The potential repeal of Calgary's blanket rezoning policy has put millions in federal housing funding at risk, according to an internal city memo obtained by media outlets. The Canada Mortgage and Housing Corporation has reportedly paused $129 million earmarked for the city's housing strategy.
Funding in Limbo
The correspondence from last week indicates that money allocated through the federal government's Housing Accelerator Fund program has been "paused" by CMHC, which administers the grant program. The pause is described as "pending further clarity on the status of citywide rezoning."
If the situation isn't resolved by the end of March 2026, the city could lose a third instalment of $64 million, according to the memo sent to councillors. The document emerged after a meeting between city officials and CMHC representatives.
Previous Funding Success
Calgary initially received $228.5 million from the Housing Accelerator Fund in November 2023 to support its housing strategy. The city demonstrated early success, earning an additional $23 million from CMHC in March after surpassing early benchmarks by enabling construction of 42,000 additional housing units.
The funding agreement stipulated that the city would receive 25 percent of the funding upfront and 25 percent each year for three subsequent years. To date, Calgary has received $122 million of the total funds, the council memo stated.
Current Programs at Risk
The federal funding has supported several key housing initiatives in Calgary, including the secondary suite incentive program, downtown office-to-residential conversion program, and transit-oriented development projects on city-owned land. These programs could face funding challenges if the federal money is withdrawn.
In a statement Wednesday, CMHC denied that grants for Calgary have been officially paused but confirmed the crown corporation is reviewing its agreement with the city. "We are aware of Calgary's proposal and are reviewing the details — no official decisions have been made on Calgary's HAF funding," the email stated.
The corporation emphasized that it "expects municipalities to fulfill their agreements." The statement continued: "If a partner's agreed upon commitments aren't met or are reversed, this puts their HAF funding at risk."
The timing of this development is particularly significant, with city budget deliberations beginning next week. The memo noted that officials are "working diligently to review implications, risks and mitigation strategies" regarding the potential funding loss.
The connection between Calgary's HAF grants and approval of blanket rezoning has been a point of debate since the previous council undertook its marathon public hearing on the matter in spring of 2024. The current council's move to reconsider the zoning changes has now triggered federal scrutiny of the funding agreement.
