Question Period Note: MERLO-DAVIDSON

• This government recognizes the devastating impacts of workplace violence, harassment and discrimination and is committed to eliminating it in all its forms.

• Veterans Affairs Canada was neither a party in the class action, nor the settlement negotiations.

• The department has contacted the known claimants to determine if their offsets were processed in accordance with our legislation and made corrective payments as appropriate.

• Veterans Affairs Canada is committed to ensuring all Veterans and members get access to the benefits to which they are entitled.

BACKGROUND – MERLO-DAVIDSON

The Merlo-Davidson Class Action settlement concerns gender and sexual orientation-based harassment and discrimination of women RCMP employees in the workplace from 1974 to 2017.

In 2017, the Federal Court approved a settlement that established a confidential, independent claims process and compensation scheme overseen by former Supreme Court of Canada Justice, the Honourable Michel Bastarache, as Independent Assessor.

A total of 3,086 claims were filed. The Assessor determined that 2,304 claimants were entitled to compensation under the settlement agreement, for a total of $125.4 million in compensation awards.

Some of these claimants are also in receipt of a Disability Pension under the Pension Act. VAC is obligated under section 25(a) of the Pension Act to reduce a Disability Pension by damages, or compensation, awarded for the same disability.

Section 8.02 of the settlement agreement stated, “There will be no amounts deducted from the compensation awarded to a claimant under this settlement agreement in relation to any benefits paid or payable under the federal Pension Act, R.S.C. 1985, c. P-6 (“Pension Act”). Nothing in this Agreement prevents government officials who adjudicate or administer pensions under the Pension Act from making pension adjustments in accordance with the applicable legislation.”

The Office of the Veterans Ombuds (OVO) requested that Veterans Affairs Canada review the application of the Pension Act offset provisions to known claimants. On February 23, 2023, the OVO published a letter calling on Veterans Affairs Canada to review these cases to determine if pension reductions have been properly applied, and if not, to issue corrective payments. The OVO made two recommendations:

1. That VAC immediately cease Disability Pension reductions for Merlo-Davidson levels 1 and 2 claimants, and issue corrective payments to women who have had their pensions reduced.

2. That VAC publish the methodology for determining whether and in what amount Merlo-Davidson compensation constitutes compensation for a pensioned disability, and if unable to do so, immediately cease Disability Pension reductions for claimants at levels 3 to 6 and issue corrective payments to those who have had their pensions reduced.

The approach taken by VAC has in essence resolved the two recommendations as the known claimants have been contacted and their disability benefits recalculated as appropriate. Furthermore the process is being updated to create enhanced transparency.

On February 6, 2024, the Ombud published a letter indicating her satisfaction that VAC has made appropriate adjustments and has addressed the intent of the OVO recommendations for all known claimants who self-identified as having received Merlo Davidson compensation.

WHEN PRESSED:

Q1 – Why did Veterans Affairs Canada (VAC) have to reduce these individuals’ pensions?

Veterans Affairs Canada was neither a party in the class action, nor the settlement negotiations. The Department’s engagement in this situation arises from its responsibilities to implement legislatively required offsets. Section 25 of the Pension Act requires VAC to reduce the monthly Disability Pension if the pensioner receives third-party compensation that is determined to be an amount paid for the same death or disability for which the pension is payable.

Q2 – How many people are affected by this situation?

For privacy reasons we cannot provide this information.

Q3 – How would others involved in the settlement know if their pensions were being reduced?

Those who advised VAC that they had received a settlement amount for the same disability for which they were also in receipt of a Disability Pension would have received a decision letter stating that their Disability Pension would be reduced by compensation received from the Merlo-Davidson settlement.

Q4 – What can individuals do to have their cases reviewed?

VAC contacted individuals who had their Disability Pension reduced by the Merlo-Davidson settlement compensation.

Q5 – What is the total dollar amount that was reduced from these individuals?

Disability Pensions are reduced by settlement compensation on a case-by-case basis. Each claimant receives a different level of compensation as set out in the settlement agreement. VAC cannot comment on individual files due to privacy.

Q6 – What is VAC doing to review these cases?
VAC provided known claimants with the opportunity to submit additional information regarding their settlement amount to determine if their reductions had been processed in accordance with our legislation. If the claimants provided a detailed breakdown of the settlement indicating that a portion of the settlement did not compensate for the same pensionable disability, then their Disability Pension reduction amount was recalculated and they will receive a higher monthly Disability Pension amount. They also received a corrective payment.

Q7 – What are the possible outcomes?

If the claimants provided a detailed breakdown of the settlement indicating that a portion of the settlement did not compensate for the same pensionable disability, then their Disability Pension reduction amount was recalculated, a corrective payment was issued and they will receive a higher monthly amount going forward. If the new information did not provide a breakdown or indicate that some of the settlement amount compensated for something other than the same disability for which they are receiving a Disability Pension, then no change was made to their monthly amount.

Those who received a letter requesting additional information did not have to supply more information. If they did not wish to supply more information, a review did not take place and no change was made to their monthly amount.

Q8 – Will VAC be looking into all of the 2300+ individuals who received settlement payments?

With the confidentiality framework of the settlement agreement, VAC did not receive a list of Merlo-Davidson settlement compensation recipients. Therefore VAC reviewed cases where the claimant self-identified as having received Merlo-Davidson compensation for the same disability that they were applying for Disability Benefits or if they advised VAC that they have received compensation for the same disability for which they are receiving Disability Benefits..