Nearly a billion dollars in federal funding is at risk should Calgary eliminate its Rezoning for Housing bylaw in the spring, according to a new city admin report.

A new government funding risk report, which was requested at a Dec. 15 meeting of Calgary city council – when they set the wheels in motion on a repeal – will come to the Feb. 11 Infrastructure and Planning Committee meeting.

The presentation deck shows that up to $861.2 million in federal funding over 10 years through three programs could be at risk should the citywide rezoning bylaw be tossed. It’s unknown how it might impact Calgary’s ability to tap into a $20 billion Canada Public Transit Fund, to which the City of Calgary hasn’t yet applied.

“A full repeal of the RHB may result in The City being deemed to be non-compliant with its HAF Contribution Agreement (HAF Agreement) with Canada Mortgage and Housing Corporation (CMHC). This would put a portion or all of the HAF funding at risk,” read the admin cover report.

City officials have indicated in the past, at multiple checkpoints, that federal funding could be in jeopardy should the City of Calgary not fulfill contractual obligations with the parties involved.

The CMHC, for its part, has been clear on funding risk potential.

“We will also reiterate, we expect municipalities to fulfill their agreements. If a partner’s agreed-upon commitments aren’t met or are reversed, this puts their HAF funding at risk,” read a previous email response to questions from LWC.

The elements of the HAF agreement that the city believes it could be deemed non-compliant include Initiative 2: Undertake city-initiated city redesignations to streamline approvals to increase housing supply, and Initiative 3: Undertake land-use bylaw amendments to promote missing-middle land-use districts.

Back in 2022, the Calgary city council approved missing middle amendments to the land-use bylaw, particularly around Housing – Grade-Oriented and Residential – Grade Oriented Infill District (R-CG) uses.

‘Doom and gloom’ report: Coun. Chabot

Ward 8 Coun. Nathan Schmidt, who sits on the Infrastructure and Planning Committee, said Calgary may be stretching itself thin with outward growth, compounded by major infrastructure challenges, then to lose a big chunk of cash from the feds.  

“I see this as a real risk that it, obviously we can’t look into the future, but it seems like we are putting ourselves in a position where we could be out up to a billion dollars of funding from the federal government,” Schmidt told LWC.

“When we have communities in the donut around downtown that had more people living in them in the 1960s 70s and 80s, when they were first built, than we do today, and then losing this funding on top of doing those things that we were already going to make more difficult for ourselves – it’s just like salt in the wound.”

Schmidt said they need to make the public aware of what the impact could be of the decision.

Ward 10 Coun. Andre Chabot, chair of the Infrastructure and Planning Committee, who helped spearhead a repeal of citywide rezoning, admitted that the admin report does imply that funding could be impacted.

“Now, of course, it’s going to paint the doom-and-gloom picture with the worst-case scenario sort of outcome from the blanket zoning,” he told LWC.

“But you and I both know that reality is highly unlikely, that it’s going to be a complete reversal of what was previously implemented on the blanket zoning.”

Chabot is referring to ongoing discussions among councillors to go through the process of fully removing the existing bylaw change and eventually replacing it with something that’s been described as being more surgical.

He also disputed some of the information in the report suggesting the volume of development that’s been done in established areas being directly attributed to rezoning.

“Of course, it’s always good to have more information to help to form our opinion and form our decisions and maybe influence our decisions on what amendments we want to make to mitigate any potential losses, but it’s not black and white,” Chabot said.

HAF funding pulled in other markets

There is precedent for the CMHC to rescind funding for cities that are non-compliant with their HAF agreements.

In mid-January, the cities of Red Deer, Toronto and Vaughan all received word that their funding would be reduced or eliminated because of non-compliance with their signed contracts.

Calgary Mayor Jeromy Farkas has said in the past that he hoped the CMHC would look at the overall housing outcomes in determining if Calgary has met its obligation under the contracts. The City of Calgary recently outlined a record ~28,000 housing occupancies in 2025, which is more than double the long-term average of 13,000.

Mayor Farkas is currently in Ottawa for the Big City Mayors conference, and he expected to be able to meet with CMHC and the feds to discuss the funding agreements.

Coun. Chabot wouldn’t discount the decisions that have been made around funding for other cities, adding that he’s said all along that the funding should be tied to outcomes.  

“Tell us what you want, not how to do it, and whilst we’ve certainly done more than our fair share so far as new developments and maintain affordability,” he said.

“At the end of the day, what is the most important thing for me is making sure that Calgarians are happy with what we ultimately decide, and it cannot be because we’re going to lose funding. It has to be based on what is the long-term vision for our city.”

Schmidt said that he’s hopeful Mayor Farkas can broker some sort of compromise on funding.

“I have a lot of faith in his ability to have these kinds of constructive conversations with the federal government and to perhaps look at some kind of path forward that keeps the houses being built and maintains the funding while we work on some kind of solution that can make everybody happy – or everybody unhappy,” Schmidt said.

Ultimately, he’s waiting to hear what Calgarians have to say when the public hearing on the matter comes up on March 23.

“I think for me, it comes down to, what do we hear from the people who come to speak and the people who submit letters and what our experts in administration tell us about the actual effects of rezoning itself and a potential repeal,” he said.  

“If a whole bunch of people come and talk about this funding is a real risk, then we have to listen to what the public tells us. In that case, if nobody comes and talks about that, then it’s going to be less on our minds, because the purpose of these public hearings is really for us to guide our decision based on what our constituents are telling us.”