# 2024-249 Pay and Benefits, Home Equity Assistance, Capital Improvements in accordance with article 8.2.10 of the CF IRP

Case summary

F&R Date: 2025-05-22

On 19 April 2018, revisions to the Canadian Forces Integrated Relocation Program (CFIRP) Directive came into effect, removing the ability 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 in Cold Lake sold in July 2019, resulting in an equity loss of approximately $49,000. The grievor was reimbursed approximately $30,000 through the HEA benefit. The grievor argued that they invested $55,000 in home improvements into the home, raising the total equity loss. The grievor sought full reimbursement of their home equity loss under the previous HEA benefit, arguing that the purchase of the home occurred under the protection offered by that policy.

The Initial Authority, the Director General Compensation and Benefits, found that the grievor had been treated in accordance with applicable policies and regulations.

The Committee found that the amendments made on 19 April 2018 also removed the Capital Improvements benefit for homes sold after 19 April 2018 and therefore found that the grievor's renovation costs could not be considered in the calculation of the lost equity.

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 cited an interview given by the Director 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” was CFIRP Directive article 2.1.01, which allowed for the Treasury Board Secretariat (TBS) to approve requests for reimbursement of expenses that are exceptional circumstances. 

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 agreed with the grievor that HEA should not be taxed as income but also that it is governed by the Income Tax Act and recommended that the CAF and the TBS seek to reduce the tax burden due to military relocations with the Canada Revenue Agency. The Committee recommended that the Final Authority afford the grievor redress by pursuing a mechanism to enable the grievor's request for 100% reimbursement of their HEA loss, potentially through a submission to the Treasury Board with the full support of the CAF.