# 2021-046 Pay and Benefits, Home Equity Assistance Program

Case summary

F&R Date: 2021-05-28

The grievor was posted from Cold Lake, Alberta in July 2019. On 19 April 2018, revisions to the Canadian Forces Integrated Relocation Program (CFIRP) Directive came into effect, removing the option to apply for 100% Home Equity Assistance (HEA) reimbursement from the Core envelope for homes sold in a depressed market area. The grievor's home sold in April 2021 and he suffered an equity loss of $72,500. The grievor argued that he followed a lawful order to move to Cold Lake and relied on the CFIRP Directive to protect him from volatile housing prices. He sought the full reimbursement of his equity loss and more than $7000 in capital improvement expenses.  

The Initial Authority (IA) found that, on 4 February 2021, the Treasury Board Secretariat (TBS) declared that houses sold in Cold Lake after 18 April 2018 would be subject to the revised version of the CFIRP Directive HEA policy, which no longer considered the depressed market status. The IA denied the grievance, finding that the grievor's home sold after 18 April 2018, disqualifying the sale from the TBS depressed market designation. 

The Committee first considered whether the grievor had a vested right to be administered under the previous CFIRP Directive version, but found that he would have had to sell his house before 19 April 2018 to have locked-in that vested right.  

The Committee then noted that in an interview given by the Director of Compensation and Benefits Administration (DCBA) to the Canadian Broadcasting Corporation in May 2018, the DCBA stated that the intent of the Canadian Armed Forces (CAF) was to address catastrophic home equity losses using a “caveat” found in the CFIRP Directive. DCBA staff advised the Committee that the “caveat” was CFIRP Directive article 2.1.01. The Committee found that CFIRP Directive article 2.1.01 did apply to the grievor in that his issue was directly related to relocation and the extent of his equity loss was a reasonable expense incurred under an exceptional circumstance. The Committee also found that the TBS declaration of the end of a depressed market in Cold Lake after 18 April 2018 was arbitrary and did not reflect the true state of the housing market.

The Committee recommended that the Final Authority direct that the grievor's request for 100% loss of equity expense be submitted to TBS for approval with the full support of the CAF.

FA decision summary

The Chief of the Defence Staff (CDS) agreed with the Committee's findings and recommendation to afford the grievor redress. The CDS found that there was no vested right afforded to CAF members, such as the grievor who sold their home after the 19 April 2018 deadline. Since the CDS was unable to grant redress, he directed that Chief of Military Personnel (CMP) ensure the grievor's request for 100% reimbursement of the loss of equity from the sale of his residence in Cold Lake be submitted to TBS for approval with his full support. The CDS reiterated that he has already directed CMP, in cooperation with TBS, to review CFIRP HEA provisions with an aim to implementing some form of catastrophic loss protection and, in doing so, minimize the negative impacts on CAF families. This should include a discretionary mechanism to deal with undue financial hardship in unique situations, such as the grievor's. Barring this, and anticipating limited flexibility to address the lack of a catastrophic loss clause, the CDS would offer that, in future, should losses over $30 000 be anticipated by a CAF member, that a member's branch leadership should be mandated to explore and implement alternate Active Posting Season courses of action to negate the potential for long-term financial impact to the CAF families, to include remote virtual work potential as well as possible posting cancellations. As indicated by the CDS, these means, while not optimal, are within the CAF's capacity to influence. The CDS directed CMP to investigate a mechanism through which to implement this CAF-centric approach quickly, be that through a CANFORGEN or similar order to ensure rapid, consistent implementation throughout the CAF.