No, the letter must come from you, the sponsor. See section 5.40 of the IP2 manual linked above:
5.40. Withdrawal of undertaking/no refund of permanent residence application fee
The sponsor may request the withdrawal of the sponsorship undertaking after the
processing of the sponsored relative's or family member's application for permanent
residence has begun. There is no repayment of processing fees for the application
for permanent residence or right to an appeal. An undertaking is not automatically
withdrawn upon the request of the sponsor; the CPC must agree to the withdrawal.
Where a sponsor requests to withdraw their undertaking, and where the CPC
approves the withdrawal, this may ultimately have the effect of a refused application
for permanent residence pursuant to R120.
I would simply write the letter explaining that you are regrettably withdrawing the sponsorship undertaking because your father has decided that he no longer wants to immigrate to Canada. You can also include a letter from your father but you must write the actual withdrawal letter.
Can I ask why your father has decided that he doesn't want to immigrate to Canada? It sounds based on what you wrote that he is already living here in Canada. I don't want to dissuade you from your decision but keep in mind that it often takes 4 years for parental sponsorship applications to be approved. So if you think there is a chance that he may change his mind in the next few years then I think it makes sense to keep the application in process. Keep in mind that he just has to land by the expiry date on the visa but does not need to live in Canada right away. To maintain his PR status, he only needs to live 2 out of every 5 years in Canada. So what that means for your father is that he could potentially spend an additional 3 years outside of the country (after waiting ~ 4 years to finalize his application). So think about 7 years down the road....would your father want to live here then?? If so, then why cancel the application?? Also keep in mind that if you withdraw the application, and God forbid, that anything serious should happen to your father's health, that he may become inadmissable based on medical grounds. Sorry if I've confused you but I just thought you should keep those factors in mind. Good luck with everything.