6. Conclusions and Recommendations
The following section summarizes the overall conclusions for the evaluation, and proposes related recommendations, along three broad themes: loan issuance, loan repayment and collections, and contributing to settlement objectives.
TB Directives require that loans be authorized appropriately (i.e., either approved or refused), and that approval is given on the expectation of full repayment.Footnote 142 It is however challenging to implement the procedures for assessing the potential ability of the recipient to repay a loan in an overseas refugee processing context due to the nature of the criteria to be assessed and the limited time and information available to properly assess them. Furthermore, refusing loans for refugees is problematic; as such a decision is likely to prevent selected refugees without financial means or other avenues of assistance from coming to Canada, and thereby to impede Canada’s ability to meet its resettlement commitments and humanitarian goals. The loan has become the default option for most resettled refugees.
TB Directives further require that recipients are informed of their loan obligations.Footnote 143 The evaluation found that there is a risk that some refugee recipients do not fully understand the terms and conditions of the loan at the time of signing, and that they do not know the amount of the loan prior to their departure for Canada. Without this understanding and knowledge, the spirit and intent of a loan agreement comes into question.
Recommendation #1: It is recommended that CIC fully comply with the requirements for loans programs as stated in Treasury Board (TB) Directives. In particular, given the context of overseas refugee processing, compliance with TB Directives requires policy and/or procedural changes to ensure:
- Adherence to the criteria established to assess ability to repay the loan; and
- Procedures for signing the loan agreement are clear and obtain free and informed consent from the client, including communicating the amount to be borrowed.
Acknowledging that some refugees may not qualify for a loan given the requirements under the TB Directives, it is therefore also recommended that CIC ensure policies and corresponding measures are in place to support its humanitarian policy objectives and to facilitate the resettlement of all refugees who do not qualify for a loan.
Loan Repayment and Collections:
The IRPR sets out the requirements for loan repayment, including repayment schedules and the treatment of interest. While the TB Directive on Receivables Management requires the prompt recovery of all debts, the Immigration Loan Program is also guided by an internal CIC policy to ensure that collection on these debts does not cause undue hardship to recipients.
Some refugee recipients are having difficulty meeting the requirements of loan repayment. Very few loan recipients start repaying within 30 days, putting the vast majority from the outset in a situation of arrears. This is further complicated by the fact that it takes CIC closer to four months to set up the loan accounts and issue the first loan statement. Some are not able to repay within the original loan term and some not within the interest-free period.
In addition, having to repay the loan is having a negative impact on the settlement of some refugees (e.g., having to pay back the loan under the current Immigration Loan Program terms makes it difficult to pay for basic necessities like food, clothing and housing). CIC Collection Services are available to provide support to loan recipients; however, information on CIC Collection Services is not widely communicated, and many loan recipients are not aware of the support it can provide. Furthermore, while there is a write-off mechanism in place for the program, it does not forgive the debt and cannot be pursued until all means of collection have been exhausted.
Recommendation #2: It is recommended that CIC make policy and/or procedural adjustments to its loan repayment requirements and collection practices to ensure that the loan program is aligned with CIC’s resettlement, settlement and integration policy objectives and does not adversely affect the settlement outcomes of resettled refugees. In particular, CIC should consider:
- Aligning the loan program policies with those of other refugee programming;
- Aligning the start of the repayment with the receipt of the first loan statement;
- Aligning the loan repayment schedule with the time needed to repay;
- Ensuring the use of interest and interest relief are appropriate to the financial situation of the client;
- Providing mechanisms to allow for debt forgiveness where necessary;
- Providing easy access to information on how to contact CIC Collection Services and the types of assistance available for clients.
Contributing to Settlement Objectives
There is a potential for the Immigration Loan Program to be more fully utilized in support of Canada’s settlement and integration objectives. For instance, while the assistance loan is uniquely positioned to support settlement once in Canada, it is largely under-utilized in terms of both the type of assistance (i.e., limited to housing rental and utility deposits) and the recipients (i.e., almost exclusively GARs).
Recommendation #3: It is recommended that CIC explore how the Immigration Loan Program could better support the achievement of CIC’s settlement and integration policy objectives (i.e., that newcomers and citizens participate in fostering an integrated society), considering opportunities such as the expansion of the in-Canada assistance loan to improve labour market access for all newcomers, including refugees.
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