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Ottawa facing new war with veterans over benefit claw-back compensation

OTTAWA - Canada's veterans ombudsman and the Royal Canadian Legion are calling on the Harper government to say once and for all whether it will retroactively compensate ex-soldiers whose pensions and benefits were unfairly clawed back.

Veterans Affairs Canada has been silent about whether it will follow National Defence and reimburse those whose earnings loss benefits, income supplements and war veterans allowance cheques were improperly docked.

In May 2012, a Federal Court justice ruled that the federal government was wrong to claw back the military pensions of injured soldiers by the amount of disability payments they received.

Former defence minister Peter MacKay ended the deduction and federal lawyers negotiated an $887-million retroactive settlement dating back to 1976, when the process first started.

Former veterans minister Steven Blaney also ended the practice for programs in his department, but his successor has yet to open discussions about compensation for what was deducted prior to the decision.

Ottawa military lawyer Michel Drapeau has written to the new minister, Julian Fantino, on behalf of an ex-soldier whose benefit cheque was deducted and says he's prepared to launch legal action, perhaps even in the form of a class action.

"We truly hope government will live up to its promises," Drapeau said in an interview Thursday.

Fantino's response to Drapeau's Dec. 18 letter was non-committal.

Veterans ombudsman Guy Parent said he's been bombarded with calls and messages from ex-soldiers and wants to see the uncertainty ended.

The mechanics of the legislation governing veterans and the resulting obligations of the government are slightly different when compared with the military disability pension case, the ombudsman noted.

"Veterans need to get an answer," Parent said. "If they're not going to give retroactivity, then say it."

His sentiment is echoed by the Royal Canadian Legion, which says the Harper government has poured millions of dollars into commemorative events, such as the War of 1812, while issues like the benefit back payment have lingered.

"They need to make a decision on retroactivity," said Andrea Siew, the legion's director of services. "Veterans need to know. They have a right to know and then they can decide where they go from here. And they need to make a fair decision."

Joshua Zanin, a spokesman for Fantino, said the issue is still on the government's agenda, but noted that — unlike in the case of National Defence — the veterans department was not compelled by the courts to halt the clawback.

"Our government voluntarily decided to cease the deductions as an additional action to recognize the sacrifices of Canada's veterans," Zanin said in an email.

He referenced comments by the minister last fall when the government ordered a comprehensive review of the charter governing veterans benefits, casting the issue of back payments as something they're not obliged to pay.

"Our government is committed to looking into the call of veterans for this additional benefit and will respond in a timely fashion," he said.

How much a retroactive settlement would cost the government is unclear, and Siew said it would depend on how broad the terms might be.

For example, it could become expensive and complicated if the war veterans allowance is included. That monthly payment — to soldiers and their surviving spouses — dates back to the Second World War.

"How far do they go back? Do they pay estates? Those are some of the challenges," Siew said.

Both the ombudsman and the legion are also united when it comes to a class-action lawsuit launched by members of the RCMP over clawbacks to their disability benefits.

They say Mounties shouldn't have to fight for benefits when a precedent has already been established by the Federal Court in the case of the military.

It's time to undertake a study of what all veterans — military and RCMP, past and present — are owed, Drapeau said.

"Veterans are veterans, and if we owe them, it doesn't matter if have to go back to 1940. A debt is debt is a debt, and a promise is a promise is a promise."

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