So when I heard about the supposed demise, I got in touch with a few of my contacts from my days in government to see what the deal was. At one department, supervisors were effectively told that the program was over without any context. But at another federal science department, there was a bit more information presented.
According to my anonymous government contacts, the whole issue began when a VF challenged their employment status. Because VFs are paid directly from NSERC, this person argued, they should be receiving benefits as well, and treated as fully fledged employees. They took their case to the Canada Revenue Agency, who arbitrates on such matters, and the CRA ruled that VFs are employees of NSERC. As result, NSERC pulled the plug.