Plans to enlist the private market in military housing provision could help Canada’s department of National Defence reduce a growing shortfall between supply and demand, but there is no funding yet in place to advance that campaign. A newly released report from the Auditor General of Canada uncovers shoddy oversight in the existing portfolio of roughly 11,700 residential units and 26,000 dormitory bed spaces, and concludes National Defence and its affiliated Canadian Forces Housing Agency are not meeting their mandate to provide for the needs of military personnel.

“National Defence’s own research has shown that housing is an issue that can negatively affect the well-being of military families, with impacts on retention,” the report states. “To meet operational needs, Canadian Armed Forces members can be required to move frequently. It is important for their morale and well-being that they can access affordable housing in good condition with sufficient living space for their needs.”

The auditors critique inadequate upkeep and a mismatch of unit types to occupier need that’s resulting in unfavourable living conditions and long waiting lists for aging stock. That’s partly attributed to fragmented management across 27 army, naval and air force bases and the lack of centralized coordination of asset condition assessments, capital planning and maintenance priority setting. Further muddying transparency, National Defence lumps housing accommodations in with facilities such as warehouses and hangers in its infrastructure budgeting and expenditure reporting.

The audit covers a 24-month period, from April 1, 2023 to March 31, 2025, and scrutinizes the two complementary elements of the military housing portfolio:

• furnished, dormitory-style accommodations in 318 buildings, primarily intended to house Forces members on training courses, short-term assignments or in transit between operational locations; and
• longer-term housing located on military bases, of which nearly 80 per cent is family-oriented units with at least three bedrooms.

The private sector is already a significant provider of housing for military personnel given that only about 17,000, or 26 per cent, of the approximately 65,000 Forces members lived within the National Defence portfolio as of this spring. The portion living off-base is expected to grow as the Canadian government seeks to boost the ranks to 71,500 before the end of this decade.

A relatively new housing benefit, introduced in July 2023, helps junior ranks cover those costs. It provides a subsidy to reduce renters’ accommodation costs to no more than 25 per cent of their gross salary, with the maximum allowable subsidy based on the average rental cost of a two-bedroom unit in the market where the base is located. Nearly 12,200 Forces members qualified for the benefit in the first year it was on offer, equating to a payout of $72.3 million.

“The benefit is designed to provide greater assistance to junior ranks and either less or no assistance to higher ranking members who were in a higher salary band,” the audit report states.

The auditors note that Forces members who require more than two bedrooms to accommodate their families would likely have to pay more than 25 per cent of their incomes, even with subsidies, to rent more spacious and presumably pricier homes. In contrast, all military personnel who live within the National Defence portfolio pay rent that is capped at 25 per cent of the member’s gross pay, excluding utilities.

Wi-Fi may not be one those of the utilities, however, since the auditors also report that it is one of the “modern amenities” sometimes lacking in aging dormitory space. Nevertheless, there’s no shortage of prospective tenants. As of this spring, more than 3,700 applicants were waiting for an opening, while just 205 longer-term residential units became available. About two-thirds of military personnel on that waiting list are single individuals.

A current plan to build 1,400 new residential units and renovate 2,500 existing residential units on Forces bases — budgeted to cost $2.2 billion over a 19-year period — already lags the targeted need. Notably, housing availability has actually slipped slightly since May 2019 — falling from 11,798 to 11,741 residential units. The auditors calculate a shortfall of 3,800 to 5,800 units, and call for an updated overarching military housing strategy to reflect the envisioned 71,500 military personnel.

The auditors flag some “innovative options to obtain additional housing” that National Defence is pursuing, including reserving market rentals and/or bulk leasing housing units in the private market and partnering with private sector developers to develop military housing. For now, those strategies are described as “at different stages of implementation” with no actual funding.

“National Defence must address how it will meet its need for living accommodations,” the audit report asserts. “National Defence should complete its reassessment of the needs of the Canadian Armed Forces for residential housing. It should then update its cost estimate and plan to meet any shortfall and implement its plan in a timely manner. It should regularly update its assessment to consider future growth of the Canadian Armed Forces and changes in the geographical distribution of personnel.”

In response to the Auditor General’s report Canada’s Minister of National Defence, David McGuinty, outlined progress thus far on the pledged 1,400 new residential units. Eight sixplexes — delivering 36 apartments in Edmonton and 12 in Kingson — are scheduled to be completed in 2026. Another 108 units are under construction and 380 are in the design phase, collectively slated for the Borden, Gagetown, Halifax, Petawawa, Trenton and Valcartier bases.

McGuinty pointed to the recent fast-track acquisition of a 37-unit apartment building to provide housing for the Esquimalt naval base in British Columbia, in which a process that has conventionally taken up to two years unfolded in five weeks. He also promised a new compliance and oversight framework for rental housing allocation, currently in development, would be implemented by March 2027.

“We welcome the Auditor General’s report and acknowledge its important findings about the challenges facing military housing. The department of National Defence accepts these recommendations and is fully committed to making real, measurable improvements for our members and their families,” McGuinty said. “We will continue to listen carefully and monitor how policy changes impact all members, to ensure our housing program remains fair, relevant and supportive of retention and quality of life.”