REPORT ON THE HOME EQUITY ASSISTANCE ENTITLEMENT FOR RELOCATING MEMBERS
Marcus Brauer
25 Wheatstone Heights
Dartmouth, NS
B2Y 4E1
28 January 2013
SYSTEMIC DENIAL OF 100% HOME EQUITY ASSISTANCE
(HEA) ENTITLEMENT FOR RELOCATING CANADIAN FORCES MEMBERS
Reference: A. Telephone Hon Jack Harris – Maj Marcus Brauer, 25 Jan 2013
B. Access to Information report http://wp.me/a2VdY5-1t
C. Home Equity Assistance website http://healoss.wordpress.com/
D. Canadian Forces Integrated Relocation Policy 2009 at http://www.cmp-cpm.forces.gc.ca/dgcbdgras/pd/rel-rei/aps-paa-2009/doc/aps-paa-2009-eng.pdf
ISSUE
1. As requested at reference A, the aim of the briefing note is to apprise the committee of a systemic
denial of approved relocation entitlements by the Treasury Board Secretariat (TBS), significantly
affecting hundreds of Canadian Forces members and their families. Policy, examples, ATI requests and
discussions have been collated at reference C for ease of access.
BACKGROUND
2. The Canadian Forces Integrated Relocation Program (CFIRP) is a DND policy which authorizes
100% of Home Equity Loss over $15,000 as a reimbursable entitlement if criteria are met and if TBS
identifies the “community” as a “depressed market”. Although as of 2010, there were 146 applications,
none were approved. The Canadian Forces Grievance system was unable to provide relief even when
applications were supported by the Chief of Defence Staff and the CF Military Ombudsman. The
authority to approve 100% HEA is held by those who are responsible for declaring a community with a
“depressed market”. A Depressed market, as established by Treasury Board Secretariat, “is defined as a
community where the housing market has dropped more than 20%” (Reference D).
DISCUSSION
3. The discussion will summarize key issues:
a. CDS not approved to provide for relief
(1) Although the CDS supported the 100% HEA applications, and identified the systemic denial
within the TBS, he could neither force TBS to reconsider, nor could he affect any form of
relief due to his limited financial authority. This issue is discussed within Bill C-15 debates.
b. Unfair use of blanket denial
(1) TBS decision makers denied all HEA application by applying a blanket denial indicating
that there are no depressed markets in Canada, although being provided information to
the contrary (Reference B).
(2) When evidence (HEA applications) provided the proof of meeting all criteria (specifically an average 20% loss in housing costs), the TBS changed tactics and used a blanket denial which was based on 2007-2008 data when applying it to moves in 2010, and had not been updated (Reference B);
(3) Treasury board has replaced the term “community” in the CFIRP policy with the term “area” in all of their decisions, with the effect of lowering the average home sale price from the required 20% to below the 20% cut off limit. This has been confirmed by the CDS, CF Ombudsman and CF Grievance Board Authority (CFGBA). TBS indicated that the use of area is an efficiency method (reference B); and
(4) Blanket denials have been tried in Federal Court of Canada previously and have been found to be unconstitutional infringing on the s.7 rights of individuals.
c. Definition of community
(1) CFIRP policy has the term community as the area to be assessed as a “depressed market”. This definition is neither defined nor used by Treasury Board or the NJC relocation policy. However, it is defined by the Government of Canada, the legal definition and scholarly articles, all of which support a rural town as a “community” not part of an “area”;
(2) The interchanging of a policy terminology between how it is written and how it is assessed demonstrates that the policy is vague and over-breadth. At no time has TBS or the military attempted to clarify the definition of community to the relocating members in order to prevent continuing failure of this policy and jeopardizing the financial stability of relocating members;
(3) TBS data sources used for market analysis were non authoritative (i.e. Blogs, Wikipedia, wrong geographic areas, and 2 years prior to the dates in question) (Reference B). However data provided for my particular file was based solely on authoritative sources (MLS sales, realtor reports, Statistics Canada) etc. There is no evidence that this data was considered (Reference B).
d. Current levels
(1) Although average housing costs in Canada have doubled in the last five years, the baseline (percentage) reimbursement has not been adjusted resulting in even greater losses. I.e. if a community loses 19% in their average sale price, the member is not entitled to 100% HEA. Now on a $400,000 bungalo, this can represent a $76,000 loss.
e. Recourse
(1) As the CF Grievance system has been exhausted, the only recourse is a Judicial Review in Federal Court. An estimate provided by a local solicitor identifies the cost of a Judicial Review between $15,000-$20,000. As all affected members and their families can attest to, this is not feasible, specifically as a Judicial Review does not provide an appeal.
(2) While families have been able to stretch their finances to allow the CF Grievance process is completed, it has been three years in some cases. Military families are selling their assets, taking second jobs, declaring bankruptcy and utilizing community financial assistance programs. I would hope that within our Governance there is a way for Treasury Board to be held accountable;
(3) CF members were provided this as an entitlement arising from SCONDVA. It is not supposed to take 3+ years, hundreds of thousands of dollars lost and staff work within DND, TBS, Ombudsman, DCCL, ATI and other offices likely costing substantially more than the original requests. We would like to be paid what we were promised. We would also like this fixed for future relocations.
CONCLUSION
4. There is a need to revisit the 100% HEA applications (retroactively), compensate affected members due to secondary and tertiary damages and prevent further effects by clarifying the policy as identified by the Chief of Defence Staff and CF Ombudsman on multiple occasions.
5. The lack of procedural fairness, to process the application (as per NJC/TBS/CFIRP policy) and the resultant delays/denials have had severe and detrimental effects to CF families. If relief is provided, it will allow affected military families to be in a sustainable financial situation and begin the healing process. Without the financial assistance some families will exhaust their credit, continue to suffer significant mental health issues, lose military career (due to impacts of bankruptcy on security clearances and continuing mental health issues), impact the health and wellbeing of dependents as well as becoming a burden to society. I believe in our leadership but having this situation forced onto families without any means of surviving it is cruel and unjustified.
6. As there is a great deal of stigma attached with the resultant effects of declaring bankruptcy, divorce, career implications, mental health and other effects of these denials; most CF members are not willing to provide their contact information at this point. As a senior leader in the Canadian Forces, I feel it is my duty to act on their behalf to answer any questions regarding this matter as they pertain to my situation. I may be contacted using the information below.
Prepared by: Marcus Brauer, 902-466-4339, i_win@live.ca
Date prepared: 9 November 2012
Date revised: 28 January 13
Please consider assisting us with fundraising for a judicial review. Donations can be made at our website at http://www.gofundme.com/Home-Equity-Assistance or mailed direct in order to minimize our service charges of 10%.
To date we have raised $3,650.
The systemic home equity assistance denial does not affect a lot of people but those it does effect, does so in a severe manner.
Have a good weekend.
Marcus Brauer
majorbrauer
May 3, 2013 at 16:18
Our family was posted to Edmonton from Gagetown in July 2007
When we were posted the next year to Kingston, Ontario I moved under Imposed Restriction (IR) for one year due to the severe drop in the Morinville real estate market. On 14 August 2009, my home finally sold, but at loss that coupled with other expenses amounted to over $80,000. In order to sell the home, we had to acquire an emergency loan from the bank to cover the mortgage difference.
To date, I have formally submitted:
a. a request for compensation (adjudication) through the military Directorate of Compensation Benefits Administrations (DCBA) to TB;
b. a request for compensation (grievance Initial Authority (IA)) through the military Director General Compensation and Benefits (DGCB) through TB;
c. a request for compensation (grievance Final Authority (FA)) through Director General Canadian Forces Grievance Authority (DGCFGA) through TB;
d. a request for support from the Minister of National Defence (Mr. P. MacKay) through my Member of Parliament; and
e. a 2nd request for compensation through Directorate of Compensation Benefits Administrations (DCBA) to TB.
Once again all submissions were denied because TB had not deemed the area of home purchased as a “Depressed Market”(Depressed market, as established by Treasury Board Secretariat, which was defined in relocation policy as a community where the housing market has dropped more than 20%) even with a letter from my realtor in Morinville stating that the market in the community of Morinville, AB had dropped an estimated 25 to 30 %.
I have completed a submission of compensation for those losses which are directly related to the reimbursement of actual, reasonable and legitimate relocation expenses which have been incurred by due to our posting to Alberta in APS 07 and subsequently being posted to Ontario in APS 2009.
We incurred a cost of well over $80,000 due to a depressed market. My expectation as a CF member is that no-one should be placed in a situation that leaves our family in such an extreme financial hardship, with no opportunity for procedural justice. Especially, as this is already provided for in approved entitlements for CF members within approved TBS policy.
I have completed a submission of compensation for those losses which I believe to be directly related to the reimbursement of actual, reasonable and legitimate relocation expenses which have been incurred by my family and me due to our posting to Edmonton in APS 07 and subsequently being posted to Kingston in APS 2009.
Whether or not the 2009 values are formally considered “depressed” or the 2007 values considered artificially high, the fact remains that My family incurred a cost of well over $80,000 due to a combination of his posting and a change in the market. My expectation as a CF member is that he should not be placed in a position that leaves me and my family in such an extreme financial situation.
Anonymous
January 17, 2013 at 16:20
I do have a question. I am ex military, bought and sold houses and also choose to live in a pmq. Isn’t it the members choice whether to buy a house or rent a pmq on base? Of course in the end its nice to have a house bought and paid for at retirement but the army doesn’t order their members to purchase homes in the first place so why should they pay out funds to someone who buys during a boom?
It is devastating to hear that it is happening to troops, and soo much money is lost. Something definitely should be done to compensate but we also should take responsibility for the choices we make. I personally am thankful for the military funding our moves.
Jane
April 18, 2013 at 14:08
Hi Jane:
Thanks for the question. Yes, it is up to the member to rent, and PMQ’s would have been a great choice in our situation, however when we applied for a PMQ in Edmonton in 2007, there was a 2 year waiting list so PMQ’s were not an option.
As far as personal choice, yes that is a factor. I could have asked to leave my pregnant wife several provinces away while I worked in Edmonton for three years. I think I made the same choice any employee would make, that is family first.
The Home Equity Assistance program was created to protect soldiers and their families due to the
frequent relocations demanded of them. It was also created based on the current industry standard for civilian employers at the time. The recommendations and the HEA policy were born from the Standing Committee on National Defence and Veterans Affairs (a parliamentary committee) which realized that this was a necessary entitlement, the rest is history.
Our family did our homework, relied on the policy as it was written, and were denied because Treasury Board changed the rules after they put them on paper to systemically deny HEA. There is nothing I would have done differently. I am grateful for the relocation package with the exception of the HEA loss, which is not within the control of the military. This is a TBS issue to be resolved in court (unfortunately). I hope this answers your questions.
majorbrauer
April 18, 2013 at 16:56
The military has backed out of the PMQ business to a great extent, so much so that getting one in most places is difficult. As well, PMQs are extremely old and built for lifestyles of another era. While we may “choose” to own homes we should not be put a a disadvantage due to our service to our country. I chose to keep my Halifax house and rent in Ottawa and now Victoria as these two markets are too expensive for us to buy. Few other professions ask their people to move as much as the military and those that do compensate very well or the inconvenience; why should we be different?
Jason Cheney
May 23, 2013 at 01:07