Veterans Affairs Committee on March 5th, 2013

[Mary Chaput]

Thank you.

As the members of the committee may know, the budget for the Veterans Review and Appeal Board is separate and apart from that of the department. There is no mixing of expenditures or flow-through of funds from one organization to the other. The budget of Veterans Affairs is going up by 2%. That will be used for the programs we administer and for the benefits and services we provide to veterans. The requirements of the Veterans Review and Appeal Board, be they related to publication of decisions or other matters, would be handled through separate main estimates and separate supplementary estimates.

The short answer is that none of the money in the Veterans Affairs Canada budget would flow to the Veterans Review and Appeal Board. Those needs would be attended to elsewhere.

The minister and the chair of the board, Mr. Larlee, in particular attend to the operating budget of the board. I, as the deputy minister of Veterans Affairs, do not become involved in their business, it being a quasi-judicial tribunal.

[The Vice-Chair, NDP, Peter Stoffer]

Thank you, Madam.

Thank you, Mr. Chicoine.

We now go to Mr. Zimmer, please.

[Bob Zimmer, Conservative, Prince George—Peace River, BC]

Thank you for coming today.

I'm going to ask you about some numbers. I've been trying to put some meaning to the numbers we have before us.

From reviewing supplementary estimates (C), I believe the amounts for the veterans independence program are close to $40 million. Could you please highlight the increased amount for this program and the rationale behind it?

[Mary Chaput]

The increasing amount, or the delta—the additional funding provided by virtue of supplementary estimates (C), should they be approved—is indeed close to $40 million. That $40 million is required by the department and in turn by veterans for two reasons.

The principal reason is the conversion of the program from a contribution program to a grant program, as explained by the minister. What this means is that instead of veterans being provided with reimbursement for their expenses, they are provided with an upfront payment in anticipation of those expenses. In that way, they're never out of pocket.

Because of the change in the sequencing of those payments—we're paying the same amount, but sooner—the requirement for funding hits the balance sheet, one could say, sooner, and we therefore see an increase here in the amount of money.

That is in part the explanation for the $40-million increase. The other part of it has to do with an increase in both the number of people availing themselves of the program and the types of services they're availing themselves of.

As you would know, there is groundskeeping and housekeeping, but there are also elements of the program that relate to such things as personal care. When a veteran is still at home but may be in need of someone coming in a couple of times a week to help with personal care, we provide that as well through the program. This is a more expensive component of the program, and therefore it drives the costs up disproportionately as more people shift into that area of the program.

[Bob Zimmer, Conservative, Prince George—Peace River, BC]

Sure.

I have another question.

There is another increase, of $5.5 million for their earnings loss and supplementary retirement benefits. I want you to explain why that increase was included.

[Mary Chaput]

You're right, sir, that approximately $5 million relates to both earnings loss and the Canadian Forces income supplement.

Basically, that increased cost is driven by the fact that while veterans are in rehab, be it vocational rehab, medical rehab, or psychosocial rehab, we cover the cost of the earnings they forgo by virtue of being in rehab.

As veterans' needs change and in these days become more complex, their time in rehab has become a little longer than it has been in the past. Whereas in the past a veteran had typically stayed in rehab, if they needed it, for about 24 months, we're seeing that period now extend to about 38 months. Because of the 38-month versus 24-month period, earnings loss payments have increased as a result.

I would say part of the beauty of the program is that a veteran doesn't have to rush through rehab and risk an unsuccessful transition into civilian life. They can take the time they need, knowing their earnings will be attended to during that period. It allows for a very unrushed, comprehensive, and successful transition.

[The Vice-Chair, NDP, Peter Stoffer]

Thank you very much, Madam Chaput.

Now we go to Mr. Casey, please, for four minutes.

[Sean Casey, Liberal, Charlottetown, PE]

Thank you, Mr. Chairman.

Welcome, Madam Chaput and Ms. Stewart.

We've heard at this committee and in the public, when we talk about broad numbers within your department, that the Department of Veterans Affairs operates on a budget of about $3.6 billion, about 90% of which is paid out to veterans.

It's true that this has been stated in the past, right?

[Mary Chaput]

Yes.

[Sean Casey, Liberal, Charlottetown, PE]

Is it roughly accurate?

[Mary Chaput]

Yes, sir, it is. I could break it down a little bit for you, if you wish.

[Sean Casey, Liberal, Charlottetown, PE]

Well, the reason I've posed the question is that the backgrounder we've been given from the Library of Parliament indicates a flow-through of between 70% and 74%.

Have you seen that backgrounder?

[Mary Chaput]

I have not, but I could potentially explain what the confusion or difference might relate to.

[Sean Casey, Liberal, Charlottetown, PE]

Sure.

[Mary Chaput]

Typically a department's operating budget is shown in what's called vote 1. Our vote 1 represents much more than our operating budget, so it's possible that the Library of Parliament assumed that all of vote 1 was our operating budget.

In fact, our vote 1 is worth almost $1 billion, and that is because included in our vote 1 is about $650 million associated with purchases we make on behalf of veterans. It's not actual programs and services, but it's purchases we make for such things as glasses, dental, drugs, even special equipment for their homes. All of those purchases are included in our vote 1 amount.

So when you separate those purchases as well as the budget for Ste. Anne’s Hospital, and then finally the costs of rehab, which are also included in our vote 1, you end up with what we call our pure operating budget, which is in the order of $230 million. If you add Ste. Anne's to that, it comes up to about $330 million.

That may be the reason that the Library of Parliament cast its light differently.

[Sean Casey, Liberal, Charlottetown, PE]

Thank you for that.

In terms of the raw numbers of employees within the department, in the last four years we've seen that number go from just under 4,000 to the most recent number in the report on planning and priorities; that number for the next year is projected to be under 3,500. We're about ready for the next report on planning and priorities, in which there will be, I presume, an updated number.

I have two questions. One, do you anticipate that the number in the last report, the 3,463, is about right? Two, given that this is a reduction from last year, can you give us some insight as to where you expect to see the cuts as between head office and the regions?

[Mary Chaput]

Sure. The numbers in the RPP are planning figures, as you know. They're not soft estimates, but they are not actual head counts on any given day. That's because, as you would know, there's an ebb and flow to employees joining and leaving the department.

In Veterans Affairs in particular, a couple of variables in the equation make it even harder to predict than it might be for other departments. Over 30% of the workforce in our department is eligible to retire. That doesn't mean they will, but they may. That can cause the number to go up and down at any point. Moreover, temporary programming comes and goes, and as you would know, transformation of the department is under way whereby, frankly, we're catching up with the business of government in terms of the movement from paper to electronic processes. That's changing our skill mix. It's changing somewhat the things we have people doing on a day-to-day basis, but I would say the biggest variable is that eligibility to retire and the choices people will make in that regard.

[The Vice-Chair, NDP, Peter Stoffer]

Thank you very much, Madam.

Now we go on to Ms. Adams for four minutes, please.

[Eve Adams, Conservative, Mississauga—Brampton South, ON]

In fact, it's Mr. Lobb.

[The Vice-Chair, NDP, Peter Stoffer]

Sorry, Mr. Lobb.

[Ben Lobb, Conservative, Huron—Bruce, ON]

You touched a little just now on the movement of labour and the arrangement of labour within the department. I'm wondering if you could tell the committee about attrition and what you're experiencing. If you could start there, that'd be great.

[Mary Chaput]

Sure. We include in attrition both spontaneous departures when people get a job or make a choice to leave for a career change on any given day as well as those who retire with a full pension.

We had anticipated that retirements would slow to a certain degree with the onset of government downsizing. In our department, there hasn't been a significant change. People are continuing to retire. That's because these people aren't only eligible to retire, but they're much past the point of being eligible to retire, meaning they're almost as old as I am. They're not 55. They're older than 55. They've got to a certain point in their career. In combination with their pension, they feel confident in leaving the public service.

Our attrition rate remains reasonably stable. We have people leaving and people coming. That's spread proportionally throughout the department's headquarters and regions. It's not always an even-steven match because of shifts in local markets. Generally speaking, we're seeing a steady movement through the department in terms of attrition.

[Ben Lobb, Conservative, Huron—Bruce, ON]

Nobody ever wants to lose their job, but it does seem quite fair. I came from the private sector and worked in the automotive parts manufacturing sector. I can tell you the approach in that sector, in industry, is far and away different from the approach taken in the public sector, which in many ways is 100 times fairer to all the workers, especially the younger employees.

[Mary Chaput]

Yes.

[Ben Lobb, Conservative, Huron—Bruce, ON]

I appreciate your comments. The other thing I want to talk about, and I asked Minister Blaney about this as well, is more on what you're doing as far as implementing technology. He touched on where the veterans will touch, but tell us a little more about behind the scenes, what's going on inside the administration, and how the transformation's taking place about the technology being used.