Question Period Note: MAIN ESTIMATES – DEPARTMENTAL BUDGET 2025-2026

• Veterans Affairs Canada’s budget reflects the government’s commitment to ensuring Canadian Veterans and their families are provided with the support they need.
• 94% of the Department’s budget represents payments to Veterans, their families and other program recipients.
• The 2025-26 Main Estimates provide VAC funding of $7.8 billion.
• These contributions for Veterans are an important part of achieving Canada’s NATO targets.

The 2025-26 Main Estimates provide Veterans Affairs Canada funding of $7.83 billion, which represents a net increase of $1.62 billion (26%) compared to last year’s Main Estimates (2024-25).
The 2025-2026 Main Estimates reflect funding adjustments for the following:
• Annual quasi-statutory program adjustments;
• Funding for newly signed collective bargaining agreements;
• Funding for the Manuge Class Action Settlement agreement;
• Funding for the Juno Beach Centre, Veterans and Family Well-Being Fund and Research;
• Funding for Telemedicine Services; and
• Funding for Advertising.
The net increase of $1.62 billion is comprised of the following items:
$625M increase in Vote 1 (Operating):
o Other Health Purchased Services: $280M increase due to overall increase in demand and costs for treatment/healthcare.
o Manuge SPA (Special Purpose Allotment): $275M – new funding to meet obligation in the Manuge Class Action Final Settlement Agreement.
o Veterans Support Services: $50M increase due to updated forecast from new rehabilitation contractor.
o Regular operating: $19M increase due to funding for Collective Bargaining, Service Excellence (Case Management), and Manuge, offset by reduction due to the Reduced Government Spending initiative.
o Advertising Initiatives: $2M received for Advertising funding.
$985M increase in Vote 5 (Grants and Contributions):
o Increase due to increased demand and/or increased expenditures for the following programs:
 Pain and Suffering Compensation: $687M
 Income Replacement Benefit: $229M
 Housekeeping & Grounds Maintenance: $46M
 Additional Pain and Suffering Compensation: $33M
$7M increase in Statutory budget
o Employee Benefit Plan: Increase due to annual adjustment exercise, Manuge, and Collective Bargaining Agreement.

QUICK FACTS & FIGURES
• VAC’s 2025-26 Main Estimates are $7.8 billion
Overall Budget Growth
• Increase of $1.62 billion (26%) over 2024–25 Main Estimates
• Increase is related to increase in demand, increased production and costs for benefits and services
• 94% of VAC’s budget is dedicated to payments for Veterans, their families, and other recipients
Budget Increase Drivers
• Annual demand-driven (quasi-statutory) program adjustments
• Funding for newly signed collective bargaining agreements
• Manuge Class Action Settlement agreement
• Juno Beach Centre, Veterans and Family Well-Being Fund, and Research
• Telemedicine Services
• Advertising initiatives
Support for Veterans
• Majority of funding directed to Veterans’ benefits and services
• Programs are demand-driven (quasi-statutory): ensures all eligible Veterans receive entitled benefits
• Budgets are updated annually to reflect expected demand
Managing Increased Demand
• If more Veterans require benefits or services than forecasted, budgets can be increased during the year through Treasury Board submissions
Pain and Suffering Compensation – program with largest increase
• Increase of $687 million in 2025–26, driven by:
o More Veterans coming forward for support
o Faster processing and production
o More Veterans electing to receive lump sum payments