RENT INCREASE DEFERRED TO 1 APRIL 2021
In an effort to reduce stress and financial uncertainty resulting from impacts of COVID-19, we are working on measures to support you and your family during this challenging time.
The Canadian Forces Housing Agency (CFHA) will be deferring annual rent increases (also known as the Annual Shelter Charge Adjustment) by one year. Any rent increases originally scheduled for 1 April 2020 will be postponed to 1 April 2021.
Departmental systems have already been set up for your rent deductions to occur in April, we are asking for your patience as we update the systems to reflect this change.
How are the rental rates for the DND housing units set?
According to Government policy and Department of National Defence (DND) regulations, rents for all DND housing must reflect local market values for similar homes in the local market. This helps to ensure fairness and equity for military families, regardless of whether they choose to live in the private sector or in Crown housing. In addition, Government of Canada policy states that DND housing shall be set at market rates to avoid competition with the private sector.
In other words, the policy ensures that a military member is provided with DND housing at a rental cost that is similar to what others in their neighbourhood in the private sector, with a similar housing unit, would pay.
To meet these regulations, CFHA must review rents across the country on a yearly basis and make adjustments to reflect changes in the local market, based on the initial value of the unit.
Since April 2014, like other government departments, DND has used Statistics Canada’s Consumer Price Index (CPI) to determine its annual housing rent adjustments. The rent adjustment also includes utility rate adjustments for those DND housing units that may not be individually metered for heat, electricity, and/or water.
How does the Consumer Price Index (CPI) work?
As defined on the Statistics Canada’s website, “the Consumer Price Index (CPI) is an indicator of changes in consumer prices experienced by Canadians. It is obtained by comparing, over time, the cost of a fixed basket of goods and services purchased by the consumers.”
Once Statistics Canada publishes the CPI report in the fall, CFHA applies the August to August provincial Rented Accommodation CPI accordingly to the housing rents.
As this CPI does not exist for Yellowknife or Iqaluit, the All-Items CPI is used.
How are utility charges calculated?
For DND housing units that are not individually metered for utilities (heat, electricity and/or water) the Government of Canada is deemed the supplier. Utility rates for these occupants are calculated in accordance with the Treasury Board Secretariat (TBS)/National Joint Council (NJC) Isolated Post and Government Housing Directive (IPGHD), Section 6.14 - Fuel and Utility charges. These charges are also adjusted annually by the Canada CPI indexes for water, fuel and electricity.
What percentage will the rent increase be across Canada for fiscal year (FY) 2020-2021?
The national average for the Provincial Rented Accommodation CPI-based rent adjustment process for FY 2020-2021 will be an increase of 1.57%. CPI adjustments in Ontario are 4.4%, and occupants will only incur a 2.2% change due to provincial rent control limits. Also, with the CPI adjustment of 3.3% in British Columbia, occupants will only incur a 2.6% change due to provincial rent control limits. Although Manitoba has a provincial rent control limit of 2.4%, the CPI adjustment is only 1.8%. Therefore, all occupants currently paying the full Base Shelter Value (BSV) for 2019/20 will only incur a 1.8% increase for 2010/21. Longer term occupants that may be paying less than the full BSV due to consecutive years of provincial rent control may have their BSV increased up to the maximum 2.4% if required to meet or close the gap to the established BSV. Yellowknife and Iqaluit rents will be adjusted by 1.8% using the All-Items CPI as endorsed by the Treasury Board of Canada Secretariat as there is no Rented Accommodation CPI value for that area.
How does this percentage increase translate to actual rental costs?
For 2020-21, the national average shelter charge increase for DND housing units will be approximately $13 per month, representing 1.57%.
Does having a garage change an occupant’s rent?
A garage increases the value of the residential housing unit and therefore increases the rent of the property.
When a garage is attached to the house, on-lot or a row garage specifically assigned to the house, the garage value is included in the rent value and the occupant does not see the garage as a separate charge.
When a garage is not attached to a specific dwelling (more common with row garages), the rent for these garages appears as a separate (additional) charge to the occupant.
Is provincial rent control applicable to DND housing?
Provincial rent control is applicable in accordance with regulations. Occupants in rent control provinces in 2020 may see their rent increase up to the provincial limits (British Columbia at 2.6%, Manitoba at 2.4% and Ontario at 2.2%) if they were not paying the currently established Base Shelter Value (BSV) in the previous year. That means an increase can be higher than the CPI percentage increase.
Does DND offer any housing financial assistance to military members?
Rents (excluding parking costs and utilities) cannot exceed 25% of the combined gross household income for all families living in DND housing. If a member believes they are eligible for a rent reduction, they may apply to their Housing Services Centre for review.
Additionally, the shelter charges for fiscal year 2020-2021 for Privates (Incentive Pay Categories 1 or 2) and Officer Cadets, in accordance with DND regulations and approval from the Minister of National Defence, are limited to the shelter charge rate in effect on March 31, 2020 plus 1.57% (the national average increase).
Will the Post Living Differential (PLD) be adjusted to help with the new rent?
While the PLD rates currently remain at 2008 levels, the Government of Canada is working to establish a new PLD framework that is affordable and sustainable. PLD rates are reviewed regularly to help CAF personnel and their families with the cost of living when posted to various locations across Canada.
The PLD allowance is separate from pay. More information on this allowance is available in Chapter 205.45 on Allowances for Officers and Non-Commissioned Members on the DND/CAF website.
CAF members continue to be supported by a robust compensation and benefits package, reflecting the unique nature and demands placed on CAF members and their families. Components of the total compensation package are continuously reviewed and updated as required. PLD is one component of the overall benefits package.
If a residential housing unit is renovated, will the rent increase?
Only major upgrades (total renovation, kitchen and/or bathroom renovation, full exterior retrofits, etc.) increase the value of the unit and consequently the rent. Repairs and maintenance projects such as plumbing, electrical, or counter replacements will not have an impact on the rent.
What happens if the member does not want to pay the new rent increase?
Living in DND housing is optional for CAF members and their families. CFHA aims to accommodate every member’s needs, while ensuring all terms, conditions, and policies are understood and respected by both parties.
Do rental rates take into account a CAF member’s rank?
Rent is purely based on the local market value which considers housing type, size, and age, as well as access to amenities, additions like a garage and general condition of the units. Rank or size of the family is not a consideration for rent setting.
Does CFHA keep the money collected for un-metered utilities?
Monies collected from occupants for DND housing units that are not individually metered are used to pay the utility provider whether that be a municipality for water and sewer, a gas company for fuel, a municipal or provincial hydro utility for electricity, or a Base or Wing that produces a utility.
Why has there been a 10% rent reduction in Cold Lake since 2013?
To ensure military housing continues to be a viable option for CAF members living in Cold Lake, and to address the issue of a high vacancy rate for DND’s housing, in December 2012 the Minister of National Defence directed a reduction in rents by 10% effective April 1, 2013, to encourage occupancy for CAF members in DND housing in Cold Lake.
It should be noted that when rent is reduced to less than the fair market value calculated for DND housing, the difference between what is being charged and the market value is considered a taxable benefit as per the Income Tax Act.
This also served to offset the significant increase in rents for FY 2013-14 as appraised by the Canadian Mortgage and Housing Corporation. This 10% reduction has been re-approved for each subsequent year since, including FY 2020-21.
What will the average rent adjustment be for residential housing units (RHUs) at Cold Lake?
The RHUs in Cold Lake will see an average increase of approximately $15 based on the CPI adjustment of 1.6% for FY 2020-21.
With the 10% reduction in place for FY 2019-20, occupants saved an average of $98 per month. With the 10% reduction continuing for 2020-21, occupants will save an average of $99 per month (as the 2020-21 shelter charge is increasing by an average of $15 per month, the 10% reduction is also slightly higher).
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