Some of the biggest job cuts at Veterans Affairs in recent years have been in the disability awards branch – the division targeted in a recent auditor general's report for taking too long to decide on the benefit claims of ex-soldiers.

Departmental performance reports stretching back to 2009 show that roughly 897 positions have been eliminated across Veterans Affairs, with 33 per cent coming out of the section that administers pensions and awards.

Those same records show the health and rehabilitation branches also took a sizable hit – roughly 372 positions during the same time frame.

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Commemorations, the division that celebrates past wars and maintains memorials, was reduced by 17.2 per cent, while internal services – Prime Minister Stephen Harper described it last week as "backroom administration" – lost 71 positions, just 10.1 per cent.

"We have taken resources out of backroom administration from bureaucracy. We have put it into services," Mr. Harper said Wednesday during question period. "There are more benefits and more money for veterans than ever before, and more points of service. That is called good administration, good government, and it is good service for the veterans of this country."

As late as Friday, the Harper government was continuing to insist the reductions, part of an overall effort to eliminate the federal deficit, were not coming at the expense of ex-soldiers.

"We make no apologies for reducing bureaucratic expenses at Veterans Affairs Canada," said Conservative MP Parm Gill, the parliamentary secretary to the minister, Julian Fantino.

"The opposition wants to increase government bureaucracy. We are increasing front-line support for Canada's veterans. We recently announced eight new front-line mental-health clinics for Canadian veterans. While the NDP defends the unions, along with the Liberals, we are defending Canada's veterans."

The majority of the staff cuts in the disability and death compensation branch took place between 2010 and 2013. That section also underspent its budget allotment by $121-million, according to a 2013-14 departmental performance report.

There's a direct connection between the job cuts, the auditor general's complaints about benefit application wait times and the $1.13-billion in budget allocations that have gone unspent since 2006, said Liberal MP Frank Valeriote.

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You can't spend the money or process the applications if you don't have the staff, said Mr. Valeriote, who accuses Mr. Harper of misleading Canadians by saying the cuts were administrative in nature.

"It is indefensible," he said.

"Internal services, the backroom position of which the Prime Minister spoke on Wednesday when he said they're in the backroom, the cuts were minor in nature. So, let's make no mistake and let's be very clear: He lied."

The Union of Veterans Affairs Employees confirmed the job loss numbers, but noted that there is a knock-on effect when disability claims are delayed, which can also contribute to lapsed funding. Other benefits, such as health care and re-establishment to civilian life, don't kick in until a disability is approved.

There was $33-million in underspending on that area in the last budget year.

In 2013-14, the department did over-spend on financial benefits for the mostly seriously wounded, including $7.9-million in the permanent impairment allowance, which has been the subject of criticism from the veterans ombudsman.

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Despite blowing that portion of their allocation, Veterans Affairs underspent its budget by $133-million in 2013-14, the performance reports show.

A spokeswoman for Mr. Fantino said that the number of clients served by the department declined to 205,213 in 2013, which is about a 13-per-cent drop from where it was in 1994. Some of the reduction can be attributed to the passing away of Second World War and Korean War veterans, a trend that's expected to accelerate in the coming years.

The veterans' employees union has revealed that it filed formal notice on Nov. 18, demanding the government suspend further cuts until an independent third party can analyze the impact the staff reductions have had on services.

"We want an independent body to determine whether Veterans Affairs is capable of carrying out its mandate," said Carl Gannon, the union's president.

The union, a division of the Public Service Alliance of Canada, is currently in the midst of contract talks with the federal Treasury Board.

Mr. Fantino faced multiple calls to step down last week, but Mr. Valeriote said he expects the Conservative strategy is to run out the clock on Parliament's latest sitting and hopes the anger blows over during the Christmas holidays.