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OTTAWA — Canada's passport agency has asked the government for a fresh source of cash in the face of a “deteriorating” financial position and “international criticism” over delayed security improvements.
In an internal report obtained by The Canadian Press, money-losing Passport Canada urges Ottawa to consider a new funding model that would allow it to bankroll projects including the long-promised e-Passport, containing a data-packed computer chip.
The cash crunch raises serious questions about whether the agency has enough resources to ensure the Canadian passport will not be routinely abused by terrorists and other criminals.
Passport Canada argues new funding arrangements are needed in an era when the passport is no longer merely a travel pass, but a security and identity document that helps support anti-terrorism efforts post-9-11.
“Passports have become a primary asset for Canada and Canadians,” the report says.
As a result, it adds, the passport agency provides services “similar to other publicly funded measures to ensure safety and security.”
However, Passport Canada is funded almost entirely through fees collected from passport applicants, not large government subsidies. In 2005-06 the agency had revenues of almost $196-million and expenses of more than $199-million, resulting in an operating deficit of over $3-million, says the report, completed last November.
Demand for passports has risen, partly due to new border rules imposed by the United States, but costs have also climbed, “stressing” the agency's capacity.
Passport Canada's “financial situation is deteriorating because expenses are increasing faster than revenues,” the report adds.
If this continues, Passport Canada “cannot support the required major investments in new security initiatives, meet the increasing demand for services, and finance ongoing investments in capacity and infrastructure,” the document says.
“Canada is already facing international criticism for our delays in implementing new security features (eg. e-Passport) and what is perceived to be a somewhat laissez-faire attitude to security and identity process improvements.”
The report was drafted as a basis for discussions on a future funding model with Foreign Affairs (the agency's parent department), Finance, the Treasury Board Secretariat and the Privy Council Office.
It was released to The Canadian Press in response to a request under the Access to Information Act. Portions of the document, including details of the recommended funding options, were blanked out because they're considered confidential advice to government.
Passport Canada spokesman Fabien Lengelle said federal officials are considering the report. “It's still under discussion. It's still very much an ongoing debate.”
In April 2005, Auditor General Sheila Fraser uncovered serious weaknesses at the passport agency, citing the potential for abuse. Last year it was revealed that an alleged Russian spy used a fake Ontario birth certificate to obtain passports in 1995, 2000 and 2002.
Three years ago, Canada announced plans for an e-Passport — an enhanced version of the current document intended to bolster security. It would feature a digital chip with basic information about the holder as well as a photo.
Mr. Lengelle indicated the challenges Britain and Australia experienced when ushering in high-tech passports have made Canada more cautious.
“At this point we do have authority and funds to go ahead with a pilot project,” Mr. Lengelle said.
“It's really early to say when we'll have an e-Passport in Canada, but we're working on it. It's a very broad undertaking that needs to be very carefully studied before it's rolled out.”
Another security initiative that would involve electronically comparing the photos of every passport applicant with those of terrorists lags months behind schedule, with a new target date of October.
There has also been talk of increasing the passport's lifespan to 10 years from the current five. The report says doing so under the current funding model would not save the agency money but rather see losses skyrocket to $106-million annually by 2012-13.
“Passport Canada believes that a five-year validity period is much better for the Canadian passport,” Mr. Lengelle said.
The shorter period allows the office to introduce security features more quickly, and reduces the risk that a passport holder's appearance will differ markedly from the photo in their booklet, since a new picture must now be taken every five years.
In addition, Mr. Lengelle said, the international trend has seen other countries — including New Zealand and Singapore — reduce the validity period of their passports to five years.
