P.C. 2022-713 June 20, 2022: SOR/2022-149
Canada Gazette, Part II, Volume 156, Number 14
SOR/2022-149 June 21, 2022
IMMIGRATION AND REFUGEE PROTECTION ACT
P.C. 2022-713 June 20, 2022
Her Excellency the Governor General in Council, on the recommendation of the Minister of Citizenship and Immigration, pursuant to subsections 5(1) and 88(2) of the Immigration and Refugee Protection Act footnote a, makes the annexed Regulations Amending the Immigration and Refugee Protection Regulations (Immigration Loans Program).
Regulations Amending the Immigration and Refugee Protection Regulations (Immigration Loans Program)
1 Subsection 290(1) of the Immigration and Refugee Protection Regulations footnote 1 is replaced by the following:
290 (1) The maximum amount of advances that may be made under subsection 88(1) of the Act is $250,000,000.
Coming into Force
2 These Regulations come into force on the day on which they are registered.
REGULATORY IMPACT ANALYSIS STATEMENT
(This statement is not part of the Regulations.)
The Immigration Loans Program provides foreign nationals who intend to establish in Canada with access to funding that would otherwise not be available to them, so they may pay for certain essential costs related to transportation and assistance with initial settlement in Canada. While these loans are available to all immigrant classes, resettled refugees constitute 99% of Immigration Loans Program users. Funding for the Immigration Loans Program is provided through an advance from the Consolidated Revenue Fund, and has a maximum defined in the Immigration and Refugee Protection Regulations (Regulations), set at $126.6 million.
Canada has become a global leader in the resettlement of refugees. The latest Immigration Levels Plan includes a target to resettle 138,100 refugees between 2022 and 2024. The plan consolidates Canada’s humanitarian commitment to resettle at least 40,000 Afghan nationals over the next two years, which accounts for most of the increase in refugee targets over recent years.
Increased resettlement targets will lead to increased use of the Immigration Loans Program, and it is projected that the current maximum of $126.6 million will likely be reached in 2022. Should the maximum amount be reached, Immigration, Refugees and Citizenship Canada (IRCC) would no longer be able to issue loans to resettled refugees and other foreign nationals, to help pay for costs they are required to incur to travel and settle in Canada until sufficient repayments from previous recipients are made to replenish the fund.
To keep pace with the volume of anticipated new loans due to increased immigration levels in 2022-2024 and beyond, the Immigration Loans Program requires an increase in the maximum amount of funds that can be advanced from the Consolidated Revenue Fund to $250 million.
The Immigration Loans Program is funded through an advance from the Consolidated Revenue Fund. When clients make repayments, the available funding envelope is replenished, and these funds become available to issue new loans. The current maximum amount of advances for the Immigration Loans Program is set at $126.6 million, as prescribed by subsection 290(1) of the Regulations. This maximum amount was increased from $110 million in 2018 (SOR/2018-22).
The average loan is approximately $3,293 (per family unit), with roughly 21% of loans issued for more than $5,000, which includes loans issued for travel costs as well as assistance for initial settlement in Canada. The process for issuing loans begins during eligibility interviews, where migration officers counsel refugees on the availability and terms and conditions of the loan to cover the costs associated with the transportation of individuals and/or their dependants from point of origin to final destination in Canada (transportation loan). Currently, the policy is to cap the maximum loan amount at $15,000 per family. Loans may also be issued in Canada by designated officers to cover costs associated with initial settlement (e.g. first and last months’ rent and utilities) (assistance loan).
In 2018, loan terms were amended (SOR/2018-22) to ease the financial burden on recipients, many of whom are selected for resettlement based on their vulnerability, rather than their ability to establish in Canada, and arrive with higher settlement needs than other classes of new immigrants. These amendments extended the loan repayment periods by two years to reduce the size of monthly instalments, eliminated interest charges, and delayed the beginning of the repayment period to one year after arrival in Canada (repayment started 30 days after arrival prior to the amendments). Depending on the loan amount, recipients have between three (for loans up to $1,200) and eight years (for loans over $4,800) to repay their loans. Repayment terms may be eased for resettled refugees facing hardships in repaying their loans following arrival in Canada (for example, by extending the repayment period).
Prior to 2014, the Government of Canada issued approximately $13 million in loans every year. In recent years, the number of outstanding loans has increased due to both an increase in the number of refugees Canada resettled, and to the lengthening of the repayment period. In 2019, the Government of Canada issued almost $40 million in new loans, covering about 29,000 refugees. As of March 31, 2022, the total loan amount outstanding was $80.1 million.
With higher refugee resettlement levels announced on February 14, 2022, as part of the 2022-2024 Multi-Year Levels Plan, the number of new immigration loans is projected to increase significantly and exceed the current maximum amount in the Regulations in 2022.
The objectives of this amendment are to:
- Ensure the future sustainability of the Immigration Loans Program through an increase in the maximum funding amount that may be advanced to grant loans through the program.
- Enable and facilitate the resettlement of higher levels of refugees, including the Government’s commitment to resettle at least 40,000 Afghan nationals to Canada, through an accessible and affordable loans program.
Subsection 290(1) of the Regulations is amended to increase the total allowed advance amount from the Consolidated Revenue Fund for the Immigration Loan Program from $126.6 million to $250 million.
The regulatory amendment relates to an internal process to ensure the continued operation of the Immigration Loans Program and does not otherwise affect the scope or parameters of the loans program. No external consultations were conducted.
For many years, refugee advocates, private sponsors of refugees, and Service Provider Organizations serving refugees have called on the Government to eliminate the Immigration Loans Program and absorb the costs of the transportation expenses for refugees. The Immigration Loans Program continues to be a cost-effective way to provide an affordable lending program for refugee newcomers.
A prepublication comment period in the Canada Gazette, Part I, was not undertaken due to the time sensitivity of the proposal as it relates to the Government’s commitment to resettle Afghan refugees. The regulatory amendment relates to government operations and isn’t expected to have impacts on external stakeholders.
Modern treaty obligations and Indigenous engagement and consultation
No modern treaty implications are anticipated because Indigenous peoples in Canada are not impacted by the proposal. This amendment relates to the continued operation of the Immigration Loans Program.
Ensuring the sustainability of the Immigration Loan Program by increasing the available maximum of total advances though this regulatory change is a cost-effective way for the Government of Canada to maintain the pace of resettlement and immigration targets, without increasing expenditures or having to absorb the costs for refugees’ incoming travel. In the absence of an increase to the regulatory ceiling for the Immigration Loans Program, the Department would limit the issuance of new loans as soon as the maximum is reached and until sufficient funds are repaid from previous recipients to replenish the Consolidated Revenue Fund. Canada’s humanitarian tradition to resettle refugees and the Government’s ability to meet immigration targets in 2022 and beyond may be challenged, if immigration loans are no longer available to help defray refugee travel costs. There is no other funding source identified for these costs.
Benefits and costs
An important first step in developing a cost benefit methodology is establishing a baseline scenario against which options may be measured. For this analysis, the baseline scenario is one where the Government of Canada would not be able to provide loans through the Immigration Loans Program beyond the existing $126.6 million. In this scenario it is assumed that once the maximum is reached, immigrants that are otherwise eligible for loans would not be able to travel to Canada, or would have to resort to other means for financing their travel and resettlement expenses. Similarly, the regulatory scenario is one where the Government of Canada would be able to lend up to $250 million, facilitating travel and resettlement expenses. This analysis examines the impacts of the amendment for a 10-year period from 2022 to 2031.
The amendment will result in total costs of $6.7 million Present Value (PV) over 10 years to the Government of Canada. They include one-time implementation costs, ongoing administrative costs and the costs associated with the risk of default.
Minor transition costs are anticipated for the development of communications materials and updates to IRCC’s webpage. These one-time transition costs are estimated to be $1,000 PV and will be incurred in 2022.
There will also be ongoing costs to administer the additional volume of loans. These costs include incremental labour hours required to administer the program (creating loan files, collecting payments, etc.), as well as the costs of sending monthly statements to loan recipients. The total ongoing costs are estimated to be $3 million PV over 10 years, and they include $1.5 million for labour costs and $1.5 million in monthly statements expenses.
While IRCC invests in resources to encourage repayment, including collection activities and flexible repayment options, historical data presents that 4% of granted loans may not be repaid in accordance to terms. For the purpose of this analysis, uncollectible loans are considered costs to the Government of Canada. The increase to the maximum loan amount is expected to result in defaults amounting to $3.6 million PV in the 10-year period of analysis.
The increase of available loanable funds will support the Government of Canada’s objective to facilitate successful integration of higher levels of refugees. The amendment will allow the Government of Canada to continue resettling vulnerable Afghan nationals, and support refugees through an accessible and affordable loans program, as opposed to refugees being required to find financial solutions elsewhere, for instance, through commercial banks. Given the financial situation of the majority of refugees, alternate lending sources would likely not be available to them, or available at significant additional cost, making their resettlement to Canada challenging and in some cases not possible. The amendment ensures the future sustainability of the Immigration Loans Program, which helps refugees and other foreign nationals in challenging environments defray costs related to their travel and settlement in Canada.
Small business lens
The small business lens does not apply as there are no impacts on businesses associated with the proposal.
The one-for-one rule does not apply as there is no incremental change in administrative burden on business and no regulatory titles are repealed or introduced.
Regulatory cooperation and alignment
This proposal is to amend the maximum amount that the Government of Canada can advance from the Consolidated Revenue Fund to loan to incoming or recently admitted permanent residents to Canada. As such, it does not offer opportunities of regulatory cooperation with other jurisdictions.
Similarly to Canada, the United States issues interest-free transportation loans to refugees, while a number of other countries pay for refugees’ travel costs (the United Kingdom, Australia and New Zealand).
Strategic environmental assessment
In accordance with the Cabinet Directive on the Environmental Assessment of Policy, Plan and Program Proposals, a preliminary scan concluded that a strategic environmental assessment is not required.
Gender-based analysis plus
The Immigration Loan Program provides access to funding for persons who have few personal financial resources and are unable to access traditional lending institutions. Approximately 99% of Immigration Loans Program users are resettled refugees. They are members of vulnerable social and economic groups, who may not have other financial means to fund their travel to Canada and other settlement costs, nor have access to other lending sources. Resettled refugees are mostly racialized individuals, only a small proportion of whom speak English or French on arrival. Refugees often have lower levels of education and transferrable work experience, and can take many years to climb out of poverty. Recipients benefit from the favourable loan terms, with zero interest and long repayment periods ranging between three years (for loans up to $1,200) and eight years (for loans exceeding $4,800), meant to support their gradual integration in Canada. Those facing hardships can at any time ask for a review of their repayment arrangements, and may be granted additional time to repay their loan balance.
With regard to gender, applicants of all genders would be affected positively by the proposal, as more funds would be available to issue interest-free immigration loans to individuals, who may not have access to traditional financial institutions pre-arrival and may not be able to otherwise afford some of the costs associated with resettlement to Canada. With regard to age, adults would benefit the most by the proposal. Based on an analysis of refugee admissions processed in 2015–2021, children accounted for 41% and adults accounted for 59% of refugees resettled in Canada over the last seven years. Refugees are also more likely to be visible minorities, with the top refugee source populations over the past 5 years from: Syria (78K), Eritrea (22K), Iraq (18K), Afghanistan (11K), Somalia (7K), Congo (7K) and Ethiopia (5K).
IRCC has a commitment to ensure resettled refugees are able to travel to Canada, which is consistent with the humanitarian nature of its refugee resettlement initiatives. Most immigration loans are issued to provide financial assistance to refugees and their beneficiaries overseas. The Immigration Loans Program supports Canada’s resettlement efforts, by providing incoming refugees with a reliable and affordable source of funds to help defray costs associated with their travel and settlement in Canada. Increasing the maximum allowable amount that can be drawn from the Consolidated Revenue Fund will enable the Immigration Loans Program to continue to serve clients in need, given projected immigration levels, and facilitate the successful integration of higher levels of refugees.
Implementation, compliance and enforcement, and service standards
This regulatory amendment comes into force on the day on which it is registered. Upon implementation, the Department will continue to provide loans statements to clients, and receive repayments of the loaned money. The Department will also continue to monitor the repayment rate of loans and to monitor the total balance of loans outstanding.
Refugee Affairs Branch
Immigration, Citizenship and Immigration Canada
365 Laurier Avenue West