That disturbing assessment is found in the latest report to Chief of the Defence Staff Gen. Wayne Eyre from Canadian Forces Chaplain General Brig.-Gen. Guy Bélisle. A copy of the report was obtained by CBC News.

The report found that military morale is flagging for a variety of reasons.

"The past six months have been very difficult for many CAF members and their families as they struggle to find a way forward through the economic, social and cultural realities and changes that are confronting all Canadians in these uncertain times," said the July 26, 2023 briefing note from Bélisle.

The assessment zeros in on recent changes to the Post Living Differential (PLD) — which helps military members offset the cost of living and frequent moves — as the biggest factor in discontent within the ranks.

"Though unintended, these changes, concurrent with CAF efforts to reconstitute the Force, has resulted in many CAF leaders and members feeling more undervalued and underappreciated than at any point in recent memory," said the briefing note, written just weeks after the changes to the PLD came into effect.

"The morale of members across the CAF was assessed by chaplains in this reporting period to be notably lower than during the last few reporting periods, due to several key factors and realities ... changes to PLD, the increasing lack of affordable housing, the rising cost of living, and staff shortages all contributed to exacerbating the tensions and challenges being experienced by members and their families."

The new PLD policy was a work-in-progress for almost a decade and a half. It took effect in July and was meant to help lower-ranking members cope with steep housing costs in Canadian cities.

But several thousand high-ranking members who had been receiving the housing offset now face the prospect of being cut off from the benefit.

Chaplains hearing pleas for funds to cover rising costs

Bélisle's report says chaplains at bases across the country are hearing from those members, who say "the end of PLD will have a significant negative impact on them financially and will also be a determining factor in their decision to seek advancement, postings, or remain in the CAF.

"Many chaplains continue to report increases in requests for funds to assist members who are unable to meet the growing costs of housing and food."

The briefing said that support agencies and charities, such as the military family support foundation Together We Stand (TWS), have cushioned the blow only slightly.

"However, despite such generosity, support from organizations like TWS can only be viewed as a short-term solution for members who are facing increased significant financial and other issues," the report said.

The briefing concluded that recent changes to the internal professional evaluation system, known as PaCE, are also having a negative impact on military members.

Efforts to reform military culture taking root: Bélisle

Bélisle also noted that recent efforts at reforming the Canadian Forces' culture — including changes intended to stamp out sexual misconduct and improve the responsiveness of senior officers — are starting to be accepted and even appreciated in the ranks.

"On the positive side, some members have noted that their workplace appears to be getting psychologically safer, and that there is less of a taboo now on communicating issues with [chains of command]," he wrote.

"Leaders at all levels generally seem to be trying more to take seriously the difficulties that some members are going through, while recognizing the benefits of being flexible with members who are trying to get the help they need (e.g., being more generous in the interpretation of compassionate situations and the granting of leave; accommodating members by allowing and supporting more flexible work schedules)."

Canadian Forces personnel are feeling the bite of inflation and it's undermining their morale, says Chaplain General Brig.-Gen. Guy Bélisle. (Sean Kilpatrick/The Canadian Press)

In an interview with CBC News, Bélisle said that while military morale has taken a hit since his previous assessments, it's not the lowest he's seen in his more than three decades in uniform.

"One thing is very important to say, and that is CAF members and their families are facing right now the same challenges as other Canadians," he said. "They are struggling with the effects of the pandemic, the rising costs of leaving larger mortgage payments, access to family doctors, and the pace of change across our whole society."

To soften the impact of changes to the PLD, the Department of National Defence has introduced a transitional program called the Provisional Post-Living Differential that will slowly reduce the amount of money they receive between now and 2026.

It's also introducing something called the Canadian Forces Housing Differential (CFHD). The new benefit is specifically focused on housing affordability, rather than the cost of living, which is how the PLD is calculated.

In a background statement, the department pointed out that ordinary military members recently received a 12 per cent pay increase, stretched out over four years and retroactive to 2021.

Bélisle said his chaplains try to counsel confidence and patience.

"As chaplains, we're there to bring hope, we're there to support, we're there to be with them and walk with them through that difficult period," he said. "And we've got a lot of hope."