Benefits & Pensions
Military under fire as thousands of troops face lost cost of living allowance
By Lee Berthiaume
The Canadian Armed Forces is under fire for its plan to cut thousands of troops off a cost-of-living allowance without much notice.
The military announced last week that about 7,700 Armed Forces members will no longer receive the top-up starting in July, when it will be replaced by a new housing benefit that commanders say will better assist those who need the most help.
Social media and online forums dedicated to military personnel have been crackling with dissatisfaction over the plan, including the abbreviated timeline. Some are also unhappy with a new 10 per cent pay increase over four years, retroactive to 2021.
Experts say the lack of notice speaks to larger problems around how the military treats its people, which they worry is sparking anger and frustration at a time when the Canadian Armed Forces is struggling with a recruitment and retention crisis.
“We’re pissing people off,” said retired lieutenant-general Guy Thibault, who previously served as vice-chief of the defence staff. “And this may be the final straw that pisses them off. It’s not really about compensation. It’s just that they’re not feeling valued.”
Allowance rates frozen in 2009
The decision to replace the military’s existing cost-of-living allowance with a new housing benefit follows a 14-year battle between the Department of National Defence and Treasury Board, the central department that controls federal spending.
Established in 2000 as a way to compensate members for the added costs of having to live and work in certain communities, the allowance rates were frozen in 2009 as defence and treasury officials fought over the program’s cost and parameters.
Canadian Forces College professor Alan Okros said members were led to believe that that when a deal was finally struck, it would finally raise rates and expand eligibility as troops living in some parts of the country did not qualify.
“There was a generalized tone and expectation of, ‘Look, we’re working on it. … We’re going to sort it all out,”’ said Okros, who specializes in military personnel and culture.
“There was this generalized expectation of, ‘It’s going to be much better.”’
Such expectations were predicated on the belief that the government would put more money into the pot to compensate troops for their service, particularly given that the Armed Forces is currently dealing with a recruitment and retention crisis.
Housing benefit to cost $30 million less annually
That didn’t happen. Instead, the military says the new housing benefit is both more equitable and more efficient than the previous allowance as it is tied to salary, includes more geographic locations, and will cost about $30 million less per year.
Charlotte Duval-Lantoine, an expert on military culture at the Canadian Global Affairs Institute think tank, said some members who were receiving the cost-of-living allowance would have accounted for that money in their budgetary planning.
“This is the distinction that frustrates people the most, because some of them will not be eligible in this (new benefit) even though they’re struggling in terms of their cost of living,” she said. “There’s going to be a readjustment for people.”
The fact it is being taken away in a matter of months without any previous consultation or warning speaks to problems with how the chain of command treats and communicates with its troops, she added.
“It’s kind of emblematic of the way that we talk about personnel policy and how the military communicates (with) its personnel,” she said. “It’s always big announcements. And then we don’t hear about it for years on end. Then there’s a new announcement.”
The housing benefit has also come under scrutiny, with concerns about the actual rates being based on the cost of renting a two-bedroom apartment without consideration for family size. There’s also a seven-year cap on receiving the benefit in one location.
Pay raises not keeping pace with inflation
Members are also complaining that the new pay increase does not keep up with inflation.
The new benefit and pay increase have nonetheless sparked a bit of a debate over compensation for military personnel, with some arguing troops are relatively well paid and most Canadians are facing some sort of economic pressure.
“We’ve got a pretty well-paid force, not only against other allied forces or volunteer forces, but against the general population,” said Thibault, who is now chair of the Conference of Defence Associations Institute think tank.
“In terms of where we’re going with the economy, it’s not unique to the Canadian Forces. It’s a societal problem right now with interest rates, with inflation, with the economy, with housing.”
Rather, experts feel the reaction is more symptomatic of bigger problems as the Armed Forces faces growing demands while struggling with a shortage of personnel, old equipment, and efforts to radically overhaul its culture.
“Our government and Canadians, they seem to care for the Canadian Forces,” Thibault said. “But not care enough about them to make it a priority, or to address some of these longstanding problems.”
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