Evaluation of the Immigration Loan Program

3. Findings Related to Efficiency and Economy

Demonstration of efficiency and economy was examined in relation to the financial management of the program, resource utilization and program monitoring.

3.1 Financial Management

Finding: From a financial management perspective, the loan program functions well, evidenced by the fact that the Consolidated Revenue Fund used to finance loans is adequately replenished, and the immigration loan portfolio is structured in accordance with regulations and TB Directives.

According to TB Directives, government accounts receivables are to be “managed fairly, efficiently and effectively, while minimizing the risk of loss.”Footnote 32 Accounting and collections for the Immigration Loan Program adhere to the TB Debt Write-off Regulations and the TB Directive on Receivables Management. A variety of guidance and support are in place, from both CIC and TB, which adequately support the financial management (accounting and collections) of the immigration loan portfolio (see Table 9), and interviews with CIC’s Finance Branch did not reveal any issues with this guidance.

Table 9: Documentation Providing Oversight for the Immigration Loan Program
Sources Title
Citizenship and Immigration Canada Collections Manual
Financial Accounting Manual: Chapter 2 – Policy on Accounting for Immigration Loans
Financial Policy Manual: Chapter 5 – Asset and Liability Management: Debt Write-Off
Immigration and Refugee Protection Act (A88)
Immigration Act Fees Regulations [Repealed in 2003]
Immigration and Refugee Protection Regulations (Part 18, Part 19)
Department of Finance Financial Administration Act
Treasury Board Policy on Loans [Rescinded October 2009]
Debt Write-off Regulations
Directive on Receivables Management
Directive on Loans and Loan Guarantees

Loan repayment is key to replenishing the CRF and ensuring its continued sustainability. Repayments on existing loans serve to maintain the fund and are used to finance new loans.Footnote 33 Although the loan fund has had to be increased several times in the past (most notably in 1967, 1980, 1986, and 1990),Footnote 34 the outstanding balance and ratio of new loans to repayments collected has remained relatively stable in recent years (see Table 10).

Between FY 2002/03 and FY 2013/14, the amount of outstanding loans ranged from $33.6M to $43.5M, representing a little under half of the maximum advance from the CRF ($110M). Furthermore, over the same time period, CIC lent out approximately as much as it collected ($154.6M versus $152.3M), with small fluctuations from year to year in terms of the ratio of new loans to repayments. In FY 2009/10, there was a significant decrease in the amount of repayments collected, relative to the new loans issued, but this ratio has since stabilized.

Table 10: Financial Balance of Immigration Loans (FY 2002/03 – FY 2013/14)
Fiscal Year Opening balance (outstanding loans) New loans (excluding accrued interest) Repayments received on outstanding accounts (including interest) Write-off Closing balance


$47,218,406 $11,525,969 -$14,554,429 -$664,273 $43,525,673
2003/04 $43,525,673 $13,795,761 -$14,049,243 -$777,911 $42,494,280
2004/05 $42,494,280 $14,120,206 -$13,757,773 -$913,740 $41,942,973
2005/06 $41,942,973 $13,573,606 -$15,245,408 N/A $40,271,171
2006/07 $40,271,171 $13,049,038 -$14,261,861 -$978,102 $38,080,246
2007/08 $38,080,246 $12,418,593 -$14,512,489 -$1,596,540 $34,389,810
2008/09 $34,389,810 $11,017,154 -$11,752,872 N/A $33,654,092
2009/10Footnote * $33,654,092 $13,314,633 -$8,330,295 -$649,953 $37,988,477
2010/11 $37,988,478 $11,636,426 -$10,538,798 N/A $39,086,106
2011/12 $39,086,105 $14,884,734 -$10,817,185 -$1,344,780 $41,808,874
2012/13 $41,808,874 $11,272,994 -$11,886,438 -$366,539 $40,828,892
2013/14 $40,828,892 $13,964,799 -$12,552,609 -$609,385 $41,631,696
Average -- $12,881,159 -$12,688,283 -- --

Note: Write-offs did not occur in FY 2005/06 due to the dissolution of Parliament, in FY 2008/09 due to changes in the loans system, and in FY 2010/11 due to the prorogation of Parliament.

Source: CIC Financial Documentation.

Write-offs are the mechanism used by CIC to deal with uncollectible debts, and provide an important means of managing the immigration loan portfolio when loans become unrecoverable. Debt write-off is guided by the TB Directive on Receivables Management, which defines a write-off as “an accounting action that applies primarily to uncollectible debts. It does not forgive the debt or release the debtor from the obligation to pay; nor does it affect the right of the Crown to enforce collection in the future.”Footnote 35 The TB Debt Write-Off Regulations require that every reasonable effort be made to collect on a debt before considering a write-off, and that only debts that are truly uncollectible be written-off.

On average, 2,253 loans are requested to be written off per year. It was noted in interviews that the amount of write-off is managed from year to year, such that there is a relatively consistent amount being written-off each year. Most of these loan accounts are written off for small amounts (under $25) which are considered to be paid in full, however, they represent less than 1% of the total dollar amount written-off (see Table 11). Of the $8.7M requested for write-off between FY 2002/03 and FY 2013/14, $3.9M (45%) was written off due to the inability to locate loan recipients, while another $1.4M (17%) was written off because all other means of collection had been exhausted.Footnote 36 The reasons for write-offs remained consistent over the period under review.

Table 11: Loans Requested for Write-Off by Reason (FY 2002/03 – FY 2013/14)
Reason Number of Accounts Capital Interest and accrued interest Total % of Total
02 - Cannot be located 1,443 $2,856,108.29 $1,086,852.11 $3,942,960.40 45.0%
10 - OtherFootnote * 886 $1,216,306.74 $245,506.07 $1,461,812.81 16.7%
09 - Bankrupt 392 $971,784.00 $192,992.50 $1,164,776.50 13.3%
05 - Indigent, 08 - Disabled 267 $915,280.94 $110,344.91 $1,025,625.85 11.7%
01 - Deceased 264 $764,292.88 $70,439.77 $834,732.65 9.5%
04 - Deported, 06 - Repatriated, 07 - Returned Overseas 76 $220,755.34 $39,911.93 $260,667.27 3.0%
03 - Small Amount 22,383 $37,457.51 $4,836.97 $42,294.48 0.5%
12 - Liability not acceptedFootnote ** 11 $25,392.03 $3,396.04 $28,788.07 0.3%
11 - Administrative Error 10 $1,833.02 $332.95 $2,165.97 0.0%
Total 25,732 $7,009,210.75 $1,754,613.25 $8,763,824.00 100.0%

Source: CIC Financial Documentation.

Between FY 2002/03 and FY 2013/14, the total amount of immigration loans written-off ($8.6M) was relatively consistent with the total amount of interest collected ($7.9M), minimizing the associated loss.Footnote 37

3.2 Resource Utilization

Finding: Operational efficiencies have been achieved in loan collections, resulting in a decrease in the number of required full-time employees dedicated to collection services over time.

There are approximately 14,000 accounts being actively managed by CIC’s Collection Services in any given year.Footnote 38 Resources dedicated to collection activities were noted to be adequate in most interviews with representatives from Finance Branch. In the interviews where this was not the case, a need was identified for more resources (i.e., people and/or tools) for tracing activities.

Interviewees from Finance Branch identified a number of program changes over the years that have lead to increased efficiencies, and decreases in the number of full-time equivalent (FTE) required in CIC Collection Services. Some of these efficiencies included:

  • the introduction of online payments or in-person at financial institutions, which reduced the number of walk-ins to local CIC offices;
  • greater inclusion of promotional information on loan statements to encourage the use of the online banking payments;
  • the use of an automated phone system which includes self-service options, which resulted in fewer agents required to field calls; and
  • a decrease in the hours of operation of CIC Collection Services.

The evaluation examined six years of cost data for CIC Collection Services. Between FY 2008/09 and FY 2013/14, operating costs increased (from $175K to $242K) while salary costs decreased. Over this same period the number of FTEs decreased by almost half, from 17.5 to 9.5 (Table 12).

Table 12: Immigration Loan Program Costs – CIC Collection Services (FY 2008/09 - FY 2013/14)
Fiscal Year Salary Budget Salary Actual Operating Budget Operating Actual Total Actual Cost FTE
2008/09 $1,227,916 $865,113 $200,000 $175,675 $1,040,788 17.5
2009/10 $1,218,821 $865,630 $288,000 $221,795 $1,087,424 15.1
2010/11 $1,069,220 $804,106 $240,000 $264,981 $1,069,088 13.8
2011/12 $849,264 $738,617 $195,000 $207,768 $946,385 12.3
2012/13 $787,736 $719,694 $246,000 $234,753 $954,447 12.1
2013/14 $669,690 $523,498 $230,455 $242,339 $765,837 9.5
Total $5,852,647 $4,516,658 $1,399,455 $1,347,312 $5,863,970 --

Note: Costs do not include EPB or Accommodations.

Source: Financial Operations Branch, IFMS (SAP).

Overall, actual costs for collections are less than budgeted amounts; however, this is not the case for operating costs in three of the past four years. According to interviewees and internal communications with program areas, operating costs such as postage costs and banking fees increased, resulting in higher annual expenditures.

3.3 Program Monitoring

Finding: Current CIC financial systems and program data provide a means to monitor the day-to-day operations of the loan program, but do not fully support reporting on program outcomes (e.g., to what extent loans are repaid in a timely manner).

Over the course of the reporting period for the evaluation, there were three systems in place associated with the financial management of loan accounts (both active and inactive) and collection work (Immigration and Program Accounts Receivable (IPAR), Integrated Financial and Material System, System and Application in Data Processing (IFMS (SAP)) and an archive system), as well as various Excel spreadsheets used to keep track of overseas contributions and in-Canada loan conversions issued.Footnote 39

Based on findings from the interviews and observations during the evaluation, these systems and the available program data were adequate to support the day-to-day issuance of loans and contributions, as well as the management of the loan accounts and collection activities. However, at the time of the evaluation, the IPAR system was being fully decommissioned and replaced by the IFMS (SAP) system. As a result, some concerns were raised in interviews regarding the ability of the IFMS (SAP) system (on its own) to adequately support the loan collection work.

There was also some mention in the interviews of the reporting limitations of the loans component of IFMS (SAP). Using this system and other program data during the evaluation was challenging when reporting on program performance. While these challenges were addressed in the evaluation, a significant level of effort was required to extract and manipulate the data before the analysis could be conducted. At the time of the evaluation, efforts were underway by the Finance Branch to review the reporting requirements for the different stakeholders (policy and program) involved in the Immigration Loan Program, and to consider options to improve this capacity.

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