Calgary Rezoning Repeal: The $861M Federal Funding Showdown
Council's rezoning vote could cost Calgary $861M in federal funds.
CALGARY, AB — While City Hall debates whether duplexes belong in your neighborhood, a bigger question looms: Can Calgary afford to pick this fight?
In February 2026, Council moved to fully repeal the citywide rezoning policy that allowed 'missing middle' housing like townhomes and duplexes across residential zones. The public hearing is set for March 23. But the Canada Mortgage and Housing Corporation (CMHC) has issued a stark warning: repeal the policy, and the city risks breaching its Housing Accelerator Fund (HAF) agreement.
The price tag? Nearly $861 million in federal funding across multiple infrastructure streams—including roads and transit projects that have nothing to do with housing.
The Tax Trap Nobody's Talking About
Council just approved a 2026 budget with a modest 1.6% property tax increase. That number assumed federal dollars would flow. If CMHC pulls the plug, the city faces a $201 million capital deficit for infrastructure projects already on the books this year.
The math is brutal: either slash services mid-year, or impose a 'corrective' tax hike before December. Neither option will play well with taxpayers who were promised predictable levies.
The August Limbo
Even if Council votes to repeal in March, the old zoning rules don't kick back in until August 4, 2026. That creates a five-month scramble where developers and trades are racing to lock in permits under current rules, while City planners brace for potential legal fallout with Ottawa.
It's a high-stakes game of chicken—and Calgary residents are riding shotgun.
What Happens Next
March 23 is the flashpoint. Council will hear from the public, weigh the housing vs. fiscal trade-offs, and decide whether to call the Federal Government's bluff. If the repeal passes, expect a tense summer of funding negotiations and behind-the-scenes legal reviews.
If it fails, the policy stays—and the debate shifts back to how Calgary builds density without losing neighborhood character.
Either way, your property tax bill is listening.
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