Vol. 148, No. 1 — January 1, 2014

Registration

SOR/2013-246 December 13, 2013

IMMIGRATION AND REFUGEE PROTECTION ACT

Regulations Amending the Immigration and Refugee Protection Regulations

P.C. 2013-1401 December 12, 2013

His Excellency the Governor General in Council, on the recommendation of the Minister of Citizenship and Immigration, pursuant to subsection 5(1) and section 14 (see footnote a) of the Immigration and Refugee Protection Act (see footnote b), makes the annexed Regulations Amending the Immigration and Refugee Protection Regulations.

REGULATIONS AMENDING THE IMMIGRATION AND REFUGEE PROTECTION REGULATIONS

AMENDMENTS

1. (1) Paragraph 132(1)(b) of the Immigration and Refugee Protection Regulations (see footnote 1) is amended by striking out “and” at the end of subparagraph 132(1)(b)(iii) and by replacing subparagraph 132(1)(b)(iv) with the following:

(2) Paragraphs 132(2)(a) and (b) of the Regulations are replaced by the following:

(3) Paragraph 132(5)(a) of the Regulations is replaced by the following:

2. Subparagraph 133(1)(j)(i) of the Regulations is replaced by the following:

3. (1) The portion of subsection 134(1) of the Regulations before paragraph (a) is replaced by the following:

Income calculation rules

134. (1) Subject to subsection (3), for the purpose of clause 133(1)(j)(i)(A), the sponsor’s total income shall be calculated in accordance with the following rules:

(2) Subsection 134(2) of the Regulations is replaced by the following:

Exception

(1.1) Subject to subsection (3), for the purpose of clause 133(1)(j)(i)(B), the sponsor’s total income shall be calculated in accordance with the following rules:

Updated evidence of income

(2) An officer may request from the sponsor, after the receipt of the sponsorship application but before a decision is made on an application for permanent residence, updated evidence of income if

Modified income calculation rules

(3) When an officer receives the updated evidence of income requested under subsection (2), the sponsor’s total income shall be calculated in accordance with subsection (1) or (1.1), as applicable, except that

COMING INTO FORCE

4. These Regulations come into force on January 1, 2014.

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Background

Canadian citizens and permanent residents of at least 18 years of age may sponsor their parents and grandparents (PGPs) and their accompanying family members (e.g. spouse/common-law partner and dependent children). To be eligible to sponsor, sponsors must sign a sponsorship agreement wherein they commit to provide for the basic needs of the sponsored person(s), such as food, clothing and shelter for a period of 10 years. Pursuant to the Immigration and Refugee Protection Regulations (IRPR), a sponsorship undertaking also obliges sponsors to reimburse the government for every benefit provided as social assistance to, or on behalf of, the PGPs and their accompanying family members during the term of the undertaking. If a sponsored person (PGPs and/or their accompanying family members), after arriving in Canada, obtains social assistance during the undertaking period, his or her sponsor is considered to be in default and social assistance amounts paid to the sponsored person may be collected from the sponsor.

To be eligible to sponsor their PGPs, sponsors must demonstrate that their total income meets the minimum necessary income (MNI) required to support themselves, their immediate family members residing in Canada, as well as the PGPs they intend to sponsor, including the PGPs’ accompanying family members. Sponsors may add the income of their spouse or common-law partner to meet the MNI if that person co-signs the sponsorship undertaking (accepting the same legal obligation to support the PGP and their accompanying family members).

The IRPR presently define the MNI as equal to the low income cut-off (LICO), established annually by Statistics Canada. LICO is an income threshold below which a family will likely devote a larger share of its income to the necessities of food, shelter and clothing than the average family. Under the IRPR, the sponsor is required to demonstrate that he or she has a total income that is at least equal to the MNI for the most recent taxation year, or for the 12-month period preceding the date of filing the sponsorship application. Sponsors may submit a notice of assessment or an equivalent document issued by the Canada Revenue Agency (CRA), or any other documents to establish their annual income.

Over the past several years, the number of applications received to sponsor PGPs has significantly exceeded annual admission targets for this category. As a result, a significant backlog developed — over 160 000 applications as of 2011 — leading to processing wait times of eight years. Without any action, the PGP backlog was projected to balloon to 250 000 applications and processing wait times would have grown to 15 years by 2015.

To address backlog and wait time issues in the shorter term, the Action Plan for Faster Family Reunification was launched in November 2011. As part of the Action Plan, Ministerial Instructions were issued under section 87.3 of the Immigration and Refugee Protection Act (IRPA) to temporarily pause the receipt of new PGP sponsorship applications for up to 24 months (this temporary pause has since been extended to January 1, 2014, to take into account the date when the regulatory amendments come into force), a 10-year multiple-entry super visa for PGPs permitting continuous stays in Canada of up to 2 years was introduced, annual PGP admission targets were increased to 50 000 persons over 2 years, and a commitment to consult with Canadians on a redesigned PGP program was included. By the end of September 2013, the Action Plan reduced the backlog by 44%. The super visa has been popular, with over 26 000 super visas issued since its launch, at an approval rate of 84%.

Issues

While the 2011 Action Plan for Faster Family Reunification has created temporary measures to help reduce backlogs (e.g. the temporary pause on applications and increase in PGP admissions in 2012 and 2013), more needs to be done to ensure that the PGP program is placed on a more manageable and efficient track over the long term. Furthermore, continued backlogs would keep families apart and leave little flexibility for the Government of Canada to focus on creating a more economically driven immigration program to address Canada’s economic and labour force needs.

During consultations with Canadians on a redesigned PGP program, concerns regarding the costs that the PGP program imposes on taxpayers were raised. Correspondingly, sponsors’ ability to adequately support their sponsored family members’ basic needs was questioned.

Finally, redesigning the PGP program also provides an opportunity for Citizenship and Immigration Canada (CIC) to address technical amendments to the IRPR [subsection 132(2)] as recommended by the Standing Joint Committee for the Scrutiny of Regulations (SJCSR) and to make other clarifications to this subsection.

Backlogs

Backlogs create lengthy wait times (e.g. processing wait times for PGP applications reached eight years in 2011), program inefficiencies and increase client dissatisfaction. When the PGP program reopens on January 2, 2014, the backlog is expected to have been reduced by close to 50%, leaving a backlog of approximately 80 000 applications.

Costs to Canadians

The PGP program generates costs to Canadian taxpayers, as PGPs are unlikely to engage in paid employment or to become financially independent when in Canada. Data show that approximately 1 in 10 seniors aged 65 years and older participates in the labour market. (see footnote 2) Low labour market participation by PGPs means limited contributions to Canada’s tax base, a higher likelihood of low incomes, (see footnote 3) and consequently a potential increased draw on social assistance benefits in comparison to economic immigrants, who consistently demonstrate a use of social assistance below PGP and average Canadian levels. (see footnote 4) Data show that the incidence of social assistance benefits by PGPs increases significantly after the 10-year sponsorship undertaking period — from about 3% during a sponsorship undertaking, to close to 20% immediately after the undertaking has ended (see footnote 5) — indicating that some PGPs depend on social assistance as an important source of income once the sponsorship undertaking has come to an end. The increase in the incidence of social assistance by PGPs is attributed principally to the fact that after the PGPs’ 10 years of residence in Canada, sponsors no longer have undertaking obligations towards their PGPs.

The PGP program also generates costs to Canadians in terms of health care given that many PGPs enter Canada at a time at which health care costs typically increase. The average age of a PGP principal applicant at arrival is 65 years. In Canada, more than 50% of a person’s lifetime health care expenses are incurred after age 65; these consume nearly 44% of all health care dollars.

Sponsor’s ability to adequately provide support to sponsored family members

The current financial requirements sponsors must meet to be eligible to sponsor their PGPs are insufficient for assessing a sponsor’s capacity to financially support their PGPs. As a result, there is an increased risk that sponsors may find themselves vulnerable to even minor economic setbacks which in turn may impact their ability to financially support their PGPs. The current minimum income thresholds for PGP sponsors are low and the current 12-month period for demonstrating the current MNI is not a reliable indicator of a PGP sponsor’s financial stability. Moreover, the fact that PGP sponsors can provide any type of documentation to demonstrate they meet the MNI makes it very difficult to verify documents and determine whether the documents are fraudulent. In certain instances, there is also a limited ability for immigration officers to adequately assess whether sponsors continue to meet the MNI, particularly in cases where more than one year has elapsed between the time an application is submitted and the time it is opened for processing by an immigration officer (e.g. wait times for PGP sponsorship applications had reached eight years by 2011). Together, these factors provide insufficient means for assessing a sponsor’s ability to financially support their sponsored family members.

First, the current MNI (i.e. LICO) is no longer an appropriate standard for assessing a PGP sponsor’s ability to adequately provide for their sponsored PGPs. The current MNI is low (e.g. MNI for a family of six — four in Canada plus two PGPs — is only $55,378), and provides no cushion if a family encounters an economic setback. Furthermore, when LICO was introduced as the benchmark for sponsorship in 1978, immigrant unemployment rates were lower, (see footnote 6) economic outcomes were better (see footnote 7) and were achieved earlier. As a result, sponsors’ ability to financially support their PGPs has become more strained over time. Additionally, while LICO takes inflation into account, it does not reflect any changes that occur over time regarding average spending on necessities. For example, housing now accounts for close to 30% (see footnote 8) of household expenses, up from roughly 15% in 1978. (see footnote 9) Finally, health care costs not covered by provincial health care are not adequately captured (e.g. eye care, dental care, mobility aids) by LICO — these costs have increased due to increased life expectancy.

Second, the ability to demonstrate income by submitting any type of documentation makes it difficult to detect fraudulent documentation, thereby inaccurately representing a sponsor’s ability to financially support their PGPs. Common scenarios include sponsors who submit statements of self-employment income that surpass income thresholds, but when asked for further corroborating evidence, they are unable to comply. Therefore, not only is the submission of fraudulent documentation problematic in its own right, but it also makes the assessment of income based on the varied types of documentation labour intensive for CIC officers. Also, it potentially enables sponsors to rely on income they have concealed from the CRA. As a result, the process will be more objective and fair and will entail less verification of documents, which will speed up processing.

Third, a single-year test of income is an insufficient indicator of a PGP sponsor’s ability to support their sponsored PGP over the term of the sponsorship undertaking. A prospective PGP sponsor could have a “banner year” that would not reflect the sponsor’s true financial health (e.g. prospective PGP sponsors may take on extra work within a given year, thereby temporarily inflating income).

Finally, the IRPR currently allow officers to request updated income evidence for the purpose of assessing the MNI only in cases where the officer receives information indicating that the sponsor is no longer able to fulfill the sponsorship undertaking — this applies to all sponsors where the MNI requirement applies (and not exclusively PGPs). If the officer does not receive any such information, the officer is unable to verify if the sponsor continues to meet the MNI requirement at the time of the determination of the application. In some instances, several years (e.g. average wait time of eight years for a parent and grandparent sponsorship application) have elapsed between the time a sponsorship application is received and when it is opened for processing by an officer. In such instances, the prospective sponsor’s income may have decreased to below the income threshold. Should the circumstances under which an officer is able to request updated income evidence remain restrictive, there is a risk that sponsors who are sponsoring any member of the family class where the MNI applies would not be accurately assessed on their ability to meet the income threshold for their family size.

Technical inconsistencies in the IRPR regarding sponsorship undertaking durations for different members of the family class

In a letter issued by the SJCSR in January 2006, inconsistencies in the English and French texts of subsection 132(2) of the IRPR were highlighted. A further review of subsection 132(2) also revealed that not all sponsorship undertaking durations for different members of the family class are included. These issues are addressed through the regulatory amendments.

Objectives

The objectives of the regulatory amendments are to

Description

These objectives will be achieved through the following regulatory amendments.

An extended sponsorship undertaking period for PGPs from 10 years to 20 years: The previous sponsorship undertaking period for PGPs was 10 years. Canadian citizens and permanent residents who seek to sponsor their PGPs and their PGPs’ accompanying family members will be required to commit to a lengthened sponsorship undertaking period of 20 years. This means sponsors and co-signers (if applicable) will be responsible for repaying any provincial social assistance benefits paid to the PGP and the PGPs’ accompanying family members throughout the extended 20-year sponsorship undertaking period. Sponsors will also need to commit to continuing to be responsible for providing financial support to their PGP and their PGPs’ accompanying family members for the extended 20-year sponsorship undertaking period.

An increased MNI for sponsoring PGPs equivalent to MNI plus 30%: Canadian citizens and permanent residents (including co-signers, if applicable) who seek to sponsor their PGPs and their PGPs’ accompanying family members will be required to have a total income equivalent to MNI plus 30%. This new income threshold will continue to be calculated based on the number of persons the sponsor is supporting and would be supporting — namely, the sponsor and their family members, the PGPs and their family members, and any other persons for whom the sponsor has an active undertaking. For example, under this regulatory amendment, a sponsor with a spouse and two children who wishes to sponsor two parents will be required to meet the new income threshold (MNI plus 30%) for six people (e.g. $71,992). (see footnote 11)

A lengthened period for demonstrating the MNI from one year to three years: Canadian citizens and permanent residents who seek to sponsor their PGPs and their PGPs’ accompanying family members will be required to demonstrate that they meet the new income threshold for three consecutive tax years. This means that the sponsor and co-signer (if applicable) will have to have earned a total income equivalent to MNI plus 30% for the three consecutive tax years immediately preceding the time at which a PGP sponsorship application is submitted.

Limiting evidence of income to documents issued by the Canada Revenue Agency (CRA): Canadian citizens and permanent residents (including co-signers, if applicable) who seek to sponsor their PGPs and their PGPs’ accompanying family members will be required to demonstrate that they meet the new income threshold for three consecutive years using only documentation issued by the CRA. Documents other than those issued by the CRA will no longer be accepted. In this regard, adjustments are made to the pre-published subsection 134(1.1) and paragraph 134(3)(c) to clarify that the sponsor’s total income will be calculated on the basis of CRA notices of assessment (NOAs) issued in respect of each of the three consecutive taxation years preceding the date of the filing of the application. The prospective sponsor will not be required, for example, to provide a NOA (or an equivalent document issued by CRA) for the 2013 taxation year, if the sponsor were to submit the sponsorship application in January 2014 (when the PGP Program is to be re-opened). Under the Regulations, the sponsor will only be required to provide evidence of income for taxations years of 2010, 2011 and 2012, given that the NOA for 2013 would not be available at the time of the application.

Submitting updated evidence of income: Canadian citizens and permanent residents (including co-signers, if applicable) who seek to sponsor foreign nationals as members of the family class will be required to submit, upon request, updated evidence of income in the following cases: (a) where the officer receives information indicating that the sponsor is no longer able to fulfill the obligations of that undertaking; or (b) where more than one year has elapsed since the time a sponsorship application was received. In these cases, an officer may request updated evidence of income at any time between these events and before a decision is made on the permanent resident application. Providing officers with the authority to request updated evidence of income will assist in ensuring that prospective sponsors continue to meet the MNI requirement from the time of receipt of the sponsorship application by CIC until the time of the determination of the permanent resident application. This regulatory amendment will apply to all sponsors where the MNI applies.

Where officers request updated income evidence, sponsors of PGPs will be required to submit updated income evidence for the three-year period preceding the day the request is made by the officer. For all other sponsorship cases where the MNI applies (e.g. orphaned relatives), sponsors will continue to be required to submit updated income evidence for the 12-month period preceding the day the request is made by the officer.

Of note, following prepublication, an adjustment was made to subsection 134(2) to clarify that, following receipt of an application, although a decision to issue a permanent resident visa may have been made, an officer would have the authority to request from the sponsor updated evidence of income up until the time of the granting of permanent residence to the permanent resident applicant.  This clarification is made to eliminate any inconsistency with the existing authorities to refuse to grant permanent residence as per paragraph 120(b).

Addressing technical issues in the IRPR: Technical amendments to subsection 132(2) will be made to ensure the English and French texts are harmonized. The amendments will also more clearly identify the length of sponsorship undertaking periods applicable to different members of the family class in provinces that have signed agreements with the federal government with respect to sponsorship undertakings (except where the laws of that province have established a shorter sponsorship undertaking period). These amendments will reflect the change to the length of the sponsorship undertaking for PGPs and their PGPs’ dependent family members from 10 to 20 years.

Consultation

In the spring of 2012, CIC consulted widely with stakeholders and the public on the redesign of the PGP program, as committed to in the Action Plan for Faster Family Reunification. An online consultation questionnaire was available for public comment. The online consultation received a total of 6 444 responses — the most of any online consultation hosted by CIC. The majority of responses, 6 390 in total, were from participants who selfidentified as members of the general public and who did sponsor, are sponsoring, or intend to sponsor their PGPs. Fifty responses were received from stakeholders/individuals representing an organization, and four responses were gathered from those representing a provincial or territorial government.

The previous Minister of Citizenship, Immigration and Multiculturalism also hosted a series of multi-city, in-person meetings with stakeholders. The in-person meetings were attended by stakeholders who represented a variety of perspectives, including those of settlement provider organizations, ethno-cultural organizations, and economists.

The consultations sought feedback on two key areas: (a) how to manage the intake of applications, and (b) what a modernized PGP program could look like.

All of the options received mixed responses of varying degrees. For example, respondents were almost equally divided on increasing the MNI and lengthening the MNI demonstration period (44% of the general public agreed, 41% disagreed, 15% were neutral; while 36% of stakeholders agreed, 46% disagreed, 18% were neutral), and lengthening the current sponsorship undertaking period (45% of the general public agreed, 40% disagreed, 15% were neutral; while 36% of stakeholders agreed, 48% disagreed, 16% were neutral). However, participants did support the need for sponsors to demonstrate income stability. Many also commented on the costs PGPs present to Canada’s social programs and expressed concern about admitting numbers of people that would exceed Canada’s financial capability to support them.

Comments on the prepublished Regulations

The regulatory amendments were prepublished in the Canada Gazette, Part I, on May 18, 2013, followed by a comment period of 30 days. Close to 60 responses were received from the general public and key stakeholders, including lawyers, advocacy groups, immigrant consultants, community groups, and people who had either sponsored a PGP or had intent to do so. Many comments regarded the PGP program in general and some concerns were raised regarding the proposed Regulations. Some respondents raised concerns regarding the availability of NOAs and the perceived inequity that the increase of minimum necessary income and required three-year proof of income period could have on sponsors with lower incomes. Some respondents agreed with raising the sponsorship period to 20 years, while others felt it increased hardship for sponsors and PGPs. CIC responded to all of the queries. Amendments were made to the Regulations to clarify that sponsors are expected to provide NOAs that are issued by the CRA in respect of the three consecutive taxation years preceding the date of the filing of the application (e.g. an application submitted in January 2014 would require NOAs for 2010, 2011 and 2012 and not for 2013). No amendments were made to the increase in MNI or the proof of income period as both these measures are necessary to ensure sponsors are able to adequately provide for their PGPs. Furthermore, the impact of the increase on sponsors is considered to be nominal as the new required income for sponsors (MNI + 30%) remains below the average Canadian household income.

“One-for-One” Rule

The “One-for-One” Rule does not apply to this proposal as the proposal applies to individuals and there is no change in administrative costs to business.

Small business lens

The small business lens does not apply to this proposal as the proposal applies to individuals and there are no costs to small business.

Rationale

a. Lengthening the sponsorship undertaking period for PGPs from 10 years to 20 years

Sponsorships are intended to minimize the impact of family reunification on social assistance and, ultimately, taxpayers. Lengthening the sponsorship undertaking period from 10 to 20 years for PGPs and their accompanying family members will extend the period during which provinces can recover from sponsors any provincial social assistance paid to PGPs and their accompanying family members. This will mitigate the draw on social assistance programs and improve the fiscal sustainability of the PGP program. A lengthened sponsorship undertaking will also ensure sponsors assume more financial responsibility for their PGPs over a longer period of time. This will also include health care costs not covered by provincial health care (e.g. eye care, dental care, mobility aids). Surveys of representative household expenditures indicate the basic needs of PGPs for food, clothing, transportation, health care, and personal care could increase annual household consumption expenditure by approximately 19%. (see footnote 12)

b. Increasing the MNI required to sponsor PGPs to MNI plus 30%

The previous MNI is no longer an appropriate standard for sponsoring PGPs. Given high immigrant unemployment rates (see footnote 13) and diminishing economic outcomes, (see footnote 14) the ability of sponsors to financially support their PGPs has become more strained over time.

Increasing the MNI by 30% will provide an improved safeguard against possible economic setbacks and better ensure sponsors are able to meet the needs of their families and those they sponsor. Increasing the MNI for PGP sponsors in particular will also capture the higher expenses assumed by this particular age group in terms of health care, and takes into consideration the lower incomes (see footnote 15) of PGPs and consequently higher dependence on their children/grandchildren for overall financial support for basic necessities.

An increase to the income threshold may be perceived by some prospective sponsors as a barrier to sponsoring their PGPs. However, sponsors will continue to have the option to have their spouse or common-law partner co-sign the sponsorship undertaking, which will take into consideration the co-signer’s income. The objective of the increase in the MNI is to ensure sponsors are better placed to financially support their PGPs and improve the fiscal sustainability of the PGP program.

c. Lengthening the period for demonstrating the MNI from one year to three years for sponsors of PGPs

Requiring prospective sponsors of PGPs to provide evidence of income over a three-year period, as opposed to 12 months, will demonstrate greater stability in employment earnings and make it difficult to temporarily inflate income. Lengthening the period for demonstrating the MNI to three years may be perceived as an administrative and/or financial burden on some prospective sponsors of PGPs, such as those who are not in stable occupations. However, a lengthened demonstration period is a more reliable indicator of a sponsor’s financial stability and ability to adequately support their PGPs and their accompanying family members throughout the sponsorship undertaking period. As with increasing the income threshold, the objective of this regulatory change is to ensure that sponsors are better able to support their PGPs, thereby improving the fiscal sustainability of the PGP program.

The requirement to provide evidence of income over of a three-year period is limited to sponsors of PGPs. Other family class sponsorship cases where the MNI applies can include orphaned children below the age of 18, or dependent children of sponsors who have dependent children of their own. As individuals in this age cohort typically have lower needs than PGPs — for example in terms of health care — and have higher employability rates than PGPs, they are less financially reliant on their sponsors in the long term. Evidence of the sponsor’s income over a 12-month period is deemed sufficient to meet the needs of these family class sponsorship cases where the MNI applies.

d. Limiting evidence of income for sponsors of PGPs to documents issued by the CRA

Requiring prospective sponsors of PGPs to submit CRA-issued documentation will add rigour and accuracy to the assessment of an application and will guarantee that prospective sponsors are contributing to the public services their sponsored family members are likely to use (e.g. provincial health care, public transportation).

The requirement to submit CRA-issued documentation is limited to sponsors of PGPs, amongst whom the submission of fraudulent documentation is more common.

e. Officers’ authority to request updated evidence of income (for all members of the family class where the MNI is applicable)

Providing officers with the authority to request updated evidence of income in instances where more than one year has elapsed will ensure that prospective sponsors continue to demonstrate their ability to support their sponsored family members.

Summary of rationale

Overall, the regulatory amendments are expected to improve the fiscal sustainability of the program over the longer term and avoid future backlogs, while ensuring those who are able to provide for their sponsored parents and grandparents continue to be reunited with them. The new financial requirements will ensure eligible sponsors in the redesigned program are in a better financial position to meet the needs of their PGPs and their PGPs’ accompanying family members, thereby ensuring they are well supported throughout their time in Canada.

Overall improvements to CIC’s processing efficiency are also expected as a result of the new financial requirements. The requirement for sponsors of PGPs to provide evidence of income issued by the CRA will decrease the potential for the submission of fraudulent documentation, thereby making the assessment of applications more rigorous and simplified.

Implementation, enforcement and service standards

The regulatory amendments come into force on January 1, 2014. PGP sponsorship applications received before the pause on PGP application intake — implemented on November 5, 2011 — will be assessed based on regulations that were in force at that time. PGP sponsorship applications received as of January 2, 2014, will be assessed based on the amended Regulations.

The operational manuals and guidelines as well as sponsorship kits and guides will be updated to ensure prospective sponsors and immigration officers are informed of the changes to the program.

The redesigned PGP program will be assessed as part of an evaluation of the Family Reunification Program, scheduled to begin in 2017–18.

Contact

Fraser Fowler
Assistant Director
Social Immigration Policy and Programs
Citizenship and Immigration Canada
365 Laurier Avenue W
Ottawa, Ontario
K1A 1L1
Email: Fraser.Fowler@cic.gc.ca