Canada shortchanged up to 272,000 disabled veterans of roughly $165 million

Anatomy of a blunder: How Veterans Affairs quietly buried a $165M accounting error

CBC
Murray Brewster
January 11, 2019

It was an incredibly simple (and incredibly daft) mistake — and it led to a $165 million federal fiscal faux-pas.

Veterans look on during Remembrance Day ceremonies at the National War Memorial in Ottawa on Sunday, Nov. 11, 2018. New documents obtained by the CBC show how Veterans Affairs attempted to gloss over a $165 million accounting error affecting disability pensions. (Sean Kilpatrick/The Canadian Press )

In 2001, the Liberal government of Prime Minister Jean Chrétien made what appeared to be an innocuous change to federal tax forms.

It separated federal and provincial tax exemptions, shuffling the basic personal tax credit from one part of the document to another.

Staff at Veterans Affairs, who administer disability awards and pensions, did not pick up on the modification to the tax law for several years and ended up short-changing former soldiers — most of them elderly — who received disability pensions and awards benefits.

It was a mistake that cascaded, over time, into a whopping, multi-million dollar fiscal mess that Justin Trudeau's Liberal government began to mop up last fall.

CBC News has obtained hundreds of pages of documents under access to information legislation, and has conducted a series of background interviews with current and former federal officials, to understand the extraordinary blunder that shortchanged up to 272,000 disabled veterans of roughly $165 million.
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