Some northern federal staff say rule changes will cost them thousands

The Canadian government is changing the housing subsidy it pays northern employees, a move that some affected staff say is the equivalent of losing $8,500 a year.

Until this fall, federal employees in a handful of northern communities received what amounted to a housing allowance to compensate for their isolation compared to those in the south.

For example, over the past year, a federal worker residing in private accommodation in Yellowknife was entitled to an allowance of $8,502. This is called the Shelter Cost Differential.

Now, the federal government has changed how the Shelter Cost Differential is worked out – and who gets it.

On the one hand, 15 more northern communities have been added to the list. For the first time, various smaller Yukon and Nunavut communities – and Fort Chipewyan – are named in the Shelter Cost Differential policy, allowing workers in those places to access the benefit.

On the other hand, the new-look policy removes thousands of dollars from payments to Yellowknife-based workers and appears to entirely wipe out payments to federal staff in Yellowknife who own their own home.

Amounts payable are also reduced in Inuvik, in some circumstances again by thousands of dollars a year, and removed entirely in Norman Wells. No NWT communities are among the 15 added to the list.

“In these times, when people can barely afford their renewed mortgages, it will likely cause hundreds of employees to reconsider where they live,” one federal worker who lives in Yellowknife told Cabin Radio. Employees quoted in this report asked for anonymity to discuss their employer’s actions.

The employee said there had been no consultation with workers and notification of the change came only in an “unclear” email just as the NWT’s wildfire crisis reached its peak.

Another Yellowknife-based federal worker wrote to Cabin Radio: “The impact this will have on Yellowknife could be devastating. Federal government employees are now considering looking for jobs with the GNWT or elsewhere, outside of Yellowknife.”

While federal employees are generally not among the North’s lowest-paid workers, isolation payments on top of regular salaries often help to attract candidates to those northern jobs in the first place if they cannot be filled locally.

Last week, the Public Service Alliance of Canada – which initially didn’t identify the issue in a July webpage acknowledging the changes – published a call for affected homeowners to keep receiving the Shelter Cost Differential.

“Homeowners should continue to receive the subsidy because this financial support is crucial to members and plays a key role in recruiting and retaining federal public service workers in northern communities,” the union wrote.

PSAC said the Treasury Board of Canada Secretariat was “aware of the issue” and had “agreed to review and discuss the potential impacts to homeowners” in a meeting on October 31.

Treasury Board’s response

For Yellowknife-based federal workers, what happens to your Shelter Cost Differential depends on what kind of housing you have.

If you are in housing offered by the government, in the past year you should have received $9,128 if you had dependants or $5,477 if you did not. (Sums vary for employees on hourly rates.) You are now set to receive $6,526 if you have dependants or $3,915 if you do not, drops of around $2,602 and $1,562 respectively.

If you rent privately, you were due to receive $8,502 in the past year. You are now set to receive $6,526, a drop of $1,996.

If you own your own home, you previously received $8,502 but now appear set to receive nothing.

However, the wording provided on various federal webpages is not uniform and often not clear.

For example, even the Professional Institute of the Public Service of Canada, which represents some federal scientists and other professionals, expressed uncertainty about what, exactly, is happening to homeowners’ payments.

The institute said online this month that, in its reading, the provisions “do NOT indicate that the SCD is only payable to those who rent,” using an initialism for the Shelter Cost Differential.

“If you are a homeowner and do not receive your allowance as a result, please contact your steward. We will determine whether a grievance is appropriate on a case by case basis,” the institute told its federal members.

But some federal departments clearly interpreted the change to mean homeowners will be left out from now on.

An email sent to staff by the labour relations team at Crown-Indigenous Relations and Northern Affairs Canada specifically stated: “Homeowners are no longer entitled to the SCD.”

A petition published online, asserting that homeowners would lose their access to the extra payment, described a “dramatic reduction in take-home pay for federal employees in the North.”

Cabin Radio approached the Treasury Board of Canada Secretariat for clarification on Thursday last week.

In a written response provided on Tuesday, the Treasury Board made no reference to Cabin Radio’s request for an interview on the subject and did not provide any information about the changes’ impact on homeowners working for the federal government.

The Treasury Board declined to specify the number of staff affected by the changes. Estimates from staff members range from about 800 to 1,400 employees who stand to lose income through the new Shelter Cost Differential.

Rola Salem, a Treasury Board spokesperson, wrote that the new Shelter Cost Differential sums are “based on available census data on shelter costs provided by Statistics Canada and more accurately reflect the current cost of renting accommodation in isolated posts across Canada.”

“Some rates have decreased for certain locations and others have increased,” Salem wrote.

The cost of shelter in Yellowknife rose by 3.8 percent between September 2022 and September 2023, the NWT Bureau of Statistics reported this week. The federal government says the changes are based on census data from 2021 and assess Yellowknife rent costs against data from 12 southern cities: Vancouver, Edmonton, Calgary, Saskatoon, Winnipeg, Toronto, Ottawa, Montreal, Quebec City, Moncton, Halifax and St John’s.

Critics of the new methodology say the drop in payments to northern staff is “primarily a result of rental costs in the south increasing, rather than the costs in the North decreasing,” in the petition’s words.

“Our office has heard from several federal public servants in Yellowknife regarding changes to the Shelter Cost Differential,” a spokesperson for the NWT’s Liberal MP, Michael McLeod, told Cabin Radio by email.

The MP “has been expressing the concerns he is hearing from constituents regarding this matter directly with the offices of the President of the Treasury Board and the Minister of Northern Affairs,” that email continued.

“We are continuing to engage with their offices on this issue.”