Passport Program Annual Report for 2017 to 2018

Passport Program Annual Report for 2017 to 2018 (PDF, 2.99 MB)

© Her Majesty the Queen in Right of Canada, represented by the Minister of Immigration, Refugees and Citizenship, 2019
Cat. no. Ci1-21E-PDF
ISSN 2371-2538
C&I-2507-06-2019

Executive Summary

The Passport Program Annual Report offers an overview of the program’s performance and financial situation for a specific fiscal year (April 1 to March 31) and speaks to future plans. It is one of the ways the program demonstrates accountability to its clients, who entirely fund its operations, as well as to the general public.

The 2017 to 2018 Passport Program Annual Report starts with the customary Message from the Deputy Minister of Immigration, Refugees and Citizenship Canada (IRCC), who is responsible for the Passport Program. This year’s message touches on some of the program’s recent accomplishments, notably:

• amendments brought to the Canadian Passport Order to enhance protection of children and strengthen refusal and revocation authorities
• interim measures available for people who wish to display an identifier other than F (female) or M (male) in their travel document
• changes to the service delivery network to avoid duplication
• advancing important projects – the Passport Program Modernization Initiative, Next Generation ePassport, and Identity Linkages Project

An overview of key figures are presented in the Year in Numbers pages. The Passport Program Performance in 2017 to 2018 section delves in earnest into how the program did last fiscal year under its 3 pillars, including:

Service delivery:

• client satisfaction of 97% in Canada and 94% abroad
• 99% of services rendered were within announced times
• 4.97 million travel documents were issued

Security:

• compared to last fiscal year, fewer passports and other travel documents were lost, stolen or refused, but more were revoked
• more travel documents were refused and fewer were suspended under the Family Orders and Agreements Enforcement Assistance Act

Program management:

• average wait time at passport offices was 24 minutes, considerably less than the 45-minute operational target

Financial performance:

• the net result for 2017 to 2018 was $231 million

Finally, in Moving Forward, some of the program’s most pressing short- and medium-term priorities are presented, including:

• evaluation of the Passport Program’s effectiveness since 2013
• providing excellent service through the advancement of the Passport Program’s large-scale projects.

We hope that you find this report informative and helpful.

Message from the Deputy Minister

At the Passport Program, we strive to produce one of the most secure, respected and treasured travel documents in the world. It involves a great deal of planning, patience and passion. And we’ve been delivering!

In the 2017 to 2018 fiscal year, Canadians once again expressed great satisfaction with the service they received. Our annual Passport Program Evaluation Survey measured an astounding 97% client satisfaction rate for services provided in Canada. This year we introduced a new survey for Canadians who received passport services abroad, and 94% of the respondents were satisfied with their experience.

We met our processing service standards more than 99% of the time. At Passport offices, the average wait time was only 24 minutes, substantially less than our 45-minute target.

On the legislative front, the Canadian Passport Order was modified to enhance the protection of children. New amendments now allow the Minister to issue a passport to a child without a parent or guardian having applied, or to refuse, revoke or cancel a passport issued to a child, if it is in the child’s best interest.

The Canadian Passport Order was also amended to clarify and strengthen existing authorities. The Minister can now refuse or revoke a passport if a person stands charged with a hybrid offence, and refuse or revoke the passport of a person who facilitates the use of a passport by someone other than its bearer.

As promised, Immigration, Refugees and Citizenship Canada (IRCC) introduced interim measures for people who wish to have their travel documents display an identifier other than female (F) or male (M). The interim measures, consisting of the remark “The sex of the bearer should read as X, indicating that it is unspecified”, will be available until the department is able to print an “X” in its documents. Indeed, IRCC is committed to better reflecting gender inclusiveness in all its programming. We are currently working on ways to ensure that documents, applications and systems can accommodate a non-binary gender identifier and still comply with international standards.

We also made changes to our service delivery network. In 2016 to 2017, we expanded passport services to more than 300 Service Canada Centres across the country, making our services accessible to 97% of Canadians within 100 km of their home.

To avoid duplicating efforts, as of 2017 to 2018, Canada Post Corporation no longer offers passport services. That said, Canada Post remains an essential partner of the Passport Program as it delivers and transports travel documents across the country. Moreover, individuals can continue to pick up forms or mail completed passport applications at their preferred Canada Post office.

Behind the scenes, we continued our work on planning and implementing a number of long-term projects in 2017 to 2018. Notably, we are advancing our work on a new passport issuance system. Improvements in application and integrity features along with the new system will set the foundation for continuing to modernize the program.

We are also working to introduce the Next Generation ePassport with electronic security features in order to reduce forgery risks, prevent fraud and protect the integrity of our travel documents.

Finally, we are improving collaboration with provinces and territories though the Identity Linkages Project by creating systems that allow us to easily share information and validate identity documents, such as birth certificates.

All of these projects are essential for improving the efficiency and retaining the integrity of our systems, processes and products. We aim to carry them forward, without compromising client service, so your passports and other travel documents continue to facilitate your travels.

Marta Morgan
Deputy Minister
Immigration, Refugees and Citizenship Canada

The Year in Numbers …

From April 1, 2017 to March 31, 2018

… for the Passport Program

For more details on the numbers and how they compare to the last year, refer to the sections linked at the bottom of the pages.

Indicators with * are associated with the departmental result

• Canadians’ international travel is facilitated

The Passport Program

The Passport Program provides passport and other travel document services to eligible Canadian citizens, permanent residents and refugees.

The program is administered jointly by several federal departments. Immigration, Refugees and Citizenship Canada (IRCC) has the overall accountability for program policy, finances and operations.

Employment and Social Development Canada (ESDC), through Service Canada, administers program delivery in Canada. Global Affairs Canada (GAC), through its missions outside of Canada, is responsible for program delivery abroad.

Through an extensive service delivery network in Canada and abroad, the Passport Program provides information on applying for and possessing Canadian travel documents, collects and processes applications, authenticates applicants’ identity, determines eligibility, and issues secure Canadian travel documents.

The program also performs activities to prevent and detect fraud and misuse of travel documents. As such, it can refuse, cancel, revoke or withhold travel documents.

Passport Program operations are funded on a full cost-recovery basis from fees charged for travel document services. In other words, operations are not financed by taxpayers; they are financed by those who apply and pay for the travel document services.

Facilitating international travel

To enhance accountability and transparency, the Canadian government has adopted a Results and Delivery approach by which departments plan, measure and report on activities that bring important results to Canadians.

The program’s ultimate objective, known as IRCC’s Departmental Result 8, is to facilitate Canadians’ international travel. All activities and outputs from the program’s 3 pillars – Service Delivery, Security and Program Management are geared towards achieving this result.

Performance indicators used to measure the achievement of program results are presented by program pillar in the Passport Program Performance section. The 3 key performance indicators associated with the program’s departmental result are identified by an asterisk in the Year in Numbers section.

Text version: Expected results of the Passport Program

Passport Programs expected results are dependent on pillar activities and their immediate and intermediate results; from pillar activities, to immediate results, to intermediate results and finally to Departmental results.

Expected results of the Passport Program displayed in a flow chart show the interconnected nature of activities and results. The main Departmental Result “Canadians’ international travel is facilitated” is dependent on these activities.

At the base of the flow chart are the Pillars: Program Management, Security and Service Delivery. These flow upwards into Immediate Results.

Program management flows into Immediate Results:

• Policies program management and partnerships are efficiently managed
• Management of the Passport Canada Revolving Fund contributes to the Fund’s long term sustainability

These results flow horizontally into other Immediate Results that feed into by the next two pillars.

Security and Service Delivery flow into Immediate Results:

• Only genuine and valid Canadian travel documents are used for travel
• Legitimate and eligible travelers are in possession of Canadian travel documents
• Canadians are satisfied with client experience
• Applicants understand the requirements in applying for a Canadian travel document
• Canadian travel document holders understand the responsibility of safeguarding a Canadian travel document

All Immediate Results flow upwards into Intermediate Results:

• The integrity of the Passport Program contributes to national and international security interest
• Canadian travel documents are internationally respected and recognized
• Canadians confidence in the Passport Program

All Intermediate Results flow upwards into the Departmental Result:

• Canadians’ international travel is facilitated

Products and Services

The Passport Program provides the following products and services to eligible Canadians and non-Canadian citizens (permanent residents and refugees).

Travel documents for Canadians

Travel documents for non-Canadians

Administrative services

In addition to travel documents, the program offers a variety of services in Canada and abroad. At the applicant's request, the program can:

• provide expedited services
• provide up to 3 certified true copies of travel documents
• replace a lost or stolen passport or other travel document
• transfer a file between offices in Canada
• retain a valid passport or other travel document in Government of Canada offices abroad
• add a special stamp or observation to a travel document to alert border authorities to particular facts or to facilitate travel to some countries

To see the services’ associated fees, refer to Annex A – Service Fees.

Service Delivery Network

The Passport Program offers several types of points of service to apply for travel documents and access information.

Service Canada, Canadian missions abroad, IRCC’s Official Travel office, and some offices of Members of Parliament provide various levels of passport services^{Footnote 1}. Alternatively, individuals can apply by mail.

This extensive network is complemented by several points of contact online (websites and social media) and toll-free telephone numbers where the general public can direct their inquiries.

With the recent increase in the number of Service Canada Centres that provide passport services, Canada Post ceased to offer basic passport services in December 2017. The locations that provided such services are on average within 4 kilometers of a Service Canada Centre that offers receiving agent services for passport applications at no additional cost. With the increase, 93% of Canadians residing in Canada have access to passport services within 50 kilometers of their place of residence.

Canadians in Canada can use our online locator to find the closest service location.

Text version: Service Delivery Network

The Passport Service Delivery Network has several points of service. Service Canada, Canadian missions abroad, IRCC’s Official Travel office, and some offices of Members of Parliament provide various levels of passport services. Alternatively, individuals can apply by mail.

The Passport Service Delivery Network as of March 31, 2018 consists of:

• 34 dedicated Passport Offices across Canada that offer full passport services with one office offering certificates of identity and refugee travel documents.
• Over 300 Service Canada receiving agent sites across Canada that offer passport services.
• 1 Official Travel office that processes all diplomatic and special passports.
• 203 Global Affairs Canada points of passport service abroad, including 119 missions that offer full passport services.
• Members of Parliament (MPs) offer basic passport services across Canada. Individuals can also provide feedback about the Passport Program to their MPs.
• Individuals in Canada or in the United States can send in their applications by
  • Mail: Passport Program / Gatineau / QC / K1A 0G3 / Canada
  • Courier: Passport Program / 22 de Varennes Street / Gatineau / QC / J8T 8R1 / Canada

Passport Program Performance 2017 to 2018

Service Delivery

Canadians expect high-quality services and the Passport Program makes it a priority to meet its clients’ needs throughout its service delivery network.

This subsection speaks to 4 program results:

• Canadians are satisfied with client experience
• Applicants understand the requirements in applying for travel documents
• Holders understand the responsibility of safeguarding a travel document
• Canadians have confidence in the Passport Program

Applications received

The program received 4.95 million travel document applications in 2017 to 2018, 3.5% less than last fiscal year (5.13 million).

Passport offices remained the most popular service channel, where 6 out of 10 clients submitted their travel document applications. Two out of 10 clients used receiving agent sites to apply for a passport. Notably, usage of these sites increased by almost 5% compared to last year. The increase coincides with the recent expansion of passport services to more than 300 Service Canada Centres. Usage rates for other channels remained stable.

According to the annual Passport Program Evaluation Survey, convenience is the primary reason for choosing a service channel in Canada. Processing speed (total time to receive a passport) and personal service were either the second or third most important reasons why respondents chose to go to a passport office or a receiving agent site.

Travel documents issued

The program issued 4.97 million travel documents in 2017 to 2018, about 2% less than the previous fiscal year (5.08 million).

As can be the case in periods of decreasing demand, the number of issued travel documents is higher than the number of applications received. That is because not all issued travel documents stem from applications received in the same reporting period. Applications received in the last days of the previous fiscal year are processed in the first days of the following fiscal year. When fewer applications are received that following year, this can result in more travel documents being issued than received.

Of all travel documents issued this fiscal year, 99% were regular passports, 83% issued to adults and 17% issued to children. Approximately 88% of adults were issued a 10-year passport.

Applications received by service channel

Percentages of applications received through

Percentages may not total 100% due to rounding

Travel documents issued

Last 5 fiscal years

Text version: Travel documents issued

	Travel documents issued
2013-14	4,907,000
2014-15	5,111,150
2015-16	4,788,100
2016-17	5,075,700
2017-18	4,970,708

Performance against service standards

The Passport Program has consistently processed applications in a timely manner and this reporting year was no different. In 2017 to 2018, 99.15% of all services rendered were within service standards.

In Canada, service standards compliance for services for Canadians and for non-Canadians, for expedited services and for other services was 99.66%. Compliance for services for Canadians outside of Canada was 89.74%. See table for details on specific products and services.

Performance against service standards by channel and product (2017-18)

Percentages of applications or requests processed within announced service standards

Client support

Provided that there are no changes in Passport Program policy or service, the number of client support requests normally reflects passport demand.

This appears to have been the case in 2017 to 2018, when the fewer number of received telephone calls and website visits mirrors the decrease in applications received. However, there were slightly more general inquiries compared to the previous fiscal year.

Client support: telephone and website

Changes of +/- 10 % are marked with Arrow up or Arrow down

Passport Program Evaluation Surveys

The Passport Program Evaluation Survey is conducted annually to gather feedback from our clients on the Passport Program’s services and products. This insight allows the program to fine-tune operations and address its clientele’s current and future needs.

The survey has traditionally been limited to clients who received passport services in Canada, but for the first time in 2017 to 2018, clients who received services abroad were surveyed as well. Because of differences in methodology (telephone versus online), the results of both surveys are not directly comparable, so they are presented separately.

Survey results for services in Canada

The 2018 Passport Program Evaluation Survey for services offered in Canada was conducted by telephone from February 11 to March 22, 2018. The survey had a sample size of 2,503 passport holders, aged 18 years or older, who applied for a new passport in Canada between May and November 2017. There were about 250 respondents from each province.

Survey results are accurate within +/- 3.8%, 19 times out of 20. Changes of +/- 4% with the previous survey are marked. New questions to the survey will not show any data from the previous year.

Satisfaction levels

The survey results show that clients remain satisfied with the current program delivery model. Across service channels in Canada, 97% of respondents were either “very satisfied” or “satisfied” with their overall service experience.

Satisfaction levels

Percentage of respondents satisfied and very satisfied with …

For most aspects of the in-person service experience in Canada, respondents indicated very high levels of satisfaction. Most results are comparable to last year’s survey (within 2%) except for one: convenience of locations saw a notable increase of 5%, which is likely due to the additional Service Canada Centres now offering receiving agent passport services. Although the result for “waiting time at the office” is the same as last year’s result (81%), more respondents (84%) reported waiting times of less than 30 minutes (see Wait time improvements).

Client satisfaction - In-person service in Canada

Percentage of respondents satisfied and very satisfied with …

Changes of +/- 10 % are marked with Arrow up or Arrow down

Confidence levels

Similar to previous years, most respondents felt the Canadian passport is a recognized travel document that provides confidence and peace of mind when travelling, and a sense of national pride.

Trust and pride in the Canadian passport

Percentage of respondents who felt …

Awareness levels

Respondents’ awareness levels of Passport Program protocols appear to be stable over time. Most respondents were aware that passports should be kept in a secure location, that lost or stolen passports should be reported, that a copy of their passport should not be provided to anyone, and that a damaged passport should be replaced. However, over half of the respondents still did not know that the passport of a deceased person should be cancelled.

Of note, only 17% of respondents knew that, since November 2016, visa-exempt foreign nationals (excluding U.S. citizens) need an electronic travel authorization (eTA) to fly to, or transit through Canada. Awareness is important because, since the implementation of the eTA, dual Canadian citizens need a valid Canadian passport to travel to or transit through Canada by air.

Awareness of passport protocol

Percentage of respondents who were aware that …

Online usage levels

Almost half of the respondents (48%) visited the Passport Program website before submitting their passport application and 96% of them were highly satisfied with the information they found. The majority of respondents were looking for passport application forms, instructions on how to apply for an adult passport, and requirements for supporting documents.

In 2017 to 2018, 43% of respondents obtained their application forms online. About the same proportion, 44%, picked up their forms at an in-person service location; of them, more than half (55%) went to a Canada Post office. Among those who obtained their application form in person, 32% did not know that the forms are available online. Nonetheless, 48% of the respondents who obtained their forms in person did so because it was more convenient for them.

Interest for applying online has remained stable over the past 4 surveys. Again, about 6 out of 10 respondents, 61%, said they would likely complete their passport application online (including submitting photos and paying fees) if the service were available. Conversely, 35% of respondents would rather not apply online, stating security and privacy concerns, complexity of the process, and a preference for in-person service.

Online usage

Percentage of respondents who reported …

When prompted to choose between important factors for online services, respondents chose as most important: user-friendliness of the online application (99%), security of the online process (99%), and completing every step of the process online – including payment (98%).

When unprompted, the most cited factors for considering online services were: user-friendliness (23%), not having to go in person (16%) and security of the online process (12%).

Survey results for services abroad

The first ever Passport Program Evaluation Survey for clients living outside of Canada was conducted from November 23, 2017, to March 31, 2018. When receiving their passport, individuals were given a card inviting them to participate in the online survey.

The survey had a sample size of 3,994 passport holders aged 18 years or older who applied for a new passport at overseas Canadian missions or via mail from the United States between November 2017 and March 2018. Survey results are accurate within +/- 1.5%, 19 times out of 20.

Satisfaction levels abroad

Ninety-four percent of overseas respondents were either “very satisfied” or “satisfied” with their overall service experience. The percentage of “very satisfied” respondents was an impressive 70%.

Client satisfaction levels abroad

Percentage of respondents satisfied and very satisfied with …

The mail-in service was the most commonly used method to submit passport applications abroad. Roughly 65% of overseas respondents used mail or courier to apply for their passports, while 32% applied in-person at missions. Satisfaction rates are slightly higher for mail-in respondents.

Satisfaction levels by channel abroad

Percentage of respondents satisfied and very satisfied with experience …

The respondents who applied in-person at a Canadian Embassy, High Commission of Canada, or Consulate General of Canada were satisfied with their overall experience and with a number of specific aspects of their experience, notably with the service provided in their official language of choice.

Client satisfaction abroad

In-person Service at a Canadian mission

Percentage of respondents satisfied and very satisfied with …

Wait times of 20 minutes or less were reported by 85% of respondents, and 93% reported being served within 30 minutes. Only 7% waited more than 31 minutes. Of the respondents who indicated their wait time was longer than expected, 2 out of 3 believe they should be served in 15 minutes or less.

Online usage levels abroad

Most respondents living abroad (94%) visited the Government of Canada website prior to submitting their application. They mostly looked for an application form, photo requirements and information on fees.

Online usage abroad

Percentage of respondents who reported …

If the service were available, 93% of respondents abroad indicated that they would likely complete their passport application online (including submitting photos and paying fees).

When prompted to choose between important factors for online services, respondents abroad chose as most important: user-friendliness (99%), security (97%), and the ability to complete the whole process online.

Security

In collaboration with government security partners, the Passport Program constantly works to enhance passport security features, deter fraud and reduce the likelihood that documents are issued to, or used by individuals presenting a security threat.

This subsection speaks to 3 program results:

• Program integrity contributes to national and international security interests
• Only genuine and valid Canadian travel documents are used for travel
• Legitimate and eligible travellers are in possession of travel documents

Refused, revoked and suspended travel documents

Under the Canadian Passport Order, IRCC has legal authority to cancel, refuse or revoke a passport when an application or investigation raises concerns about identity fraud, entitlement fraud, passport misuse or criminality. Public Safety Canada can do the same for cases related to national security and terrorism.

Compared to last fiscal year, there were 8% fewer refused applications and 20% more revoked travel documents. The increase is mostly due to an additional 100 cases of revocations related to judicial restrictions, where courts have restricted a person from travelling outside the country.

Security measures

Number of Canadian travel documents that were …

Changes of +/- 10 % are marked with Arrow up or Arrow down

The Family Orders and Agreements Enforcement Assistance Act compels the program to suspend passports belonging to, or refuse to issue passports requested by, individuals subject to a federal license denial due to child support payment arrears.

Under the Act, there was a 4% decrease in suspensions and a 9% increase in refusals.

Lost and stolen travel documents

Lost or stolen passports are monitored for security purposes. The information is shared with the Royal Canadian Mounted Police, the Canada Border Services Agency and INTERPOL for inclusion in their respective databases to support their efforts to identify persons travelling with invalid passports.

In 2017 to 2018, 55,587 Canadian travel documents were reported lost or stolen, 2% less than last fiscal year. The total number represents 0.23% of the travel documents in circulation.

Family Orders and Agreements

Enforcement Assistance Act

Number of Canadian travel documents that were …

ePassport enhancements

In 2017 to 2018, the program developed the Statement of Requirements for the Next Generation ePassport. Procurement is scheduled to continue until spring 2019 with the release of the request for proposals to pre-qualified suppliers, the evaluation of submissions and the contract award.

Beginning in June 2019, project implementation will involve the redesign of the entire suite of travel documents with enhanced security features and the deployment of a new software solution and equipment that personalizes blank passports.

Deployment of the new ePassport is planned to start in the winter of 2020 to 2021.

Program Management

The Passport Program conducts planning, analysis, outreach and modernization activities required to achieve security and service excellence, while providing value for money for Canadians. In other words, the program aims for optimal efficiency.

This subsection speaks to 2 program results:

• Canadian travel documents are internationally respected and recognized
• Policies, program management and partnerships are efficiently managed

Modernization initiative

The Passport Program Modernization Initiative (PPMI) is a multi-year, large-scale government service transformation project involving IRCC, ESDC and GAC.

The project will improve efficiency, security and convenience of passport services offered to the Canadian public. It will also lay the foundation for future business improvements, such as the introduction of online passport services.

A key component of PPMI is the deployment of a new passport issuance system by the end of the current business cycle. During 2017 to 2018, the program clarified PPMI’s business requirements and advanced on critical deliverables, including an intake tool for the new passport issuance system. Work continued to be informed by lessons learned and feedback from controlled environment testing, wherein passport officers processed more than 4,000 mail-in passport applications.

Modernization has already led to the expansion of passport intake services to all Service Canada Centres. Building upon this success, much work is underway to ensure PPMI delivers effective, long-term and sustainable results.

Forecasting

As one of the few Government of Canada programs operating on a full cost-recovery basis, the Passport Program uses a forecasting model to assist in effective program management, notably in resource allocation.

The number of travel documents applications forecasted for 2017 to 2018 (5.25 million) was 5.8% higher than the number of applications actually received (4.95 million).

Forecasts vs. actual applications received

Fiscal years of current business cycle

Text version: Forecasts vs. actual applications received

	2013-14	2014-15	2015-16	2016-17	2017-18
Forecasts	5,229,679	5,074,807	5,116,094	4,829,056	5,248,765
Actuals	4,950,029	5,126,636	4,814,372	5,117,376	4,945,114

Wait times improvements

The Passport Program has been working to decrease the wait times when accessing passport services in person. In 2017 to 2018, in all but 1 of the 34 passport offices providing full passport services, the average length of wait-time was 24 minutes. This is 21 minutes below the 45-minute target.

The survey results confirm that clients in Canada are experiencing the improvements; 8 out of 10 respondents (84%) reported waiting times of 30 minutes or less to receive passport services. This result is a significant increase from 2016 to 2017 (77%) and 2015 to 2016 (54%).

International engagement

The Passport Program is actively engaged with a number of international organizations and partners. This engagement ensures that the Canadian passport is recognized by foreign authorities, provides visa-free access to a number of countries, and facilitates Canadians’ travels abroad.

Five Nations Passport Group

The Five Nations Passport Group is an international forum of the passport issuing authorities of Australia, Canada, New Zealand, the United Kingdom and the United States. The group meets annually to discuss issues of mutual concern and share new ideas and best practices.

In 2017 to 2018, Canada participated in the Five Nations Passport Conference that was held in Wellington, New Zealand in May 2017.

G7 Roma-Lyon Group

Comprised of Canada, France, Germany, Italy, Japan, the United Kingdom, the United States and the European Union, the G7 Roma-Lyon Group (RLG) pursues practical projects in counterterrorism, transportation security, high-tech crime, criminal legal affairs, law enforcement and migration.

IRCC and the Canada Border Services Agency represent Canada in the RLG Migration Experts Sub-Group, which works on issues related to migration flows, border security and travel documents.

In 2017 to 2018, program officials attended RLG meetings on 3 occasions (April 2017, October 2017 and March 2018) and advanced its work on projects to improve systematic checks at ports of entry and on strategies to combat document fraud among G7 countries.

International Civil Aviation Organization

The International Civil Aviation Organization (ICAO) is a United Nations specialized agency that manages the administration and governance of the Convention on International Civil Aviation. Composed of 192 member states, ICAO works with industry groups to establish international civil aviation standards and recommended practices and policies in support of a safe, efficient, secure, economically sustainable and environmentally responsible civil aviation sector.

In 2017 to 2018, the Passport Program complied with all ICAO standards and recommended practices related to travel document production and issuance (known as Annex 9 of the Convention).

Capacity building in the Americas

Canada is actively engaging partner countries in the Americas for continued collaboration on passports, border management, immigration and other related issues.

In 2017 to 2018, Canada led a number of capacity building events. In collaboration with the International Organization for Migration, ICAO and the United Nations Office on Drugs and Crime, Canadian officials held a Travel Document Integrity and Identity Management – Securing our Borders workshop in March 2018 in Bogotá, Colombia.

The workshop was attended by 64 participants from 16 countries and was well received and positively assessed by the delegates - 97% noted they would recommend the workshop to their colleagues. More importantly, this event was an opportunity to showcase Canada’s passport and identity management policies and programs, and further advance Canada’s leadership on the international stage, while sharing practical knowledge with partners in the Americas.

Financial Performance

Allocating resources responsibly is a major priority of the Passport Program, as its operations are entirely funded from the fees charged for travel documents and paid by clients.

This subsection speaks to the program result:

• Management of the Revolving Fund contributes to the Fund’s long term sustainability

Passport Program business cycle

The Passport Program business cycle is a period during which activities and revenues are expected to fluctuate in response to the rise and fall of demand for travel documents. Demand is mostly driven by the take-up of the 10-year regular passport for adults and the end of validity of 5-year regular passports. The current 10-year business cycle started in 2013 to 2014, when the 10-year passport was introduced, and will conclude in 2022 to 2023.

As a full cost-recovery program, the program must generate sufficient revenues to meet expenditures over the 10-year business cycle – creating neither a substantial deficit nor a substantial surplus at the end of the cycle. When annual revenues exceed expenditures, they are carried over and used to fund the program’s deficits in years when revenues do not cover expenditures within the business cycle.

Passport financial governance

A strong governance framework is in place at IRCC to ensure compliance with all applicable legislation, including the Revolving Funds Act and the Directive on Charging and Special Financial Authorities.

In addition, the Passport Program minimizes financial risks by using forecasting and activity-based management for budget allocation.

Financial results for 2017 to 2018

In 2017 to 2018, the program’s actual revenues were $639 million, a 3% decrease from the previous fiscal year, while operating expenditures were $408 million, an increase of 16%. A net result of $231 million was thus generated; it represents a 25% decrease from last fiscal year. As previously stated, any surplus will be used to offset future deficits.

The program expected to generate high revenues during the first half of the business cycle and to experience a drop in revenue starting in 2018 to 2019. This decrease is projected because most passport applicants and holders are opting for the 10-year passport since its introduction in 2013, which will result in fewer Canadians needing to renew their passports in the second half of the business cycle.

Financial results for the Passport Program Revolving Fund

In millions of dollars

Changes of +/- 10 % are marked with Arrow up or Arrow down

For details of the Passport Program’s financial situation, refer to Annex B – Financial Statements.

Moving Forward

In anticipation of the forecasted increase in demand beginning in 2023 to 2024, when the first wave of 10-year passports start expiring, the Passport Program aims to complete its transition to a new passport issuance system by the end of the current business cycle.

With the Next Generation ePassport project, the updated travel documents should be ready to start deploying at that time as well. Moreover, the program will enhance passport integrity by working with provincial and territorial partners to improve the validation process of identity documents through the Identity Linkages Project.

While it is a notable achievement that individuals can now request an observation in their travel documents that reads “The sex of the bearer should read as X, indicating that it is unspecified”, IRCC is working towards a future where the “X” option will appear in the sex field of its documents.

In 2018 to 2019, the Passport Program will undergo an internal evaluation that will focus on the program’s effectiveness since its transfer from GAC in 2013. Through the examination of client survey results as well as an assessment of the service delivery model and the travel-facilitating aspects of the program, the evaluation is expected to identify new improvement opportunities.

Delivering high quality client service while modernizing infrastructure, processes and products remain a central priority for the program. The next few years should be eventful on many levels, but throughout the changes, Passport Program employees will endeavour to ensure smooth and thorough transitions.

These efforts will help the program play its part in maintaining the reputation of one of the most powerful passports in the world, as ranked by the Henley & Partners Passport Index.

Annex A – Service Fees

Service Fees as of March 31, 2018
Adult: 16 years or over / Child: 15 years or under

Travel documents for Canadians

Expedited services

Administrative services

Annex B – Financial Statements

Statement of management responsibility

We have prepared the accompanying financial statements of the Passport Canada Revolving Fund as required by and in accordance with the Treasury Board Directive on Charging and Special Financial Authorities and the reporting requirements and standards of the Receiver General for Canada. These financial statements were prepared by the management of the Fund in accordance with the significant accounting policies set out in note 2 of the financial statements, on a basis consistent with that of the preceding year except for the restatement described in note 3. Some previous year’s figures have been reclassified to conform to the current year’s presentation.

Responsibility for the integrity and objectivity of these financial statements rests with the management of the Fund. To ensure maximum objectivity and freedom from bias, the financial data contained in these financial statements is examined by the Departmental Audit Committee in conjunction with their review of the departmental financial statements. The information included in these financial statements is based on management’s best estimates and judgment with due consideration given to materiality. To fulfill its accounting and reporting responsibilities, the Fund maintains a set of accounts which provides a centralized record of the Fund’s financial transactions. Financial information submitted to the Public Accounts of Canada and included in the department’s Departmental Results Report is consistent with these financial statements.

The Fund’s financial management develops and disseminates financial management and accounting policies and issues specific directives which maintain standards of accounting and financial management. The Fund maintains systems of financial management and internal control which gives due consideration to costs, benefits and risks. The systems are designed to provide reasonable assurance that transactions are properly authorized by Parliament, are executed in accordance with prescribed regulations, and are properly recorded to maintain accountability of Government funds and safeguard the assets under the Fund’s administration. Financial management and internal control systems are augmented by the maintenance of internal audit programs. The Fund also seeks to ensure the objectivity and integrity of data in its financial statements by the careful selection, training and development of qualified staff, by organizational arrangements that provide appropriate divisions of responsibility, and by communication programs aimed at ensuring that its regulations, policies, standards and managerial authorities are understood throughout the organization.

Approved by:
(Original signed by)
Christopher Meyers, CPA, CA
Deputy Chief Financial Officer and Director General, Financial Management
Immigration, Refugees and Citizenship Canada

(Original signed by)
Daniel Mills, CPA, CMA
Assistant Deputy Minister and Chief Financial Officer
Immigration, Refugees and Citizenship Canada

May 28, 2018
Ottawa, Canada

Passport Canada Revolving Fund
Statement of authority provided (used) (unaudited)

For the year ended March 31
(in thousands of dollars)

Passport Canada Revolving Fund
Reconciliation of unused authority (unaudited)

As at March 31
(in thousands of dollars)

Passport Canada Revolving Fund
Statement of financial position (unaudited)

As at March 31
(in thousands of dollars)

Contractual obligations (Note 10)
The accompanying notes form an integral part of these financial statements.

Passport Canada Revolving Fund
Statement of operations and net assets (unaudited)

for the year ended March 31
(in thousands of dollars)

The accompanying notes form an integral part of these financial statements.

Passport Canada Revolving Fund
Statement of cash flows (unaudited)

for the year ended March 31
(in thousands of dollars)

The accompanying notes form an integral part of these financial statements.

Notes to the financial statements (unaudited)

1. Authority and purpose

The Passport Canada Revolving Fund (the “Fund”) was established in 1969 to provide for the issue of appropriate passport and other travel document services in Canada and at posts abroad. The Revolving Funds Act authorizes the operation of the Fund.

Effective July 2, 2013, the accountability for the passport program and the Fund transferred from the Department of Global Affairs Canada (GAC) to Immigration, Refugees and Citizenship Canada (IRCC). In addition, the Fund transferred its passport delivery and processing services to Employment and Social Development Canada (ESDC) on July 2, 2013.

The Fund has a continuing non-lapsing authority from Parliament, in the amount of $1, to make payments out of the Consolidated Revenue Fund for working capital and tangible capital acquisitions.

2. Significant accounting policies

Significant accounting policies are as follows:

a) Basis of accounting

These financial statements have been prepared in accordance with the significant accounting policies stated below to comply with the requirements of Section 6, subsection 4 of the Treasury Board of Canada Policy on Special Revenue Spending Authorities and the reporting requirements for revolving funds prescribed by the Receiver General for Canada. The basis of accounting used in these financial statements differs from Canadian Generally Accepted Accounting Principles (GAAP) since the revenues from passport service fees are recognized upon receipt of payment and verification of an application for completeness as stated in the Regulations prescribing fees for passport services. In addition, the funding for tangible capital assets received from Treasury Board is recorded as contributed capital and not as a reduction of the cost of capital assets.

b) Revenue recognition

Revenues from passport fees are recognized upon request for a passport service, which is upon receipt of payment and verification of the passport application for completeness.

c) Inventories

Inventories of materials and supplies are carried at the lower of cost using the average cost and net realizable value.

d) Tangible capital assets

Tangible capital assets are recorded at cost and amortized on a straight-line basis over their estimated useful lives, as follows:

Assets under construction are recorded in the applicable capital asset class in the year that they become available for use and are not amortized until they become available for use.

e) Employee future benefits

Pension benefits

Eligible employees of the Fund participate in the Public Service Pension Plan, a multiemployer pension plan administered by the Government. The Fund’s contributions to the Plan are charged to expenses in the year incurred and represent the Fund’s total obligation to the Plan. The Fund’s responsibility with regard to the Plan is limited to its contributions. Actuarial surpluses or deficiencies are recognized in the financial statements of the Government of Canada, as the Plan’s sponsor.

Severance benefits

Severance benefits provided to the Fund’s employees were previously based on an employee’s eligibility, years of service and salary at termination of employment. However, since 2011 the accumulation of severance benefits for voluntary departures progressively ceased for substantially all employees. Employees subject to these changes were given the option to be paid the full or partial value of benefits earned to date or collect the full or remaining value of benefits upon departure from the public service. By March 31, 2017, all settlements for immediate cash out were completed.

3. Restatement of Financial Statements

In the context of the modernization initiative, the Passport program is transitioning to the IRCC Global Case Management System (GCMS) and the Integrated Payment Revenue Management System (IPRMS) for the processing of passport applications. The expenses allocated to this initiative are capitalized in the financial statements of IRCC, which owns and presents these systems as capital assets. IRCC charges an annual usage fee to the Fund to account for its use of the systems.

A review of the accounting treatment for the modernization initiative was performed during fiscal year 2017 to 2018. It was then determined that the expenditures for the modernization initiative should be considered as prepaid expenses in order to adequately present the contribution of the Fund to this initiative, as well as the services received from IRCC. The approach adopted in previous years did not properly reflect the situation and the Fund corrected the accounting accordingly, resulting in a retroactive restatement of prior years’ balances.

As a result of this restatement, the cumulative balance of prepaid expenses has increased by $16.5 million ($10.9 million in 2015 to 2016). Consequently, the opening balance of net assets increased by $10.9 million and the net assets balance at the end of the year increased by $16.5 million in the Statement of operations and net assets.

An amount of $7.2 million previously reported as an investment in modernization initiative in the Statement of Cash Flows has been restated under the prepaid expenses, while the usage charge of $1.6 million related to this initiative is presented in reduction of prepaid expenses, resulting in a net decrease of $5.6 million in prepaid expenses in 2016 to 2017.

In addition, an adjustment was made to the opening balance of the Accumulated net charge against the Fund's authority, in order to reflect an initial investment made in the modernization initiative in 2014 to 2015.

4. Accounts receivable and advances

The following table presents details of the Fund’s accounts receivable and advances.

Accounts receivable and advances

(in thousands of dollars)

5. Inventories

The following table presents details of the inventory, measured at the lower of cost using the average cost and net realizable value.

Inventories

(in thousands of dollars)

The inventories held for consumption are mainly composed of prepaid envelopes and informatics hardware. The inventories held for resale are passport booklets.

The cost of consumed inventory recognized as an expense in the Statement of Operations and Fund’s net assets is $63,680,681 for 2017 to 2018 ($61,234,359 for 2016 to 2017).

6. Prepaid expenses

The following table presents details of the Fund’s prepaid expenses.

Prepaid expenses

(in thousands of dollars)

In the context of the modernization initiative, the Passport program is transitioning to the IRCC Global Case Management System (GCMS) and the Integrated Payment Revenue Management System (IPRMS) for the processing of passport applications. The expenses allocated to this initiative are recorded as prepaid expenses in the financial statements of the Fund. The prepaid expenses are gradually recognized as expenses to reflect the usage of IRCC’s systems by the Fund.

7. Tangible capital assets

The following table presents details of the tangible capital assets held by the Fund during the fiscal year.

Tangible capital assets

(in thousands of dollars)

Accumulated Amortization

(in thousands of dollars)

Net Book Value

(in thousands of dollars)

8. Accounts payable and accrued liabilities

The following table presents details of the Fund’s accounts payable and accrued liabilities.

Accounts payable and accrued liabilities

(in thousands of dollars)

9. Net assets

The accumulated net charge against the Fund’s authority represents the cumulative receipts and disbursements over the life of the Fund.

The accumulated surplus is an accumulation of each fiscal year’s surplus net of deficits since the inception of the Fund.

The contributed capital is a financing arrangement approved by Treasury Board, to finance the acquisition of tangible capital assets in substitute of the Fund’s authority. In the current year, there were no additional capital contributions from Treasury Board to finance the Fund’s capital project.

Net assets

(in thousands of dollars)

10. Contractual obligations

Because of the nature of its activities, the Fund is engaged in contractual obligations for the purchase of goods and other services.

Below are the expected future maximum payments under contract for its supplier of blank passports, rent of office premises and other operating expenses:

(in thousands of dollars)

11. Related party transactions

Through common ownership, the Fund is related to all Government of Canada created departments, agencies and Crown corporations. Payments for passport operations at missions abroad, passport delivery and processing service throughout Canada, accommodation and legal services, and the employers’ contributions to the health and dental insurance plans are made to related parties in the normal course of business. All related party transactions are accounted for at the exchange amount, which represents the consideration agreed to by both parties.

As part of its operations, the Fund collects Consular fees on behalf of the GAC. These fees are not recorded as revenues in the Statement of operations and net assets. In 2017 to 2018, the Fund collected and remitted to GAC $98,831,700 ($101,001,725 in 2016 to 2017) in consular fees.

Expenses reported as professional and special services in the Statement of operations and net assets include the following transactions with Shared Services Canada (SSC) and ESDC:

Related party transactions

(in thousands of dollars)

The following table presents the total of other transactions with related parties, such as accommodation, legal services and employers’ contributions to the health and dental insurance plans.

(in thousands of dollars)