# 2023-109 Pay and Benefits, Canadian Armed Forces Relocation Directive, Mortgage Default Insurance, Relocation Benefits, Relocation Expenses

Case summary

F&R Date: 2025-02-25

As part of a posting from one Canadian province to another, the grievor inquired about relocation benefits with Brookfield Global Relocation Services (BGRS) and he received confirmations on two occasions that he would be entitled to Mortgage Default Insurance (MDI), if he chose to purchase a residence at the new location, while retaining his residence at the former location, which he finally chose to do. After the grievor signed an agreement to purchase a residence and began his posting, the grievor inquired for the third time his entitlement to MDI reimbursement and found out that under Article 8.3.10 of the Canadian Armed Forces Relocation Directive, MDI is only available to members who are currently renting their residence and have not previously received the Real Estate Incentive (REI). Since the grievor had already claimed REI and he did not sell his house at the former location, the Director Compensation and Benefits Administration denied the grievor's request for MDI. The grievor argued that he should be reimbursed for the MDI as he was provided with incorrect information by BGRS. The grievor stated that his decision was a direct result of the misinformation received and confirmed by BGRS.

The Initial Authority (IA) determined that the grievor was not entitled to be reimbursed for MDI since he decided to keep his house prior to purchasing the new one. Although the IA acknowledged that the grievor made financial decisions based on incorrect information provided by BGRS, the Treasury Board (TB) is the sole authority responsible for establishing the criteria for approving expenses and the IA cannot deviate from it and has no authority to extend or create benefits which are not outlined in the policy.

The Committee concluded that reimbursement for MDI is intended only under specific conditions, which do not apply in this case. Consequently, the Committee determined that the grievor is not entitled to MDI reimbursement under the applicable provisions. However, BGRS provided incorrect advice upon which the grievor relied in making a significant financial decision. Thus, the Committee found that BGRS failed in its responsibilities, as a service provider they had a duty of care toward the grievor, who fulfilled his responsibilities by attempting to obtain information on more than one occasion. The Committee believed that the grievor's case met the five criteria established by the Supreme Court in the Cognos decision to give rise to compensation when harm results from a negligent misrepresentation. 

Additionally, the Committee noted that both the grievor and the BGRS representative misunderstood the directive, and while the IA reached the correct outcome, it was based on incorrect reasoning. The Committee emphasized that improving the directive's clarity would help prevent misinterpretations that can lead to financial hardship for members.

The Committee recommended that the Final Authority (FA) supports the grievor's claim based on negligent representation and referred it to Director Claims and Civil Litigation for consideration as a claim against the Crown. Should the FA disagree with the liability assessment presented in these findings, the Committee recommended that the Chief of Defense Staff consider granting an ex gratia payment to the grievor. In addition, the Committee recommended that the FA directs, at the earliest opportunity, that representations be made to TB to clarify the wording of the MDI benefit.