VAC provides two types of financial benefits to compensate for the effects of service-related disability or death: economic benefits and non-economic benefits. These benefits have different purposes and achieve different outcomes. Economic benefits are designed to compensate for the monetary impacts of illness, injury or death, such as loss of salary, loss of earning capacity and various expenses. Economic benefits provided by VAC include the Earnings Loss Benefit (ELB) and the Permanent Impairment Allowance (PIA), among others. These types of economic benefits have been reviewed by the Veterans Ombudsman in the past, and are not discussed in this report.
Non-economic benefits, which are the subject of this report, are non-taxable, lump-sum or periodic payments that compensate for the non-monetary impacts of illness, injury or death, such as loss of or diminished body function, pain and suffering, emotional distress, limitations on daily activities, impact on quality of life, and loss of companionship and guidance. In civil litigation cases involving personal injury, this type of compensation is referred to as non-pecuniary or general damages – money awarded to a plaintiff to provide reasonable solace for his or her intangible losses.
An analysis of compensation for non-economic loss is inherently challenging because of the ambiguous nature of non-economic loss. Unlike economic loss where one can calculate the income lost or one’s out-of-pocket expenses as a result of an illness or injury, it is challenging to establish a benchmark with respect to non-economic loss. Justice Dickson described the ambiguity inherent in compensating for non-economic loss in the Supreme Court of Canada decision in Andrews v. Grand and Toy Alberta Ltd., where he stated that:
“…The monetary evaluation of non-pecuniary losses is a philosophical and policy exercise more than a legal or logical one. The award must be fair and reasonable, fairness being gauged by earlier decisions; but the award must also of necessity be arbitrary or conventional. No money can provide true restitution…”
The purpose of this report is to assess the fairness of compensation provided under the NVC for non-economic loss and to compare this to what other Canadians can receive. The report compares the benefits provided by VAC to the compensation provided to other Canadians by Canadian federal and provincial/territorial programs and by the Canadian courts.
In addition, the report reviews what other Allied countries provide to their armed forces members and Veterans, and their survivors, for the non-economic effects of service-related disability or death. It is challenging, however, to compare the benefits provided to Canadian Veterans to what other countries may provide to their Veterans. There are many differences among the various countries, including: how benefits are delivered; service-delivery approaches; eligibility criteria; payment schemes and monetary amounts, and therefore benefit-to-benefit comparisons are not easily made. Every country designs its programs to meet its own needs, national imperatives and economic realities, and programs take into account external factors such as cost of living, availability of other Government programs and the economic environment. As a result, Allied country compensation schemes should not be used as a benchmark for assessing how well Canadian Veterans are compensated for non-economic effects of disability or death.
There are differences between how VAC compensates CAF members and Veterans for the non-economic effects of disability and how provincial/territorial Workers Compensation Board (WCB) benefit programs compensate individuals for the non-economic effects of work-related permanent impairment. While the WCB programs generally compensate for the effects of permanent impairment of a body part or function, every program provides compensation for non-economic loss in a different way using a variety of assessment tools, and different benefit calculation methodologies and compensation amounts.
Furthermore, there are also a number of differences between how VAC compensates CAF members and Veterans for the non-economic effects of disability and how Canadian courts award damages for personal injury. While VAC uses a systemic and legislated approach to awarding compensation, the courts have flexibility to make determinations regarding the amount of non-pecuniary damages that are awarded for injury based on the unique factors in each case. However, both VAC and the courts have an upper limit (approximate limit for the courts) for the amount of compensation that can be awarded for non-economic loss or general damages. Unlike the courts however, a CAF member or Veteran can appeal the amount of compensation awarded for non-economic loss and can ask for a reassessment should their illness or injury worsen. There is no recourse within the courts once a settlement has been reached.
The report uses the Veterans Ombudsman’s measures of fairness – adequacy, sufficiency and accessibility – to analyze the fairness of NVC compensation provided by VAC to disabled CAF members, Veterans, and survivors for non-economic loss. When the Disability Award is analyzed in this manner and is compared to how other Canadians are compensated for the non-economic effects of impairment/injury, the award paid to a maximum of $360,000 is considered to be fair.
However, when this fairness lens is applied to other non-economic benefits provided by VAC, two inconsistencies are apparent. First, disabled CAF Veterans covered under the Pension Act are compensated for the non-economic effects of exceptional incapacity, while disabled CAF Veterans covered under the NVC are not. Second, compensation for death under the NVC is different depending on the marital status of the CAF member.
The report makes three recommendations to address these inconsistencies. First, Veterans (and their survivors) should be compensated under the NVC for the non-economic effects of exceptional incapacity. Second, the criteria to qualify for compensation for exceptional incapacity should not be based on a specific minimum disability percentage. Third, a designated family member of a single CAF member with no dependent children who dies in service to Canada should be permitted to apply for the Death Benefit.
By addressing these three recommendations, VAC will provide fair compensation to CAF members, Veterans, and survivors for non-economic loss.
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