Shelter charge (rent) adjustments

According to government policy and DND regulations, shelter charges for all DND housing must reflect local rental market values for similar rental units. This helps to ensure fairness and equity for CAF members, regardless of whether they choose to live in the private sector or in Crown housing. GC policy also states that DND rental housing shall be set at market rates to avoid competition with the private sector.

In other words, the policy ensures DND housing rental costs for CAF members are similar to what others in the neighbourhood would pay in the private sector for a comparable housing unit.

To meet these regulations, CFHA must review shelter charges across the country annually and make adjustments to reflect changes in the local market, based on the initial value of the unit. 

Since April 2014, DND has used Statistics Canada’s provincial Rented Accommodation Consumer Price Index (CPI) (and the annual Rent CPI percentage adjustment (January) for Canada for Yellowknife and Iqaluit) to determine annual housing shelter charge adjustments as recommended by TBS. These shelter charge adjustments also include utility rate adjustments for those DND housing units that are not individually metered for heat, electricity, and/or water, and where the GC is the supplier.

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 consumers.”

Once Statistics Canada published the August 2023 CPI report, CFHA applied the August-to-August provincial Rented Accommodation percentage change component of the CPI to the existing shelter charge of each housing unit to calculate the 2024-2025 adjustments. The August 2022 to August 2023 annual percentage changes can be found in Table 18-10-0004-04 of the CPI.

As the Rented Accommodation component of the CPI does not exist for Yellowknife or Iqaluit, the TBS has recommended that the January Rent component of the CPI for Canada be used. The January annual percentage changes can be found on the Statistics Canada website. 

For DND housing units not individually metered for utilities (heat, electricity and/or water) the GC is deemed the supplier. Utility rates for these occupants are calculated in accordance with the TBS/National Joint Council 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.

Overall, the provincial Rented Accommodation Consumer Price Index (CPI)-based rent adjustment process for RHUs for 2024-2025 will apply a national average increase of 4.2% ($37 per month) with rent control limits applied.

As the CPI percentages vary from province to province and with rent control limits for four provinces, the annual adjustments range from a 2.1% in Saskatchewan (Dundurn and Moose Jaw) to 8.3% (average $58 increase) in Newfoundland and Labrador (Gander and Goose Bay).

Certain adjustments for 2024-2025 are subject to provincial restrictions. In particular:

• The Government of Ontario announced a rent control limit of 2.5% for 2024.  Although the annual CPI adjustment for 2024-2025 will be 6.8% (an average $63 per month increase), current occupants will be limited to an average $22 increase with rent control limits applied.
• The Government of British Columbia announced an annual allowable rent increase of 3.5% for 2024. Although the annual CPI adjustment for 2024-2025 will be 5.8% (an average $68 per month increase), current occupants will be limited to an average $38 increase with the annual allowable rent increase applied.
• Although all RHUs in Manitoba will be subject to the 6.0% CPI adjustment (an average $49 per month increase), due to the provincial rent control limit of 3.0% for 2024, current occupants will be limited to an average $24 increase with rent control limits applied.
• Nova Scotia has extended the Interim Residential Rental Cap Act which provides a percentage limitation of 5.0% for 2024 The 9.3% CPI adjustment will increase the shelter charges by an average of $75, however with the 5.0% rental cap limitation, current occupants (on or before March 31, 2024) will only incur an average shelter charge increase of $40.
• There is no Rented Accommodation CPI available for the Northwest Territories (Yellowknife) and Nunavut (Iqaluit). They will be adjusted by 5.8% using the Canada January Rent CPI as provided by the TBS for FY 2024-2025, which is an average shelter charge increase of $111 per month in Yellowknife and $131 per month in Iqaluit.
• Current occupants receiving a shelter charge reduction in 2023-2024 for which they no longer qualify in 2024-2025, could see an increase in the overall monthly shelter charge. This increase is not reflective of an RHU shelter charge increase but solely a result of no longer qualifying for a particular reduction (benefit). An example would be no longer qualifying for a shelter charge reduction based on the 25% of gross household income threshold. If the subsequent increase in the overall monthly shelter charge payment is solely from the loss of a benefit, it will not be limited by the annual CPI adjustment, nor provincial rent control legislation, as these limitations are applied to the full base shelter charge of the RHU prior to any subsequent reductions or abatements (benefit).

Since 2014, CFHA has relied on Statistics Canada’s Provincial Rented Accommodation component of the Consumer Price Index (CPI) to adjust shelter charges. As endorsed by TBS, CFHA uses the CPI because the annual percentage change provides the most precise data available for the mandated annual review and adjustment of shelter charges for government housing. It is an accurate monthly or yearly indicator of change. Each year’s percentage change in rent is based on 12 individual monthly adjustments, which can vary significantly over any given year, as we see for this past year. Provincial CPI data vary from province-to-province and from year-over-year for a variety of reasons including market fluctuations, movement of population, and others. For a better understanding of the CPI, please visit the Consumer price index portal or refer to the Statistic Canada document, Shelter in the Canadian CPI: An overview.

For 2024-2025, the national average percentage shelter charge increase for DND residential housing units is 4.2% and will be approximately an average $37 per month increase for current occupants after rent control limits in British Columbia, Manitoba, Ontario, and Nova Scotia are applied. Shelter charge adjustments for current occupants range from $10 for four occupants in Saskatchewan (Moose Jaw) to a maximum of $175 for one occupant in northern regions (Yellowknife). Note that these amounts do not include utility charges, which are calculated and applied separately. Overall, 89% of occupants will see a monthly increase of less than $60 per month.

As the CPI percentages vary from province to province and with rent control limits for four provinces, the annual adjustments range from a 2.1% in Saskatchewan (Dundurn and Moose Jaw) to 8.3% (average $58 increase) in Newfoundland and Labrador (Gander and Goose Bay). There is no Rented Accommodation CPI available for the Northwest Territories (Yellowknife) and Nunavut (Iqaluit) and therefore they will be adjusted by 5.8% using the Canada January Rent CPI as provided by the TBS for FY 2024-2025, which results in an average shelter charge increase of $111 per month in Yellowknife and $131 per month in Iqaluit.

A garage increases the value of the residential housing unit and therefore increases the shelter charge 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 overall shelter charge value and the occupant does not see the garage as a separate charge on their annual Notification of Annual Housing Shelter Charge Adjustment letter.

When a garage is not attached to a specific dwelling (more common with row garages), the charge for these garages does appears as a separate (additional) charge to the occupant and is provided on their annual Notification of Annual Housing Shelter Charge Adjustment letter.

Provincial rent control is applicable in accordance with regulations if a specific percentage limitation has been enacted as outlined in the legislated Queen’s Regulations and Orders for the Canadian Forces, Volume IV, Appendix 4.1 (4). In 2024, occupants in rent-controlled provinces may see their shelter charge increase up to the provincial limits (British Columbia at 3.5%, Ontario at 2.5%, Manitoba at 3.0%, and Nova Scotia at 5.0%).

DND aims to provide the means and support for CAF members and their families when residing in DND residential housing and takes into consideration the needs of their personal circumstances.

• As per DND policy, shelter charges (excluding parking costs and utilities) should not exceed 25% of the combined gross household income of all occupants residing in the DND residential housing unit in any one year. If a member believes they are eligible for a shelter charge reduction, they may apply to their HSC for review.
• As per the DND Compensation and Benefit Instruction applicable to CAF members, Isolation Allowance is intended to offset the cost differentials between isolated and non-isolated locations and to compensate members for harsh environmental conditions experienced at isolated posts.
• As per TBS directive, CFHA adjusts it’s Base Shelter Values annually which aligns with CAF annual economic increase (i.e., pay raise) for eligible CAF members. To assist them in mitigating financial decreases in monthly finances, the annual adjustment takes place 01 April of every year.

Generally, any upgrades to a RHU (total renovation, kitchen and/or bathroom renovation, full exterior or interior retrofits, etc.) may increase the value of the unit and consequently the shelter charge. In addition, the combination of multiple smaller projects which improves the overall quality and condition of the housing unit may result in a shelter charge increase (a bathroom upgrade combined with full replacement of all hardwood flooring and millwork, for example).

Living in DND housing is optional for CAF members and their families. If the new monthly shelter charge increase is not in the best financial interest of the CAF member (even after applying for the 25% of gross household income ceiling), they may inquire about moving to a less expensive RHU (subject to availability) or are free to secure alternate accommodations in the private sector marketplace, thus maximizing their freedom of choice. CFHA requires a minimum of 30 days written notice in advance of the date they expect to vacate the RHU.

The shelter charge is 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 family size is not a consideration when setting the shelter charge.

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.  

No. As directed by TBS, annual shelter charge adjustments must represent that year’s market rate of escalation. In accordance with TBS direction, CFHA uses the CPI (rent component) for each region as the year’s market rate of escalation to administer RHUs annual shelter charge adjustments. This Regulation would apply to shelter charge increases administered in addition to the annual shelter charge adjustments.