Thousands of military members to be cut off as Ottawa introduces expanded housing benefit

After working on it for almost a decade and a half, the Department of National Defence (DND) is rolling out a new benefit to help military members deal with the high cost of housing — but it's not going over very well with everyone.

Military members learned at a virtual town hall Tuesday that a new, highly-anticipated housing benefit is coming in July. It's meant to help lower-ranking members cope with steep housing costs in dozens of additional Canadian locations.

But not everyone is getting it. The military estimates the new policy will mean roughly 7,700 military members who have been receiving a monthly housing allowance will soon be cut off. That news sparked an angry online backlash from those who say they will receive less than before.

Brig.-Gen. Virginia Tattersall, the military's director general of compensation and benefits, said that more members overall will receive the housing benefit under the new taxable benefit policy.

While she said she's "sympathetic" to those no longer eligible, Tattersall added the math shows those losing the housing benefit "are able to afford" housing or can live in military housing with protected rental rates.

"They will feel that they have lost, but we have delivered a benefit that is equitable, that is endeavouring to help those that need it the most," Tattersall told CBC News.

A series of military families contacted CBC News saying losing the benefit couldn't have come at a worse time due to inflation. Some families living on bases in military housing are "reeling" from the news, one person said. 

The family members did not want to be named citing a fear of reprisal to their spouses or children serving in the Canadian Armed Forces. Military members need authorization by their chain of command to do media interviews. 

DND and the Treasury Board negotiated the new benefit for 14 years after the military housing allowance was frozen in 2009, Tattersall said.

The new taxable benefit can be used for rent or mortgage payments.The benefit varies according to income and location. For example, said Tattersall, members in Vancouver can receive $600 to $2,500 per month,

Chief of Defence Staff Gen. Wayne Eyre said last year that the main concern he hears from military members when he's travelling across Canada is the rising cost of living.

In Comox, B.C., some military members were told by email last year to consider contacting the charity Habitat for Humanity if they can't find affordable housing.

In Borden, Ont., the shortage of housing has some military families doubling up and sharing homes, said Tattersall. 

In Ottawa — where military members were not eligible for housing allowances before the new benefit is introduced — junior members were struggling to pay for accommodation while training, she said. 

Eyre has said addressing the cost of living for military members is one of his top priorities.

Tattersall said the military chose to target the benefit at lower-ranking members with smaller salaries to ensure they don't have to pay more than 25 per cent of their annual gross income on housing.

Tattersall described the old housing benefit as a "one-size-fits-all approach." Everyone got the same standard housing benefit adjusted to the local cost of housing, she said — including high-ranking, high-earning members.

The military estimates more than 28,000 Canadian Armed Forces members will receive the new housing benefit in 65 Canadian housing markets.

That means an estimated 6,300 military members who didn't qualify for the old benefit will qualify for the new one. It also means the new benefit will be available in dozens of housing markets where the old one didn't apply, including Ottawa, Comox and Borden.

Tattersall said the new benefit is going to make life easier for military members struggling to get by.

"They're not going to sort of have to be scrimping just to be able to afford the basics," she said. "They can occasionally enjoy ... being able to go out and have a meal and breathe a little bit easier."

Military critics of the new benefit have accused the military online of scrimping to save $30 million a year. Tattersall said that's not the case.

As part of the new deal, Treasury Board is requiring that the military stick to its $150 million annual budget for the housing benefit, Tattersall said. The Canadian Armed Forces went over budget by $30 million — to $180 million — when the Treasury Board approved the new policy, she added.

"We've only ever been approved to spend a finite amount on this benefit," she said. "We were spending more than what we were approved.

"There's no savings here. We have not shortchanged the men and women of the Canadian Armed Forces in terms of endeavouring to provide a form of assistance to them."

A controversial 7-year deadline

Some military members online have zeroed in one aspect of the new housing benefit — the fact that members become ineligible for it if they don't move for seven years or more.

The benefit policy Treasury Board approved says that a member loses the benefit after living seven years in the same city or community because they are expected to have "adjusted to the cost of that location," Tattersall said. 

Tattersall said the benefit is also tied to income: as a member's salary increases, the benefit shrinks. Those who earn over a certain threshold receive no housing benefit at all.

The military announced a pay increase for members as it unveiled the new benefit.

Non-commissioned members, general service officers, pilots at the rank of lieutenant-colonel and below, and medical and dental officers will receive four pay increases, ranging from 1.5 to 3.5 per cent annually, for the years 2021 to 2024. Members will receive a lump sum payment for their retroactive increases in July. 

Tattersall said the military plans to assess the housing benefit program and local housing markets and could in future ask the Treasury Board to extend the benefit beyond seven years.

"But we also need time to be able to see how this benefit is actually going to impact Canadian Armed Forces members and to make adjustments as necessary," she said.

Natalie Frodsham, a broker at Exit Ottawa Valley Reality, said the new housing benefit likely won't help military members at CFB Petawawa looking to buy housing in Ontario's Renfrew County.

"Because it's the low inventory that's the problem for buyers," said Frodsham. 

The challenge military families face, she said, is finding housing in their price range. She noted there are fewer multiple offers for sales now, which is starting to make "things a little bit easier."