Finance Committee on May 29th, 2014

[The Chair, Conservative, James Rajotte]

Colleagues, that deals with part 5.

I'm recommending we take a break now. Is there a guide to the chair how long we want to break for? Let's do a 15-minute break.

I want to thank Mr. Cook and Mr. Ernewein for their appearance. Thank you so much for being here.

We will suspended.

[The Chair, Conservative, James Rajotte]

I call this meeting back to order. It is meeting number 37 of the Standing Committee on Finance, dealing with clause-by-clause discussions of Bill C-31, an act to implement certain provisions of the budget tabled in Parliament on February 11, 2014 and other measures.

Colleagues, we are starting with part 6. We will proceed division by division. The first division, division 1, is payments for Veterans Affairs, which deals with clauses 102 to 107.

We have Mr. Butler here for any questions from members. I again want to welcome Mr. Butler back to the committee.

(On clause 102—Earnings Loss Benefit)

Under clause 102, we have amendments NDP-10 and LIB-10, and I will just highlight to the member that the chair will have a ruling on NDP-10 that will apply to both.

I would ask Mr. Cullen to move NDP-10.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

I will. I'll attempt to be brief.

Just as a small parenthetical note, I don't think we've said this properly to all of our departmental officials gathered with us here tonight. I would offer our condolences or apologies for the process that you're engaged in. It's somewhat ridiculous to have all of you here for so long. Maybe I can move a friendly amendment to order in pizza, Chair, because I know there isn't enough food to go around, but maybe that's a budgetary matter.

This specific clause—when asking departmental officials, I'm not sure if it was you, Mr. Butler, before, but I don't think it was, at the departmental briefing—is about the clawback that the government instituted and was taken to court successfully. That started in 2006. What our provision does is it simply brings the clawback right back to 2006 when it began.

I've asked the department officials very clearly what the reasoning was for stopping before 2006, for not doing the full clawback, and I was told that it was a policy decision, which doesn't say much. It doesn't say much for our veterans. We move this motion to bring some fairness to our veterans and allow them the proper compensation, especially those who are injured, which is whom this applies to. We would see that the government hopefully would find some support in this, but that is our amendment, Chair.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Cullen.

I have a ruling on amendment NDP-10 that applies to LIB-10 as well.

Bill C-31 establishes retroactively a period for which earnings loss benefit applicants and recipients will receive a compensation. The amendment seeks to expand this period. As House of Commons Procedure and Practice, Second Edition, states on pages 767 and 768:

Since an amendment may not infringe upon the financial initiative of the Crown, it is inadmissible if it imposes a charge on the public treasury, or if it extends the objects or purposes or relaxes the conditions and qualifications specified in the royal recommendation.

In the opinion of the chair, therefore, the amendment, by modifying the period of admissibility, infringes on the conditions and qualifications specified in the royal recommendation. The amendment is therefore ruled inadmissible.

That applies to amendments NDP-10 and LIB-10.

We will move to discussion on clause 102.

I will take speakers for clause 102. I'll start with Mr. Cullen.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Very specifically—and I appreciate the ruling, Chair—this is the machination of what we have here, which is an omnibus bill. Within the omnibus bill is an attempted correction of an injustice, as I think all of us around the House agree, whereby a clawback through the ELB was inflicted upon veterans who are suffering from various injuries, such as PTSD or other physical injuries, and only through a very expensive court case was the government forced to acknowledge this at all.

I'm going to quote Sean Bruyea, who appeared before this committee and testified on this very thing. Allow me, Chair—and I'll stop at this—to quote Sean Bruyea, retired captain:

Justice, or the appearance of justice being done, is plainly not being offered in Bill C-31. Should you pass the legislation as is, you will force the most disabled veterans under the flagship Conservative veterans benefit program known as the new Veterans Charter to enter the paralytic morass of years of unnecessary and bitter legal battles. These battles will sap the health, the family stability, and the dignity of military veterans and their families.

The fact that we have full awareness of what it is we're doing, which is inciting yet another round of litigation that is incredibly expensive and incredibly tiresome to the veterans who have already suffered once.... To re-victimize those veterans for the sake of what was offered only as a policy decision and to not allow this clawback to go back to the first moment when it started, which was 2006, is simply beyond me as a Canadian. I don't understand how we can talk about a Veterans Charter and respecting our troops.... If the government seeks to take a bow for this one because it was in their kindness that they offered to return this clawback, I fail to see many veterans celebrating it across the board.

Thank you, Chair.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Cullen.

I have Mr. Simms next.

[Scott Simms, Liberal, Bonavista—Gander—Grand Falls—Windsor, NL]

Chair, at the risk of repeating what was already said, I certainly think that going back to the period beginning April 2006 is the obvious choice as to when this whole thing should begin, notwithstanding, of course, the royal recommendation.

I agree with that, but I question why they chose that arbitrary date in the beginning and did not go back to when the charter really took place.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Simms. We'll then go to a vote on clause 102.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

A recorded vote on clause 102.

(Clause 102 agreed to: yeas 7; nays 2 [See Minutes of Proceedings])

(On clause 103—Canadian Forces income support benefit)

[The Chair, Conservative, James Rajotte]

I'll move to clause 103. I have two amendments, NDP-11 and LIB-11, and a hint here. I have a ruling. If I could get someone to briefly move of the NDP-11, then we'll have a discussion on clause 103 generally.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Very briefly, Chair, I suspect the ruling that's coming. What we're attempting to do here is to take a bad system and implore the government to listen to those veterans that are affected by this and do that justice, as Mr. Simms talked about. It's similar to the one we moved before, and we would seek just a little bit of common sense. If this is when the clawback started in 2006, well then let's retroactively bring it back. Let's do the veterans right by us. They deserve at least that.

Thank you, Chair.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Cullen.

My ruling is that Bill C-31 establishes retroactively a period for which Canadian Forces income support applicants and recipients will receive compensation. These amendments seek to expand this period.

House of Commons Procedure and Practice, Second Edition, states on pages 767 and 768:

Since an amendment may not infringe upon the financial initiative of the Crown, it is inadmissible if it imposes a charge on the public treasury, or if it extends the objects or purposes or relaxes the conditions and qualifications specified in the royal recommendation.

In the opinion of the chair, this amendment, by modifying the period of admissibility infringes on the conditions and qualifications specified in the royal recommendation. Therefore, I rule the amendment inadmissible. That applies to NDP-11 and LIB-11.

Therefore, I'll move to discussion on clause 103.

Do you have a question, Mr. Cullen?

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

We haven't brought Mr. Butler into this conversation yet.

Mr. Simms raised, I think, a valid question. We asked officials before why this date was picked, so let me start with that.

Why pick the date chosen by the government to end the clawback and compensate veterans back to, I believe it's 2012?

[Bernard Butler, Director General, Policy Division, Policy, Communications and Commemoration Branch, Department of Veterans Affairs]

That is correct.

The date of May 29, 2012, was the date that the Government of Canada made the announcement that they would cease the offsetting of the disability pension from these three programs. Moving from that date, the common—as you know, it took six months to implement the cessation of the offsetting for the first two programs, earnings loss and the Canadian Forces income support program, and then it took another six months to, because legislative change was required, to end the offsetting for the war veterans allowance program.

If you look at both those programs, you're right, Mr. Cullen. The earnings loss program and the Canadian Forces income support program did come into effect in April 2006 as a function of the introduction of the new Veterans Charter. The War Veterans Allowance and Civilian War-related Benefits Act, those pieces of legislation go back further in time. The WVA actually goes back to the 1930s.

The concern was to find a common date, or that was one of the issues: find a common date for calculating this benefit. The other issue really was, again and for clarity, with the SISIP ruling as it relates to the service income security insurance plan. That was the subject of the Federal Court ruling in Manuge.

As we discussed previously the last time we were here, the Government of Canada was not in fact mandated to cease the offsetting of the disability pension benefit under Veterans Affairs Canada programming. These are two separate and distinct constructs. Under the service income security insurance plan, that was a policy, an insurance policy administered by the Department of National Defence.

Our programming is legislative in nature, and the Government of Canada was not in fact mandated to cease the offsetting of the disability pension benefit pursuant to that decision. In other words, the Government of Canada simply chose, on its own motion, in light of the decision, to make the determination that it would in fact stop the offsetting. That was on May 29, 2012.

Those were the reasons, Mr. Chair, for that May 29, 2012, date.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Thank you.

Further to that, what is the cost of going back to 2012? What is the estimated cost from the department to...?

I just want to make sure our terms are not competing. You used the term “offsetting”. Is that term replacing “clawback”, the term that I've been using?

[Bernard Butler]

Certainly for your purposes, I think “clawback” would be the equivalent of our term, which would be “offsetting”.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Okay.

Again, for going back to 2012, as was the government's decision, do we know what the cost was of that offsetting, or the stopping of the offsetting?

[Bernard Butler]

The stopping, yes; in terms of the bill that's before you right now, this will amount to roughly $19.9 million in benefits paid out to veterans who are impacted by this decision.

If you recall, the decision to actually stop the offsetting on a go-forward basis, which was made in previous legislation, was about a $279-million cash cost over five years.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

So it was $279 million over five years. I'm going to be backcasting, because that's the provision we're dealing with here just in terms of what's coming forward to veterans, and that's the question I have. Did the department do an estimate of what the cost would have been to in fact go back to 2006 rather than 2012?

[Bernard Butler]

The department, in the context of preparing for advice to cabinet, to ministers.... Different costing models were done, yes.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

I know that advice to cabinet is.... I'm not asking what the number was; I'm asking whether a number was offered in terms of the compensation, with several options in front of the minister: here is one that takes us back to May 2012, here is an option that will take us back to 2006, and here are the costs. Was that proferred up?

[Bernard Butler]

I think it's fair to say that in preparing memorandums to cabinet, various options are offered.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Well, as a somewhat logical person, I'll logically conclude that various options were offered.

So the point of the government on this—I'll stop here, Chair—was that, while not directed by the courts, by Manuge, there was not an explicit direction by the judge, then why do the compensation? Was it a...I don't want to use the loaded term “moral obligation”, but why seek out and then spend nearly $20 million anyway if the courts ruled that the government was in the right for this so-called offsetting, this clawback?

[Bernard Butler]

Again, Mr. Chair, that was a decision of the government to make that announcement back on May 29, 2012. The Manuge decision in fact was very explicit in saying that the legislative structure for the offsetting of the disability pension benefit against these particular programs that are before you today was entirely appropriate, given the legislative framework.

The government, in its announcement, said that simply in light of the Manuge decision, and that determination on the SISIP file, they thought it would be appropriate to stop the offsetting on a go-forward basis.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

I'm sorry, Chair; I always say that's the last one, but then the witness says something.

I just want to be clear. The very last thing you said was “in light of the Manuge decision”. I guess that's what I'm trying to determine here: what guides government policy when deciding when an offset or a clawback is inappropriate and when it's not. It wasn't a legal obligation, as you've said, but the decision guided the department.

What I'm trying to understand is also what other programs in the future or in the past we'll be looking at to get some clue, for the veterans we speak to, as to what will be available and not offset or not clawed back anymore.