Monday, January 16, 2012

Immigration fees: ‘Grossly unfair’

Can a department of the federal government be allowed to profit from its fees?

This issue is at the centre of a class action filed by Alan Hinton of Coquitlam, British Columbia, when he paid Canada Immigration a $75-fee to sponsor his Russian wife to immigrate to Canada in 2003. Based on information obtained through Access to Information request, Canada Immigration’s own documents show that the actual unit cost of Hinton’s application was only $36.69, resulting in a $38.31 profit for the department.

On January 4, 2008, the Federal Court of Canada has allowed the national class-action lawsuit to proceed which alleges that the Department of Citizenship and Immigration profits from its visa application fees and has illegally raked in more than $700 million over the past decade from new immigrants.
Number of Immigrants and Immigration Rate in Canada, 1900 to 2006.
Under Canada’s Financial Administration Act, the federal government is allowed to charge fees for services, but these fees must not exceed the cost of the service. In other words, a federal government department is not allowed to make a profit from its fees.

Not many are aware of this landmark class-action which is now pending trial before the Federal Court. Who would imagine that a $75-fee to sponsor a wife could spark a multi-million dollar lawsuit against Canada Immigration for charging and profiting from its cost recovery fees for over a decade?

Two Canadian lawyers, Richard Kurland of British Columbia and his colleague Lorne Waldman of Toronto, are spearheading the national class-action suit. The lawsuit all began when Alan Hinton, a software technician from Coquitlam, B.C., met his future wife Irena in Moscow seven years ago. He was in Russia to attend a friend’s wedding, and met Irena through the bride. A few days of visiting Moscow turned to love and Mr. Hinton later returned to Russia, this time to marry Irena. After taking their vows, the pair returned to Canada, with Mr. Hinton sponsoring his wife's permanent residence visa at a cost of $75.

When Hinton was approached by Mr. Kurland, a Vancouver-based immigration lawyer who had been investigating visa fees for years, Hinton realized that he may have paid more than he should. It took Mr. Kurland 13 years of Access to Information requests to collect enough information to bring this case forward.

Six years and one baby later, the Hintons say they are standing up for much more than the $38.31 they stand to be refunded.

“I felt very passionately about it,” says Mr. Hinton. “I thought the government shouldn’t be charging more money for services that they are supposed to be offering at a break-even cost,” he added.

According to Mr. Kurland, families who have filed numerous applications over the past few years to sponsor relatives to Canada could be owed hundreds if not thousands of dollars by the government. If the case is successful, it could have an impact on governments of all levels across the country.

It is the first time in the history of the Federal Court that a contested class action has been certified—or allowed as a class claim. The lawsuit alleges that since 1998, the government has been overcharging on fees it collects from people applying for immigration visas, whether they are visitors to Canada, foreign workers or students, or people seeking permanent residency.

“The principle involved here is an extremely important one,” Mr. Kurland says. “All governments charge fees for various services. The question this case raises is how responsible those governments should be in how they cost out these things.”

The Financial Administration Act forbids federal departments to charge any more in fees than the amount they need to recoup the cost of their services. The Act also requires departments to have mechanisms in place to ensure that profits aren’t made off public services.

Mr. Kurland says the Immigration Department has been “systematically violating” the law for years, in many cases charging more than double what it costs to process visa applications. The total cost of refunding visa applicants within the April 1, 1994 to March 31, 2004 period being examined is roughly $700 million, Mr. Kurland says. He adds that if the years from 2005 to 2007 are included, the bill could rise to nearly $1 billion.

In one of a number of defences made in response to the lawsuit, federal lawyers have argued that the Financial Administration Act does not apply to the department.

Mr. Kurland however argues that government agencies, such as the Passport Office, are allowed to make profits because they have been granted special exemptions. However, such exemptions have not been granted to Citizenship and Immigration Canada, Mr. Kurland says.

The largest class action suit in Canada was brought by Nora Bernard, a Canadian Mi’kmaq activist, who led an estimated 79,000 survivors of Canada’s residential school system in suing the Canadian government for compensation. When she was nine years old, Bernard was forced to attend a residential school in Shubenacadie, Nova Scotia, for five years where she suffered sexual and other forms of physical abuse. The Canadian government settled the lawsuit in 2005 for more than $5 billion dollars.

Peter Showler, a law professor at the University of Ottawa and specialist in immigration and refugee law, observes that by becoming a class action, this present lawsuit against Canada Immigration “has just exploded into an enormously huge case from the point of view of the government. If this case wins, it would also reflect badly on the government, which will have been overcharging refugees as well,” Mr. Showler says.

“It proves that on top of that the government is actually reaping a profit, that would just be extraordinarily offensive...and morally objectionable,” Mr. Showler adds.

This class-action lawsuit against Canada Immigration has serious ramifications to the present Conservative government’s efforts in reducing intake of new immigrants, especially family members for the purpose of reunification. Canada Immigration Minister Jason Kenney has always maintained that Canada faces a big backlog of applications every year.
Canada Minister of Citizenship and Immigration Jason Kenney. Click link,, to view Minister Jason
Kenney before the Standing Committee on Citizenship and Immigration.
According to Minister Kenney, Canada gets about 420,000 applications every year and refuses about 10 per cent of those. Based on these new applications every year, Canada Immigration would net close to $230 million in processing fees (not including the $75 sponsorship application fee per person upon which the class-action suit was calculated) which are not refundable. Over ten years, these fees could go upwards to over $2 billion.

In 2011, Canada Immigration targeted a total of 265,000 new immigrants from all streams—economic, family class, refugees and humanitarian applicants. Computing processing fees, Canada Immigration would collect close to $145 million annually. Thus, the $75-sponsorship application fee appears unnecessary, considering that only half of it is really imputed as an actual cost. Maybe the class action suit filed by the Hintons is right after all.

It’s not a simple math problem as Minister Kenny would always like us to believe. For one thing, the immigration backlog should be determined by comparing the actual number of applications processed (not received) with the number of actual approvals. And if you add in the total fees harvested from the total applications received, Canada Immigration could end up netting a profit from these fees, which is not supposed to happen under the Financial Administration Act. Hence, we have a policy problem, more than the numbers would seem to indicate.

People who come to Canada do not only pay the high cost of immigration but in many instances have to spend all their lifetime savings, incur heavy debts and may have mortgaged their future for the opportunity of a better life. In addition, they also have to pay exorbitant legal and consulting fees, so the cost recovery fees imposed by Canada Immigration have become an unfair burden to them.

The class-action suit against Canada Immigration for overcharging its fees and raking profits as a consequence is one case we should all be monitoring. We don’t know how the Federal Court would decide, but if the case wins, this would have long-lasting implications on how Canada Immigration and other departments of the federal government run its business.

As Olivia Chow of the NDP says, “even if there are user fees, they should not be overcharged as it is now. It’s grossly unfair.”

1 comment:

  1. The fee process can be legitimized by a proper notification on the forms as to how the fee is allocated but once a single document transfers from the hands of one bureaucrat to another, the cost of that "manpower" is technically an added administrative/overhead cost. Nonetheless, the fee is quite reasonable in proportion to and given the public benefits the Canadian government provides to its citizens eventually. But of course, the government must be held accountable to its own policies which, at this time, may have been too lax given its efforts at one time to attract settlers that would help build the country that it is now.