OTTAWA - Justifying spending cuts on the basis of a dwindling corps of veterans makes no sense because their numbers are actually on the rise, the watchdog for Canadian veterans said Wednesday.

Veterans Affairs is planning to shave $226 million off its budget over the next two years because, it says, the number of veterans from the Second World War and Korean War is dropping.

But those numbers aren't falling as fast as projected, veterans' ombudsman Guy Parent told a Senate committee on Wednesday.

And in the meantime, the number veterans from current conflicts and modern military service is growing.

Altogether, there are over 700,000 veterans in Canada.

Though not all take advantage of benefit programs, there is the potential that they will, Parent said.

"It means the same budget for the same programs," he said.

A spokeswoman for Veterans Affairs Minister Steven Blaney stood by the department's projections. She said the spending reduction was not a cut in benefits to veterans.

"Our government will ensure that funding will always be available to provide veterans with the benefits they are entitled to," Codie Taylor said in an email.

"If demand for benefits is greater than what is forecasted, there is a standard process in place through Treasury Board to increase funding to ensure the necessary funds are available."

Parent's appearance before committee comes as he prepares to mark his first year in office.

He was appointed to the position last November to replace outspoken ombudsman Pat Stogran, who irked government with his confrontational approach to veterans' advocacy.

The position of ombudsman was created in 2007 and since then Parent said over 25,000 complaints have been lodged.

The top concern is access to health care and benefits, with veterans frustrated by the appeal board process, he said.

Veterans denied benefits are allowed to appeal the decision and, if that fails, they can take the matter to court.

Parent's office is currently reviewing the court decisions to see if there's a systematic problem that needs to be fixed. The result of that study is due later this fall.

While the ombudsman is supposed to be independent, Parent told senators there are concerns his relationship with the department may appear too close. Among the red flags are the $1.3 million in funding his office receives directly from Veterans Affairs for internal services.

"Sometimes that brings questions of independence from the department because that gives them some sort of control over the access to human resources and corporate services," he said.

He said his office and the department are currently working on a memorandum of understanding that clarifies the relationship.

He said doesn't know whether his office will lose any funding as a result of the program spending review currently underway by government.

But Parent said if the United States and the United Kingdom are saying that veterans programs are exempt, Canada must do the same.

"Either they do the same or make sure the restriction is kept to a bare minimum," he said in an interview after the committee hearing.

The Liberals want the House of Commons veterans' affairs committee to drop its current study and focus on cuts instead.

"The Conservatives want our committee to spend the next six weeks studying their initiative to `commemorate' veterans so they can sweep the fact that they just cut $226 million from veterans' supports and services under the rug," Liberal veterans affairs critic Sean Casey said in a written statement.

"They are clearly afraid to discuss the consequences that their cutbacks will have on our veterans."