The Canada Mortgage And Housing Corporation (CMHC) has formally informed the Town of Tecumseh that it is in breach of its Housing Accelerator Fund (HAF) agreement.
The town committed to pre-zone land for up to four housing units as-of-right but council narrowly voted against the plan in July 2025.
The decision came following months of pushback from residents fearing how it could change the character of the town.
CMHC said in its letter dated Dec. 24, 2025, that Tecumseh had 37 days to fix the issue or face termination of the funding deal.
The letter is in the correspondence portion of the agenda for Tuesday's council meeting.
Deputy mayor Joe Bachetti said the letter serves as a formality and he's not looking to reopen the file.
"Based on 18 months of back and forth with convenient public open houses, public meetings, we heard loud and clear from our community that they do not want four units as-of-right, and so again, for myself, I can't speak for how things will go but that's just under correspondence to note and file in my opinion," he said.
He said it’s important to respect the process that has unfolded, out of consideration for the community and Tecumseh residents.
"No new information has come out to justify, in my opinion, to look at changing this and then reversing it within two weeks by January 30. It's just absurd to look at those timelines to do something like that," Bachetti said.
Bachetti was a vocal opponent of four units as-of-right and said he still felt the same as he did last July.
"Look, we have a lot of land and we're doing our housing outcomes, we're doing the targets, we don't need to go into established neighbourhoods to add more density. At the end of the day, that's what the community was looking for is when is enough enough," he said.
"In terms of making that final decision, that was done in July."
If no further action is taken the town will lose out on the remaining $3.2 million in federal grant funding.
CMHC did say that the $1.09 million already advanced to the town will not need to be repaid if spent as agreed upon.