Regulations Amending the Immigration and Refugee Protection Regulations (Amendment of Certain Fees): SOR/2020-45
Canada Gazette, Part II, Volume 154, Number 7
Registration
SOR/2020-45 March 16, 2020
IMMIGRATION AND REFUGEE PROTECTION ACT
FINANCIAL ADMINISTRATION ACT
P.C. 2020-137 March 13, 2020
Her Excellency the Governor General in Council, on the recommendation of the Minister of Citizenship and Immigration with respect to the provisions of the annexed Regulations, and on the recommendation of the Treasury Board with respect to section 3 of the annexed Regulations, pursuant to subsections 5(1) and 89(1) footnote a of the Immigration and Refugee Protection Act footnote b and paragraph 19.1(a) footnote c of the Financial Administration Act footnote d, makes the annexed Regulations Amending the Immigration and Refugee Protection Regulations (Amendment of Certain Fees).
Regulations Amending the Immigration and Refugee Protection Regulations (Amendment of Certain Fees)
Amendments
1 Section 294 of the Immigration and Refugee Protection Regulations footnote 1 is amended by striking out “and” at the end of paragraph (b), by adding “and” at the end of paragraph (c) and by adding the following after paragraph (c):
- (d) the fees set out in subsections 295(1) and 301(1), section 302, subsection 304(1) and section 307 shall be indexed at 09:00:00 a.m. Eastern daylight time on April 30, 2022, and every two years after that on April 30 at that same time, in accordance with the cumulative percentage increase to the Consumer Price Index for Canada, published by Statistics Canada, for the two previous years, rounded to the nearest five dollars.
2 Paragraphs 295(1)(b) and (c) of the Regulations are replaced by the following:
- (b) if the application is made by a person as a member of the Quebec investor class, the Quebec entrepreneur class, the start-up business class, the self-employed persons class or the Quebec self-employed persons class
- (i) in respect of a principal applicant, $1,575,
- (ii) in respect of a family member of the principal applicant who is a spouse or common-law partner, $825, and
- (iii) in respect of a family member of the principal applicant who is a dependent child, $225; and
- (c) if the application is made by a person as a member of any other class or by a person referred to in section 71
- (i) in respect of a principal applicant, $825,
- (ii) in respect of a family member of the principal applicant who is a spouse or common-law partner, $825, and
- (iii) in respect of a family member of the principal applicant who is a dependent child, $225.
3 Subsection 303(1) of the Regulations is replaced by the following:
Fee — $500
303 (1) A fee of $500 is payable by a person for the acquisition of permanent resident status.
Indexation
(1.1) The fee set out in subsection (1) shall be indexed at 09:00:00 a.m. Eastern daylight time on April 30, 2022, and every two years after that on April 30 at that same time, in accordance with the cumulative percentage increase to the Consumer Price Index for Canada, published by Statistics Canada, for the two previous years, rounded to the nearest five dollars.
Coming into Force
4 These Regulations come into force at 09:00:00 a.m. Eastern daylight time on April 30, 2020, but if they are registered after that time, they come into force at 09:00:00 a.m. Eastern daylight time on the day after the day on which they are registered.
REGULATORY IMPACT ANALYSIS STATEMENT
(This statement is not part of the Regulations.)
Executive summary
Issues: The Government of Canada promotes a cost-effective approach to financing Government programs, which means that beneficiaries of services should contribute to the costs of those services. A significant imbalance exists between the cost of providing services to permanent resident applicants and the fees paid by them.
Description: The Immigration and Refugee Protection Regulations (the Regulations) are amended to ensure that the costs of managing and delivering permanent residence programs are more equitably shared between the Government of Canada and those who receive the services and benefit from them (i.e. permanent resident applicants).
Rationale: These Regulations aim to reduce the subsidization burden on the taxpayer for the management and delivery of permanent resident programs and services. This will be achieved through shifting more of the cost burden on to the users who benefit the most from the service (i.e. permanent resident applicants) and by ensuring that fees rise on a biennial basis at a pace commensurate with inflation.
The approach was selected as it fulfills the dual objective of accounting for structural underpayment for services over the years (since 2002) and emphasizing a higher cost recovery rate for economic programs based on capacity to pay (Federal High Skilled programs under Express Entry; provincial nominee program; business programs; the Atlantic pilot program, and Quebec’s skilled worker program).
The Regulations will increase permanent residence fees to levels that better reflect the actual costs of managing and delivering permanent resident programs and more closely align with the Government’s direction to promote a cost-effective approach to financing Government programs, whereby the beneficiaries of services contribute to the costs of those services.
The total estimated cost of raising fees is approximately $300.6 million in present value (PV) over ten years. The total monetized benefits are estimated at $377.5 million, resulting in a net benefit of $76.9 million over 10 years. Increasing permanent resident fees will generate revenues that will be used to better offset the cost of immigration, thereby reducing the cost burden on Canadian taxpayers.
Issues
The Government of Canada promotes a cost-effective approach to financing Government programs, which means that costs should be reasonably offset by those who receive services and/or benefit from them. A significant imbalance remains between the cost of providing services to permanent resident applicants and the fees paid by them.
Background
Administering a successful immigration program for Canada entails significant costs for Immigration, Refugees and Citizenship Canada (IRCC) and its delivery partners (primarily the Canada Border Services Agency, the Canadian Security Intelligence Service, and the Royal Canadian Mounted Police). As the immigration program has grown in recent years, substantial new investments have been made to match these higher levels of permanent resident admissions. Additional funds support IRCC and its partners to process and screen more applications, while the largest portion of investments is used to fund settlement programming, which assists newcomers in integrating into Canadian society.
The costs of administering the immigration program are partially offset by a number of fees set out in the Regulations for services related to the administration of the Immigration and Refugee Protection Act (IRPA). Foreign nationals seeking permanent residence in Canada must make an application to IRCC and pay associated fees. These fees include operational, processing and service delivery costs related to all permanent residence immigration programs.
As the number of permanent resident applications and admissions grows, so too do revenues accruing to the Consolidated Revenue Fund. However, permanent residence fees have not been increased since 2002, even by inflation, and, as a result, are no longer commensurate with the total cost of managing and implementing permanent residence programs. As a result of inflation alone over the past 18 years, fees have lost 34% of their value. As such, fees collected from Permanent Resident applicants now cover only about 35% of total costs of services provided.
Objective
The objective of this regulatory amendment is to reduce the subsidization burden on the taxpayer for permanent resident programs and services. This is achieved through sharing the cost burden more equitably with permanent resident applicants, who benefit from the services. Fees for Permanent Resident applications will then rise on a biennial basis at a pace commensurate with inflation.
A two-phased approach will be undertaken starting in 2020.
During the first phase, in 2020-21, the Right of Permanent Residence Fee (a privilege fee) will be increased from $490 to $500. As the increase in the Right of Permanent Residence Fee is focused on those who successfully become permanent residents, the intent of this increase is to augment the capacity to defray costs of the permanent residence regulatory scheme, which provides economic opportunity, access to a wide range of programs and services provided by both federal and provincial Canadian governments, and is a pathway to Canadian citizenship. Although the Right of Permanent Residence Fee is not directly tied to the recovery of processing costs, it is bound to the overall costs of the regulatory regime for permanent residence. The modest increase (2%) represents a scalable and progressive approach to compensate for creeping inflationary increases, investment costs, and volume growth year over year as part of the regulatory regime for permanent residents. Certain classes of applicants are exempted from paying the Right of Permanent Residence Fee such as dependent children of principal applicants or sponsors, protected persons, some applicants eligible on humanitarian and compassionate grounds, refugees resettled from abroad, and application for sponsorship under certain adoption and orphaned dependents situations. Exempted applicants will be unaffected by this fee increase.
In this first phase, application fees will also increase by 50% for principal applicants and their accompanying family members in all Economic Class programs, with the exception of the two 2019 Federal Caregiver pilot programs, the Home Child-Care Provider Pilot and Home Support Worker Pilot, to account for structural underpayment for services over the years and emphasize a higher cost recovery rate for economic programs based on capacity to pay. These classes are the Federal High Skilled programs under Express Entry; provincial nominees; business programs; the Atlantic Immigration pilot program, Rural and Northern Immigration pilot program, the Agri-Food Immigration pilot program, and Quebec’s skilled worker program.
During the second phase, beginning in 2022-2023, all application fees in the Economic, Family and Humanitarian classes, as well as the Right of Permanent Residence Fee, will be increased on a biennial basis to ensure that fees remain consistent with inflation.
The fees for permanent resident cards, permanent resident travel documents and certification or replacement immigration documents will not increase.
Description
The Regulations are amended such that
- Starting in 2020-21, permanent resident processing fees for Economic class applicants increase as follows:
- Fees for principal applicants of the Economic business class (including self-employed, start-up visa, Quebec investor, Quebec entrepreneur, and Quebec self-employed) will increase from $1,050 to $1,575 (an increase of 50%).
- Fees for principal applicants of the Economic non-business class will go from $550 to $825 (an increase of 50%). Note: this increase will not apply to fees for principal applicants and their families in the Caregivers programs, which will remain unchanged.
- Fees for spouses or common-law partners of all Economic classes will go from $550 to $825 (an increase of 50%).
- Fees for dependent children of all Economic classes will go from $150 to $225 (an increase of 50%).
- The right of permanent resident fee will increase from $490 to $500 (an increase of 2%).
- Starting in 2022-2023, on the day of the two-year anniversary of the coming into force of these Regulations and every two years thereafter, selected permanent resident processing fees will be increased every two years by the applicable Consumer Price Index (CPI) increase, rounded to the nearest $5. The approximation assumption being that the CPI is 2% per year on average, but the fees would nevertheless be subject to inflation calculated cumulatively from the time of coming into force. The following prospective fee increases below are provided for illustrative purposes only:
- Permanent resident processing fees for all economic business class principal applicants (including self-employed, start-up visa, Quebec investor, Quebec entrepreneur, and Quebec self-employed) will be increased to approximately $1,640 (projected) in 2022-2023, to $1,705 in 2024-2025, and so on.
- Permanent resident processing fees for most economic non-business class principal applicants (including federal skilled workers, federal skilled trades, provincial nominee, Canadian experience class, the Ministerial Instruction economic immigration classes [currently, Atlantic Immigration class, Rural and Northern Immigration class, Agri-Food Immigration class], and Quebec skilled workers), will be increased to approximately $860 in 2022-2023, to $895 in 2024-2025, and so on. Permanent resident processing fees for principal applicants (as well as the spouses or common-law partners and dependants) in the Home Child Care and Home Support Worker caregiving classes will be increased by the applicable CPI increase.
- Permanent resident processing fees for spouses or common-law partners of all Economic classes will be increased to approximately $860 in 2022-2023, to $895 in 2024-2025, and so on.
- Permanent resident processing fees for dependent children of all Economic classes will be increased to approximately $235 in 2022-2023, to $245 in 2024-2025, and so on.
- Permanent resident processing fees for all noneconomic class principal applicants (including the family, protected persons, and humanitarian and compassionate class applicants) will remain at the current rate of $550 until 2022-2023, when that fee will be increased biennially and rounded to the nearest $5, to approximately $570 in 2022-2023, to $595 in 2024-2025, and so on. Permanent resident processing fees for all family members of principal applicants (spouses, partners, and parents and grandparents, as applicable) will remain at the current rate of $550 until 2022-2023 when that fee will be increased biennially and rounded to the nearest $5, to approximately $570 in 2022-2023, to $595 in 2024-2025, and so on.
- Permanent resident processing fees for dependent children and their family members will remain at the current rate of $150 until 2022-23 where they will be increased by the applicable CPI rounded to the nearest $5 on a biennial basis to $155, to $160 in 2024-2025, and so on.
- Starting in 2022-23, the processing fee for processing an application by a person as a member of the permit holder class to remain in Canada as a permanent resident will be increased to $340 and then increased by the applicable CPI rounded to the nearest $5 multiplier every two years thereafter.
- Starting in 2022-2023, the fee to sponsor a member of the family class will be increased to $80 and then increased by the applicable CPI rounded to the nearest $5 multiplier every two years thereafter.
- Starting in 2022-2023, the Right of Permanent Residence Fee (a privilege fee) will be increased to approximately $520, and then increased by the applicable CPI rounded to the nearest $5 multiplier every two years thereafter.
The Regulations will come into force on April 30, 2020, at 09:00 am eastern daylight time.
Regulatory development
Consultation
Public support for immigration in Canada has remained stable and relatively strong for many years. With immigration projected to increase in 2020, 2021 and 2022, it is important to ensure that immigration continues to be viewed positively by Canadians. Public opinion on immigration is partly influenced by how well immigrants are contributing to Canada economically and socially, as well as whether the Government is effectively managing the immigration system. Increasing user fees helps to demonstrate a commitment to effectively manage immigration by improving cost recovery, addressing the loss of revenue due to inflation, and reducing the amount that Canadian taxpayers are subsidizing processing costs. As such, increases are likely be seen favourably by most Canadians.
The permanent resident user fee increases are not expected to raise significant criticism that the fees are out of step with Migration Five partners (USA, Australia, UK, and New Zealand), nor that they make Canada a less attractive destination to immigrants.
Modern treaty obligations and Indigenous engagement and consultation
Pursuant to the Cabinet Directive on the Federal Approach to Modern Treaty Implications, an assessment of modern treaties was undertaken. The assessment did not identify any modern treaty implications or obligations.
Instrument choice
Fees related to permanent residence applications are set by regulation. In order to increase these fees, a regulatory change is necessary.
Regulatory analysis
Benefits and costs
The table below provides an overview of the cost-benefit analysis study results. The analysis period is 10 years starting in 2020 and ending in 2029. Present values (PV) were calculated using a discount rate of 7%.
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 is a scenario where all foreign nationals seeking to apply for permanent residence would pay existing fees. The baseline is compared with the regulatory proposal to raise fees in some of these programs.
The analysis presents the incremental costs for the Government of Canada’s initiative to implement a fee increase. These costs include updates to bulletins and forms, information technology and web updates as well as communication costs to advise users of immigration services of the fee increases. It is estimated that the government’s transition costs, which include implementation and communications costs incurred in the year the proposed fee increases are imposed would be $0.25 million.
Those who are considered in scope for assessing the net benefits are Canadian citizens, permanent residents and those foreign nationals who reside in Canada with status. Thus, the analysis also accounts for the impact of a fee increase on temporary foreign workers, students and permit holders who reside in Canada and may apply for permanent residence from within Canada. It is acknowledged that foreign nationals applying overseas will also face fee increases; however, the cost impacts on those applicants are not monetized as they would be considered out of scope for the purposes of the cost-benefit analysis.
The analysis also monetizes the benefits to the Government of Canada as a result of the additional revenue from increasing the fee. Since the introduction of permanent resident services fees, Immigration, Refugees and Citizenship Canada has never fully recovered the cost of processing permanent resident and related applications. The fees currently charged for these services are lower than the cost of providing the service and therefore require partial funding by the Government of Canada. While the objective of the fee increases is to reduce subsidization burden on Canadian taxpayers, rather than to facilitate full cost recovery, the additional revenue from all applicants, both within and outside of Canada, represents a benefit to the Government of Canada. Moreover, there is an implicit benefit to all Canadian residents, as Government revenue funds publicly provided services.
The incremental revenues of the proposed permanent resident fees were estimated by examining the number of permanent resident applicants in each category, and multiplying by the associated fee increase (ranging from $10 to $525), and then applying the fee increase to the forecasted volumes of applicants to whom the increased fee would apply in the next 10 years. The analysis uses 2019 constant dollars. This effectively maintains the real value of the fee and eliminates the need to account for inflation. Hence, only those impacts that are a result of fee increases for the purposes of better cost recovery are monetized in the cost-benefit analysis.
It is expected that fee increases will not impact the demand for permanent residence and other services once the fee increase comes into force. The benefits of acquiring permanent residence or other services are seen to outweigh the incremental cost increases associated with the proposed fee structure, especially relative to the significant costs that are involved with migration. Furthermore, the permanent resident service fees are set at very competitive rates as compared to the Migration Five countries, thus are not expected to incentivize qualified candidates to apply elsewhere instead.
Historical analysis and the Department’s forecasting model are used to estimate future application intake. Moreover, this analysis uses the 2019-2021 Multi-Year Levels Plan, which provides a strategy for the number of permanent residents who will land in Canada each year. The departmental forecasting model leverages these volumes to present application volumes for future years.
Based on the analysis of incremental impacts, the total estimated cost of a fee increase to in-Canada applicants is approximately $300.6 million (PV) over the period 2020-2029. The total monetized benefits to the Government of Canada in the form of higher fee revenues from all applications, within and outside of Canada, are estimated at $377.5 million, resulting in a net benefit of $76.9 million, or an annualized average of $11.0 million in net present value benefits per year, that will be used to better offset the cost of immigration, thereby reducing the cost burden on Canadian taxpayers.
| Costs, Benefits & Distribution | 2020table 1 note * | 2024 | 2029 | Total Present Value | Annualized Averagetable 1 note ** | |
|---|---|---|---|---|---|---|
A. QUANTIFIED IMPACTS IN CAD $ |
||||||
| Benefits | ||||||
| Incremental Revenue From The Economic & Economic Business Programs from both in-Canada and overseas applicants | Government of Canada | 33.4M | 50.1M | 50.4M | 360.5M | 51.3M |
| Incremental Revenue From Granting The Right Of Permanent Residency to both overseas and in-Canada applicants | Government of Canada | 1.5M | 2.4M | 2.4M | 17.0M | 2.4M |
| Total Benefits | 34.9M | 52.5M | 52.9M | 377.5M | 53.7M | |
| 2020table 1 note * | 2024 | 2029 | Total Present Value | Annualized Average | ||
| Costs | ||||||
| Transition costs | IRCC | 0.3M | 0.0M | 0.0M | 0.3M | 0.04M |
| Increased Fees For In Canada Economic And Economic Business Class Applicants | In Canada Economic And Economic Business Class Applicants | 26.7M | 40.1M | 40.4M | 288.6M | 41.1M |
| Increased Fees For In Canada Right of Permanent Residence Payees | In Canada RPRF Payees | 1.0M | 1.6M | 1.7M | 11.7M | 1.7M |
| Total Coststable 1 note *** | 28.0M | 41.7M | 42.1M | 300.6M | 42.8M | |
| Net Benefits | 6.9M | 10.7M | 10.8M | 76.9M | 11.0M | |
Table 1 note(s)
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Qualitative impacts
- It is acknowledged that the fees will increase for foreign nationals applying for permanent residence overseas however these applicants are out of scope for cost benefit analysis purposes. The impact of a fee increase on these foreign nationals is not included in the above analysis.
- It is acknowledged that the fee increases may impact applicants as people adjust to the new fees however fee increases are not expected to result in any reduction in overall demand for permanent residence and other related services.
Cost benefit analysis methodology information is available upon request.
Small business lens
The small business lens does not apply to this regulatory amendment. There are no anticipated administrative or compliance costs imposed on business.
One-for-one rule
The one for one rule does not apply to this regulatory amendment, as there are no anticipated administrative burden impacts on business.
Regulatory cooperation and alignment
Provincial and territorial partners were engaged on the approach to increasing permanent resident fees and did not express concerns.
Key Government of Canada delivery partners including the Shared Services Canada, Global Affairs Canada, Justice Canada along with Public Safety were also engaged and did not express concerns.
IRCC will work closely with federal delivery partners, provincial and territorial governments to ensure a smooth implementation of the new fees.
Gender-based analysis plus (GBA+)
An increase in fees is expected to increase the financial hardship of submitting an application for those with less ability to pay, which can be linked to immigration class, number of years in Canada, and gender:
- Immigration Class: On average, immigrants in the sponsored family, protected person, and humanitarian and compassionate classes have earnings that are well below the Canadian average. This suggests that a permanent resident user fee increase may be more burdensome on immigrants from non-economic classes given their lower earnings. However, the proposed amendments mitigate the disproportionate impact on applicants as certain vulnerable persons are exempt from paying the Right of Permanent Residence, such as protected persons and dependent children, while other economic classes are still required to pay.
- Number of Years in Canada: On average, after five years in Canada, the labour force participation rates and employment rates of economic principal applicants are higher than those of Canadian-born, and their unemployment rates are comparable to those of Canadian-born. This suggests that newly arrived immigrants may be more affected by an increase in permanent residence user fees than established immigrants. However, data suggests that the likelihood that an immigrant will sponsor a family member increases with time in Canada, therefore, a greater number of more established immigrants are sponsoring family members than newly arrived immigrants.
- Gender: On average, and compared to their Canadian-born counterparts, female immigrants have lower labour market rates, such as labour market participation rate and employment rate. This suggests that female economic principal applicants are likely to be more affected by an increase in permanent resident user fees as they have less economic means to offset the increased cost. For family, protected persons, and humanitarian and compassionate classes of immigrants the gap between female and male immigrants is larger.
The increases in financial hardship, however, is proportionate with the amount of the fee increase. Applicants who have less ability to pay will only see a small increase in fees, which is not expected to have a significant impact on their applications. Additionally, certain vulnerable persons are exempted from paying the Right of Permanent Residence Fee such as dependent children of a principal applicant or sponsor; protected persons; some applicants eligible on humanitarian and compassionate grounds; resettled refugees; sponsorship applications for adopted children; and sponsorship applications for an orphaned brother, sister, niece, nephew or grandchild.
IRCC will continue to analyze the GBA+ considerations in more depth as part of the increase to the permanent residence fees and will monitor the fee increases closely to assess the extent to which uneven impacts may be expected to be experienced by applicants who tend to have less ability to pay the fees.
Implementation, compliance and enforcement, and service standards
The Regulations come into force on April 30, 2020, at 09:00 am eastern daylight time (EDT).
Completed applications received before 09:00 am EDT on April 30, 2020, will be processed in accordance with the fee schedule in place prior to April 30, 2020.
Applications received on or after 09:00 am EDT on April 30, 2020, will be processed in accordance with the fee schedule established in the Regulations.
Applications received on or after 09:00 am EDT on April 30, 2020, that do not include the correct fees will be returned to the applicant as incomplete.
Evidence of the correct fee payment needs to accompany any application for a permanent resident program submitted to IRCC.
Contact
Isabelle Ricard
Director
Fees and Activity Based Costing Division
Immigration, Refugees and Citizenship Canada
300 Slater Street, 5th Floor
Ottawa, Ontario
K1A 1L1
Email: IRCC.FSBFees-FraisDGSF.IRCC@cic.gc.ca