Veterans Affairs Committee on May 21st, 2013

[The Chair, Conservative, Greg Kerr]

Good morning, everybody.

We had set aside two meetings, as you know, to discuss the subject matter of clauses 156 to 160, with regard to the Pension Act and the War Veterans Allowance Act, in Bill C-60, An Act to implement certain provisions of the budget tabled in Parliament on March 21, 2013 and other measures.

We have presentations this morning. I will say that the Legion was invited to be one of the presenters. They've sent us a letter saying that they support what's in the proposed changes; they're supportive of the bill as is and decided they didn't need to appear to make that point. Other than that, we have our witnesses, who we'll get to in a moment.

We start this morning with a face that is familiar. We'd ask Mr. Bernard Butler, director general in the policy division of the department, if he'd open with some comments, and then we'll do our usual round of questions. Away we go.

Good morning.

[Bernard Butler, Director General, Policy Division, Department of Veterans Affairs]

Good morning, Mr. Chairman, and thank you very much.

Good morning everyone. As usual, I'm pleased to be here with you.

Mr. Chairman and members, I'm pleased to be here to speak to part 3, division 8, of the budget implementation act, and in particular clauses 156 through to 160 of that piece of legislation, which essentially propose amendments to the Pension Act and the War Veterans Allowance Act, a function of which, if implemented, would no longer see disability pension benefits payable under the Pension Act being taken into account when determining eligibility and calculating benefits provided under the War Veterans Allowance Act.

What is the War Veterans Allowance Act? Essentially, it provides for a program that provides assistance to low-income veterans of both the Second World War and the Korean War, as well as their survivors. Eligibility for the program and the range of benefits provided depend on a recipient's income, so it's an income-tested program to support eligible veterans and their survivors.

Under the terms of eligibility for the current program, a veteran's total income includes the disability pension provided under the Pension Act through Veterans Affairs Canada. The pension is automatically deducted from the amounts of benefits available to veterans and survivors through the war veterans allowance. As I indicated, with these proposed amendments, those benefits paid under the Pension Act will no longer be factored into the calculation of income.

To provide a quick bit of context, you will recall that in the spring of last year the Government of Canada announced that it would end the deduction of VAC's disability pension payments from a number of VAC's programs. On October 1, 2012, we ceased the deduction of these disability payments for our New Veterans Charter programs, the earnings loss program and the Canadian Forces income support program. We were able to make those changes relatively quickly because they were regulatory in nature and not legislative.

On February 5, 2013, the priorities and planning committee ratified an MC regarding the cessation of these benefits being calculated for WVA purposes. Essentially we are now seeking Parliament's approval through the BIA to cease those deductions.

As I indicated, the war veterans allowance is essentially a financial assistance program for low-income veterans who served during the Second World War and the Korean War, and their immediate survivors. Under this program, dating back to 1930, a VAC disability pension has always been treated and considered as income. As a consequence, any WVA recipients who were receiving disability pensions had the amount of allowances paid under the War Veterans Allowance Act reduced accordingly by that amount.

It's a significant move forward in the sense that not only does an individual or an eligible veteran or their survivor qualify for income support, but the war veterans allowance program also serves as a gateway to a number of other Veterans Affairs programs, including the veterans independence program, the so-called VIP, long-term care benefits, and health care benefits.

Essentially, to cease the deduction of VAC's disability pension from war veterans allowance, these amendments are required to both the War Veterans Allowance Act and to the Pension Act. The changes to the War Veterans Allowance Act will simply exclude disability pension benefits from the definition of income, so it's a fairly simple legislative amendment. Changes to the Pension Act will stop the withholding of disability pension payments to WVA recipients in order to avoid a WVA overpayment. Once the legislative authority is obtained through the budget implementation act, there will be some very positive outcomes for this group of low-income clients.

Essentially, based on our assessment, about 200 recipients will actually receive an increase in their war veterans allowance payments. Just over 3,000 veterans and survivors will qualify for the allowance. Seven hundred more veterans will qualify for Veterans Affairs Canada health care benefits. About 2,000 veterans who are in long-term care will receive a greater subsidy for their care. Finally, basically over the next five years, the government will incur expenditures to support these changes of approximately $95 million.

Mr. Chair and members, that's a bit of an overview of the proposed amendments. I'm pleased to turn the floor back to you.

[The Chair, Conservative, Greg Kerr]

Thank you. You kept it very succinct. I appreciate that, Bernard.

We will start with Mr. Chicoine. Go ahead for five minutes, please.

[Sylvain Chicoine, NDP, Châteauguay—Saint-Constant, QC]

Thank you, Mr. Chair.

Mr. Butler, thank you for having come to explain these changes.

Regarding the income replacement allowance, why was there no retroactivity provision in the agreement that was concluded between the government and the veterans' groups? I would like you to explain that to us.

[Bernard Butler]

Thank you. That's a good question.

What I can tell you, Mr. Chair and members, is that the Government of Canada has yet to decide on how to proceed with respect to the retroactivity of various benefits. At the moment, these legislative provisions, similar to the regulatory changes implemented in the fall of 2012, are targeted at implementing the future course of the cessation of the payment of these benefits.

[Sylvain Chicoine, NDP, Châteauguay—Saint-Constant, QC]

Fine.

I don't know if the other members of the committee have had the same experience as I have had regarding this, but many of the veterans who have contacted me think that they are entitled to a retroactive payment.

Mr. Butler, will you be conveying your decisions in the near future, in a clear and specific way, to all of the parties in this class action suit? A lot of these people are expecting this retroactive payment. Will you contact these veterans' groups to explain your decisions in a clear and specific way?

As I have already pointed out, many of them think that they will be receiving a retroactive payment and they are expecting it, but the situation is not very clear to them.

[Bernard Butler]

Indeed, the communication strategy regarding these provisions of the budget implementation act will be very clear about what implementing the act will mean for veterans who are receiving these benefits. It will also be clear in the shorter term that these particular provisions do not target or address the issue of retroactivity.

I certainly appreciate and welcome your comments in that respect. We have certainly heard a number of questions raised, and a number of concerns expressed likewise, and all of that feedback will certainly be considered by the government in determining the way forward.

[Sylvain Chicoine, NDP, Châteauguay—Saint-Constant, QC]

Excellent. Thank you.

Concerning the new wording included in the act, was a complete verification done so as to eliminate all possibilities of class action suits?

Has there been an exhaustive check of every clause to verify whether there are still opportunities for class action suits regarding the deductions?

[Bernard Butler]

Mr. Chair, as with all legislative amendments of this nature, the Government of Canada applies a fairly rigorous process to assess them, and that includes a very comprehensive legal risk analysis by the Department of Justice so that whenever any change or a change in regulation or legislation is contemplated, it goes through that rigorous assessment and legal risks are assessed into the future.

In the normal course, the government does not move forward unless that legal risk assessment is favourable. That certainly would be the case here. We believe this is a very positive initiative, and that is not really an issue for us at this time.

[Sylvain Chicoine, NDP, Châteauguay—Saint-Constant, QC]

Fine.

I might have another question, but it would be too long. I may ask it during the next round.

[The Chair, Conservative, Greg Kerr]

Thank you very much.

Ms. Adams, go ahead for five minutes, please.

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

Thanks very much.

Mr. Butler, could you tell us how long the disability pension has been considered income with respect to the war veterans allowance?

[Bernard Butler]

Indeed, Madam, the disability pension has been treated as income really since the inception of the program, which dates back to 1930.

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

So that's about 83 years.

[Bernard Butler]

It's been a while.

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

This would prove to be a very significant change to the program.

[Bernard Butler]

Indeed this is a marked change in how benefits are calculated and how eligibility is determined. There is no doubt that it would have a positive effect on clients in this category.

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

For the first time it would dramatically improve the war veterans allowance.

[Bernard Butler]

Indeed.

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

Thanks.

Do you think the amendments to the WVA address the concerns of the Veterans Ombudsman? Do you feel as though the government is responding to his suggestions and recommendations?

[Bernard Butler]

Mr. Chair, I think it's fair to say that the offsetting of disability pensions from Veterans Affairs Canada programs has been an issue over some years. There's no doubt this is one area that the ombudsman has expressed concerns about, and this should certainly address his concerns on that issue.

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

Moving to the expediency with which we need to look at this issue, I think it is reasonable to assert that given the advanced age of war veterans allowance recipients....

Mr. Butler, do you believe that all parties in this room should act quickly to implement these amendments to ensure that veterans and their families receive the support they need?

[Bernard Butler]

With the greatest respect, Mr. Chair, I would not presume to advise members of Parliament on how they ought to cast their vote in support of proposed legislative amendments. But from a departmental perspective and a policy perspective, I can certainly say this is a positive move forward. This will benefit low-income veterans of the Second World War and the Korean War, and it should be seen as a positive amendment to the legislation.

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

Thank you.

Mr. Butler, the war veterans allowance is one of the services and benefits available to Canadian veterans, but there are others who are receiving the allowance and they may have access to other health care benefits as a result. Can you share with us what these other health care benefits are?

[Bernard Butler]

Indeed. As I indicated in my opening remarks, this issue of offsetting not only affects eligibility to the program, because it is an income-tested program, but it also has a flow-through effect on a number of programs that veterans receiving WVA are eligible for. Essentially what that means is that it will improve access for a group of veterans in this category to VAC's health care benefits, and that includes things like the veterans independence program, our long-term care program—in terms of the subsidies that are paid to veterans who are in the facilities—and to health care treatment benefits as well.

There is a flow-through effect of these changes that is fairly broad.