City officials say the country music festival failed to pay a required $150,000 amount to use city-owned property from Aug. 10 to 12.
In response, organizers for Capital Hoedown state they plan to bring the money to the city on Friday and ask for the city's decision to be reconsidered.
The city was originally told the payment was wired on May 24, but as of Thursday determined the money never came, a city statement read.
"It takes time to process and verify this type of payment. The city’s finance department was in contact with Capital Hoedown organizers on the wire issue of the transfer in order to ensure receipt," the city stated.
"After spending considerable time investigating, it was clear that the money was never sent to the city contrary to what was indicated earlier by the organizers of Capital Hoedown."
Late Thursday, the city terminated its three-day special events agreement with Capital Hoedown, barring the event from being held on city property.
Organizers for Capital Hoedown said in a statement that they respected the city's need to protect taxpayers, and are preparing to bring the money to officials shortly.
"The funds in discussion are to support the various city services surrounding the festival. While the festival has not been able to meet the payment, which will sit in escrow until the August event, we plan to approach the city with the funds on Friday and request that they reconsider their decision," a statement from Capital Hoedown read.
"The festival is reviewing other venues for the event, but we remain committed to bringing the event to Ottawa west. The economic benefit to the community and Ottawa is significant, and we look forward to reviewing the options with the city."
Several of the performers slated to come to Capital Hoedown have removed mention of the festival from their upcoming tour dates, according to media reports.