# 2019-306 Pay and Benefits, Home Equity Assistance

Case summary

F&R Date: 2020-05-22

The grievor received a posting message relocating him from Cold Lake, Alberta with a change of strength date in July 2018. On 19 April 2018, revisions to the Canadian Forces Integrated Relocation Program (CFIRP) Directive came into effect, removing the option to apply for 100% Home Equity Assistance (HEA) reimbursement from the Core envelope for homes sold in a depressed market area. The grievor's home sold in August 2018 and he suffered an equity loss of $75,000. The grievor argued that his equity loss is far beyond what the amended CFIRP Directive is capable of compensating and that losses above the maximum reimbursement of $30,000 should be considered on a case-by-case basis. He sought the full reimbursement of his equity loss.

The Initial Authority (IA) found that, on 17 July 2018, the Treasury Board Secretariat (TBS) declared that houses sold in Cold Lake after 18 April 2018 would be subject to the revised version of the CFIRP Directive HEA policy which no longer considered the depressed market status. The IA denied the grievance, finding that the grievor's home sold after 18 April 2018 and could not be administered under the previous CFIRP Directive version.

The Committee first considered whether the grievor had a vested right to be administered under the previous CFIRP Directive version but found that he would have had to sell his house before 19 April 2018 to have locked-in a vested right. The Committee then noted that in an interview given by the Director of Compensation and Benefits Administration (DCBA) to the Canadian Broadcasting Corporation in May 2018, the DCBA stated that the intent of the Canadian Armed Forces (CAF) was to address catastrophic home equity losses using a “caveat” found in the CFIRP Directive. DCBA staff advised the Committee that the “caveat” was CFIRP Directive, article 2.1.01. The Committee found that article 2.1.01 did apply to the grievor in that his issue was directly related to his relocation and the extent of his equity loss was exceptional in nature. The Committee recommended that the Final Authority direct DCBA to forward the grievor's claim for full reimbursement of his equity loss to the TBS with the full support of the CAF.

FA decision summary

The Chief of the Defence Staff (CDS) agreed with the Committee's findings and recommendation that the grievor's case be brought before the Treasury Board (TB) with a recommendation that he be afforded Home Equity Assistance (HEA) for 100% of the financial loss incurred with the sale of his home in Cold Lake.

The CDS was also of the view that the 18 April 2018 date was chosen purely as a means of aligning the termination of access to 100% reimbursement of qualifying losses on a home with the changes to the new HEA policy. He therefore found, as the Committee, that the imposition of the 18 April 2018 cut-of date of no relevance to the economic conditions present in Cold Lake at the time. As explained by the Committee, the current HEA policy, found in the Canadian Forces Integrated Relocation Program (CFIRP), does not address the harm being caused to the small segment of CAF members who suffer catastrophic loss of home equity on relocation. For those individuals and their families, the HEA benefit remains inadequate as they should not be expected to absorb such severe home equity losses as a result of serving in the CAF. Therefore, the CDS reiterated that he has already directed Chief of Military Personnel, in cooperation with the TB, to review CFIRP HEA provisions with an aim to implementing some form of catastrophic loss protection and in doing so, minimize the negative impacts on CAF families. This should include a discretionary mechanism to deal with undue financial hardship in unique situations, such as the one that the grievor found himself in.