Raising benefits for military, RCMP families would add $6B liability: PBO

OTTAWA – A new analysis says an NDP proposal to boost pension benefits for families of deceased Canadian Forces and RCMP veterans could hurt Ottawa’s bottom line by more than $6 billion.

The NDP private member’s bill calls for raising retirement benefit payments to surviving spouses and children to 70 per cent of a contributor’s annual allowance from the current level of 50 per cent.

The federal budget watchdog estimates such a change could create an additional pension liability of nearly $6.4 billion for the government.

The budget office says that Treasury Board policy indicates the entire liability would hit Ottawa’s books, net of any surplus in the account — all in the year the change is approved.

The parliamentary budget office also estimates the proposed legislation would create an annual service cost of $152 million for the federal government.

The private member’s bill was introduced in April by New Democrat MP Irene Mathyssen. It has passed the first-reading stage, but opposition proposals typically have little chance of being adopted.

“It is important that supports remain in place for the spouse and family after the veteran passes away,” Mathyssen said in the House of Commons in April.

“Many veterans’ spouses are forced to give up their own careers to support the veteran during the veteran’s service when they are moved from city to city, making it difficult for the spouse to establish a career. Or a spouse may give up work to care for an injured veteran.”

Taking a closer look at the numbers, the budget office says the proposed changes would increase pension liability by about $5 billion for the regular Canadian Forces pension plan and by about $1.3 billion for the Mounties’ pension plan.