Hamilton's outdoor shelter costs balloon $5.1 million over budget
Hamilton's first outdoor shelter is $5.1 million over budget.
Capital costs have almost tripled from what city staff first pitched and council approved last September — from $2.8 million to $7.9 million, says a report to council's general issues committee Wednesday.
Staff revealed in the report there's been a number of issues with site contamination and the 40 tiny homes, which were delivered not up to code. These issues drove up costs for a project already plagued with controversial decisions and delays.
"I have to say, I was shocked by everything that occurred, sincerely," Coun. Brad Clark told staff. "I could not believe this has happened in the manner it did and we had a full slate of people involved in this process."
North-end resident Kelly Oucharek, who's been opposed to the outdoor shelter's location from the start, delegated to councillors wearing a shirt that said, "If I had $5.1 million" — a play off the Barenaked Ladies song, If I Had $1000000.
"I along with many Hamiltonians are dismayed this project is 300 per cent over budget," said Oucharek.
Gessie Stearns, a researcher on homelessness and advocate, told the committee that the city's decision to build the outdoor shelter on contaminated land for millions of dollars wasn't done in consultation with people experiencing homelessness or the cash-strapped community groups who support them.
"If you gave 10 organizations in the community $500,000, it would've been unprecedented," Stearns said. "Here, $5 million has evaporated like it's nothing."
Last summer, Mayor Andrea Horwath used strong mayor powers, which allow mayors to take quicker initiative on some issues, to direct staff to create some kind of "sanctioned" encampment site. She wasn't present at the meeting Wednesday due to an accident.
By September, staff had proposed an 80-person temporary outdoor shelter — intended to house couples and people with pets — that would open by December in time for winter.
It is a temporary site, and will only be operational for up to two years, but the "exit strategy" has yet to be announced, Grace Mater, general manager of healthy and safe communities, told councillors.
'A small subdivision in under 4 months'
The city knew the land was contaminated when the project began, but soon discovered it would cost millions dollars more to deal with than budgeted, said Mater.
The site needed grading, erosion control and other work to address the pollution, and the city had to hire architects, engineers and environmental experts to guide and sign off on the process, the report said.
Mater defended city staff's management of the project on a tight timeline.
"We've basically built a small subdivision in under four months," she said. "As with all projects of this magnitude, there were challenges along the way."
There were also issues with the tiny homes ordered from MicroShelters Inc., staff said.
The decision to buy them from the fledgling Brantford, Ont., company was already controversial, but then staff learned the units weren't up to code.
The electrical wiring didn't meet Canadian standards and had to be completely replaced, said the report. The city also had to pay for architectural validation of MicroShelter's documents to make sure they met occupancy standards.
The fire department had concerns about the layout of the overall shelter and individual tiny homes, and the city had to make design changes for safety reasons, the report said.
In total, the city spent an unexpected $400,000 to make sure the tiny homes were safe for people to live in, Mater said.
Coun. Craig Cassar said it was "very surprising" the "vendor did not deliver what was promised" and described the tiny homes as "defective."
The city's legal team said it is assisting staff in trying to recoup some money from MicroShelters.
MicroShelters did not respond to a request for comment, but director Jeff Cooper previously said in an email, "all aspects of its business are proprietary and confidential. Under advice of our lawyer we decline comment."
Hamilton's auditor general is reviewing the contract between MicroShelters and the city, said Mater.
Lawsuit filed against MicroShelters
MicroShelters was incorporated weeks before council approved the project and used images on its website identical to those used by another tiny home company, Foldum Corporation. MicroShelters then imported the tiny homes from China through U.S. company Global Axxis.
Foldum is now suing both MicroShelters and Global Axxis in California court, alleging they "conspired" to make a profit by using Foldum's proprietary information.
Foldum's complaint says MicroShelters "falsely" advertised Foldum's housing and past projects as its own, "misleading Hamilton and other potential buyers" and then charging the city "a significant price."
The allegations have not been proven in court. Global Axxis told CBC Hamilton, through a lawyer also named in the complaint, that it denies Foldum's allegations. Neither Foldum nor MicroShelters provided comments for this story.
Before the lawsuit and budget overrun, city staff admitted they'd not done a thorough check on MicroShelters before awarding them a contract worth millions of dollars.
Because of the short timeline, staff selected the company through a non-competitive process.
Mater previously told CBC Hamilton she didn't know if MicroShelters had ever fulfilled any other similar contract before choosing it and wasn't aware they'd be importing the units from China.
She said it was the only company the city could find to deliver foldable tiny homes big enough for two people in short order. The units ended up arriving weeks later than anticipated, in January.
Manager says she could've told council sooner
Several councillors, including Cameron Kroetsch, Matt Francis and Mike Spadafora, asked staff why they were not told of the ballooning costs or site challenges until now.
"Staff had instructions to move forward extremely fast," Spadafora said. "But I think the disconnect is staff should've come back and said, 'It's not going to work, the site's a dump, it's going to cost millions of dollars and we're not going to be able to get people in before the snow flies.'"
Kroetsch said if he had known the site would cost $5.1 million more and not be ready in time for winter, he wouldn't have supported it.
Mater took responsibility for not "reporting back in a timely manner" but said the challenges and costs were "coming at us at a very rapid pace."
The committee told staff to report back with a detailed breakdown of all the project costs, as approved in a motion from Francis.
Mike Zegarac, general manager of finance, said staff would pull the additional $5.1 million from federal and provincial funding already secured for the project.
Coun. Tammy Hwang defended the project, saying staff were given "an impossible task" to build the outdoor shelter in a matter of months.
"This is the admirable and amazing way they have showed up and given their all," she said. "I'm thankful for the work done and respectful of the mistakes made. We need to figure out how do we talk about this and share lessons learned."
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
CBC
02-05-2025
- CBC
Hamilton's outdoor shelter costs balloon $5.1 million over budget
Hamilton's first outdoor shelter is $5.1 million over budget. Capital costs have almost tripled from what city staff first pitched and council approved last September — from $2.8 million to $7.9 million, says a report to council's general issues committee Wednesday. Staff revealed in the report there's been a number of issues with site contamination and the 40 tiny homes, which were delivered not up to code. These issues drove up costs for a project already plagued with controversial decisions and delays. "I have to say, I was shocked by everything that occurred, sincerely," Coun. Brad Clark told staff. "I could not believe this has happened in the manner it did and we had a full slate of people involved in this process." North-end resident Kelly Oucharek, who's been opposed to the outdoor shelter's location from the start, delegated to councillors wearing a shirt that said, "If I had $5.1 million" — a play off the Barenaked Ladies song, If I Had $1000000. "I along with many Hamiltonians are dismayed this project is 300 per cent over budget," said Oucharek. Gessie Stearns, a researcher on homelessness and advocate, told the committee that the city's decision to build the outdoor shelter on contaminated land for millions of dollars wasn't done in consultation with people experiencing homelessness or the cash-strapped community groups who support them. "If you gave 10 organizations in the community $500,000, it would've been unprecedented," Stearns said. "Here, $5 million has evaporated like it's nothing." Last summer, Mayor Andrea Horwath used strong mayor powers, which allow mayors to take quicker initiative on some issues, to direct staff to create some kind of "sanctioned" encampment site. She wasn't present at the meeting Wednesday due to an accident. By September, staff had proposed an 80-person temporary outdoor shelter — intended to house couples and people with pets — that would open by December in time for winter. It is a temporary site, and will only be operational for up to two years, but the "exit strategy" has yet to be announced, Grace Mater, general manager of healthy and safe communities, told councillors. 'A small subdivision in under 4 months' The city knew the land was contaminated when the project began, but soon discovered it would cost millions dollars more to deal with than budgeted, said Mater. The site needed grading, erosion control and other work to address the pollution, and the city had to hire architects, engineers and environmental experts to guide and sign off on the process, the report said. Mater defended city staff's management of the project on a tight timeline. "We've basically built a small subdivision in under four months," she said. "As with all projects of this magnitude, there were challenges along the way." There were also issues with the tiny homes ordered from MicroShelters Inc., staff said. The decision to buy them from the fledgling Brantford, Ont., company was already controversial, but then staff learned the units weren't up to code. The electrical wiring didn't meet Canadian standards and had to be completely replaced, said the report. The city also had to pay for architectural validation of MicroShelter's documents to make sure they met occupancy standards. The fire department had concerns about the layout of the overall shelter and individual tiny homes, and the city had to make design changes for safety reasons, the report said. In total, the city spent an unexpected $400,000 to make sure the tiny homes were safe for people to live in, Mater said. Coun. Craig Cassar said it was "very surprising" the "vendor did not deliver what was promised" and described the tiny homes as "defective." The city's legal team said it is assisting staff in trying to recoup some money from MicroShelters. MicroShelters did not respond to a request for comment, but director Jeff Cooper previously said in an email, "all aspects of its business are proprietary and confidential. Under advice of our lawyer we decline comment." Hamilton's auditor general is reviewing the contract between MicroShelters and the city, said Mater. Lawsuit filed against MicroShelters MicroShelters was incorporated weeks before council approved the project and used images on its website identical to those used by another tiny home company, Foldum Corporation. MicroShelters then imported the tiny homes from China through U.S. company Global Axxis. Foldum is now suing both MicroShelters and Global Axxis in California court, alleging they "conspired" to make a profit by using Foldum's proprietary information. Foldum's complaint says MicroShelters "falsely" advertised Foldum's housing and past projects as its own, "misleading Hamilton and other potential buyers" and then charging the city "a significant price." The allegations have not been proven in court. Global Axxis told CBC Hamilton, through a lawyer also named in the complaint, that it denies Foldum's allegations. Neither Foldum nor MicroShelters provided comments for this story. Before the lawsuit and budget overrun, city staff admitted they'd not done a thorough check on MicroShelters before awarding them a contract worth millions of dollars. Because of the short timeline, staff selected the company through a non-competitive process. Mater previously told CBC Hamilton she didn't know if MicroShelters had ever fulfilled any other similar contract before choosing it and wasn't aware they'd be importing the units from China. She said it was the only company the city could find to deliver foldable tiny homes big enough for two people in short order. The units ended up arriving weeks later than anticipated, in January. Manager says she could've told council sooner Several councillors, including Cameron Kroetsch, Matt Francis and Mike Spadafora, asked staff why they were not told of the ballooning costs or site challenges until now. "Staff had instructions to move forward extremely fast," Spadafora said. "But I think the disconnect is staff should've come back and said, 'It's not going to work, the site's a dump, it's going to cost millions of dollars and we're not going to be able to get people in before the snow flies.'" Kroetsch said if he had known the site would cost $5.1 million more and not be ready in time for winter, he wouldn't have supported it. Mater took responsibility for not "reporting back in a timely manner" but said the challenges and costs were "coming at us at a very rapid pace." The committee told staff to report back with a detailed breakdown of all the project costs, as approved in a motion from Francis. Mike Zegarac, general manager of finance, said staff would pull the additional $5.1 million from federal and provincial funding already secured for the project. Coun. Tammy Hwang defended the project, saying staff were given "an impossible task" to build the outdoor shelter in a matter of months. "This is the admirable and amazing way they have showed up and given their all," she said. "I'm thankful for the work done and respectful of the mistakes made. We need to figure out how do we talk about this and share lessons learned."
CBC
02-05-2025
- CBC
Meet the 4 new MPs elected in Hamilton and Niagara
Social Sharing Hamilton and Niagara residents have voted to send four new people to represent them in Ottawa. MPs-elect John-Paul Danko and Aslam Rana won for the Liberals in Hamilton West—Ancaster—Dundas and Hamilton Centre, respectively. For the Conservatives, Ned Kuruc took Hamilton East—Stoney Creek and Fred Davies was voted in for Niagara South. Danko and Davies were already serving their respective communities as municipal councillors when the federal election held Monday was called. Rana and Kuruc have been active in party politics, but this will be the first time they've held elected office. All will be new to the House of Commons. Kuruc and Rana both defeated incumbent candidates in their ridings, which isn't easy to do, Kuruc told CBC Hamilton. In 2021, he ran and lost in Hamilton East—Stoney Creek, coming second to Chad Collins. This time, Collins came second to him. The riding has been held by Liberals for most of its existence. Kuruc, a 44-year-old mortgage specialist who's lived in Hamilton his whole life, said he started knocking on doors to campaign about a year and a half ago. He'd log about 20,000 to 25,000 steps a day, he said. "Our goal was to try to talk to as many people as possible." Before that, he spent time campaigning in Hamilton for Pierre Poilievre in the Conservative leadership race. WATCH | Federal election night '25 in 3 minutes: Federal election night '25 in 3 minutes 3 days ago Duration 2:40 "The whole election is bittersweet because I won but we didn't form government on the national side," Kuruc said. The Liberals, led by Mark Carney, won a minority government. Still, the Conservatives gained multiple seats, something Kuruc said he's pleased about. The party's focus on change, affordability and public safety strongly appealed to Hamiltonians, he said. On Canada's relationship with the U.S. — another major issue this election — Kuruc said he hopes Carney will prioritize defending the country from economic harm, especially considering so many industrial manufacturing jobs are based in Hamilton East—Stoney Creek. "I will be there to protect jobs and to protect workers," Kuruc said. "I have no problem working with anybody on any party lines to solve that issue." Hamilton Centre winner looks forward to moving to the city The Liberals' response to that issue resonated with voters, Rana said. The 52-year-old civil engineer and engineering professor at Toronto Metropolitan University lives in Mississauga, but said he plans to move to Hamilton, where he's been interested in running for office since 2015. "I told my friends and my classmates [who live] here that whenever I get a chance, I will go and I will do my best and to lift up this neglected riding," Rana told CBC Hamilton prior to his victory on Monday. He said he'll focus on housing and infrastructure in the riding, drawing on his engineering background to make improvements. Rana's win over incumbent NDP candidate Matthew Green was a surprise to many. Green won by about 9,000 votes in 2021, beating the second-place Liberal candidate. But Rana said he was confident going in because he thought voters would support Carney and the Liberals. "I really appreciate each and everybody, and I'm thankful to my party, who had confidence in me," the MP-elect said. "I'm going to make the difference." 2 area councillors become MPs In neighbouring Hamilton West—Ancaster—Dundas, voters elected a new MP from the same party as before. Former Liberal MP Filomena Tassi announced in the fall she would not run for re-election. Danko, Hamilton's Ward 8 city councillor, ended up running for the party. The 47-year-old, who is also an engineer, told CBC Hamilton he's "excited" to get to work in Ottawa. "One of the biggest issues that we heard from residents at the door was the cost of housing and just generally the cost of living," Danko said. "I think the insight that I have in understanding the investments that we need in housing in Hamilton but also in the economy in the city Hamilton is something that I'm excited to bring to Ottawa." Danko added there are some "loose ends" he needs to tie up as a councillor and he's confident in his colleagues to continue serving the city. Davies is the regional councillor for Port Colborne, Ont., who will now be the MP for Niagara South. Ridings were redistributed before this election and Niagara South changed quite significantly. It has a new name and includes much of what used to be called Niagara Centre, as well as about one-third of the riding formally called Niagara Falls. In 2021, both those ridings were close Conservative-Liberal contests. This time, the Conservatives won both, as Davies beat former Liberal MP Vance Badawey. Davies did not respond to a request for comment before publication. His campaign website said he's "known for his hands-on approach to business," and "knows what it takes to create jobs and support families." Here's the full list of who won in the Hamilton area Monday night: Brantford—Brant South—Six Nations: Larry Brock, Conservative. Burlington: Karina Gould, Liberal. Flamborough—Glanbrook—Brant North: Dan Muys, Conservative. Haldimand—Norfolk: Leslyn Lewis, Conservative. Hamilton Centre: Aslam Rana, Liberal. Hamilton East—Stoney Creek: Ned Kuruc, Conservative. Hamilton Mountain: Lisa Hepfner, Liberal. Hamilton West—Ancaster—Dundas: John-Paul Danko, Liberal. Niagara Falls—Niagara-on-the-Lake: Tony Baldinelli, Conservative. Niagara South: Fred Davies, Conservative. Niagara West: Dean Allison, Conservative. St. Catharines: Chris Bittle, Liberal.
CBC
28-04-2025
- CBC
Voting in Hamilton and Niagara regions today? Here's what you need to know
Along with the rest of Canada, Hamiltonians go to the polls today in a federal election, with U.S. economic and sovereignty threats and affordability among the main issues being considered, as Canadians choose a government to lead the country for the next four years. Mark Carney triggered the vote in March, weeks after he was elected to lead the Liberal Party following Justin Trudeau's resignation. An estimated 7.3 million Canadians — a record — cast their ballots in early voting over the Easter weekend, according to Elections Canada. That's a 25 per cent increase from 2021. Nationally, the Conservative Party of Canada, led by Pierre Poilievre, and the Liberal Party are the leading contenders, according to CBC's poll tracker. The NDP, led by Jagmeet Singh, is trying to hold onto official party status. How to vote Polls will be open 9:30 a.m. to 9:30 p.m. ET. People still waiting in line at 9:30 p.m. will still be able to vote. Elections Canada notes there are three options for voting: Show your driver's licence or any other card issued by the Canadian government with your photo, name and current address. Show two pieces of ID that have your name and at least one must have your current address. That could include a voter information card and a bank statement or a utility bill or student card. A full list of accepted ID is available on the Elections Canada website. Expired ID can be used as proof of identity if it has your name and as a proof of residence. If you don't have ID, you can declare your identity and address in writing and have someone who knows you vouch for you at a polling station. The person vouching for you must be able to prove their identity and address. A person can vouch for only one person (except in long-term care facilities). Polling locations can be found by typing your postal code into the Elections Canada website. People can also contact local candidates for help to find their polling locations and some candidates will also offer transportation help if necessary. Get to know your riding Want to know more about your riding, the candidates and the local issues that matter to them? CBC Hamilton has a profile for each of the 12 ridings in the Hamilton and Niagara area. Find out more about: Brantford—Brant South—Six Nations. Burlington. Flamborough—Glanbrook—Brant North. Haldimand—Norfolk. Hamilton Centre. Hamilton East—Stoney Creek. Hamilton Mountain. Hamilton West—Ancaster—Dundas. Niagara Falls—Niagara-on-the-Lake. Niagara South. Niagara West. St. Catharines. The issues Over the course of the campaign, CBC Hamilton heard from residents who said that in addition to the U.S. tariffs, other issues would also help shape how they vote. These include: Cost of living. Housing. Public safety. Health care. Climate change and the environment. "I check [food] prices constantly — there's no room for anything extra," Hamilton resident Joe Struthers told CBC News. "If my landlord decides to sell, I'd probably end up homeless. I couldn't afford anything else in the city." Another resident, Jessica Fawcett, an occupational therapist and a mother of two, says her family's financial future feels uncertain — squeezed by the lack of affordable daycare and the prospect of renewing her mortgage at a much higher interest rate next year. Shri Kulkarni, a tech worker and a father in Burlington, thought buying a home would offer his family security. Instead, he says they're feeling the financial strain more than ever. "We bought during the peak," he said. "Now mortgage rates are way up, and home values are down. We're stuck — can't sell, can't save, and every month costs us more." Leaders made several visits to Hamilton In their costed platforms, the Liberals promised to generate revenue by boosting investment. The Conservatives said they would pay for significant tax cuts by slashing government spending and upping revenue from home-building and policy changes, such as repealing Ottawa's Impact Assessment Act. The NDP said it would invest billions in health care and tax the wealthy. The leaders of the Conservative Party of Canada and the New Democratic Party (NDP) visited Hamilton during the first week of the federal election campaign. McMaster University politics Prof. Peter Graefe said those visits highlighted the importance of the area to the parties. Graefe said the NDP leader "wants to hold on to the one seat that he has in the city — Hamilton Centre," but also he sees a possibility to expand his caucus in Ottawa, with the Hamilton Mountain seat. The riding was held by the NDP from 2006 until 2021, when then MP Scott Duvall said he would not seek reelection. Former journalist Lisa Hepfner won for the Liberals. For Poilievre, Graefe said he might want to reach for the Hamilton East-Stoney Creek (HESC) seat, where the current incumbent is Liberal Chad Collins. Carney was also in Hamilton on March 12 when he visited steelmaker ArcelorMittal Dofasco. During the visit he spoke with steelworkers about the tariffs on Canadian steel and his confidence in the future of the company. The leaders of the Conservatives, Liberals and NDP all made subsequent trips to Hamilton throughout the five-week campaign, including Carney on Sunday.
