The minister's comments came as the Harper government signals it is looking to see what can be done for reservists who are finding not all of their military pension will count towards their eventual civil service retirement.
O'Toole, who replaced Julian Fantino at the helm of the embattled department in early January, has been busy putting out political fires.
They've ranged from the question of converting pension time — which the minister describes as "a specific and small situation" for part-time members — to the pointed concerns of Canadian Forces ombudsman Gary Walbourne, who says Veterans Affairs should not be passing judgment on whether a soldier's discharge was medically justified.
Walbourne — with the qualified support of the veterans ombudsman — said that determination should be made by National Defence, which is the agency that decides a soldier is no longer fit to serve.
To that end, Bill C-27, which put qualified wounded veterans at the head of the line for federal jobs, should be amended, Walbourne said.
But O'Toole told a Senate committee Wednesday that the ombudsman's concerns would be better addressed through the reorganization, which will see Veterans Affairs staff getting involved in cases of wounded members before their release.
"I sincerely hope the National Defence ombudsman's suggestion, the need for it, will be eliminated on making better use of collaboration in that three-to-five year span for medically releasing veterans," O'Toole said, referring to the length of time it takes some soldiers to move through the system.
From the moment a soldier is wounded and posted to a so-called joint personnel support unit, they have three years under the military's universality of service rule to recover and return to their unit. If they are deemed medically unfit after that, the release process can take more than 18 months.
"I see why he made that suggestion, because he's saying, 'You're injured in uniform, let's let DND care of that,'" O'Toole said.
"The issue is we at Veterans Affairs have that expertise, and now that we're going to be collaborating far earlier in the Canadian Forces life of that future veteran, we will eliminate the delay and frustration that the ombudsman highlighted."
The legislation to give veterans top access to federal jobs was crafted last year after soldiers complained that they were being hustled out of the military before the 10-year mark, when they qualify for an indexed federal pension.
At the time, the government's answer to the pension concern was that members could take a return of contribution, or buy back their pension for conversion, if they landed in the federal civil service, the approach the Conservatives were championing.
Yet, earlier this week Beth Lepage, a former air force captain, revealed that a portion of her Canadian Forces pension — accumulated as a part-time member — can't be converted because of a difference in the way government and military retirement benefits are calculated.
The jobs legislation, currently in the final stages of Senate approval, doesn't touch on the pension issue.
Nonetheless, Lepage and Walbourne say that inability to fully convert a mixed-service pension will be a significant "disincentive" to ex-soldiers applying for federal jobs.
In order to fix the problem, the federal Treasury Board would have to rewrite the regulations — something it has so far refused to do.
There are some 30 cases in the system similar to that of Lepage, but O'Toole denies the pension would be a "disincentive" for reservists to apply.
Liberal veterans critic Frank Valeriote said the handling of reserve pensions came up when the Commons committee studied the new veterans charter, the 2006 legislation that revamped how the government compensates vets.
"It's a simple fix," Valeriote said. "It's another example of how reservists are treated as second-class citizens."