Billion Dollar Accounting Error a Burden on our Veterans

Recently, a Federal Court judge signed off on a class-action settlement between Veterans Affairs Canada (VAC) that will see taxpayers’ foot the $1 billion bill for a minor accounting error.

That error was made by VAC staff back in 2002 and was so innocuous that it would not be discovered for another eight years. It involved a minor change made to tax forms in 2001 that separated federal and provincial tax exemptions. This minute change, which involved relatively small sums of money owed to veterans because of these tax exemptions, went overlooked by VAC staff until 2010, and ballooned over time. In the end, the mistake shortchanged approximately 272,000 disabled veterans to the tune of $165 million.

When the mistake was finally caught by VAC staff in 2010, they corrected it, but made no effort to notify or compensate those 272,000 disabled veterans who were affected. The Minister of Veterans Affairs at the time of discovery, former Conservative MP Jean-Pierre Blackburn, seemingly never bothered to address the matter publicly. In fact, the error would still go unnoticed for another seven years, until former Canadian Veterans Ombudsman Guy Parent’s office discovered it, which then took VAC another year to confirm. The class-action lawsuit was filed in 2019 and has finally been settled.

If it feels like an exhausting timeline to discover and compensate veterans for a minor calculating error, many of whom were living on fixed incomes, it’s because it is. A compensation program was announced six years ago, and at that time, it was estimated that 170,000 of the 272,000 veterans had already passed away. The program, which started in 2019, has only paid out about half of its funds so far to affected veterans and their families. Many of the veterans affected would have been living on a fixed income, and this accounting error, in some cases, would have meant some of them would have been out hundreds of dollars a month in compensation.

To this day, nobody was held accountable for the error, nor for the decision by the department, under former Minister Blackburn, to keep the matter quiet once discovered. We aren’t certain if the department simply assumed the matter would never be uncovered, and that the government wouldn’t be on the hook for the amounts owed to veterans. This is a perfect example of why we need offices like the Veterans Affairs Ombudsman. We need people to advocate for those who have given so much of themselves for their country.

The approximately $1 billion in compensation is the result of the settlement between the class action complainants and the Government of Canada. It includes the $165 million already earmarked for the previously noted compensation program, and $817 million in compensation, which includes interest for the amounts owed but not paid to veterans.

It’s a perfect example of why honesty is always the best policy. The department could have come clean about the error, informed veterans, and came up with a plan to compensate them in 2010 or 2011. Instead, it was swept under the rug, forcing the Ombudsman to discover the error, and again forcing veterans to take the government to court.

Whether by cutting red tape to make it easier for veterans to access the services they need, to reversing the privatization of rehabilitation and mental health services or eliminating the sexist golddigger clause that prevents spouses from accessing veterans’ benefits, we need to make things easier for the people who have served our nation. It’s exhausting hearing about the number of hoops veterans need to jump through just to be treated with dignity and respect by their government.