The Newfoundland and Labrador government's decision to freeze funding for private home care companies has come back to haunt them, the leader of the province's largest union says.

Last week, 27 of the 34 private firms that provide home care in the province said they would no longer be able to take on subsidized clients due to higher costs.

Those costs include having to absorb a 50-cent-an-hour wage increase for workers that will come into effect in July.

NAPE president Carol Furlong said the government needs to increase its spending on subsidized care so that companies can continue to stay in the marketplace.

"I think it spells, for the people of this province, pretty bad news," she said. "And I think it makes government look pretty tight when they're talking about 50 cents."

Furlong said she was surprised when government said it would not be increasing subsidies, despite heightened home care costs.

"We anticipated that government would certainly live up to that obligation and would ensure that, you know, the 50 cents was going to be made available," she said.

"We're not talking about big cash here."

At least one company — All Care Home Support in Trinity Bay — has already handed out layoff notices as it faces possible closure.

Furlong said it is not just the clients and companies who will suffer. She said the province will be at a disadvantage, with fewer home-care workers and more patients going into long-term care facilities.

"They keep talking about the fact they are investing in the future," she said. "This is one investment they don't want to miss out on."