Standing Senate Committee on National Security and Defence

Report of the committee

Tuesday, June 7, 2016

The Standing Senate Committee on National Security and Defence has the honour to table its

THIRD REPORT

Your committee, which was authorized to examine the subject matter of the elements contained in Division 2 of Part 4 of Bill C-15, An Act to implement certain provisions of the budget tabled in Parliament on March 22, 2016 and other measures, has, pursuant to the motion adopted by the Senate on 3 May 2016, examined the said subject-matter and now reports as follows.

Your committee delegated the study of the subject matter of Division 2 of Part 4 to the Subcommittee on Veterans Affairs, which has reported to this committee as follows:

“On 18 May 2016, the Subcommittee on Veterans Affairs held two meetings to study the provisions of the budget implementation bill concerning veterans and members of the military. The Subcommittee heard evidence from the Department of Veterans Affairs, the Office of the Veterans Ombudsman, the Royal Canadian Legion, and Mr. Brian McKenna, as an individual.

Specifically, Division 2 of Part 4 of Bill C-15 proposes to make six key changes to the Canadian Forces Members and Veterans Re-establishment and Compensation Act (New Veterans Charter). The changes are as follows:

• The “Permanent Impairment Allowance” would be renamed “Career Impact Allowance” to better reflect the primary purpose of this allowance;

• The expression “totally and permanently incapacitated,” which is used as eligibility for certain services and benefits provided for in the Act, would be replaced with “diminished earning capacity,” whose differences with the original expression would be specified by regulation;

• The amount of the Earnings Loss Benefit would increase from 75% to 90% of the gross revenue that the member was receiving at the time of release;

• The amount of the Disability Award would be increased as of 1 April 2017, and as a result the amount of the Death Benefit as well, as it is calculated using the same rates. The maximum rate would be $360,000, and indexed, an increase of 16% compared with the current rate;

• The moment when a Disability Award becomes payable and the formula used to calculate this amount would be clarified;

• A retroactive payment of the increase to the amount of the Disability Award or the Death Benefit would be paid to any person having received either of these benefits between 1 April 2006 and 31 March 2017, or approximately 70,000 individuals, according to the Department of Veterans Affairs.

The provisions in Division 2 of Part 4 of the bill were generally well received by the witnesses, who saw them as improvements. The changes to the Disability Award and the Death Benefit, in particular, were welcomed.

However, the witnesses pointed out that the proposed changes to the Permanent Impairment Allowance (renamed “Career Impact Allowance”) and the condition of “totally and permanently incapacitated” (replaced by “diminished earning capacity”) can be assessed only once the regulatory changes are known. They noted that the bill contains changes to the wording only, without any definition or explanation of the concrete changes they will create. The witnesses were adamant that interested parties must be consulted in drafting these regulatory changes.

The increase in the Earnings Loss Benefit from 75% to 90% of pre-release gross income was seen as a step forward by the witnesses. However, two concerns were raised in relation to this change. First, the witnesses said that the increase would be minimal for veterans in the lower ranks at the time of their release, since the Department of Veterans Affairs announced that regulatory changes would decrease the minimum salary on which the calculation for the Earnings Loss Benefit was based. Second, the witnesses wondered whether long-term disability benefits paid out by the Department of National Defence (through the SISIP), also set at 75% of pre-release revenue, would be increased as well.

The witnesses also underscored the importance of continuing efforts to resolve some long-standing deficiencies in veterans support programs.

In particular, they noted the importance of setting up lifetime financial security for injured veterans and their families which would reflect the natural career progression that they could have experienced. The fact that income replacement measures do not take into account the usual promotions injured veterans may have received had they been able to pursue their military career is a recurring issue that was raised in the 2013 report of the Subcommittee on Veterans Affairs, “A Study of the New Veterans Charter”.

Furthermore, the witnesses said that steps must be taken to increase veterans’ knowledge and understanding of the various programs available to them.

Based on the entirety of the testimony placed before us, your subcommittee supports the amendments proposed in Division 2 of Part 4 of Bill C-15.”

Respectfully submitted,

DANIEL LANG

Chair