By Laura Truesdell, Blog Writer

One of the most troubling aspects of Canada’s Immigration Loan Programme (ILP) is the degree to which it fails to live up to humanitarian standards in international law. This discrepancy is significant even in comparison to the less-than-perfect refugee resettlement programs of other countries such as the USA and Australia.

For instance, the Office of the United Nations High Commissioner for Refugees Resettlement Handbook indicates that most resettlement costs are to be met almost entirely by the receiving government, with a select few being granted under a government loan scheme. Canada is one of only three countries (Australia and the USA being the other two) that charge immigrants for the cost of their transportation to their new country of resettlement. Unlike Australia and the USA however, Canada is the only country that adds interest to these loans.

Australia, for example, offers a No-Interest Loans Scheme (NILS) for travel through the International Organization for Migration (IOM). Under Australia’s overseas refugee resettlement policy, only refugees admitted under the Special Humanitarian Programme (SHP) are entitled to apply for a no-interest travel loan through the IOM. (Note: Established in 1981, the SHP has some similarities to Canada’s Private Sponsorship Program, allows people who face human rights violations to be sponsored by a ‘proposer’ who is most often a close family member). The loan must be repaid in full in the agreed upon timeframe – typically around 24 months. Research into the overall cost of travel loans for SHP entrants and their proposers was conducted by the Refugee Council of Australia, and they found costs associated with travel to be both incredibly high and even prohibitive for many refugees. Given the narrow criteria for IOM loans, few proposers under the SHP category are eligible, which has resulted in them taking loans from other sources with exploitive conditions such as rapid repayment and high interest rates. The accumulated debt from these loans was found to have serious negative impacts,  including causing delays in family reunification. Also problematic is the fact that, at best, IOM only pays a fraction of the total airfare cost, meaning proposers either then had to take out additional loans to cover the remainder, or borrow money from family and friends back home. Unsurprisingly, the Report concluded by recommending that the Federal Government completely do away with loans and cover the cost of airfares for SHP entrants to Australia. Despite the criticism levelled by refugee advocates at Australia’s loan scheme, Canada’s Immigration Loan Program takes these unfavourable conditions one step further by requiring refugees to pay crippling interest on their travel and medical examinations debts.

Like Australia, refugees resettling to the United States can apply for interest-free travel loans through the IOM. Once they accept the loan the refugee is required to sign a promissory note prior to departure stating that they agree to repay the entirety of their debt within 42  to 46 months after arrival in the United States. According to the State Department, the average monthly payment for newly arrived refugees is approximately USD$85, with the average loan being between USD$1,200 and USD$2,500. Monthly payments require repayment starting within 6 months of arrival in the USA, a grace period twice as long as that on offer in Canada. However there are provisions for deferring or even waiving the debt for reasons such as economic hardship.

The promissory notes also indicate that if a loan recipient misses payments or fails to pay back the entire sum in the agreed upon timeframe, the IOM can accelerate payment and report the refugee to a collection agency. Travel loans are assigned for collection to either the IOM or a loan collecting resettlement agency based in the United States. It has been reported that the nine resettlement agencies contracted by the State Department make in excess of USD$5 Million per year in commissions on refugee debt collection. Further criticism of the US Travel Loan Program has increased as a result of the Syrian crisis. Advocates point to Canada’s recent waiver of travel and medical exam costs for Syrians as highlighting the unique and problematic position of both countries requiring newly resettled refugees to cover their own travel costs. Nevertheless, Canada continues to require the majority of potential refugees to pay pack their travel costs with interest,  and on a similarly restrictive timeline to the US program.

Refugees being resettled to new countries are in incredibly vulnerable situations that require both urgency and empathy in response . In contrast, these onerous travel loan schemes saddle refugees with debt upon arrival, with tight repayment deadlines forcing families to prioritize paying off their debt before other more important settlement needs such as housing, medical care, employment and education. The growing dissatisfaction of advocates in Australia and the United States over their refugee travel loan schemes, as well as the similar findings of the Canadian government’s recent report on the ILP, reflect an emerging international consensus on the problem of immigration loans. Canada must now take the lead in translating this consensus into a new, more humane policy for dealing with refugee resettlement. 

Reforming the ILP is our main STAND Canada campaign this fall. To learn more, click here.

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