Under CAF policy, I think they would maintain their pay. Because they are unfit for the CAF doesn’t mean they would be unfit in Transport Canada’s eyes. And we still need pilot staff officers.
You are likely right. But if they are unfit for CAF service, they should be released, and then, if still fit in TC's eyes, they could feed in to the supply and demand for civilian pilots.
As to staff officers, where do you draw the line? How do you rationalize paying a pilot who flies for two years, gets broken, and then serves for 27 more in a staff position, with an artificially elevated (in his/her case) salary that now no longer reflects current experience/value? Wouldn't the new Air Ops O be a better solution to billets currently being filled by out of seat/trade pilots, thus increasing the aval pool of pilots?
I am not trying to be argumentative here. Rather, I am trying to understand how you can equate market forces, which value a commodity, to deal with this. Market forces have some influence, but are not all-encompassing.
I have watched the CAF throw money at a variety of occupations and trades in an effort to be competitive with the civilian market. ( Medical, Dental, Legal and SOF all come to mind). In some cases, it had a temporary effect, but people still left, for a number of reasons. Economics was sometimes a factor, but not all the time.
Your suggestion would mitigate some of the problem, but probably not enough to make a noticeable difference.