OTTAWA, ON, April 20, 2001 

The National Council of Veteran Associations today called upon the Minister of Veterans Affairs to institute an immediate appeal procedure to deal with claims in regard to interest which the Government failed to pay in respect of funds being administered on behalf of institutionalized veterans who were judged incapable of handling their own affairs.

The question before the Ontario Court of Appeal is whether the Government is liable for payment of interest from the promulgation of the Pensioners Regulations in 1916 to January 1990, at which time the Department of Veterans Affairs was authorized to commence payments.

The National Council has been opposed to the Class Action based on the potential enormous cost to the taxpayers. In explaining his opposition to the Class Action, NCVA Chair Cliff Chadderton said: "We should bear in mind that in most instances the monies would go to descendants of veterans which was not the intent of the legislation."

"We are concerned as well that if the Class Action succeeds the Government would have an excuse to turn away current initiatives including full payment to Merchant Seamen, grants in lieu of rehabilitation benefits for Ferry Command Pilots and others who supported the forces during the war, and a much-needed increase in the widow pensions which are paid 25% less than their male counterparts," he added.

In a letter sent today to Minister Ron Duhamel, Chadderton levelled severe criticism at the Department of Veterans Affairs. He suggested that when the funds being held for the veterans became so large, the situation changed from one of assisting the veteran to an arrangement under which the Government became the custodian of the veterans' estate. In such circumstances, which began to occur in the 1960's, a case might well be made for the payment of interest. The Department of Veterans Affairs bureaucrats of that time may well have failed in their duty to veterans.

He cited in his letter to the Minister, also, that Mr. Justice Brockenshire, who wrote the Judgement in favour of the Class Action, chastised departmental officials for faulty information and, in one instance, fined the Department of Veterans Affairs $10,000 for failing to provide sufficient public information.

Chadderton stated that his Council felt obligated to ask the Minister to establish an immediate Appellate procedure within the structure of his Department to look at claims, without waiting for a Court decision which could be months away. The Crown's Appeal is scheduled to be heard October 1, 2001, but further appeals could be referred to the Supreme Court with subsequent added delays.

MR. CHADDERTON'S LETTER FOLLOWS:

April 20, 2001

The Honourable Ron J. Duhamel
Minister of Veterans Affairs
House of Commons
Ottawa ON K1A 0A6

RE: CLASS ACTION: VAC ADMINISTERED ACCOUNTS 

Dear Minister,

Undoubtedly, you are well informed involving aspects of the class action demanding payment of interest on funds administered by the Department of Veterans Affairs on behalf of institutionalized veterans.

The National Council of Veteran Associations has, by resolution, opposed this class action. As a result, I have given a number of media interviews on the subject.

One of our concerns is that the petition to the Court requests that interest on such administered funds include cases back to 1916.

Should the Department of Justice appeal on behalf of the Canadian government fail, the legal firm acting for the plaintiffs has estimated the cost at not less than $1.6 billion. Other estimates give an estimate as high as $3.5 billion.

In describing the position of NCVA, I have stated, from the outset, that the government should establish a review procedure which would ensure that, regardless of the outcome of the court case, claims could be the subject of appeal.

In this regard, it is suggested that, without waiting for any Court decision, the Department should make it possible for claimants to file application for an immediate review.

The pension or allowance paid to the veteran would have been at the direction of the Canadian Pension Commission or the War Veterans Allowance Board. Therefore, the question of a payment of interest could, in my opinion, be rendered by the Veterans Review and Appeal Board without legislative amendment.

The purpose of this letter is to ask that you consider the adoption of this proposal. It will be obvious that these matters are of sufficient urgency to warrant a decision by you at an early date. As you will know, the date set by Chief Justice Roy McMurtry for the hearing is October 1, 2001.

In my view, it would be unconscionable to expect possible claimants to wait until the disposal of this matter by the courts, bearing in mind that further judicial review (a request to the Supreme Court of Canada) might easily result in many more months of delay before the situation is resolved.

In asking for your consideration regarding an immediate appellate review of possibly-legitimate cases, you should be aware that the Department is open to legitimate criticism that it did nothing for many years about this situation.

Moreover, the court record at the initial hearing last year indicates that the presiding judge severely criticized the failure of Departmental officials to provide full information. For example, the record of proceedings indicates that Mr. Justice Brockenshire considered that the explanations of the Department were "weak." Moreover, as you will know, the Court fined the Department $10,000 for serious omissions in respect of material provided to the Court.

As one who has followed this matter from the beginning, I can state that the Department, since the commencement, has been remiss in not providing information to the public and to the courts.

Should the Crown lose the appeal, it could create a huge liability against the taxpayer. It would be a dereliction of duty on the part of your officials, in my view, if the class action succeeds because your officials provided faulty information or failed to explain the Department's position.

On another issue, should the class action succeed, the resulting liability should in no circumstances be taken into account in regard to the funding of decisions by your government in respect of outstanding issues such as:

• complete payment of the monies promised to Canada's merchant seamen;
• payments to members of Ferry Command and other so-called "civilian" agencies which supported the war effort, in lieu of the failure of the government to provide any form of post-war civilian rehabilitation for these groups; and
• consideration of the inequity represented by the fact that the widow of a 100% pensioner receives a pension which is 25% less than the pension paid to a single (usually male) pensioner. Notwithstanding, such widows have the same financial needs as the pensioners themselves.

Yours sincerely,

H. Clifford Chadderton, CC, O.Ont., OStJ, CAE, DCL, LLD
Chairman

CC: Members of Parliament
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