CMHC cancels housing fund deal with City of Red Deer, council won’t return money

Red Deer city council passed a resolution earlier this week refusing to give back the first installment of funding pending a meeting with the federal housing minister.

The Canada Mortgage and Housing Corporation (CMHC) has terminated its agreement with the City of Red Deer for millions of dollars in housing funds, but city council is refusing to return the grant money allocated so far.

CMHC announced it is cancelling its Housing Accelerator Fund (HAF) agreement with Red Deer effective Friday afternoon, as the organization found that, as of July 21, 2025, the city was “non-compliant with a mandatory requirement of the program’s second funding round.”

The City of Red Deer and the federal government signed an agreement for $12 million in HAF funding in Feb. 2025, with a series of conditions, but just $3.2 million has been allocated to date.

According to CMHC, Red Deer’s commitments “have not been met.”

“Our government is committed to removing barriers and cutting red tape to enable more housing development in communities across Canada,” federal Housing and Infrastructure Minister Gregor Robertson said in a statement. “We are also committed to demonstrating the results of the Housing Accelerator Fund and being transparent, while maintaining the integrity of agreements, as we work to build more homes across Canada.”

According to city council documents, the second round of HAF funds was conditional on Red Deer adopting zoning rules to allow “four units as of right” on a single residential property.

In July 2025, Red Deer city council unanimously supported a motion to not move ahead with the zoning changes and instead commit to finding other ways to build affordable housing in the community.

Documents said the City of Red Deer has been advocating to the federal government that moving forward with the zoning changes to allow four units on a single lot “was unacceptable to our residents,” and that other existing city initiatives can be used for “densification and increasing the number of housing units.”