Vol. 146, No. 26 — December 19, 2012

Registration

SOR/2012-253 November 30, 2012

FINANCIAL ADMINISTRATION ACT

Passport and Other Travel Document Services Fees Regulations

P.C. 2012-1590 November 29, 2012

Whereas the User Fees Act (see footnote a) applies in respect of the fees fixed in the annexed Regulations;

And whereas the requirements of section 4 of that Act have been complied with;

Therefore, His Excellency the Governor General in Council, being of the opinion that it is in the public interest to do so, on the recommendation of the Minister of Foreign Affairs and the Treasury Board, pursuant to paragraph 19(1)(a) (see footnote b), section 19.2 (see footnote c) and subsection 23(2.1) (see footnote d) of the Financial Administration Act (see footnote e), makes the annexed Passport and Other Travel Document Services Fees Regulations.

PASSPORT AND OTHER TRAVEL DOCUMENT SERVICES FEES REGULATIONS

INTERPRETATION

Definitions

1. The following definitions apply in these Regulations.

• “base year”
  « exercice de base »
• “base year” means either the reference year of the last fiscal year for which there was a fee adjustment under section 4 or 6, as the case may be, or the fiscal year beginning April 1, 2013, whichever is most recent.
• “Passport Canada”
  « Passeport Canada »
• “Passport Canada” has the same meaning as in section 2 of the Canadian Passport Order.
• “reference year”
  « exercice de référence »
• “reference year” means, with respect to a given fiscal year, the fiscal year preceding the fiscal year in which the adjustment calculation under section 4 or 6, as the case may be, is performed.

PAYMENT OF FEES

Amount of fees

2. (1) Subject to section 3, every person who requests that a service set out in column 1 of the schedule be performed must pay the fee set out in column 2.

Replacement of lost or stolen passport

(2) When a person requests that a service set out in any of items 1 to 6, 9 and 10 of the schedule be performed to replace a lost or stolen passport or other travel document,

• (a) the person is deemed to have made a request for the service set out in item 14 of the schedule; and
  
  
• (b) the fee set out in item 14 of the schedule applies in addition to whichever of the fees set out in items 1 to 6, 9 and 10 of the schedule is applicable.

Fee for accelerated service

(3) If Passport Canada is required to open one of its offices outside of that office’s normal business hours to perform one or more services set out in item 1 or 2 of the schedule within the time required by the person for whom the services are performed, the person must pay, in addition to any applicable fees, the fee set out in item 8 of the schedule.

Fee for retention of non-expired passport

(4) When a person requests that a service set out in item 1 or 2 of the schedule be performed and also requests to retain the valid passport that was previously issued to them during the processing of the request, the applicable fee is increased by $45.

General exceptions

3. (1) No fee is payable in respect of

• (a) a service set out in item 1 or 2 of the schedule that is performed for
  • (i) a destitute person, or
    
    
  • (ii) a child less than 16 years of age or mentally incompetent person living in an institution in another country; or
• (b) the issuance of an emergency travel document for the return of a Canadian citizen who is deported to Canada.

Humanitarian service

(2) The fees set out in paragraphs 7(a) and (b) and item 8 of the schedule do not apply in respect of a person who requests any of the services referred to in those provisions in order to travel outside Canada in support of any humanitarian operation conducted in response to a natural disaster or human conflict, including rescue, relief and reconstruction operations, if the person provides an official document to Passport Canada from an appropriate authority attesting to the person’s participation in the humanitarian operation.

FEE ADJUSTMENTS

Adjustment factors — subparagraph 1(a)(i) of schedule

4. (1) Subject to subsection (4), the fee set out in subparagraph 1(a)(i) of the schedule is to be adjusted in accordance with this section in respect of each fiscal year to take into account

• (a) any variation in the external cost incurred by Passport Canada to send passports and other travel documents in Canada by mail or courier;
  
  
• (b) any variation in the amounts incurred by Passport Canada that are payable to a government body, including a Crown corporation, for exercising any of the administrative powers listed in subsection 12(1) of the Canadian Passport Order.

Adjustment calculation

(2) Subject to subsections (3) and (4), the amount of the adjustment in respect of a given fiscal year is calculated during the preceding fiscal year and is the positive or negative amount, as the case may be, determined by the formula

[(A⁄B − C⁄D) × B⁄E] + [(F⁄G − H⁄I) × G⁄E] + J

where

A is the total external cost incurred by Passport Canada to send passports and other travel documents in Canada by mail or courier in the reference year, in constant dollars;

B is the total number of passports and other travel documents sent by Passport Canada by mail or courier in Canada in the reference year;

C is the total external cost incurred by Passport Canada to send passports and other travel documents by mail or courier in Canada in the fiscal year preceding the reference year, in constant dollars;

D is the total number of passports and other travel documents sent by Passport Canada by mail or courier in Canada in the fiscal year preceding the reference year;

E is the total number of passports and other travel documents issued by Passport Canada in Canada in the reference year;

F is the total external cost incurred by Passport Canada for the exercise of its administrative powers by other government bodies in the reference year, in constant dollars;

G is the total number of passports issued by Passport Canada in Canada in the reference year as a result of passport applications received by other government bodies;

H is the total external cost incurred by Passport Canada for the exercise of its administrative powers by other government bodies in the fiscal year preceding the reference year, in constant dollars;

I is the total number of passports issued by Passport Canada in Canada in the fiscal year preceding the reference year as a result of passport applications received by other government bodies; and

J is the total amount of all adjustments that would have been made since the base year, but for the application of subsection (4).

Rounding up

(3) If the adjustment calculation results in a fraction of a dollar, the amount of the adjustment is to be rounded up to the nearest dollar.

Exception

(4) There is to be no fee adjustment in respect of a given fiscal year if the adjustment calculation for that year, prior to rounding up, results in an amount greater than -$1 but less than $1.

Adjustment calculations — subparagraph 1(a)(ii), paragraph 2(a) and items 3 to 6 of schedule

5. (1) Subject to subsection (2), when the fee set out in subparagraph 1(a)(i) of the schedule is adjusted for a given fiscal year, the following adjustments are also made for that fiscal year:

• (a) the fees set out in subparagraph 1(a)(ii) and item 5 of the schedule are adjusted to an amount representing 70% of the fee set out in subparagraph 1(a)(i) of the schedule as adjusted in accordance with section 4;
  
  
• (b) the fees set out in paragraph 2(a) and item 6 of the schedule are adjusted to an amount representing 60% of the fee set out in subparagraph 1(a)(ii) of the schedule as adjusted in accordance with paragraph (a);
  
  
• (c) the fee set out in item 3 of the schedule is adjusted by the same amount as the fee set out in subparagraph 1(a)(i) of the schedule; and
  
  
• (d) the fee set out in item 4 of the schedule is adjusted to an amount representing 60% of the fee set out in item 3 of the schedule, as adjusted in accordance with paragraph (c).

Rounding up

(2) If an adjustment calculation results in a fee that includes a fraction of a dollar, the resulting fee is to be rounded up to the nearest dollar.

Adjustment factors — subparagraph 1(b)(i) of schedule

6. (1) Subject to subsection (4), the fee set out in subparagraph 1(b)(i) of the schedule is to be adjusted in accordance with this section in respect of each fiscal year to take into account

• (a) any variation in the external cost incurred by Passport Canada to send passports outside Canada by mail or courier; and
  
  
• (b) any variation in the amounts incurred by Passport Canada for the delivery of the passport program outside Canada.

Adjustment calculation

(2) Subject to subsections (3) and (4), the amount of the adjustment in respect of a given fiscal year is calculated during the preceding fiscal year and is the positive or negative amount, as the case may be, determined by the formula

[(A⁄B − C⁄D) × B⁄E] + [(F⁄G − H⁄I) × G⁄E] + J

where

A is the total external cost incurred by Passport Canada to send passports by mail or courier outside Canada in the reference year, in constant dollars;

B is the total number of passports sent by Passport Canada by mail or courier outside Canada in the reference year;

C is the total external cost incurred by Passport Canada to send passports by mail or courier outside Canada in the fiscal year preceding the reference year, in constant dollars;

D is the total number of passports sent by Passport Canada by mail or courier outside Canada in the fiscal year preceding the reference year;

E is the total number of passports issued or sent by Passport Canada outside Canada in the reference year;

F is the total external cost incurred by Passport Canada for the Department of Foreign Affairs and International Trade to deliver the passport program outside Canada in the reference year, in constant dollars;

G is the total number of passports issued by Passport Canada outside Canada in the reference year as a result of passport applications received by the Department of Foreign Affairs and International Trade;

H is the total external cost incurred by Passport Canada for the Department of Foreign Affairs and International Trade to deliver the passport program outside Canada in the fiscal year preceding the reference year, in constant dollars;

I is the total number of passports issued by Passport Canada outside Canada in the fiscal year preceding the reference year as a result of passport applications received by the Department of Foreign Affairs and International Trade; and

J is the total amount of all adjustments that would have been made since the base year, but for the application of subsection (4).

Rounding up

(3) If an adjustment calculation results in a fraction of a dollar, the adjustment is to be rounded up to the nearest dollar.

Exception

(4) There is to be no fee adjustment in respect of a given fiscal year if the adjustment calculation for that year, prior to rounding up, results in an amount greater than -$3 but less than $3.

Adjustment calculations — subparagraph 1(b)(ii) and paragraph 2(b) of schedule

7. (1) Subject to subsection (2), when the fee set out in subparagraph 1(b)(i) of the schedule is adjusted for a given fiscal year, the following adjustments are also made for that fiscal year:

• (a) the fee set out in subparagraph 1(b)(ii) of the schedule is adjusted to an amount representing 70% of the fee set out in subparagraph 1(b)(i) of the schedule as adjusted in accordance with section 6; and
  
  
• (b) the fee set out in paragraph 2(b) of the schedule is adjusted to an amount representing 60% of the fee set out in subparagraph 1(b)(ii) of the schedule as adjusted in accordance with paragraph (a).

Rounding up

(2) If an adjustment calculation results in a fee that includes a fraction of a dollar, the resulting fee is to be rounded up to the nearest dollar.

Interpretation

8. For the purpose of sections 4 to 7, the fees set out in subparagraphs 1(a)(i) and (b)(i) of the schedule are the fees set out in those provisions as previously adjusted, as applicable, in accordance with these Regulations.

Constant Dollars

9. For the purposes of subsections 4(2) and 6(2), the amount of the external cost, in constant dollars, for a given fiscal year, is determined by the following formula:

A × 1.02^−B

where

A is the amount of the external cost, in current dollars; and

B is the difference in the number of years between

• (a) the reference year and the base year, in the case of elements A and F of the formulas set out in subsections 4(2) and 6(2); or
  
  
• (b) the year preceding the reference year and the base year, in the case of elements C and H of the formulas set out in those subsections.

Same fees

10. For greater certainty, if a fee adjustment is made in accordance with these Regulations, the fees for a subsequent fiscal year in respect of which no adjustment is made remain the fees resulting from the last adjustment.

REMISSION

Remission

11. (1) Subject to subsection (2), a fee paid by a person for a service set out in paragraph 7(a) or (b) or item 8 of the schedule is to be remitted by Passport Canada to the person if the reason for travelling is the serious illness of the person or another individual, or the death of the other individual.

Other conditions

(2) The remission is to be given if the person

• (a) makes a written request to Passport Canada for the remission within 180 days after the service is performed;
  
  
• (b) provides a written statement to Passport Canada to the effect that
  • (i) the reason for the trip is their own serious illness or the serious illness or death of another individual, and
    
    
  • (ii) if the reason for the trip is the serious illness or death of another individual, the person has or has had a relationship with that individual; and
• (c) provides an official document to Passport Canada from an appropriate authority attesting to the serious illness or death.
  

TRANSITIONAL PROVISIONS

Application of prior fees

12. The fee that applies on June 30, 2013 in respect of a passport service set out in the schedule to the Passport Services Fees Regulations continues to apply in respect of that service if a request for the service, accompanied by the fee,

• (a) is made in person on or before June 30, 2013 to Passport Canada, a mission outside Canada or a government body exercising any of the administrative powers set out in subsection 12(1) of the Canadian Passport Order; or
• 
  (b) is received by mail or courier within five working days after July 1, 2013 by Passport Canada or a mission outside Canada.

Passports containing more pages than requested

13. For greater certainty, Passport Canada may, without any additional fee being payable, issue a 36-page passport with a maximum validity period of five years to an applicant for a passport service set out in any of items 1 to 3 of the schedule to the Passport Services Fees Regulations if the request is accompanied by the applicable fee for that service and is

• (a) made in person on or before June 30, 2013; or
  
  
• (b) received by mail or courier within five working days after July 1, 2013 by Passport Canada or a mission outside Canada.

Replacement of travel document without fee

14. (1) Despite items 2 and 6 of the schedule, if a person under one year of age has been issued a passport or other travel document that is valid for a period of three years or less, that person may obtain, before the day on which the original document expires, another such document without paying a fee if the document to be replaced was issued on or before June 30, 2013 and is returned at the same time that the request for the new document is made.

Ceases to have effect

(2) Subsection (1) ceases to have effect on June 30, 2014.

No fee adjustment before April 1, 2016

15. There is to be no fee adjustment under sections 4 to 7 in respect of the fiscal years before April 1, 2016.

CONSEQUENTIAL AMENDMENT TO THE PASSPORT SERVICES FEES REGULATIONS

16. Items 4 to 6 of the schedule to the Passport Services Fees Regulations (see footnote 1) are repealed.

REPEAL

17. The Passport Services Fees Regulations (see footnote 2) are repealed.

COMING INTO FORCE

July 1, 2013

18. (1) Subject to subsections (2) to (4), these Regulations come into force on July 1, 2013.

March 31, 2014

(2) Subsections 2(2) and 2(4) and items 13 to 15 of the schedule come into force on March 31, 2014.

Registration

(3) Section 13 comes into force on the day on which these Regulations are registered.

May 27, 2013

(4) Section 16 comes into force on May 27, 2013.

SCHEDULE

(Section 2, paragraph 3(1)(a), subsections 3(2), 4(1), 5(1), 6(1)
and 7(1), section 8 and subsection 11(1))

Item	Column 1 Service	Column 2 Fee ($)
1.	Issuance of a passport to a person at least 16 years of age, other than a passport issued for official purposes, as follows:
	(a) if the request is made in Canada and the passport is to be delivered in Canada (i) for a passport with a validity period of 10 years (ii) for a passport with a validity period of 5 years (b) if the request is made outside Canada or the passport is to be delivered outside of Canada (i) for a passport with a validity period of 10 years (ii) for a passport with a validity period of 5 years	135 95 235 165
2.	Issuance of a passport to a person less than 16 years of age, other than a passport issued for official purposes, as follows:
	(a) if the request is made in Canada and the passport is to be delivered in Canada, for a passport with a validity period of 5 years (b) if the request is made outside Canada or the passport is to be delivered outside of Canada, for a passport with a validity period of 5 years	57 100
3.	Issuance of a certificate of identity to a person at least 16 years of age	235
4.	Issuance of a certificate of identity to a person less than 16 years of age	141
5.	Issuance of a travel document under the Convention relating to the Status of Refugees dated July 28, 1951, and the Protocol relating to the Status of Refugees dated January 31, 1967, to a person at least 16 years of age	95
6.	Issuance of a travel document under the Convention relating to the Status of Refugees dated July 28, 1951, and the Protocol relating to the Status of Refugees dated January 31, 1967, to a person less than 16 years of age	57
7.	Making available for pick-up in Canada a passport or other travel document in respect of which a service referred to in any of items 1 to 6 of this schedule is performed
	(a) on the first working day after the day of the request for service (b) after the working day after the day of the request for service but before the tenth working day after that day (c) after the ninth working day after the day of the request for service	110 50 20
8.	Performance of one or more of the services set out in items 1 and 2 of this schedule in the circumstance referred to in subsection 2(3) of these Regulations	335
9.	Issuance of an emergency travel document
	(a) to a person at least 16 years of age (b) to a person less than 16 years of age	50 30
10.	Issuance of a temporary passport in conjunction with a request to issue a passport	110
11.	Addition of a special stamp in a passport or other travel document	45
12.	Addition of an observation in a passport or other travel document	45
13.	Certifying true copies, up to three, of part of a passport or another travel document	45
14.	Replacement of a lost or stolen passport or other travel document	45
15.	Transfer of an application file for the issuance of a passport between Passport Canada’s issuing authorities within Canada	45

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

1. Executive summary

2. Background

Passport Canada derives its mandate from the Canadian Passport Order and is responsible for the issuing, revoking, withholding, recovery and use of Canadian passports. In the federal budget of 2008, the Government of Canada announced that Canada would be adopting a higher-security electronic passport, or ePassport, with a 10-year validity period. This commitment was reiterated in the Speech from the Throne of March 3, 2010. The ePassport is a recommended practice of the International Civil Aviation Organization (ICAO), a special agency of the United Nations that is responsible for establishing standards and recommended practices for the issuance of travel documents. Today, approximately 95 countries issue ePassports, and an estimated 400 million such documents are in circulation worldwide.

Under the Passport and Other Travel Document Services Fees Regulations, made pursuant to the Financial Administration Act, the federal government prescribes fees for various passport services. Passport Canada finances its operations entirely from the fees charged for passports and other travel documents. As a full cost-recovery organization, Passport Canada must ensure that it generates sufficient revenues to meet its mandate, while ensuring that processes are as streamlined and efficient as possible.

Passport Canada must also establish its fees in accordance with the User Fees Act and must go through a process that involves public consultations, complaints resolution and parliamentary review before updating its fee structure.

3. Issue

Although Passport Canada has exercised prudent management of its costs, the organization has been in deficit since 2008–09, losing around $4.59 per passport (from 2008–09 to 2011–12). A fee structure that has not significantly changed since 2001 (the 2001 fee increase was established to sustain the organization for a five-year business cycle), the fixed organizational cost structure necessary for program delivery, the growing complexity of the business and the need to modernize infrastructure are all contributing to this situation.

Passport Canada has been able to fund these deficits from previously accumulated surpluses. However, in 2012–13, the organization will deplete its accumulated surpluses and begin accessing repayable funding from the Government of Canada. Passport Canada is quickly reaching a point where not only will new advancements such as the ePassport be impossible, but the organization’s ability to maintain current operations and deliver its mandate will be jeopardized.

The current fee structure hinders Passport Canada’s ability to cover costs and expenditures while maintaining existing security and service standards, and makes implementing the ePassport financially impossible. Passport Canada must secure a fee increase to introduce the 10-year ePassport, keep pace with technological advancements and maintain its current level of service for Canadians.

4. Objectives

The Regulations update Passport Canada’s fee structure. Passport Canada’s goal is to offer a 10-year ePassport for the lowest possible fee while ensuring it generates sufficient revenues to deliver its mandate regarding passport security and client service over a 10-year business cycle.

The fees set out in the Regulations are consistent with the Government’s cost-recovery objective of promoting fairness by shifting the costs of a particular program or activity from taxpayers to the users who benefit most directly from the services. In the case of passports, travellers pay the full cost of passport services, just as they pay for their airplane fare and travel insurance.

The fees are also established in accordance with the User Fees Act. The Regulations formalize the elements contained in Passport Canada’s fee-for-service proposal, endorsed by Parliament on May 17, 2012.

5. Description

Passport Canada will begin issuing electronic passports to all passport applicants in 2013. The ePassport looks like a regular passport book, but includes an extra security feature: an electronic chip containing the same personal information that already appears on the bio-data page of the passport (page 2). This feature makes the passport more resistant to tampering, it allows border authorities to confirm that the passport was issued by Canada and it allows Canada to keep pace with international practices.

With the Regulations, the 10-year ePassport becomes Passport Canada’s keystone product, generating the majority of revenue to support the general cost of delivering the passport program. The organization will also issue 5-year ePassports at a lower fee, to provide Canadians with a lower upfront cost option.

The new fees reflect the general costs of the passport program and have been determined using activity-based management methodology, which is recognized by industry and government alike for providing the necessary information to facilitate strategic and management decisions that improve efficiency and ensure value for Canadians.

By introducing a 10-year ePassport, the organization is making the transition from a 5-year business cycle to a 10-year business cycle. As a cost-recovery organization, Passport Canada’s costs and revenues must balance out over its 10-year business cycle, neither creating a substantial deficit nor surplus at the end of the cycle. For additional information on how the fees were established, please consult Passport Canada’s fee-for-service proposal at www.pptc.gc.ca/publications/consultations.

People affected

The Regulations affect the following people who apply for travel documents or services offered by Passport Canada:

• All Canadians;
• People whom Citizenship and Immigration Canada considers refugees under the United Nations Convention Relating to the Status of Refugees (1951) or those who fall under the terms of the Immigration and Refugee Protection Act; and
• Permanent residents of Canada who are without nationality or who are unable to obtain travel documentation from their country of origin for a valid reason.

New fees

Travel documents

As outlined in the table below, the Regulations establish new fees for ePassports with a validity of 5 and 10 years, certificates of identity and refugee travel documents. Children’s passports continue to be priced at 60% of the adult equivalent and the 5-year ePassport is priced at 70% of the 10-year fee.

Passport Canada collects a $25 consular fee per travel document on behalf of the Department of Foreign Affairs and International Trade to support the consular program at Canadian government offices abroad. The funds collected do not go to Passport Canada and the organization has no authority over the amount or use of this fee. For example, of the $160 charged for a 10-year ePassport, only $135 is used to cover Passport Canada’s operating expenses. The consular fee is not levied on children’s travel documents.

The current and revised fees (effective July 1, 2013) for travel documents are as follows:

Passports: Applications made in Canada and passport delivered in Canada
Travel document	2012		July 1, 2013
	Rate	With consular fee	Rate	With consular fee
10-year passport	--	--	$135	$160
5-year passport (or less)	$62	$87	$95	$120
Children’s passport	$37	--	$57	--

Passports: Applications made outside of Canada or passport delivered outside Canada
Travel document	2012		July 1, 2013
	Rate	With consular fee	Rate	With consular fee
10-year passport	--	--	$235	$260
5-year passport (or less)	USA: $72 Abroad: $75	USA: $97 Abroad: $100	$165	$190
Children’s passport	USA: $37 Abroad: $35	--	$100	--

Travel documents for non-Canadians
Travel document	2012		July 1, 2013
	Rate	With consular fee	Rate	With consular fee
Certificate of identity	$102	$127	$235	$260
Children’s certificate of identity	$37	--	$141	--
Refugee travel document	$62	$87	$95	$120
Children’s refugee travel document	$37	--	$57	--

Administrative services

The Regulations establish new fees for three administrative services that are currently offered for free. These services are as follows:

1. Replacement of lost and stolen passport or other travel document (in addition to passport fee).
2. A file transfer at the client’s request. A file transfer fee applies when a client who has submitted a passport application then decides, after the fact, that he/she would like his/her passport to be delivered through a different service channel (by mail or through a regional office) or to a different location.
3. Certified true copies. This refers to official certification, dated and sealed, by Passport Canada that the copy is true and authentic.

In addition, when a client with a valid passport requests to retain his/her current passport during the processing of his/her application for a replacement passport, the Regulations establish that the applicable fee is increased by $45.

The current and revised fees for administrative services are as follows:

Service	Current rate	New rate	Date of implementation of new rate
Replacement of lost or stolen passport or other travel document (in addition to passport fee)	$0	$45	March 31, 2014
File transfers (between offices in Canada)	$0	$45	March 31, 2014
Certified true copies (up to three copies)	$0	$45	March 31, 2014

As described in the table below, the Regulations also increase the fees for the addition of a special stamp or observation in the travel document (effective July 1, 2013).

Service	Current rate	New rate	Date of implementation of new rate
Addition of a special stamp (at applicant’s request)	$12	$45	July 1, 2013
Addition of a special observation (at applicant’s request)	$12	$45	July 1, 2013

Expedited services

As indicated in the table below, revised fees are also established for expedited services (effective July 1, 2013) as follows:

Expedited services in Canada (in addition to the regular passport fee)
Service	2012		July 1, 2013
	Rate	With consular fee	Rate	With consular fee
Making available for pick-up — Urgent service (1 day)	$70	--	$110	--
Making available for pick-up — Express service (2–9 days)	$30	--	$50	--
Making available for pick-up (day 10)	$10	--	$20	--
Same day, out of regular hours of service	$220	--	$335	--

Expedited services outside of Canada (in addition to the regular passport fee)
Service	2012		July 1, 2013
	Rate	With consular fee	Rate	With consular fee
Emergency travel document (one trip)	$6	$31	$50	$75
Children’s emergency travel document (one trip)	$6	--	$30	--
Temporary passport (linked to regular passport application)	$70	--	$110	--

Fee adjustment formulas

In addition, Passport Canada has modified its regulations to include adjustment formulas that reflect fluctuations in the following:

External costs in Canada

• The cost of sending travel documents by mail or courier in Canada; and
• The cost of service delivery partnerships (the amount paid by Passport Canada to government bodies such as Service Canada).

External costs outside Canada

• The cost of sending travel documents by mail or courier outside Canada; and
• The cost of the delivery of the passport program outside Canada (the amount paid by Passport Canada to the Department of Foreign Affairs and International Trade).

Passport fees will be adjusted if the average unit cost fluctuates, in constant dollars, by over $1 for external costs incurred in Canada and $3 for external costs incurred outside of Canada over time. To reduce the frequency of fee changes, the threshold is higher for costs incurred outside Canada, as these costs, particularly shipping costs, are more volatile. There will be no fee adjustment based on adjustment formulas before April 1, 2016.

The objective of the fee adjustment formulas is to limit significant financial losses to Passport Canada while keeping fees as low as possible for Canadians. If external costs were to increase by $1 per passport delivered in Canada, this would mean an annual loss of over $4 million for the organization. However, these adjustment formulas will be used to not only increase fees, but also to reduce fees if circumstances lead to lower operating costs. Once the formulas are triggered, Passport Canada will adjust passport fees to either recoup its accumulated losses or pass along savings to Canadians.

If the fee adjustment formulas are applied, fees will be adjusted with the objective of maintaining the established pricing ratios as much as possible. For instance, children’s fees will remain at 60% of equivalent adult fees, while the 5-year adult passport will remain at 70% of the 10-year passport. If the 10-year passport fee for applicants in Canada is adjusted, the fees for certificates of identify will automatically be adjusted by the same amount. The same way, the fees for refugee travel documents will automatically be adjusted by the same amount the 5-year passport fee for applicants in Canada is adjusted.

Discontinued products or services

Infant passports for children under three years of age will be discontinued, along with the gratis replacement of infant passports. Children under three years of age are now eligible for regular five-year children’s passports, which are available for all children under the age of 16. These changes are consistent with international practices and help keep adult passport fees and fees for other services as low as possible.

The 48-page passport option will also be discontinued. While the previous 5-year non-electronic passport had 24 pages, the new 5- and 10-year ePassport books both have 36 pages. This higher number of pages accommodates the longer validity period of the 10-year ePassport. Keeping passport books one size helps streamline Passport Canada’s processes and provide cost savings that benefit all passport applicants.

The Regulations will also eliminate the possibility of extending the validity period of a passport issued with a limited validity period, the option of adding a married name to an existing passport, and the option of removing a geographical limitation label from an existing passport. These changes have been introduced for security reasons and are consistent with international practices.

6. Regulatory and non-regulatory options considered

No non-regulatory options were considered, as a fee increase is necessary to sustain Passport Canada’s operations and any changes to fees must be done through regulations made pursuant to the Financial Administration Act.

7. Benefits and costs

The following section describes the potential benefits and costs of the Regulations. Financial estimates are expressed in constant 2012 dollars, using the gross domestic product deflator, and provided over Passport Canada’s 10-year business cycle (from the last three quarters of 2013–2014 to the last three quarters of 2023–2024). To derive costs and benefits in present value terms, amounts were discounted by 8%, as recommended by the Treasury Board Secretariat. A more detailed impact analysis is available at www.pptc.gc.ca/publications/consultations.

Benefit: Sustaining Passport Canada

The fee increase allows Passport Canada to offer Canadians a 10-year validity ePassport with improved security features, to fully recover the costs of providing passport services, and to generate sufficient revenues to deliver its mandate concerning passport security and client service while meeting international passport standards. The Regulations result in present value benefits of approximately $1.3 billion for Passport Canada over a 10-year period.

Benefit: Increasing Canadians’ security and fighting identity fraud

About 67% of Canadians hold a passport and more than 22 million valid Canadian passports were in circulation in 2012. Passport Canada’s consultations and market research reveal that, when acquiring a passport, Canadians see strong security features as one of the most important selling points.

All Canadians benefit from Passport Canada having sufficient resources to keep pace with advances in technology, international standards and recommended practices in the field of travel document security, and to continue protecting the integrity of the passport. For example, the adoption of the ePassport is expected to have a positive impact on travel safety, as well as national safety and security. This new passport book is more resistant to tampering and makes illicit travel, such as travelling under a false identity, more difficult.

Today, approximately 95 countries issue ePassports, including key allies and all other G8 countries. Not deploying the ePassport would mean that the Canadian passport would be more vulnerable to fraud in comparison to the passports of other countries, thereby increasing its appeal to organized crime groups or terrorist operatives to help them cross borders under false identities.

Since passports are increasingly used as identity documents to access public services and benefits, a more secure passport also helps prevent identity fraud or theft, which carries significant economic costs to taxpayers and federal and provincial governments.

Benefit: Facilitating travel for Canadians

Canadians currently have a very high level of travel freedom. According to the 2010 Henley Visa Restrictions Index, Canada is among the top countries in the world in terms of visa-free access to other countries. Canada is currently in a privileged position, particularly as some countries require that foreign nationals carry ePassports to waive their visa requirements. Obtaining a visa can add up to $150 per trip, depending on the country. In some countries, such as the United States, the process also involves fingerprinting. This high level of visa-free access around the world is a reflection of Canada’s relationships within the international community, as well as the high regard in which the Canadian passport is held. To maintain this credibility, Passport Canada must have the means to stay abreast of technological advances such as the ePassport.

Canada’s trade with the world is equivalent to approximately two-thirds of the gross domestic product, and one out of five jobs is directly linked to international trade. These numbers reflect the increased mobility of people and goods in today’s world. Without the ePassport, Canadian travellers could potentially be subject to the imposition of visa requirements, face closer scrutiny at borders and longer delays at points of entry. Any additional entry requirements could disrupt international trade and have a significant impact on just-in-time and cross-border production, resulting in an impact on Canada’s economic prosperity.

Benefit: Reducing the administrative burden on passport holders

The Regulations permit adult passport applicants to have a choice between a 5- or 10-year ePassport. The new 10-year ePassport offers greater convenience and savings to passport holders, since it is only necessary to pay for photos and submit an application once every 10 years, thus reducing the administrative burden they need to deal with. Results from Passport Canada’s consultations reveal a strong preference for a 10-year ePassport, with about 80% of Canadians preferring a 10-year ePassport at $160 to a 5-year ePassport at $120 (prices for applicants in Canada, including the consular fee) for the reasons stated above.

Benefit: Providing excellent client service

Finally, the fee increase ensures that Passport Canada has sufficient revenues to continue to deliver excellent client service and meet evolving needs. Over half of Canadians surveyed by Passport Canada assign strong importance to client service when acquiring a passport, considering the ease of the passport application process and the time it takes to obtain a passport. Passport Canada’s 2008 client satisfaction survey showed that over 90% of clients are satisfied with the services they received overall.

Cost: Increasing fees for obtaining travel documents

The former adult fee for a 5-year non-electronic passport, Passport Canada’s keystone product in the past, was $87 in Canada (including consular fee). Passport Canada’s new keystone product is the 10-year ePassport, which, at $160 in Canada, costs less per year of validity. Furthermore, Canadians benefit from a book with more pages and the most up-to-date security features.

Passport Canada’s clientele is the “travelling public” and the passport remains a minor portion of overall travel costs. Market research reveals that for two-thirds of Canadians, price ranks last in terms of perceived importance when thinking of acquiring a passport. Similarly, over 60% of non-passport holders assign very little impact to price as a factor explaining why they do not currently have a valid passport.

However, consultations have demonstrated that some segments of the Canadian population may be more sensitive to an increase in passport fees. Canadians less likely to express interest in the 10-year passport are older Canadians, who may not need a passport that is valid for 10 years, and lower-income Canadians. The amended Regulations offer a 5-year validity ePassport at $120 (for applicants in Canada, including the consular fee), which provides a lower upfront cost option. Passport Canada’s research indicated that about 10% of Canadians would prefer the 5-year ePassport at this price. Families may raise concerns about the increased cost, although the amendments maintain all fees for children’s travel documents at 60% of the adult equivalent to limit the negative impacts on families. Canadians unsatisfied with the passport fee increase may also choose an alternative travel document, such as a NEXUS card, an Enhanced Driver’s License (if available in their province of residence), or decide not to travel.

The Regulations establish higher fees for Canadians who apply for a passport outside of Canada compared to Canadians who apply in Canada. The fee differences reflect the fact that it is more expensive to offer passport services outside of Canada. This is due to a number of factors, including higher demand for children’s passports, which are offered at a reduced fee, higher international shipping fees, and the amount paid by Passport Canada to the Department of Foreign Affairs and International Trade for the delivery of the passport program outside Canada. The increased fees will allow Passport Canada to maximize the efficiency of its service offerings around the world. About 5% of Canadian passports are issued outside of Canada. Therefore, although the fees to obtain a passport abroad are higher and could have an impact on Canadians outside of Canada, the fact that applicants in Canada are not subsidizing the small percentage of Canadians applying from outside the country means that the overall impact on all Canadians is positive.

Through Passport Canada’s 2010 public consultations, representatives from the tour operators sector indicated that a fee increase may influence decisions on travel and thus impact their business. However, less international travel would likely mean an increase in domestic tourism. They added that the convenience of a 10-year validity passport, and any measure that may facilitate travel for Canadians, was seen as positive for the tourism industry.

The Regulations represent a total incremental present value cost of around $1.3 billion for passport holders over a 10-year period.

Cost-benefit summary statement

The cost-benefit analysis demonstrates that the benefits of the fee increase significantly outweigh the costs of maintaining the status quo, which would result in Passport Canada being unable to proceed with new advancements, maintain current operations, or deliver its mandate. The table below provides a summary of the estimated benefits and costs of the Regulations. Due to the uncertainty in quantifying the potential benefits of the Regulations in terms of border security, reduced identity fraud, and facilitated travel and trade, these benefits are presented in qualitative terms only.

Cost-Benefit Summary Table

Cost-benefit statement		Description	Base year (2013– 2014)(see footnote 3)	2014– 2015	2015– 2016	2016– 2017	2017– 2018	2018– 2019	2019– 2020
A. Quantified impacts — millions of 2012 Canadian dollars
Benefits	Passport Canada	The fee increase allows Passport Canada to generate sufficient revenues to deliver its mandate	$234	$336	$268	$281	$317	$24	$26
Costs	Passport holders	Increased fees	$234	$336	$268	$281	$317	$24	$26
Net benefits

Cost-benefit statement		Description	2020– 2021	2021– 2022	2022– 2023	Final year (2023– 2024)(see footnote 4)	Total business cycle (present value)	Average annual
A. Quantified impacts — millions of 2012 Canadian dollars
Benefits	Passport Canada	The fee increase allows Passport Canada to generate sufficient revenues to deliver its mandate	$32	$33	$38	$62	$1,274	$165
Costs	Passport holders	Increased fees	$32	$33	$38	$62	$1,274	$165
Net benefits							$0	$0

B. Quantified impacts in non-dollars
No other impacts were quantified.
C. Qualitative impacts
Passport Canada	Passport Canada will generate sufficient revenues to deliver its mandate regarding passport security, including offering a 10-year ePassport and maintaining a high level of client service.
Passport holders	All passport holders will receive a high-value, secure travel document. For the vast majority of them, this product will cost less, per year of validity, than the previous 5-year non-electronic passport.
Canadian public	All Canadians benefit from Passport Canada having sufficient resources to keep pace with advances in technology and international standards, and to continue protecting the integrity of the passport. Having a strong passport makes Canada’s borders more secure and helps prevent identity fraud. It also helps maintain Canadians’ freedom to travel with few visa restrictions, which in turn facilitates international trade and has a positive impact on Canada’s economic prosperity.

8. Rationale

Overall, the Regulations ensure Passport Canada has the means to issue secure travel documents to Canadians, including a 10-year ePassport, while maintaining a high level of client service. Ten-year passport holders, who will make up the vast majority of passport holders, will receive a high-value, secure ePassport for a lower annual cost than the previous 5-year non-electronic passport in Canada. The heightened security and integrity of the passport will benefit all Canadians, as this will deter identity fraud, increase border security and help maintain Canadians’ freedom to travel with few visa restrictions.

It should also be noted that Passport Canada’s revised fee structure is in line with fees and service levels in comparable countries. A more detailed international comparison of passport programs is available at www.pptc.gc.ca.

9. Consultation

Passport Canada undertook extensive consultations with Canadians and parliamentarians on its proposed fees and services.

In the spring of 2010, Passport Canada held in-depth public consultations on the services for which it charges fees, and reported the results in a Public Consultations Findings Report, published in the fall of 2010 (available at www.pptc.gc.ca). Over 7 200 responses were received through an online open-ended questionnaire on current and future services. Comments were also collected through three round tables with key Passport Canada stakeholders (i.e. consumer groups, business and trade groups, travel and tourism groups) and a letter campaign to 75 other Passport Canada stakeholders. Overall, these consultations revealed strong support for the introduction of the ePassport with a 10-year validity option and general satisfaction with Passport Canada’s service offering.

Passport Canada also conducted public opinion research and primary market research, including through its monthly Passport Demand Survey, to support the consultation process. The organization used the input from the research and consultative efforts to help design the updated service offering and fee structure.

As part of the User Fees Act process, Passport Canada unveiled its fee-for-service proposal public on November 10, 2011, including the proposed new fee structure. This sparked the beginning of an input process, which provided Canadians with another opportunity to have their voices heard. While there were a relatively high number of visits to Passport Canada’s consultations Web page during the input process period, with over 7 400 visitors, the organization only received input from 56 Canadians. Some of this input was positive; the majority of complaints received focused on the fees. A summary of input received is available at www.pptc.gc.ca.

Following that phase, Passport Canada’s fee-for-service proposal was tabled by the Minister of Foreign Affairs in both Houses of Parliament, allowing parliamentarians an opportunity to provide input on the proposal. Passport Canada’s proposal was reviewed by the House of Commons Standing Committee on Foreign Affairs and International Development and the Senate Standing Committee on Foreign Affairs and International Trade. The House of Commons Committee did not submit a report and is therefore deemed to have approved the proposal. The Senate Committee voted to recommend approval of the fee-for-service proposal to the Senate. The recommendation was approved by the Senate on May 17, 2012.

10. Implementation and enforcement

Transition to the ePassport

Passport Canada intends to make the transition from the current passport to the ePassport as seamless as possible for Canadians. The 36-page ePassport will therefore be introduced gradually in passport offices across Canada, starting in early 2013. The progressive implementation strategy has been applied and proven successful in many other countries and is now a recognized best practice when introducing new technology. This tried and proven incremental approach will ensure Passport Canada keeps its commitment to providing high-quality service to Canadians, while maintaining the integrity and international reputation of the Canadian passport. During the transition phase, passports (electronic or not) will be issued for a maximum validity period of five years at the existing price of $87 (including the $25 consular fee).

The new fee structure and the 10-year validity period option will take effect on July 1, 2013, when the transition to the ePassport is complete. However, as indicated in the “Description” section, some of the new fees will take effect on March 31, 2014, for obtaining certified true copies, replacing a lost or stolen passport, requesting a transfer of an application file between passport offices, and for retaining a passport pending an application to obtain a new one.

Communications and engagement strategy

The new fees will be published on Passport Canada’s Web site. A news release providing details on the new fee structure and the advantages of the 10-year ePassport will be issued. Counter staff and call centre agents at Passport Canada, staff at Canadian missions abroad and receiving agents at Service Canada and Canada Post will receive information to share with clients. A marketing campaign on the benefits of the 10-year ePassport is in place, including at least one educational video published on YouTube and a second to be released in the fall outlining what the ePassport concretely means for Canadians crossing the border.

Enforcement

The fees are payable upon application for a travel document or other service and will be self-enforcing in that the applicant will be required to pay the fees prior to obtaining the service.

Service standards

Passport Canada has established service standards regarding its service offering. For Passport Canada, the service standards deemed most relevant under the User Fees Act are processing times. This requirement gives assurance to Canadians that when they pay passport fees, they can expect Passport Canada to make every effort to meet its stated processing times.

With the implementation of the Regulations, Passport Canada is committed to keeping the same high level of client service currently offered. There will, however, be one change to processing times for applications made outside Canada, as indicated during Passport Canada’s User Fees Act consultative process. The current turnaround time is 15 business days, which is less than the 20-day turnaround time for applications that are mailed to Passport Canada or received by Service Canada and Canada Post. To provide fair and consistent service delivery, Passport Canada will be aligning the processing times for applications outside Canada with these similar service channels in Canada. Passport Canada’s service standards are available at www.pptc.gc.ca.

Passport Canada will be held accountable for meeting these processing times and will be required to report on them annually in the Department of Foreign Affairs and International Trade’s Departmental Performance Report. Service standards are also published on Passport Canada’s Web site.

11. Contact

Lisa Pezzack
Director General
Policy, Research and Communications Bureau
Passport Canada
70 Crémazie Street, Ground Floor
Gatineau, Quebec
K1A 0G3

• Footnote a
  S.C. 2004, c. 6
• Footnote b
  S.C. 1991, c. 24, s. 6
• Footnote c
  S.C. 1991, c. 24, s. 6
• Footnote d
  S.C. 1991, c. 24, s. 7(2)
• Footnote e
  R.S., c. F-11
• Footnote 1
  C.R.C., c. 719
• Footnote 2
  C.R.C., c. 719
• Footnote 3
  Last three quarters.
• Footnote 4
  Last three quarters.