The federal government has reduced funding for settling immigrants in Ontario because the money is now needed in provinces where the influx of newcomers is growing, Immigration Minister Jason Kenney said Thursday.

Kenney said Toronto, for example, is settling fewer new immigrants, and that other parts of Canada are settling more.

"Toronto in particular is receiving fewer newcomers. More people are deciding to settle in other provinces, particularly western and Atlantic provinces, and so what we have to do is re-allocate the settlement funding to make sure that it’s following the newcomers," he said.

"It’s not fair to give settlement agencies in Toronto, that have seen a decline in number of immigrants, more funding than those that are struggling in other provinces, which are seeing an expanding number of newcomers," Kenney said.

Various agencies across Canada have been informed by letter in the last two weeks that their funding will be cut by $53 million in the next fiscal year, nearly $45 million of that in Ontario alone.

At least 10 immigrant settlement agencies in the Greater Toronto Area have been told their federal funding will not be renewed next year, and up to 35 others across Ontario are facing cuts.

Citizenship and Immigration says the cuts are part of an annual funding review of settlement programs, which help immigrants improve language skills and find jobs. The federal government says it is trying to make settlement spending more equitable to other parts of Canada.

Kenney's office said that since the Conservatives came to power they have tripled the amount of cash that goes to these settlement agencies. Officials say in 2005 the funding was $111 million, and in 2010, it was $346 million.

Toronto Liberal MP Bob Rae slammed the cuts.

"I don't think I've ever seen such a harsh and draconian and inexplicable cut to the most vulnerable people in our midst," he said.

"We as a community, we as a city, as a greater city, we accept and welcome well over 150,000 people a year from around the world," he added.

Toronto's South Asian Women's Centre may have to close

In light of the news of funding cuts, one agency that has served newcomers to Toronto for over 20 years said it may have to shut down.

Kripa Sehkar, executive director of the South Asian Women's Centre, said she was blindsided by the letter from Citizenship and Immigration.

"It was the most devastating news," she said. "This was not the [holiday] gift we expected from them."

More than half of the centre's operating budget, $570,000, will disappear.

For 20 years, women from countries such as India, Pakistan and Sri Lanka have made their way to the centre's doors to get help settling in the city.

Sehkar said it served 14,000 clients last year, mostly South Asian women, and the cuts mean nine people are facing layoffs and hundreds of newcomers will be left to fend for themselves.

"We're still absorbing the news," Sekhar said. "Our hope is that this decision would be reversed."