Regulations Amending the Immigration and Refugee Protection Regulations (Immigration Loans Program): SOR/2023-279
Canada Gazette, Part II, Volume 158, Number 1
Registration
SOR/2023-279 December 19, 2023
IMMIGRATION AND REFUGEE PROTECTION ACT
P.C. 2023-1299 December 15, 2023
Her Excellency the Governor General in Council, on the recommendation of the Minister of Citizenship and Immigration, makes the annexed Regulations Amending the Immigration and Refugee Protection Regulations (Immigration Loans Program) under subsections 5(1) and 88(2) of the Immigration and Refugee Protection Act footnote a.
Regulations Amending the Immigration and Refugee Protection Regulations (Immigration Loans Program)
Amendment
1 Subsection 290(1) of the Immigration and Refugee Protection Regulations 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 $300,000,000.
Coming into Force
2 These Regulations come into force on the day on which they are registered.
REGULATORY IMPACT ANALYSIS STATEMENT
(This statement is not part of the Regulations.)
Issues
The Immigration Loans Program provides eligible immigrants with access to funding for costs related to transportation and for assistance with initial settlement in Canada. Funding for the Immigration Loans Program is provided through an advance from the Consolidated Revenue Fund (CRF), and the maximum advance is defined in the Immigration and Refugee Protection Regulations (the Regulations).
Based on forecasted admissions of eligible immigrants who typically require loans for transportation and settlement, the current maximum defined in the Regulations will be reached by February 2024, necessitating that a higher maximum amount be defined. Amendments to the Regulations are required to set the new maximum amount of the advances.
Background
The Immigration Loans Program, originally known as the “Assisted Passage Loan Scheme,” was created in 1951 to financially assist immigrants from Europe whose services were urgently needed in Canada and who could not afford their own transportation. Over time, eligibility for the program expanded to include immigrants from all countries and other immigration classes, and additional regulations were made governing interest and repayment terms.
In 2018, loan terms were amended (SOR/2018-22) to ease the financial burden on recipients, many of whom are selected for resettlement based on their vulnerability, rather than their ability to establish in Canada, and have higher settlement needs than other classes of new immigrants. These amendments extended the loan repayment periods by two years to reduce the size of monthly instalments, eliminated interest charges, and delayed the beginning of the repayment period to one year after arrival in Canada; prior to the amendments, repayment started 30 days after arrival.
While the Immigration Loans Program makes loans available to all immigrant classes, including individuals arriving to Canada under humanitarian initiatives, historically, resettled refugees constitute 98% of Immigration Loans Program users. The program is intended to be self-sustaining; when clients make repayments, the available funding envelope is replenished, and the funds become available to issue new loans.
The process for issuing loans begins during eligibility interviews, where migration officers counsel refugees on the availability and terms and conditions of transportation loans to cover the costs associated with the transportation of individuals and their beneficiaries from their point of origin to their final destination in Canada. Assistance loans may also be issued by designated officers after individuals arrive in Canada to cover costs associated with initial settlement, such as first and last months’ rent and utilities. Loan repayment periods range of from three to eight years, depending on the loan amount. Repayment terms may be eased for resettled refugees facing hardships in repaying their loans following arrival in Canada, for example by extending the repayment period.
Objective
The objective of this amendment is to continue to enable and facilitate welcoming resettled refugees, as well as other newcomers, arriving under humanitarian commitments through an accessible and affordable loans program.
Description
The Regulations are amended to set the maximum amount of advances from the CRF for the Immigration Loans Program at $300 million.
Regulatory development
Consultation
The regulatory amendment relates to an internal process to ensure the continued operation of the Immigration Loans Program and does not change the scope and parameters of the program. No external consultations were conducted.
A prepublication comment period in the Canada Gazette, Part I, was not undertaken due to the time sensitivity of the amendment.
Modern treaty obligations and Indigenous engagement and consultation
No modern treaty implications are anticipated because Indigenous peoples in Canada are not impacted by the amendment.
Instrument choice
The maximum amount of loans that can be advanced is prescribed in the Regulations, therefore amending the Regulations to set a new maximum amount is the only option.
Regulatory analysis
Benefits and costs
An important first step in developing a cost benefit methodology is establishing a baseline scenario against which options may be measured. For this analysis, the baseline scenario is one where the Government of Canada would not be able to provide loans through the Immigration Loans Program beyond the existing $250 million. In this scenario, it is assumed that once the maximum is reached, immigrants that are otherwise eligible for loans would not be able to travel to Canada or would have to resort to other means for financing their travel and resettlement expenses.
Similarly, the regulatory scenario is one where the Government of Canada would be able to lend up to $300 million, facilitating travel and resettlement expenses.
Although funds become available as loan repayments are made, recent increases in transportation costs have increased the average loan amount per person. Furthermore, regulatory changes to the Immigration Loans Program in 2018 removed interest, extended the repayment start date from 30 days to one year after arrival, and extended all repayment periods by 2 years. In addition, loans collection activities were temporarily paused from March 2020 to September 2023 due to the hardship created by the COVID-19 pandemic. These factors have resulted in a slower replenishment of available loan funds.
This analysis examines the impacts of the amendment for 10 periods of 12 months starting the year that the regulatory amendment comes into force. All monetized values are expressed in 2022 dollars.
Government costs
The amendment will result in total costs of $3,083,605 in present value (PV) to the Government of Canada. This includes one-time implementation costs, ongoing administrative costs, and the costs associated with the risk of default.
Implementation and loan administration costs
Minor transition costs are anticipated for the development of communications materials and updates to Immigration, Refugees, and Citizenship Canada’s (IRCC) web page. These one-time transition costs are estimated to be $1,000 PV and will be incurred within the first period.
There will also be ongoing costs to administer the additional volume of loans. These costs include incremental labour hours required to administer the program, including creating loan files, and collecting payments, as well as the costs of sending monthly statements to loan recipients. The total ongoing costs are estimated to be $858,771 PV, and they include $269,128 PV for processing and file management costs and $589,643 PV in monthly statements expenses.
Default costs
IRCC invests in resources to encourage repayment, including collection activities. Collection activities begin only after a client has not made three sequential payments and include direct telephone contact to ascertain the nature of the problem and to seek a viable resolution to resuming repayment. Where repayment would cause financial hardship, IRCC may also adjust the repayment terms. Historical data from 2008 to 2017 indicates that 4% of granted loans may not be repaid in accordance with the terms of the loan. For the purpose of this analysis, uncollectible loans are considered costs to the Government of Canada. Based on this historical data, the increase to the maximum loan amount is expected to result in defaults amounting to $2,223,835 PV over 10 periods.
Although historical data suggests that 4% of loans may not be repaid, there is uncertainty around this estimate due to a number of factors, including a pause on collection activities from April 2020 to September 2023, economic and social impacts of the COVID-19 pandemic on new immigrants, and the 2018 regulatory changes to the Immigration Loans Program. In particular, with repayments beginning one year after arrival and the longest repayment period being 8 years, complete data, including final recovery rates, on loans issued in 2018 and beyond is not yet available.
Benefits
The increase of available funds will support the Government of Canada’s objective to facilitate the arrival and successful integration of refugees and other newcomers arriving under humanitarian initiatives. Increasing the loans ceiling will support vulnerable newcomers through an accessible and affordable loans program, as opposed to being required to find financial solutions elsewhere - for instance, through commercial banks. Given the financial situation of those who typically benefit from the loan program, alternate lending sources would likely not be available to them, or would be available at significant additional cost, making their immigration to Canada challenging and, in some cases, impossible.
Small business lens
Analysis under the small business lens concluded that the amendment will not impact Canadian small businesses.
One-for-one rule
The one-for-one rule does not apply, as there is no incremental change in administrative burden on business and no regulatory titles are repealed or introduced.
Regulatory cooperation and alignment
This initiative is to amend the maximum amount that the Government of Canada can advance from the CRF to loan to incoming or recently admitted permanent residents to Canada. As such, it does not offer opportunities for regulatory cooperation with other jurisdictions.
Strategic environmental assessment
In accordance with the Cabinet Directive on the Environmental Assessment of Policy, Plan and Program Proposals, a preliminary scan concluded that a strategic environmental assessment is not required.
Gender-based analysis plus (GBA+)
Resettled refugees are mostly racialized individuals. The top five countries of birth for resettled refugee admissions between 2017 and 2022 were Syria, Afghanistan, Eritrea, Iraq, and Somalia. Only a small proportion of resettled refugees speak English or French on arrival. Refugees often have lower levels of education and transferable work experience and can take many years to climb out of poverty.
Applicants of all genders would be positively affected by the amendment, as more funds would be available to issue interest-free immigration loans. Adults would benefit the most from the amendment; based on an analysis of refugee admissions processed in 2015–2022, children under the age of 17 accounted for 40% and adults accounted for 60% of refugees resettled in Canada. The loans issued under the Immigration Loans Program are available to cover resettlement costs for individuals of all ages.
Rationale
IRCC has a commitment to ensure resettled refugees are able to travel to Canada, which is consistent with the humanitarian nature of its refugee resettlement initiatives. If the maximum loan amount is reached, IRCC would no longer be able to issue loans to resettled refugees and other foreign nationals to help pay for costs they incur to travel to and settle in Canada. The majority of clients who benefit from the loan program would not be able to pay directly for travel to Canada. Increasing the maximum allowable amount that can be drawn from the CRF will enable the Immigration Loans Program to continue to serve clients in need and facilitate the successful integration of refugees and humanitarian admissions.
Implementation, compliance and enforcement, and service standards
This regulatory amendment comes into force on the day on which it is registered. The Department will continue to provide loans statements to clients and receive repayments of the loaned money. The Department will also continue to monitor the repayment rate of loans and to monitor the total balance of loans outstanding.
Contact
Faith Woods
Assistant Director
Resettlement Policy Branch
Immigration, Refugees, and Citizenship Canada
365 Laurier Avenue West
Ottawa, Ontario
K1A 1L1
Email: IRCC.RASO-ILP-PPI-OSRA.IRCC@cic.gc.ca