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, we are mandated to 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 includes utility rate adjustments for those DND housing units that are not 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 the changes in consumer prices experienced by the target population. The CPI measures price change by comparing, over time, the cost of a fixed basket of goods and services.”
Once Statistics Canada publishes the report in the fall, CFHA applies the 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) 2019-2020?
The national average for the Provincial Rented Accommodation CPI-based rent adjustment process for FY 2019-2020 will be an increase of 1.24%, with the maximum increase being 1.9% for British Columbia. Yellowknife and Iqaluit rents will be adjusted by 2.2% using the All-Items Consumer Price Index as provided by the Treasury Board Secretariat as there is no Rented Accommodation CPI value for that area.
How does this percentage increase translate to actual rental costs?
For 2019-20, the national average shelter charge increase for DND housing units will be approximately $10 per month, representing 1.24%.
Can an occupant’s rent be increased by more than the CPI percentage adjustment?
In some circumstances, rents can exceed the CPI percentage adjustment:
- Shelter charges may increase above the CPI % (up to provincial rent control limits) if the occupant was paying less than the full base shelter charge in 2018-19
- Shelter charge may increase above the CPI % and even above provincial rent control limits to the maximum increase of $100 per month if the full base shelter was not applied at the date of occupancy or date of re-assessment
Is provincial rent control applicable to DND housing?
Provincial rent control is applicable in accordance with regulations. Occupants in rent control provinces in 2019 may see their rent increase up to the provincial limits (British Columbia at 2.5%, Manitoba at 2.2% and Ontario at 1.8%) if they were not paying the full Base Shelter Value (BSV) in the previous year. That means an increase may 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 HSC for review.
Additionally, the rents for fiscal year 2019-2020 for Privates (Incentive Pay Categories 1 or 2) and Officer Cadets, in accordance with DND regulations, are limited to the shelter charge rate in effect on March 31, 2019 plus 1.24% (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 military 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.
Military members continue to be supported by a robust compensation and benefits package, reflecting the unique nature and demands placed on military members and their families. Components of the total compensation package are continuously reviewed and updated as required. The PLD is one component of the overall benefits package.
If a housing unit is renovated, will the rent increase?
Only major upgrades (total renovation, kitchen and bathroom renovation, 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.
Do rental rates take into account a military 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.
How do you calculate utility charges if RHUs are not individually metered for heat, electricity, and/or water?
The formula is identified in the Treasury Board Secretariat (TBS)/National Joint Council (NJC) Isolated Post and Government Housing Directive (IPGHD), Section 6.14 - Fuel and Utility charges.
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. The Department will directly pay:
- the municipality for water and sewer
- a gas company for fuel
- a municipal or provincial hydro utility for electricity
- 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 military 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 military members living in DND housing in Cold Lake. 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 2019-20.
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.
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