Red Deer loses $12M housing fund after rejecting federal zoning rules
Red Deer has lost its Housing Accelerator Fund (HAF) agreement with the Canada Mortgage and Housing Corporation (CMHC). The decision follows the city’s refusal to change zoning rules required for the second round of funding. Officials now face repayment demands and potential risks to future federal grants.
The dispute began when CMHC set conditions for the second phase of HAF funding. Red Deer was required to allow 'four units as of right' on single residential properties. On July 21, 2025, CMHC declared the city non-compliant with this mandatory rule.
City council responded by voting unanimously against the zoning changes. Instead, they chose to explore alternative methods for building affordable housing. Later, in an October 15 letter, the city administration reached out to Federal Minister Gregor Robertson to renegotiate the funding terms. By a 7-2 vote, councillors decided not to return the $3.2 million already received until discussions with the minister took place. CMHC, however, insisted the city had breached the agreement and demanded repayment of the first $3 million instalment. The city manager also cautioned that withholding funds could jeopardise other federal grants. Despite the conflict, earlier estimates suggested the HAF money could attract up to $40 million in private investment for Red Deer.
The termination of the HAF agreement leaves Red Deer without access to the remaining $8.8 million of its $12 million allocation. The city must now repay the initial $3 million while seeking new ways to fund housing projects. Future federal grants may also be at risk due to the dispute.
