Regulations Amending the Immigration and Refugee Protection Regulations
Immigration and Refugee Protection Act
Department of Citizenship and Immigration
(This statement is not part of the Regulations.)
The Immigration Loans Program is intended to ensure that immigrants who are unable to pay for certain costs (for example transportation to Canada, overseas administrative costs and settlement costs in Canada) have access to a funding source. While these loans are available to all immigrant classes, resettled refugees constitute 98% of Immigration Loans Program users.
The Immigration and Refugee Protection Regulations (the Regulations) specify the repayment terms of these loans, including the repayment period, interest rate, and when interest starts to accrue. While some stakeholders would like to see the program cancelled in favour of a travel grant program, a 2015 departmental evaluation recommended adjusting repayment terms to consider the financial impact on resettled refugees, and to better align the program with the resettlement and integration policy objectives of Immigration, Refugees and Citizenship Canada (the Department).
The Regulations specify a maximum number of advances that may be made from the Consolidated Revenue Fund to make loans under this program. It is expected that, with changes to the terms of repayment and recent increases in levels of resettled refugees, this amount will likely be reached within the next few years, and needs to be increased.
The Immigration Loans Program is funded through an advance of $110 million from the Consolidated Revenue Fund, as prescribed by subsection 290(1) of the Regulations. Historically, the Government of Canada has issued $13 million in loans annually, and approximately 93% of loaned funds are repaid.
Since 2002, the average loan has been approximately $3,000, with roughly 20% of loans issued for more than $5,000. Currently, the policy is to cap the maximum loan amount to $10,000 per family.
Most loans are issued to refugees selected for resettlement to fund their travel to Canada. These loan recipients are currently required to begin repaying their loans 30 days after landing in Canada, and — depending on the amount — have between one and six years to repay their loans. Refugees pay interest (at the rate the Government charges to Crown corporations) in accordance with the following schedule:
Balance at Start of Repayment Period
Period the Loan Must be Repaid in Full (months)
Start of Interest Accrual
Up to $1,200
$1,201 to $2,400
$2,401 to $3,600
$3,601 to $4,800
Presently, less than half of 12-month loans are repaid on schedule, while over 70% of 36-month loans are repaid on schedule.
Where resettled refugees face hardships in repaying their loans following arrival in Canada, the terms of repayment can be eased by the Department (for example by extending the repayment period).
Effective April 1, 2017, the Government of Canada expanded the Interim Federal Health Program to provide certain pre-departure medical services to refugees who have been identified for resettlement to Canada, including coverage for the Immigration Medical Examinations, certain vaccinations, services to manage outbreaks in refugee camps, and medical support during travel to Canada. Therefore, this is no longer an expense for refugees, which had previously been added to their loans.
The objective of the proposed amendments is to
- reduce the financial burden for resettled refugees; and
- ensure future program sustainability through an increase in the maximum amount of money that may be advanced from the Consolidated Revenue Fund to grant loans to resettled refugees and other foreign nationals.
The proposed amendments would
- amend section 293 of the Regulations to eliminate interest charges on all new immigration loans, and eliminate further interest accumulation on all existing immigration loans;
- amend subsection 291(1) to defer the loan repayment start date from 30 days to one year;
- amend subsection 291(2) to extend the repayment period for all loans by two years, thus reducing the required monthly instalment amount; and
- amend subsection 290(1) to increase the allowed advance amount from the Consolidated Revenue Fund identified by the Government of Canada for immigration loans from $110,000,000 to $126,600,000.
The change to the terms of repayment would not apply retroactively, that is, they would not change the conditions of loans issued prior to the implementation date. However, recipients of loans issued before the date of implementation would still be able to seek more flexible terms of payment through the Department’s Collection Services, on a case-by-case basis. While clients with loans issued before the date of implementation would be required to repay the interest accrued to date, they would benefit from the elimination of interest as no new interest would be accrued on their outstanding loans.
The “One-for-One” Rule does not apply to this proposal, as there is no change in administrative costs to business.
Small business lens
The small business lens does not apply to this proposal, as there are no costs to small business.
For many years, refugee advocates, private sponsors of refugees and service provider organizations serving refugees have called on the Government to reform or eliminate the Immigration Loans Program. The Canadian Council for Refugees has been advocating for the elimination of the Program, and for many years has called on the Government “to absorb the costs of the transportation expenses for refugees.” This position is shared by the Sponsorship Agreement Holder Council, which represents Canadian private refugee sponsorship organizations. The Canadian Immigrant Settlement Sector Alliance has also recently recommended the elimination or reform of the loans program.
The Parliamentary Standing Committee on Citizenship and Immigration has an interest in the Immigration Loans Program, and in a 2016 report noted that it looked forward to the results of a departmental review that would “evaluate possible amendments that would lessen the burden on new arrivals.” Further, the report from the Standing Senate Committee on Human Rights, published in December 2016, included a recommendation that “the Government of Canada replace the immigration loans for transportation expenses provided to refugees with grants, given that they are an economic burden and a source of high levels of stress and anxiety for refugees. Alternatively, the Government of Canada should introduce a debt forgiveness mechanism for those who are unable to repay their loans without financial hardship and eliminate the charging of interest on immigration loans.”
All of these views were taken into account in weighing the Government’s options. The desire to reduce the financial impact of the loans undertaken by resettled refugees was weighed against the financial priorities of the Government of Canada and potential costs of various options.
Eliminating interest charges and extending the repayment period as well as the period before the loan becomes repayable will give resettled refugees more time to focus on their integration, without needing to give immediate attention to loan repayments. Given their need to learn the language, along with other integration challenges they may face, many resettled refugees take more than one year to secure employment in Canada. Thus, these amendments will give them more time to repay their loans, and keep the loans fixed at the amount that was borrowed. From a gender and diversity lens, these changes will benefit all, but particularly those who need more time to establish themselves in Canada due to factors such as low levels of education, official language skill, and other intersectional factors that impact their eventual labour market attachment.
The benefits to the clients of added repayment flexibility and reducing the total amount repayable (due to eliminating interest charges) are balanced against the cost to the Government of Canada in foregone revenue from the interest portion of loans, estimated at $7.3 million in present value in the 10 years following introduction of the proposed Regulations. This calculation uses the 2016 interest rate of 0.76% (established in the Regulations as the rate equal to the rate established by the Minister of Finance for loans made by that Minister to Crown corporations).
Increasing the maximum allowable amount that can be drawn from the Consolidated Revenue Fund would enable the Immigration Loans Program to continue to serve clients in need, given projected immigration levels and a predicted increase in the number of outstanding loans due to the proposed amendments to the terms. The proposed amendment would increase to $126.6 million from $110 million the amount than can be drawn, and could therefore increase the foregone interest that would have applied to a higher number of loans with the proposed Regulations than the maximum allowable without the proposed Regulations.
Implementation, enforcement and service standards
Upon final publication of the proposed Regulations, the Department would continue to provide loans statements to clients, and receive repayments of the loaned money. The Department would also continue to monitor the repayment rate of loans and to monitor any effects of these amendments. The Immigration Loans Program is scheduled to be evaluated within the next five years, and the timing would be reviewed as part of the annual departmental evaluation planning process.
Refugee Affairs Branch
Department of Citizenship and Immigration
365 Laurier Avenue West
Notice is given that the Governor in Council, pursuant to subsections 88(1) and (2) of the Immigration and Refugee Protection Act (see footnote a), proposes to make the annexed Regulations Amending the Immigration and Refugee Protection Regulations.
Interested persons may make representations concerning the proposed Regulations within 30 days after the date of publication of this notice. All such representations must cite the Canada Gazette, Part I, and the date of publication of this notice, and be addressed to Jean-Marc Gionet, Director, Resettlement Policy, Refugee Affairs Branch, Immigration, Refugees and Citizenship Canada, 365 Laurier Avenue West, Ottawa, Ontario K1A 1L1 (telephone: 613-437-7356; email: ILP-PPI@cic.gc.ca).
Ottawa, September 21, 2017
Assistant Clerk of the Privy Council
Regulations Amending the Immigration and Refugee Protection Regulations
1 Subsection 290(1) of the Immigration and Refugee Protection Regulations (see footnote 1) is replaced by the following:
- Maximum amount
- 290 (1) The maximum amount of advances that may be made under subsection 88(1) of the Act is $126,600,000.
2 (1) Paragraphs 291(1)(a) and (b) of the Regulations are replaced by the following:
- (a) in the case of a loan for the purpose of defraying transportation costs, one year after the day on which the person for whose benefit the loan was made enters Canada; and
- (b) in the case of a loan for any other purpose, one year after the day on which the loan was made.
(2) Subsection 291(2) of the Regulations is replaced by the following:
- Repayment terms
- (2) Subject to section 292, a loan made under section 289, together with all accrued interest, if applicable, must be repaid in full, in consecutive monthly instalments, within
- (a) 36 months after the day on which the loan becomes payable, if the amount of the loan is not more than $1,200;
- (b) 48 months after the day on which the loan becomes payable, if the amount of the loan is more than $1,200 but not more than $2,400;
- (c) 60 months after the day on which the loan becomes payable, if the amount of the loan is more than $2,400 but not more than $3,600;
- (d) 72 months after the day on which the loan becomes payable, if the amount of the loan is more than $3,600 but not more than $4,800; and
- (e) 96 months after the day on which the loan becomes payable, if the amount of the loan is more than $4,800.
3 Section 293 of the Regulations is replaced by the following:
- No interest on loan
- 293 (1) A loan made under this Part bears no interest as of the day on which this section comes into force.
- Unpaid loan
- (2) The interest on any loan that has not been repaid before that day continues to accrue until the day preceding that day.
Coming into Force
4 These Regulations come into force on the day on which they are registered.