The city had tried to get the Canucks' American Hockey League affiliate to play out of the Abbotsford Entertainment and Sports Centre, but the two groups could not agree on terms.
"Everybody's hopes were high that Vancouver would end up being here,” said Mayor Bruce Banman.
Banman said he can't give specifics about why negotiations broke down, but says the city is reviewing all options.
“There's always tomorrow, the door's not closed, we'll talk to anybody that wants to come,” Banman added.
The city was hoping Vancouver's club would boost attendance and cut the subsidy it currently pays to the Abbotsford Heat.
The Heat — a farm team for the Calgary Flames — has a tough time filling the local rink, and brings in around 2,000 fewer fans per game than the minor hockey league average.
Three years ago, the city signed a deal with the Heat to guarantee almost $6 million a year in revenue.
Taxpayers in Abbotsford covered losses of nearly $2 million last year, in the third consecutive year of shortfalls.
The Heat's contract with the city lasts until 2019.