Ottawa rescues military disability insurance plan with $622 million bailout

Higher-than-expected disability claims are draining the Canadian military's long-term disability insurance plan. The Liberal government is pouring over $622 million into the plan to prop it up, according to newly released budget documents.

Cash injection follows $887-million settlement of veterans class-action lawsuit over disability payments

Canadian Army soldiers practice live fire exercises in Valcartier, Que. The federal government has had to inject $622 million into the plan that provides long-term disability insurance for military personnel. (Cpl. Tommy Dufresne/Canadian Armed Forces)

The Liberal government is spending more than $622 million to bail out the Canadian military's long-term disability insurance plan, newly tabled federal budget documents reveal.

The enormous infusion of cash comes almost five years after the former Conservative government settled a class-action lawsuit with disgruntled veterans who were angry that their payments were being clawed back.

Supplementary budget estimates for the current fiscal year, tabled this week in the House of Commons, show the Service Income Security Insurance Plan (SISIP) is running in deficit and the federal government is "contractually obliged" to keep it afloat.

'Significantly higher number of claims'

The plan, which serves both full-time and part-time soldiers, is underfunded "due to a significantly higher number of claims, largely owing to increased awareness and recognition of post-traumatic stress disorder and mental health," says the estimates document.

Defence Minister Harjit Sajjan said in a conference call Thursday the government has committed to looking after members of the military.

"We'll continue to make the right investments," he said. 

In 2013, the Harper government paid out $887 million for a settlement with 7,500 former soldiers whose long-term disability income had faced clawbacks for over 35 years.

In an email, National Defence said the bailout was necessary to keep the Service Income Security Insurance Plan afloat in the face of "the continuing growth in the number of claims" over the past few years.

"This sum is required for the [Canadian Armed Forces] to continue to adequately fund its group disability plan," the department said.

Veterans Affairs is also getting an extra $177 million top-up to cover a higher-than-expected number of disability claims for ex-soldiers.

The supplementary estimates document says the department is seeing an "increased number of veterans accessing programs, such as the Disability Award, and increased requirements for health services."

'Left out in the cold'

The news comes as veterans converge on Parliament Hill Thursday for an outdoor protest they have dubbed "left out in the cold."

Most of their anger and frustration relates to the Liberal government's plan to give injured veterans a choice between a lump sum compensation payment for injuries and a lifetime pension.

Critics — both in the veterans community and on the opposition benches — have said the plan falls short of what the Liberals promised in the 2015 election campaign.

Trevor Sanderson was camping overnight this week beneath the walkway connecting the East and West Memorial Buildings on Wellington Street, ahead of Thursday's protest for better services for veterans. (Marc-André Cossette/CBC)

Afghanistan veterans who claim the system discriminates against them have vowed to carry on with a lawsuit challenging the federal government's pension policy. Prime Minister Justin Trudeau managed to increase tensions with veterans at a town hall appearance a few weeks ago.

Asked why his government is still fighting veterans in court, Trudeau told the town hall audience that the veterans are "asking for more than we are able to give right now."

The Conservatives plan to introduce a motion Thursday calling on Trudeau to formally "apologize to veterans for his insensitive comments."

They're also demanding that he live up to his campaign vow that, under his government, no ex-soldier would "be forced to fight their own government for the support and compensation they have earned."

About the Author

Murray Brewster

Defence and security

Murray Brewster is senior defence writer for CBC News, based in Ottawa. He has covered the Canadian military and foreign policy from Parliament Hill for over a decade. Among other assignments, he spent a total of 15 months on the ground covering the Afghan war for The Canadian Press. Prior to that, he covered defence issues and politics for CP in Nova Scotia for 11 years and was bureau chief for Standard Broadcast News in Ottawa.

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