Quarterly Financial Report for the quarter ended June 30, 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 June 30, 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, the Visa Application Centres 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.

As of June 30, 2025, IRCC’s total authorities include full supply for the 2025-26 Main Estimates. 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.

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 $103.1M in 2025-26, an increase of $5.6M compared to last year’s reduction of $97.5M. 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 June 30, 2025 are included.

IRCC’s total budgetary authorities available for use in fiscal year 2025-26 increased by approximately $20.2 million (0%) 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 $35.7 million (2%) in 2025-26, primarily due to the following changes:

Increases:

• Additional funding of $173.1 million to provide health care services to refugees and asylum seekers through the Interim Federal Health Program;
• Top-up funding of $52.3 million to pay the Visa Application Centre (VAC) contractors for the biometrics collection services; and
• Additional funding of $44.0 million to advance the Digital Platform Modernization initiative, aimed at improving client service delivery and replacing the existing Global Case Management System (GCMS) with modernized back-end technologies.

Decreases:

• Reduced funding of $117.0 million following the fulfillment of the Department’s commitment to resettle 40,000 Afghan nationals;
• Reduced funding of $75.3 million as the Department continues its draw down of temporary accommodation operations; and
• Reduced funding of $47.4 million resulting from the government’s decision to lower immigration levels under the 2025-2027 Immigration Levels Plan.

ii. Authorities for Vote 5 – Capital Expenditures

The Department’s Vote 5 – Capital Expenditures authorities decreased by $5.9 million (50%), primarily attributable to the following changes:

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;
• 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 increased by $8.0 million (0%), primarily attributable to the following changes:

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;
• Additional funding of $85.5 million to compensate provinces and municipalities for the interim housing of asylum claimants under the Interim Housing Assistance Program (IHAP);
• 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; and
• New funding of $6.3 million to provide transitional financial assistance through the Resettlement Assistance Program (RAP) to eligible recipients arriving in Canada under the Americas Humanitarian Pathway.

Decreases:

• Reduced funding of $139.8 million due to funding fluctuations related to the multi-year Immigration Levels Plan;
• 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.

iv. Budgetary Statutory Authorities

The 2025-26 statutory authority level in the first quarter decreased by $17.5 million (9%) compared to 2024-25, primarily attributable to the following changes:

Decreases:

• Reduced funding of $20.5 million in the Passport Program due to a decrease in anticipated revenues of $64.8 million offset by a net increase in planned expenditures of $85.3 million; and
• Reduced funding of $2.1 million related to other statutory authorities.

Increases:

• Incremental funding of $5.0 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 June 30, 2025 decreased by $290.7 million (19%) compared to the same quarter in 2024-25, which is mainly explained as follows:

1. Salaries and Employment Benefits have decreased by $17.9 million (6%) 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.
2. Transportation and Communication expenditures have decreased by $9.4 million (51%), primarily due to reduced courier services stemming from a lower volume of travel documents seen this quarter, compared to the first quarter 2024-25; as well as a reduction in travel expenditures following the Budget 2023 announcement on Refocusing Government Spending.
3. Professional and Special Services expenditures have increased by $35.1 million (13%) which is mainly related to 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. These increases are offset by a decrease in payments made to the Department of Justice for legal services due to the timing of invoices; a decrease in temporary accommodation costs for asylum seekers associated with the Department’s draw down operations; a decrease in payments to Employee and Social Development Canada (ESDC) for passport delivery services due to the lower projected volumes for fiscal year 2025-26; a decrease in payments to Global Affairs Canada this quarter for passport delivery services resulting from delayed invoice submission; and a decrease in operational costs to support third party Visa Application Centres (VAC) due to a significant decline in Temporary Resident enrollments.
4. Rentals expenditures have decreased by $62.9 million (77%) which is attributed to a decrease in the average temporary accommodation cost per asylum claimant, a decrease in the overall number of rooms, and a decrease in number of claimants; as well as a decrease in payments issued to Microsoft Canada explained by the timing of invoices received and fewer user-based licences renewed for this fiscal year.
5. Utilities, Materials and Supplies expenditures have increased by $2.7 million (19%) which is mainly attributable to the rise in passport material inventory. However, since the volume of passports issued in the first quarter of 2025-26 also decreased, the change in consumption was less pronounced and less proportional to the change in inventory.
6. Acquisition of Machinery and Equipment expenditures have increased by $4.9 million (487%), primarily attributable to the purchase of new laptops which was reported from 2024-25 to the first quarter of 2025-26.
7. Transfer Payments have decreased by $230.5 million (30%) which is mainly explained by the timing of quarterly payments to Quebec in relation to the Canada-Quebec Accord on Immigration; as well as a decrease in payments to immigrants and refugees under the Resettlement Assistance Program (RAP) Transitional Financial Assistance due to the Ukraine initiative ending in June 2024. The decrease is partially offset by an increase in spending under the Interim Housing Assistance Program due to the timing of payments.
8. Other Subsidies and Payments have decreased by $12.0 million (51%) which is primarily due to the reduction in the remission payments issued on service fees under the passport program because of delays in refunds and improvement of the passport delivery within service standard in the first quarter of 2025-26 when compared to the same quarter last year; as well as a reduction in refunds of revenues collected in previous years from applicants for services that were not rendered.

Through the Passport Program and International Experience Canada, IRCC generated $136.1 million and $3.5 million respectively in re-spendable revenues in the first quarter of 2025-26. Overall, this resulted in net budgetary expenditures of $1,067.8 million as of June 30, 2025, compared to $1,319.5 million in the same quarter of 2024-25.

1. Passport re-spendable revenues have decreased by $39.1 million (22%) compared to the same quarter of the previous fiscal year, mainly due to a decline in the number of passport applications. This is largely 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 increased by $0.1 million (3%) compared to the same quarter in the previous fiscal year as a result of an increase in the number of participants in the Program.

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 threats and rapidly shifting migration trends.

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 have a direct impact on IRCC’s ability to deliver on its mandate and are therefore also factored into the Department’s forward thinking and planning.

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.

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, 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 uses the Crisis Response Framework (CRF) to ensure consistent strategic advice for Government decisions and well-coordinated migration responses to international and domestic 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.

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

On May 13, 2025, Prime Minister Mark Carney appointed Lena Metlege Diab as the new Minister of Immigration, Refugees and Citizenship Canada (IRCC), following the latest federal election. Ms. Diab replaced Rachel Bendayan, who had taken over from Marc Miller during a cabinet shuffle earlier in March 2025.

On April 1, 2025, following a departmental realignment and budget rationalization process, IRCC made adjustments to its organizational structure. The new structure is designed to respond to shifting demands while remaining aligned with the department’s priorities. In addition to the sector-level changes, broad-based functional changes will impact the whole department. These changes aim to streamline operations, reduce bureaucracy and make the department’s work more effective.

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
August 19, 2025

Statement of Authorities

Departmental Budgetary Expenditures by Standard Object

Note: Numbers may not add up due to rounding.