Proceedings of the Subcommittee on Veterans Affairs
Issue 2 - Evidence, February 12, 2003
OTTAWA, Wednesday, February 12, 2003
The Subcommittee on Veterans Affairs of the Standing Senate Committee on National Security and Defence met this day at 12:20 p.m. to examine the health care provided to veterans of war and of peacekeeping missions; the implementation of the recommendations made in its previous reports on such matters; the terms of service, post- discharge benefits and health care of members of the regular and reserve forces as well as members of the RCMP and of civilians who have served in close support of uniformed peacekeepers; and all related matters.
Senator Michael A. Meighen (Chairman) in the Chair.
[English]
The Chairman: Honourable senators, this afternoon we are continuing our study of benefits provided to veterans and specifically the benefits payable under the provisions of the Service Income Security Insurance Plan, usually referred to as SISIP.
Last week, we heard from Major Bruce Henwood, who lost both of his legs while serving in Croatia, an injury for which he received no compensation from SISIP because his income from other government programs added up to the SISIP maximum of 75 per cent of his pre-accident salary.
The committee learned that colonels and generals of the Canadian Forces, as well as parliamentarians and executive members of the public service and the RCMP benefit from an accidental death and dismemberment insurance policy, paid for by the government. The government would pay compensation in the form of a lump sum payment of some $250,000 in the case of the loss of both legs.
A panel briefed the committee about the accidental death and dismemberment benefits available to parliamentarians, to members of the Canadian Forces and to workers in private enterprise. We learned that this coverage is relatively inexpensive and is frequently part of benefit packages in private industry.
Today's witnesses will brief the committee on the details of how SISIP works and how it accounts for contributions from members of the Canadian Forces and the government. A representative from Maritime Life, the company that provides the insurance, is also with us.
The deputy chair of the subcommittee is Joseph Day, the distinguished senator from New Brunswick. He graduated in electrical engineering from the Royal Military College and in law from Queen's University, and later received a Master of Law from Osgoode Hall. Prior to his appointment to the Senate in 2001, Senator Day had a successful practice in the fields of patent and trademark law and intellectual property issues, before joining J.D Irving Ltd. as legal counsel in 1992.
Senator Day is not only the deputy chair of the Subcommittee on Veterans Affairs, but also of the Standing Senate Committee on National Finance. Currently, the latter committee is looking at the financial framework for federally funded, arm's-length foundations. He is also a member of the Standing Senate Committee on Transport and Communications, which is just starting a study on the current state of media industries.
I also would like to introduce Senator Michael Forrestall, from Nova Scotia. He has served the constituents of Dartmouth as their member of the House of Commons for 25 years, and for the past 12 years as their senator. Throughout his distinguished parliamentary career, Senator Forrestall has followed defence matters, serving on various parliamentary committees, including the 1993 Special Joint Committee on the Future of the Canadian Forces. As well, he has represented Canada at NATO parliamentary assemblies. He is deputy chair of our parent committee, the Standing Senate Committee on National Security and Defence.
The chair of that parent committee is Senator Colin Kenny, who worked in the Prime Minister's Office from 1970 to 1979. Thereafter, he worked in the private sector as an energy executive. During his parliamentary career, Senator Kenny has chaired the Standing Senate Committee on Internal Economy, Budgets and Administration, as well as the audit committee and the subcommittee budgets. He has served on numerous committees, including a special joint committee on Canada's defence policy, a special committee on terrorism and security, and a special committee on illegal drugs. His private senator's bill on alternative fuels was enacted, a rare honour for a non-government bill. Other bills he has sponsored have sought to regulate the tobacco industry and discourage youth from smoking. Currently, he is also a member of the Standing Senate Committee on Energy, the Environment and Natural Resources, and is involved with the NATO parliamentary assembly.
Our time is short today, but before I go to our distinguished guests, I believe Senator Kenny has a question.
Senator Kenny: I was going to suggest that, due to the limited amount of time, you might consider foregoing statements and go straight to questions.
The Chairman: I have spoken to our lead guest, Lieutenant-General Christian Couture, and he has provided us with a statement that we all received this morning. Rather than read it, he will make some brief remarks and then the floor will be open to questions from senators. Perhaps, first, Lieutenant-General Couture could introduce those who are with him.
LGen. Christian Couture, Assistant Deputy Minister, Human Resources — Military, Department of National Defence: Thank you for giving us the opportunity to speak to the committee today.
With me today is Mr. Pierre Lemay, who is the president of SISIP, together with Mr. John Geci, president and chief executive officer of the Canadian Forces Personnel Support Agency, known as CFPSA. In case we have specific questions, I have in the audience with me Captain (Navy) Andrea Siew, who is the director of the Directorate of Quality of Life, Colonel Scott Cameron, who is the surgeon general of the Canadian Forces, and Lieutenant-Colonel David Wrather, director of Casualty Support and Administration.
Ms. Kathleen Martin, who is the manager of the Service Income Security Insurance Plan (SISIP) with Maritime Life, is also at the table. However, this is the first time I have met her.
As you have mentioned, Mr. Chair, we have already provided you with numerous brochures and a copy of my entire remarks, so I will keep my point short.
The Canadian Forces Personnel Support Agency was created in 1996 to support the operational readiness and effectiveness of the Canadian Forces and to contribute to the morale of the members and their families. I hope, Mr. Chair that you do not mind if I use the acronyms CFPSA and SISIP during my presentation.
SISIP has two major components. The first, which we call ``SISIP Proper,'' is a non-public component that offers services such as financial education, planning, counselling, and financial assistance through loans by the Canadian Forces Personnel Assistance Fund. It also offers optional life and partial disability insurance. SISIP proper is open to all ranks and is paid for entirely by members.
The other component — the SISIP Treasury Board Supported Plan — is basically the application to the Canadian Forces of the federal government-sponsored instruments program, which is applicable to comparable groups in the public service and in the RCMP. These programs include long-term disability coverage for all employees and an additional program for the executive category. In the Forces, the latter would be the colonels and the generals.
These insurance programs form part of the Canadian Forces compensation and benefit package. The Treasury Board has full governance of this program; the chief of the defence staff is the policy owner, and Maritime Life is the insurer.
SISIP was created in 1969 to provide an optional income replacement insurance coverage for injury, dismemberment or death not related to military duty and which are not covered under the Pension Act. The Pension Act was, and remains today, the government insurance program for Canadian Forces personnel who are disabled or killed in the line of military duty.
SISIP, like any other program, will need amendment occasionally to ensure the program meets the current needs of Canadian Forces members. For example, SISIP LTD underwent a comprehensive review in 1999 that yielded significant improvements both to the eligibility criteria and to the vocational rehabilitation program. Issues by Canadian Forces members have been taken seriously and we are working hard to address their concerns.
As you are no doubt aware, the minister yesterday announced improved accidental dismemberment coverage for Canadian Forces members that will be coming very soon. The new coverage will provide for a sliding scale and lump sum payment of up to $250,000 in case of accidental dismemberment in the line of duty for all regular and reserve CF members beyond the rank of colonels. Colonels and general officers will remain covered for the same amount under the general officers' insurance plan.
Please remember that SISIP is only one of the many programs and benefits we have set in place to care for injured or deceased Canadian Forces personnel and their families. Both the ministers and the chief of defence staff have stated that the health and welfare of our troops and their families are of the utmost importance and we will continue to implement programs to support their well-being. We are committed to ensuring that injured regular and reserve Canadian Forces personnel and their families receive the best possible care, treatment and support services available. We always welcome reports and recommendations to help us achieve our goal of looking after our people.
I will stop here and invite questions.
The Chairman: Thank you very much, General Couture. Do any other members of the panel wish to make an opening statement? If not, then I will turn to our vice-chair.
Senator Day: You have had a chance to review our transcript of our hearing with Major Henwood.
LGen. Couture: I did.
The Chairman: Is there anything Mr. Henwood stated in his testimony to which you take objection?
LGen. Couture: Major Henwood spoke about his own case. I think it would be inappropriate for me to talk about specific cases because of privacy issues. I am sure honourable senators understand that.
Was there anything in particular? Not necessarily, but there is one thing I would like to clarify. Some people believe that the plan that was created for the generals and colonels, or created for them at their request. That is not true. It was a program given to them as part of their compensation, because their compensation is benchmarked against public service executives to whom this type of coverage is provided. When the benchmark was established in the early 70s, this became part of their compensation. That does not make it right. We were directed to work on the issue, and the minister made an announcement about it yesterday.
Senator Day: Major Henwood made the point that he had a grievance outstanding, which has been in the hands of chief of defence staff for a considerable period of time. Do you have an explanation for that?
LGen. Couture: The grievance, as you said, is in front of the chief of the defence staff for final adjudication, the CDS being the final authority. There is no time limit, according to the regulations we have in place, for the grievance. Has it taken a long time? Yes, it has. I cannot speak for the CDS as to when he will enter his judgment, because I do not know. I do know it is in front of the CDS.
Senator Day: There is no time limit at the present time. Perhaps that might be one thing we could recommend to the Department of National Defence. I am sure soldiers would like to hear one way or the other, so they could get on with their lives or, as Major Henwood said, have closure.
LGen. Couture: I agree. We have reviewed the grievance system and introduced a new way of doing business, as of 2000. Although there is still no time limit at the CDS level, we have introduced performance measurement standards and put more people and staff into the grievance administration to improve on that. Our goal is to shorten the time by a great deal. My own wish would be that a person would have a response within one year. We are not there yet, but we are working on it.
Senator Day: Major Henwood indicated that, because the overall SISIP program for income stability to which he was entitled was based on income he received from other sources, he was disqualified from any payment from SISIP because of other sources of income, including the Pension Act and Superannuation pensions into which he paid. As a result of the income level he had from those pensions, he was unable to get payment from SISIP; therefore, he was disqualified from SISIP benefits and support — support that he felt he needed.
He spoke from his example, but he was speaking for all armed forces staff who might be injured in the line of duty. I think it is important for our audience to understand that, even though we focused on his case because it was a clear case that we could analyze, he was speaking on other people's behalf as well, past and future.
LGen. Couture: Again, without addressing the specifics of Major Henwood's case, with military members injured in the line of duty, the Pension Act is the vehicle by which compensation is given. Because of the integration of the program, we have the program set at 75 per cent of the income at the date of release. If people are injured in the line of duty, that becomes a minimum. The Pension Ace provides a scale related to the level of disability that a person suffers.
As to the other benefits that come with the Pension Act, anything that is related to the pensionable condition is accessible to the members. That could be the Veterans Independence Program, medical care related to their pensionable condition, home assistance, it could be attendants, et cetera.
Senator Day: Pardon me for interrupting, General, but Major Henwood pointed out to us that it was during the period of time before it was determined whether he would qualify — it was a couple of years before the extent of injuries and recovery were determined — he had a lot of expenses. It was during that time frame that he pointed out the inequities and difficulties that he had. Those ranged from baby-sitting so that his wife could come to the hospital to visit him, to cab fares and those kinds of expenses. Is there anything in the armed forces, or in SISIP, that would have helped him?
LGen. Couture: At the time, I do not think so. That is why we have been listening to the people of the Canadian Forces and looked at improving the program. Since 1999, we have created the Directorate Casualty Support and Administration. They have been provided with contingency funds so situation like this can be addressed. Unfortunately, before 1998, it did not exist. Today, it exists.
Senator Day: Mr. Lemay, from a SISIP point of view, each person in the armed forces is required to pay into the income stability portion of SISIP. Is that correct?
Mr. Lemay: It is compulsory for those who joined on or after April 1, 1982.
Senator Day: Do you have any figures as to how much money was brought in under that plan, and how much SISIP has paid out to armed forces personnel who qualified from 1982 onward?
Mr. Lemay: I do not have those particular figures with me. It is possible to come up with those numbers. You were provided with the financial statements for 2002, which would include how much was collected in premiums and how much was paid out.
Senator Kenny: Put it into the record. Give him the financial statements and have him highlight those portions to us.
The Chairman: That would be fine.
Senator Kenny: Let us give him a copy of the statement and hear it.
The Chairman: Perhaps he could do it when he is not answering questions.
Senator Day: I could come back to the question.
Mr. Lemay: If you would allow me, I would appreciate the chance to talk about the creation and intent of SISIP. It may help honourable senators in your deliberations about SISIP because I think there may have been a misunderstanding in your first day of deliberation.
The Chairman: Could you do so quickly, and also indicate the misunderstanding you believe we have?
Mr. Lemay: SISIP was created to provide protection for military personnel for non-duty-related injuries. The government primary insurance plan for duty-related injury was the pension. It was realized then that most injuries and death were non-military. That was the intent of the program. It was never intended to complement pension benefits. In fact, from 1969-76, people who qualified for pension benefits could not qualify for the SISIP benefit. It was only in the 1970s that it was realized that one was able to receive only a 10 per cent or 20 per cent benefit, which would not be sufficient income for a family to live on.
At that point, SISIP was extended to bridge the Pension Act benefit up to 75 per cent of the salary. The program was never intended to provide additional compensation to benefits under the Pension Act. It was intended for non- duty-related protection, which people did not have. The premiums, from 1969 to date, although there have been changes, have been for protection from non-military-duty injury — long-term disability and dismemberment — and today, for the topping up of benefits under the Pension Act of up to 75 per cent of the salary.
You may be aware that benefits under the Pension Act are non-taxable. That non-taxability of the benefit is not included in the computation of the benefit. The program was never intended to provide benefit greater than 75 per cent of the salary. People never paid premiums for such a benefit. In fact, today, the after-tax income from full benefits under the Pension Act, depending on the number of children and the years of service because there is also the Canadian Forces Superannuation Act, CFSA, is probably in excess of 100 per cent of their after-tax income while in the military.
Senator Day: Do you keep all of the money raised by mandatory armed forces personnel payment into SISIP that you do not pay out for management purposes, for the insurance carrier and for those that qualify for benefits? Is the balance kept segregated and invested as SISIP money?
Mr. Lemay: Are we talking about the long-term disability program under the SISIP Treasury Board Supported Plan? As you know, there is SISIP Proper and the SISIP that is supported by Treasury Board.
Senator Day: Yes.
Mr. Lemay: These plans are experience-rated. All the premiums collected are put into the plan. Claims are paid out of that fund; the reserves are adjusted, depending on future liabilities; administration fees are paid to Maritime Life or to SISIP; and, at the end of the day, whatever is left, either a surplus or a deficit, belongs to the plan owner or, in the case of Treasury Board, it belongs to the Treasury Board.
In practice, if there is a surplus, the money remains in the plan for future years. If there is a deficit, then the Treasury Board Secretariat would be required to fund the deficit or the premiums would have to go up.
Senator Day: Explain the relationship between the armed forces and Treasury Board from the point of view of administration. Did the armed forces ask Treasury Board to administer this plan?
Mr. Lemay: When SISIP was created in 1969, it was strictly a departmental program. It was created under the National Defence Act as a non-public fund entity. In the early 1970s, Treasury Board introduced a federal government employer sponsor program for the employees. They introduced that to the public service for all employees. When it started, they paid 50 per cent of the premiums for long-term disability, which became a compulsory program in the public service. They set up the same program in the RCMP. It was during that time that they introduced an executive- level insurance package.
At the time, DND asked Treasury Board if SISIP could be the government-sponsored program for the Canadian Forces. Today, those Treasury Board-supported programs — whether long-term disability or the general officers' program — are the same as the government-supported programs for public service employees and for the RCMP. The programs have no relationship to the Pension Act or the Pension Act administration, although there is a bridging today in the long-term disability, LTD, program.
Senator Day: Who chooses Maritime Life as the carrier for this? Is it the Department of National Defence or the Treasury Board that makes the decision?
Mr. Lemay: The decision was made in 1969, when a tender was put out by DND. At the time, Treasury Board was not involved. Maritime Life was selected as the insurer for the program. There was no limit to the contract and it has evolved over the years through a series of agreements.
Obviously, today we do not work with the same contract that we had in 1969. Treasury Board assumed the payment of the premium for some programs. In fact, in 1982, Treasury Board assumed governance of its now Treasury Board Supported Plan. Neither SISIP nor the Chief of Defence Staff could change anything in the insurance policy without the approval of Treasury Board after 1982.
In terms of competitiveness, the Treasury Board Supported Plan is reviewed and studied by the Treasury Board Secretariat each year, by the office of the Superintendent for Financial Institutions. They can compare the program to those of the public service and the RCMP. To date, the relationship and the services have been evaluated as excellent, so there has not been a requirement to re-tender the contract.
Senator Day: In 34 years there has been no re-tendering of the contract?
Mr. Lemay: That is correct, senator.
Senator Kenny: I note in the document we have, an overview of care of the injured programs. It says: ``We have undertaken serious reforms of our health care system and our social support programs. We are committed to ensuring that injured personnel and their families receive the best possible care, treatment, and support services available.''
Are there different classes of protection within the Canadian Armed Forces for the different ranks of people who receive injuries? If a private received the same injury, for example a lost leg, as a colonel received, would the levels of compensation or protection available be different?
LGen. Couture: There are two entrance programs paid for by the government today. One is for people below the rank of lieutenant-colonel and the other is for colonels and general officers. The program for general officers and colonels contains the accidental death and dismemberment provision. As you are aware, the plan could provide a lump sum payment of up to $250,000 that is calculated on a sliding scale.
The plan for lieutenant-colonel and lower in rank has a different kind of dismemberment clause that would allow for up to three years' coverage for disability. As you also know, this is offset by other sources of revenue such as those available under the Pension Act, if the injury occurred in the line of duty, or the Canadian Forces Superannuation Pension Fund.
The lump-sum payment for the senior officer had no offset provision. As this was unacceptable, we have made some changes to that and the minister announced yesterday that very soon everyone in the forces will have access to dismemberment benefits on the sliding scale up to a maximum of $250,000, which will have no impact on other programs. It would be a lump sum payment that will not offset any other aspect of protection that we have.
Senator Kenny: Then would it be fair to say that you, as a distinguished commander and leader, feel more comfortable looking your men and women in the eye when you send them into harm's way?
LGen. Couture: I have been in the military for 32 years. I have had the privilege of commanding troops at every rank level in the officer rank. I have had the privilege of commanding troops in operation and I have never had any difficulties in looking my people in the eye.
Senator Kenny: You felt the old system was appropriate, then?
LGen. Couture: The system had been designed based on a compensation system. That does not make it right, but it was designed as a compensation system. Therefore, I think that people felt that people of my rank deserve the compensation to which we are entitled. I do not think I was at liberty to refuse it. I have never said, and I will never say, that this makes the system right. That is the reason why we have worked to make some changes.
Senator Kenny: My question was do you feel better about the changes?
LGen. Couture: Of course I do.
Senator Kenny: How about retroactivity? Is this a looking forward plan or does this capture people looking backwards as well?
LGen. Couture: No, senator, it does not have a retroactive provision in it. As per Treasury Board policy, a program like this one of compensation, benefits are from date on being approved forward.
Senator Kenny: How many people would it apply to if it looked backwards?
LGen. Couture: My knowledge is that for the last 10 or 12 years there have been no more than a dozen people.
Senator Kenny: A dozen?
LGen. Couture: Mr. Lemay may have better figures. I think a dozen is probably the number.
Senator Kenny: What was the rationale for excluding these dozen people from this benefit?
LGen. Couture: That was the program that we had in place at the time.
Senator Kenny: I understand that, but these people are missing a leg and we seem to all agree that this is a good and a fair way to treat people. They are still missing a leg and they did not get compensation that anyone in this room seems to think is appropriate. Why are they excluding the dozen people? What would the cost be to compensate these dozen people? Would it be 12 times $250,000 maximum?
LGen. Couture: If the maximum is given you could say that.
Senator Kenny: If we are only talking about 12 people, why does this not have a backward element to it? Why do we not consider that?
LGen. Couture: This is a policy that I did not make. I have absolutely no control the policy decision that direct benefits like this to go forward. I agree with you, senator, that the people who have suffered. I feel very sorry for them. If there is anything that could be done that I could do personally I would do it. However, I do not think I can do anything personally to provide this type of compensation.
The Chairman: What would be required, General Couture? Suppose I were the minister and I said, ``I would like this to happen, please,'' and I do point out that $250,000 is the top lump sum payment for dismemberment so not all of the dozen people we are talking about would be entitled to the $250,000. We are talking about an amount somewhere below $3 million. If I were the minister I said, ``General Couture, I would like these people to be compensated to the extent that they are entitled retroactively,'' what would you have to do? Can anyone answer that question?
LGen. Couture: I would have to go into the rules and regulations that exist pertaining to how we can provide money to people, and for what reason and what basis, and then try to find out a policy or an exception to policy.
The Chairman: I am assuming it is not authorized.
Senator Kenny: Would not a simple Order in Council do it?
The Chairman: That is what I would think.
LGen. Couture: Maybe, but I do not know, senator'' An ex gratia payment, perhaps? I do not know. In respect of an Order in Council, I think you are better qualified than I am to answer that type of question.
The Chairman: I believe we are agreed that the present legal framework does not provide for retroactive payments.
LGen. Couture: That is my understanding.
The Chairman: We are talking about an ex gratia payment or an Order in Council. If anyone can think of another way, I am sure the minister would be pleased to hear.
Mr. Lemay: I just wanted to mention, senator, that the number 12 that has been mentioned is reasonably close to the number of claims that have been paid over the last 10 years, but the condition of the claimant and the payment of those claims is different from what is addressed under the new program. I would therefore suggest that the number is somewhat larger than 12 but I do not think we could give you a number.
Senator Kenny: Is it 40 or 50?
Mr. Lemay: We do not know, senator. It probably is not. However, the number 12 that has been mentioned seems to be consistent with the number of claims that Maritime Life has paid for dismemberment in the last 12 years.
The Chairman: It would therefore only be people entitled to receive a lump sum payment for dismemberment, to wit, people holding a rank of colonel or higher. Is that correct?
Mr. Lemay: That is partly correct. The current clause has a rule that you must be released within three years of the accident to be able to claim, while the new rule will not have that exception. You will be paid shortly after the dismemberment occurs. I am suggesting that we probably have not captured a number of persons who have had dismemberments in the last 10 years for which people may not have been released. They may have been kept in the military; the disability may have been an unfortunate loss of an eye or something of this nature. All I want to suggest is that the number is probably larger than 12, it is probably not 100, but not to leave you with the impression that it is 12.
The Chairman: Would it be fair to say that those who were released within the three years would, generally speaking, have been those who suffered more severe and disabling injuries?
Mr. Lemay: In my judgment it would be safe to say that, yes.
LGen. Couture: Yes senator, because if the medical condition of injured people is below the minimum required to serve in the Canadian Forces then unfortunately we have to release them. All those who are still within the limitation, although with maybe a limited disability, they can remain on and serve. We do have a few people in that situation.
The Chairman: Would it therefore be possible to obtain the information as to the number of people who suffered dismemberment and were released from the Armed Forces within a three-year period and who did not receive, because they were not of the rank of colonel or above, a lump-sum payment for that dismemberment?
Mr. Lemay: No one that falls below the rank of colonel would have received a lump sum payment up until today. They would have qualified for this monthly replacement income up to three years, depending on the severity of the dismemberment.
The Chairman: I understand that. However, would your records indicate people who were released by reason of dismemberment and, as you say, would not have received any payment?
Mr. Lemay: They have been entitled to this monthly replacement income for a certain period of time. We can go back in the records.
The Chairman: That is not lump sum, though, is it?
Mr. Lemay: It is not lump sum; it is a monthly income.
The Chairman: I am interested in lump sum.
LGen. Couture: Lump sum did not exist until the announcement of this new program for people below the rank of lieutenant-colonel. The lump sum never existed.
The Chairman: We know that.
LGen. Couture: If I understand your question correctly, you want to know the number of people who suffered dismemberment and have been released within three years of that unfortunate incident, but are not receiving compensation.
The Chairman: Lump sum compensation.
LGen. Couture: No one is receiving a lump sum.
Senator Kenny: How many are not receiving any?
The Chairman: Let me rephrase this: how many people, under the new guidelines, would have received this benefit?
LGen. Couture: I understand now.
Senator Day: I hope you have come to the conclusion that we are looking for how much it would cost you if a minister's announcement were retroactive to when SISIP started in 1969, as opposed to going forward.
The Chairman: It was limited to non-military in 1969.
Mr. Lemay: Yes.
LGen. Couture: It became mandatory in 1982.
The Chairman: How about 1982?
[Translation]
LGen. Couture: I understood your question perfectly well.
Senator Day: It was complicated to explain what we were looking for.
The Chairman: I should have asked my question in French.
LGen. Couture: That was fine.
The Chairman: I did not express myself properly.
LGen. Couture: I did not know exactly what information you were looking for and your clarification gave me the answer.
The Chairman: I asked my question on a negative mode.
[English]
Senator Forrestall: I will go back over the same ground in a different way. Is the fund actuarially sound?
LGen. Couture: For the basic knowledge that I have, yes, it is, but Ms. Martin can better answer this.
Ms. Kathleen Martin, Manager, Service Income Security Insurance Plan (SISIP), Maritime Life: I am not an actuary, honourable senators. I manage the nuts and bolts of the administration. I could have an actuary from Maritime Life answer that question for you.
Senator Forrestall: You do not come here with any authority.
Ms. Martin: I handle the day-to-day administration of the SISIP.
Senator Forrestall: You have no authority to change anything.
Ms. Martin: No, I do not.
Senator Forrestall: Looking at the operating highlights, I hope I am within this plan. You can never tell how the Auditor General gets along with you people at all; you certainly confuse the public.
Is this a typical annual statement?
Mr. Lemay: I think those are the highlights.
Senator Forrestall: Is it typical? If I took a statement from three years ago, would it be relatively similar?
Mr. Lemay: Are we talking about the Treasury Board Supported Plan LTD?
Senator Forrestall: Let us take both of them. Let us take the first one first and the Treasury Board second. Are they typical reflections of the operations?
Mr. Lemay: The Treasury Board Supported Plan would be somewhat typical only of the last three years. That is because there was a major change and improvement to the program in 1999, which has almost doubled the premiums to the program. I can go into more detail, if you wish. The program is much larger today than it was before 2000.
Senator Forrestall: You have a relatively healthy surplus of income over expenses.
Mr. Lemay: That is correct.
Senator Forrestall: Has that been a pattern under both accountings, over the last five or ten years?
Mr. Lemay: It has been somewhat of a pattern. There have been deficits in some years, depending on actuarial projections.
Senator Forrestall: Would it seriously impair the actuarial soundness of the program were you to, as has been suggested, reach back retroactively and make an adjustment?
Mr. Lemay: The department is still considering options of how to implement this new program.
Senator Forrestall: Is that one of them?
Mr. Lemay: It would be one of the options, but a program of accidental dismemberment for duty only, with a lump sum provision, would not be considered a very costly program. In proportion to the programs you have there, it would be a small program.
Senator Forrestall: My point is, we are not talking about a lot of money and we have a surplus. Is there a reason for holding on to it, General?
LGen. Couture: The surplus on the side of the SISIP Proper is non-public fund money. It belongs to the soldiers.
Senator Forrestall: You will pay out of general revenue, no matter what the figures say.
LGen. Couture: It is not public money. It is revenue from base activity, from CANEX sales and other areas.
Senator Forrestall: I am well aware of where it comes from.
LGen. Couture: On the LTD side, the Treasury Board Supported Plan, the fund belongs to the Treasury Board, not us.
Senator Forrestall: Who is the Treasury Board? The people of Canada.
LGen. Couture: Of course, but I have no control over this fund.
Senator Forrestall: Give me a yes or no. Can we help these people or not? Is the fund healthy enough to consider what you obviously sense the committee is talking about?
Mr. Lemay: The new program, senator, will be sponsored by the Government of Canada.
Senator Forrestall: It will be sponsored by the people.
Mr. Lemay: Yes, by the people of Canada.
Senator Forrestall: Not private funds.
Mr. Lemay: That is correct, senator. The surplus funds that you have in the SISIP Treasury Board Supported Plan belong to the people of Canada, but the governance of these funds is with the Treasury Board Secretariat, not with SISIP or the Department of National Defence. Therefore, we could not make the decision to use these funds from the people of Canada to pay for a retroactive program with the new lump sum payment, because those funds are under the governance of the Treasury Board Secretariat.
Senator Banks: I have a series of quick questions. With the new plan you are talking about, which will be put in place and will provide some benefits which are above what there is already, how immediately are we looking at implementation? Is that something that will happen this May or in 2005?
LGen. Couture: It will begin as soon as the paperwork is signed.
Senator Banks: The paperwork is paperwork that was generated by you folks, not by Treasury Board. The Treasury Board control of those funds is at least in part a response to ideas you have put forward. They respond when you propose that this should be done; Treasury Board will not generate a plan and suggest that they compensate people retroactively for those things.
LGen. Couture: We have been working at this for the last several months. We have had a lengthy discussion with our colleagues from the Treasury Board. The ministers made the announcement yesterday.
Paperwork generated by us will go quickly through the department. If we have the signatures tomorrow, the coverage will be in effect as of tomorrow.
Senator Banks: If you were to generate a proposal that said that you think it would be prudent, wise and fair to compensate people retroactively — that is, if you were to believe that. If you generated a plan that stated the conditions under which you would retroactively compensate people — dismemberment, for example — then one would assume that it would receive the same kind of treatment as the new plan that you are talking about. That is to say that it will be considered carefully and dealt with.
LGen. Couture: I would hope that it would be that easy.
Senator Banks: You said, four months.
LGen. Couture: We have been working for three to four months to come this far. If there is a way to look after what you have suggested, we will find it. If there is no way, then we will go back to the chairman's suggestion of an Order in Council or an ex gratia payment.
Senator Banks: Has retroactivity been under active consideration? Was it among the considerations for the plan that is about to be signed as soon as the paperwork is finished and then later rejected? Or did it not actually make it as far as the top of the pile?
LGen. Couture: Based on my experience in dealing with compensation and benefits, there is no retroactivity provision. It is always proactive.
Senator Banks: The idea of retroactivity has not been seriously considered.
LGen. Couture: It was considered but it was set aside when we ran into a ``brick wall.'' It was easier go around the brick wall to achieve what we have today.
Senator Banks: Whose brick wall was it? Did Treasury Board say no to the idea?
LGen. Couture: Treasury Board does not consider retroactivity, normally. I cannot speak for the Treasury Board because I am not a member. However, based on my experience in this area, compensation and benefits have always been considered from the date of approval and forward. We pick the date that the claim is approved and move forward from there. Unfortunately, sometimes an individual would qualify the day before but not the day after. I could cite examples that occurred, particularly when we made the changes in 1999 to the LTD plan. It was enforced as of December 1, 1999, but if the date of claim approval was the day before, he or she could not qualify.
Senator Banks: There always have to be cut-off dates.
LGen. Couture: Yes, but it is unfortunate. There are other ways around it and I am open to suggestions. I do not give up that easily.
Senator Banks: Mr. Lemay, you made a distinction earlier between general officers on the one hand and other ranks on the other hand in respect of the mutual exclusivity of dismemberment payments and of other considerations. Does that mutual exclusivity apply to the officers of general rank? You said there is a distinction between on-duty accidents and, I presume, off-duty accidents. Does that distinction apply or obtain in respect of the insurance coverage for general officers? Is there dismemberment payment made to them, regardless of how, when or why they sustained the injury.
Mr. Lemay: The short answer is that their coverage is 24/7.
Senator Banks: The other ranks are not?
Mr. Lemay: It would be military duty. I believe we talked about the fact that the program for general officers has been in existence since 1972. It was the application to the Canadian Forces of the program in the public service and in the RCMP. The compensation for colonels and generals benchmarked the executive category of the public service. When the government introduced the program in the public service, as it did to parliamentarians, it allowed the Canadian Forces to introduce it to the generals.
In the military, it has implications that may be different than those in the public service. Most recently, it meets the concerns that have been expressed. However, it appears that the concerns were based on inequities for military duty.
Senator Banks: In the new regime, will there be an approximate equality and parallel arrangement as there is between dismemberment payments to general officers and other ranks?
Mr. Lemay: For military duty, yes, it will be the same.
Senator Banks: The distinction will remain for other ranks that it will not be payable if it is non-duty injury.
Mr. Lemay: That is correct.
LGen. Couture: The existing dismemberment clause, which could provide up to three years of up to 75 per cent salary, will still exist for non-military duty for people below the rank of colonel.
The Chairman: What would ``non-military duty'' be? Driving to the store to pick up milk at night?
LGen. Couture: Yes, sir. Military duty is everything that is involved in the performance of your task. When there is an incident or an accident, there is usually a summary investigation to determine whether it is military duty-related. This is part of the documentation that would be provided to the adjudicator and we would proceed from there.
Senator Banks: If I am in Croatia and I have a day off, am I on military duty?
LGen. Couture: In that case — in Croatia — you would be in a special duty area and so you would be covered 24/7 under the insurance plan as opposed to under the Pension Act.
Senator Atkins: In view of the minister's announcement yesterday, are any military personnel who are sent overseas or to a special duty area covered?
LGen. Couture: As of the date that the paperwork is signed —that should be today or tomorrow — those personnel would be covered. I will add that currently, we do not have any personnel who would fit your description.
Senator Atkins: It is my understanding that this new program is not optional for anyone of any rank. They are covered.
LGen. Couture: Yes, sir.
Senator Atkins: The plan is not such that they have to subscribe for every $10,000?
LGen. Couture: No, sir. There is a sliding scale. I dislike that term but, depending on the loss, it is from $60,000 to $250,000 and is paid by the government.
Senator Atkins: That applies to military of any rank.
LGen. Couture: It applies for those who did not have such coverage before — from privates to lieutenant-colonels, included. Colonels and the generals will continue to be covered by the existing General Officers' Insurance Plan. Everyone will be covered, one-way or the other, for dismemberment.
Senator Day: General, could you have somebody in the Department of National Defence advise us when the paperwork has been signed?
LGen. Couture: I will call you personally.
Senator Day: It would be a pleasure to hear from you.
It is important for all of you to understand that we look upon the lump sum payment not as winning the lottery, because you have lost two legs or an eye, but rather as close to some kind of compensation that we can provide to the person who has given his arms or his leg or his eye. It would be compensation against his or her inability to otherwise earn a comparable income. That is why we thought it to be a bit unfair that the compensation was based on income at 75 per cent of salary when the injury occurred. This person then faces the prospect of no further promotions with the commensurate increases in salary. The individual's salary will not increase.
If Major Henwood had been injured last week instead of three years ago, his 75 per cent of salary would have been significantly greater than what it is. The lump sum payment is to compensate for the loss of potential future earnings. Thus, we think that it is important.
Are you familiar with the United Nations Military Observers Insurance Plan, which covers those Canadian Armed Forces personnel who are serving with the United Nations?
LGen. Couture: I am not very familiar with it; I just know that it exists. When I deployed on operation I was with a different unit and it was under the Canadian government. I have not served as an observer myself. Perhaps my colleagues are aware, but I do not have any details. I would not want to mislead you.
Senator Day: If an Armed Forces person who was injured received some compensation under that plan, would that compensation be factored into the income under our existing plans?
Mr. Lemay: Not under SISIP.
The Chairman: For the purpose of the record, I should read this item into our proceedings because I asked our clerk to contact our previous witness, Major Henwood, to ask if he had received any compensation from the United Nations, since our understanding was that he was working for United Nations at the time he was in Croatia. Major Henwood replied that indeed he had received some compensation, in the amount of $70,000, from the United Nations Military Observers Insurance Plan. Senator Day has asked about the implications of that. Under SISIP are none, so that is where the matter can stay.
Now I should like to express the thanks of our sub-committee for your attendance today. We are sorry we started late and kept you so long. We are particularly sorry that we did not have a chance to talk to Mr. Geci about his area of responsibilities, but perhaps we will save that for another session. We do appreciate though what you have done to help us with a better understanding of these somewhat complicated issues.
We would appreciate it, General Couture, if you could possibly arrange to have the information that you undertook to get to us arrive before next Wednesday, because no doubt the minister will receive it before we do and we would like to receive it when the minister is here with us next Wednesday.
LGen. Couture: I will do my best. I will call Senator Day as soon as I can.
The Chairman: That would be fine because that would obviously enable us to discuss the matter with the minister.
The committee adjourned..