Maj. Marcus Brauer, who now lives in Halifax, appeared Tuesday in Federal Court to ask Judge Richard Mosley to order the Treasury Board Secretariat to review its decision to grant him only $15,000 in compensation.
Brauer's lawyer, Daniel Wallace, argued that Ottawa should have covered all of his client's losses because there is a policy in place offering financial protection for military members forced to move from depressed housing markets.
"This was a devastating financial blow for Maj. Brauer," Wallace said.
Wallace told the court that housing prices in Bon Accord, Alta., dropped 23 per cent during the three years Brauer lived there, which is three percentage points above the threshold that defines a depressed market in the military's relocation policy.
However, the Treasury Board Secretariat decided Brauer wasn't living in a depressed market when he moved, arguing the municipality was actually part of Edmonton, where housing prices had dropped just 2.9 per cent.
In court, Wallace cited the exact wording of the policy: "Depressed market, as defined by Treasury Board Secretariat, is defined as a community where the housing market has dropped more than 20 per cent."
The problem, said Wallace, is that the word community is not defined in the policy.
"The employer is trying to benefit from this ambiguity," Wallace told the court, suggesting that by lumping Bon Accord in with Edmonton — 40 kilometres to the south — the Treasury Board Secretariat ignored its own policy in a bid to save some money.
Wallace said Bon Accord is an incorporated town with its own mayor, boundaries and a population of 1,500.
But the government's lawyer, Susan Inglis, said the government defines a community as a group of people "held together by economic bonds."
In court documents, the federal government argued: "It is not unreasonable to consider a town 'minutes' away from a major urban centre as part of its suburban area and 'community.'"
When the judge asked Inglis if the Treasury Board Secretariat had ever designated a depressed market for the purposes of the policy, the lawyer said she didn't know but would find out.
Mosley also asked about the RCMP's relocation policy, which he said included an independent arbiter to resolve disputes over compensation. Inglis said she would look into the Mounties' policy and report back within two weeks.
As well, the judge wanted to know why the Treasury Board Secretariat didn't produce an economic analysis when assessing Brauer's application, relying instead on local media reports, news releases and undated blog posts to justify their decision.
"Mr. Wallace said that doesn't inspire confidence and I'm inclined to agree with him," Mosley told Inglis. "I have to say that I would have expected more."
Mosley reserved his decision.
Outside the court, Brauer said his family, which includes five children under the age of 14, is in desperate financial shape.
"I've been collecting cans to make ends meet," he said, adding that he tried to pawn his wedding ring and medals, but his wife bought them back.
Brauer, who has moved seven times during his 24-year military career, is the first member of the military to challenge home-equity assistance program, Wallace said outside the court.
Among those who support Brauer's claim are the chief of defence staff, the Canadian Forces ombudsman and the Forces' director of compensation.
In 2007, Brauer paid $405,000 for a house in Bon Accord when he was posted to Canadian Forces Base Edmonton. Three years later, when he was told to move to Halifax, he sold his home for $317,000 following what he says was a market crash linked to the failure of several industrial projects in the area.