Backlog targeted as Veterans Affairs reports nearly $1B for ex-soldiers was unspent

OTTAWA — The federal Liberal government is facing fresh calls to eliminate a backlog of disability claims from ill and injured veterans amid revelations Veterans Affairs Canada failed to spend nearly $1 billion of its budget last year.

Veterans Affairs Minister Lawrence MacAulay’s office has denied any direct link between the backlog and the unspent money, which was part of a combined $38 billion in lapsed funds across the federal government in the last fiscal year.

But veterans’ groups and others are skeptical of the claim, saying more funds would have flowed to ill and injured veterans if their applications for financial and medical assistance had been approved in a timely manner.

“So you have thousands of cases where the dollars are not coming out of the budget because of the wait times and the backlog,” said Brian Forbes, national director of the National Council of Veteran Associations, which represents 60 organizations.

“Until they clean that up, there’s always going to be this residual carry-over.”

The amount of lapsed funds at Veteran Affairs and across government is spelled out in the most recent iteration of the public accounts, a report on federal revenues and spending by departments and agencies that is tabled in the House of Commons every year.

The $920 million that went unspent in 2021-22 represented the largest lapse at Veterans Affairs in a single year, and compares to nearly $1.1 billion that went unspent over a combined seven years under Stephen Harper’s Conservative government.

Veterans Affairs spokesman Marc Lescoutre blamed several issues for the unprecedented lapse, including problems predicting how many veterans would apply for assistance and the fact that fewer people accessed in-person health services than expected due to the COVID-19 pandemic.

Lescoutre also said the department took longer than expected to train and recruit hundreds of temporary employees hired to tackle the backlog of applications, which remained at about 30,000 claims at the end of September.

“While these additional staff significantly increased the department’s capacity to process disability applications, the time it took to recruit and train these term employees to become fully productive, as well as the attrition rates related to these positions, were underestimated,” he said in an email.

Yet in a separate email, MacAulay’s spokeswoman Erika Lashbrook Knutson refuted any link between the unspent funds and the backlog, noting that the number of unprocessed claims held by the department has dropped in recent years even as the lapse increased.

Veterans Affairs held 30,725 unprocessed applications for disability benefits from 23,505 individual veterans at the end of September, down from a peak of nearly 49,000 outstanding claims in March 2020. Over that period, the amount of lapsed funds doubled from $457 million to $920 million.

“The backlog does not have an impact on unspent funds,” Lashbrook Knutson said.

But not everyone is convinced, with Royal Canadian Legion dominion president Bruce Julian saying in an email that his organization was “surprised and concerned” to learn of the budget lapse at Veterans Affairs, and is demanding more clarity on the reasons for the unspent funds.

“We’d also like to be assured that the explanation of fewer people applying for benefits is not related to actual difficulties in accessing those benefits,” Julian added. “While we understand over-budgeting can happen in uncertain times, the pandemic is not a fallback for inaction.”

Julian went on to argue that the government should redirect some of the unspent funds to eliminate the backlog, “something that is taking way too long.”

The federal Liberals responded to mounting anger and frustration from Canada’s veterans’ community last February by promising to spend more than $140 million to retain 595 temporary staff who had been previously hired to deal with the backlog for the next two years.

Yet they fell short of heeding parliamentary budget officer Yves Giroux’s warning in September 2020 that the government would need to keep most of the temporary staff through 2025 to properly deal with the backlog.

Giroux also said at the time that the government could have eliminated the entire backlog by the end of 2021 by hiring 400 additional employees on top of those already under contract, which would have added $159 million to the budget. The Liberals did not follow that recommendation.

While the unspent funds have since been returned to the central treasury, the government says no veteran who qualifies for aid will receive less than they should. That is because new funding is made available every year, based on how many veterans the department estimates will need assistance.

But Union of Veterans Affairs’ Employees national director Virginia Vaillancourt, whose organization represents thousands of employees at the department, said the point is that too many veterans are waiting too long for help — and not getting the services they deserve in the process.

“Plain and simply, veterans are waiting for services and benefits, and that is the money that the government is giving back,” said Vaillaincourt, who has called for MacAulay’s resignation over a recent rehabilitation services contract between the department and an outside company.

“It’s not that the veterans don’t need it or aren’t entitled to that money. It’s because they are not providing that service at this point. And veterans are waiting.”

The Bloc Québécois and NDP added their own concerns about the lapse, which they also linked to the backlog.

“While some spending cuts are understandable and welcome in the current economic environment, others are surprising to say the least,” Bloc Québécois public accounts critic Nathalie Sinclair-Desgagne said in a statement in French.

“A shortfall of $1 billion at Veterans Affairs Canada, when we know that the average wait times are close to 30 weeks for French-speaking veterans, is absolutely unacceptable.”

NDP veterans affairs critic Rachel Blaney echoed those concerns, saying: “Instead of supporting veterans who desperately need support, the Liberals are leaving billions of dollars unspent.”

Julian and Forbes repeated past calls for the government to change the way veterans apply for assistance, suggesting claims should be automatically approved and verified later to ensure those in need are not forced to wait.

This report by The Canadian Press was first published Jan. 31, 2023.

Lee Berthiaume, The Canadian Press