City Hall’s shelters division spent $300M on sole-source deals

Figures released after a freedom-of-information request show the division signed 72 contracts outside of the city’s competitive bid processes

Published May 02, 2026  •  4 minute read

Toronto City Hall is seen on Wednesday January 14, 2026. Photo by Ernest Doroszuk /Toronto Sun

Toronto’s shelter and support services division had nearly $300 million worth of sole-source contracts on the books this term of council, the Toronto Sun has learned.

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Figures released after a freedom-of-information request show the division signed 72 contracts outside of the city’s competitive bid processes, and those $296,942,199.09 worth of deals are still active or expired during this term of council, between Oct. 1, 2022, and March 16, when the Sun requested the figures.

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Many of the largest sole-source contracts were for hotels, which the city used as temporary homeless shelters before and during the COVID pandemic. The largest such deal was for the Comfort Hotel Airport North at Rexdale Blvd. and Hwy. 27, which the city secured in November 2018 for $36.25 million. (That contract expired in April 2024.)

The single largest contract on the books was $74 million for the Canadian Red Cross Society. That deal was signed in April 2022 and expired at the end of last year.

While the Red Cross provides shelter-related services such as emergency lodging, the City of Toronto declined to clarify what services had been procured through any individual contract.

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In a statement, Imane Boussaid, a City Hall communications adviser, said each time a contract is signed under a non-competitive process, the reason for it “must be clearly documented and approved at the appropriate level within the city.”

Hotel procurements are responsible for roughly $90 million worth of the sole-source contract total. Beyond those, Boussaid said other sole-source deals were also signed to service hotel-based shelters, and the City of Toronto has since broken away from that concept in favour of purpose-built shelters.

“Non-competitive procurement is permitted only in limited circumstances, which may include emergency needs, health and safety or security considerations, a lack of available suppliers, specialized technical expertise, or where changing vendors would create significant service disruption or substantial duplication of costs,” Boussaid wrote. “It may also be used where a competitive process did not result in a successful outcome.”

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But Noah Jarvis, the director for Ontario at the Canadian Taxpayers Federation, said no matter the justification, sole-source contracts are inherently expensive for the city.

“The problem with sole-source contracting is that it drives up the cost of procurement, and that’s simply because there’s no competitive bidding process to determine the value of these contracts,” Jarvis told the Sun.

Some of the city’s sole-source deals have been covered in the Sun. Security firm One Community Solutions was signed to a $19-million contract in August 2020, while consultants Bruce Davis and Joe Mihevc, via their companies Public Progress and Mihevc Consulting and Mediation, were inked to deals worth $199,330 and $159,000, respectively, in late 2024.

‘There’s more than one company’

Shelter services handed out sole-source contracts for catering, PR consulting, ergonomic furniture, portable toilets, software and building maintenance – even diapers. Comfy Cotton Diaper Service, based in Markham, was signed to $600,000 and $2-million contracts, signed just over a month apart in late 2022 and early 2023.

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Boussaid said City Hall can uses non-competitive processes to acquire services “like security, cleaning, catering or health services.”

“This can happen when public safety is involved or when service providers need specific experience,” she said, “such as working with vulnerable people. No matter how a contract is awarded, city staff must review the pricing, explain the reason for the approach in writing and ensure value for the city.”

But Jarvis argued that simply because a service is important doesn’t mean the contract shouldn’t go up for a competitive bid.

“If the services that were procured were security, I mean, there is more than one security company that operates in Canada,” Jarvis said. “I’m sure that there would’ve been some other security companies that would’ve loved to bid on a contract and provide those services, perhaps (at) a cheaper price.”

The process could also work the other way, Jarvis said, allowing City Hall to weed out companies that might put in low bids but not do the job right. City Hall is facing a $32-million class action lawsuit amid accusations that one shelter services contractor, One Community Solutions, fell short of labour laws and provincial regulations.

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“A competitive environment would allow the city to be able to not just choose a company that is providing the cheapest services possible, but also services that would meet the city’s quality standards,” Jarvis said.

“But when you do have a sole-source contracting scheme, you do get the situation where taxpayers are being overbilled for expenses that you would think would be cheaper to procure, like $2 million on diapers, for example.”

Shelter services saw its budget fall to $786 million for 2026, as the city says demand is easing. In 2025, the budget was just shy of $900 million, and it was trending upward toward a billion a year.

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