Veterans Affairs Committee on Nov. 26th, 2009

[Judy Sgro, Liberal, York West, ON]

Could the committee receive a list of the witnesses we have lined up or who have indicated an interest in attending?

[The Chair, Conservative, David Sweet]

Sure.

[Judy Sgro, Liberal, York West, ON]

Thanks very much.

To all of you, thanks very much for coming here today. I find every one of these meetings enlightening and challenging.

I have to say that I think every person who works for Veterans Affairs cares very much about the veterans. We've met them and talked to them. We always leave those meetings in Charlottetown or elsewhere feeling good because they tell us about all the great things they're doing to help and about their motivation and all of that. We always feel quite good when we come back to our meetings.

Then, as part of this review, we are hearing from people who clearly have frustrations. But that's why this is a living document. The whole intent was to pass the Veterans Charter and then start a review a short time later. It's meant to be changed. We're meant to be doing exactly what the committee is doing, which is listening to you.

Ms. Richard, I hope you will leave us a copy of your presentation.

[Louise Richard]

I have.

[Judy Sgro, Liberal, York West, ON]

Thank you. I thought it was very informative.

I'm trying to keep my questions down to one particular area; otherwise, I'll never have enough time.

On the Pension Act, one of the issues I'm very concerned about as we look at the Veterans Charter is making recommendations specifically to do with the economic issues. We continue to be inundated with issues in and around the economic side, such as bridging and a variety of things like that. I think the Veterans Charter we're reviewing right now is a good opportunity for us to look at the kinds of changes that need to be made to ensure our veterans are getting the kind of help that all of us on this committee want. We want to ensure that they are being looked after effectively.

Specifically, Captain Gray, you mentioned rewriting the Pension Act. I'd like to hear some comments in regard to the Pension Act.

Mr. Fraser, you talked about the issue of permanent impairment.

Could the two of you elaborate a bit on the economic side of those issues, please?

[Hugh Marlowe Fraser]

Thank you.

I was on the economic subcommittee, so I can cover off on most of the points covered in the report.

One of them is the permanent impairment allowance issue. We totally agree with veterans organizations that the lump sum issue needs to be dealt with. It's in the report because it's just not equitable. We have people out... I'm in a program now with homeless veterans in Victoria. We're supporting them and we have a house that a local developer has given us. Three of them received a lump sum payment and within a month it was gone; the wife has it or the ex-girlfriend has it. They're still living in the back of the truck and now we're taking care of them in the homeless shelter.

So we totally agree with this because we have people with psychological injuries and you're dumping that money into their laps. It just isn't going to work, right? That's the care and responsibility on a monthly basis that we talked about, where at least you're sustaining those people over the long term.

With the permanent impairment allowance, the qualification issue is in the report, and that's what we want to have changed. It would mean that pretty well any individual who has a chronic condition and is applying under the new charter would hopefully still get a lump sum, but then they would get categorized under the permanent impairment allowance at a 5%, 10%, or 15% annuity that would cover off during their lifetime, which they could appeal, just like under the Pension Act. The problem right now is that when it came out we only had three or four people, I think, who ever qualified for it because it's so stringent to meet the qualifications. That's one issue.

The other one is the transitional amount of money you get, the 75%, and that's the insurance-based issue. There are ways of getting around that, too, with the economic earnings allowance. But we all want to see 100%, right? Whatever you're making at the time, you get two years to get out and get your life together, get your rehabilitation done, and get a new job or whatever. If your condition is severe, well, then it continues. If not, then you're in a new job, and you can sustain yourself.

But as for giving back your pension amount, your CPP, and all these other amounts that you have to qualify for and do all the work for and then to give all the money back... We had a case that I think was reported to your committee a couple of weeks ago. An RCMP officer ended up having to pay back more money than he initially got. Some of the issues are just ridiculous.

So for the economic needs, we have the permanent impairment allowance, and we have the change to the 75%, which is the base, and then we have the younger veterans who are injured while at the level of private, which is a very low amount of money. These younger veterans have children. Obviously, they sustain their injury throughout a lifetime, and what we're suggesting in the report is that if you're injured, your assessment--your base pay--is at the level of corporal so that you at least have a standard of living. Then, for the injury of an individual who loses his career for a lifetime, we're looking at the life course for benefits.

In the report what we're suggesting is that if you are a leading seaman you're going to generally make it to the level of what we call a chief petty officer or master warrant officer in the stint of a normal career. There are pay guides already out there that show this normal progression. What we're suggesting is that if you have a disability award or pension, it should be augmented and adjusted accordingly over the course of your life so that you can make up for the cost of living, the loss of pension opportunities, and other things. Because with that, at 65 you lose your income, and you have no pension entitlement and you're in the poorhouse once again.

I'm a little biased here because I was on the economic subcommittee. I wanted to be on that committee because the biggest impact for me was “show me the money” and let's talk about it. I mean, I was being rehabilitated and I had medical treatment, but no money to survive with. I mean, my wife was saying, “Your whole career is with the military and this is what they're doing to you?” At one point, I was defending the department and I was going to get kicked out of the house. It just gets... We could sit around with a coffee or a beer and I could tell you stories that you would not believe.

[A voice]

Okay.

[Hugh Marlowe Fraser]

Being a veteran and having been through the system, I've seen a lot of cases, but I think there are good recommendations in there. I truly believe that it will improve the economic state. On the lump sum, we worked on that and batted it around as best we could. Joe Sharpe was the chair and he's a great guy.

With the lump sum, if we can get the permanent impairment allowance or the earnings loss benefit adjusted, there are other mechanisms within the charter that we can adopt or change to get that monthly annuity going again to satisfy some of the major issues that other veterans organizations have. All veterans have an issue with the lump sum, let me tell you, but we know the charter is here and we're trying to work as best we can to keep that going in the right direction.

[The Chair, Conservative, David Sweet]

Thank you, Mr. Fraser.

We're out of time, but I do know that Madam Sgro had mentioned--

[Hugh Marlowe Fraser]

Oh, I'm sorry.

[The Chair, Conservative, David Sweet]

It's okay. Our tradition here is to allow the time limits for the members, not for those who are answering.

But I do think that you wanted some input from Mr. Gray as well, Madam Sgro.

Mr. Gray, please.

[Capt(N) Perry Gray]

I just want to make two points. First, when we consider the old and the new, there have to be similarities and things passed on. One of the problems is that the language in all the legislation is not the same. That comes down to the terminology, to the words and the definitions. For example, what is meant by “permanent severe impairment”? How is it broken into “chronic and persistent”? It should be clear to the veteran, medical professionals, and VAC what is meant by each specific term.

The other thing we have to note is the new Veterans Charter has converted non-taxable financial benefits into taxable income and that's wrong.

We're also against the fact that at the magic age of 65 you start to lose things and they're not replaced. For example, if I were still in the military and I had an impairment I could claim for SISIP. It would pay me and I would also get 100% of my salary. As soon as I retired that would drop to 75%, regardless. So a person in uniform would get 100%-plus, but a person out of uniform would get 75% or less. That's wrong. That's all I wanted to say.

[The Chair, Conservative, David Sweet]

Thank you very much.

Now we'll move on to the Conservative Party for five minutes.

Mr. Wallace.

[Mike Wallace, Conservative, Burlington, ON]

Thank you, Mr. Chair.

I'm not a regular member of this committee. I've been here a couple of times, filling in on this particular topic. I'm actually a member of the finance committee, which I will have to run out to in 45 minutes or so.

My questions will be to you, Mr. Fraser, just so I understand what you're asking for here.

I would also like to say that my experience with the minister has been very positive. I'm from Burlington, Ontario, and the VAC staff in Hamilton have been very helpful to the veterans in my area. I want to put on the record that they've been very good.

On the ELB, if you don't mind me asking some specific questions, the change you're asking for is to go to 100% fully taxed. Is that correct?

[Hugh Marlowe Fraser]

That's correct.

[Mike Wallace, Conservative, Burlington, ON]

Was there a discussion about leaving it at 75% but reducing the tax burden?

[Hugh Marlowe Fraser]

There was.

[Mike Wallace, Conservative, Burlington, ON]

What was the reasoning?

[Hugh Marlowe Fraser]

I'll tell you exactly what the reasoning was. It was to get away from the ideology of the insurance-based mindset. If we were to try to bring that forward and keep it non-taxable, it would look as if we were trying to go that way. We say it should be just 100% taxable. You're in the military, you're injured, and you're being released, but you're in a transitional phase for two years. You're just kept on the record as being paid, instead of getting into--

[Mike Wallace, Conservative, Burlington, ON]

So they should continue to treat you as an employee?

[Hugh Marlowe Fraser]

It's semantics.

[Mike Wallace, Conservative, Burlington, ON]

Okay. I appreciate that. I've heard from a number... Obviously, it's in the recommendations.

The salary based on your rank when you leave, are asked to leave, or are unable to continue to work, is an interesting concept to me. I have relatives in the forces and some are veterans, but I've never been involved myself. Is there an actual career path expectation? If I become a private in the armed forces tomorrow, do I have a reasonable expectation of making corporal or whatever? Is there a formula that's used? Are you applying that formula to decide where benefits should fall out on this? That's my first question.

Second, for a veteran who's asked to leave, do you expect that to progress over time or is than an immediate piece?

[Hugh Marlowe Fraser]

Yes, we use the same model. If you go into the Canadian Forces they have a pay scale. You join as a private. There's an expectation that over a certain number of years you'll be promoted, and that within a 20-year period you will be a chief petty officer, like in my case, for example, in retirement. Your pay is adjusted quarterly to that and is paid out for the length of your disability. After five years, you are re-evaluated at what your expectation would have been at that time and what the pay scale is saying, indexed, and then a formula has to be built, of course.

On the base salary issue, when you join as a private or “private trained” you're still kind of in the early stages of your career. It takes about three to four years to get what you call “corporal trained” or “leading-seaman trained”. The difference is $55,000 compared to $23,000, so if you're injured at that younger age and you have to survive on that with a family, it's very difficult.

[Mike Wallace, Conservative, Burlington, ON]

I'm more familiar with, for example, the firefighting force in Burlington, where you can get promotions based on length of service. Is that similar to the armed forces?

[Hugh Marlowe Fraser]

Generally speaking, it's the length of time served and training you have to complete, but normally within a four-year period you expect you're going to be a leading seaman or a corporal. That's controlled locally. There are no numbers. The captain of a ship or the CO of a base could promote everybody to leading seaman without any justification to Ottawa. That's why we're using it as a base.