Revised Methodology for the Shelter Cost Differential (SCD) - FAQ - August 1, 2023

Isolated Posts and Government Housing Directive (IPGHD)

Frequently Asked Questions

(1) What is the purpose of the SCD?

A SCD is payable, at the rates set out in Appendices K-1 and K-2, to employees renting from private accommodation and in government housing at qualifying isolated posts to help offset the higher shelter charges experienced there.

(2) Why is there a revised methodology in place for the SCD?

The Canada Mortgage and Housing Corporation stopped providing base shelter values in 2012 further to a strategic review. An interim methodology was in place since 2013. The interim methodology was based on adjusting the SCD rates which were last established in 2012 and it was adjusted by the “all items” territorial CPI thereafter. The NJC Executive Committee tasked the NJC IPGH Committee with recommending a revised methodology for the SCD.

(3) What is the revised methodology?

The revised methodology is based on available data on shelter from the census. The data provides the average unsubsidized rent for all 3-bedroom accommodation at the 12 points of departure (12 major cities in Canada as listed in the IPGHD) plus 15% to establish the national average threshold. The average rent at the isolated posts is based on the average unsubsidized rent for all 3-bedroom accommodation at the isolated post. When the average rent at the isolated post exceeds the national average threshold, the difference between the average rent at the isolated post and the national average threshold is used to calculate the monthly amount. This monthly amount is multiplied by twelve to establish the annual amount of shelter cost differential which the employee can receive.

(4) What happens to employees who are at a location where the amount of the SCD decreases because of the revised methodology or where the location no longer qualifies for the SCD?

Agreement was reached by the parties to implement transitional provisions to allow employees to adjust to the new SCD amounts. Once the transitional provisions end, the existing provisions of the IPGHD will be applied when new census results are released and new SCD qualifying locations and rates are established.

(5) When will I know if my location still qualifies for the SCD and what amount I will be receiving?

The SCD will be established based on the 2021 Census results and the parties are planning on releasing the qualifying locations and associated rates prior to the implementation of the new methodology. Rates will become effective on August 1, 2023, and employees who are subject to a rate decrease or if their location no longer qualifies for the SCD will be subject to the transitional provisions.

(6) Once locations and rates have been established for my isolated post, will the SCD for my location be reassessed or reviewed the following year?

Once a location qualifies for the SCD based on the revised methodology and after census data on shelter is released, it will be adjusted by the “all items” territorial CPI until new census results are made available. All locations will be reassessed each time a census is conducted which means that SCD rates will be indexed on a yearly basis until new census data is made available.

(7) Once my location qualifies, would I receive the SCD even though I do not live in a 3-bedroom unit?

Yes. However, employees without dependants in government housing will receive 60% of the rate for an employee with dependants.

(8) Where can I find the definition of Census Division and Census Subdivision?

• Dictionary, Census of Population, 2021 – Census subdivision (CSD) (recensement2011.gc.ca)
• Dictionary, Census of Population, 2021 – Census division (CD) (statcan.gc.ca)

Examples

(1) I am an employee without dependants renting private accommodation in Norman Wells, NT. What will happen if my isolated post no longer qualifies for the SCD after August 1, 2023?

The transition measures will be applied, and you will continue to receive the SCD until the end of the third (3^rd) month (as listed in Appendix K-1: $72). On the first day of the fourth (4^th) month, the amount of SCD will be adjusted ($36) and the SCD will end on September 1, 2024. The location will be reassessed as the results of the next census on shelter are made available to see if it qualifies for the SCD allowance.

(2) I live in Inuvik, NT, I have dependants and my family is living in government housing. What will happen given that my SCD allowance is $94 on August 1, 2023?

The transition measures will be applied, and you will continue to receive the SCD until the end of the third (3^rd) month (November 30, 2023) (as listed in Appendix K-2: $874). On the first day of the fourth (4^th) month, the amount of SCD will be reduced by half the amount of the decrease (minus $390) which means that the SCD will be $484 until it returns to an adjusted amount on September 1, 2024, which represents $94 indexed annually by the “all items” territorial CPI.

Thereafter, the adjustments will be made every year until new census data is released and the SCD is reviewed, which generally occurs on a five-year cycle.

(3) Statistics Canada has determined that my location still qualifies for the SCD. I understand that it will be indexed by the annual year-over-year territorial average Consumer Price Index (CPI). How will the indexing be applied?  

The SCD will be reassessed by Statistics Canada when census data on shelter is available. When no census data on shelter is available, the SCD will be indexed until it is reassessed by Statistics Canada. Given that the SCD is indexed by the annual year-over-year territorial average CPI (reference period May to May), when Statistics Canada reviews the isolated post to confirm that it still qualifies for the SCD, the allowance may increase or decrease depending on how the rents are fluctuating at post in relation to the point of departure when applying the methodology. This reassessment is referred to as baselining in the table below.