The report, by financial consultancy KordaMentha, showed costs for rebuild projects were likely to rise, some assets were underinsured and insurance payouts may not be as high as budgeted.
Canterbury Employers Chamber of Commerce chief executive Peter Townsend told Radio New Zealand's Nine to Noon programme that despite the findings, the council was in relatively good shape.
Mr Townsend said the council could reduce its holdings in companies such as the airport or City Care. He acknowledged that selling the businesses would be contentious but said these assets were put away for a rainy day - and that time had come.
Council in red over rebuild deal
Christchurch Mayor Lianne Dalziel said the cost-sharing agreement between the previous council and the Government to help rebuild the earthquake-hit city had left the council in the red.
The new council had opened the books on spending promises and debt left behind by the old council.
The interim findings of the KordaMentha report showed ongoing operating costs of anchor projects, such as the metro sports facility, had not been factored into the council's agreement with the Government.
The cost of repairing underground infrastructure, such as pipes, was rising and previous estimates were already out of date.
Ms Dalziel said that had left a shortfall in what the council could afford, and the final KordaMentha report would look at ways to meet that which did not involve more debt. She said the council now had a baseline to work from and could re-prioritise the work.
Former mayor Bob Parker said there should be nothing surprising in the new report, that the rebuild plan was always likely to change as projects are firmed up, and settling the insurance payout had been a challenge.
Mr Parker said the council was aware it might not get a full settlement but had to assume it would get what it was entitled to. He was confident the rebuild plan could go ahead unchanged.
However, Labour Party MP Ruth Dyson said the plan should be reassessed, as some of the anchor projects the council had committed to could be too ambitious.
"I certainly think that it would appropriate for the mayor and (Canterbury Earthquake Recovery) Minister Gerry Brownlee to say 'we can't do this to our city and our region' and to take a step back and say 'let's start again'," Ms Dyson said.
Ms Dyson called on the council and the Government to go over some of the key projects and see what needed to be done but said she was pleased the council was being upfront about the financial situation.