Ottawa softening refugee loan rules

Advocates still want transportation debts eliminated for all refugees, not just Syrians

Chris Friesen is director of settlement services for the Immigrant Services Society of B.C.

The federal government will at least soften its policy of making refugees repay costly transportation loans to get to Canada.

Ottawa has already waived the loans for new Syrian refugees and it’s under continued pressure to eliminate them for all others who continue to arrive with interest-bearing debts of up to $10,000.

The immigration and refugees ministry indicated that’s still under consideration, but for now it may adjust the interest rates and timeline for starting payments to fit the circumstances of each non-Syrian refugee, and forgive debts in some cases.

Chris Friesen, settlement director of the Immigrant Service Society of B.C., said he’s still pushing for the elimination of transportation loans for all refugees on humanitarian grounds.

Critics argue arriving refugees feel so driven to repay the loans to their new host country they make financial sacrifices that undermine their integration and success here.

“Given the tremendous stress of rebuilding your life in a new country without family or friends in many cases, without language abilities initially, having an interest-bearing loan on top of this is really challenging,” Friesen said.

“Children are going to school hungry. They don’t have enough clothes. High school students are working in some cases before and after school helping to provide enough financial means to the family.”

Forgiving some loans or relaxing terms on a case-by-case basis is problematic, Friesen said, because “the need is so great across the board” and it would be difficult for federal staff to decide which cases deserve different treatment.

About $13 million in transportation, medical assessment and documentation costs for approved refugees is rolled into new loans each year. The current total of outstanding loans is $41.6 million.

According to federal figures, 69.4 per cent of refugee transportation loans issued in the 10 years to 2012 have been fully repaid and another 10 per cent are still being paid off. About 20 per cent are delinquent or written off.

A newly released internal review of the loan policy backs up a number of the concerns raised by advocacy groups.

“Having to repay the loan is having a negative impact on the settlement of some refugees, posing difficulties in the payment of basic necessities like food, clothing and housing,” the federal review says.

“It also causes stress for a number of refugees, and impacts on their ability to access learning opportunities through school, training and settlement services designed to help them adapt to life in Canada and overcome obstacles inherent to the newcomer experience.”

The review notes many refugees surveyed did not know the loan amount, that interest would be charged, or other terms of repayment until they were in Canada, saying they signed for the loan overseas without full understanding “because they felt they had no choice, or they were rushed.”

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