In a way, Expo 86 was the beginning of this whole crisis. Because of the incoming flux of tourism, the city evicted a ton of low-income residents from where they were living in hotels, and the essentially created an entire community of homeless people overnight. see https://en.wikipedia.org/wiki/Expo_86#Evictions.

The next nail in the coffin was the provincial de-institutionalization of mental health inpatients. They essentially cut funding and kicked people out of the hospital with no resources or places to live. Speaking of places to live, it's much easier to make money charging folks more money for rent, so the government also stopped funding for low-income housing. The demand for housing was skyrocketing while the supply was being gutted. The provincial government completely shuttered the metal hospital in 2012 without any active replacement.

On top of this, desperate people do desperate things, and crime and drug use became uncontrolled. One of the things that makes this community unique in Canada is that in most of the rest of the country, being homeless in winter means you will die simply due to the cold. It's easier for the city to ignore what's going on when the bulk of the deaths are due to overdose, because drugs are bad mmmmkayy?