Billy-Jo Nachuk filed the complaint after officers with the Brandon police removed him from a bar in April 2011.
Nachuk said he had a service dog with him to help him with his PTSD — and had the certification papers to prove it — but police refused to listen to him.
Earlier this year, the police service offered a settlement of $5,500 but Nachuk turned it down and the Manitoba Human Rights Commission said it was too low.
The commission says a new offer was put forward and agreed to, but it is confidential.
Another veteran was turned away from a restaurant in Prince Albert, Saskatchewan, in March because he had a service dog for PTSD.