Funding: Foreign Credential Recognition Loans – Eligibility

From Employment and Social Development Canada

2. Eligibility

For the purpose of this CFP, funding will be provided to successful applicants based on the eligibility of the recipient, project, activities and expenditures.

Eligible Contribution Recipients

Eligible recipient organizations for this CFP are:

  • Not for profit organizations, outside the province of Quebec, that have the capacity and experience to deliver support services specific to FCR activities to participants.

When submitting their application for funding, organizations must provide a document from the Canada Revenue Agency (CRA) that includes the applicant’s registration number as a not for profit with CRA (e.g., tax-related documents, CRA correspondence). This information will be used to verify the organization’s eligibility for funding. For more information, please visit the CRA website.

Eligible Projects

Each of the following requirements must be met for projects to be considered eligible for funding:

  • All required documents must be submitted with the Application for Funding. For a list of required documentation (please see Apply/Checklist).
  • The duration of projects must be for a maximum of 8 years. The first 4 years will be the contribution payment period and the last 4 years will be the loan repayment period (See Eligible Activities for more information).
  • The total funding from ESDC for the total duration of the project cannot exceed $4,000,000.
  • Proposals must demonstrate that projects meet the objectives of this CFP.
  • Proposals must demonstrate that projects meet the expected results of this CFP (see Expected Results and Question 45).
  • Proposals must identify how project results will be measured (see Question 46).
  • Proposals must demonstrate, through a letter of intent, that the applicant has secured a partnership with a financial institution to issue loans. The letter(s) of intent must:
    • Demonstrate a commitment from financial institutions to use their own capital to fund loans; and
    • Demonstrate a commitment from financial institutions to meet a minimum private leverage ratio of 2:1Footnote 7.
  • Cash and/or in-kind contributions equal to or greater than 15% of eligible project costs, excluding amounts specific to the loan guarantee fund, must be provided through sources other than the Government of Canada (which can include the applicant’s own organization). Applicants must provide letters confirming all cash and/or in-kind support from contributors (other than financial institutions) with their application. For further details please see Part 3A - Anticipated Sources of Funding.

ESDC will consider regional representation when selecting recipient organizations in an effort to have coverage across Canada and serve Official Language Minority Communities.

Also, additional points may be awarded to proposals that:

  • Include an outreach strategy to improve awareness and increase uptake (see Question 44);
  • Provide support services tailored to the needs of immigrant women who face additional barriers to having credentials recognized in comparison to their male counterparts;
  • Confirm, at the time of the application, that they have secured an interest rate for loans from financial institution at prime +2% or lower, to encourage low borrowing costs for participants (in the letters of intent); or
  • Secure a private leverage ratio above the minimum of 2:1.

Eligible Activities

Eligible projects will develop, maintain and manage a loan guarantee fund, as well as provide support services for participants undertaking FCR process and/or related alternative careerFootnote 8 or training activities.

The selected projects will follow the framework of activities below over the course of the duration of the project/funding agreement:

Phase 1 (first 4 years of the agreement) - Contribution payment period:

Recipient organizations will provide support services to participants and will refer participants to financial institutions to issue loans. Recipient organizations must complete a character-based assessment of the participant prior to their reference to the financial institutions for loan issuance. Within Phase 1, as loans are repaid, recipient organizations could guarantee additional loans issued by the financial institutions, as long as they continue to meet the private leverage ratio of 2:1. Note that during the term of the agreement, the recipient must have only one Financial Institution and must not change.

Although it is expected that activities at Phase 1 would be carried out over a 4 year period, recipient organizations may decide to stop referring participants for loans sooner. In this case, Phase 1 would end and Phase 2 - Loan repayment period would automatically begin.

At the end of Phase 1, a financial report will be completed and submitted to ESDC to account for unspent funds in the loan guarantee fund that are expected to be returned to the Receiver General over Phase 2 of the project.

Phase 2 (last 4 years of the agreement) - Loan repayment period:

Recipient organizations will no longer refer participants to financial institutions for loans. However, recipient organizations will continue to offer support services to participants and will collaborate with financial institutions to manage the loan guarantee fund.

During Phase 2, financial reconciliation will take place on an annual basis to account for loan repayment or claims made by financial institutions against the loan guarantee fund.

Although it is expected that activities at Phase 2 would be carried out over a 4 year period, this phase of the project could end sooner if loans are all repaid before the end date.

In order to support administrative costs during the loan repayment period of the agreement, recipient organizations may use up to 10% of the unexpended loan guarantee fund annually.

At the end of the agreement, recipient organizations will not retain any funds, including interest earned on the loan guarantee fund.

In addition, for this CFP, projects are expected to include the following activities:

  • Enter into a Financial Institution ContractFootnote 9 (FI Contract) with a financial institution, and submit it to ESDC within 90 days following the project start date. Please note that ESDC will not advance funds for the loan guarantee fund to recipient organizations until a Financial Institution Contract has been signed between the recipient organizations and a financial institution, and a copy of the contract and a certification statement have been provided to ESDC.

    Note: ESDC recommends that the Recipients seek independent legal advice and any other independent professional advice including financial advice in order to prepare the provisions of the FI Contract.

  • Manage daily operations of the initiative with participants, including but not limited to:
    • Participant recruitment;
    • Participant screening and assessment for loans;
    • One-on-one career counselling with participants;
    • Financial counselling with participants to determine the financial risk, likelihood of obtaining a loan, estimating the loan amount required and completing a credential plan; and
    • Providing support throughout the loan process for navigating the complexities of FCR processes and/or related alternative career or training activities.
  • Manage activities with financial institutions, including but not limited to:
    • Refer participants to financial institutions in order to facilitate the issuance of loans and repayment;
    • Collaborate with financial institutions to deliver loans to participants;
    • Manage any issues related to default payments and liaise with participants; and
    • Manage a loan guarantee fund with financial institutions, through a dedicated account.
  • Collect and report on the established results measurement indicators for the project.
  • Complete and submit to ESDC, financial reports after each Phase of the project, as described above.
  • May provide assistance in securing employment by connecting with employers in the participants chosen field.

Ineligible Activities

The following activities are not eligible under this CFP:

  • The provision of financial assistance (e.g. loans, direct supports) to individuals for purposes unrelated to the foreign credential recognition process and/or related alternative career or training activities or training activities.

Eligible Expenditures

Expenditures will be reimbursed on the basis of eligible costs incurred. To be eligible, expenditures must be project-related and have been incurred during the agreement period. Eligible costs may include, but are not limited to the following expenditures:

  • overhead costs, including costs related to central administrative functions of the recipient organization that are used to support project activities (such as shared postage, telephones, information technology (IT) maintenance and head office support);
  • the costs of materials and supplies;
  • wages and mandatory employment-related costs (MERCS);
  • staff training and professional developmental costs;
  • hospitality costs;
  • printing and communication costs;
  • travel costs (international travel must be specifically authorized);
  • professional fees (i.e. consultants, research, audit, IT, technical expertise, facilitation, legal, construction contractors);
  • the costs associated with establishing and maintaining loan guarantee fund;
  • capital costs;
  • the costs of the purchase of tools, equipment, computers, furniture; and
  • other costs reasonably associated with the operation of a non-for-profit association related to the objective of the project, as approved by ESDC.

Where the recipient organization further distributes contribution funding to a third party organization to carry out project activities, payments by the recipient organization to the third party to reimburse it for the types of expenditures listed above incurred by the third party are also eligible expenditures.

All eligible costs are subject to assessment and negotiation.

Eligible participants

Eligible participants for projects under this CFP:

  • are permanent residents, Canadian citizens or Persons granted refugee status in Canada and legally permitted to work in Canada
  • have obtained credentials from abroad:
    • post-secondary academic credential(s) and/or occupational certification(s).
  • have demonstrated financial need and a lack of access to comparable financial resources:
    • financial need: FCR related costs and/or alternate career costs that exceed the client’s means to pay for these costs; and
    • access: cannot obtain loan/line of credit from a regulated financial institution at an interest rate comparable to what is available through the FCR Loans program (e.g. prime +2% or lower).
  • are seeking to have their foreign credentials recognized and/or related alternative career or training activities.
  • have successfully completed a character-based assessment by the Recipient.

Loan terms and conditions

  • The maximum value for an individual loan is $15,000. Participants will have access to more than one loan if they can demonstrate continued financial need to complete their FCR process and/or related alternative career or training activities, but have repaid any outstanding loans issued under this program.
  • Participants will be required to repay loans to financial institutions, including any interest on the loan.
  • Default payments:
    • Individual loans will be guaranteed up to 100% by the loan guarantee fund (up to the maximum amount in the loan guarantee fund which represents 50% of the amount issued in loans); and
    • Total claims from financial institutions may never exceed the total value of the recipient organization loan guarantee fund.

Examples of expenses used in determining the loan amounts.

In order to estimate the amount of the loan required by a participant, the recipient organization should consider expenses directly related to FCR services. Expenses could include, but are not limited to the following:

  • Qualification assessments;
  • Association and exam fees;
  • Books and course materials;
  • Short-term bridge training;
  • Travel expenses;
  • Living allowance.

Ineligible Expenses

The following activity is not eligible for funding:

  • Referral to financial institutions to obtain financial assistance (e.g. loan, direct support) to individuals for purposes unrelated to foreign credential recognition and/or related alternative career or training activities.
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