Home Equity Assistance

Topic

Home Equity Assistance

Case number

Description

The Board examined the Home Equity Assistance (HEA) policy under section 8.2.13 of the Canadian Forces (CF) Integrated Relocation Program (IRP), which was applicable to members on posting who sold their homes at a loss in relation to the original purchase price.  Section 8.2.13 contains a $15,000 maximum on compensation for losses on sale where the home is not located in a depressed market area.  (Treasury Board Secretariat has defined a depressed market area as a community where the housing market has dropped more than 20%, and in such an area, section 8.2.13 authorizes compensation for 100% of the loss.)  The Board found that, under modern market conditions, in light of the $15,000 maximum on compensation and 20% market drop required for a depressed market designation, it was likely that CF members in certain cases would continue to incur unreasonable losses on the sale of their homes on posting ($30,000 in this case).  The Board found that permitting losses of this magnitude did not achieve the aim of relocating members with a minimum detrimental effect and was not in accordance with the purposes of the IRP policy. 

Recommendation

The Board recommended that the CDS direct that the HEA policy applicable to CF members selling their homes upon posting be re-examined with a view to reducing the impact of losses on sale to a reasonable and minimally detrimental level.

Final Authority Decision

The CDS also agreed with the Board's systemic recommendation and he directed DGCB to review the HEA provisions with TB with a view to reducing the impact of losses on sale of a residence to a reasonable and minimally detrimental level. One issue for review is the definition of "community": using a large metropolitain area as a basis for defining a community would average out large discrepancies amongst the communities that make up the larger area.  For example, Ottawa is an amalgamated city that includes several previously existing cities (Vanier and Kanata), each of which consists of identifiable areas considered as communities .

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