Funds created to compensate Canadians who contracted hepatitis C through tainted blood before 1986 and after 1990 have a combined shortfall of more than $220-million, according to a new document filed in court by the federal government.

OTTAWA — The Globe and Mail

Unless Ottawa comes up with money to fill that gap, many of the victims of one of the worst health scandals in Canadian history will never get the full amount they are owed and some of the families of those who have died will get nothing.

“I think it’s a travesty that the Canadian government has never accepted responsibility for those who were infected pre1986,” said Cathy Stevenson, whose mother, Myrna MacDonald, died of hepatitis C in 1983 at the age of 45 after being given three units of blood two years earlier. “I just think it’s wrong.”

Ms. MacDonald’s estate was paid some compensation but is still owed about a quarter of a million dollars, leaving Ms. Stevenson and her family among hundreds of other Canadians who have not received the money they were promised for their suffering and for the loss of their loved ones.

Although there is more than enough cash to cover an original settlement with those infected between 1986, when the United States began testing donated blood, and 1990, when Canada began screening, there is not enough to fully compensate those who contracted hepatitis C outside of that time frame. A new document filed by the government in the Ontario Superior Court of Justice, in advance of a December hearing to assess the sufficiency of the funds, shows the full scope of the shortfall.

Peter Gorham, an actuary with Morneau Shepell, calculated that the funds would need another $223,670,000 to meet the terms of the agreement struck in 2007 and to achieve parity with the 1986-to-1990 victims. Morneau Shepell is the human-resources firm once chaired by Finance Minister Bill Morneau that was retained in 2005 under the name Morneau Sobeco to provide financial advice about the settlement.

Those who became sick before 1986 and after 1990 have been given just 90 per cent of the amounts they were awarded from a main compensation fund. Ten per cent of that money was withheld because it wasn’t known how many people would access the fund. That pool still has about $31-million left in it. But, according to Mr. Gorham, it would take a little more than an additional $130-million to bring everyone up to 100 per cent of what they are owed.

Meanwhile, a second fund created to compensate victims of hepatitis C for their past economic losses, and to give money to the dependents of those who died, is empty and would require an infusion of nearly $93-million to pay those claims if the rules of the 1986-to-1990 fund applied.

When the funds were created, it was believed that it would take about a billion dollars to compensate all of the pre-1986 and post-1990 victims of hepatitis C through tainted blood, said David Klein, a Vancouver lawyer who negotiated the settlement on their behalf. Those estimates were off by 20 per cent, said Mr. Klein.

There were more claimants. But, on top of that, the claimants were much sicker than expected, he said, “and because they were sicker, the amount they were eligible for was higher.”

In addition, the average age of the hepatitis victims was much younger than forecast, said Mr. Klein. “A younger claimant receives more than an older claimant,” he said, “because they are going to be living with the disease for a longer period of time and because of the likelihood that the disease will progress.”

Mr. Klein has appealed to the federal government to correct what he says is a basic unfairness by topping up the funds and providing his clients with the same compensation that has been paid to those who were infected between 1986 and 1990. But the government has, so far, shown little interest in responding to that appeal.

“The details on those funds were determined at a previous period of time and an arrangement was made that was deemed to be fair at that point,” Health Minister Jane Philpott said Wednesday.

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