September 15, 2010
In December of this year, the Supreme Court of Canada will hear the Attorney General of Canada and the Attorney General of Ontario appeal the Ontario Court of Appeal (OCA) decision, Mavi v. Canada (Attorney General), 2009 ONCA 794 [Mavi].
At issue in the OCA decision was how the government should behave when enforcing promises, known as undertakings, made by Canadian citizens or permanent residents who sponsor a relative’s immigration to Canada. Specifically, the issue was whether governments must exercise discretion on a case-by-case basis and comply with a duty of procedural fairness when enforcing the undertakings. Under the Family Class Immigration Regime established by the Immigration and Refugee Protection Act, S.C. 2001, c.27 (the new Act) and by the former Immigration Act, R.S.C. 1985, c. I-2 (the old Act), Canada relies on the economic ability of the sponsor to take financial responsibility for the sponsored relative’s essential needs. An obligation is imposed on the sponsor to ensure that the sponsored relative will not be dependent on a government for social assistance or other similar government benefits. Accordingly, the sponsor must execute an undertaking promising that the sponsor will fulfill his or her sponsorship obligations and that the sponsored relative would not require social assistance.
Background & Facts:
Mavi was initially brought forward by eight individuals whose sponsored relatives all received social assistance in Ontario during the period of their sponsorships. Under the terms of their undertakings, these eight sponsors owe a debt to Ontario for the amount of social assistance paid to their relatives. However, for circumstances beyond their control (see Appendix F of the OCA decision for a summary of the factual circumstances), the sponsors were unable to honour their undertakings. In other words, the sponsors were in default.
The sponsors applied for a declaration that they be discharged from their sponsorship obligations. They submitted that the language of the Acts stating that sponsorship debt “may be recovered” (see provisions below) indicates that the governments have discretion to forgive sponsorship debt.
The Old Act
s. 118(2) Any payments of a prescribed nature made directly or indirectly to an immigrant that result from a breach ofan undertaking referred to in subsection (1) may be recovered from the person or organization that gave the undertaking in any court of competent jurisdiction as a debt due to Her Majesty in right of Canada or in right of any province to which the undertakings assigned.
The New Act:
s. 145(2) Subject to any federal-provincial agreement, an amount that a sponsor is required to pay under the terms of an undertaking is payable on demand to Her Majesty in right of Canada and Her Majesty in right of the province concerned and may be recovered by Her Majesty in either or both of those rights.
The application judge found that the words “may be recovered” are merely enabling in the sense that they do no more than permit the government to enforce the debt. She further concluded that they do not impose either an obligation on the government to consider the appellants’ circumstance on a case-by-case basis, or a duty of procedural fairness.
The OCA Decision: How to Interpret ‘may be recovered’?
Taking a contextual approach to the interpretation of the language of the Acts, with particular focus placed on the wording of the regulations and the forms of the undertakings, the OCA held that the provisions in issue require the exercise of a case-by-case discretion concerning the enforcement of sponsorship debt. The legislative scheme contemplates that an agreement may be reached with a sponsor in satisfaction of the default or that no recovery action may be taken against a defaulting sponsor in the face of “other appropriate” circumstances. Accordingly, Ontario fettered or abused its discretion by adopting a policy inconsistent with the overall legislative scheme. The Ontario policy for the recovery of sponsorship debt limits the consideration of relevant facts of the case, compelling an inflexible and arbitrary application of the “Guiding Principle”, which requires a defaulting sponsor to repay the full amount of debt. Additionally, the policy surrounding deferral of enforcement of sponsorship debt is limited to considerations surrounding the sponsor’s financial circumstances that are documented. The policy therefore precludes itself from achieving what is contemplated by the legislative scheme.
The OCA Decision: Are sponsors owed a duty of procedural fairness?
A perhaps more controversial aspect of the OCA decision pertains to the question of whether sponsors are owed a duty of procedural fairness. The OCA held that given the nature of the decision of whether to enforce sponsorship debt, its public component, its finality and specificity, and its importance to the individual sponsors, the Canadian and Ontario governments owe sponsors a duty of procedural fairness. With regard to the Baker factors (factors and principles considered by courts in determining the scope and content of the common law duty of procedural fairness discussed by the SCC in the case Baker v. Canada (Minister of Citizenship and Immigration), [1999] 2 S.C.R. 817 [Baker]), the parameters of this duty include: 1) an obligation to provide a process for individual sponsors to explain their relevant personal and financial circumstances; 2) an obligation on government to consider those circumstances; and 3) an obligation to inform any sponsor who makes submissions that their submissions have been considered and of the decision that was made. Moreover, the wording of the undertakings creates a legitimate expectation on the part of sponsors that the government will consider negotiating a settlement of sponsorship debt that goes beyond a consideration of their financial circumstances. In order to meet this legitimate expectation, it is necessary for Ontario to “hear” and consider the sponsor’s submissions.
The Future of Sponsorship Debt:
With immigration being a popular topic of debate (see marriage article and immigration crime article), it will be interesting to see the road the highest court takes. It would not be the first time the Supreme Court of Canada has added elements of procedural fairness into the immigration regime (see Baker for example); however, the question surrounding how much deference courts should give to the government and its administrative boards will most definitely arise. Upholding the OCA decision will inevitably force governments to revise their policies and practices surrounding the recovery of sponsorship debt. Notably, the OCA decision attempts to strike a balance between instilling elements of procedural fairness into the regime and recognizing that the exact nature of the parameters of procedural fairness is for the government to determine. For example, the court recognizes that an opportunity should be provided for sponsors to make submissions in writing or such other form that government deems appropriate about their circumstances, but rejects the appellants’ claim that the government is required to notify a sponsor when a sponsored relative applies for or obtains social assistance.
On a practical level, the outcome of this decision will have a significant impact on the family class regime. Proponents of immigration often comment that the length of undertakings, which can range from three to ten years depending on the sponsored relative’s age and relationship to the sponsor, is a heavy burden for a sponsor to take on considering that it is impossible to predict the future. The people involved in these undertakings are real people in real relationships where real things happen. The Ontario regime already makes exceptions for cases of sponsorship breakdown that involve abuse in the relationship (a case of a marital relationship that breaks down due to spousal abuse or domestic violence would fall under here); the OCA decision provides relief from sponsorship debt in other situations that warrant recognition. For example, consider a scenario where a sponsor becomes unemployed during the course of his or her undertaking and can no longer afford to support the sponsored relative. Upholding the OCA decision will potentially make people more willing to sponsor the immigration of relatives from abroad. In reply to these implications, opponents of immigration will likely comment that there may be an increase in the sponsorship of false relationships if relief is given from the pressure and responsibility imposed by the undertakings. Additionally, sponsors should be financially stable when they bring relatives over to Canada since they are initially aware that Canada relies on their economic resources to sponsor the foreign relative. Notably, before a strict debt recovery process was set up by Ontario, in 2004 almost 7,500 sponsored relatives were on social assistance in Ontario, at a cost to the taxpayer of about $70 million annually. Both sides present strong arguments, and it will be interesting to see what the fate of sponsorship debt for the family class will be.
11 Comments
Hello Laura: I have a few questions which I hope you can answer.
1. Do you know if any of the 8 sponsors made any attempt to pay off the relative's debt (minimal contribution)?
2. If some contribution was made is there any record of how much?
3. Did the sponsors present any proof that their financial circumstances will not improve in the future such that they can cover the debt (partially and/or fully) without bankrupting the 8 families?
I take the view that trust and acting in good faith are key components of procedural fairness which must be shared equally between both parties (government and sponsors) to be fair. In this case, all the sponsored relatives are receiving social assistance from the government and those who agreed to accept financial responsibility for their relatives apparently, are not.
Ms. Kindree:
Reponse to your questions follow:
1&2) A summary of the factual circumstances of the sponsors can be found in Appendix F of the OCA judgment. Link here: http://www.canlii.org/en/on/onca/doc/2009/2009onca794/2009onca794.html
A few of the sponsors did enter into voluntary agreements, for example Mr. Oleg Grankin agreed to repay $50/month.
3) Many of the applicants refused to submit financial statements. If you refer to paragraphs 159-160 of the OCA decision, part of the appellants' argument (which I did not raise in the post) was that the requirement by Ontario to file a sworn financial statement before deciding whether their circumstances merit exceptional treatment was a denial of procedural fairness. The OCA rejected this submission. I quote, "We do not see this as a denial of procedural fairness. In our view, the government is entitled to require a sponsor to file a sworn financial statement at the same time as it receives submissions concerning the sponsor’s personal circumstances. The summary nature of the process and the absence of any procedural requirements in the scheme suggest that there is no requirement for a multi-faceted process or a bifurcation of decision-making as between the sponsor’s personal circumstances and their financial situation."
You have presented a very good summary of the implications of the upcoming Supreme Court decision.
As an immigration practitioner in British Columbia, I thought I'd ad my two cents.
In BC, the collection of all debts owing to the government is guided by the Taxpayer Fairness and Service Code. Collection is theoretically based on the individuals' ability to pay, which is determined by reviewing the individual's income and expenses.
When I first encountered this issue I thought that this meant that it was possible to receive some amount of forgiveness from the government.
However, in practice what it means is that the BC government will review the amount owing. The sponsor must provide full financial disclosure to the B.C. government. Failure to do so will result in the undertaking being due on demand. The government can garnish wages or put liens on property in order to recover.
With full disclosure it is possible to go on a monthly payment plan, which is reviewed annually. The rate of interest is prime plus 3.
It is extremely difficult to obtain any forgiveness of the total amount. Bankruptcy is often recommended.
However, it is important to note that if the individual is declaring bankruptcy, then the debt will be discharged for all debt that had acquired prior to the declaration. Any debt that accumulates after the discharge (as the family member is still collecting assistance) will continue to be payable by the sponsor.
It sounds like the situation is similar in Ontario, and I await the federal court decision.
Q #3: can should be can't. Thanks.
Hi Steve,
I think your 2 cents is equivalent to a gold bar!
Thanks.
Interesting to see the OCA going out of its way to note that while informing the sponsor when their sponsored relative applied for benefits might indeed be a very good idea, this couldn't be part of procedural fairness. While this is surely correct, given that the fairness only applies to the administrative decision to require repayment, it also demonstrates one of the limitations in using court action to remedy legislative failings. Such proactive information providing might stop some of these concerns before they spiral out of control, but the courts can't order it (at least under a procedural fairness rubric). At the same time, of course, such a change would also raise interesting issues about the privacy rights of those seeking public benefits, especially if they are seeking them as the result of the breakdown of their relationship with the sponsor.
(I also recommend that everyone actually read Appendix F of the OCA decision -- it sheds light on precisely how these situations came to be, including some quite depressing tales of individuals arriving in Canada only to vanish a week later, with the sponsor never hearing about them again until they were served with notice from the government that they were now in significant debt. There's a whole mess of complicated cultural, economic, and social issues beneath the apparently simple question of "should sponsors have to pay?", and I am curious to see how/if the SCC ultimately deals with them).
A suggestion:
After reviewing the OCA judgment I was wondering if the imposition of a renewable security bond would allow for decisions on a case-by-case basis (procedural fairness) while securing the necessary financial support for those relatives that are being sponsored. Could this approach provide an alternative to filing bankruptcy and also, preempt the need for a scheme for debt recovery?
The queries:
If a legal agreement exists (new legislative authority s. 145.2) wouldn't this be considered binding between the federal-provincial governments and the sponsors? The power and duties of the governments, related to the sponsorship program under the Acts, include oversight, enforcing compliance and debt recovery. The sponsors are not disputing the debt owed however, they are questioning the implied obligation that the language ('may be recovered') has on the procedural fairness related to this agreement. How can one word like 'may' change the legal intent and spirit of this agreement? What is the strict liability statute on binding agreements?
Laura, I appreciate your response which has also enriched my interest in this case.
Ms. Kindree:
The approach to be taken to debt recovery is for the legislature to decide when setting up their policy and practice surrounding sponsorship. This decision seeks to instill a level of procedural fairness as required by the common law into the system/process that has been set up by the legislature.
In regard to your second question, the wording of statutes play a very important role in statutory interpretation, and is always a starting point for courts. Courts often look to the choice of the legislature to use "may" over "can" or "shall", etc. to determine their intent. They also look to other factors - for example legislative history - in order to determine the intent of the legislature.
With regard to legal and binding contracts I was wondering why the word "consideration" or a "promise to give consideration" was not included in the wording rather than "may"? Did I miss the reference to this legal term?
Once again, thanks for your valuable input.
Hi Stuart,
What are your thoughts on the benefits and/or drawbacks of arbitration vs. the court to "remedy legislative failings"?
On your recommendation, I re-read appendix F---so glad you suggested this and identified the deeper problems that exist with the sponsorship program. It seems the governments are not the only ones left holding the bag.
I found this information interesting (should be verified) on "isthatlegal.ca" a free online legal guide to Ontario and Canada Law. Welfare (Ontario Works) Law (01 November 2009) Chpt. 7 (b) Some specific situations of the Duty to Realize: Immigration Sponsorship.
"However, an immigration sponsorship, legally is a promise by the sponsor to the Government of Canada--it is not a contract between the sponsor and the immigrant and therefore, is not enforceable by the sponsored immigrant Bilson v. Kokotow (Ontario HC, 1975). Therefore an immigrant claimant's efforts to compel the sponsor to pay are necessarily limited."
I was wondering if some financial relief (Legal Aid) might be available for the sponsors who have relatives who have disappeared (no notice, no contact) and/or have left the relationship and married someone else?