# 2014-030 - Integrated Relocation Program (CF IRP), Mortgage Breaking Penalties

Case Summary

F&R Date: 2014–04–30

The grievor was posted to a location where housing costs were significantly higher than his previous place of duty. Since he was unable to purchase a property and had to break his mortgage, the grievor incurred a mortgage early repayment penalty. The grievor believed that he should have been entitled to the reimbursement of this penalty since he had negotiated a mortgage that followed the existing policies and guidelines available at the time of the purchase of his residence. However, the policy was amended and the benefit is no longer available.

The Canadian Forces Integrated Relocation Program (CFIRP) is the Treasury Board approved policy for Canadian Armed Forces (CAF) members on relocation of their Dependants, Household Goods and Effects. Effective 1 April of each year, the CFIRP transitions to a new policy which regulates the relocation of CAF members during the current Active Posting Season.

At the time the grievor purchased his house, CAF members were entitled to the reimbursement for mortgage early repayment penalties in instances where they had to break their mortgage for relocation purposes. However, a policy change was announced by the Canadian Forces General message in July of 2012 removing this benefit, effective 1 September 2012. At the Committee's request, the Director General Compensations and Benefits confirmed that there were no transitional provisions within the revised policy. Since the grievor was posted after 1 September 2012, the Committee found that he was subject to the new policy and therefore not entitled to be reimbursed for his mortgage early repayment penalty. The Committee observed that the grievor had shown due diligence in negotiating a mortgage that was in accordance with the applicable CFIRP. The Committee also agreed that it was reasonable for the grievor to believe that if he followed the policies when he entered into a mortgage contract, that he would not be negatively affected during a future posting. The Committee suggested that transitional provisions be included during policy amendments where a CAF member's previous decisions could be impacted. Also, longer lead times could be provided when making amendments that could negatively affect CAF members.

CDS Decision Summary

CDS Decision Date: 2016–01–15

The Final Authority (FA) agreed with the Committee's findings and recommendation that the grievance be denied. The FA reiterated that in a recent decision, the CDS directed the Chief of Military Personnel to engage Treasury Board at the earliest opportunity to restore the Mortgage Early Repayment Penalty (MERP) provision removed from Compensation Benefits Instructions 208 for those CAF members who are expressly prohibited from purchasing a residence on posting or find themselves in a position where they are unable to purchase a residence at destination. However, the FA advised the grievor that the change to benefits such as the MERP are rarely, if ever, retroactive, and consequently, if it is approved, it may not remedy this grievance.