Question Period Note: BUDGET 2025 CLARIFYING AMENDMENTS TO VAC LEGISLATION

• The Fall 2025 Federal Budget directed amendments to Veterans Affairs Canada (VAC) legislation to clarify its annual calculations of benefit amounts.
• These amendments do not change the amount of benefits that Canadian Armed Forces Veterans are receiving.
• For ongoing legal cases, it is up to the court to decide how these legislative changes may affect the litigation.
• The legislative amendments are consistent with VAC's well-established policies and practices.
• Veterans and their families can be confident that their benefits are being calculated transparently and fairly.

The following Veterans Affairs Canada (VAC) related legislative measures were announced in Annex 5 to Budget 2025:
“In Budget 2025, the government proposes legislative amendments and/or regulations to modify the escalation formula of the Disability Pension, so that the benefit is indexed based on the Consumer Price Index alone, for serving and retired RCMP members and for related benefits, effective January 2027. These proposed legislative amendments and/or regulations would also clarify the escalation formula for the Disability Pension Benefit and related benefits for CAF members, veterans and serving and retired RCMP members (including on a retroactive basis). The government also proposes legislative changes to the Department of Veterans Affairs Act and its regulations to clarify the methodology used to calculate the Accommodation and Meals charge in the Long-Term Care Program on both a retroactive and go-forward basis. Legislative measures are also proposed to clarify and make explicit that VAC had the authority to prorate certain indexation adjustments in the calculation of the now repealed Earnings Loss Benefit under the Canadian Forces Members and Veterans Re-establishment and Compensation Act and its regulations.”
Amendments to the Pension Act and the Pension and Allowance Regulations – Annual Adjustment of benefits
VAC administers annual increases to the amounts of disability pensions and other relevant amounts based on an escalation formula defined in the Pension Act.
VAC amended the Pension Act to clarify the escalation formula and to clarify the basic pension amounts over the period of 1985 to 2025. Upcoming regulatory amendments will add the 2026 basic pension to Schedule IV of the Pension Act and provide additional details to further clarify the calculations.
These clarifications in the law are expected to make the administration of the annual escalation formula more clear. There are no changes to the amounts of benefits under the Pension Act or other relevant amounts for CAF Members, Veterans, their survivors and dependents as a result of these changes.
Awards and compensation payable to current and former RCMP members and their survivors will be based on the rates under the Pension Act until 31 December 2026. These benefits will be adjusted using only a consumer price index rule beginning on January 1, 2027.
Amendments to the Department of Veterans Affairs Act and Veterans Health Care Regulations to the Accommodation and Meals Charge
Most Veterans and clients in Intermediate Care and Long Term Care and pay a contribution for board and lodging costs, known as an Accommodation and Meals charge. VAC’s regulations set the maximum Accommodation and Meals charge determined annually.
VAC has used only the provincial rates in establishing its maximum Accommodation and Meals rate. The Interpretation Act defines “province” to be the ten provinces and the three territories in every enactment unless otherwise stated. VAC intends to clarify its use of the term “province” by defining it in the Veterans Health Care Regulations.
Amendments to the Veterans Well-being Regulations – Earnings Loss Benefit
Retroactive amendments have beenmade to the Veterans Well-being Regulations (previously titled the Canadian Forces Members and Veterans Re-establishment and Compensation Regulations) through the Budget Implementation Act to clarify and make explicit VAC’s authorities for the proration of adjustments for amounts used in the calculation of the Earnings Loss Benefit.
Impact of amendments on litigation
Litigants who have obtained a favorable court judgment under the old law or who have entered into a settlement agreement with the Crown will remain unaffected by the retroactive amendments despite the change in the law. This is the case for class members of the Manuge Settlement.
For ongoing cases such as White et al., it is up to the court to decide how these legislative changes might affect the litigation. Introducing the legislation does not directly determine the outcome of any ongoing lawsuit.

Legislative Amendments to the Department of Veterans Affairs Act and Veterans Health Care Regulations for Accommodation and Meals
• These amendments clarified the Department’s long-standing methodology used in the calculation of its maximum monthly Accommodation and Meals charge on a retroactive and go-forward basis.
• When determining the maximum monthly Accommodation and Meals charge, the lowest accommodation and meals charges of the provinces should be considered. The amendments clarify that the term “province” in the Veterans Health Care Regulations refers to the ten provinces.
Legislative Amendments to the Veterans Well-being Regulations
• Amendments clarified the pro-ration methodology used for the first annual adjustment of certain amounts used in the calculation of the Earnings Loss Benefits (ELB).
Amendments to the Pension Act and the Pension and Allowance Regulations
• The amendments to the Pension Act clarify the amounts of the basic pension over the period of 1985 – 2025 and provided some details regarding the escalation formula for the Disability Pensions and other related benefits for Canadian Armed Forces (CAF) members, Veterans and their survivors and other eligible individuals (including on a retroactive basis). Upcoming regulatory amendments will provide additional details to further clarify the calculations.