Evaluation of the Immigration Loan Program

1. Introduction

1.1 Purpose of the Evaluation

This report presents the results of the evaluation of the Immigration Loan Program. The evaluation was conducted in fulfillment of the requirements under the Treasury Board (TB) Policy on Evaluation,Footnote 5 and was also identified as a recommended action item resulting from the Evaluation of the Government Assisted Refugee and Refugee Assistance ProgramFootnote 6 conducted by Citizenship and Immigration Canada (CIC) in 2011. The data collection and analysis for this evaluation were undertaken in-house by CIC’s the Research and Evaluation Branch, between November 2013 and January 2015.

The report is organized into the following sections:

  • Section 1 presents the purpose of the evaluation and the profile of the Program;
  • Section 2 presents the methodology for the evaluation, and discusses the strengths and limitations;
  • Section 3 through 5 present the findings, organized by core evaluation issue;Footnote 7 and
  • Section 6 presents the conclusions and recommendations.

Appendices are included at the end of the report. Technical appendices, providing more detailed information on the analyses undertaken as part of the evaluation, are available upon request.

1.2 Program Profile

This section provides an overview of the Immigration Loan Program, including: a brief history of the program, a program description, a profile of loan accounts and recipients, a description of roles and responsibilities, program governance, key partners and stakeholders, and a summary of program resources.

1.2.1 History of the Program

The Immigration Loan Program was created in 1951 to, “financially assist immigrants from Europe whose services were urgently needed and could not afford their own transportation.”Footnote 8 Originally known as the Assisted Passage Loan Scheme, the program provided loans to immigrants from Europe, but was subsequently expanded to include immigrants from the Caribbean (1966) and eventually immigrants from all countries (1970).Footnote 9 By the early 1970s, the loan scheme was mainly being used as “a device for financing refugee movements,” as loans were “granted and then quickly written off as uncollectible”.Footnote 10

In order to keep pace with the changing refugee movements and ensure the financial integrity of the loan fund, various changes were made to the program over the years.Footnote 11

1.2.2 Program Description

The Immigration Loan Program falls under CIC Strategic Outcome (SO) 3: Newcomers and citizens participate in fostering an integrated society. The immigration loan is intended to ensure, “that some persons, otherwise unable to pay for the costs of transportation to Canada and medical admissibility exams, have access to a funding source”.Footnote 12

Loans

According to section 289 of the Immigration and Refugee Protection Regulations (IRPR), various categories of persons are eligible to apply for an immigration loan, including foreign nationals, permanent residents, and Canadian citizens, with eligibility linked to the purpose of the loan to be issued. The IRPR also identifies four purposes for which a loan may be provided, as outlined in the table below.

Table 1: Description of Loans and Eligibility
Purpose Description Eligibility
Transportation Provided to cover the costs of transportation from their point of origin to their place of final destination within Canada. It also includes service fees from the International Organization for Migration (IOM), and other related expenses.
  • Foreign nationals under Parts 1 and 2 of the Immigration and Refugee Protection Act (IRPA) (including beneficiariesFootnote *)
  • Permanent residents and Canadian citizens (beneficiaries only)
Admissibility Provided to cover the costs associated with medical services (such as medical exams) required to establish admissibility to Canada.
  • Foreign nationals under Part 2 of IRPA (including beneficiaries)
  • Permanent residents and Canadian citizens (beneficiaries only, if classified as protected persons)
Assistance Provided to cover the costs associated with the initial settlement of persons granted admission to Canada (e.g., rental and utility deposits).
  • Foreign nationals under Parts 1 and 2 of IRPA (including beneficiaries)
Right of Permanent Residence Fee (RPRF) Provided to cover the costs of the right of permanent residence fee (currently $490 per person, with some exceptions).
  • Foreign nationals under Part 1 of IRPA (including beneficiaries)
  • Permanent residents and Canadian citizens (beneficiaries only)

Source: Canada, CIC (2014) OP 17 – Loans; Canada, Department of Justice (2002) Immigration and Refugee Protection Regulations, R288 - R289.

Both transportation and admissibility loans are arranged overseas by visa officers at the time of the intake interview, while assistance loans are arranged in-Canada by CIC designated officers. Right of Permanent Residence Fee (RPRF) loans can be arranged both in-Canada and overseas.

Loans are interest bearing and are repayable in full, and loan repayments are due to begin 30 days after arrival in Canada (in the case of transportation and admissibility loans) or 30 days after issuance of the loan (in the case of assistance loans). When loans covering admissibility and/or transportation costs are arranged by the International Organization for Migration (IOM)Footnote 13, they are capped at $10,000 per loan.

Contributions

The program allows for certain refugees identified by CIC as having higher settlement needs to have access to the contribution fund from the Resettlement Assistance Program (RAP) to pay for transportation, admissibility, and other associated costs to the final destination in Canada.Footnote 14 Higher settlement needs include situations where a refugee may require additional support in Canada to become self-sufficient (e.g. victims of trauma and torture, single parent head of households, seniors without accompanying or established family in Canada).Footnote 15

Arrangements for access to RAP contributions are generally made overseas, determined by visa officers, and are reviewed and approved by the Integration Program Management Branch (IPMB) within CIC, prior to the arrival of the refugee in Canada. However, from Fiscal Year (FY) 2006/07 to FY 2010/11, arrangements could also be made to convert a loan to a contribution after the recipient’s arrival in Canada if it was determined that a refugee had high settlement needs (commonly referred to as an in-Canada loan conversion). Information on the rationale for this change is provided in Section 4.2.2 of the report.

Repayment and Interest

The loan term and interest start date vary, based upon the size of the loan (see Table 2). The interest start date is based on the loan recipient’s arrival date in Canada and the interest rate is calculated according to the yearly rate set by the Department of Finance. Between 2003 and 2012, the interest rate charged on loans varied from 1.26% to 4.24% (see Appendix A).

Table 2: Start of Interest by Loan Term
Size of Loan Loan Term Interest StartsFootnote *† 
Up to $1,200 12 months 13th month
$1,201 to $2,400 24 months 25th month
$2,401 to $3,600 36 months 37th month
$3,601 to $4,800 48 months 37th month
Over $4,800 72 months 37th month

Source: Canada, Department of Justice (2002) Immigration and Refugee Protection Regulations, R291(2), R293(2), and R293(3).

Collection

At any time, loan recipients facing hardships can request a review of their repayment arrangement to prevent further undue burden.Footnote 16

When a loan recipient is unwilling to repay or has failed to keep contact with CIC (e.g., maintaining a current address), CIC, under a formal agreement with the Canada Revenue Agency (CRA), can request CRA to set-off any amount (up to the amount of the debt) that may become payable to the loan recipient as a result of filing their taxes.Footnote 17

In cases where there is no prospect for recovery of the loan, the loan can be written-off. In order for this to occur, the department must first make every reasonable effort to collect and exhaust all possible avenues before considering a write-off.Footnote 18 A write-off must then be approved by Treasury Board and Parliament.Footnote 19 If it becomes known, in the future, that the loan recipient’s financial position has improved and that they are capable of paying the debt, the written-off account is reinstated, interest is calculated as applicable, and repayments resume.

CIC does not share information on loan payments and the use of alternative arrangements with credit bureaus. As a result, the loan does not have an impact, either positive (i.e., building a credit history) or negative (i.e., lowering a credit rating or score) on the individual loan recipient’s credit standing.

1.3 Profile of Loan Accounts

The evaluation examined loans issued to recipients between 2003 and 2012 which represents a population of 48,446 loan accounts.Footnote 20 Based on a random sample of 4,742 loan accounts, the average loan amount was approximately $3,090.Footnote 21 The distribution of loans by loan term is presented in Table 3.

Table 3: Distribution of Loans by Loan Term (2003-2012)
Loan Term Number of Loan Accounts Percentage
12 months 655 13.8%
24 months 1,944 41.0%
36 months 683 14.4%
48 months 538 11.3%
72 months 922 19.4%
Total 4,742 100.0%

Source: Sample of Integrated Financial and Material System (System and Application in Data Processing) (IFMS (SAP)), Immigration Program Accounts Receivable (IPAR), and Archived Microfiche Loan Accounts (2003-2012).

While loans can be arranged at different points in time (i.e., overseas prior to departure as well as in-Canada after arrival) and cover different costs (i.e., transportation, medical exams, initial settlement expenses), they are consolidated into one loan for ease of administration and repayment. Therefore, a loan recipient may have more than one component to their loan, but combined together into one overall loan. The vast majority of loan recipients for the 2008 to 2012 periodFootnote 22 (94.6%) had a transportation component to their loan, 81.5% had an admissibility component, and 40.6% had an assistance loan component. Only six recipients had a RPRF component to their loan.

1.4 Profile of Loan Recipients

Information on the characteristics of loan recipients, based on a sub-population of the loan accounts issued in 2008 to 2012 for which socio-demographic was availableFootnote 23 shows that:Footnote 24

  • While persons from various immigration categories are eligible to apply for an immigration loan, 97.8% of loan recipients were either Government Assisted Refugees (GAR) or Privately Sponsored Refugees (PSR);
  • 53.5% reported no knowledge of either of Canada’s official languages at landing;
  • 62.3% were educated at a secondary school level or less, and 73.4% were classified as new workers when they first came to Canada;
  • 43.7% of loan recipients came from countries in West Central Asia or the Middle East, and 34.6% came from countries in Western, Eastern, Central or Southern Africa; and
  • the most frequent source country for loan recipients for this period was Iraq, with 27.7% of loan recipients indicating it as their country of birth.

1.5 Roles and Responsibilities and Program Governance

A number of branches within CIC are involved in the Immigration Loan Program.

Refugees Affairs Branch (RAB): RAB is responsible for the policy aspects of the program, responding to questions and comments from stakeholders, and policy and program development.

Finance Branch: Finance Branch is responsible for the accounting of debts managed by National. Headquarters (NHQ), and negotiating debts and repayments with debtors. The Branch also works with outside service providers such as CRA to recover outstanding loan amounts, and includes a CIC Collection Services unit, which is responsible for the ongoing collection and management of loan receivables.

Finance Branch also supports the CIC Debt Write-Off Committee which meets annually to review and approve accounts that have been recommended by the CIC Collection Services unit for write-off. Committee roles and responsibilities are established in accordance with the TB Debt Write-Off Regulations. The Committee is comprised of three CIC individuals, two of whom must directly report to an Assistant Deputy Minister. At least one member must not have been involved in the creation or establishment of the debts proposed for write-off, nor in the collection action for debts. Once approved by the Committee, the accounts identified to be written-off must then be approved by TB through a submission and tabled in Parliament through the Supplementary Estimates process.

Integration Program Management Branch (IPMB): IPMB is responsible for functional guidance to visa officers overseas and in-Canada staff, acts as the primary liaison with Finance Branch, conducts program audits to ensure loans are issued in alignment with policy, approves contributions out of the RAP budget, and interacts with key stakeholders in the resettlement sector and informs policy development.Footnote 25

International Region (IR): IR is responsible for delivering the program overseas, including assessing and approving transportation and admissibility loans.

Domestic Regions (Regional Offices): Domestic regions are responsible for assessing and approving loans initiated in Canada.

1.6 Key Partners and Stakeholders

The following organizations are involved in directly or indirectly supporting the Immigration Loan Program:

  • The International Organization for Migration (IOM) has a Memorandum of Understanding with CIC, in which the IOM arranges for the transportation and medical exams of refugees selected by Canada for resettlement;
  • Sponsorship Agreement Holders (SAH), as well as their constituent groups, and Service Provider Organizations (SPO) responsible for the delivery of Resettlement Assistance Program services (RAP SPOs) provide advice and support to loan recipients, mostly with respect to repayment;
  • The United Nations High Commissioner for Refugees (UNHCR), while not directly involved in the loan program, is a stakeholder to the extent that it identifies refugees for resettlement and provides guidelines to countries to assist in refugee determination and resettlement.

1.7 Program Resources

Annual expenditures by fiscal year for the administration of CIC Collection Services for the Immigration Loan Program are shown in Table 4. The expenditures associated with other aspects of the program (i.e., policy development, issuing loans and time spent discussing loans with immigrants) are not reported separately from the larger processes to select and resettle refugees and are therefore not included in Table 4.

Table 4: Expenditures for the Administration of CIC Collection Services (FY 2008/09 - FY 2013/14)
CIC Collection Services FY
2008/09
FY
2009/10
FY
2010/11
FY
2011/12
FY
2012/13
FY
2013/14
Total
Salary $865,113 $865,630 $804,106 $738,617 $719,694 $523,498 $4,516,658
Operating $175,675 $221,795 $264,981 $207,768 $234,753 $242,339 $1,347,312
Total Cost $1,040,788 $1,087,424 $1,069,088 $946,385 $954,447 $765,837 $5,863,970

Note: Costs do not include Employee Benefit Plan (EBP) or Accommodations.

Source: Financial Operations Branch, IFMS (SAP).

Funding for the loans is provided through the Consolidated Revenue Fund (CRF). The fund allocated for immigration loans is currently approved for $110 million,Footnote 26 as per the IRPR. The annual amount of loans issued between FY 2002/03 and FY 2013/14 averaged just over $12.7 million (see Table 5).

As noted previously, contributions are available to cover the costs of transportation and admissibility loans for individuals deemed to have high settlement needs. Since FY 2004/05, a maximum of $500,000 per year has been available for contributions.Footnote 27 Between FY 2002/03 and FY 2013/14, a total of $6.6 million in contributions was provided (see Table 5). A discussion of the variation in the total amount of contributions provided by fiscal year can be found in Section 4.2.2 or the report.

Table 5: New Loans and Contributions (FY 2002/03 – FY 2013/14)
Fiscal Year New loans (excluding accrued interest) Total of RAP contributions
2002/03 $11,525,969 $227,838
2003/04 $13,795,761 $243,740
2004/05 $14,120,206 $209,126
2005/06 $13,573,606 $170,810
2006/07 $13,049,038 $1,422,768
2007/08 $12,418,593 $734,450
2008/09 $11,017,154 $678,751
2009/10 $13,314,633 $1,356,617
2010/11 $11,636,426 $717,381
2011/12 $14,884,734 $230,126
2012/13 $11,272,994 $213,860
2013/14 $13,964,799 $434,787
Average $12,782,647 $553,354

Source: Public Accounts, IFMS (SAP).

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