# 2021-151 Pay and Benefits, Home Equity Assistance Program

Home Equity Assistance Program (HEAP)

Case summary

F&R Date: 2021-12-13

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 (AB) in July 2020 and sold his home in Cold Lake in September 2020 with an equity loss of approximately $125,000. While he was reimbursed $30,000 from the Core funding envelope, the grievor argued the changes to the HEA benefit were unfair to those who bought homes and took comfort in the protection the previous CFIRP Directive provided. The grievor wanted to be grandfathered under the previous Directive.

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 HEA policy that no longer contained the depressed market benefit. The IA denied the grievance, finding that the sale of the grievor's home, which took place after 18 April 2018, could not be administered under the previous version of the CFIRP Directive. 

The Committee first considered whether the grievor had a vested right to the application of the previous CFIRP Directive, but found that he would have had to sell his house before 19 April 2018 to have locked-in that vested right.  

The Committee then cited an interview given by the Director of Compensation and Benefits Administration (DCBA) to the Canadian Broadcasting Corporation in May 2018 in which 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 CFIRP Directive article 2.1.01 did apply to the grievor in that his issue related directly to his relocation and the extent of his equity loss was exceptional in nature.   

The Committee also observed that taxation of the current $30,000 HEA maximum reimbursement from the Core envelope reduces the benefit to the grievor. Given this taxation is governed by the Income Tax Act, the Committee recommended that the CAF and TBS pursue a reduction in this tax burden on military members. The Committee recommended that the Final Authority direct DCBA to forward the grievor's claim to TBS for full reimbursement of his equity loss, 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. He determined that the grievor was aggrieved. In accordance with article 2.1.01 of the CFIRP Directive, the CDS directed that the Chief of Military Personnel (CMP) ensure the grievor's request for 100% reimbursement of the loss of equity from the sale of his residence in Cold Lake is submitted to TBS for approval, with the CDS’ full support.

The CDS noted that based on previous direction on this matter, TBS and the DCBA have been in consultation to discuss the situation affecting CAF members who sold their residences at a loss in Cold Lake. As a result, TBS directed DCBA to initiate a market study assessing the periods of 2014-2018 and 2018-2020. The study remains ongoing as of March 2022. Barring this and anticipating limited flexibility to address the lack of a catastrophic loss clause, the CDS offered that, in future, should losses over $30,000 be anticipated by a CAF member, that a member's branch leadership be mandated to implement alternate Active Posting Season courses of action. Such courses of action would aim to eliminate potential long-term financial impact to CAF families and would include remote work and posting cancellations. The CDS directed CMP to find a mechanism through which to quickly implement this CAF-centric approach, such as the Canadian Forces General Messages or other similar means to ensure rapid and consistent implementation across the force. 

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