Canada Housing Market

Calgary may lose up to $129 million in federal housing funding after city council voted to repeal citywide rezoning, according to a new internal email from the Canada Mortgage and Housing Corporation (CMHC). The federal government has reportedly paused further payments until it receives clarity on the city’s long-term zoning direction.

The potential funding freeze adds a major twist to Calgary’s ongoing rezoning debate – one that now comes with a real financial price tag.

CMHC Pauses Funding Over Uncertainty

According to the internal memo, CMHC wants clear direction from council before releasing more Housing Accelerator Fund dollars. Without firm confirmation of the city’s zoning path, federal officials say they cannot proceed.

Key points from the update:

• CMHC requires clarity before sending additional funding
• If the city does not provide clarity by March, Calgary risks losing the next $64 million installment
• Total funding at stake is approximately $129 million
• City staff say conversations with Ottawa are still ongoing
• Calgary’s mayor argues funding decisions should be based on results, not politics

The pause does not cancel Calgary’s funding outright, but it places the city in a time-sensitive position to provide a plan acceptable to CMHC.

Why the Funding Is at Risk

The federal Housing Accelerator Fund is tied directly to municipal zoning reforms that support more density and diverse housing types. Calgary’s initial decision to move forward with blanket rezoning helped secure its funding earlier this year.

However, after council voted to repeal the zoning changes, the federal government signaled concern that the city may be reversing commitments required under the program.

If clarity is not provided by the March deadline, Calgary could permanently forfeit tens of millions in housing-related funding.

City and Federal Talks Still Underway

City officials noted that conversations with Ottawa have not stopped, and they remain optimistic that a solution can be reached. The mayor also reiterated that Calgary has made progress on housing supply and affordability, and that results should be the basis for continued funding.

Still, the uncertainty has created tension between different levels of government, with housing advocates warning that delays could stall much-needed projects.

What This Means for Calgary

If the funding is lost, Calgary could see delays or cancellations in housing initiatives intended to address affordability and supply gaps. Developers and residents may also face longer timelines for new builds, especially in areas where density expansions were planned.

The rezoning debate has now become more than a policy conversation – it has turned into a financial risk with major implications for Calgary’s growth.

Bottom Line

Calgary’s rezoning repeal has triggered a pause on more than $100 million in federal housing funds, and the city now has a tight window to resolve the issue. The next few months will determine whether Calgary secures the funding or loses a significant opportunity to accelerate its housing supply.

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