Special Guest Blog Writer, Gloria Palubjakova
The Immigration Loans Program (ILP) helps government assisted and privately sponsored members of the convention of refugees abroad and countries of Asylum with loans covering,
- The costs of medical examinations abroad
- Travel documents
- Transportation to Canada.
Canada is the only country that still charges interest on loans granted to refugees. Repayments are 72 months on average for amounts over $4,800 and 12 months for up to $1,200. According to Citizenship and Immigration Canada (CIC), the average loan is capped at $10,000 per family and an interest rate of 1.38% comes into effect an average of about 13-37 months upon arrival in Canada. A high number of refugees in Canada are forced to make extra sacrifices in order to repay their loans. Often, refugee families try to overcome the challenge of repaying their immigration loans and accrued interest by using their child tax benefit, a badly needed source of financial aid for many refugee families, and giving up other basic necessities.
However, a set number of refugees from Syria who arrived after Nov.4 do have an exemption in the repayment of the transportation loan, creating a two tier situation with other refugees feeling, justifiably, unfairly treated. On average, a majority of the immigration loan recipients in Canada start repayment 30 days after arrival. When compared with other common forms of loans offered by the government, especially Canadian student loans, this 30 day period seems quick. Canadian Student Loans require repayment starting 6 months after graduation, with a fairly generous program in place to apply for exemptions or breaks in repayment. Even the US immigration loan program allows a 6 month period before requiring repayment to start.
Furthermore, Immigration Canada takes about 4 months to set up the loan account and issue the first loan statement causing a delay in the repayment loan for immigrants. Additionally, the 30 day period is often not properly communicated to loan recipients. This puts the recipients at a disadvantage in repaying the loan within the interest free period as seen in the CIC data where 68% of recipients start repayment 6 months or more after arrival. In addition, the CIC discovered that for loan terms of 12 and 72 months, 90% of repayment occurred after 31.3 and 74 months respectively thereby highlighting the need for, at a minimum, longer loan terms.
Already, factors such as language, disabilities, trauma caused from refugee experience, language and a host of other factors act as barriers for refugees to obtaining gainful and meaningful employment. Therefore, it stands to reason that many refugees lack adequate income to live off of, nevermind repay their ILP loan. At the time of loan repayment 41.5% were unemployed and reportedly found it very difficult to repay the loans while 22.5% percent of immigrants who were employed still found it very challenging to repay the loans while juggling other resettlement and day-to-day expenses.
These stringent measures associated with loan and interest repayments are what have driven STAND Canada’s recommendations involving ILP reform. Among STAND Canada’s suggestions are:
- Properly advising loan recipients about the terms of the ILP
- Two tier situations should be avoided and all refugees from high conflict regions facing human right abuses and civil war should be exempt from repayment
- Interest associated with late repayments should be abolished while loan periods should be extended.
We at STAND Canada see truly viable solutions for the Government of Canada as it leads to productive goals in both the humanitarian and economic aspects and goals of refugee immigration.
Learn more about STAND Canada’s spcific policy recommendations regarding the ILP by clicking here.