Veterans Affairs Committee on Dec. 10th, 2013

[The Vice-Chair, NDP, Peter Stoffer]

Thank you, sir. Thank you, Mr. Chicoine.

We now move on to the Parliamentary Secretary for Veterans Affairs Canada, Mr. Gill.

[Parm Gill, Conservative, Brampton—Springdale, ON]

Thank you, Mr. Chair.

I also want to take this opportunity to thank our witnesses and veterans for everything that you have done to defend our country and for your service. I truly appreciate it. I also want to thank you guys for appearing before the committee. This motion to hear from you guys was put forward by the members of the government.

Can you tell us if you are aware that more money is spent today under the new Veterans Charter than under the Pension Act?

[Jim Scott]

We're not looking at the funding model for this. That will be your job. We're looking at the effect model. What effect is it having? For instance, my son's compensation, with $41,500 for his injuries, is disproportionately low. How that funding created this situation, I don't know. But it created a situation where you have a disproportionately low settlement.

I know of another person who was shot in the kneecap and got a one-time payment of $26,000. These are low payments. You're talking about $5 billion going into an organization. If I get my calculator out and divide it by the number of injured soldiers, it's going to equal more than $26,000 or $41,000. So I just don't know how you can spend that amount of money and still have these small payments, unless there's a blockage in the system somewhere.

[Parm Gill, Conservative, Brampton—Springdale, ON]

I understand. We're not talking about individual cases. My question is whether you are aware that the government today under the new Veterans Charter spends more money than it did under the Pension Act.

[Jim Scott]

Does that mean you're spending more on the basis of a comparison between the charter and the act? Or does it mean you're spending more because there are more people going through the system? I just don't know.

[Kevin Berry]

I'd like to expand on that as well, Mr. Secretary. The Pension Act focuses on the pain and suffering; that's all it does. It is not for vocational rehab. It is not rehabilitation. It has nothing to do with any of that. Only one of the programs under the new Veterans Charter, the disability award lump sum, can be compared with the Pension Act.

You would have to compare a comprehensive system with the War Veterans Allowance Act, which compensated World War II veterans. It's disingenuous to make such a comparison with the amount of money spent on a comprehensive rehabilitation program that anybody can access. Anybody in the Canadian Forces who's compensated under the Pension Act or under the new Veterans Charter can get new Veterans Charter benefits. However, Pension Act payments are only for pain and suffering, and they are only for those who are wounded or handicapped in the service of Canada.

So putting the two side by side, you see they are not the same. Not even close.

[Parm Gill, Conservative, Brampton—Springdale, ON]

If I understand you correctly, you do acknowledge, obviously, that there are more benefits available under the new Veterans Charter than, say, under the Pension Act, and that overall the amount of money spent on these benefits is higher than with the Pension Act.

[Jim Scott]

I don't have those numbers. I would have to take a look at them. One of the things is that with the lump-sum payments you're basically prepaying the first 10 years of their benefits. That's where the tipping point comes as far as where you start to save. Normally under a pension scheme you amortize your costs over 60 years, so let's say that you had a 25-year old person, you would have payments over 60 years. If you front-end load, you could have a ballooning in your benefits here.

I think what these soldiers are doing is looking at their lifetime benefits and not their benefits in the first few years of the new Veterans Charter, because obviously if they get a lump sum they are years ahead of a pension program for the first few years.

Once again, I would have to take a look at your numbers to see if you're front-end loading whether this is going to be a long-term benefit to the soldier or just a temporary benefit.

[Parm Gill, Conservative, Brampton—Springdale, ON]

I have a chart here that goes back to 1992 actually and then all the way to 2013. It's just a very simple graph showing in billions of dollars how much money each year the government spends, so my question to you is this. As you can see, there's a dramatic spike—

[Jim Karygiannis, Liberal, Scarborough—Agincourt, ON]

Chair, on a point of order—the parliamentary secretary referred to a graph. The rest of us do not have the privilege of having that graph and I'm just wondering if he would like to make that available to the rest of us.

[The Vice-Chair, NDP, Peter Stoffer]

Mr. Karygiannis, I can assure you, sir, this is not a court of law. This is a committee. Individuals can refer to whatever documents that are out there as they wish. If they wish to be challenged later on to provide that document, all individuals are more than free to write to that individual to ask them that at a later time.

Carry on, Mr. Gill.

[Parm Gill, Conservative, Brampton—Springdale, ON]

Thank you, Mr. Chair.

As I was saying, the graph that I have, which I would be happy to share, clearly shows a dramatic spike in funding to Veterans Affairs, and about 90% of it goes to benefits and services.

Given this information, do you believe there is less money spent on veterans' financial and rehabilitation benefits than, say, there was in 2002?

[Jim Scott]

I would have to take a look at it. What's causing your spike? Is it the fact that you have more claims because you've been at war for 10 years? I just don't know. I think this is one of the issues on which, as we get farther down into the legal matters, we will be subpoenaing these documents and having analysts take a look at them. I know what you're saying, but I just can't comment on it.

[The Vice-Chair, NDP, Peter Stoffer]

Thank you, Mr. Gill. Your time is up.

Would you like to add to that part?

[Glen Kirkland]

Yes, please.

[The Vice-Chair, NDP, Peter Stoffer]

You have a very short time, sir.

[Glen Kirkland]

Could I see the same chart with the suicide rate? I bet they would correspond.

[The Vice-Chair, NDP, Peter Stoffer]

That shall be taken under advisement, sir. Thank you.

I will now move on to the Liberal Party.

Mr. Jim Karygiannis, go ahead, please, for five minutes.

[Jim Karygiannis, Liberal, Scarborough—Agincourt, ON]

Thank you, Chair.

I 'd like to read a couple of words into the order.

In 1917, then-Prime Minister Rob Borden said that “you need not fear that the government and the country will fail to show just appreciation of your service to the country” and that “no man, whether he goes back or whether he remains in Flanders, will have just cause to reproach the government for having broken faith with the men who won and the men who died.” Those were words that were said.

There was a covenant between the soldier, military personnel, and the country that it was going to look after you. When we come to today, we have the minister saying:

As I explained to 25 Veterans stakeholders a few weeks ago, the plaintiffs in the current court proceedings argue that the promises of past governments are binding on present and future governments. While this may sound reasonable, their argument could have a far broader impact than perhaps intended. If accepted, this principle could undermine democratic accountability, as parliamentarians of the future could be prevented from changing important legislation. Hence this is not about the issues raised by the plaintiffs, but about unintended consequences to the very functioning of our parliamentary democracy.

We've seen governments come and governments go, and especially this government has a tendency of breaking covenants that previous governments have worked upon, which we had come to accept. We broke the covenant that at 65 years old you're going to get a pension. Now it's 67. So you start working and you have a contract with the government and all of a sudden it's, “No, we're going to change that contract to 67”.

Having said in 1917 that we would not turn away from you, in 2013 we say, well, we can't do that. We have examples of covenants that are broken. I'm sure in your case right now this is the highest covenant that this government is trying to break.

I wonder if you would like to make a comment on that.

[Jim Scott]

I'll comment, and then maybe Don Sorochan can comment.

I think one of the issues in this particular action by Equitas is that people see it as a slight to the government for soldiers to ask the courts to define their rights and benefits. As we send our soldiers overseas, we always say it's because we want to install democracy in countries like Afghanistan.

Parts of democracy are the government and the courts. We have the courts, the Senate, the House, and they all form our democracy in Canada. There's nothing wrong with soldiers asking the courts what legal rights we have in this country. The courts will define them.

Right now, we're at odds. During the trial, the government lawyers said that soldiers are no different from anybody else collecting welfare and that the government has the right to set welfare as they see fit. We disagree with that opinion, and therefore we're asking an independent source to say there is a duty of care by the government in individual cases, not mass funding. The courts don't look at funding requirements, they look at individual cases. That's why I think it's the appropriate place right now for soldiers to be addressing their individual rights in contract with the government.

Don?

[Donald Sorochan]

The political reality of different policies and political ideologies coming forward is not offended by the position we're advancing, because we say that the social covenant goes beyond a mere political statement. The social covenant was not a statement of a political party—although there were some political reasons for it. One of the political reasons was that the prospect of trying to fill the trenches by conscription would have irreparably divided the country at the time. It was a highly divisive issue between Quebec and other parts of Canada. So the government of the day, speaking not as a government but on behalf of the country, said they would make this covenant, this promise, to you.

So in this context, we argue—and if necessary, we'll argue to the courts—the fact that it has been repeated historically since 1914 as a continuing social covenant we say makes it different from an ordinary political promise. I know we wouldn't want to constitutionalize every politician's promise.

[The Vice-Chair, NDP, Peter Stoffer]

Thank you very much.

Your time is up, Mr. Karygiannis.

We now move to Mr. Hayes, please, for five minutes.

[Bryan Hayes, Conservative, Sault Ste. Marie, ON]

Thank you, Mr. Chair, and welcome.

I want you to know that all of us on this committee have a vested interest in being on this committee, and we're here to make the new Veterans Charter absolutely the best it can be.

I'm just educating myself, plain and simple, so we can make the right decisions.

I'm looking at an individual case in the ombudsman's report. The Veterans Ombudsman noted that a 24-year-old medically released veteran with an 80% disability will receive $2 million just in financial benefits under the new Veterans Charter.

In this case, do you believe that $2 million is more than what that same veteran would have received under the Pension Act?

[Jim Scott]

That's a very good question because I think the trigger to be severely disabled is 78%, so 80% would make this person disabled and they would get their lump sum and then monthly support payments.

Our position on this is very simple: you're so bloody close to having a real pension if you just didn't reduce it at age 65, because at 65, you go to what you call a 2% pension. Everybody thinks that's 2% per year of service, but it really is a 2% lump sum payout on the money that is collected, and the benefit you get for that period of time is subject to tax and has clawback provisions.

If those little cleanups were done, you've got that one pegged, because under workers' compensation programs, the benefit is reduced to 75% to make it non-taxable. It's really a 100% compensation package reduced to 75% to make it non-taxable. Under the new Veterans Charter, you make it 75% and taxable, so that's the difference. Then you make it “clawbackable” and I think that's the worst thing you're doing because it's a disincentive for these guys to find meaningful employment.

[Bryan Hayes, Conservative, Sault Ste. Marie, ON]

So you've reviewed the ombudsman's report?