The salaries of Canadian soldiers and police officers serving on recognized overseas missions will no longer be federally taxed, Defence Minister Harjit Sajjan said Thursday.
The tax exempt status is retroactive to Jan. 1, 2017, and will apply to the 1,450 personnel who are currently deployed on international operations.
The cost of the program is currently pegged as a $43 million per year, a calculation based on revenue that will not be collected.
The tax free status had previously been tied to the level of risk associated with each mission; the higher the risk, the more likely the benefit would kick in. Troops in Kuwait lost the tax-free status last fall when the mission's risk level was downgraded.
The changes announced Thursday essentially remove that caveat and put each overseas assignment on the same level.
But the cost of the policy will likely rise because the Liberal government intends to send more troops and police overseas in the coming months and years as part of a renewed involvement in United Nations peacekeeping.
Some members deployed in Kuwait have complained they were being unfairly treated because of changes that removed their tax-exempt status.
Troops serving in dangerous or difficult assignments will still get extra pay in the form of a hardship allowance, the minister said.
"This is just one portion of the defence policy, which is going to be focusing on our people," Sajjan said prior to addressing the graduating class at the Royal Military College in Kingston, Ont.
Later during his speech to newly minted officers, Sajjan laid down other markers that will, in all likelihood, be addressed in the long-anticipated defence policy.
The defence policy will be released on June 7 after over a year of consultation.
Approach to care insufficient
The Canadian government has an obligation to the people who serve, Sajjan said.
"It is my view that successive governments have not always held up their end of the bargain nearly well enough," he said. "The fact is, our whole approach to care is insufficient to meet the challenges of a modern military and the needs of our women and men who serve."
The Defence Department has been inundated with complaints — and sometimes embarrassing public stories — from retiring members who often go months before receiving pension cheques and severance payments. There are gaps in benefits coverage and confusing requirements, particularly for those facing medical release.
The problems are the result of not having "enough trained staff to offer the level of support our members need," Sajjan told the cadets, without pointing at cuts by the previous Conservative government — something he has done in the past.
"After serving Canada for years, some Canadian Armed Forces members report feeling abandoned, uncared for and the victims of a broken system," he said.
"Making the transition to civilian life has been too hard and the frustrations of red tape are too numerous. This is not the message of gratitude a government should be sending troops at the end of their military careers. We need a new approach."
It is unclear whether the upcoming defence policy will address these long-standing concerns, but Sajjan's remarks raise the bar of expectation.
The minister also noted gaps in the military health system.
"We see the strains of over-extension when it comes to taking care of Canadian Armed Forces members and their families," he said. "Having too few people in critical support roles means the level and quality of care has been inconsistent."
The comments are significant because senior members of the military and successive defence ministers over the years have appeared before House of Commons committees defending Canadian Forces Health Services as "among the best in the world."
No simple solution to college concerns
Sajjan also addressed low morale, suspected suicides and alleged sexual misconduct at the college, an issue that was the subject of a recent report.
The analysis, released by the chief of the defence staff in March, found leadership tension, negative role models and some cadets afraid to ask for help.
The 227-page report listed a variety of administrative and institutional reasons for the problems, including "inadequate" training for new military and academic staff.
But the assessment rejected the notion there is a culture of bullying and sexual misconduct.
"There are no simple answers to how we deal with these challenges," Sajjan said.
"There is no single cause we can eradicate overnight. If there was, we'd do exactly that. But you should know the government of Canada and the Canadian Armed Forces chain of command are focused on taking whatever steps are necessary to ensure the college and the entire military family emerge stronger than ever before."