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By Ian Gustafson

Federal grant

Red Deer city council stands their ground on HAF2 four units as-of-right condition

Jan 13, 2026 | 3:37 PM

Red Deer city council has approved a resolution that the city will not return over $3 million in grant funding received from the federal government’s Housing Accelerator Fund Round 2 (HAF2) until a discussion has been had with the Federal Minister of Housing and Infrastructure, Gregor Robertson.

The resolution was brought forward by councillor Chad Krahn and passed by a vote of 7-2.

Councillors Jaelene Tweedle and Kraymer Barnstable were opposed; meanwhile, councillors Tristin Brisbois, Bruce Buruma, Cassandra Curtis, Adam Goodwin, Chad Krahn, and Dianne Wyntjes were in favour.

This comes after the Canada Mortgage and Housing Corporation communicated to the city through a letter on Dec. 19, 2025, that explained they were in breach of the terms and conditions of the HAF2 agreement.

The CMHC said council breached the contract on July 21, 2025, when they passed a motion to not move ahead with the grant condition that would allow four units as-of-right on all residential lots.

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The CMHC said four units as-of-right is a minimum requirement for applicants from large/urban streams and is foundational to the program’s objectives.

As a result, the corporation notified the City of Red Deer that they have 21 days from the date of the notice to cure the noncompliance, and if they don’t, the contract would be terminated.

If it is terminated, the city must pay back the first payment of the grant in the amount of $3,088,682.08. The initial payment was actually $3,128,682.08, but the city spent $40,000 of the grant on public consultations.

The city explained they received the $3 million as the first installment of a $12 million grant prior to council’s decision not to move forward with the four units as-of-right grant condition.

The deadline was set for Dec. 9, but city administration asked for a seven-day extension to allow for council to have the discussion. Administration expects the CMHC to send a letter for termination by this Friday, Jan. 16.

Krahn explained his reasoning for the motion during Tuesday’s council meeting, saying it was to continue the need for advocacy efforts.

“This is something that could unlock incredible private investment in our community. The homelessness foundation shared with the community last week and correctly assessed that the biggest challenge in our community is housing supply. That’s exactly what this grant is working on to do to increase housing supply in our community,” he said.

“I think we need to find space to make sure we can have the minister’s attention. This is a three-million-dollar phone call that he’s willing to have, that should be some time for him too… This is a deep need in our community, and I hope we can have a real conversation about this.”

In the city’s summary report in the council agenda, they explained they’ve actively advocated to the federal government since June 25, 2025, that the four units as-of-right condition was unacceptable to citizens and that other Red Deer appropriate housing initiatives can be used for the densification and increasing the number of housing units.

Also in council’s decision in July, they directed the mayor and members of council to advocate to the Minister of Housing and Infrastructure and MP Burton Bailey to remove the federal requirement for four-units-as-of-right, while administration will advocate to CMHC for the same.

However, efforts to reach Minister Robertson, the city explained, have led to no response but are keeping the pressure on.

The city began reaching out on June 23, and again on July 28 and Oct. 6, with letters from former Red Deer mayor Ken Johnston. They also reached out by phone; however, there was still no response.

Meantime, the city received a letter from MP Burton Bailey offering to assist in the city’s advocacy in November.

Through Bailey’s office, city administration added that Minister of Assisted Living and Social Services with the provincial government, Jason Nixon, has also offered assistance.

Mayor Cindy Jefferies said they met with Bailey last week to give him a current update, and he invited some members of council to Ottawa and to have access to the Shadow Minister of Housing, Scott Aitchison, as well as other meetings.

In addition, Jefferies said she talked with Penhold Mayor Mike Yargeau, who’s also a representative for the Federation of Canadian Municipalities (FCM). She said Yargeau indicated that FCM could also do some advocacy work.

Barnstable said he voted against Krahn’s motion because “the longer you hold on to dollars, the harder it is to give them back.”

“We talk about wanting at least a conversation from the minister, at least some sort of communication, before we go back on that. I think the act of not responding to our number of letters is communication enough for me,” he said.

“I feel like the longer we go on with this, the more that cloud just hangs over the community. I think we need to start preparing for how we make housing work in the city of Red Deer without the federal dollars, as opposed to living on this hope that we can still leave with this $12 million.”

Administration explained that the City of Calgary is in a similar boat as they are repealing their blanket zoning, which jeopardizes approximately $129 million in funding from the HAF2 program.

Some council members raised concerns about what could happen if they decide to hang on to the grant money in terms of potential penalties from the federal government.

City Manager Tara Lodewyk said there is always risk, adding the federal government could connect it to some of the other federal grants the city receives.

Councillor Tweedle had a concern about potential legal ramifications; however, city administration said they could only speak on that in a closed meeting.

“I will have to vote in opposition as well, not because I want advocacy to stop or because I’ve lost all hope that these dollars can be maintained. For me, it’s just a matter of staying in line with the contract we signed and not being in breach of contract to say we’re holding on to this money until we get something we want,” Tweedle said.

Meantime, councillor Wyntjes, who spoke in favour of the motion, said it’s important to have conversations amidst a conflict.

“I find the motion is about having conversations and to see what we can do. I’m also an optimist in this work. We are a mid-sized city… We know that every municipality, every region needs housing dollars, so for me, this is a very complex issue in terms of federal government decisions,” Wyntjes explained. “I’m optimistic, recognizing that government moves so slowly. I think having a conversation and impressing upon Minister Robertson that we need those conversations and our creativity in terms of delivering housing, which we know we can do.”