July 21, 2024
Canadian veterans march following a Remembrance Day ceremony in Montreal in 2023. (Graham Hughes/The Canadian Press)

Lawsuit over massive Veterans Affairs accounting error to cost Ottawa almost $1 billion

More than 272,000 veterans were short-changed on pension and disability payments for almost eight years

An embarrassing multi-million-dollar accounting error that was covered up for years at Veterans Affairs Canada (VAC) will end up costing taxpayers almost $1 billion, now that a Federal Court judge has signed off on a combined class-action settlement.

More than 272,000 former soldiers, sailors and aircrew — most of them elderly — were short-changed on pension and disability payments for almost eight years, starting in 2002.

VAC staff made the mistake by not factoring provincial tax credits for individuals into their calculations. The department discovered the error in 2010.

The oversight was fixed but officials decided at the time not to notify the affected veterans and not to offer reimbursement for the missed payments.

The affected veterans — who include some former members of the RCMP — sued and have now been awarded an additional $817 million on top of $165 million in compensation earmarked by the federal government.

The Liberal government chose to settle the case rather than fight it out in court. A settlement agreement struck last fall was approved by Federal Court Justice Catherine Kane on Jan. 17, 2024.

The settlement comes into effect in mid-March.

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