Vol. 151, No. 7 — April 5, 2017

Registration

SOR/2017-42 March 24, 2017

CANADIAN FORCES MEMBERS AND VETERANS RE-ESTABLISHMENT AND COMPENSATION ACT

Regulations Amending the Canadian Forces Members and Veterans Re-establishment and Compensation Regulations

P.C. 2017-253 March 24, 2017

His Excellency the Governor General in Council, on the recommendation of the Minister of Veterans Affairs, pursuant to section 94 (see footnote a) of the Canadian Forces Members and Veterans Re-establishment and Compensation Act (see footnote b) makes the annexed Regulations Amending the Canadian Forces Members and Veterans Re-establishment and Compensation Regulations.

Regulations Amending the Canadian Forces Members and Veterans Re-establishment and Compensation Regulations

1 Section 11 of the Canadian Forces Members and Veterans Re-establishment and Compensation Regulations (see footnote 1) is repealed.

2 These Regulations come into force on April 1, 2018.

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Executive summary

Background

The rehabilitation services and vocational assistance of Veterans Affairs Canada (VAC or the Department), authorized under the Canadian Forces Members and Veterans Re-establishment and Compensation Act (the Act), may provide needs-based access to medical, psychosocial and vocational rehabilitation services and assistance to eligible Veterans, survivors and spouses/common-law partners to help them achieve optimal levels of health, function and participation at home, at work and in the community. On application, a person must undergo an assessment to determine their medical, psychosocial and vocational rehabilitation needs. A rehabilitation plan or a vocational assistance plan is then developed and implemented to address the needs resulting from the assessment.

Rehabilitation services and vocational assistance are provided to Veterans who have medically released from the Canadian Armed Forces (CAF) and have applied within 120 days of their release. They are also provided to Veterans, at any time post-release, who have physical or mental health problems resulting primarily from their military service that is creating a barrier to re-establishment into civilian life.

Survivors of CAF members or Veterans who die as a result of a service-related injury or disease, or a non-service-related injury or disease aggravated by service, are eligible to receive rehabilitation services and vocational assistance. In addition, spouses/common-law partners of Veterans are eligible if it has been determined that the Veteran would not benefit from vocational rehabilitation as a result of being deemed to be “totally and permanently incapacitated,” as defined in the Canadian Forces Members and Veterans Re-establishment and Compensation Regulations (the Regulations).

The Regulations state that survivors need to apply within one year of the member’s or Veteran’s death, and spouses/common-law partners are required to apply within one year of the Veteran’s totally and permanently incapacitated designation. If applications are submitted after these time limits, subsection 76(3) of the Act allows discretion for VAC to consider these applications, based on individual circumstances.

The Veterans Ombudsman’s 2013 report, Improving the New Veterans Charter: The Report, noted the restrictive time for survivors to apply for rehabilitation services and vocational assistance, and recommended eliminating this time limit. The Army, Navy and Air Force Veterans in Canada (ANAVETS) have also raised this issue at their 2014 and 2016 Conventions, putting forth a resolution in 2016 that the Regulations be amended to remove the time limit for survivors to apply for rehabilitation services and vocational assistance. Further to this, a priority in the Minister of Veterans Affairs and Associate Minister of National Defence’s 2015 mandate letter included ending the application time limit for survivors for rehabilitation services and vocational assistance.

Issues

The one-year time limits that are contained in the Regulations for survivors and spouses/common-law partners to apply for rehabilitation services and vocational assistance limit access and participation for some of these individuals, as extreme changes in their personal and family circumstances during this time period may not allow them the opportunity to focus on their own future vocational goals.

As an example, the death of a spouse/common-law partner can be a very emotional time, filled with significant pressures and changes for the survivor and family members as they learn to cope and move forward without their loved one. While bereavement can be a very individualized process influenced by many factors, research has indicated that in many cases, a survivor is not prepared to make major long-term decisions, including their future vocational goals, within the first year after the death of their spouse/common-law partner.

In addition, and as another example, families can be greatly affected as a result of a Veteran’s chronic health problem or disability, including how the condition may impact the family’s financial responsibilities, the spouse’s/common-law partner’s evolving role as caregiver, and the emotional strain of providing long-term care and support to the Veteran. Spouses/common-law partners need sufficient time to adapt to these changes and responsibilities, and adjust to their new roles within the family before making any major long-term decisions. For many spouses/common-law partners, it may be premature to focus on pursuing their future vocational goals, within such a short period of time (one year) of the Veteran being deemed totally and permanently incapacitated.

The necessity of making such life-impacting decisions in a time of family upheaval, uncertainty and/or grief may only add to the stress that survivors or spouses/common-law partners are already experiencing during what can often be a very difficult time. As a result, some individuals may choose not to apply for rehabilitation services and vocational assistance during this time, while others may apply and participate at a time when they are not able to make the necessary investments to fully benefit from these services and assistance. Others still may be too focused on their personal circumstances to be aware of the availability of these services and assistance until the one-year time limit has passed.

Removing the time limit for eligible survivors to apply for rehabilitation services and vocation assistance is consistent with the treatment of eligible Veterans, and addresses concerns raised by the Ombudsman and stakeholders. However, to be consistent and equitable in the treatment of all applications for rehabilitation services and vocational assistance, the time limit for eligible spouses/common-law partners also needs to be removed.

Objectives

The objectives of the regulatory amendments are to

• provide eligible survivors and spouses/common-law partners the flexibility to choose a more opportune time to apply for and receive rehabilitation services and vocational assistance, when they may be better prepared, both emotionally and mentally, to address their future vocational goals; and
• demonstrate the Government of Canada’s continued commitment and leadership to help support Veterans and their families by simplifying processes and increasing access to, and participation in, supports and assistance for survivors and spouses/common-law partners.

Description

The amendments repeal subsection 11(1) of the Regulations to remove the one-year time limit for eligible spouses/common-law partners to apply for rehabilitation services and vocational assistance. The amendments also repeal subsection 11(2) of the Regulations to remove the one-year time limit requirement for eligible survivors to apply for rehabilitation services and vocational assistance.

These two amendments come into force on April 1, 2018.

Regulatory and non-regulatory options considered

Time limits for survivors and spouses/common-law partners are prescribed in the Regulations; therefore, regulatory amendments are required to address the issues previously outlined. While subsection 76(3) of the Act allows applications filed after the time limit to be considered, this provision does not permit the time limits contained in section 11 of the Regulations to be waived in all cases. Accordingly, non-regulatory options were not considered.

VAC did consider an alternative regulatory option: removing only the time limit for survivors to apply for rehabilitation services and vocational assistance. Some stakeholder groups and the Veterans Ombudsman have been advocating for the removal of the one-year time limit for survivors to apply for rehabilitation services and vocational assistance. It was also a commitment made in the 2015 mandate letter of the Minister of Veterans Affairs and Associate Minister of National Defence. However, while removing the application time limit for survivors only would address their concerns, a real or perceived inequity may have resulted if the time limit for spouses/common-law partners remained. For consistency in program and policy design, and to provide access to rehabilitation services and vocational assistance for all eligible individuals (i.e. Veterans, survivors, and spouses/common-law partners), the application time limit for spouses/common-law partners should also be removed. As such, this alternative regulatory option was not chosen.

Benefits and costs

The following analysis provides an overview of the costs and benefits of the regulatory amendments. The table below highlights the benefit and costs, factoring in a discount rate of 7% per year, as recommended by the Treasury Board of Canada Secretariat.

The present value (PV) of total benefits is valued at $11.1 million over the period, while costs are valued at $11.8 million, yielding a ratio of the benefits-to-costs of 0.94.

Cost-benefit statement (see reference 1)

			First Year 2017–18	Final Year 2026–27	Total (PV)	Annualized Equivalent
A1. Quantified impacts (in millions Canadian dollars)
Benefits	Eligible survivors of CAF members, and Veterans and eligible spouses/common-law partners of Veterans		$0	$2.0	$11.1	$1.6
Costs	Government of Canada (Veterans Affairs Canada)		$0.6	$2.0	$11.8	$1.7
Net benefits					($0.7)	($0.1)
B. Quantified impacts in non-dollars
Positive impacts	Eligible survivors of CAF members and Veterans, and eligible spouses/common-law partners of Veterans		0	55	N/A	62
Negative impacts	None identified
C. Qualitative impacts
Eligible survivors of CAF members and Veterans, and eligible spouses/common-law partners of Veterans		Improved access and participation to VAC’s services and supports; and Increased comfort and well-being by providing them the flexibility to apply for, and receive services and assistance, when they feel they will most benefit.
Family members		Residual positive effect on families, given the expected improved well-being of survivors and spouses/common-law partners as they pursue vocational goals.
Veterans Ombudsman / Veterans stakeholder groups		Contentment knowing that eligible survivors and spouses/common-law partners have improved access to services and supports; and Satisfaction in knowing that the Government is addressing some of their concerns.
Government of Canada (VAC)		Continuance of the Government’s commitment and leadership to help support Veterans and their families.

Reference 1
The table presents the results of benefits and costs over the 10-year period starting in 2017–18 (one year prior to the coming into force of the regulatory amendments on April 1, 2018), through the end of the fiscal year 2026–27, using a discount rate of 7%. All costs in 2017–18 are solely administrative costs. Figures may not add due to rounding.

Benefits

As of March 31, 2016, there were 38 survivors and 135 spouses/common-law partners receiving rehabilitation services and vocational assistance from VAC. (see footnote 2) Over the first nine years of implementation (first year costs are administrative only and are prior to implementation) these regulatory changes are expected to benefit up to 615 eligible recipients of rehabilitation services and vocational assistance. The methodology for determining the number of these individuals, as well as how they will be positively impacted follows.

The number of eligible survivors and spouses/common-law partners expected to benefit from the regulatory amendments was based on a review of historical data of rehabilitation services and vocational assistance since introduced in 2006 and up to March 31, 2016. The review revealed 47 instances where survivors and spouses/common-law partners had not been provided rehabilitation services and vocational assistance, and for the purposes of this costing, it was conservatively assumed that all 47 were not provided these services and assistance as a result of the one-year application time limit. It was also assumed that an additional 9 survivors and/or spouses/common-law partners would not be provided rehabilitation services and vocational assistance over the next two years (April 1, 2016, to April 1, 2018), totalling 56 individuals. A further assumption made was that the expected uptake from those who self-screened from applying would equal the number of those who did not receive services and assistance since April 1, 2006, to April 1, 2018, in effect doubling the 56 individuals to a total of 112 (i.e. a conservative estimate of 200% of the historical data, to ensure the proposal is not under-costed).

As it is improbable that all 112 people will apply within the first year of implementation, it was assumed that these people would apply over the first few years after the regulatory amendments came into effect, with a slightly higher proportion in the first year due to greater visibility and communications. The calculations assume that 44 (approximately 40%) will apply and receive rehabilitation services and vocational assistance in fiscal year 2018–19, and 34 (approximately 30%) will apply and receive these services and assistance in both fiscal years 2019–20 and 2020–21.

The Chief Actuary forecasted yearly intake for rehabilitation services and vocational assistance up to 2026–27 assumes there will be approximately a 10% uptake each year going forward as a result of the application time limits for survivors and spouses/common-law partners being removed, (see footnote 3) over the forecasted baseline of between 550 and 580 successful applicants to the program (which includes Veterans, survivors and spouses/common-law partners) annually. This equates to a high of 58 additional survivors and/or spouses/common-law partners receiving these services and assistance in 2018–19, to a low of 55 in other years.

The total number of people expected to benefit are outlined in the following chart:

• Number to benefit

Fiscal year	2017–18	2018–19	2019–20	2020–21	2021–22	2022–23	2023–24	2024–25	2025–26	2026–27
Eligible survivors and spouses/common-law partners (April 1, 2006, to April 1, 2018)		44	34	34
Eligible survivors and spouses/common-law partners — going forward	0	58	57	56	55	56	56	55	55	55
Total (615)	0	102	91	90	55	56	56	55	55	55

Note: The implementation date of the regulatory amendments is April 1, 2018; however, there are administrative costs related to this proposal prior to this date.

The monetized benefit to this group is assumed to be exactly equal to the program costs for VAC (see Costs section below). Being part of the workforce and contributing to the income of the family are critical factors in supporting and increasing a person’s self-esteem and sense of purpose. As a result, eliminating barriers and increasing access for eligible survivors and spouses/common-law partners to participate in rehabilitation services and vocational assistance will help address their future vocational needs, and therefore, contribute to improving their overall well-being. However, this benefit has not been monetized. Instead, program costs related to the regulatory amendments have been used as a direct proxy, given the program costs will be the amount provided to eligible survivors and spouses/common-law partners via the rehabilitation services and vocational assistance that are needed.

Costs

Government of Canada — All costs related to these regulatory changes, which will come into force on April 1, 2018, will be borne by the Government of Canada. The net present value costs, both program and administration, paid by the Government of Canada is valued at $11.8 million over 10 years, from fiscal year 2017–18 to fiscal year 2026–27.

Program costs were determined by multiplying the annual number of individuals expected to benefit (as described above in the “Benefits” section) by the average vocational assistance cost each year, and also applying an annual inflationary factor following the first year of implementation. Although survivors and spouses/common-law partners are eligible to receive both rehabilitation services and vocational assistance, only vocational assistance costs have been considered in the calculations. Based on historical access by survivors and spouses/common-law partners, it was assumed that the vast majority of these individuals will be mentally and physically healthy when applying, and, therefore, only utilize vocational assistance.

In addition, administration costs (rounded to the nearest $100 000) were determined based on the need for an additional 0.5 temporary full-time equivalent public service resources in fiscal year 2017–18 to support required changes prior to implementation (e.g. updated business processes and training). There are also IT development costs (e.g. updated design and testing) to implement system changes, including changes to VAC’s Client Service Delivery Network (the Department’s electronic records management system) and My VAC Account (a secure web portal that allows Veterans and others to do business online with VAC). There is also an additional internal resource requirement throughout the Department to support the regulatory changes. There will not be any ongoing administrative costs associated with these regulatory amendments as the processing of the additional survivors and spouse/common-law partners can be handled by existing resources.

Total program and administrative costs are included in the following chart:

• Program and administrative costs

Fiscal year/ Dollars in millions	2017–18	2018–19	2019–20	2020–21	2021–22	2022–23	2023–24	2024–25	2025–26	2026–27	Total	Total (PV) (7%)
Program costs	$0.0	$0.5	$1.4	$1.9	$2.1	$2.0	$2.0	$2.0	$2.0	$2.0	$15.8	$11.1
Admin. costs	$0.6	$0.1	$0.0	$0.0	$0.0	$0.0	$0.0	$0.0	$0.0	$0.0	$0.7	$0.7
Total	$0.6	$0.6	$1.4	$1.9	$2.1	$2.0	$2.0	$2.0	$2.0	$2.0	$16.6	$11.8

Note: Figures may not add due to rounding. The implementation date of these amendments is April 1, 2018; however, there are administrative costs related to this proposal prior to this date.

Non-quantified benefits

These regulatory amendments will positively impact certain individuals and stakeholder groups including the following:

Eligible survivors and spouses/common-law partners — These individuals will benefit from having improved access to, and participation in, VAC’s rehabilitation services and vocational assistance. They will also have increased comfort and peace of mind as they will either no longer feel pressured to apply for rehabilitation services and vocational assistance at a time when their emotional and mental energy may be focused elsewhere, or when they may have screened themselves out from applying should the one-year time limit have already passed. Rather, once the application time limit is removed, they will be given the flexibility to apply for, and receive these services and assistance at a time that they feel will be more beneficial to them. Being part of the workforce and contributing to the income of the family are critical influences in supporting and increasing a person’s well-being and sense of purpose. The elimination of barriers for survivors and spouses/common-law partners to participate in rehabilitation services and vocational assistance will possibly help their self-worth, identity and overall well-being.

Family members — Families will see a residual positive effect, given the survivor or spouse/common-law partner may have a renewed sense of self-worth and overall improved well-being as they pursue their vocational goals.

Veterans Ombudsman and Veterans Stakeholder Groups — The Veterans Ombudsman and Veterans Stakeholders groups, in particular ANAVETS, will benefit from the knowledge that VAC is making improvements to access services and benefits provided to survivors and spouses/common-law partners. They will also be content in knowing that that the Government is taking action to address a concern that they have identified and have been lobbying to change.

Government of Canada — The regulatory amendments allow the Government of Canada to fulfill one of the commitments in the Minister of Veterans Affairs and Associate Minister of National Defence’s mandate letter, and demonstrate the Government’s continued commitment and leadership to support Veterans and their families.

The cost-benefit analysis is available upon request.

“One-for-One” Rule

The “One-for-One” Rule does not apply to these amendments, as there is no administrative cost to business.

Small business lens

These amendments do not increase or decrease administrative burden or compliance costs on small businesses.

Consultation

These regulatory amendments were developed, in part, in response to an issue raised by stakeholder groups, including the Veterans Ombudsman and ANAVETS.

One of these amendments was publicly announced in the Minister of Veterans Affairs and Associate Minister of National Defence’s 2015 mandate letter as a priority: to remove the time limit for eligible survivors to apply for rehabilitation services and vocational assistance. Stakeholders groups were invited to provide input and feedback related to all of the mandate commitments during various engagement and consultation activities throughout 2016. As well, the Minister of Veterans Affairs launched a publicly available online feedback mechanism to invite the broader stakeholder community and all Canadians to share their concerns, views, and ideas on issues of importance to Veterans and their families. This regulatory amendment is reflective of one of the many broader trends that were identified, including that consideration be given to Veterans’ survivors and families in future policy and program development. To date, the Department has not received any negative reaction or feedback with respect to this mandate commitment.

In addition, the Department has exceeded this mandate commitment by also expanding the elimination of the application time limit to include eligible spouses/common-law partners for consistency in program design. Given the relieving nature of both amendments and the absence of any opposition from stakeholders and the general public, it is expected that both regulatory amendments will be well received by Veterans, survivors, spouses/common-law partners, families and stakeholder groups.

Rationale

VAC exists, in part, to assist those whose courageous efforts gave us our legacy and contributed to our growth as a nation. VAC achieves this mandate by providing benefits and services, through the Act and other legislation, that respond to the needs of CAF members, Veterans and their families. VAC is committed to making ongoing enhancements to these benefits to better meet the needs of CAF members, Veterans and their families, including survivors and spouses/common-law partners. The amendments to the Regulations will support the emotional and mental preparedness of eligible survivors and spouses/common-law partners, provide them sufficient time to gain resiliency and adopt coping strategies, and provide them the ability to choose their optimal point in time to move forward and address their future vocational needs.

Additionally, although the cost-benefit statement demonstrates that, from a financial perspective, the costs to the Government of Canada slightly exceed the monetized benefits provided to eligible survivors and spouses/common-law partners, the non-quantified benefits indicate that the benefits outweigh the financial costs.

Lastly, these amendments respond to a concern identified by some Veteran stakeholder groups, fulfill a commitment made by the Government of Canada, and will help confirm the Government’s continued commitment to do more to support the families of Canada’s Veterans.

Implementation, enforcement and service standards

The regulatory amendments are to come into force on April 1, 2018. As of this date, eligible spouses/common-law partners will be able to apply for rehabilitation services and vocational assistance, regardless of the date the Veteran was deemed totally and permanently incapacitated and unable to benefit from rehabilitation services and vocational assistance. Also as of this date, eligible survivors will be able to apply, regardless of the date the CAF member or Veteran died (provided the date of death does not pre-date the introduction of the Act — April 1, 2006).

VAC will use the existing service delivery infrastructure already in place to deliver rehabilitation services and vocational assistance. However, some system work is required to incorporate these regulatory changes into VAC systems. Changes and updates to existing policies, business processes, guidelines and application forms are also required to support these changes. As well, during the year prior to implementation (fiscal year 2017–18) and the first year of implementation (fiscal year 2018–19), additional resources, both human and financial, are required. In the years following, rehabilitation services and vocational assistance will be managed and delivered within existing departmental resources.

Ongoing communication with VAC staff will be an integral component to the successful implementation of these changes. Communication products and training plans will be developed and delivered to VAC staff prior to the coming into force date of the regulatory amendments, so they are well informed and can effectively assess applications, respond to questions, and provide information and advice based on the changes.

As with other benefits and services offered by VAC, there are established service standards with respect to rehabilitation services and vocational assistance, including timely eligibility decisions (made within 2 weeks of receiving an application), and timely development of plans to meet identified needs (developed within 45 days of the eligibility decision). Although the regulatory changes may result in an increase in the number of applications received from survivors and spouses/common-law partners, and the number of plans that will need to be developed, the projected increase will not adversely affect these service standards.

Performance measurement and evaluation

Reviews will be conducted in accordance with the performance measurement strategy developed for rehabilitation services and vocational assistance to guide the selection, development, and ongoing use of performance measures. The purpose of this performance measurement strategy is to assist VAC to

• continuously monitor and assess the results of the rehabilitation services and vocational assistance provided, as well as the economy and efficiency of their management;
• make informed decisions and take appropriate, timely action with respect to these services and assistance;
• provide effective and relevant departmental reporting; and
• ensure that credible and reliable performance data are being collected to effectively support evaluation.

Results will be measured in accordance with indicators contained in the performance measurement strategy, and data will be collected through the Client Service Delivery Network, case manager’s closure reports completed at the end of a participant’s participation in rehabilitation services and vocational assistance, and annual statistics generated by VAC’s Statistics Directorate.

VAC’s Audit and Evaluation Division also conducts audits and evaluations of all VAC benefits and services, including rehabilitation services and vocational assistance. Results are published regularly on VAC’s external website. An evaluation of rehabilitation services and vocational assistance as well as the financial benefits provided under Part 2 of the Act is currently planned for fiscal year 2019–20.

Contact

Katherine Morrow
A/Manager
Cabinet Business Unit, Strategic Oversight and Communications
Veterans Affairs Canada
P.O. Box 7700
Charlottetown, Prince Edward Island
C1A 8M9
Telephone: 902-566-6890
Email: Katherine.Morrow@vac-acc.gc.ca

• Footnote a
  S.C. 2016, c. 7, par. 97(j)
• Footnote b
  S.C. 2005, c. 21
• Footnote 1
  SOR/2006-50
• Footnote 2
  Gender breakdown of the number of survivors and spouse/common-law partners receiving rehabilitation services and vocational assistance does not exist. However, as the vast majority (85.2%) of the Canadian Armed Forces population is men, and women are customarily the caregivers and primary support to Veterans with chronic care needs, it is expected that the majority of people who will directly benefit from the regulatory change will be women.
• Footnote 3
  Forty-seven individuals historically denied access, divided by the pool of 1 037 clients (being the total number of totally and permanently incapacitated and married and rehabilitation eligible clients), equals 5%. An equal number (i.e. another 5%) is conservatively assumed to have historically self-screened.