The Town of Tecumseh is on the clock. Federal housing officials have issued a stern ultimatum: rectify the municipality's housing plans within 37 days or lose access to $3.2 million in crucial funding.
A Breach of Agreement Puts Millions at Risk
Canada Mortgage and Housing Corporation (CMHC) has declared Tecumseh in breach of its Housing Accelerator Fund (HAF) agreement. The warning came in a formal letter dated December 24, 2025. At the heart of the dispute is the town's failure to implement a key federal requirement: allowing up to four residential units as-of-right on low-density residential lands.
This condition was a cornerstone of the funding deal, designed to rapidly increase housing supply. In March 2024, the federal government approved $4.38 million for Tecumseh under the HAF program, to be disbursed over three years. The town has already received approximately $1.1 million, which CMHC states it will not seek to recover as it was spent on approved initiatives.
The Council Vote That Triggered the Crisis
The current crisis stems directly from a council decision on July 22, 2024. On that date, Tecumseh's council voted against a bylaw that would have permitted four housing units on nearly all residential lots in the municipality. This vote directly contravened the terms of the HAF agreement.
As a result, CMHC withheld the second advance payment. The agency's letter states clearly: "Following the review of your first annual report, CMHC withheld the disbursement of the second advance of the HAF funding as you had not completed the 4UAOR initiative by the completion date." The 37-day deadline to "cure" the breach began from the date of the December notice.
What Happens Next?
The consequences of inaction are severe. If Tecumseh does not bring itself back into compliance by amending its bylaws, CMHC will terminate the agreement and cancel all remaining funding. The $3.2 million at stake represents the bulk of the promised federal support.
This situation places significant pressure on Tecumseh's municipal leaders. They must now choose between adhering to local planning preferences or aligning with federal housing priorities to secure millions in funding intended to spur development and address the housing shortage. The clock is ticking toward a late-January deadline that will have major financial implications for the town's housing strategy.
