Robert Leeming said he had been wrongly suspected of killing his tenant Jasmine Lovett, 25, and her daughter Aliyah Sanderson, who vanished from the Cranston area of Calgary earlier this month.
The 34-year-old, who has lived in Canada for six years, was arrested on Thursday at his home in Cranston.
Calgary Police later said an unnamed suspect had been released without being charged, “however, he remains the primary suspect in the case”.
Speaking to local media after his release, Leeming said he understood he remained a suspect, describing it as a “very stressful experience”.
“They have it wrong, as far as I’m concerned. Of course they do,” he said.
The mother and daughter’s family said they were “devastated” by their disappearance.
“They are so loved by so many people and we just want answers,” they said in a statement to the Calgary Herald.
“We are hoping and praying for closure for everyone involved.”
Calgary Police said Ms Lovett and Aliyah were last seen in Cranston on the evening of Tuesday April 16, while activity on her bank accounts stopped on April 18.
“There have been no signs of life since,” the force said.
“(We) do not believe this incident to be random because the suspect and victims knew each other,” police said.
“We are currently working with multiple other agencies to search Cranston and the area around Bragg Creek for evidence.”
Leeming said he was being treated as the prime suspect because he was “the last person to see them” on the evening of Thursday April 18.
The day before, they had gone to a picnic area at Bragg Creek, a beauty spot around 40 miles away from Cranston, he said.
Leeming, who described his relationship with Ms Lovett as “just good friends”, said he went out with the mother and baby for “beers and some food” before returning home.
“Nothing unusual,” he told reporters.
Leeming said he was from England but had moved to Canada in 2013 and been issued permanent residency.
Ms Lovett and her child had been living at his property since October.
Asked if there had ever any romantic involvement between them, he replied: “There was initially, but towards the end no.”
On Saturday, Calgary Police appealed for anyone who saw a “Caucasian man in his mid-30s” driving a Mercedes SUV in the Bragg Creek area between April 16 and April 20.
“The Calgary Police Service continues to search for evidence in the suspected homicides of Jasmine Lovett and Aliyah Sanderson,” the force said.
“The man may have been alone or with either of the victims, and may have been carrying mulch in his vehicle,” the force said.
“Despite changing weather, investigators continue to search the Bragg Creek area as well as a residence in Cranston in connection with this case.”
UK Foreign Office officials are understood to be aware of media reports of the case although no request for consular assistance has been made.