Veterans Affairs Committee on March 16th, 2010

[The Chair, Conservative, David Sweet]

Good morning, ladies and gentlemen, and welcome to the second meeting of this session's veterans affairs committee.

Today we have with us Bernard Butler, who's the director general of program management, as well as Brenda MacCormack, the director of rehabilitation.

I have to say that some case scenarios were submitted to the committee. They were not translated, so we can't distribute them, because they need to be in....

[Bernard Butler, Director General, Program Management, Department of Veterans Affairs]

No, there was a French version.

Thank you very much, Mr. Chair.

Mr. Chair and committee members, it's a pleasure to appear before you today with my colleague, Brenda MacCormack, who is the national director of Veterans Affairs Canada's rehabilitation program.

Mr. Chair, members of the Standing Committee on Veterans Affairs, it is a very great pleasure to appear before you today.

We are committed to keeping you informed on how well the new Veterans Charter is meeting the unique needs of our modern-day veterans and their families. More than 20,000 clients have received support from one or more of the programs since the coming into force of the new act. We have provided you with a document that contains some client case scenarios, which, although not intended to be a complete representation of all of our client case types, do help to illustrate how the programs of the new Veterans Charter can and do make positive changes in the lives of modern-day veterans and their families.

The new Veterans Charter programs give younger veterans the tools and opportunities they need to build better lives for themselves and their families after their career in the military has ended. Prior to the introduction of the new Veterans Charter on April 1, 2006, the existing disability pension program was not responding to Canadian Forces veterans' needs for recovery and rehabilitation. The new Veterans Charter offers monthly financial payments for disabled veterans and a cash disability award to compensate for pain and suffering. The disability award offers upfront financial and investment opportunities to assist the veteran in his or her family transition to civilian life. This package of benefits is much better suited to meeting the reintegration needs of younger veterans and their families. Indeed, they were designed to support the successful transition of the whole family.

The new benefits are an integrated set of programs and services based on a wellness model. Essentially, they accrue a monthly payment that provides up to 75% of the previous salary to compensate for the loss of earnings while an individual is participating in rehabilitation, or until age 65 in cases where an individual is disabled permanently and unable to return to work. Rehabilitation services include medical, psycho-social and vocational rehabilitation, a lump sum disability award to compensate for pain and suffering, a permanent impairment allowance that provides an additional monthly amount to those who are severely and permanently impaired, health care benefits, financial counselling, help to find a job when the member is ready and a supplementary retirement benefit to compensate for the lost opportunity to contribute to a retirement plan for those who are unable to return to work. Clients and their families in need also have access to strengthen mental health services, peer support, and comprehensive case management.

The new Veterans Charter is an excellent foundation for meeting the needs of our modern-day veterans and in fact was recently recognized, as most of you would know, by an Australian study as the best in class of all such programs in Australia, New Zealand, the United Kingdom and the United States.

Over the past three years, VAC has made changes to maximize efficiency within its existing authority and has been exploring and analyzing the potential gaps that were identified through various sources. In addition to internal assessments of the suite of programs, we have collaborated with the Department of National Defence and the Canadian Forces through various fora, consulted with stakeholders, including veterans organizations, and worked with advisory groups including the new Veterans Charter advisory group, which I understand that you heard from during the last sitting, and a special needs advisory group.

Additionally, the department has examined other sources, including information on best practices of other countries. As of October 1, 2009, the new Veterans Charter advisory group report has been received by Veterans Affairs Canada and has as a major theme early intervention to rehabilitation services as a key to successful transition. The National Institute of Disability Management and Research reports that without early intervention, an injured worker has only a 50% likelihood of returning to work after being laid off for six months, with this percentage dropping dramatically to 20% after one year and to 10% after two. VAC is working closely with National Defence to ensure the Canadian Forces members who may become Veterans Affairs clients receive necessary interventions as early as possible, and this will ensure that they are able to achieve positive outcomes and successfully transition to civilian life. In other words, intervention must occur as soon as possible prior to an individual's release from the military after an injury or illness.

The design of the new Veterans Charter ensures that more money and resources are available for all modern-day veterans whose services to Canada has left them with real challenges in civilian life. It allocates more resources to those with more severe disabilities and challenges and provides a less but fair compensation for those who have no transition challenges. But even for those with minor or no disabilities, the new Veterans Charter provides a permanent statutory safety net, guaranteeing that if they ever have a need related to service, the charter is there whenever and for as long as it is needed.

We believe the New Veterans Charter will have some positive benefits. Veterans Affairs Canada is working to ensure that the new charter continues to meet the ever-changing needs of our clients and to develop approaches that promote positive results for every one of our clients and their families.

Thank you for the opportunity to provide you with this update.

I will be pleased to take any questions now with my colleague, Brenda MacCormack.

[The Chair, Conservative, David Sweet]

Thank you very much, Mr. Butler.

I understand from our discussion that if people have questions on the scenarios, Madam MacCormack will be able to answer them as well.

It took us until almost five after to get a quorum. Again, I'm always at the behest of the committee, but we have enough time to go for two rounds, and then you can negotiate splitting your time among the individual parties. That will take us to about a quarter after. Then we'll have the second half for business. Is that pleasurable for everybody? Okay, that's great.

The first round goes to Mr. Oliphant of the Liberal Party for seven minutes.

[Rob Oliphant, Liberal, Don Valley West, ON]

Thank you.

Thank you for joining us today.

I'll begin by saying that the spirit of the new charter for veterans is absolutely admirable. We're going to start with that. There is a sense of independence instead of dependence, a less paternalistic approach, more decision-making, and a larger suite of programs. All of that is given.

No doubt you have been tracking the town halls being given by the ombudsman. Hopefully you've been tracking my town halls and meetings across the country and the stories of veterans, particularly modern veterans, who are saying it is not working for them.

About 95% of your presentation was about what is working, and about 5% was on the gaps--or maybe 1%. I think you mentioned that you're looking at the gaps. I want us to focus on the gaps, because we know what's working. What I'm hearing in the community is what's not working. Perhaps it's simply that people don't understand the availability of programs and there's a communication problem--I'm open to that possibility.

But I am hearing real stories of people who are finding that the lump sum payments are not adequate or do not relate to their real needs. I am hearing that pensioners have lost their relationships with the people of Canada when they get lump sum payments and don't have ongoing monthly cheques. That covenant has been broken.

I have heard that the suite of programs is not accessible to everybody if you don't live near a centre. It is hard if you live in northern Alberta, because the kinds of programs that may be necessary for pain management are not there. The transportation costs are often eaten by the veteran and not paid for under the suite of programs. There are significant problems. I have lots of documentation.

The advisory committee has come up with a couple of dozen severe problems that they are acknowledging. I want you to explain to me where you think the gaps are and where we should be focusing our attention.

[Bernard Butler]

That's a lot of ground to cover, but I'll make an effort in the process.

I think it's important to emphasize that it's a relatively new program. As you know, we've been at it now almost four years, but we have begun through various means, including the types of activities that you have indicated, Mr. Oliphant, to identify where these gaps are.

I think firstly we've had challenges in terms of communicating around the program. Oftentimes we feel that some veterans remain focused, as you've suggested, on the lump sum award and the comparison to the previous framework where there was a recurring monthly benefit or monthly pension. Part of that communication challenge is addressed in a sense through the introductory remarks this morning.

This is a dual award approach, and oftentimes folks don't look at the other side of this in terms of what these payments are really all about. The disability award itself is for compensation for pain and suffering, and it is recognition of the service that these members have made to their country. But it is intended to enable that individual to begin a transitional process to address costs they may have in terms of establishing a new home, and so on.

The other side of the dual award approach, though, is the issue around the financial benefits payable. The important consideration here is that what the program has done is to try to move away from a concept of a recurring monthly benefit that under the Pension Act was not really geared or established to be an income replacement, and with financial benefits of the new Veterans Charter, to focus on the rehabilitation and the wellness of the veteran and to enable the member to re-establish in civilian life.

So it's a very important distinction and focus that we feel sometimes may be lost. I think there's certainly much more that we should be doing and can be doing in terms of communicating the message, and certainly the opportunity to appear before you today is an example of that in terms of ensuring that the community understands the distinction.

In terms of other issues, other gaps, there's no doubt that issues such as early intervention are very critical. We've done a lot of work with our colleagues at national defence and the Canadian Forces to try to ensure a seamless and integrated approach to disability management with members, and so on. We've established, as you know, 19 integrated personnel support centres across the country. We've deployed staff to bases across the country. We've done a number of things to ensure that we are out there engaged with members as early in the process as possible, and there's probably more that we can do along those lines.

In terms of other gaps, as you pointed out, the new Veterans Charter advisory group has identified a number of issues in terms of enhancing support to families. They too have raised issues around the economic benefits, whether they're adequate for all members, and so on. These are issues we are looking at.

As you know, we have an internal evaluation going on of the new Veterans Charter, as we speak. It's scheduled to be completed by the end of this year. Those types of studies will inform us a good deal more in terms of where we ought properly to be focusing our activities in terms of addressing need.

I would like to make just one final comment, because you spoke to the service delivery issue. We are well aware of the fact that, with our changing client demographic, where our new members are situated may not necessarily be where they were with the traditional veteran. So we're doing quite a bit currently in terms of looking at how we can outreach to those clients and at whether the traditional structure we have for a framework in Veterans Affairs for serving veterans is appropriate. We've done a whole lot of activities in terms of mental health, the telemental health, outreaching to veterans that way.

So these are areas we're sensitive to, and we are directing our minds in terms of addressing them.

[The Chair, Conservative, David Sweet]

Very briefly.

[Rob Oliphant, Liberal, Don Valley West, ON]

I could go on content quite a lot, but I want to go on process just to close. In terms of the content issue, the advisory committee didn't question, I think, whether there was inadequacy. I think they said there was inadequacy. So I just want to get that on the record, that it's not whether there is possibly an inadequacy; they've said there is inadequate financial reimbursement.

On the process, the Senate is looking at the new Veterans Charter through their committee on defence, and we are looking at the new Veterans Charter. You're doing a review of the charter, and the ombudsman is looking at the charter. What is the department's plan for taking all of that and doing it? You seem to have a stand-alone review, but the Senate, the House of Commons, and the ombudsman are also doing reviews. Where do we have a way in to you if our study is not going to be listened to?

[Bernard Butler]

I would say that we will certainly be listening to the report of this committee, and certainly be taking guidance from it, as we will be taking guidance from the Senate committee looking at it. Equally, we are very attentive to the work the ombudsman is doing. We monitor the reports of his findings. We are looking at it as a whole, because I think the important consideration for all of us is to ensure that whatever changes we might propose to the new Veterans Charter are the right changes and maximize the benefits and services that are available to veterans. So we are certainly sensitive to that, and we'll be looking at that as part of our ongoing evaluation.

[The Chair, Conservative, David Sweet]

Thank you, Mr. Butler.

Monsieur André, vous disposez de sept minutes.

[Guy André, Bloc, Berthier—Maskinongé, QC]

Thank you for being here.

I have a few questions along the same lines as the ones asked by Mr. Oliphant.

You talked about the lump-sum award and compared it to the monthly allowance paid prior to the introduction of the New Veterans Charter.

For some time now, we have noticed certain problems. For various reasons, young soldiers returning from a mission experienced post-traumatic stress syndrome or other types of trauma associated with their tour of duty. They were awarded a lump-sum amount under the terms of the New Veterans Charter.

At times, after two or three years, they are at a point where they want to reintegrate civilian life, but that transition is hard for them because of the trauma they experienced during their military missions. Some have spent all of their lump-sum award. Of course, ideally they should purchase a home or invest their money “wisely” or strategically for the long term. However, that is not what really happens sometimes.

In cases like this, do you provide some kind of support, some kind of financial support to help them along? It is not easy, because a person can claim that it's their money to do with as they please.

So then, these young people have spent the money and are often dependent on others. They are dependent on their families, because they have spent everything within the space of two or three years. That is a problem.

Quickly, since the introduction of the New Veterans Charter, compared to the situation that existed in the past, overall, have the amounts of the allowances provided increased, or decreased? Has providing a lump-sum award instead of a monthly allowance resulted in savings, or has it proven to be a more costly initiative?

[Bernard Butler]

The intent of the new Veterans Charter was not to find savings in programming at all.

[Guy André, Bloc, Berthier—Maskinongé, QC]

Have any studies been done on this subject? Have any savings being realized, even though this was not the objective? Do you have any figures on this?

[Bernard Butler]

I do not have any figures on that I could provide you with. All I can tell you is that in terms of the monetary amounts paid, these amounts are paid based on assessment tables and so on, according to the degree and extent of disability. I don't think there's any indication right at the moment that those amounts would be lower than the assessments that would have been made in the earlier era.

In terms of whether or not, in the longer term, savings might be realized through the advent of the charter, there's been no study done on that as of yet. Obviously, over time there may be more information available to us on that.

[Brenda MacCormack, Director, Rehabilitation, Department of Veterans Affairs]

Bernard, if I could just add, in terms of government investment at the outset, there was an initial upfront cash investment of $740 million to finance these new programs over the first five years, so there absolutely was an investment on the part of government.

In terms of whether we will save money over the longer term, if we do, it will be because we're more successful in terms of having people transition, and then more successful with re-establishing into civilian life. I guess that would be a positive result.

[Guy André, Bloc, Berthier—Maskinongé, QC]

Is this an additional $740 million for allowances or for new veterans services, for services close to home, for caregivers and other services? How has this $740 million been allocated? I don't think this has anything to do with allowances.

[Brenda MacCormack]

That $740 million was the investment the government made to implement the programs under the new Veterans Charter.

[Guy André, Bloc, Berthier—Maskinongé, QC]

So then, it was allocated to all veterans programs.

[Brenda MacCormack]

Yes.

[Robert Vincent, Bloc, Shefford, QC]

I'd like to continue.

Earlier, you said that no savings would be realized. However, consider the award provided to someone who is 80% disabled because of post-traumatic stress disorder or some other trauma. Compare that amount to a $220,863 lump disability award. Let's say that a veteran who is 80% disabled receives 80% of his salary upon release from military service. If that CF member earned $40,000 or $50,000 a year, had 30 years of service when his career ended and was still alive at the age of 65, clearly he would receive more than the $280,000 or the $220,000 that you are giving him. So then, it's more cost-effective for you to provide an award of $220,000 instead of 80% of his salary. Would you agree with that assessment?

[Bernard Butler]

If you look at those case scenarios we presented, and you may be looking at those currently, I think it's fair to say that depending on the degree of disability the member might have and how much he might receive from the previous pension versus an award, there is no doubt that at lower levels of disability the overall financial benefit to that individual might be less over the life course of the member. At the other end of the continuum, the more severely disabled the member is and the more access to other program benefits through rehabilitation and earnings loss benefits and so on, the overall financial return might indeed be greater. It very much depends on where on the continuum the member is, the degree of disability, and the services they might need to access over time.

[Brenda MacCormack]

It may be helpful to look at the scenario outlined on the chart. If we look at the seriously disabled scenario, there is a lump sum that's payable--as you pointed out, $220,000. In addition, there are a number of financial benefits: the earnings loss, as you mentioned; a permanent impairment allowance, which is to compensate for loss of career progression during one's lifetime; and a supplementary retirement benefit, which represents two percent of the gross earnings loss, payable at age 65. There is the opportunity for purchasing the public service health care plan, if that's not otherwise accessible. If the veteran is ill enough that he can't participate in rehabilitation, particularly vocational rehabilitation, we can provide that vocational assistance to the spouse. The suite of programs is about enabling people to achieve independence; it's about helping families, and in this case the spouse would be able to access that kind of assistance.

[The Chair, Conservative, David Sweet]

Thank you, Ms. MacCormack.

Now on to Mr. Stoffer, for five minutes.

[Peter Stoffer, NDP, Sackville—Eastern Shore, NS]

Thank you, Mr. Chairman.

I first of all want to thank Mr. Kerr.

These two fine folks are from the Maritimes. One is from Nova Scotia and one is from P.E.I., and that's why we're getting things done around here.

To put it on the record, who actually gets to qualify under the new Veterans Charter?

[Brenda MacCormack]

In terms of looking at some of the programs, anyone with a service-related disability can certainly access the programs. They can access a disability award at any time. With respect to rehabilitation, anyone who is medically releasing from the forces can access the rehabilitation program, whether they are releasing for a service-related disability or not. As well, they can access at any point in their future and as many times as they want for a service-related disability.

[Peter Stoffer, NDP, Sackville—Eastern Shore, NS]

If the person served in Bosnia and left in 1992, would they qualify under the new Veterans Charter if they were filing for a claim now?