10/06/2011 12:25 EDT | Updated 12/06/2011 05:12 EST

Improved veterans benefits up and running one year after promised

OTTAWA - It could take more than 50 years to spend the $2 billion the Harper government set aside to improve the benefits of injured war veterans.

And most of the extra cash they receive will be taxable, according federal documents that accompanied recently enacted legislation.

Veterans Affairs Minister Steven Blaney turned the spotlight Thursday on the government's long-standing commitment to improve the lives of critically injured soldiers, stating that the suite of programs, promised 11 months ago, is now up and running.

The government has been keen to highlight the huge price tag that goes with guaranteeing wounded members a minimum pre-tax income, better eligibility allowances and a $1,000-a-month supplement to the permanent impairment allowance.

The promises were made last year in the aftermath of a privacy scandal at Veterans Affairs, accusations from the former veteran's ombudsman that Ottawa was short-changing the most critically injured troops, and following a review of government policy.

The improvements amount to an additional investment of only $189 million over the first five years of the program, portion of which will be recouped through the tax system.

At that rate of spending, the fund will last more than half a century.

Most Afghan veterans are in their early 20s. Blaney and senior department officials say the program will be there as long as it's needed.

"It is $2 billion over the life the program," the minister said during a news conference in front of armoured vehicles at the Canadian War Museum.

When pressed about the estimated lifetime of the program, he would only say the commitment to veterans is "never-ending."

But figures posted on the Canada Gazette, as part of the legislative process, suggest the direct cost of three of the improvements to Veterans Affairs would amount to $129 million over 10 years. The Defence Department would kick in an additional $13 million during the same time frame.

The submission underscored the advantage to the government.

"The earnings loss benefit and the indexation of the permanent impairment allowance supplement are taxable; the Regulations will therefore result in increased tax revenues of $40.4 million, which will benefit Canadians and the Canadian economy," said the Gazette entry posted online on July 9.

Blaney brushed aside the fiscal questions.

"What matters is not the money, it's that the program is there for the veterans who need it," he said.

Longtime critics, such as former intelligence officer Sean Bruyea, said the government's re-announcement was shameless politicking.

"The rhetoric in no way matches the fiscal commitment to care for veterans and once again veterans are used as political props without any substantive actions to take care of them," said Bruyea, whose personal medical file was leaked around Veterans Affairs — a privacy breach for which the government paid $400,000 to settle his lawsuit.

Bruyea said there is a lot of discontent in the veterans' community and pointed to a planned protest on Nov. 6.

Legislation that brought about the changes passed as the Conservative minority government was defeated in a House of Commons vote last March. The former minister, Jean-Pierre Blackburn, made a special appeal to the Senate to expedite it before Parliament was dissolved.

Even with the approval, Blaney says full implementation of the new benefits was knocked off track by the federal election.

The improvements also changed how a $285,000 lump-sum disability award is paid, allowing disabled soldiers to receive it all at once — or over time. That benefit is tax-free.

Critics have charged the lump-sum payment is cheap in comparison to similar benefits in other countries, such as Britain and the United States where pay outs are three times higher. But veterans officials argue that the Canadian figure was based upon a study of settlements handed out by the courts in this country and workers compensation awards.

They say it must be viewed within the context other allowances and benefits, including Canada's universal health-care system.

But another advocate, Mike Blais, said studies show the average court awarded settlement for injury and negligence in Canada is now $350,000 or more. He points out there is a difference between getting a leg blown off with a roadside bomb and being injured in a regulated workplace.

He says comparing the two is "disrespectful."