The three men and two women were arrested Thursday because police say they interfered with city workers who were removing tents in Oppenheimer Park.
A B.C. Supreme Court judge issued an injunction against campers last week when the city claimed the rights of locals were being trampled and pledged to make more shelters available to the homeless.
Police say they released the five once their identities had been confirmed and city workers regained control of the park.
After reviewing the circumstances and considering the public interest, police say they decided not to pursue criminal charges.
The tent city appeared in Oppenheimer Park in late July, when homeless people began setting up makeshift shelters.