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Minister of Immigration, Refugees and Citizenship John McCallum, centre, visits a Syrian refugee camp in the southern town of Ghaziyeh on Dec. 18. (Bilal Hussein/AP Photo)
Minister of Immigration, Refugees and Citizenship John McCallum, centre, visits a Syrian refugee camp in the southern town of Ghaziyeh on Dec. 18. (Bilal Hussein/AP Photo)

Ottawa to modify immigration loan program to lighten refugee debt load Add to ...

Ottawa will adjust its immigration loan program to ensure government-sponsored refugees receive more help covering the cost of medical exams and flights to resettle here without being indebted for years – a change made amid criticism that Canada is the only country in the world to charge interest on such loans.

Immigration loan program

A spokeswoman for Immigration Minister John McCallum said Tuesday a decision has not yet been made on whether the government will get rid of the travel loan program altogether and fully cover these costs, which can add up to $10,000 a family for all medical exams, travel documents and flights.

But in the interim, the government has agreed that the interest rates charged to refugees and the timeline for starting payments will be tailored to the financial circumstances of individual refugees. Ottawa has also committed to debt forgiveness in cases where it’s necessary.

Three weeks ago, the federal Liberal government said it would waive travel loans for the 25,000 Syrians slated to enter Canada over the next three months, but not for the thousands of other asylum seekers who resettle in the country each year.

The government posted an update Monday on Immigration, Refugees and Citizenship Canada’s website. It notes that “the department is committed to ensuring that the provision of financial support to refugees selected for resettlement to Canada occurs within a program structure that recognizes and accommodates their often vulnerable circumstances (including financial need) both preceding and immediately following their arrival to Canada.”

The department pledged to address the “challenges” with the loans and said it will have solutions “ranging from operational changes to fundamental modifications to the program’s design” by mid-2016.

An internal review dated from September, and also posted to the website, recommended the department do more to “support its humanitarian policy objectives and facilitate the resettlement of all refugees who do not qualify for a loan.”

It also recommended that more families get a reprieve from paying what has become “the default option for most resettled refugees.” The Immigration Department currently budgets about $500,000 a year to waive the travel loans for about 50 to 63 extremely vulnerable families, amounting to just 2 per cent of the total number of non-Syrian refugee cases it sponsors annually, according to the review.

Refugee and settlement organizations have long criticized Canada for these loans and their interest, and the new review found that the department’s policy of forcing recipients to start paying back the loans within 30 days of landing was “not consistent with standard practices.”

Only 14 per cent of government-sponsored refugees reported earnings in their first year, compared with more than half of those privately sponsored. But many government-assisted refugees are often in arrears soon after landing because it typically takes the Immigration Department up to four months to set up a loan account and issue the first balance statement, the internal review found.

The evaluation also noted that about two-thirds of these refugees take six months or more to start repaying and, over all, about two-thirds of loan accounts are repaid within the loan term, which can range from 12 to 72 months depending on the amount. Interest rates ranged from 1.26 to 4.24 per cent between 2003 and 2012.

Jorge Salazar, manager of a Vancouver Foundation-funded group for young refugees, said refugees often struggle to meet their basic needs in those early months because they are so focused on repaying their debt to the government that brought them here.

“When refugees receive support from Canada, they’re often grateful and they always want to support the system back,” said Mr. Salazar, whose family repaid such a loan after arriving in 1990 from Colombia. “For many refugees, paying that loan is a priority.”

The department’s internal review stated that “requirements to repay an immigration loan are a source of stress and create additional challenges.”

Chris Friesen, director of the Immigrant Services Society of B.C., said the department must waive these loans for another 7,500 or so non-Syrian refugees who are sponsored by the government each year.

“We feel that this should be terminated completely and the cost of those transportation loans should be absorbed by the federal government,” he said. “The government can afford it. … It’s about political will and what’s right.”

The federal government spent an average of almost $13-million on new loans for refugees in each of the last 10 years, according to government data.

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