Retired soldiers and Mounties, along with wounded veterans and their families, are among a group of former federal employees that the government targeted for savings in its budget Tuesday.
In its economic plan, the government announced it was going after $7.5 billion in savings by forcing participants in the government’s health plan for public servants to pay half of the costs, up from 25 per cent. Before 2006, it was even lower.
The changes have been criticized by retired public servants who have called on the government to honour its commitments to the program made in previous contract negotiations.
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The government’s budget document indicated the changes would affect “retired federal employees,” but it did not specify that soldiers, Mounties and some veterans wounded in Afghanistan would also be affected.
“I’m very disappointed in this move,” said Gordon Moore, Dominion president of the Royal Canadian Legion.
“These men and women put their life on the line. These young men and women who served 30, 35, or 40 years in the Canadian Forces or the RCMP, they made a commitment, and the government made a commitment at that time that they would look after them for life.
“And now the government of the day is turning its back on these veterans of both the Canadian Forces and the RCMP.”
Government calls changes 'modest'
But Tuesday, the government described the changes as “modest” and low cost for those affected.
“For a government employee opting for individual coverage in his/her retirement, a move to equal cost sharing would increase his/her annual payments to the plan from $261 to roughly $550.
"This increase, when fully implemented, would represent less than one per cent of a gross federal public service pension of $30,000,” the budget said.
But it's likely those changes are actually worth hundreds of dollars more because many former public servants, soldiers and Mounties opt for benefits for their families. That family coverage is more expensive.
Moore said the Legion wrote to Treasury Board president Tony Clement in November to discuss rumours of the benefit changes.
“Unfortunately, we did not get a response back,” Moore said.
The letter suggested the government is breaking a promise it made to the former federal employees, who held up their end of the bargain.
“Future retirees are going to end up paying 50 per cent of their total health cost, which is not the commitment the government made to them when they joined the Forces or the RCMP,” Moore said.
“As they get into their retirement years, what I am worried about is … are they going to have to take that out of their income? Because you know they have rent and all sorts of other expenses that they might have to choose as a priority over their own health.”
Indeed, the budget document itself anticipated such criticism and included a quote from the C.D. Howe Institute attacking the provision of such paid benefits.
'There is no case for taxpayers to cover 75 percent of the cost of the [plan].' - C.D. Howe Institute report
“There is no case for taxpayers to cover 75 per cent of the cost of the Public Service Health Care Plan, especially when such benefits are rare and becoming rarer in the private sector.”
Clement said Wednesday that the government would act to protect low-income retirees from being negatively impacted by the government’s move. But Clement maintained the 100 per cent cost increase for retired soldiers, Mounties, public servants and some veterans is fair.
“I believe I've been fair and reasonable in my approach to this while at the same time maintaining the integrity of a voluntary program that offers very generous supplemental benefits over and above what these retirees have available to them as by virtue of provincial health-care plans or other programs like the Veterans Affairs program,” he said.
Clement said the final details of the government’s proposed changes would be hammered out with the public service unions at the bargaining table.
“So far as I’m concerned, even though we have directed our attention in the budget to this issue, there is still time for the union to discuss the modalities of any changes with me. I want to be fair and reasonable, make sure that we protect low-income seniors, have a transition period so that this does not wallop people all at once. I don’t want to see that happen, as well.”
Some retired soldiers and Mounties belong to the National Association of Federal Retirees, an organization that Clement’s office said will be consulted in the talks.
But Moore said the veterans affected by these changes need their own representation.
“The Royal Canadian Legion would be more than grateful to be invited to the table so we can discuss these issues,” he said.