Quarterly Financial Report for the quarter ended December 31, 2025

1. Introduction

This quarterly report has been prepared by management as required by section 65.1 of the Financial Administration Act and in the form and manner prescribed by Treasury Board. This quarterly report should be read in conjunction with the 2025-26 Main Estimates Part II and the 2024-25 Quarterly Financial Report for the quarter ended December 31, 2024.

A summary description of Immigration, Refugees and Citizenship Canada (IRCC) programs may be found in Part II of the Main Estimates and the 2025-26 Departmental Plan.

1.1 Basis of Presentation

This quarterly report has been prepared by management using an expenditure basis of accounting. The accompanying Statement of Authorities includes the Department’s spending authorities granted by Parliament and those used by the Department consistent with the Main Estimates for the 2025-26 fiscal year. This quarterly report has been prepared using a special purpose financial reporting framework designed to meet financial information needs with respect to the use of spending authorities.

The authority of Parliament is required before money can be spent by the Government. Approvals are given in the form of annually approved limits through appropriation acts or through legislation in the form of statutory spending authority for specific purposes.

When Parliament is dissolved for the purposes of a general election, section 30 of the Financial Administration Act authorizes the Governor General, under certain conditions, to issue a special warrant authorizing the Government to withdraw funds from the Consolidated Revenue Fund. A special warrant is deemed to be an appropriation for the fiscal year in which it is issued.

The Department uses the full accrual method of accounting to prepare and present its annual departmental financial statements that are part of the Departmental Results Report process. However, the spending authorities voted by Parliament remain on an expenditure basis.

1.2 IRCC’s Financial Framework

In order to deliver on its mandate, IRCC is funded through three budgetary mechanisms:

1. Appropriations
   • Voted appropriations:
     • Vote 1 – Operating Expenditures;
     • Vote 5 – Capital Expenditures; and
     • Vote 10 – Grants and Contributions (G&C)
   • Special Purpose Allotments including the Interim Federal Health Program and the Immigration and Refugee Protection Act’s Division 9.
   • Budgetary statutory authorities is comprised of Employee Benefit Plan.
2. Vote-Netted Revenue (VNR under Vote 1)
   • International Experience Canada (IEC) Program
3. Revolving Fund
   • Statutory authorities also includes the Passport Program Revolving Fund.

Additionally, IRCC’s non-budgetary authorities consist of Immigration loans, mainly to resettled refugees to help defray the cost of their travel to Canada and to their final destination within Canada.

2. Highlights of fiscal quarter and fiscal year-to-date (YTD) results

Following the dissolution of Parliament on March 23, 2025, ahead of a general election, no appropriation acts had been passed for the new fiscal year. To ensure the continuity of government operations, the Governor General issued two Special Warrants – one on April 1 and another one on May 2, authorizing interim funding until a new Parliament could be formed and the next appropriation act received royal assent. The 2025-26 Main Estimates were subsequently tabled in the House of Commons on May 27, 2025 and full supply was granted on June 27, 2025.

As of December 31, 2025, IRCC’s total authorities include full supply for the 2025-26 Main Estimates and incremental funding provided through the Supplementary Estimates (B). Key investments include funding to continue delivering essential health care service to asylum seekers through the Interim Federal Health Program, to compensate provinces and municipalities for the interim housing of asylum claimants under the Interim Housing Assistance Program (IHAP), to advance the Digital Platform Modernization; and to sustain and expand the department’s biometric collection capabilities.

Total authorities to date also include funding from the 2024-25 Operating and Capital Budget Carry Forward.

The department’s financial outlook over the next fiscal years, starting in 2025-26, signals substantial shifts in funding allocations. Multiple sources of temporary funding that have supported the department in recent years are now coming to an end, including allocations for the Afghanistan Resettlement Commitment, the Canada-Ukraine Authorization for Emergency Travel (CUAET) and the drawing down of temporary accommodation provided to asylum claimants. In addition, Budget 2023 directed federal government departments to refocus government spending, including spending on travel and professional services. In response, IRCC committed to reducing its operating expenditures by prioritizing modernization to minimize impacts on clients. This represents a reduction of $103.1 million in 2025-26, $5.6 million more than the $97.5 million reduction from last year. Finally, due to the reduced immigration targets outlined in the 2025-2027 Immigration Levels Plan, funding is expected to decline across multiple years, starting in 2025-26.

These reductions will require adjustments to operational planning and service delivery strategies to maintain alignment with departmental priorities. IRCC will continue to enhance efficiency and productivity through ongoing modernization efforts, the implementation of new policies, and infrastructure investments. These investments aim to optimize operations and strengthen the department’s ability to achieve results both now and in the future.

A. Significant changes to authorities

The following table shows the total budget available for use by IRCC. Only authorities available for use and granted by Parliament as at December 31, 2025 are included.

IRCC’s total budgetary authorities available for use in fiscal year 2025-26 decreased by approximately $598.7 million (9%) compared to the same quarter in 2024-25.

i. Authorities for Vote 1 – Operating Expenditures

The Department’s Vote 1 – Operating Expenditures authorities increased by $220.3 million (8%), which is mainly explained by the following items:

Increases:

• Additional funding of $538.2 million to provide health care services to refugees and asylum seekers through the Interim Federal Health Program; and
• Top-up funding of $52.3 million to pay the Visa Application Centre (VAC) contractors for the biometrics collection services.

Decreases:

• Reduced funding of $175.7 million as the Department finalized its draw down of temporary accommodation operations and ended the program on September 30, 2025;
• Reduced funding of $117.0 million following the fulfillment of the Department’s commitment to resettle 40,000 Afghan nationals;
• Reduced funding of $47.4 million resulting from the government’s decision to lower immigration levels under the 2025-2027 Immigration Levels Plan; and
• Decreased allocation of $15.0 million through the Treasury Board central vote for the Operating Budget Carry Forward.

ii. Authorities for Vote 5 – Capital Expenditures

The Department’s Vote 5 – Capital Expenditures authorities decreased by $8.0 million (47%), which is mainly explained by the following items:

Decreases:

• Reduced funding of $1.6 million resulting from the delivery of the Digital Intake Tool under the 2020-2022 Immigration Levels Plan;
• Reduced funding of $1.6 million to support the implementation of the administrative penalties regime under the Immigration and Citizenship Consultants project;
• Decreased allocation of $1.5 million through the Treasury Board central vote for the Capital Budget Carry Forward;
• Reduced funding of $1.1 million following the implementation of the information technology component of the Agriculture and Fish processing stream within the Temporary Foreign Worker Program; and
• Reduced funding of $1.0 million following the stabilization and improvement of technology and tools required to support people using IRCC client support services.

iii. Authorities for Vote 10 – Grants and Contributions (G&C)

The Department’s Vote 10 – Grants and Contributions authorities decreased by $791.6 million (22%), primarily attributable to the following changes:

Decreases:

• Reduced funding of $581.3 for one-time stand-alone payment to Quebec made in 2024-25 in recognition of expenses for the provision of services to asylum claimants, including temporary housing;
• Reduced funding of $133.7 million due to funding fluctuations related to the multi-year Immigration Levels Plan;
• Reduced funding of $126.3 million to compensate provinces and municipalities for the interim housing of asylum claimants under the Interim Housing Assistance Program (IHAP);
• Reduced funding of $52.9 million related to the transitional financial assistance under the measures related to the Canada-Ukraine Authorization of Emergency Travel; and
• Reduced funding of $19.5 million following the fulfillment of the Department’s commitment to resettle 40,000 Afghan nationals.

Increases:

• Additional funding of $92.3 million to support settlement and integration services in the province of Quebec under the Canada-Quebec Accord on Immigration; and
• New funding of $35.2 million to provide temporary refuge and extend in-Canada and overseas support to Palestinians and their immediate family members affected by the Israel-Hamas conflict.

iv. Budgetary Statutory Authorities

The 2025-26 statutory authority level in the second quarter decreased by $19.4 million (9%) compared to 2024-25, primarily attributable to the following changes:

Decreases:

• A decrease of $20.45 million in the Passport Program is explained by a decrease in anticipated revenues of $64.8 million offset by a decrease in planned expenditures of $85.3 million; and
• Reduced funding of $2.3 million related to other statutory authorities.

Increases:

• Incremental funding of $3.4 million for the Employee Benefit Plan as a result of personnel funding received in Vote 1 – Operating Expenditures.

B. Significant changes to departmental budgetary expenditures by standard object

Quarter over quarter analysis

The following table shows IRCC’s budgetary expenditures and revenues netted against expenditures for the period, and their comparison with the same period last fiscal year.

Note:Numbers may not add up due to rounding.

The total gross budgetary expenditures during the quarter ending December 31, 2025 increased by $215.0 million (16%) compared to the same quarter in 2024-25, which is mainly explained as follows:

i. Salaries and Employment Benefits have increased by $9.1 million (3%) which is attributable to higher severance payments resulting from the workforce adjustment undertaken by the Department in 2025.

ii. Professional and Special Services decreased by $22.7 million (5%) compared to 2024-25. This reduction is due to lower planned expenses in the 2025–26 Service Level Agreement (SLA) with Employment and Social Development Canada (ESDC) for the delivery of the Passport Program, driven primarily by a lower projected volume than last year and cost containment measures implemented in 2025-26; a decrease in the use of specific forms that require strict security controls; a decrease in temporary accommodation costs for asylum seekers associated with the end of the program on September 30, 2025; a decrease in operational costs to support third party Visa Application Centres (VAC) due to a decline in Temporary Resident enrollments; and a decrease in payments made to Shared Services Canada due to the timing of invoices.

These decreases are partially offset by an increase in reimbursements paid to Interim Federal Health Program (IFHP) health-care providers as a result of a growing total eligible beneficiary population, increased overall program utilization and a higher first-year utilization rate among asylum seekers; as well as an increase in payments made to Information Technology (IT) consultants due to the timing of invoices.

iii. Rentals expenditures have decreased by $44.2 million (81%), primarily due to the conclusion of the Interim Lodging Sites for Asylum Seekers program on September 30, 2025.

iv. Transfer Payments have increased by $274.7 million (51%) which is mainly explained by an increase in spending under the Interim Housing Assistance Program as announced in Budget 2024, the annual adjustment to the base of the Canada Quebec Accord as well as the timing of payments under the Settlement program.

v. Other Subsidies and Payments decreased by $1.6 million (16%), primarily due to significantly lower remissions payments following the earlier decision to pause on Service Fees Act remissions, limiting payments to complaint-based cases, and the use of exceptional-circumstances exclusions stemming from the labour disruption of Canada Post.

Through the Passport Program and International Experience Canada, IRCC generated $134.8 million and $0.5 million respectively in re-spendable revenues in the third quarter of 2025-26. Overall, this resulted in net budgetary expenditures of $1,447.4 million as of December 31, 2025, compared to $1,217.0 million in the same quarter of 2024-25.

1. Passport re-spendable revenues decreased by $15.3 million (10%) compared to the same quarter of the previous fiscal year, mainly due to a decline in the number of passport applications compared to Q3 of 2024-25. This is mainly attributable to the impact of the economic outlook and impacts of tariffs where demand since January 2025 has significantly decreased.
2. International Experience Canada revenues have decreased by $0.2 million (29%) compared to the same quarter in the previous fiscal year as a result of a decrease in the number of participants in the Program seen this quarter, as well as the absence of quota adjustment between countries during the 2025 season.

Cumulative analysis

The following table shows IRCC’s year-to date budgetary expenditures and revenues netted against expenditures, and their comparison with the same period last fiscal year.

Note:Numbers may not add up due to rounding.

IRCC’s year-to-date gross budgetary expenditures totalled $4,362.7 million in 2025-26, compared to $4,501.6 million in 2024-25, representing an decrease of $138.8 million (3%), which is mainly explained by the following:

i. Salaries and Employment Benefits have decreased by $35.6 million (4%) which is attributable to a reduction in temporary funding for various initiatives, including the resettlement of Afghan nationals; the decrease of funding following the decision to reduce immigration levels as part of the 2025-2027 Immigration Levels Plan; as well as the department strategy to reduce spending following the Budget 2023 announcement. The Decrease is partially offset by higher severance payments resulting from the workforce adjustment undertaken by the Department in 2025.

ii. Transportation and Communications expenditures have decreased by $16.6 million (31%) primarily due to lower courier costs resulting from reduced travel document volumes; as well as a reduction in travel expenditures following the Budget 2023 announcement on Refocusing Government Spending.

iii. Professional and Special Services expenditures have decreased by $41.0 million (4%) is due to lower planned expenses in the 2025–26 Service Level Agreement (SLA) with Employment and Social Development Canada (ESDC) for the delivery of the passport program, driven primarily by a lower projected volume than last year and cost containment measures implemented in 2025-26; a decrease in temporary accommodation costs for asylum seekers associated with the Department’s draw down operations, as the program ended on September 30, 2025; a decrease in operational costs to support third party Visa Application Centres (VAC) due to a decline in Temporary Resident enrollments; a decrease in the use of specific forms that require strict security controls; and a decrease in payments made to Shared Services Canada for IT services and tools.

These decreases are partially offset by an increase in reimbursements paid to Interim Federal Health Program (IFHP) health-care providers as a result of a growing total eligible beneficiary population, increased overall program utilization and a higher first-year utilization rate among asylum seekers and to additional costs due to increased Legal Services rates, as well as higher litigation volumes.

iv. Rentals expenditures have decreased by $178.2 million (82%) which is attributed to a decrease in the average temporary accommodation cost per asylum claimant, and a decrease in the overall number of rooms due to the Department’s drawn down operation, as the program has ended on September 30, 2025. The decrease also reflects lower expenditures due to software license payments that were accounted for in 2024-25.

v. Utilities, Materials and Supplies expenditures have decreased by $5.6 million (10%) in 2025-26 which is attributable to a decrease of meal provisions due to the number of asylum claimants dropping. This is part of the significant adjustments made to the Interim Lodging Services Program to reflect the reduced capacity, as the program has ended on September 30, 2025.

vi. Acquisition of Machinery and Equipment expenditures have increased by $4.0 million (101%), primarily attributable to the purchase of new laptops which was reported from 2024-25 to 2025-26.

vii. Transfer Payments have increased by $160.8 million (8%) which is mainly explained by an increase in spending under the Interim Housing Assistance Program as announced in Budget 2024, the annual adjustment to the base of the Canada Quebec Accord as well as the timing of payments under various programs. This is partially offset by a decrease in spending under the Resettlement Assistance Program due to the Ukraine initiative ending in June 2024 as well as the timing of payments under various programs.

viii. Other Subsidies and Payments have decreased by $28.3 million (52%) which is primarily due to significantly lower remissions payments following the earlier decision to pause on Service Fees Act remissions, limiting payments to complaint-based cases, and the use of exceptional-circumstances exclusions stemming from the labour disruption of Canada Post.

Through the Passport Program and International Experience Canada, IRCC generated $403.4 million and $5.8 million respectively in re-spendable revenues by the end of the third quarter of 2025-26. Overall, this resulted in net budgetary expenditures of $3,953.6 million as of December 31, 2025, compared to $4,001.6 million as of December 31, 2024.

1. Passport re-spendable revenues decreased by $89.6 million (18%) compared to the previous fiscal year, mainly due to a decline in the number of passport applications compared to 2024-25. This is mainly attributable to the impact of the economic outlook and impacts of tariffs where demand since January 2025 has significantly decreased.
2. International Experience Canada revenues have decreased by $1.3 million (18%) compared to the previous fiscal year as a result of a decrease in the number of participants in the Program, as well as the absence of quota adjustment between countries during the 2025 season.

3. Risks and Uncertainties

IRCC operates in a constantly changing environment. Its strategic directions as well as its policies and operations are influenced by external factors such as emerging domestic and global events, impacts of climate change on migration patterns, Canadian and international economic conditions, shifting social or political contexts, increasing cyber security and program integrity threats and rapidly shifting migration trends that place pressure on service delivery and processing capacity.

Internal or management risks also may present as threats, opportunities or events that may influence the operations and service delivery of the Department. Risks such as system outages or the potential for workplace disruptions as well as interdependencies across multiple complex digital systems have a direct impact on IRCC’s ability to deliver on its mandate and are therefore also factored into the Department’s forward-looking planning and decision-making.

Given IRCC’s ongoing efforts to review the scope of its mandate and modernize its organization as well as its operations and service delivery model, the Department will operate in a challenging and complex environment and is expected to continue to maintain its pace and focus on the breadth of challenges, innovations and opportunities it seeks to address while managing competing departmental priorities, funding pressures, and responding to emerging risks.

3.1 Crisis Management

As global displacement becomes more complex, Canada is increasingly called upon to address unique humanitarian situations. Canada may use a range of immigration measures in responding to international crises, including a combination of permanent and temporary programs or special pathways and discretionary tools, alongside other Government of Canada responses (e.g., consular support, humanitarian assistance, etc.). As part of IRCC’s approach to well-managed migration, the Department leverages the Crisis Response Framework (CRF) to advance consistent and coherent strategic advice for Government decisions and well-coordinated migration responses to international crises. Building on lessons learned from recent responses, the CRF includes tools to assess and implement migration responses in alignment with annual immigration levels planning, and enable coordination with provinces and territories, partners, and stakeholders. The CRF also helps guide IRCC’s analysis and decision-making related to advice on the provision of supports and services to crisis cohorts where there is an identified need. The Department continues to process applications from clients affected by international crises (including those in Afghanistan, Sudan, and Gaza) and is working to support their settlement in Canada. The Department also has ongoing temporary facilitative measures in place to support Temporary Residents in Canada who are affected by crises in Ukraine, Iran, Sudan, Palestine, and Haiti.

It has also become evident that unforeseen crisis events can significantly impact IRCC’s operations, particularly when they occur in regions where our offices and employees are located, complicating response efforts. IRCC also responds to wildfires and other natural disasters in Canada by supporting affected Canadian citizens, permanent residents and temporary residents through special measures and facilitation of foreign emergency services personnel.

Beyond these crises, IRCC manages irregular migration crossings at the Canada-US border, and an increased demand for services such as passports. While addressing these priorities, efforts continue to improve internal processes and systems through change initiatives.

3.2 Litigation and Legal

IRCC operates in a very high volume litigation environment which includes complex, high profile and high impact files. Sound management practices are in place to manage all of these challenges in a consistent and coordinated fashion, including consultations with Justice and other partner departments.

4. Significant Changes in Relation to Operations, Personnel and Programs

Louise Baird, who previously served as Senior Assistant Deputy Minister of the Strategic Policy Sector began her role as vice-president with the newly created, federal Major Projects Office on November 24, 2025.

Justice Canada has appointed Mory Afshar to the position of Executive Director and Senior General Counsel of IRCC’s Legal Services Unit. Mory has been in this role on an interim basis since September 2025.

There have been no other significant changes in relation to operations, personnel and programs during the quarter.

Approval by Senior Officials

Approved by:

Ottawa, Canada
February 19, 2026

Statement of Authorities (in thousands of dollars)

Departmental Budgetary Expenditures by Standard Object (in thousands of dollars)

Note: Numbers may not add up due to rounding.