Evidence of meeting #15 for Veterans Affairs in the 44th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was pension.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

Eric Ping Hung Li  Associate Professor, The University of British Columbia, Canadian Institute for Military and Veteran Health Research
Crystal Garrett-Baird  Director General, Policy and Research, Department of Veterans Affairs
Virginia Tattersall  Director General, Compensation and Benefits, Department of National Defence
Simon Crabtree  Executive Director, Pensions and Benefits, Treasury Board Secretariat

2:25 p.m.

Liberal

The Chair Liberal Emmanuel Dubourg

Thank you very much, Ms. Blaney.

I now give the floor to Mr. Frank Caputo, the first vice-chair of the committee.

Mr. Caputo, you have the floor for five minutes.

2:25 p.m.

Conservative

Frank Caputo Conservative Kamloops—Thompson—Cariboo, BC

Thank you, Mr. Chair.

I'm going to actually follow up because I believe that MP Blaney kind of stole my thunder there.

I'm really having trouble with the numbers with this and how it all works. As the panel has probably gathered, one of the biggest points of contention is a veteran attempting to provide for their spouse or partner and the money they attempted to provide for their spouse or partner ultimately is relinquished and does not come back to them.

I'm sorry. I just launched in because I was so inspired by MP Blaney's question. First off, I thank you all for your service and for being here. I neglected to say that right from the get-go.

This is for Mr. Crabtree or Brigadier-General Tattersall.

I'm going to use an example because I'm having a lot of trouble visualizing this. For me, it's helpful if we use tangible numbers.

Let's say a veteran has a $4,000 pension monthly—a big pension. They can give 20%, 30% or 50% or something along those lines and they decide to give 50%. That means that they're putting away $2,000, as I understand it, every single month. That $2,000 is there to compensate in the event that the veteran passes prior to their surviving spouse. Is everybody with me so far?

After four years, roughly $96,000, by my math, has been put aside at $2,000 per month over four years. If I understand this correctly, hypothetically, if the spouse or common-law spouse passes away at the four-year mark, is that $96,000 never to be seen again?

2:25 p.m.

Executive Director, Pensions and Benefits, Treasury Board Secretariat

Simon Crabtree

I will go on this one first.

In essence, you're right that the amount that's reduced of the benefit is forgone. Pension plans are a pooling of risks between members. They're not designed to pay out in every case for exactly what people pay into them. There are many employees or members who pay into these plans who never receive what they paid into them because they are deceased before they can yield those benefits or otherwise. That's true across all of our public sector plans.

As I said, I would look at the optional survivor benefit like purchasing a term life insurance policy. You are paying something for an insurance benefit that would be paid out to a spouse, but if that spouse predeceases you, those contributions you made to that term life insurance policy would not be returned to you afterwards. It is an insurance that you'd be purchasing, essentially. This is similar.

2:25 p.m.

Conservative

Frank Caputo Conservative Kamloops—Thompson—Cariboo, BC

Of course, I see. The distinction I draw, sir, is this. Say I pay $1,000 a year for an $800,000 policy. In other words, I will probably never see that $1,000 a year. The reason I'll never see it is that I am a 43-year-old who is unlikely to perish. An actuary has done the math and said that this is where it's going to go. Now, never seeing that $1,000 again on a term life insurance, I think we can all agree, is substantially different from paying 50% of your pension into something for your spouse and you never see it again if your spouse dies first.

Am I being clear, first of all, on this?

2:30 p.m.

Executive Director, Pensions and Benefits, Treasury Board Secretariat

Simon Crabtree

You're being exceptionally clear, but I would make the point here that we're talking about very different time horizons. Most of these people opting into an optional survivor benefit have very little time to accumulate any money into a plan. If they were to go out at 65 and buy a term life insurance policy, for the kind of money that we're talking about, they wouldn't be paying $1,000 a month. They'd be paying many thousands of dollars a month.

It's very similar to a term life insurance policy if they were going to go out to the private market to buy a similar type of coverage. It's actuarially derived. These calculations are representative of the real cost of the plan for offering this benefit. These are not unfavourable calculations.

2:30 p.m.

Conservative

Frank Caputo Conservative Kamloops—Thompson—Cariboo, BC

I fully understand what you're saying there, because you're right that buying term life insurance at 65 is a lot different from buying term life insurance at 43. I am mindful of that.

In anybody's experience, is there some sort of information gap here that people may not be realizing and seeing that? If I'm a veteran and I'm paying $2,000 a month—

2:30 p.m.

Liberal

The Chair Liberal Emmanuel Dubourg

Mr. Caputo, I'm so sorry, but you'll have to come back to that in the next round.

2:30 p.m.

Conservative

Frank Caputo Conservative Kamloops—Thompson—Cariboo, BC

I was on a roll, Chair, but go ahead.

2:30 p.m.

Liberal

The Chair Liberal Emmanuel Dubourg

I understand that.

2:30 p.m.

Conservative

Frank Caputo Conservative Kamloops—Thompson—Cariboo, BC

Thank you.

2:30 p.m.

Liberal

The Chair Liberal Emmanuel Dubourg

I see that Ms. Blaney has inspired you.

To conclude this round of questions, I'd like to invite Mrs. Rechie Valdez, for five minutes, please.

May 20th, 2022 / 2:30 p.m.

Liberal

Rechie Valdez Liberal Mississauga—Streetsville, ON

Thank you, Chair.

Thank you to all the witnesses joining us for this important study. We've spoken to many witnesses, and as my colleagues have mentioned, this topic is very sensitive and a lot of them have been very impacted by this.

I'm going to direct these questions to Ms. Garrett-Baird. Hopefully they are for you, and if not, you can redirect me.

You mentioned that the $150 million has not been used as of yet, and obviously the work, it sounds like, is now under way with the report that's been put in front of us. Are you able to share what alternative programs, if any, can be used to distribute the $150 million? Are we at the point where you're formulating or thinking through what we're able to distribute or hoping to distribute?

2:30 p.m.

Director General, Policy and Research, Department of Veterans Affairs

Crystal Garrett-Baird

What we're doing right now is based on the the qualitative and quantitative research, both of which were inevitably delayed due to the pandemic. I think that's a very key consideration here. Now that we have it, we have been looking at it, and we're now using it to determine the options and the right approaches that could be a consideration for a veterans survivors fund and how best to support this population.

That's where we're at, while taking into consideration the other programs and services that the department offers, such as the veterans independence program, disability pensions, the income replacement benefit and the VAC assistance line, and then other social support programming, such as the guaranteed income supplement, old age security and the Canada pension plan. We're looking at things holistically as we look at the options and the data.

2:30 p.m.

Liberal

Rechie Valdez Liberal Mississauga—Streetsville, ON

I appreciate that context.

I'm going to transition to asking you a bit about the Quebec model. As I understand it, this system deems the spouse of public sector retirees eligible for pension regardless of age at marriage.

Have any other jurisdictions that you know of used this model? Do you think it could be used at the national level?

2:30 p.m.

Director General, Policy and Research, Department of Veterans Affairs

Crystal Garrett-Baird

I can't speak to the model from a pension perspective. I can only speak to what Veterans Affairs Canada is providing and what it does.

Perhaps my colleagues at the Treasury Board Secretariat would like to weigh in on that.

2:30 p.m.

Executive Director, Pensions and Benefits, Treasury Board Secretariat

Simon Crabtree

I can speak to this at a very high level.

We know that only a few pension plans in Canada offer a survivor benefit to a spouse or common-law partner whose union begins after retirement. As you pointed out, there is the Quebec plan, but there is also the Ontario Municipal Employees Retirement System, both of which have those. In both cases, the benefit is provided to the spouse at death and is only provided to that one survivor. That's to say that a married spouse would have priority over a common-law spouse in cases where a plan member was, say, separated at the time of death.

Even in plans that may offer that postretirement benefit, there are still obviously some eligibility restrictions. That means the person living with the member may not, upon their death, receive a survivor benefit.

It should be noted that these plans provide a benefit that's a percentage of what the member was receiving rather than a percentage of an unreduced pension benefit, which is what we offer under the public sector plans here in the federal government.

2:35 p.m.

Liberal

Rechie Valdez Liberal Mississauga—Streetsville, ON

I got it. Thank you.

As you've heard already, since we've talked about it before, the U.S. is trying to take steps to remove the gold digger clause. It's very hurtful. Put yourself in their position. Who wants to be called a gold digger?

Has Veterans Affairs conducted any cross-jurisdictional research to look into having this removed here in Canada, or for the Canadian government to remove it?

2:35 p.m.

Director General, Policy and Research, Department of Veterans Affairs

Crystal Garrett-Baird

The focus of the work at Veterans Affairs Canada has been the research on the population and the veterans survivors fund. Given that we do not have jurisdiction over any of the pension plans referenced, whether it's the RCMP Superannuation Act, the Canadian Forces Superannuation Act or the Public Service Superannuation Act, we have not done comparisons, but my colleagues from either National Defence or TBS may want to add there.

2:35 p.m.

Executive Director, Pensions and Benefits, Treasury Board Secretariat

Simon Crabtree

Speaking broadly here for a moment, I would first say that it's unfortunate that the gold digger connotation is associated with this provision, because it's really not what it's intended to do. I think the restrictions on marriage after retirement were about aligning with family law and direction as to who would have rights to pension assets; wherein, family law would guarantee the rights of spouses regarding assets acquired during a period of marriage or common-law union.

As far as studies are concerned, we haven't done much work in this respect. There has not been much direction. Obviously, the question comes up from time to time.

The provisions offered under the plans are very similar to what's offered under most other Canadian plans. As we noted earlier, the optional survivor benefit is actually a more generous and flexible option that was added to our plan, and that doesn't exist elsewhere.

2:35 p.m.

Liberal

Rechie Valdez Liberal Mississauga—Streetsville, ON

Thank you.

2:35 p.m.

Liberal

The Chair Liberal Emmanuel Dubourg

Thank you, Mrs. Valdez.

I'd like to propose to all of you, witnesses and members, that we do another round of questions for 25 minutes, and after that we can take a health break. We have until four o'clock. Are there any objections? Can we go on with another round of 25 minutes?

2:35 p.m.

Some hon. members

Agreed.

2:35 p.m.

Liberal

The Chair Liberal Emmanuel Dubourg

That's great.

I invite Mrs. Wagantall, for five more minutes, please.

2:35 p.m.

Conservative

Cathay Wagantall Conservative Yorkton—Melville, SK

Thank you, Chair.

I look at this, and it concerns me deeply. I don't think we're advising our veterans on the best direction of action to take as they get older. If they choose to get married at 60.... Obviously things are different now from what they were many years ago, and this is a norm.

I am concerned that, since 1994, there have been nine private member's bills on this issue, a motion in 2006 and then a 2015 mandate letter from the Prime Minister that made it a top priority to eliminate the marriage after 60 clawback clause. Then, of course, in budget 2019 that was all gone, and we're into a veterans survivors fund approach.

Clearly, I don't think our government is in a position right now to look at what this would cost to make those changes that, on a personal level for these veterans, should really be there.

I have a question about that $150 million over five years, and that it hasn't been spent. The way I read it, it says, to better support the surviving spouses married after age 60, budget 2019 announced $150 million over five years starting in 2019 to create a veterans survivors fund. However, as you were saying, that needs to be created—$30 million a year. Why is there not far better research going into what this needs to be moving forward? It looks to me that it's not going to be set up well, if it is set up at all, and it needs to have proper research.

Dr. Li, what would you have liked to have available to you to do a more rounded approach to the particular study you did?

2:35 p.m.

Associate Professor, The University of British Columbia, Canadian Institute for Military and Veteran Health Research

Dr. Eric Ping Hung Li

I would suggest that there would be some data triangulations that we would have to put together. When I am doing my qualitative research, I know that StatsCan is also putting out their numbers. I think a certainly it would be nice to see both datasets compared to each other. That would be one next step that I would like to see.

I also see some opportunities about getting those actual individuals who are impacted and seeing the needs and how our government is helping them. As I mentioned, there would be a spectrum of veterans and also their survivors who fall into these particular categories. Many of them are aged 70-plus, and many of them are living in very remote areas. That is not like someone you can see every day in Vancouver or Toronto.

Having said that, more effort needs to be put into identifying those individuals who are impacted. I think that would be my suggestion.