Proceedings of the Subcommittee on
Veterans Affairs
Issue 5 - Evidence - May 5, 2014
OTTAWA, Monday, May 5, 2014
The Subcommittee on Veterans Affairs of the Standing Senate Committee on National Security and Defence met this day, at 5:37 p.m., to study the subject matter of those elements contained in Divisions 1 and 7 of Part 6 of Bill C- 31, An Act to amend certain provisions of the budget tabled in Parliament on February 11, 2014, and other measures (topic: Division 1 of Part 6).
Senator Roméo Antonius Dallaire (Chair) in the chair.
[English]
The Chair: Ladies and gentlemen, good afternoon. We are in a special session of the Veterans Subcommittee this afternoon. The subject matter is Bill C-31, but particular elements in Divisions 1 and 7 of Part 6 of Bill C-31, An Act to amend certain provisions of the budget tabled in Parliament on February 11, 2014, and other measures.
The topic is Division 1 of Part 6, talking about the alignments of the compensation and also the decisions that have been taken recently to harmonize some of the benefits. I'll leave it in that generic way.
We have two sets of witnesses. We will go close until 10 past with the Legion. After that, we will have some staff from Veterans Canada.
We're really keen on you chaps being here with us to give us your perspective because you've been in the midst of that significant legal fight and assisting with it. We have with us this evening Mr. Brad White, the Dominion Secretary, who has a fine looking moustache; and Mr. Ray McInnis, Director of Services Bureau, who has a lot more.
Gentlemen, you have an opening statement. Leave us time, please, for questions.
Brad White, Dominion Secretary, Royal Canadian Legion: Honourable chair and members, thank you very much for the warm welcome. It is a pleasure for us to be here today. I'm not sure about the comment about the moustache.
Good afternoon. It is a pleasure to appear before the committee again. On behalf of the Dominion President, Gordon Moore, we offer our support to your continuing advocacy on behalf of all veterans of all ages and their families. With me today is Mr. Ray McInnis, my director of the service bureau, who operates our service bureau aspect at the national level.
As an organization, we have been assisting veterans and their families since 1926, through our legislative mandate in both the Pension Act and, of course, the New Veterans Charter.
With regard to the issue before the committee today, Bill C-31, Division 1 of Part 6, which provides for payments to compensate for deductions in certain benefits and allowances payable under the Canadian Forces Members and Veterans Re-establishment and Compensation Act, the War Veterans Allowance Act and the Civilian War-related Benefits Act, on behalf of our more than 300,000 members, we urge the Government of Canada to move ahead with the passage of Bill C-31 as soon as possible.
Last March, the Royal Canadian Legion formally expressed our satisfaction with the government's decision to end the deduction of veterans' disability pensions when calculating their earnings loss and Canadian Forces income support benefits and a similar change to the war veterans allowance calculation. However, we expected these changes would come into effect in 2013.
In March of this year, Minister Fantino announced the same changes as a result of Economic Action Plan 2014. While we are looking at other improvements to ensure the highest quality of life-long care for all of our veterans, these changes are a definite step in the right direction. However, it is taking too long to make these changes and get it approved. May 29, 2012 is the date that the government publicly committed to end the disability pension offset in the calculation of the VAC benefits. It is almost two years later and legislation has not been passed yet in order to make these compensatory payments. Our veterans have been injured in service to our country. They deserve to be treated fairly, with respect, and in a timely manner, and they must trust the process.
The Legion is disappointed that the federal government did not address the urgent financial shortcomings of the New Veterans Charter in the budget. We will continue to press on these issues still requiring immediate resolution, including — and these things we have also talked about at the New Veterans Charter review — the earnings loss benefit, must be improved to provide 100 per cent of pre-release income, to continue for life and to include increases for projected career earnings for a Canadian Forces member; the maximum disability award must be increased to be consistent with what is provided to injured civilian workers who receive general damages in law court; and, finally, the current inequity with regard to earnings loss benefit for class A and class B less than 180-day reservists for service attributable injuries must cease immediately.
As the Royal Canadian Legion, we will continue to advocate for these much-needed improvements to the financial compensation for our injured veterans and their families. The government needs to give the men and women who have been injured in service to our country the hope for a better tomorrow and a brighter future.
Thank you for the opportunity to address the committee today.
The Chair: The chair is most appreciative of the comments that go beyond the specific analysis of this bill, as they have been heard also in the house. We also received them previously and acknowledged them. I won't curtail members of the committee should they want to go down that route.
With that said, I will turn now to the deputy chair, Senator Wells.
Senator Wells: Welcome, gentlemen. Thank you for your presentation, Mr. White.
Could you tell me how many veterans will be impacted with this payment, should the budget pass?
Mr. White: We don't have the numbers because we don't administer it, but it's probably best that perhaps Mr. Butler can do that in the next presentation.
Senator Wells: My follow-up to that is this: Do you know the approximate value or median or mean that a veteran would get from this additional benefit?
Mr. White: Again, I think that's going to depend on each individual case, depending on the level of disability and compensation they are currently being awarded. The level of retroactivity will be based on that sort of level of what they get. The median, I wouldn't know.
The Chair: If I may help the senator, it's also based on salary. It has the whole gamut.
Senator Wells: You expressed support for Bill C-31 initially, but then I heard you express something less than support. Can you tell me where you are on this particular provision?
Mr. White: On this particular provision the biggest thing we're concerned about is the time lag between 2012 and now to get it implemented. People are waiting. That is our concern.
Senator Wells: Within the legislation, it's retroactive to the announcement; is that correct?
Mr. White: Yes, it is, to May 29, I think it is.
The Chair: Thank you very much. As I'm going around the table, the chair wishes to ask a question. Are these funds taxable?
Ray McInnis, Director of Services Bureau, Royal Canadian Legion: I'm not sure, chair. I have not received that type of information yet.
The Chair: If we look at the disability payments, and so on, do you know if those are taxable?
Mr. McInnis: Disability payments are not taxable.
The Chair: Including the ones in the New Veterans Charter, the earnings loss benefits, are they taxable?
Mr. McInnis: The earnings loss benefits are taxable. Disability payments, disability award or disability pension are not taxable.
The Chair: There's quite a significant difference there between the two programs, of course.
In the documents it's indicated that all this ends at age 65, if they have full compensation. Was there any discussion that this should be a continuum as it is with the old Pension Act versus the current ending at age 65?
Mr. White: From our perspective, our first point in the bullet that we had and the issues we continue to work for is that this is for life. That is, this carries on after age 65, to make sure that those individuals post-65 are looked after and properly compensated for their injuries.
Senator Lang: I'm new to this committee, and I'm looking forward to the future here in respect to what changes perhaps could be made.
I was pleased to see the commitment that the Canadian government's making overall in respect to the veterans. I think we're well over $3 billion. The one area that I was quite concerned about was the fact that there were so many programs. I think I counted 37 programs, direct or indirect, that were in place. I know the house committee is looking at that one aspect to see whether that can be simplified.
In your opening comments, you state that the Royal Canadian Legion is disappointed the government did not address the urgent financial shortcomings in the New Veterans Charter. However, my understanding is that the New Veterans Charter is just in the process of being reviewed and recommendations may be coming forward in the forthcoming year. Perhaps it's not as quickly as one would like, but government, as we all know, doesn't necessarily move that fast. Why do you make that statement when this dealt with a commitment that had been made two years ago and finally coming into force and coming into place here? My understanding is that we are looking at just under a $20 million commitment by the taxpayers in respect to meeting their obligations.
Mr. White: Correct. There's an issue. The Royal Canadian Legion hosts twice a year what we call a veterans consultation group or forum, and we are actually going to host a meeting this Saturday at our national headquarters. The three bullets that you see in our presentation about where we believe the New Veterans Charter should go have received general consideration from all of the veterans organizations, about 20 of them, who have attended the meeting. They tend to agree that those are primarily the three issues that could be addressed now without having to do the review of the New Veterans Charter. If the government would address these, we would make sure that those veterans who are at the bottom end of the spectrum, the ones we consider are possibly falling through the cracks, would be better looked after and better supported as they carry on with their lives. In general agreement, those are the three principal financial issues we believe are necessary right now to make sure the individuals and their families will be sustained properly.
Senator Lang: To reaffirm the question of the bill and issue before us that the house and the Senate will have to vote on, you're totally in favour of this section going forward, and the sooner the better, in the best interests of the people you're representing?
Mr. White: Very much so.
Senator Day: Gentlemen, thank you very much for being here, and thank you for the work that you do on behalf of veterans. We're all very aware of that, and it's very important. I, like you, have been concerned about how long it's taken to implement this particular decision. The government had funding to do this a year ago but didn't get around to doing it. Could you help us so that people watching this could understand? Is this number of 4,500 the disabled former members of the Canadian Armed Forces that were covered by this decision of Manuge v. the Government of Canada?
Mr. White: I'm not sure what the number is. Is the 4,500 number from the Manuge case?
Senator Day: Yes.
Mr. White: I'm not sure what that is.
Senator Day: The Pension Act applied to older veterans. When the New Veterans Charter came in, the Pension Act was no longer available, as I understand it. There were new programs and new names for different programs. Am I right on that?
Mr. White: In a general sense, yes.
Senator Day: That number of 4,500, if that's the case, is not likely to go up unless an older veteran would fit under the Pension Act for services before 2006 when the New Veterans Charter came in.
Mr. White: Correct, but this bill also addresses some of the lag time in the New Veterans Charter as well. It's covering the New Veterans Charter, it's covering the old Pension Act, and it's also covering the civil related act as well.
Senator Day: When we talk about a Canadian Armed Forces disability insurance plan, is that under the New Veterans Charter? Can you explain your understanding of the difference between the Pension Act and those who receive a pension under the Pension Act and those who now come under the New Veterans Charter and how this decision impacts those two groups of people?
Mr. White: You have to draw the distinction about what is available to a member of the Canadian Forces. A member of the Canadian Armed Forces also gets the SISIP and is covered under SISIP while in service. Under the SISIP Act, or the insurance program that they have, they will be covered for certain benefits as they go along, particularly on rehabilitation and vocational rehabilitation as well. That would be covered under a certain issue.
Once the member leaves, the member can still be serving. The member can still be serving and still claim benefits under the Pension Act or, in this case now, under the New Veterans Charter as well. We see serving members every day walking into our headquarters looking for assistance. They can have claims for disability benefits under the acts that are out there today.
In the transition period, there were cases where still a member could be eligible under certain things under the Pension Act as well as eligible for things under the New Veterans Charter. There was a whole mixing and mashing of what the individuals are eligible for. That's part of the issue. When you say there is a bunch of programs out there, trying to navigate the individual through those programs and what he is eligible for is a difficult and complicated task. Particularly if an individual is injured, it makes it more complicated because sometimes it's more difficult to remove the emotion from it all and actually deal with the specifics of what the eligibilities are.
Senator Day: To put it in layman's terms, if someone was receiving a pension for a partial disability under the Pension Act, the older program, that was being deducted from what was received under the new programs involving disability as well?
Mr. McInnis: No. If you're receiving a pension under the Pension Act — this is the clawback, right? It has nothing to do with the New Veterans Charter. You are under the Pension Act and you get a monthly pension. If you were under SISIP, it was clawed back before you got that money back in this system.
Senator Day: It was the SISIP money that was being clawed back.
Mr. McInnis: Right, the disability under the SISIP. When you asked about the difference between the Pension Act and New Veterans Charter, the only claims I'm doing today under 21(2) and 21(1) are from World War II. Almost all of the claims now are under the New Veterans Charter, unless I'm doing a departmental review on someone who applied prior to 2006. They fall back under the old act.
Senator Day: Unless they applied before.
Mr. McInnis: It's too late now. They applied before and their case was withdrawn, if we go back now, it's still under the New Veterans Charter. But I'm doing claims right now for World War II on hearing loss that are under 21(1) because they never came forward at all. I did a claim on a 97-year-old last week, under the Pension Act.
Senator Day: Quite of a few of those retired artillery officers have hearing problems.
The Chair: If a person was injured previous to the New Veterans Charter and now that injury has created a deficiency, is that person being compensated under the Pension Act or under the New Veterans Charter?
Mr. McInnis: If he's applying now, Mr. Chair, it's under the New Veterans Charter.
The Chair: That is why there is so much friction going on amongst the veterans in regard to those who are with the Pension Act pre-2006, essentially since 1953-54 to 2006, and then the New Veterans Charter, the older vets who are part of the 1943 charter. That was a whole different exercise, of course, because that was a different charter.
Mr. McInnis: We have a lot of our veterans who are, as I call it, dual. They are under the Pension Act and also under the New Veterans Charter. Their pension may be for hearing loss. They may come forward with tinnitus, and tinnitus is after 2006, so they will get a disability award under the New Veterans Charter.
The Chair: Correct, but not a disability. Although the hearing loss was created previous to the New Veterans Charter, it would not be under the Pension Act but still under the New Veterans Charter.
Mr. McInnis: The only time it will go back to the Pension Act is if we can prove that the veteran was in contact with Veterans Affairs Canada prior to 2006, along with the hearing loss, with the tinnitus. Then we can go back and they will do it that way.
Senator Day: Could I get a clarification on that, Mr. Chairman? Just on that point, if the veteran was under the Pension Act, he will get a pension for a percentage of disability for his hearing loss, like you've just described, and that is pension for life.
Mr. McInnis: Correct.
Senator Day: If that same veteran was in the artillery but didn't come forward until after 2006 and then applied for 5 per cent loss of hearing, does he or she get a pension then or a lump sum payment?
Mr. McInnis: After 2006, he gets a lump sum, New Veterans Charter.
Senator Day: That's the big difference.
Mr. McInnis: Well, a correction on that. It will be a lump sum, but don't forget the lump sum can now be split. They don't have to take it all at once. They can take it in annual payments or half and half.
The Chair: The equivalencies are quite different.
Senator Lang: Being new to this, just from this conversation here it sounds like there's a real movement in the last number of years forward in respect to quite a number of these issues, the way you are speaking here, between these adjustments and how they're done and how the benefits are accruing directly to the membership. Am I to take that from what has just been said?
Mr. White: I think from the Legion's perspective, we're fairly happy with the New Veterans Charter when it came in, because we were promised it will be a living document, that as things progressed, we would be able to progress with it.
Bill C-55 was the first progressive step. We haven't had any more real changes to it since Bill C-55. We're hoping to keep those changes going.
The New Veterans Charter review is a good step in that direction, to make sure we can identify where those changes should be made to actually move the New Veterans Charter forward and look after the people. That's what we're hoping is going to happen, that once we finish the review, we will see a road map of how the government is going to improve the New Veterans Charter again.
Senator Wells: I want to go back to the lump-sum option. Is it your knowledge or understanding that the vast majority take a lump sum versus a broken payment or a regulated payment?
Mr. McInnis: Anecdotally, they're taking a lump-sum payment.
The Chair: For clarification, it is the same amount. This is not another pension. Under the Pension Act, there was a pension that was given for life. Under the New Veterans Charter, it is a lump sum that, under Minister Blaney, is able to be divided up over the next 20 years. It is not more money. It is just that same amount of money. They can take it now by monthly or annual amounts, which is quite different than the pension that was in the old Pension Act.
Senator White: My understanding is that unlike what I had thought a while ago, the veteran will determine the manner in which they receive the funds, lump sum, split up annually, split up monthly like they receive it now or similar, but ultimately, it is the same amount of money, but now self-determination will prevail as to how they receive the funding.
Mr. McInnis: Correct.
Senator White: It is my understanding, as well, that you agree with this.
Mr. White: Yes, we do.
Senator Day: What were they agreeing to?
Senator White: You agree that they have self-determination.
The Chair: Gentlemen, please.
Mr. White: We agree with the way the government has made the changes in C-55 for the individual to have a choice on how he receives his disability award, which you refer to as a lump-sum payment.
Senator Day: Dividing it up or —
Senator White: Their choice.
The Chair: Please.
Senator White: I apologize.
The Chair: That's fine. I want to make a clarification, however, Mr. White. Do you agree or do you not agree with the concept of the lump sum versus the pension?
Mr. White: From the Legion's point of view, we have supported the implementation of the New Veterans Charter, because it looks at the individual as a holistic process to make a better process. When they brought the New Veterans Charter in, it was not just the military or VAC that sat around the table. It was the Canadian Forces-VAC Advisory Group that came together along with a lot of medical personnel and rehabilitation people who sat together and looked at a new model of how to improve the outcome for an individual who was injured while in service. We agreed with that model. That's why we supported it when it came back in in 2006.
At that stage in the game, we also said that there have to be improvements as we go along. Those are some of the issues that we have, that there have not been any substantive improvements to the New Veterans Charter to make sure that we're now dealing with a whole generation of individuals who never used to come off the battlefield before but they are now.
There's a whole realm of issues and disabilities that they now have, both physically and mentally, that we have never dealt with before. There's a whole new gamut of individuals that we have to look after out there.
The Chair: We have a minute left. The chair would like to raise the question with you: Have you looked at why, as an example, those who are getting the disability pension from the old Pension Act, their retroactivity of the claw back goes all the way back, while those under the Earnings Loss Benefits, their retroactivity goes back only to 2012 when the legislation was introduced? Why didn't it go back to 2006? Did anybody give you an answer on that?
Mr. White: We have no answer on that. This is going to be a huge communication issue for the department, when this is implemented, to be able to explain the issue of retroactivity back to the individuals.
The Chair: Very good. Gentlemen, any other points of clarification? We will get more technical information from the next witness, only to remember that this is, however, a significant step forward, because this claw back that existed had a major impact on pension and monies available. We are certainly acknowledging that.
Any last comment from you, sir?
Mr. White: Thank you, chair.
The Chair: Thank you very much.
Mr. Butler, welcome back. You are sort of like a standard operating procedure for us, so whenever we get into number crunching we're going to see you. Mr. Butler is Director General, Policy and Communications and, as such, has the Commemoration Branch, which is going to be front and centre for the next four years, that's for sure.
Welcome, Mr. Butler. We are looking, as you know, at Bill C-31. If you have an opening statement, please proceed.
Bernard Butler, Director General, Policy; Policy, Communications and Commemoration Branch, Veterans Affairs Canada: Thank you very much, senator. It is a pleasure to be back and we appreciate the opportunity.
Bill C-31, Part 6, Division 1, in a nutshell, is about a one-time, compensatory repayment to veterans in recognition of the delays associated with the implementation of the government's decision to cease the offsetting of the disability pension in three of its programs: The Earnings Loss Program and its Canadian Forces Income Support Program, both of which are programs under the New Veterans Charter; and the Legacy Income Support Program of the department that goes back to 1930, and that's the War Veterans Allowance Program.
By way of context, Mr. Chairman and members, on May 29, 2012, the Government of Canada announced it would end the offsetting of this benefit, the disability pension, against those three programs. That was a policy decision that the government took following the ruling of the Federal Court in the Manuge case. Mr. Chair, you referred to that earlier.
The case was all about the way that SISIP offset disability pensions paid by Veterans Affairs Canada in the calculation of their benefits. In other words, that litigation was really framed around the SISIP policy. In that decision, the Federal Court made comment of the fact that the Department of Veterans Affairs was also offsetting disability pension benefits against these three programs but pointed out that, because it was clearly mandated in the legislation — the intent was clear and unambiguous — there was no issue identified at the time in the judgment.
The judgment was all about the SISIP, but by policy the government decided, because of the concern about having some imbalance with the SISIP program, that it would voluntarily, if you will, cease these offsetting benefits for the three programs that I have discussed. Changes to the way that the earnings loss and the Canadian Forces income support benefits are calculated came into force and effect in October 2012.
There was a lag time between May 29, the date of the government's announcement; and the date that the department could actually bring about the requisite regulatory changes through governance to give effect to the ceasing of offsetting.
The War Veterans Allowance calculation, however, was a more complicated piece because it required actual legislative amendments to the War Veterans Allowance Act. Those legislative amendments came into force in October 2013, and the five-year cost of those decisions was forecasted at $273 million. As of those two respective dates, we no longer offset disability pension benefits against these three programs. Over the course of the next five years, the projected cost will be, as I say, $273 million.
In addition, and subject to parliamentary approval of the bill now before this committee for consideration, compensation will be paid to eligible veterans now, or their survivors or dependents, for the offset that continued again between the date of the government announcement and the date that they actually came into force and effect. Essentially, this bill recognizes that those delays really should be addressed. That's what this will do.
In terms of the cost — and, senator, you raised that in front of the earlier witness from the Legion — the amount of this cost will be $19.9 million. That will be the payout for veterans and survivors who are impacted over the time frame that we have discussed.
I will give you a few more metrics here that might help you to get a sense of the scope. By ``program,'' approximately $9.2 million will be paid out to earnings loss recipients; about $.02 million will be paid to Canadian Forces income support recipients, simply because there's such a small number of veterans currently receiving that benefit; and about $10.7 million will be paid to recipients of the War Veterans Allowance Program benefits.
In terms of the number of veterans who will be affected or impacted favourably by this bill, there are about 2,200 recipients in the Earnings Loss Program; only 10 in the Canadian Forces Income Support Program; and about 3,300 veterans in the War Veterans Allowance Program.
Subject to parliamentary approval, should this bill be approved, the next steps will be a Treasury Board submission to clean it up. Compensated repayment calculations will then follow and we would hope that these payments would start to flow as early as the fall, subject, again, to parliamentary process.
As a side note, because the changes in the way these benefit programs were being administered affected the income levels of these veterans, it actually increased the eligibility of a number of veterans to access our War Veterans Allowance Program. As a consequence, there will be some favourable advantage to about 560 additional veterans who will gain access to the Veterans Independence Program; about 460 veterans will gain access to our Treatment Benefits Program; and around 2,000 veterans will see some changes in the positive. In other words, they will pay less for long- term care accommodation and meals. That's basically an overview of the bill now before you.
The Chair: The chair wishes to have a clarification. The government brings in the legislation in October 2012 that claw backs are over?
Mr. Butler: No. In October 2012, Mr. Chair, there were regulatory amendments made and approved that ceased the offsetting of disability pension benefits against two of the three programs, Earnings Loss and Canadian Forces Income Support. Those provisions were founded in the regulations under the New Veterans Charter, so they could be dealt with relatively quickly through a Treasury Board submission. The one that took the longest was the War Veterans Allowance because it required legislative change. Those legislative amendments came into force 12 months later in October 2013.
The Chair: Where does this touch base with those who are disabled under the Canadian Forces disability insurance, that claw back dimension?
That was decided also at that time with the Manuge decision, correct?
Mr. Butler: Correct.
The Chair: Which is another dimension?
Mr. Butler: It is another dimension and why is because that Federal Court ruling in Manuge was focused on the SISIP insurance policy. It really had nothing to do with Veterans Affairs directly. It was focused with the Department of National Defence and the Chief of the Defence Staff and the whole insurance program, which you are well familiar with, senator.
However, when the court pronounced on it and it concluded that the policy was not being administered the way that the parties had reflected in the policy document, or should have, government said, if that's the case, albeit the fact that there is no necessity for the government to change how Veterans Affairs Canada's legislation and regulations were structured, because it would appear that they were very clear in how they were written, how they were being enforced, the government nonetheless said that because it is a similar benefit, i.e. disability pension benefits paid under the Pension Act that have impacted all these recipients under the SISIP program, the government decided we should to try align them to the extent we can and let's now stop offsetting that disability pension when it comes to calculating these benefits under these three programs.
The Chair: Very good. All four programs have now benefited from it?
Mr. Butler: Indeed.
Senator Wells: I have two simple questions. I guess they're simple. In the event of the death of a veteran prior to payout, does the payment go to the survivor?
Mr. Butler: That is the intent, yes.
Senator Wells: I ask this not only because the two gentlemen from the Legion are still with us in the audience, but how and when will the payment be made should Bill C-31 pass?
Mr. Butler: Should Bill C-31 pass, we will begin the calculations because, as Mr. White indicated earlier — and I think, senator, you had commented on it as well — each case will be very different depending on what benefit they were receiving, how long they had been receiving it, what program they were receiving it under.
There will have to be calculations done on every file by every veteran and his family who may be impacted by that.
That being said, what we anticipate and hope for is that we would see payments going out as early as the fall of this year, 2014.
Senator Day: Mr. Butler, that was the best explanation I have heard on this. It was helpful. I'm going to get a copy of the transcript and go over this over and over. I have tried to explain and listen to many veterans and they're confusing the various names and I'm confusing the names of the various programs.
Has the refund with respect to SISIP and the activity that was going on with SISIP all been looked after now and already paid out?
Mr. Butler: I would have to say, senator, because we're not involved with that, I really could not answer the question. I'm really not certain. I believe it has, but that would be a question that you would need to put to our colleagues at National Defence and those who administer the SISIP program.
The Chair: The Chair would like to intervene. Yes, there might be a few left over, to the tune of about 600 million.
Senator Day: That was my understanding, that that had been done.
In this legislation that is before us, we're looking after three other programs that require two regulatory, one legislative, and once that's done, once this has been passed — and presumably it will; I can't see a resistance to this as long as it will achieve what was intended —
Mr. Butler: If I might, Mr. Chair, just for clarity, the actual offsetting of the disability benefit against these three programs, it has already stopped.
It stopped for two of them in October 2012; for the third one in October 2013. This bill is now simply focused exclusively on compensating for the delay in actually getting the regulations and the legislation changed.
Senator Day: The offset or the reduction in these various payments that were coming to the Armed Forces personnel was for pensions that they were receiving under the Pension Act.
Mr. Butler: Exactly right, yes.
Senator Day: That's the older Pension Act. We have just heard from the Royal Canadian Legion there's a possibility that some other older veterans could qualify for Pension Act payments even though there's the New Veterans Charter if they had an application earlier than the coming into force of the New Veterans Charter.
Was there any period of time from 2005-06 when the New Veterans Charter came in until this Manuge case came about where there was a payment under the New Veterans Charter that could be described as compensation for pain and suffering that was being deducted from income loss?
Mr. Butler: Right. The answer to that would be no. The reason for that is that disability benefits paid under the Pension Act were being offset under these programs. They were a monthly benefit and they were being offset. In 2006, when the New Veterans Charter was introduced, as has been noted previously, monthly benefits for pain and suffering were no longer available. What has become available under the New Veterans Charter, pain and suffering or what we call non-economic benefits are paid in a lump sum. Under the legislation and under the regulations, that lump sum benefit has not been offset against these three program elements. The ones who were impacted were veterans who were receiving benefits under the old Pension Act and who then came into receiving benefits under the New Veterans Charter because they applied after 2006 for other programming benefits.
Senator Day: Yes.
The Chair: As a supplementary question, however, those who were getting the earnings loss benefits were getting the claw back, were they not?
Mr. Butler: They were. If you were receiving a disability pension benefit prior to 2006 —
The Chair: No, post-2006.
Mr. Butler: Yes, if you qualified prior to 2006, and that obviously then carried over post-2006, and you then made application for one of our programs, our New Veterans Charter programs, and let's take an example, you qualified for vocational rehabilitation, you then qualified for earnings loss; the department would say, great, you are going to get an earnings loss benefit based on 75 per cent of your pre-release salary, but we're going to set off that disability pension benefit that you were already receiving.
Those folks would have been unfavourably impacted by that, and those folks are the ones who will now profit from the changes that have been brought about over the last couple of years.
The Chair: That brings me to the subsequent question, if I may, as chair. Why don't you go back to 2006 retroactively, then, for these people? Was there some particular reason why the government didn't want to do that, or is there some rule?
Mr. Butler: My response to that would be that it was essentially a policy decision of the Government of Canada to make May 29, 2012, the effective date for these changes, and I really can't speak to that.
What I can tell you, however, is that May 29, 2012, which was the date of the announcement, really was the only common date for veterans receiving benefits under these three programs.
The challenge that we have is that recipients under the War Veterans Allowance Program could go back arguably to 1930 if we had any of them still living, where New Veterans Charter programming, the earnings loss and the Canadian Forces Income Support Program, as you have already noted, only came into effect in 2006.
May 29, 2012, is a common date for all veterans that ensures that all veterans receiving benefits from Veterans Affairs Canada would be treated equally going forward.
The Chair: There is no doubt this is the right thing that was done, policy wise. I think there will still be some rebuttal in regard to those under the New Veterans Charter to go back to 2006. I can understand the problem that the government had about the potential for creating a precedent that would push them all the way back to 1930. I think that may still be a rebound.
My last question is: The changes in regulations didn't need a budget bill, did it? Surely the government has enough operational reserves to be able to handle this without having to come through a budget. Am I wrong?
Mr. Butler: I think how I would respond to that is again saying that the only measure that's before you in the budget bill is this $19.9 million compensatory payment, which was new money for the Department of Veterans Affairs and required a separate —
The Chair: Budget allocation?
Mr. Butler: Budget allocation for that purpose.
The Chair: To your baseline.
Gentlemen, do you have further questions?
What a lovely way to end a day, in such technicalities, but I'm glad you are here, sir.
Senator Day: I wanted to clarify a point that the chairman just made. That's choosing these dates. The date that was chosen, you've given us, in October 2012.
Mr. Butler: October 2012 was the date for offsetting of the monthly disability benefit against two of our programs, earning loss and Canadian Forces income support. It ceased offsetting as of that time. For veterans who are receiving earnings loss benefits or CFIS benefits, their lump sum compensatory award under Bill C-31 would be calculated on the time lag between the announcement date, May 29, 2012, and October 1, 2012. For War Veterans Allowance recipients, it took an additional 12 months, to October 2013, to bring those into effect and cease offsetting, and so those recipients have a longer period of time over which the calculation will be based.
Senator Day: The government could not implement its new policy decision until the legislation, regulations, or, in one case, the law was changed.
Mr. Butler: Right.
Senator Day: This was a policy decision that the government made, and that's the reason for these dates, as opposed to the court case, which dealt with SISIP.
Mr. Butler: Correct.
The Chair: That's a whole different one.
Senator Day: With the court case, we can understand why justifiably, if it wasn't appealed the day the appeal expired, that's the judicial rule as to when that should take effect.
The government decided to implement these other three programs, I guess is the best word, to stop offsetting with these other three programs on a policy basis, which makes for different dates.
The Chair: Remember also that the SISIP one is retroactive, however, before the decision was taken. However, on these three, it is on the date that the decision is taken.
Senator Day: Because it's a policy decision.
The Chair: That's right.
Senator Day: We would have to look at the Manuge decision to see what the court ordered in relation to that court case.
The Chair: Yes, but I think it was well explained that the department took, on its own initiative, the decision to move on the policy and to take the decision of retroactivity to solve a complexity in regard to retroactivity because of the three programs. It's worthy of taking another look at it, of course.
Mr. Butler: I would commend all of our learned senators to read the Manuge decision because it's a very good decision setting out a lot of the history and giving some real context to how we've arrived at this point today.
Senator Day: I must say, Mr. Chairman, just in closing, that I read the Manuge decision a number of times, but your explanation has been very helpful in supplementing that.
Mr. Butler: You're very welcome.
The Chair: Any other questions, gentlemen?
Thank you, Mr. Butler. We're looking forward to seeing all the parades and statues and everything else you'll be producing over the coming years.
Mr. Butler: It will be a busy time.
The Chair: Thank you very much. Well done.
Gentlemen, I shall report, then, to the full committee that we have reviewed these components of Bill C-31 and that we are acknowledging their approval for the committee to send to the Finance Committee for its final analysis under the rubric of approval. Thank you very much. With this, this special session is ended, only to say there may be a few more before the end of the session.
(The committee adjourned.)