The Canada Mortgage and Housing Corporation has officially terminated a $12-million agreement with Red Deer intended to help speed up local housing construction. The federal agency cancelled the funding on January 16, 2026, after the city declined to adopt a blanket zoning policy that would have allowed up to four housing units on every residential lot.
Red Deer, which is among the fastest-growing mid-sized cities in Canada, is now facing significant pressure to find new ways to support its increasing population. Before the agreement was ended, the city had received $3 million of the total funding. City council voted in January to hold onto those funds until a meeting with the federal government can be held to discuss a path forward.
Mayor Cindy Jefferies is working to set up a meeting with federal Housing Minister Gregor Robertson for mid-April. The city has several shovel-ready projects waiting for support, including proposals from the Red Deer Housing Authority and community partners that could provide permanent supportive housing for residents.
The cancellation has sparked a conflict between provincial and federal officials. Alberta ministers, including Jason Nixon, wrote to the federal government on March 31, 2026, stating they will not approve any further federal-municipal housing agreements until Red Deer and other local communities are treated fairly. Provincial officials have pointed to a perceived double standard, noting that when Toronto failed to meet similar density requirements, their funding was only partially reduced rather than fully cancelled.
The provincial government now holds authority over such deals under the Provincial Priorities Act, which requires municipalities to get provincial approval before signing or renewing agreements with the federal government. While the federal government redirected the $12 million to other cities, the debate continues, with provincial opposition leader Naheed Nenshi criticizing the province for prioritizing political disputes over the urgent need for housing funds.
