Veterans may have paid too much for long-term care for years due to federal error

A misinterpretation of federal rules may have caused tens of thousands of Canadian veterans to be overcharged for long-term care since at least 2005.

Veterans Affairs Canada (VAC) says it's investigating — and some lawyers have filed a new class-action lawsuit application — after an analysis by CBC News uncovered a possible error in how the department calculates what veterans pay for long-term care.

"It's just kind of a slap in the face [to] these veterans, who've given all they had during the Second World War, the Korean War … then to not be looked after properly, and not to be looked after the way Parliament wanted them to be," said retired colonel Michel Drapeau, who now practises law in Ottawa.

With some exceptions, veterans in the department's long-term care program are required to cover only the cost of their accommodation and meals. That cost is supposed to be set at a level equal to the lowest cost of room and board in the least expensive province.

Figures provided by Veterans Affairs Canada show that for this year, veterans in the program pay a maximum of $1,236.90 monthly for long-term care — roughly equivalent to the lowest available cost in Manitoba.

But the federal law that governs how other laws are interpreted defines "province" as "province or territory" — and long-term care fees are significantly cheaper in the Northwest Territories.

The long-term care rate in the Northwest Territories for this year is $976 — meaning veterans could be getting overcharged by more than $260 per month, or $3,130 annually.

Figures obtained by CBC News from provinces, territories and VAC show that some veterans in the long-term care program have been paying more than the lowest cost in the lowest province or territory (which consistently has been the Northwest Territories) for at least 19 years.

Drapeau said that publicly available information indicates only a small number of veterans are in long-term care right now — about 1,500. Ten years ago, he said, there were far more of them in care — between 6,000 and 14,000. 

"We're not talking about millionaires here," he said, adding that many veterans are on pensions. "I think the average Canadian would say, 'Wow, that's $3,000 a year. It is significant.'"

Drapeau's firm and four other firms represented 330,000 CAF and RCMP veterans in a recent class action over pension and disability payments. Those firms successfully argued Veterans Affairs Canada made a similar error in law in calculating monthly disability benefits.

In that case, Manuge v. Canada, the court concluded that the federal government undervalued a pension adjustment based on the income tax rate for the province with the lowest combined federal/provincial rate, and failed to consider that Nunavut had the lowest rate.

The settlement ordered the federal government to repay the class action members the $528.5 million they'd lost to the error, plus millions of dollars in interest dating back to 2003.

Two sources with ties to Veterans Affairs Canada told CBC News that the question of veterans being overcharged for long-term care had been flagged internally.

Both sources said the department has known about this discrepancy "for years." One source said the question of whether the issue would become public was a matter of "when, not if."

CBC News asked the department why territories aren't included in the calculation of the cost for long-term care for veterans, and when VAC was first told of this issue. The department responded with a media statement.

"At Veterans Affairs Canada, we are working to ensure that all veterans have equitable access to our programs and services. We have been asked to investigate this matter," said the statement.

The office of Veterans Affairs Minister Ginette Petitpas Taylor declined an interview request but issued a statement.

"I have been briefed by my department officials regarding the meals and accommodations matter, and I have tasked the department to investigate it further," she said in the statement. 

"We have been there for veterans, and we remain committed to supporting them. As there is pending litigation, it would be inappropriate to comment on the subject beyond this."

A spokesperson for the Veterans Legal Assistance Foundation, a charity established to provide Canada's veterans with funding to obtain legal counsel, said she hopes this matter gets settled and veterans and their estates get justice. 

"Veterans Affairs Canada has one job, which is to support these veterans and their families, and they fail miserably, time and again," said Sandra Goodwin.

"Veterans and their families shouldn't have to use lawyers, they shouldn't have to access the judicial system to get the benefits they've earned."

Class action application filed

After being asked about this issue by CBC News, some lawyers involved in the Manuge class action said they were going to file another class-action application alleging that VAC is overcharging veterans for long-term care.

Drapeau said he believes the government made the same mistake by not taking territorial rates into account.

"As far as I can see, this time we're dealing with something similar again, a rate not being applied properly," he said. "Fundamentally, it's the same issue and the same principle."

A statement of claim was filed in federal court on Monday on behalf of the estate of Gordon Allan. The claim says the Second World War veteran died in 2022 after being admitted to a long-term care facility in 2019, and that he paid the maximum accommodation and meal charges for his care.

He participated in the Normandy invasion in June 1944 and was discharged from the military in 1946, says the statement of claim.

The claim was filed by Drapeau's firm and Gowling WLG.