# 2021-067 Pay and Benefits, Home Equity Assistance Program

Case summary

F&R Date: 2021-06-30

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 relocated from Cold Lake, Alberta in August 2019. The grievor's home in Cold Lake sold in March 2019 with an equity loss of approximately $97,000. The grievor was reimbursed $30,000 from the Core funding envelope. The grievor argued that the CFIRP Directive that was in effect during the purchase of the home in 2013 should be applied when it was sold. The grievor sought 100% reimbursement plus interest from the date of the home sale.

The Initial Authority (IA), the Director General Compensation and Benefits, 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 contained the depressed market benefit. The IA denied the grievance, finding that the grievor's home sold after 18 April 2018 and that it could not be administered under the previous CFIRP Directive.

The Committee first considered whether the grievor had a vested right to be administered under the previous CFIRP Directive but found that the house would have had to be sold before 19 April 2018 in order to have locked-in a vested right.

The Committee noted an interview given by the Director of Compensation and Benefits Administration (DCBA) to the Canadian Broadcasting Corporation in May 2018, where 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 later advised the Committee that the “caveat” referred to was the CFIRP Directive article 2.1.01. The Committee found that CFIRP Directive article 2.1.01 did apply to the grievor's case given that the expense was directly related to the relocation and the extent of the equity loss was exceptional in nature.

The Committee also observed that taxation of the current $30,000 HEA maximum reimbursement from Core serves to reduce the benefit received by the grievor. Noting that the matter is governed by the Income Tax Act, the Committee recommended that the CAF and the TBS pursue a reduction in this tax burden on military members. However, the Committee found that there was no regulation providing for the payment of interest on reimbursement. The Committee recommended that the Final Authority direct DCBA to forward the grievor's claim for full reimbursement of the equity loss to the TBS with the full support of the CAF.