Shelter charge (rent) adjustments

According to the Department of National Defence (DND) Living Accommodation Instruction, shelter charge (rent) for all DND housing must reflect local rental market values for similar rental units. This helps to ensure fairness and equity for CAF families, regardless of whether they choose to live in the private sector marketplace or in DND housing.

As recommended by the Treasure Board Secretariat and approved by the Minister of National Defense (2014), DND uses Statistics Canada’s provincial Rented Accommodation Consumer Price Index (CPI) (and the annual Rent CPI percentage adjustment (January) for Canada for Yellowknife and Iqaluit) to determine its annual DND housing shelter charge adjustments. These shelter charge adjustments also include utility rate adjustments for those DND housing units that are not individually metered for heat, electricity, and/or water and where the Government of Canada is the supplier.

As defined on the Statistics Canada’s website, “the Consumer Price Index (CPI) is an indicator of changes in consumer prices experienced by Canadians. It is obtained by comparing, over time, the cost of a fixed basket of goods and services purchased by consumers.” 

Once Statistics Canada published the August 2022 CPI report, CFHA applied the August to August provincial Rented Accommodation percentage change component of the CPI to the existing shelter charge of each housing unit for calculating the 2023-2024 adjustments. The August 2021 to August 2022 annual percentage changes can be found in Table 18-10-0004-04 of the CPI.

As the Rented Accommodation component of the CPI does not exist for Yellowknife or Iqaluit, the Treasury Board Secretariat has recommended that the January Rent component of the CPI for Canada be used. The January annual percentage changes can be found on the Statistics Canada website.  As houses in the North are assigned by Public Services and Procurement Canada (PSPC), CFHA uses the January to January CPI for units in Yellowknife and Iqaluit.  

For residential housing units that are not individually metered for utilities (heat, electricity and/or water) the Government of Canada is deemed the supplier. Utility rates for these occupants are calculated in accordance with the Treasury Board Secretariat (TBS)/National Joint Council (NJC) Isolated Post and Government Housing Directive (IPGHD), Section 6.14 - Fuel and Utility charges. These charges are also adjusted annually by the Statistic Canada CPI indexes for water, fuel and electricity.

The department began transitioning away from DND utility rates to align itself with the TBS/NJC/IPGHD utility rates in April 2019. All new occupants began paying the TBS/NJC/IPGHD utility rates that year. Current occupants were advised that if the transition to Treasury Board (Bulk) Rates resulted in utility charges higher than staying with the DND (Bulk) Rates, they would remain on the DND (Bulk) Rates until further notice to minimize the financial impact of this transition.

For 2023-2024, the cost of DND-calculated heating charges will approach the TBS/NJC/ IPGHD heating charges, making it an opportune time to transition the remaining occupants to the TBS/NJC/IPGHD utility rates, thereby ensuring full compliance with the TBS/NJC/IPGHD, and fairness and equity for occupants across the country. Effective 1 April 2023, the average utility charge increase for the remaining occupants being transitioned to the TBS/NJC/IPGHD utility rates will be $57.41 per month.

To ensure consistency in how water utility charges are applied across the country, CFHA began implementing the TBS/NJC/IPGHD Utility Charges in 2019. The majority of occupants of DND housing have transitioned to the new utility charges, however, some occupants at Bagotville and Montreal have never been charged for water consumption. Effective 1 April 2023, the Government of Canada utility charges will be calculated and applied for the remaining occupants at Bagotville and Montreal, and their total monthly utility charge will now include a water utility charge. For 2023-2024, occupants will be charged an average water charge of $32.89 per month (ranging from $21.24 to $52.69).

Overall, the provincial Rented Accommodation Consumer Price Index (CPI)-based rent adjustment process for RHUs for 2023-2024 will apply a national average increase of 3.1% ($25 per month with rent control limits applied).

As the CPI percentages vary from province to province and with rent control limits for four provinces, the annual adjustments range from a 0% ($0 increase) in Manitoba (Shilo and Winnipeg) to a 6.4% (average $43 increase) in Saskatchewan (Dundurn and Moose Jaw).

With the expiry of rent control measures in New Brunswick for 2023, occupants in Gagetown will no longer benefit from a rent reduction and will be required to pay the full base shelter charge on 1 April 2023. The 2023-2024 CPI adjustment of 5.4% will be applied to the full base shelter charge for 2022-2023 (what would have been charged without the rent cap), resulting in a total average increase of $66 per month. 

Certain adjustments for 2023-2024 are subject to provincial restrictions. In particular:

• The Government of Ontario announced a rent control limit of 2.5% for 2023.  Although the annual CPI adjustment for 2023-2024 will be 6.0% (an average $52 per month increase), current occupants will be limited to an average $21 increase with rent control limits applied. 
• The Government of British Columbia announced an annual allowable rent increase of 2.0% for 2023. Although the annual CPI adjustment for 2023-2024 will be 6.5% (an average $70 per month increase), current occupants will be limited to an average $21 increase with the annual allowable rent increase applied. 
• Although all RHUs in Manitoba will be subject to the 1.5% CPI adjustment (an average $12 per month increase), due to the provincial rent control limit of 0% for 2023, current occupants will not incur an RHU shelter charge increase in 2023-2024. 
• Nova Scotia has passed the Interim Residential Rental Cap Act which provides a percentage limitation of 2.0% for 2023. The 6.5% CPI adjustment will increase the shelter charges by an average of $49, however with the 2.0% rental cap limitation, current occupants (on or before 31 March 2023) will only incur an average shelter charge increase of $15.
• There is no Rented Accommodation CPI available for the Northwest Territories (Yellowknife) and Nunavut (Iqaluit). They will be adjusted by 3.14% using the Canada January Rent CPI as provided by the Treasury Board Secretariat for Fiscal Year (FY) 2023-2024, which is an average shelter charge increase of $58 per month in Yellowknife and $62 per month in Iqaluit.
• Current occupants receiving a shelter charge reduction in 2022-2023 for which they no longer qualify in 2023-2024 could see an increase in the overall monthly shelter charge.  This increase is not reflective of an RHU shelter charge increase but solely a result of no longer qualifying for a particular reduction (benefit).  An example would be no longer qualifying for a shelter charge reduction based on the 25% of gross household income threshold. If this subsequent increase in their overall monthly shelter charge payment is solely from the loss of a benefit, it will not be limited by the annual CPI adjustment nor provincial rent control legislation as these limitations are applied to the full base shelter charge of the RHU prior to any subsequent reductions or abatements (benefit).

Since 2014, CFHA has relied on Statistics Canada’s Provincial Rented Accommodation component of the Consumer Price Index (CPI) to adjust shelter charges. As endorsed by TBS and the MND, CFHA uses the CPI because the annual percentage change provides the most precise data available for the mandated annual review and adjustment of shelter charges for government housing. It is an accurate indicator of change over several months or a year. Each year’s percentage change in rent is based on 12 individual monthly adjustments, which can vary significantly over any given year, as we see for this past year. Provincial CPI data vary from province to province and from year to year for a variety of reasons including market effects, movement of population and others. For a better understanding of the CPI, please visit the Consumer price index portal or refer to the Statistic Canada document titled Shelter in the Canadian CPI: An overview.  

For 2023-2024, the national average percentage shelter charge increase for DND residential housing units is 3.1% and will be approximately a $25 per month increase for current occupants after rent control limits in British Columbia, Manitoba, Ontario and Nova Scotia are applied. Shelter charge adjustments for current occupants range from $0 for the 833 occupants in Manitoba (Shilo and Winnipeg) to a maximum of $100 for 13 occupants in New Brunswick (Gagetown).  Note that these amounts do not include any utility charges, which are calculated and applied separately.

The 2022 New Brunswick temporary rent cap of 3.8% was announced on 28 March 2022 and was retroactive to 1 January 2022 with an end date of 31 December 2022. Although the 2022-2023 CPI adjustment to the base shelter charge was 8.6%, occupant’s increase was limited to the 3.8%. As a result, occupants are currently paying less than the full base shelter charge. For 2023-2024, occupants in Gagetown will have a noticeably higher average shelter charge increase due to a CPI adjustment of 5.4% and the loss of the 2022 rent control reduction. Effective 1 April 2023, the average monthly increase will be $66, ranging from $29 to $100 per month. 

A garage increases the value of the residential housing unit and therefore increases the shelter charge of the property.

When a garage is attached to the house, on-lot or a row garage specifically assigned to the house, the garage value is included in the overall shelter charge value and the occupant does not see the garage as a separate charge on their annual Notification of Annual Housing Shelter Charge Adjustment letter.

When a garage is not attached to a specific dwelling (more common with row garages), the charge for these garages does appears as a separate (additional) charge to the occupant and is provided on their annual Notification of Annual Housing Shelter Charge Adjustment letter.

Provincial rent control is applicable in accordance with DND regulation if a specific percentage limitation has been enacted as outlined in the Queen’s Regulations and Orders for the Canadian Forces, Volume IV, Appendix 4.1 (4). In 2023, occupants in rent control provinces may see their shelter charge increase up to the provincial limits (British Columbia at 2% Ontario at 2.5%, Manitoba at 0% and Nova Scotia at 2%). 

As per DND Regulation shelter charges (excluding parking costs and utilities) cannot exceed 25% of the combined gross household income of all occupants residing in the DND residential housing unit in any one year. If a CAF member believes they are eligible for a shelter charge reduction, they apply (PDF format) to their Housing Services Centre for review.

CAF members continue to be supported by a compensation and benefits package, reflecting the unique nature and demands placed on CAF members and their families. Components of the total compensation package are reviewed and updated as required by and under the responsibility of Chief Military Personnel (CMP). PLD is one component of the overall benefits package.

The PLD allowance is separate from pay. More information on this allowance is available in Chapter 205.45 on Allowances for Officers and Non-Commissioned Members on the DND/CAF website. 

Generally, any upgrades to an RHU (total renovation, kitchen and/or bathroom renovation, full exterior or interior retrofits, etc.) may increase the value of the unit and consequently the shelter charge. Also, the combination of multiple smaller projects within a limited timeframe that improves the overall quality and condition of the housing unit may result in a shelter charge increase (a bathroom upgraded combined with full replacement of all hardwood flooring and millwork as an example). General repairs and maintenance projects such as plumbing, electrical, or counter replacements in isolation may not have an impact on the shelter charge. 

Living in DND housing is optional for CAF members and their families. As per DND Living Accommodation Instruction, base shelter values for DND housing are reviewed and updated annually with updated values being applied 1 April of each year. These reviews are conducted in sufficient time so as to allow an occupant at least 3 months notice of any changes to shelter charge. This provides an occupant sufficient time to consider alternative accommodation options if required.

The shelter charge is purely based on the local market value which considers housing type, size, and age, as well as access to amenities, additions like a garage and general condition of the units. Rank or size of the family is not a consideration for shelter charge setting.

Monies collected from occupants for DND housing units that are not individually metered are used to pay the utility provider whether that be a municipality for water and sewer, a gas company for fuel, a municipal or provincial hydro utility for electricity, or a Base or Wing that produces a utility.