The municipalities of Toronto and Vaughan, Ont., will receive reduced federal Housing Accelerator Fund (HAF) allocations after failing to comply with their agreements with the federal government, the Canada Mortgage and Housing Corporation announced.

Toronto, which signed its HAF agreement in 2023 and was originally slated to receive $471.1 million, has been found to be non-compliant after a commitment under the agreement was not fully met. As a result, the city’s HAF funding will be reduced by $10 million.

Vaughan, which also signed its HAF agreement in 2023 and was set to receive $74 million, has been found to be non-compliant after several commitments under its agreement were not met. The city’s HAF funding will be reduced by $7.4 million.

Meanwhile Red Deer, Alta., a much smaller, secondary commercial real estate market, also took a $12-million HAF hit. Red Deer, which signed a HAF agreement with the federal government in February 2025, was found to be non-compliant with a mandatory requirement of the program’s second funding round as of July 21, 2025. The city’s HAF funding was was cancelled Friday.

“Our government is committed to removing barriers and cutting red tape to enable more housing development in communities across Canada,” said Housing and Infrastructure Minister Gregor Robertson. “We are also committed to demonstrating the results of the Housing Accelerator Fund and being transparent, while maintaining the integrity of agreements, as we work to build more homes across Canada.”

Toronto Mayor mayor Olivia Chow and counterparts Steven Del Luca of Vaughan and Cindy Jefepledged to work with Ottawa to ensure that they could get more HAF dollars. But Red Deer said it is not ready to pay back the $3.2 million in HAF funds received thus far.

Global News reported that the city was found to be in non-compliance because it refused to accept a condition requiring the adoption of four units as of right on a single residential property. The city is concerned that the requirement could deter people from living and building homes in Red Deer.

Mayor Cindy Jefferies told Global that the city is seeking a “softening” of the conditions tied to the HAF allocations.

CMHC said the HAF application process was highly competitive, with more than 540 applications received and 241 agreements signed. Funding from reductions and cancelled agreements will be reallocated to top-performing HAF communities that choose to launch new initiatives, expand their agreements, and increase building permit targets to further boost housing supply, said CMHC.

In the first year of the program, local governments that received HAF funding issued 160,585 residential building permits, 22,000 more than expected, according to the federal agency.

Launched in 2023, HAF has committed about $4.4 billion in funding to help cut red tape and fast-track new homes, including rental projects and condominium developments, for people in towns, cities, and Indigenous communities across the country.

Pictured: Condominium project under construction in downtown Toronto near the CN Tower.

Photo: Bazis