed out by Auditor General Beverly Romeo-Beehler last month are addressed.

"I'm all over the contract," said Filion, who represents Ward 18, Willowdale. "I want to know everything that's going on here."

In her report to June's meeting of the audit committee, Romeo-Beehler said the city spent $13 million over two years "for charges not in accordance with the express terms of the contract — enough to pay for about 52,000 room nights, meals and wraparound support services for an entire year." She also points to "$2-3 million" the city paid for rooms that were never used.

By sheltering about 700 refugees starting in September, staff are hoping the Novotel, at Yonge Street and Park Home Avenue, will help the city cope with a surge in claimants this year. In September of last year, the city housed 507 refugees. Now that number is closer to 1,700, according to a report on the plan that went to the city's government and licensing committee earlier this week. And that number, city spokesperson Brad Ross said, is climbing at a rate of about 55 people a week.

World events, like the war in Ukraine, and the lifting of most pandemic-related travel restrictions this year are fuelling the surge, staff say in the report. But it's not yet clear exactly what countries the refugees will be coming from.

Ross said the Novotel deal, which goes to council for final approval later this month, will be supervised in a way that will ensure the city doesn't end up on the hook for costs that aren't spelled out in the contract..

He said in the past, multiple city departments dealt with different aspects of each contract flagged by the auditor. From now on, though, the city's shelter support and hosing department will concentrate solely on caring for the needs of the individual refugee families. It will leave the corporate real estate department to negotiate and monitor the contract and billing, Ross said.

"Separating those out will be an important step in ensuring that there aren't things like overbilling, for example, and that the contract and the lease is being as efficiently managed as possible," Ross told CBC Toronto.

 "And that when there are anomalies that the real estate team is focused on that piece, while our shelter and support team is focused on the people piece."

At Monday's meeting of the government and licensing committee, Filion also introduced other measures that, he says, will ensure that past mistakes are not repeated.

He's calling on staff to come back with a figure lower than the current lease estimate — $68.5 million over five years. He says savings can be found with a  less expensive catering.and changing the current draft contract so that the city won't be on the hook for rooms that are not used.

Filion, who is not running for re-election in the fall, has also called on staff to meet regularly with the local councillor to discuss any issues with the housing plan.

Although both Ross and Filion said they expect the federal government to step up and foot at least some of the bill for the Novotel deal, it's not yet clear what the extent of that commitment will be.