Grievances rise over real estate losses and other costs of moving soldiers
By KATHRYN MAY, Ottawa Citizen January 29, 2013 9:03 PM
OTTAWA — Canada's military ombudsman is calling for the Department of National Defence to re-examine its long-standing practice of sending thousands of military personnel to new postings every year, including the relocation policies to manage those moves.
Pierre Daigle said the military should rethink how often it needs to transfer soldiers and uproot their families as part of its "operational requirements." He said moving 20 per cent of the forces every year is expensive for taxpayers and can impose major personal and financial hardships on military families.
"Why do we move people so much and how many times do we have to move?" said Daigle in an interview. "Yes, they need operational capacity and people have to be moved, but when they are moved for operational requirements, it is not their choice where they have to go so to they shouldn't be paying for it and that's where we see the unfairness that needs to be addressed."
Daigle's call comes at a time when his office and the department are facing a rising number of complaints are about the cost of transfers on families. He has been visiting bases across the country and said the financial burden of moving is a big complaint.
Some families are losing money because of the cooling of the housing market or they are selling into a depressed local market. Some say the problems are caused by unclear policies and the government becoming more rigid and inflexible in the interpretation of policies when it comes to reimbursing expenses and other costs of transfers.
These issues will be the centrepiece of Daigle's major study into the family life of Canada's military. Transfers are one of the biggest stresses on families which can face moves half a dozen times or more over the course of a military career. The study will include a review of some of the policies under the Canadian Forces Integrated Relocation Program (IRP).
The landmark study into the "Quality of Life" in the military was done by the Standing Committee on National Defence and Veterans Affairs (SCONDVA) in 1999. That report had 88 sweeping recommendations, many aimed at improving pay and benefits, which set the standard for years.
That report also led to the creation of the Integrated Relocation Program (IRP) in 1999 to ensure military and other public servants are moved with minimal disruption to their lives. The program has been tweaked over the years but the overall approach has remained unchanged.
Relocating federal employees costs the government an estimated $500 million a year — on top of what it pays moving companies to move furniture and household possessions. The government relocates about 18,000 federal employees a year and military moves account for about 85 per cent of those moves. The cost of the average move ranges between $20,000 for a tenant and $35,000 for a homeowner.
The IRP contract has been dogged by controversy since the 2002 contract went off the rails. The 2004 contract is now at the centre of a $62-million lawsuit.
DND has a backlog of about 1,500 complaints about benefits and another 212 complaints in the queue for the military's grievance process. Most of the grievances are over moving.
Daigle said the biggest complaints are over the IRP's Door-to-Door and Home Equity Assistance policies. But he said military personnel are also feeling the economic pinch of rising rents for at private military quarters.
Some of the expenses that used to be allowed for military personnel separated from their families when on "imposed restriction" are being cut back. Most recently, the department announced that it will no longer be picking up the cost of mortgage insurance, or penalties to break a mortgage for homeowners being transferred. This is partly to encourage the use of portable mortgages.
Daigle appealed to the Chief of Defence Staff Tom Lawson to ask Treasury Board to review the controversial home equity assistance policy, which has left military families swallowing big losses on the sale of their homes when being transferred. The Canadian Forces Grievance Board recently made the same recommendation.
The program, aimed at protecting military from losing money on their homes when relocating, will cover 80 per cent of all losses to a maximum of $15,000. It will, however, cover 100 per cent of losses if the home is located in a "depressed" market. The problem is Treasury Board determines what is a depressed market, and military personnel have to argue their case.
The dispute is over the definitions of "depressed" and "community." The policy says a community where the housing market dropped more than 20 per cent is depressed. Treasury Board documents show 146 families have applied for the full compensation and all were denied. Treasury Board doesn't consider any market in Canada "depressed."
Yet Daigle said people have faced equity losses on their home up to $80,000. A big concern is that Treasury Board is using Statistics Canada's "census metropolitan areas" to define a community, rather than markets in smaller towns and villages, when determining a depressed market.
The Chief of Defence Staff has supported the grievances of some soldiers who have been affected by this tug of war with Treasury Board over the definition of depressed market.
A big flaw in the grievance process, however, is that the Chief of Defence Staff has no financial authority to settle financial claims even for exceptional cases. The CDS's lack of financial authority has been flagged as an issue since a 2003 report on military justice by Antonio Lamer, former chief justice of the Supreme Court and later by a Senate committee. The issue is currently being assessed.
In an email, DND officials say financial losses and gains are risks military personnel face when they move to bases in diverse markets and the home equity program is aimed at helping to offset losses.
"Ultimately CAF members make a personal decision on where they will reside within the area they are posted to and whether they will rent or invest in the real estate market," the department said in an email.
Daigle's family report, expected in summer, will examine all aspects of uprooting families, including education, health care, employment opportunities and obstacles for military spouses.
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