Pierre Daigle's latest report says some soldiers have to wait as long as four years to settle the bill from their mandatory relocations, while those who grieve compensation or benefits are often left waiting for more than a year.
"This investigation was launched after numerous attempts to raise the issue with senior CF leadership failed to result in any concrete action," Daigle wrote.
"Delays in adjudication and grievances related to relocation benefits have been growing for five years and they are having a significant impact on CF members and their families."
The Canadian Forces moves approximately 16,000 members each year and there have been about 1,500 requests for adjudication of related claims each year since 2009, the report found.
As of Feb. 1, 2013, staff were processing files dating back to August 2010 and had a backlog of 1,702 cases with a minimum 18-month waiting period.
The issue stems from a understaffed and complex bureaucratic process faced with incomplete files and a poorly managed information system, Daigle said.
"The burden often falls on the CF member to make financial decisions where policies are confusing or uncertain – ultimately requiring adjudication to determine what can and cannot be claimed during a mandatory relocation," he wrote.
A similar problem exists with grievances filed over compensation and benefits, the report concluded.
Though there is supposed to be a timeline of 60 days to render a decision in those cases, as of November last year there were 196 files sitting in the system, some dating back to 2010.
The average processing time for a grievance file is 385 days, according to statistics provided to the ombudsman's office.
Daigle has suggested 11 ways to fix the system, including bringing in more staff, improving communication with Forces members and putting in place clearer policies.
Both the chief of defence staff and the defence minister said agree with the report's findings and said they are putting in place a plan to deal with backlogs.
More staff are being hired immediately and a review of the overall relocation policy is ongoing.
"The ombudsman's findings have further helped us to identify important compensation and benefits issues that need to be addressed along with those we are already working on," Chief of Defence Staff Gen. Tom Lawson said in a statement.
"While we have improved a number of elements within the grievance system over the years, I know we have more to do."