Question Period Note: MAIN ESTIMATES - 2022-2023

• Veterans Affairs Canada’s Main Estimates reflect this government’s continued commitment to Veterans to restore critical access to services and improve the long-term financial security and independence of ill and injured Veterans and their families.

• Over 90% of the Department’s budget represents payments to Veterans, their families and other program recipients.

• Veterans Affairs Canada’s budget reflects the historic steps we have taken to ensure Canadian Veterans and their families are treated with care, compassion and respect.

BACKGROUND – MAIN ESTIMATES 2022-2023
Main Estimates provides a detailed listing of the resources required by Veterans Affairs Canada for the upcoming fiscal year in order to deliver its programs. The 2022-23 Main Estimates provide Veterans Affairs Canada funding of $5.5 billion, which represents a net decrease of $784 million (12.5%) compared to last year’s Main Estimates (2021-22).

The 2022-2023 Main Estimates reflect funding adjustments for the following:
• Annual quasi-statutory program adjustments
• Budget 2021 items:
o Funding for the extension of resources to continue our mission to reduce wait times for disability benefits
o Funding to address sexual misconduct and gender-based violence in the Military
o Expansion and enhancement of the Veterans and Family Well-Being fund
The net decrease of $784 million is comprised of the following items:

• $54M decrease in Vote 1 (Operating)
o Regular operating: $56M decrease due to completion of temporary funding for Service Excellence from Budget 2020
o Other Health Purchased Services: $6.5M decrease due to budget reduction for travel related expenditures
o Veterans Support Services: $8.4M increase due to new contracting fees associated with providing services for health-care and Vocational rehabilitation
• $724M decrease in Vote 5 (Grants and Contributions):
o Pain and Suffering Compensation (PSC): $836M decrease due to less spending forecasted as the operational capacity linked to Service Excellence normalizes
o Income Replacement Benefit: $80.8M increase due to increased client numbers
o Additional Pain and Suffering Compensation: $24.8M increase due to increased client numbers
o Disability Pensions: $6.4M increase due to increasing assessment rates and inflation
• $5.5M decrease in Statutory – as a result of decrease in temporary Salary funding for Service Excellence

WHEN PRESSED
Q1. Why is VAC’s budget decreasing when compared to the Main Estimates of 2021-22?
Our budget changes each year because of the demand-driven nature of our programs and services, which are based on Veterans’ needs and entitlements.

VAC’s budget is decreasing by $784 million (or 12.5%) compared to the 2021-22 Main Estimates. This decrease in funding is primarily attributable to the completion of temporary funding for Service Excellence from Budget 2020 as well as a decrease in forecasted spending as operational capacity linked to Service Excellence normalizes.

These efforts will continue into the future, as recently announced, we are investing further in 2022-23 onward to ensure Veterans receive the timely access to benefits and services they so rightly deserve. These resources will be sought through future Estimates cycles during 2022-23

Q2. Is this funding enough for the proper care and treatment of Veterans?
Yes, the majority of VAC’s funding (over 90%) is for Veterans benefits and services, which is based on demand and considered “quasi-statutory” in nature. VAC’s client and expenditure forecast is updated in early summer each year and is used to determine budgetary requirements.

VAC builds its budget to ensure that all eligible Veterans who come forward receive benefits to which they are entitled.

Q3. What is a Quasi-statutory program?
Quasi-statutory programs have three characteristics:
• They are non-discretionary in nature (based on eligibility and need)
• They are recipient related and demand driven (event based entitlement and application process)
• There is no established expenditure limit (actuarial obligation for Veterans Future Benefits)

In other words, a Veteran who is entitled to a benefit is paid that benefit, regardless of the number of Veterans who come forward.

Q4. What will happen if demand for a program exceeds the forecasted expenditures?
If demand for a program increased beyond the authorized budget, VAC would seek additional funding through the Supplementary Estimates process (which provides an opportunity to adjust funding levels three times through the year – usually June, December and March).