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[Recorded by Electronic Apparatus]

Tuesday, May 30, 1995



The Acting Chair (Mr. Richardson): Ladies and gentlemen, as the time is 3:30 p.m., the chairman is in the chair and the people who are making their presentations today are here, I'd like to welcome Mr. Nicholson, the deputy minister, and his team as we conclude the estimates and questions.

I turn the floor over to you, Mr. Nicholson:

Mr. David Nicholson (Deputy Minister, Department of Veterans Affairs): Thank you,Mr. Chairman, for allowing me the opportunity to provide an opening statement.

Other departmental officials accompanying me today are Mr. Serge Rainville, the Assistant Deputy Minister, Veterans Services; Joan Albert, Acting Director, Legislation and Policy; Len Malone, Chief of Policy and Analysis in the pensions area; and Rheal Bray, Director General of Finance.

I understand that the committee wishes to concentrate its attention on the proposed changes to the War Veterans Allowance Act that are contained in Bill C-76, the Budget Implementation Act. I wish to begin by providing a brief background to this matter.

War veterans allowance is a form of financial aid that ensures that qualified veterans and their dependants receive a guaranteed monthly income. As part of Canada's social assistance program, it is based on a modified income test in which most regular income must be considered to determine eligibility. In addition to the income requirement, there are also other criteria - war service, age or health, and residence - that must be met before an allowance may be awarded.

The original act, as passed in 1930, was intended to provide income support to qualified Canadian veterans and to veterans who were domiciled in Canada upon enlisting in a formal military allied force. Following pressure on the government to recognize allied veterans who had not been Canadians before that war, in 1950 a amendment was approved to recognize postwar residents. Initially the period was 20 years, but this was reduced to 10 years by 1960.

As part of this program's evolution, significant enhancements for recognized service occurred when the term ``allied veteran'' was interpreted to include those individuals with resistance service. In fact in the middle to late 1980s the program began to experience a significant growth in the number of recipients with resistance service. This led to unexpected demand for resources for veterans benefits.

Parliament was therefore asked to review the matter, and in 1992 decided that the basic intent of this program had been allowed to stray too far. Consequently Parliament chose to bar applicants with wartime service limited to a resistance group, but it allowed those who had already become recipients to continue being paid benefits under certain restrictive conditions.

Let me move along to the present. It is well known that in 1994 the government announced a program review initiative for all federal departments and agencies. The government concluded that in these times of severe economic restraint it had to ensure that only those programs that expressly fulfilled the purpose for which they were intended were retained.


Veterans Affairs Canada conducted its examination, and several cost-containment measures within this program were identified and incorporated into the 1995 federal budget. These changes are essential to guarantee the future of the program for veterans and their families. Additionally, these changes will return the program to its original purpose.

The government decided to amend veterans legislation to remove eligibility for resistance service and to restrict eligibility for allied service clients. The budget legislation will terminate eligibility for those recipients who had qualified for veterans benefits as a result of war service with a resistance group. They will lose their eligibility for war veterans allowance and health care benefits.

However, the change will not take effect until September 1, 1995, at the earliest. This date was chosen to allow sufficient time for all those affected to begin to seek alternative arrangements where necessary. Fortunately the majority of persons have already reached an age where they qualify for payments available under the old age security legislation. The level of income support offered under old age security very closely matches the payments otherwise available from the allowance program. In addition, as residents of their respective provinces, they are eligible to receive a host of social and health care benefits. Those who have not yet reached the age of eligibility for old age security benefits may seek assistance through their provincial or municipal agencies. This type of assistance would include access to provincially available health care services.

Among the other proposed changes are measures that will limit eligibility for applicants with allied veterans service. In future only those who were domiciled in Canada upon their enlistment in an allied force will be able to qualify. Those who previously qualified on the basis of postwar residency and are receiving the benefit abroad must return to Canada by the end of February 1996 and resume their full-time residence in this country in order to continue to receive benefits.

The reason for this change is that the allowance is really an income support payment. This type of benefit is normally paid here in Canada. This principle is in keeping with the long-standing belief that social assistance programs are designed primarily to help Canadians living in Canada.

I hope the information I have provided is helpful. I would now like to invite any questions you may have.

The Acting Chair (Mr. Richardson): The first question is from Mr. Mifflin.

Mr. Mifflin (Bonavista - Trinity - Conception): I'd like to thank the deputy minister and all the senior officials for being here in front of the committee. We've seen a lot of senior officials from Veterans Affairs Canada in the last six months, and it's always been a pleasant experience.

It seems to me that back in 1992 there were some media stories about fraudulent claims. How much of an impact, if any, did this have on the decision to change the policy?

Mr. Nicholson: I'm not too sure there was a significant impact in terms of changing the policy. Our attention was first brought to bear on this situation because of the number of applications coming in from those who claimed to have resistance service.

During the course of adjudicating, deciding upon those applications, it did come to our attention that certain fraudulent documentation was being presented in support of the claims.

At that time we immediately made contact with the Royal Canadian Mounted Police and asked them to conduct an investigation to determine if fraudulent documentation was indeed being prepared with these applications. It was almost concurrent with the peak build-up of applications.


We had cooperation from Greek embassy officials. There were two types of documentation we were relying upon. One was called the A certificate and the other was called the B certificate. One was presented and authorized by the people who were in control of the military over there, and the other was prepared and presented by those who were operating out of prefectures, similar to our counties in Canada.

Without going too far, I can say that the RCMP investigation is ongoing.

Mr. Mifflin: The other question I have is not a question of judgment. I suppose I can almost answer the question myself. I suppose it was creeping incrementalism that allowed this to happen. That really strayed away from the intent of veterans allowances. It was a little bit here, a little bit there, this is okay, only a few are involved. Is this the way it happened, or was it more profound than that?

Mr. Nicholson: It was a bit more profound, Mr. Mifflin. Actually there was an application presented to the old War Veterans Allowance Board in the mid-1980s. It was declined. The applicant chose to present it for review to a federal court. The federal court directed the War Veterans Allowance Board to re-examine the merits of the case. At that time they approved the allowance, which really opened the door rather wide to subsequent applications and approvals.

That's how it happened. It was really a judicial and quasi-judicial decision that opened the door.

Mr. Mifflin: That's all I have for now, Mr. Chairman. I'd like to reserve the right to come back on the next round.

The Acting Chair (Mr. Richardson): That's fine.

Mr. Hart.

Mr. Hart (Okanagan - Similkameen - Merritt): Thank you very much. It's nice to have you back again. Sorry I was a bit late. I missed the start of your presentation, but I read the material.

I'm just wondering something. If Parliament had never intended to make former resistance fighters eligible for the allowances, why has it taken so long?

Mr. Nicholson: Why has it taken so long to...?

Mr. Hart: To recognize that.

Mr. Nicholson: As I just indicated, this was as a result of the peak build-up in applications being considered in the late 1980s. The magnitude of expenditures, not only for the allowance itself but for the related benefits, health care and the veterans independence program, drew the department's and Parliament's attention to this. There is no question about that.

We began to research the issue. In researching the issue, going back to the old Hansards and trying to determine the original intent of the program, we determined that it was never intended to include this group. The group got in the door and joined the club, if you will, because of the quasi-judicial decision. That was the precedent. That established the new rules of the game.

Moving as quickly as we could, we brought legislation to the House. It was considered in 1992, and effective March 2, 1992. That set up the provision that if you qualified because of resistance service, in order to continue to receive the allowance you had be to resident in Canada as of March 2, 1993.

That's how the change came about. Were we slow in moving on it? I think not, given the events and the evolution of the problem. So it's taken some years to come to grips with it.

Mr. Hart: Does it affect any other group besides the resistance fighters?

Mr. Nicholson: Bill C-76 will also change the provisions for what we call allied veterans who were in receipt of the balance.

Mr. Hart: How about the Canadian Armed Forces?

Mr. Nicholson: There has been no change to Canadian veterans whatsoever.

Mr. Hart: Even if they were associated with the resistance movement?

Mr. Nicholson: We don't have any cases that I'm aware of, no.

Mr. Hart: Do other countries provide veterans allowances to persons who were involved in the resistance fight?


Mr. Nicholson: Canada is the only country that provides a comprehensive range of veterans benefits to the resistance.

In Australia at the present time there has been some policy creep. Our counterparts down there are moving now to close the door before it's opened wide. It's the same type of issue, quasi-judicial adjudicators, apart from government, making decisions based on some precedent.

Mr. Hart: That's all.

Mrs. Hickey (St. John's East): Mr. Nicholson, if a veteran can prove to the Department of Veteran Affairs that because of their illness it's better for them to live outside the country, is there any way we can assist them? Is there a program in place for that, or do they have to be back before February?

Mr. Nicholson: We have a temporary absence provision, which is the same as the old age security provision. This means that we permit absences for up to six months. For special cases where, for example, it's medically necessary to remain in a climate that's more conducive to health or that would ameliorate a particular health condition, we will look at that as a one-off situation and take a decision on that. We have approved those.

The Acting Chair (Mr. Richardson): Would you like to follow up now, Mr. Mifflin?

Mr. Mifflin: Yes. Do we have any indication of how many might come back to justify their claims?

Mr. Nicholson: Would you be referring to the allied area, Mr. Mifflin?

Mr. Mifflin: Yes.

Mr. Nicholson: We don't really know. We do know that most allied recipients of the benefit reside in Canada now.

Len Malone is the one who does all the statistical work and analysis. He could probably give you a much better figure than I would. With your permission, Mr. Chairman, I'd call upon Len to assist with the answer.

Mr. Len Malone (Chief, Policy and Analysis, Legislation and Policy Directorate, Department of Veterans Affairs): There are now in excess of 11,000 allied veterans receiving the benefits in Canada. That's a combination of clients who receive the war veterans allowance benefits and others who receive strictly health care benefits.

The number of those who are living outside the country is slightly in excess of 700. We don't have any way of determining the number who will come back. We're looking within that group. There are roughly 700 who are receiving the benefits overseas. By the end of February 1996 they will have to decide if they're coming back to Canada.

Mr. Mifflin: In a round figure, Mr. Chairman, what would those benefits be? Give us a ballpark figure for the monthly benefit.

Mr. Malone: The benefit they're receiving outside the country is the war veterans allowance. If people are married they will receive $1,400 per month. If they are single they will receive roughly $925 per month.

Mr. Mifflin: That's not an inconsiderable amount.

Mr. Malone: No.

Mr. Mifflin: Because the deadline is yet to be reached, how do you account for that in your budget?

Mr. Nicholson: The bulk of the projections are in the budget because both the war veterans allowance and the disability pension payments we make are almost a statutory payment. We do our annual forecasts and we would make provision there. If we don't draw it down, of course, it's returned to the treasury. We usually have a contingency in there for applications we're not aware of that might come in during an upcoming year. So there's a provision in there.

Mr. Mifflin: Are you getting much less back in the department?

Mr. Nicholson: No, we're not. We can tell you that the budgets in these areas will be reduced by these amounts because those savings have been booked.

Mr. Mifflin: In a budget?

Mr. Nicholson: To date I don't think we've had a lot of contact from those who are affected. In fact I'm somewhat surprised. To date it hasn't been significant.

Mr. Mifflin: Thank you.

Mr. Nicholson: I should tell you that they've been advised since early March, following the budget.

The Acting Chair (Mr. Richardson): That's the kind of issue on which you generally get a quick response.

Mr. Nicholson: Yes, it is.

The Acting Chair (Mr. Richardson): Would you like to follow up, Mr. Leroux?


Mr. Leroux (Shefford): My question deals with a different subject which has been raised recently.


Merchant navy veterans have appeared before our committee and if I am not mistaken they are not elligible at the present time. They are not entitled to an allowance, isn't it?

Could you explain the reasons why those people who served during World War II are not recognized? Could they be considered elligible some day? When they came to meet us I deplored the fact that they were not recognized like others when they also risk their life. I think that they have contributed to a very large extent to the allied forces victory during World War II.


Mr. Nicholson: Yes, sir. Actually, merchant navy veterans who served in the merchant navy during World War II, were they injured on duty, did qualify and always have qualified for disability pensions, if they were disabled as a result of their service.

As of 1992 we've extended the full range of veterans benefits to merchant navy veterans. Up until 1992 they were not receiving the full range of benefits. Since 1992 they have. It's our responsibility to ensure that they do receive the same level of benefits and programming as other veterans in Canada.

The merchant navy associations we work with have identified to us, from their point of view, some gaps in the program. We continue to meet with them to try to identify where those gaps may be. If they have to be closed, we'll close them.


Mr. Leroux: Thank you. You explained it well. Maybe my colleague from the Reform Party has something to say about that?


The Acting Chair (Mr. Richardson): Are you finished, Mr. Leroux?

Mr. Leroux: Yes, I'm finished.

Mr. Hart: One area I think the merchant navy was concerned about is the merchant navy POWs. Has there been any movement on that? They were trying to get it recognized that they had spent longer in POW camps than other veterans. Is anything happening there?

Mr. Nicholson: As a matter of fact, yes. It was this committee that requested the department for us to study the issue and report back. It's my understanding that we've tabled that report. We're aware of the issue.

Many of the merchant navy who were captured early in the war did spend many months in prisoner of war camps during the war. It has always been the position of the government that it's very difficult to try to assess the level of pain and suffering faced against months of service, but we do have compensation graduated at certain levels of payment. For example, 89 days of incarceration would trigger a certain amount of payment. I think for 300-and-some days, it is another amount. But it is capped at an amount. It is capped for the merchant navy as it is for regular force servers in the army, navy and air force.

The Acting Chair (Mr. Richardson): If there are no other questions, I'd like to move to the outlook documents. The first question will be from Mr. Mifflin.

Mr. Mifflin: I want to zero in on the commemoration aspect of the outlook document.

At the outset, I want to congratulate the deputy minister and his staff on the success of the Canada Remembers program. I think it has been an unqualified success.

I had an opportunity to speak to the Secretary of State just before Question Period and I think it brought home the meaning of what veterans affairs is all about. It was not just the commemoration here in Canada - which I, by accident, played a role in, as we all did as members of Parliament - but particularly in the overseas portion, which I know is much more difficult to organize and I believe was an outstanding success. You are to be highly commended and congratulated for that.


That's the preface. The follow-on is this: where do we go from here in the commemorative budget? You must be scratching your head. How do you have a repeat performance of the Canada Remembers 50th anniversary? What kind of activities are planned? Is there a danger of the commemorative aspect of Veterans Affairs Canada languishing because of this highlight that has come and gone?

Mr. Nicholson: First of all, thank you very much for your complimentary remarks on the success of the program.

Mr. Chairman, I erred in introducing the other departmental officials by merely introducing Mr. Rainville as the Assistant Deputy Minister of Veterans Services. The fact is that he carries two titles. He is the Executive Director of our Canada Remembers program and by and large is responsible for the leadership of the program.

In answer to your question, Mr. Mifflin, this question comes up very often. It has been a fantastic year and a half of significant events in commemoration of Canadian veterans. It's going to be a very difficult act to follow. I'm sure many of you who didn't have the opportunity to travel to Holland between the end of April and May 10 would have seen on television the tremendous outpouring of sentiment and support for Canadian veterans who were there.

One of the more significant aspects of the response by the Netherlanders was that of the youth. I know it's a little different for Canadian youth, who weren't occupied by an enemy power. But the fact of the matter is that all of us who are charged with a responsibility for commemoration in this department were not only touched by the involvement of youth, but we carried home a lesson. We think this is the way we have to go. I mean, let's tell it the way it is. The average age of our veterans is 74. For many of them the visit back to Holland last month is probably the last time they'll be able to go back and carry this off.

Through the Canada Remembers program we've structured several programs that involve the youth of Canada. We're even involved in providing supplementary items in the Teach magazines that go to all the teachers in Canada. We're not trying to steer the curriculum development of the provinces, but we are setting out questionnaires and explanations of the events of World War II that relate to Canadian history, providing teaching guides to teachers, as a start, to try to introduce more in our history books. Heaven knows why most of the history books in Canada are silent on the point.

We traditionally take a cadre of youth with us on these revisits or pilgrimages. This year we decided the way to select these young people would be to have them develop teams to make films of interviews with veterans, questioning veterans on their exploits during the war and how they contributed to the war effort, whether they were on the front lines or serving here at home. I believe there were 400 participants, and from those we selected the top 10, the top 5 teams. They were the ones who came along on the pilgrimage. This is the type of thing we want to continue in the future.

Mr. Rainville has all kinds of ideas on how we're going to build upon the successes we've had. We know it's going to be a significant task, but I can tell you that we're all encouraged. There's been a real reawakening, I think, a comprehension of what happened. The young people today are writing in. They want our books and brochures, they want to talk to veterans, they come out to the meetings in the legions and things like that. We think the opportunity is there; it's up to us to assist others and ourselves to grasp it.

Would you like to add anything, Serge?

Mr. Serge Rainville (Assistant Deputy Minister, Veterans Services): Yes, I would like to add one specific thing. We had a very good suggestion by Mr. Hart on the last trip to establish a speakers' bureau so that people could go around and really get youth involved. We're going to follow up on his recommendation.


We're not at the end of the celebration yet. We are intending to close the year on November 11 next. Just stay with us. You will see something you haven't seen for the last 50 years, I can promise you.

Mr. Mifflin: I just want to make an observation. I don't know whether other members of the committee share it or not. I've noticed a very definite involvement of the Royal Canadian Legion and veterans in visiting schools, creating an awareness that I can tell you was not there ten years ago. It may have been there, but I think it was either quiescent or dormant. Specifically, in the last three years in the larger schools - I've managed to do two, three or four on November 11 - the fact that the veterans are visiting...the students are more knowledgeable.

In fact, last November 11 I was at Ascension Collegiate in Port de Grave, which is one of the larger schools in my riding, with about 12,000 students. They put on a show that was magnificent. I wasn't shocked but I was delightfully surprised that students could create this kind of feeling. A young girl, probably about 15 or 16 years old, won the award for an essay. There wasn't a dry eye in the audience when she produced it.

If this is the kind of activity you will be involved in following the success of Canada Remembers, then I think they would be resources well spent.

The Acting Chair (Mr. Richardson): Could I take some licence? I'd like to say the same thing on the Canada Remembers program. I've spoken at four so far and I'll be speaking at another one in June, and they were extremely well attended. The legions were sponsoring them, as were the army, navy and air force clubs. But they did bring the community in. They brought the Boy Scouts, school choirs and bands, and I thought it was a good balance.

I know you had a team in the field doing a lot of work with them and they all recognize that as well. I just wanted to reinforce that there was some very good work done there.

Mr. Nicholson: Thank you, sir.

Mr. Rainville: Thank you.

Mr. Hart: I think you know how I feel about the Canada Remembers program. It was a worthwhile experience. I'm glad to hear there will be a speakers' bureau, or that you're working toward it. That's a great idea, because it was mine.

Some hon. members: Oh, oh!

Mr. Hart: The other thing I would like to mention is that one group I noticed as being absent - and it seems like a natural to me - was the youth who participate in the cadet program in Canada. We have some 70,000 young Canadians. It would be worthwhile if they were part of the program to remember World War II. I actually thought it would have been nice to have a small group. I know it's costly. I'm not saying anything against the youth who were there, because they were fabulous kids and they did a great job representing Canada, but it did strike me that our 70,000 cadets weren't represented.

One of the things that really struck me was the care and attention to the graves; the War Graves Commission does a super job. Going through those cemeteries, seeing rows and rows of white headstones, neatly manicured lawns, trimmed bushes and everything just absolutely beautiful, right down to the birds that are in the background - I thought they must be mechanical because it was so incredibly beautiful - I thought of something that has been brought to my attention.

During the period around 1918, I think, we sent Canadians to Vladivostok in Russia. There are Canadian graves left in Vladivostok that are in a terrible shambles. Headstones have been stolen and knocked over. Graffiti has been painted on some of the headstones. It seems a shame that we forget about those. I think there are about 25; one of them is a former member of the RCMP and the rest are military.

Is there anything we can do, or is this going to have to be...? Maybe it should be the private sector that picks up the slack on this one, but people have to know about it. I've seen the pictures and I was very disturbed.


Mr. Nicholson: We've seen the pictures too. It is my understanding that we've been in touch with the Commonwealth War Graves Commission and they're doing something about it now. Isn't that correct?

A voice: Yes.

Mr. Nicholson: As you probably know, Canada's contribution to the Commonwealth War Graves Commission represents about 10% of their annual budgetary requirements. We've had nothing but first-class effort from them whenever we bring to their attention that there's a problem, perhaps with vandalism or graffiti on the stones. It's very hard to believe there are still people in the world who would do that. But this situation was brought to our attention. It almost seemed as though the graves were abandoned, but we have been given to understand that this deterioration happened over a very short period of time. They've moved in there now and they're restoring those back to their original state.

The Acting Chair (Mr. Richardson): I heard that at some stage we had reduced the mileage allowance for veterans. Whether it was to go to a centre or to a doctor, I don't know. Maybe it was the timing, because the federal government allowances went up and theirs went down and I got a little heat at the same time. Why were we doing this to our veterans when the members of Parliament were getting a raise? It wasn't an easy question to answer. I didn't know the amount, so I just said I would look into it. I have the names. What was the amount and what was the rationale, just for my own information?

Mr. Nicholson: The support we were providing to veterans for travel in some cases wasn't being used for its original medical intent, so we recognized that we had to tighten up the controls in that area. We haven't really come down with the final decision yet because we're right in the middle of consultations with the three major veterans organizations - the National Council of Veterans Associations, The Royal Canadian Legion and the Army, Navy and Air Force Veterans in Canada.

I think it's fair to share with the committee that we got caught with a bit of a broadside here. What we were looking at was establishing a rate for out-of-pocket expenses for veterans that would be the same as out-of-pocket expenses for public servants. At the time we put the figure on the table, it was 10¢. This is when you self-direct. It's not to pay for a car; it's to pay for your gas and oil and out-of-pocket expenses.

In the middle of our discussions with the veterans organizations we received 2¢...not right across the board, but some provinces received an increase, as did parliamentarians. So we've gone back to the veterans organizations to reopen our consultations. It's fair for me to tell you that at the end of the day we're not going to provide less than public servants would get for self-directed travel.

The Acting Chair (Mr. Richardson): Are there any other questions?

I think we'll now go through the main estimates you have in front of you. The votes we'll be voting on and approving are the main estimates and I'd like to wind them up today.


Vote 1 - Operating expenditures $494,832,000

The Acting Chair (Mr. Richardson): Shall vote 1, less the amount of $123,708,000 voted in interim supply, carry?

Vote 1 agreed to

Vote 5 - Grants and contributions $1,470,369,000

The Acting Chair (Mr. Richardson): Shall vote 5, less the amount of $367,592,250 voted in interim supply, carry?

Vote 5 agreed to

Vote 10 - Program expenditures $4,135,000

The Acting Chair (Mr. Richardson): Shall vote 10, less the amount of -


Mr. Leroux: I would like to ask a question on Vote 10.


What will become of this budget once Bill C-67 is passed? Will this money be used for...


Mr. Nicholson: Excuse me, is that Bill C-67, the pension reform bill?

Mr. Leroux: Yes. What will happen with these amounts? Will they be transferred?

Mr. Nicholson: If the bill receives parliamentary approval, once it's enacted and if there's a combining of the Veterans Appeal Board and the Canadian Pension Commission, we'll bring the two budgets together.

The Acting Chair (Mr. Richardson): Shall vote 10, less the amount of $1,033,750 voted in interim supply, carry?

Vote 10 agreed to

Vote 15 - Program expenditures $6,447,000

The Acting Chair (Mr. Richardson): Shall vote 15, less the amount of $1,611,750 voted in interim supply, carry?

Vote 15 agreed to

Vote 20 - Program expenditures $2,767,000

The Acting Chair (Mr. Richardson): Shall vote 20, less the amount of $691,750 voted in interim supply, carry?

Vote 20 agreed to

The Acting Chair (Mr. Richardson): Shall the chair report the main estimates to the house?

Some hon. members: Agreed.

The Acting Chair (Mr. Richardson): Thank you. I would like to say that this was a rather quick meeting.

Mr. Mifflin: It always is when you're in the chair.

The Acting Chair (Mr. Richardson): I guess they wanted to get me out of this chair quickly.

Thank you very much, everyone, for your cooperation. I declare this meeting adjourned.