Ottawa underestimates cost of immigration backlog wipeout, group warns

Elgin Street in downtown Ottawa, looking north...
Elgin Street in downtown Ottawa, looking northwards towards the Parliament Buildings from Queen Street (Photo credit: Wikipedia)

Nicholas KeungImmigration Reporter
Ottawa’s plan to wipe out its immigration backlog will cost taxpayers at least $6.2 million more than the $130 million estimated by the federal government, says the immigration consulting industry.
When Ottawa announced in March that it would return files and processing fees to applicants waiting in the backlog, its estimate did not include administrative costs such as courier services to send the files back to 280,000 people, said the Canadian Association of Professional Immigration Consultants.
“The budgeted costs of a backlog wipeout are much higher than calculated and also do not include ... liabilities of lawsuits affecting the administration for years to come,” warned Gerd Damitz, the association’s co-founding and past president.
The industry’s own estimate of the processing fees amounts to $145 million. That’s because some applicants also paid landing fees — between $490 and $975 each — upfront.
A spokesperson for Immigration Minister Jason Kenney confirmed the estimate did not factor in administrative costs, which will come out of the department’s operational budget.
The spokesperson said the department won’t return “physical” application files to affected applicants. The documents will be disposed of, in accordance with government privacy and audit rules.
While the industry appreciates the government’s attempt to bring in a “just-in-time” immigration system to respond to labour market needs, Damitz said the breach of contracts with would-be migrants will damage Canada’s reputation.
On Monday, immigration applicants affected by the decision will stage simultaneous protests in London, Hong Kong, Chandigarh, Karachi and Lahore to raise awareness of their plight and to condemn Ottawa’s plan.
“We want to warn any prospective immigrant of the dubious and uncertain Canadian policies,” said Preet Deep Singh, an organizer based in London.
Toronto immigration consultant Alli Amlani said Ottawa’s wipeout plan will force many in the consulting industry out of business.
More than 250 of Amlani’s clients have been stuck in the queue, some since 2004, and they are asking him for refunds.
Despite a $1,000 non-refundable policy, Amlani must still fork out at least $72,000 to clients for “incomplete work” caused by the government’s sudden change in policy.
“It will push a lot of us out of business,” said Amlani, who has been a consultant for 22 years and expects to cut his staff from eight to four as a result. “You don’t get new referrals if your old cases don’t go through.”
According to an internal survey by the regulator of Canada’s 2,000 registered immigration consultants, the government plan affects 63 per cent of its members.
Some 95 per cent said they would consider leaving the industry, while 58 per cent are pondering class-action lawsuits against Ottawa to recover alleged damages.
According to the industry, the backlog consists of about 100,000 files, representing both principal applicants and their dependants. It said it would take less than five years to clear for the backlog.

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Home prices in Canada fall

The distinctly black skyscrapers of the Toront...
The distinctly black skyscrapers of the Toronto-Dominion Centre, designed by Mies van der Rohe. Tiếng Việt: Trung tâm Ngân hàng Toronto Dominion - Toronto, Canada. (Photo credit: Wikipedia)

 – Home Capital Group said it’s capturing mortgage business from Canadian lenders including Toronto-Dominion Bank and Canadian Imperial Bank of Commerce that are retreating from the nonprime market amid signs of a housing downturn.

“The big banks are sort of juggling around their mortgage strategy and as part of that, they’re tightening up in certain areas,” Home Capital President Martin Reid said in an interview. “We’re seeing some of the fallout.”

Canada’s banks have been exercising more caution on higher-risk mortgages after Bank of Canada Governor Mark Carney warned that record household debt remains the biggest domestic risk to the economy.
Carney last week signaled the potential for interest rate increases that would cool off a housing market that has seen prices almost triple in some Canadian cities over the past decade.

“While interest rates have been at historic lows recently, the inevitable climb looks to be coming as soon as next year,” said Katie Archdekin, head of mortgage products at Bank of Montreal, the country’s fourth-biggest bank.

Home Capital, the Toronto mortgage lender, targets the Alt-A market – uninsured loans to home buyers who often don’t qualify at chartered banks because of their work history or other circumstances.
The Alt-A market is valued at 200 billion Canadian dollars, or 201 billion American dollars.
Home Capital’s clients include self-employed workers and new immigrants to Canada. Higher revenue from loans rejected by banks will add to earnings in Home Capital’s first-quarter results, to be released on May 2.

“We see opportunities with people that are really high- caliber borrowers with good proof of income, but their circumstances are a little different,” said Chief Executive Officer Gerald Soloway, who was interviewed with Reid.

Banks are paring back loans to below-prime borrowers amid signs that housing prices are starting to fall.
The Canadian Real Estate Association said April 16 that prices in Canada dropped 1.7 percent in March from the previous month, led by a decline of 3.1 percent in Vancouver.
Finance Minister Jim Flaherty said he’s “encouraged” by signs of a housing correction in Vancouver, preferring the market to “correct itself” without government intervention.
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