An Unwritten Covenant? Veterans' Benefits in Canada

Guest Blog from Kellen Kurschinski

In October 2012 six Canadian veterans who served in Afghanistan filed a class-action lawsuit against the federal government claiming that the compensation structure of the New Veterans Charter (2005) violates the Canadian Constitution and the Charter of Rights and Freedoms. In this post we examine the historical context for the arguments provided by both sides.

In particular, the claim of the six veterans in question hones in on the new Disability Awards system, which offers disabled soldiers lump-sum payments (either all at once or spread out over an extended period) in lieu of the lifetime pensions that many older veterans continue to receive under the provisions of the Pension Act. The claimants argue that this new award system, which offers much less in terms of compensation for permanent disabilities, represents a violation of ‘social contract’ or ‘social covenant’ that has existed between the Canadian state and its veterans since the First World War. The federal government has vehemently dismissed this claim, charging instead that the plaintiffs are merely "seek[ing] to advance a pure economic interest" and that a "scheme providing benefits cannot be said to amount to a deprivation merely because the claimant views the benefits as insufficient." The legal response also contends that “At no time in Canada’s history has any alleged ‘social contract ‘ or ‘social covenant’ having the attributes pleaded by the plaintiffs been given effect in any statute, regulation or as a constitutional principle written or unwritten.” The federal government’s position, in essence, is that compensation for disability incurred during service is a contractual benefit of government employment, rather than an inalienable right. As such, the shape and scope of these benefits, the level of remuneration, and eligibility criteria are subject to the discretion of parliament, and can be reformed to suit the changing needs of Canada’s military, veterans, and the society for whom they serve.

 From a statutory perspective, the government’s assertion is probably correct. Canadian pension policy has gone through significant transformations since the First World War, but it has always been subject to the changing needs and financial means of the state, the demands of veterans, and the political climate of the day. The courts will ultimately have to decide whether the system of benefits under the New Veterans Charter vs. those available through the Pension Act differ to such a drastic degree that they constitute a violation of the state’s purported fiduciary obligations to ex-members of the Canadian Forces.

The decision may very well hinge on whether the courts determine that an “unwritten” contract or covenant between veterans and the state has persisted since the First World War. A close reading of historical records – many of which are publicly available through sources like the Internet Archive and Canadiana – offers insight into the vigorous debates that took place during and immediately after the Great War over the scope and meaning of pension benefits for the disabled. Between 1915 and 1924, parliamentarians, veterans groups, pension officials, and medical experts were called each year to participate and submit recommendations to special parliamentary committees tasked with examining the problems facing Canadian veterans. Each year, pension policy figured prominently on the agenda, with veterans placing mounting pressure on politicians and pension bureaucrats to honour Canada’s sacred obligation to protect the well-being of its disabled heroes and fulfill its wartime promise of a just and equitable pension system.

The original spirit of Canada’s wartime pension regulations, as well as the intentions of its creators, should also be taken into consideration. In its response to the claimants, the federal government argued that the political statements made by then Prime Minster Robert Borden surrounding Canada’s obligations were not intended to be interpreted as the basis of a “social contract.” The reality, however, is that Prime Minister Borden had very little to do with the formulation of Canada’s pension scheme. The chief architect, in fact, was Major J.L. Todd, a Montreal physician and one of the original members of the Board of Pension Commissioners. Todd was a shrewd pragmatist, but he also firmly believed in the necessity of a liberal and flexible pension system. Such an approach to pensioning, wrote Todd in 1919, was justified out of the “national desirability of ensuring a healthy home to every worthy citizen and his family.” “Through war pensions,” he continued, “the joint responsibility of all citizens to share in damages incurred by individual citizens while giving war service is recognized.” The level of compensation would vary according to the extent of a soldier’s incapacity, but in cases of permanent and total disability, a pension was to be substantial enough for a veteran to live the remainder of their lives in “decent comfort.”

Canadian pension policy, in other words, was founded on the ‘insurance principle’ – a form of social insurance provided by the state to its citizen soldiers and any permanent force members who were disabled while in the line of duty. With few exceptions, if a disability appeared while a soldier was on duty, pension authorities were obliged to grant him the benefit of the doubt and rule it attributable to military service. If pension doctors could provide conclusive medical evidence demonstrating that the disability resulted from misconduct (such as a self-inflicted wound), or predated enlistment and was unaffected by service conditions, then there were clear grounds for dismissal of a claim. While we do not know precisely how many soldiers applied for pensions during the war years, a recent sample of 384 First World War veterans compiled by Clio’s Current author Kellen Kurschinski shows that of the veterans that did apply between 1915 and 31 December 1920, the success rate was a remarkable 75 per cent. The median award rate was a meager 15 per cent (around $10.00 per month), but the state was more or less fulfilling its obligations according to the spirit of the regulations. The steep rise in Canadian disability pensioners between 1918 and 1920 – 15,335 in 1918 to 69,203 in 1920 – would further suggest that a substantial portion of the war’s sick and wounded were receiving some manner of compensation for their suffering.

In September 1919, Canada’s patchwork of wartime pension regulations were given a statutory basis with the passing of the Pension Act. A landmark achievement in Canadian social policy for its time, the Pension Act was the culmination of several years of debate, experimentation, and in some respects, speculation on the part of military physicians, pension authorities and politicians. In the years after the First World War, however, the Act went through a series of crucial amendments that profoundly impacted Canadian veterans. Much like the New Veterans Charter, one-time payments were a key feature of these amendments, a doomed experiment in Canadian pension reform that we have discussed in a previous post. Another major change surrounded attributability and post-discharge disabilities. In 1921, a seemingly minor alteration was made to Section 11 of the Act. The amendment changed the wording of a single (but vital) sentence to state that a veteran’s disability had to be “attributable to military service as such,” whereas the text of Section 11 previously incorporated the words “attributable to or incurred on service.” According to this new interpretation, a successful pension claim had to demonstrate irrefutably that a disability was directly attributable to, or aggravated by, service conditions. The amendment was intended to protect the state’s coffers from being exploited veterans who developed disabilities that were thought to be unrelated to military service, but when interpreted too zealously, it had the ancillary effect of debarring thousands of legitimate pension claims for latent diseases or injuries (especially the effects of poisonous gas on lungs) that went undocumented in a soldier’s wartime service records.

Veterans were furious. In a widely publicized memorandum, the Great War Veterans Association charged that the pension authorities guilty of “contemptible and cold-blooded conspiracy” to deprive rights previously granted to veterans by parliament. The Mackenzie King government responded promptly, appointing a royal commission headed to investigate the status of Canada’s pension policy. The commission ultimately concluded that the GWVA’s claims of an outright conspiracy were sensationalized, but nevertheless, the system had deep flaws that needed to be addressed. Somewhere along the lines, the spirit of the Pension Act and civil re-establishment had been lost in the quest for fiscal prudence. In the years that followed, new appeal systems were introduced and revised, the lump-sum payment scheme was reversed, and the ‘insurance principle’ made a gradual return. While the interpretation of the legislation was malleable – especially for disabilities that did not conform to accepted norms of impairment – its subjectivity was persistently tempered by a widespread understanding of the state’s moral obligation to compensate veterans adequately and justly.

Today the Canadian state is entering a new chapter in its century-long relationship with veterans. Although the dynamics and context of this relationship have changed over the past hundred years, a closer examination of its origins can tell us a great deal about how veterans have viewed their relationship with the state, and how federal authorities have responded in kind. Canada’s pension legislation emerged in response to an unprecedented social crisis confronting a nation immersed in total war. With few models to operate on, its architects sought to create a policy that underscored the state’s commitment to preserve the health and well-being of its citizen soldiers for the great good of the nation.

The New Veterans Charter has done little to convince veterans that this special bond has continued on in the same spirit. Is the current system of benefits truly representative of values underpinning the relationship between Canada and its veterans? It’s a question all of us should pause to consider.