# 2019-267 Pay and Benefits, Mortgage Default Insurance

Case summary

F&R Date: 2020-04-28

The grievor challenged the denial of his claim for reimbursement of Mortgage Default Insurance (MDI) expenses he incurred from the purchase of a principal residence on 28 February 2018. He claimed that a "loophole" in the Canadian Forces Integrated Relocation (CFIRP) framework resulted in him incurring both capital improvement (CI) and MDI expenses, neither of which he could claim when the CFIRP Directive was amended on 19 April 2018 to allow MDI but disallow CI. As redress, the grievor requested reimbursement of in MDI expenses he incurred.

The Initial Authority (IA) found that because the 19 April 2018 CFIRP Directive specifically excluded MDI expenses incurred before 19 April 2018, the grievor did not meet the policy requirements for reimbursement. The IA denied redress.

The Committee sympathized with the grievor's situation, which was an unfortunate result of bad timing. Nevertheless, it found that the National Defence Act clearly provides that only the Treasury Board (TB) can determine and regulate Canadian Armed Forces (CAF) members' travel, relocation and other expenses arising out of their service. As the CFIRP is developed under TB authority, the Committee found that only the TB can amend it.

The facts in this case established that the grievor's entitlement to MDI reimbursement was determined correctly in accordance with the applicable policy in force at the time he purchased his residence. Accordingly, the Committee found that the grievor was not entitled to reimbursement of MDI expenses he incurred for the 28 February 2018 purchase of his principal residence.

The Committee observed, however, that the 19 April 2018 version of the CFIRP Directive has no retroactivity or “grandfathering” provisions. Given that many CAF members could have been in the process of purchasing a principal residence at the time of the policy amendment, the Committee opined that it may have been advisable for the CFIRP to have included a grace period or grandfathering provisions.

With regard to CI, the Committee found that the grievor's arguments were speculative as the CI in question were to his new principal residence and CI would have been reimbursable only at the time of sale.

Consequently, the Committee recommended that the Final Authority not afford the grievor redress.

FA decision summary

The Chief of the Defence Staff (CDS) agreed with the Committee's findings and recommendation. Regarding the Committee's observation on the absence of a transitory provision similar to the one in the Royal Canadian Mounted Police relocation directive, the CDS directed the Chief of Military Personnel to consider this observation and determine whether it could be beneficial to pursue in future CFIRP TB submissions.