OTTAWA — Veterans Affairs Minister Eric O’Toole has a simple explanation for a controversial $1.13 billion spending lapse and the subsequent return of the cash to the federal treasury: it’s hard to predict spending when so many elderly vets are dying.
But an opposition critic says there is much more certainty in the numbers than O’Toole is admitting, pointing to the department’s statistical research branch and the detailed, quarterly forecasts it produces.
The issue of unspent cash between 2006 and 2014 caused the Conservatives a major political headache last fall as they tried to rebuild bridges with the angry and frustrated community of ex-soldiers.
Prime Minister Stephen Harper — and now O’Toole — have said the government simply set aside more than it ended up needing in order to ensure there was enough money to cover program costs and the service needs of veterans.
O’Toole told the all-party veterans committee this week that when it comes to planned program spending, the government doesn’t “know what actually goes out the door until the public accounts come in” the following year.
Elderly Second World War and Korean veterans who die during the year create a major variable — one that the department can’t predict, he said.
“I’ll give you an example of how challenging this is … the estimate does not anticipate veterans passing away over the course of the cycle. That will go into the estimate for the following year,” O’Toole told the committee.
“You try and learn from the public accounts where you did not spend … but in terms of lapsed funds, this is why.”
O’Toole made the remarks even though the department produces an exhaustive report every three months that tracks the ranks of Canadian veterans in exceptional detail.
It includes not only the number of veterans, but also their disabilities by category; how many are expected to pass away; their age, gender, and ailments; and what is spent on individual programs and services.
The report, known as the VAC Client and Expenditure Forecast, gives the department exceptional forecasting power, Veterans Affairs sources say it was a public document until 2008 when the Harper government decided to make it for internal use only.
New Democrat veterans critic Peter Stoffer said O’Toole either wasn’t telling the truth before the committee or he wasn’t aware of the regular publication.
“This is information he should have had at his fingertips,” Stoffer said. “He’s been there almost six months. This shows he either doesn’t know his department, or he deliberately misled us.”
A spokesman for O’Toole, Martin Magnan, acknowledged the department “carries out a comprehensive client and expenditure forecast,” but the said the data is limited by the fact the department does not have a day-to-day list of all living veterans.
He said Veterans Affairs must therefore rely on survey information from Statistics Canada.
“We are further pleased that this government has never budgeted less than this department requires to meet the needs of Canadian veterans,” Magnan said in an email.
The government took a political hammering last fall over the issue of lapsed funds as both opposition parties accused the Conservatives of using the unspent funds as a backdoor way of trying to balance the budget.
O’Toole dismissed the controversy as a product of a “slow news cycle,” but something that’s been used to “sow confusion” among veterans and their families.
He said all departments have trouble spending their entire appropriation, that it has nothing to do with politics, and that the federal Treasury Board allows for leeway of one to two per cent each year.
Magnan said over the years in question, 2006-07 to 2013-14, Veterans Affairs lapsed an average of 4.6 per cent each year.
He explained that following the introduction of a new benefits regime, the department considerably underspent its budget.
“Early projections were that take-up would be immediate upon inception of the programs,” said Magnan. “However, in reality, this uptake was much more gradual. This led to the large lapses in the first two years of the program.”
Budget figures show the government had the lapsed funding issue under control until 2011, when Veterans Affairs once again began handing back large amounts of money.