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A common complaint about refugee resettlement is the cost. However, refugees resettled to Canada must pay for their medical exam and their travel to Canada. Canada’s Immigrant Loans Program ensures that refugees who are unable to pay for their resettlement have access to a funding source.
Canadian immigration legislation provides that the most that can be loaned is $126,000,000. Historically, the Government of Canada has issued $13,000,000 in loans annually. Approximately 93% of loaned funds are repaid. Since 2002, the average loan has been approximately $3,000, with roughly 20% of loans issued for more than $5,000. The current policy is to cap the maximum loan amount to $10,000 per family.
Prior to 2018, the loan repayment schedule was as follows:
Balance at Start of Repayment Period (Which Is 30 Days After Arrival in Canada)
|Period the Loan
Must be Repaid in Full (Months)
|Start of Interest Accrual|
|Up to $1,200||12||13th month|
|$1,201 to $2,400||24||25th month|
|$2,401 to $3,600||36||37th month|
|$3,601 to $4,800||48||37th month|
|Over $4,800||72||37th month|
In 2018, the Government of Canada amended the above to:
- eliminate interest charges on all new immigration loans;
- eliminate further interest accumulation on all existing immigration loans;
- defer the loan repayment start date from 30 days to one year; and
- extend the repayment period for all loans by two years, thus reducing the required monthly instalment amount.
The Government of Canada’s rationale for eliminating interest charges and extending the repayment period as well as the period before the loan becomes repayable was that it would “give resettled refugees more time to focus on their integration, without needing to give immediate attention to loan repayments. Given their need to learn the language, along with other integration challenges they may face, many resettled refugees take more than one year to secure employment in Canada. Thus, these amendments will give them more time to repay their loans, and keep the loans fixed at the amount that was borrowed.”
The cost of eliminating interest was estimated to be $7.3 million over 10 years.