BLAIRMORE, Alta. -- Bewilderment compounded a small Alberta mountain town's grief Wednesday as residents learned a young man from a well-liked local family stood charged with the murders of a father and his two-year-old daughter.

Hailey Dunbar-Blanchette's mother broke down into tears as she described an old friendship with the accused killer, Derek James Saretzky, saying she had no idea why anyone would want to harm her sweet child.

"She was my baby," Cheyenne Dunbar, 20, told reporters outside the Blairmore RCMP detachment Wednesday. "I don't know why anybody would do this to her."

RCMP say Saretzky, 22, faces two counts of first-degree murder in the deaths of Hailey and her father Terry Blanchette, 27. He also faces one count of committing an indignity to a body in the girl's death.

Hailey's body was found Tuesday evening in a rural area near Blairmore after her father's body was discovered in their home in the town a day earlier.

An Amber Alert issued after her father's death beamed the smiling toddler's picture across Western Canada and into the northern United States. Authorities launched a massive search in hopes of finding the youngster alive. News that her body was found came during a candlelight vigil meant to lend hope to that effort.

Court records show Saretzky had recently been charged with breaking into a Blairmore home in August.

The homeowner in that case, Ray MacGregor, told The Canadian Press he was not home at the time of the break-in. But he said he heard from his neighbours that it happened overnight and some liquor was stolen. Someone returned the next day and was caught in the act of trying to steal a TV.

The Saretzky family is well-known in Blairmore as the owners of the local dry-cleaning business.

A woman working at the establishment said Saretzky didn't work for the business, but did live in a home behind it. Police had the alley behind the cleaners closed off Wednesday.

Townspeople said Saretzky had two brothers. Dustin Saretzky said he didn't want to comment because he hadn't had a chance to talk to his brother since the murder charges were laid.

"I'm still in shock this could have even happened," he said via Facebook.

Matt Neufeld, who was born and raised in Blairmore, knows the family.

"They were all from the community and they were raised with the same moral standards as everybody else here, so it doesn't make sense," said Neufeld, who moved away in 2002, but still travels to the area on business.

"They're really great people that worked hard their whole lives to get where they are and that this happened is really unfortunate."

Blanchette and Dunbar were separated, but Dunbar, who recently moved to Edmonton, said the two maintained a good relationship and both cared for Hailey.

Blanchette has been described as a devoted single father. He worked as a cook and had many criminal convictions between 2010 and 2012 for issues such as failing to appear in court, evading police, minor theft and assault.

But after Hailey was born, there were no more court appearances. Blanchette's Facebook posts switched from talk of court dates to photos of him with his baby daughter.

Police said Saretzky and Blanchette were acquaintances, but Dunbar didn't know how they knew one another.

Becca Harrington, Hailey's godmother, said she was so close with Blanchette she considered him more than a best friend. She said she didn't believe Blanchette and Saretzky were friends.

"I'm sure they've probably met. Terry had lived here for so many years, and Derek grew up here, so guaranteed, they've probably run into each other," she said. "But he never said anything. He never felt fear of him. So you wouldn't see it coming."

Dunbar said Saretzky was an old friend of hers, but they never dated as some reports had suggested. She said she hadn't spoken to Saretzky in years and had forgotten about him.

"When I knew him he was a great kid. That is all I know," she said. "We were friends, we hung out every once in a while. Me and his friends all hung out. It was fine. There was never any upsetness in the group. There was never any madness."

A woman identified as Hailey's maternal grandmother, Terry-Lynn Dunbar, posted a statement from the family on Facebook thanking people for their support.

"I'm sure you have read all sorts of awful things on social media about our families as well as news broadcasts and radio programs, but just know this: Terry and Cheyenne loved their little girl more than anything in the world," it read.

Hailey's mother said she will miss everything about her little girl, who was born on New Year's Eve 2012.

"She was smart, beautiful, the greatest child ever," she said. "I am going to miss her smile. The way she ran around saying mummy.

"Everything."

- With files from Laura Kane in Vancouver.