Confessions extracted using the undercover police technique can be unreliable and hurt public perception of the justice system.
It has advised Fontaine's family of the decision.
He said it was clear the jury didn't find enough evidence to convict.
"I choose not to feed hopelessness. I feed being hopeful."
"Tina represents our babies and our babies are not safe out there."
She was in the care of social services and was staying at a Winnipeg hotel when she disappeared.
The news hits an already grieving community hard.
Her body was found in 2014.
Raymond Cormier, 53, was arrested last week in Vancouver.