Overall, for 2011-2012 and 2012-2013, Ontario's federal funding allocation for settlement services decreased by $75.6 million from COIA levels.
On November 25, 2011 the Federal government released the following statement:

The Minister of Citizenship, Immigration and Multiculturalism, Jason Kenney, today announced allocations for federal funding of settlement services in all provinces and territories outside Quebec for the 2012-2013 fiscal year.

"The Government of Canada wants newcomers to integrate into Canada. That is why we have tripled settlement funding since 2005-06," said Minister Kenney. "We are committed to ensuring the distribution of settlement funding is fair and that immigrants receive the same level of service, regardless of where they choose to settle."

Settlement funding is being more fairly distributed to serve the needs of newcomers, as a result of a national settlement funding formula that is based on a province or territory's share of immigrant intake.

This formula now applies in all provinces and territories except Quebec and reflects that, when compared to the other provinces and territories, Ontario's proportional share of new immigrants in Canada has gone from 64% in 2005 to 52% in 2010, as more newcomers have chosen to settle in Western and Atlantic Canada.

The funding formula was also updated recently to reflect the use of settlement services by refugees and will increase the amount allocated to provinces and territories, based on their intake of refugees.

"We believe it is only fair that settlement allocations across Canada should be based on the share of newcomers that provinces and territories have," noted Minister Kenney. "Most provinces and territories will receive an increase in settlement funding as a result of adjustments to Ontario."

Based on the current allocations, the average per-immigrant amount that the Government of Canada will invest to help immigrants in provinces and territories outside Quebec is $2,816, as compared to $946 in 2005.

The priority for the 2012-13 allocations is to focus on delivering services directly to immigrants and away from supporting expenses such as administration, travel, or capital costs for organizations.

The total 2012-13 amount for all provinces and territories outside Quebec is $576.8M, compared to $184.7M in 2005-06.

What this means for Ontario:

While the rest of Canada’s provinces and territories are seeing increased funding for settlement services, overall, for 2011-2012 and 2012-2013, Ontario’s federal funding allocation decreased by $75.6 million from COIA levels. The 2005 Canada Ontario Immigration Agreement (COIA) provided $920 million for settlement services in Ontario over the life of the five-year Agreement.  AMO understands that COIA spending did not actually meet the COIA allocations to a shortfall of $207 million. While many provinces and territories have immigration Agreements with the federal government in place, Ontario is currently without an agreement.

The rationale presented for decreased funding to Ontario is that fewer newcomers are choosing Ontario as their destination of choice. The provincial government has indicated that currently, the federal selection process impedes the flow of newcomers to Ontario. Namely, the labour market skills required in Ontario are a criterion that is not matched with the federal skilled workers selection process. It is interesting to note, that the backlog of applications for federal skilled workers is approximately 300,000 applicants with 60% of the applicants destined for Ontario.

In the past, Ontario has advocated for a more flexible selection process that reflect emerging labour market trends across the province. This approach seems to make sense.

AMO advises municipalities to understand the impact of reduced funding on local services and projected outcomes for newcomers. Concerns should be expressed to local MP’s and the Federal Minister of Immigration and Multiculturalism, Jason Kenney.

AMO will also be in communication with the Federal Minister to acknowledge our shared interests on the outcomes for Ontario’s newcomers and the important role settlement services play in this and the province’s labour market, economic and community development outcomes.