Evidence of meeting #8 for Veterans Affairs in the 41st Parliament, 2nd session. (The original version is on Parliament’s site, as are the minutes.) The winning word was pension.
A recording is available from Parliament.
NDP
The Acting Chair NDP Peter Stoffer
Good morning, everyone. I see we have a quorum, and our witnesses are here. Before I recognize Mr. Karygiannis, I want to welcome our witnesses: Mr. Guy Parent, the Veterans Ombudsman, also a retired chief warrant officer; Gary Walbourne, executive director, operations, and deputy ombudsman; and Colonel Denys Guérin, senior analyst.
I see Mr. Karygiannis's hand. Is this a point of order, Mr. Karygiannis?
Liberal
Jim Karygiannis Liberal Scarborough—Agincourt, ON
If you want to take it as such, Chair.
I was wondering if we could all agree that we stand for a minute of silence to pay respects to the two military individuals who lost their lives a couple of days ago.
NDP
The Vice-Chair NDP Peter Stoffer
Are you referring to the article in the paper regarding the two soldiers who unfortunately have passed on?
Liberal
NDP
The Vice-Chair NDP Peter Stoffer
I'll ask the committee if they agree. If they do, I'll ask everyone in the room to please stand for a moment of silence.
Thank you all very much. Merci beaucoup.
For the witnesses and for the folks in the room today, I extend our welcome as well from our chairperson, Mr. Royal Galipeau. Unfortunately, Mr. Galipeau is under the weather and so I've assumed the chair, but I'm sure he sends his best wishes as well.
Mr. Parent, I understand you'll be starting first. We look forward to your remarks, sir, please go ahead, and thank you for coming.
Guy Parent Veterans Ombudsman, Chief Warrant Officer (Retired), Office of the Veterans Ombudsman
Good morning, Mr. Chair and committee members.
Mr. Chairman, committee members, good morning.
Since my team members have already been introduced—
and I would like to add that Retired Colonel Denys Guérin is the head of the team tasked with reviewing the New Veterans Charter Act.
I've a few short introductory remarks and then Denys will follow with a presentation that summarizes our recently released new Veterans Charter report.
I would first of all like to thank the Hon. Julian Fantino, Minister of Veterans Affairs, for having agreed to my recommendation for a comprehensive review of the New Veterans Charter, with special focus placed on the most seriously disabled, support for families and the delivery of programs by Veterans Affairs Canada.
The men and women who serve in the Canadian Armed Forces willingly accept the risks to their health and life that are inherent to military service. If they are injured or become ill and can no longer serve in uniform, the Government of Canada has a recognized obligation to help them rebuild their lives and restore to the greatest extent possible their health, financial independence, and quality of personal and family life.
This obligation on the part of the Government of Canada to its veterans is stated clearly in the preamble to such legislation as the Pension Act, the Veterans Review and Appeal Board Act, and the War Veterans Allowance Act. Each states that the act shall be liberally construed and interpreted so that the recognized obligation to those who have served their country so well and to their dependants may be fulfilled.
I fully support the recent calls from veterans advocates and organizations to include this recognized obligation in the new Veterans Charter as in past veterans legislation. I applaud the request of Minister Fantino that this committee decide how best to articulate Canada's obligation toward its veterans.
Since April of this year, I have published a series of reviews and reports to serve as a common factual reference to guide our discussion, but more importantly, to channel action on specific new Veterans Charter program areas that need improvement. I have put forward evidence-based facts, analyses, and recommendations on how to address shortcomings in the three program areas that are of most concern to veterans. These are: first, financial instability and decreased standard of living; second, a vocational rehabilitation program that is overly rigid in its focus on existing education, skills, and experience, which constrains education upgrades and employment options; and third, difficult family environment situations due to insufficient family support.
On the second item, I am pleased to report progress. On October 8, I joined Minister Fantino in announcing a change to the Veterans Affairs Canada vocational rehabilitation program. The change gives the more than 1,300 veterans taking part in vocational rehabilitation greater flexibility to access the funding envelope for the program, while reducing red tape.
My office has analyzed the more than 200 recommendations for improvement to the new veterans Charter proposed by various expert advisory House of Commons and Senate committees since 2006, including many of the 160 recommendations mentioned by Minister Fantino when he appeared before you last week.
We also held exhaustive stakeholder consultations.
Many recommendations that deal with the three key transition areas, financial support, vocational rehabilitation and family support, have not been implemented and are continuing to affect veterans and their families.
The most pressing shortcomings to address are those related to financial support. There are five.
The first is the insufficiency of the economic financial support provided after the age of 65 to totally and permanently incapacitated veterans.
The second is the drop in income for veterans who are transitioning from the military to a civilian career, because the earnings loss benefit only pays 75% of pre-release salaries.
The third is that access to permanent impairment allowance and the permanent impairment allowance supplement continues to be a problem for many severely impaired veterans.
The fourth is the unfair practice of providing a reduced earnings loss benefit to part-time reservists who suffer an injury or illness related to service.
The fifth financial shortcoming is the non-economic benefit designed to compensate for pain and suffering, the disability award. This benefit is supposed to have kept pace with civilian court awards for pain and suffering, but it has not.
Mr. Chair, I respectfully submit that most of the analysis and review of the deficiencies in the new Veterans Charter has been done. The path to improving the new Veterans Charter is clear. I believe my report on improving the new Veterans Charter, and the actuarial analysis that supports it, can serve as a baseline for how this living charter is reviewed by the committee.
The report's analysis of benefits and programs pinpoints exactly where the current suite of new Veterans Charter benefits are failing some veterans today, and will continue to fail more tomorrow unless changes are made quickly.
If we address these five financial issues and fix, at a low cost, the shortcomings related to vocational rehabilitation and support to families, I believe that we will make a significant difference for veterans and their families.
Too often the debate that swirls around veterans issues centres on the question, “Am I better off under the Pension Act or under the new Veterans Charter?” The reality is that we have two very different benefit schemes operating in parallel.
When he appeared before you last week, Lieutenant-General Semianiw provided a very good overview of why the government implemented the new charter. My view is that we need to accept the fact that veterans are supported under two different benefit schemes, and that we are not going to rewrite the past.
Mr. Chair, I believe we must focus on addressing the challenges faced by veterans and their families today and tomorrow. If we do not deal with these challenges now, we will have to deal with the human cost later. If we study history, we know that more improvements will be required in the future, because as the nature of conflict changes, so do the needs of our men and women in uniform.
This is why I am recommending that a regular two-year review of the New Veterans Charter be enshrined in legislation so that it continues to adapt to the evolving needs of serving men and women, veterans and their families and that it continues to live up to the government's affirmation that it is a living charter.
In closing, as you are well aware, next year is the 100th anniversary of the start of the First World War. When Canada entered that war, it was not well prepared to deal with the thousands of returning casualties and with the ensuing demobilization.
Today, Canada is much better prepared to care for and support its ill and injured veterans and their families. However, better is not synonymous with sufficient. There is still work to do to ensure that this generation and future generations of veterans receive the care and support they need.
The year we commemorate the 100th anniversary of the start of the First World War and the year we end operations in Afghanistan should also be heralded as the year we fix the problems with veterans benefits and build a solid foundation of care and support for years to come.
Mr. Chair, committee members, we built on the past to get to the present. Let us now build on the present to get to the future. Our veterans and their families deserve no less.
I'll now turn the microphone over to Denys to carry on with the presentation of our new Veterans Charter review report.
Col Denys Guérin Senior Analyst, Office of the Veterans Ombudsman
Mr. Chair, I know the time is limited, so I'll walk through this briefing fairly quickly. In the interest of the chair's health and safety, I've put away my laser pointer. I'll have to just point at some of the slides here.
I'd like to start by reminding you about the four enhancements made to the new Veterans Charter through the Enhanced New Veterans Charter Act in October 2011.
While these enhancements were a good first step to improving support to veterans, there are a number of shortcomings with the new Veterans Charter that continue to affect injured or ill veterans and their families.
We broadened our review of the NVC and found that there were three specific areas most at issue for veterans. Mr. Parent mentioned the three areas: financial support, vocational rehabilitation and assistance, and support to families. There are specific shortcomings in each of these three areas. I'll cover them briefly in the next slides. Then I'll wrap up my presentation by listing the positive effects that can be achieved by addressing these shortcomings.
One of our objectives in reviewing the new Veterans Charter was to link shortcomings with actual veterans who are affected by the shortcomings. There are a lot of numbers on this slide, but I want to focus on the large numbers in bold to give you a sense of how we interpreted the statistics that are available to the department.
Taking, for example, the problem we identified with economic financial support after the age of 65, we started by looking at how many veterans there are in Canada, around 696,000; how many Veterans Affairs Canada clients there are, about 136,000; how many of these are Canadian Armed Forces clients, around 76,000; how many of these Canadian Armed Forces clients are totally and permanently incapacitated and cannot engage in suitable gainful employment, 1,428; and of these 1,428, how many are potentially at risk of living their retirement years with insufficient financial means, and the number is 406. We walked our way through that.
NDP
The Vice-Chair NDP Peter Stoffer
Before you continue, sir, and this is for clarification, does the 695,700 which you said was the veteran population include RCMP veterans as well?
Senior Analyst, Office of the Veterans Ombudsman
Yes, they are included in the 695,700.
NDP
The Vice-Chair NDP Peter Stoffer
Okay. It doesn't say that on the slide.
The total, he said, is 695,700. That's military and RCMP veterans.
Senior Analyst, Office of the Veterans Ombudsman
The reason we selected the totally and permanently incapacitated category to determine the cohort of veterans who are potentially at risk financially is that these are the ones who are assessed by Veterans Affairs Canada as being unable to generate wealth during their working years because they cannot engage in suitable gainful employment.
Here is another way to visualize the demographic data I have just given you. Each person on this slide represents 4,000 veterans. The clients of Veterans Affairs Canada are in blue. Thirteen per cent of the total number of Canadian Forces' veterans is in blue, and the number of veterans who are totally and permanently incapacitated is in red. As you can see, a very small number of veterans are totally and permanently incapacitated.
When we were looking at ways to fill the gaps in financial support, we used five scenarios in order to see what the impact would be. These scenarios represent veterans who are totally and permanently incapacitated at varying degrees of disability, various ages, rank, etc. I should point out that these scenarios represent real veterans. Real veterans were used in each of these scenarios.
Veterans often compare whether they would be better off under the Pension Act or under the new Veterans Charter, but to have a useful conversation about the adequacy of financial benefits, we believe you need to separate the benefits into two parts: the economic benefits and the non-economic benefits, which we refer to as compensation for pain and suffering.
This slide shows this breakdown. The three bar graphs on the left show the total monetary value of the benefits provided over the life of the corporal in scenario one. This was a 24-year-old who was 80% disabled. This should be provided over the life of the corporal under the Pension Act—the left bar—with the Manuge court decision and the new Veterans Charter. I would just remind you that the court decision removed the disability pension as an offset in calculating the income support, which explains why the blue line in the second bar is higher than the one on the left.
On this slide you can clearly see the effect of the court decision.
The three bar graphs on the right show the value of the compensation for pain and suffering: the disability pension is in yellow, and the disability award is in blue. You can see that the value of the pension is higher than the value of the lump sum.
Finally, the centre graphs show the value of the economic support benefits. You can see that the value of the new Veterans Charter economic support benefits is greater than that of the Pension Act benefits when the allowances, the permanent impairment allowance and the permanent impairment supplement, are provided. A discussion on how well the Pension Act and the new Veterans Charter compensate a veteran really depends on what you are actually comparing.
These graphs show the effects of the economic support benefits over time for scenarios one and five. The veteran in scenario five is a veteran without the allowances. The graphs clearly show how the economic support benefits drop off at the age of 65. When you compare the graphs, the graph on the left shows the effects of providing the allowances. The Pension Act benefits drop off because we are considering only the economic support benefits, and the pension is compensation for pain and suffering.
I would like now to quickly cover the three program areas at issue for veterans and their families.
First is financial supports. There are five shortcomings with regard to financial support, which were mentioned by Monsieur Parent. First of all, there is insufficient economic financial support after age 65 for totally and permanently incapacitated veterans who are at risk financially. Second, there's a reduction in salary after the veteran is medically released, which complicates an already challenging transition from military to civilian life. There's the unfair calculation of income support for part-time reservists. The earnings loss benefit for part-time reservists is based on a fixed amount rather than on the salary at that rank level. Over 50% of totally and permanently incapacitated veterans are not receiving the permanent impairment allowance and the supplements. Even though the enhanced new Veterans Charter improved the eligibility for these benefits, access remains a problem for some of the most seriously disabled veterans. Finally, the disability award has not kept pace with original benchmarks and specifically the maximum Canadian court awards for pain and suffering.
The following are some of the options we believe Veterans Affairs Canada should consider to address the shortcomings.
First, improve financial support after age 65 for totally and permanently incapacitated veterans, to ensure that the sum of their financial support from various government sources is at 70% of their pre-release salary. The reason we chose 70% is that it is a commonly recognized benchmark to maintain the same standard of living during retirement as you had during your working years.
Second, increase the earnings loss benefit from 75% to 90% of pre-release salary. By doing that, it equates to 100% of net salary, because while you're receiving the earnings loss benefit, you are not paying into CPP, EI, and superannuation.
Third, improve access to the permanent impairment allowance and the supplements.
Finally, increase the maximum non-economic compensation for pain and suffering to $350,000, and then conduct a comprehensive review to determine what the appropriate maximum compensation that should be provided is.
The second program area is vocational rehabilitation and assistance.
First, the program criteria of building on existing experience, skills, and training is too rigid and constrains education upgrade and employment options. While the department has recently improved the flexibility to access funding for vocational rehab and reduced red tape in this area, the program needs to be more flexible in allowing veterans to embark on new career paths that interest them, rather than shepherding them into career paths based on their past experience, skills, and training.
Second, the performance measurement to track whether veterans find employment and stay employed is inadequate. Veterans Affairs Canada needs to do better at measuring program outcomes, not just program outputs and cost, and they need to know whether, after completing the program, veterans find a job and actually stay employed.
Third, there are two programs, one from DND, the SISIP, service income security insurance plan, and one from Veterans Affairs Canada, that provide similar income support and vocational rehabilitation. This can create confusion for transitioning veterans, and it's unclear how beneficial and cost-effective this is. We believe we need to conduct an independent review of this dual program construct, to determine whether it is the best way to deliver vocational rehab and income support to veterans.
Finally, there are issues with support to families, notwithstanding that the new Veterans Charter provides more programs to families than ever before, and most advisory committees have stated that more needs to be done to support families.
Here are the main shortcomings, and most of these would require very little funding to address.
First of all, we need to provide more counselling to families, better outreach and communication, and follow-up to make sure their needs are actually being met.
We need to provide more support to help families transition to community care, and for those who can't find a family doctor, to help them with that.
The reduction of family support after the transfer from military life to Veterans Affairs Canada also needs to be improved, so we can better harmonize the support provided through the Canadian Armed Forces and Veterans Affairs Canada.
We need to compensate family members who provide primary care to their seriously disabled veterans. A number of spouses put their careers on hold or stop working completely to care for a disabled veteran. We believe they need to be compensated for the support and the sacrifices they make.
There's no access to a pension or dental service plan for a certain small group of veterans. We believe that needs to be addressed. Veterans Affairs Canada can provide a public service health care plan to veterans, and they need to make that extra step and provide the dental care for the small group of veterans who do not have it.
Finally, after the death of a veteran, there's an overly restrictive time limit of one year for a surviving spouse to apply for vocational rehabilitation and assistance support. In some cases, the spouse has small children at home and is not prepared to go back to work immediately. By having a one-year artificial limit, it basically prevents them from accessing vocational rehabilitation after that one year expires.
To conclude, there are some very positive effects that can be achieved if the new Veterans Charter shortcomings I've mentioned are addressed.
Veterans will have sufficient economic financial support during the rehabilitation period for those who can return to work, and for life for those who can no longer work. All veterans will be treated fairly and consistently for service-related injury and illness. Veterans will require the skills, training, and education they need to embark on new careers that interest them, which may, in the long term, reduce long-term dependence on Veterans Affairs Canada and other government benefits and services.
Families will be properly supported and will be able to help veterans adjust to their medical condition. They will be able to support their transition to civilian life.
Finally, veterans will achieve economic independence. They will experience improved health, wellbeing and quality of life.
Thank you, Mr. Chairman.
We stand ready for questions.
NDP
The Vice-Chair NDP Peter Stoffer
Thank you all very much for your presentation.
We turn to Mr. Sylvain Chicoine for five minutes.
NDP
Sylvain Chicoine NDP Châteauguay—Saint-Constant, QC
Thank you, Mr. Chairman.
I would also like to thank our witnesses for coming here today to share their thoughts with us. I would like to congratulate them for their excellent work which is evident in the report on improving the New Veterans Charter.
I am going to make a statement but please correct me if I am wrong. From what I understand of your report, those who are at the biggest disadvantage under the New Veterans Charter are probably veterans who are almost totally incapacitated or those who are seriously injured and have not accumulated 10 years of service.
What is the financial support for 65-year-old veterans? What is the potential impact on their lives? What kind of solutions should be considered in order to improve the lives of those veterans who have not accumulated 10 years of service and therefore will not be entitled to a pension at age 65?
Veterans Ombudsman, Chief Warrant Officer (Retired), Office of the Veterans Ombudsman
Thank you for the question.
You are correct. We focused on those veterans who are totally and permanently incapacitated. If they are not entitled to a pension from the Canadian Forces because they served for less than 10 years then they may receive a permanent impairment allowance. Aside from that, at 65 years of age they will receive no income from Veterans Affairs Canada. This is probably due to the fact that in past years, between the end of the Korean War and before the war in Afghanistan, there was a pension system and most members, when they were released for medical reasons, received a pension from the Canadian Forces. Therefore they had a guaranteed income for life.
Now, when there are missions like that in Afghanistan, soldiers often join the Canadian Forces to participate in that mission and then they leave the Canadian Forces. Therefore they are not serving for at least 10 years, which is the minimum number of years required for receiving a pension after you've been released for medical reasons. Given those circumstances, many veterans over the next several years will end up with a very low income, if any income at all, at age 65.
In our report, we identified that 53% of individuals who are totally and permanently incapacitated do not receive impairment allowances. Veterans Affairs Canada has a definition of an individual who is totally and permanently incapacitated. It makes no sense that individuals who are designated as such by the department are not receiving permanent impairment allowances, which would guarantee them an income after age 65.
NDP
Sylvain Chicoine NDP Châteauguay—Saint-Constant, QC
So these individuals could end up experiencing extreme poverty at age 65.
Veterans Ombudsman, Chief Warrant Officer (Retired), Office of the Veterans Ombudsman
Correct.
Veterans Ombudsman, Chief Warrant Officer (Retired), Office of the Veterans Ombudsman
Many of our recommendations would solve this situation, such as, for example, providing better access to impairment allowances, as we stated in our report. Even though Bill C-55, the Enhanced New Veterans Charter Act made improvements to the impairment allowance, access is still very restricted. Opening up access to that allowance would correct some problems.
I also stated that increasing the earnings loss benefit from 75% to 90% would give these veterans an opportunity to increase their retirement income. It would therefore be proactive.
We would like the department to consider these options.
NDP
Sylvain Chicoine NDP Châteauguay—Saint-Constant, QC
Fine.
Should the regulations allow contributions to the Canada Pension Plan using the earnings loss benefits? Would that be useful?
Veterans Ombudsman, Chief Warrant Officer (Retired), Office of the Veterans Ombudsman
Could you please repeat the question?
NDP
The Vice-Chair NDP Peter Stoffer
Your time is up. I'm sorry. I tried to be a little flexible here.
Now we go to the parliamentary secretary, Mr. Gill, for five minutes, please.