Crackdown on immigration fraud tied to health care benefits

Recent proposed changes to the Citizenship Act have highlighted concerns raised by some critics of the purported abuse of the medical health care system in Canada by various persons. It is suggested that so-called citizens of convenience come to Canada only to take advantage of the social and health care benefits, without contributing to their cost. The potential abuse of the health care system is not limited to immigrants or naturalized citizens, but also applies to natural-born citizens. As the population ages and the need for health care increases, the government faces more pressure to control costs. One way to control costs is to spend more on enforcing the rules on coverage eligibility, something Sayed Geissah and Souad Khalaf found out about recently.

A government-funded health care system has been a part of social policy in Canada since the 1960s. Each province is responsible for the delivery of health care under the constitution. Each province has its own laws governing how health care is delivered and paid for, and who is eligible to claim its benefits. The principal law governing health care in British Columbia is the Medicare Protection Act.

Under that law residents are entitled to medicare coverage. The law defines a resident as a citizen or permanent resident who makes his or home in British Columbia, and who is physically present in the province for at least six months in a calendar year or a shorter period set under regulations. It also includes a person deemed by regulations to be a resident, but does not include a tourist or visitor.

Detailed rules concerning deemed residency, absences for vacation or work, and extension of absences are set out in the Medical and Health Care Services Regulation. The rules are extensive. Deemed residency extends to various foreign nationals in British Columbia, including those here under study and work permits.

The Medical Services Commission is responsible for enforcement of the Medicare Protection Act. It will investigate cases where questions are raised about a person’s residence and their continuing eligibility for coverage. Such an investigation arose in 2009 for Mr. Geissah and Ms. Khalaf. They immigrated to Canada in 1994 with their three sons. By 2002 their sons had moved. They now live throughout the Middle East. Since 2002, the couple claimed to visit their sons and grandchildren for up to six months each year, before returning to live in British Columbia.

The couple was asked to provide evidence of their travels between 2002 and 2010, which they refused to provide. Based on the evidence available, including that the couple had made no health care claims during two years and infrequently in all other years, the Commission decided the couple had not met the residency requirement during those years and retroactively cancelled their coverage from 2002 up to June, 2010. A review by a delegate upheld the decision. A subsequent application for judicial review by the Supreme Court of BC was dismissed. In January, 2014, the BC Court of Appeal upheld that decision.

The appeal court dismissed all of Mr. Geissah and Ms. Khalaf’s arguments, upholding the finding that the Commission’s delegate could reasonably come to the conclusion, based on the evidence before him, that it was more likely than not that the couple did not meet the residency requirement. The court noted that the finding was limited to MSP coverage and was not a determination of eligibility for entitlement to benefits under federal programs such as Old Age Security. Fortunately for the couple, the province did not seek repayment of the costs of the medical services it paid for during the ineligibility period

In 2011 14 per cent of Canada’s population was 65 years of age and older. That is expected to rise to about 23 per cent by 20131 and will remain at about a quarter of the population for the following 30 years. An aging population poses more demand on health care. Either the government finds ways to decrease costs, or increases taxation to pay for the increased costs. Efforts are being made to improve health through alternative and preventative medical treatment.

I expect there will be continued political pressure on government to crack down on abuse of the medicare system. For the past 15 years provinces have been diligently enforcing sponsorship undertakings to recover welfare payments. With tighter tax dollars available, there will be greater enforcement of medicare eligibility requirements. The federal government’s changes to the Citizenship Act and its emphasis on investigating immigration fraud, is part of the larger concern about funding social benefits in Canada.

William Macintosh started practising as an immigration lawyer in 1984. You can reach him for advice or help on any immigration or citizenship matter at 778-714-8787 or by e-mail at macintoshlaw@gmail.com.

Cancellation of investor program raises many questions

There are currently dozens of different categories for potential immigrants to apply under, whether through federal or provincial nominee programs. Categories change as governments adjust policies to respond to changing economic and social circumstances. When the federal budget was unveiled last month, the government announced it was canceling the federal immigration investor program. The program had been in existence for nearly 30 years. The program was modified several times. In its final incarnation, the program offered permanent residence to potential immigrants having a net worth of $1.6-million, who invested $800,000 in a government fund for five years.

Earlier versions of the program allowed potential immigrants to invest in private businesses and funds. That proved open to abuse, with some businesses failing to carry out their intended investments and some investors losing their funds. The administrative cost of regulating such schemes, effectively requiring the immigration department to become a securities regulator, resulted in the adoption of the government fund model.

The government claimed, in canceling the program, that most immigrant investors are not making a long-term positive economic contribution to the country. It said employment and investment income is below Canadian averages and those of most other economic immigrants. Investors pay less in taxes over a 20-year career. They have the lowest official language ability of any immigrant category and are less likely than other immigrants to stay in the country over the medium to long term. Finally, very little “new” money came into the country, with almost all initial investments made through the program coming from Canadian bank loans.

On the other hand, other reports indicate that in settling in the country, investors added capital through the purchase of residences and transfer of personal property, as well as contributing through the purchase of goods and services. For several decades debate over immigration and investors has focused on its purported effect on real estate prices. Critics claim that housing prices in Vancouver, one of the more expensive places to live in the world, is the result of a large influx of investor immigrants buying up property to live in or for investment. Others suggest there is no direct correlation and the total number of sales does not reflect the number of immigrants coming as investors.

Much of the debate is premised on anecdotal evidence, as property sales do not track the origin of purchasers, or their immigration status. In 2012, the former governor of the Bank of Canada, Mark Carney, warned of the risk of foreign capital inflating the housing market. The 2011 census shows a shift in demographics in Metro Vancouver, with an increase of the immigrant population from 30 per cent in 1991 to 40 per cent in 2011, with 61 per cent of the immigrant population arriving since 1991. About 50 per cent of the immigrants coming in the past 10 years chose to settle in Vancouver and Surrey.

The effect of immigration on housing prices is not limited to Canada. The Sydney Morning Herald in Australia noted a few weeks ago, after the immigrant investor program was cancelled, that one major property developer reported that offshore investment in residential properties had doubled in 2013. The article speculated that Canada’s decision to limit investment immigration could only boost interest in Australia’s market.

The decision to cancel the program has prompted a reaction from some of the would-be immigrants who applied under the program. Earlier this week a group held a news conference in Beijing, asking that the government to process the 65,000 outstanding applications. They are also contemplating legal action against the decision.

That action will likely have an uphill battle to succeed. When the government introduces budget legislation to give effect to the cancellation, I expect it will include express terms to retroactively cancel the program and outstanding applications, as it did recently with another program for skilled workers. While the decision may be unfair and cast doubt on the government’s trustworthiness, it would be within Parliament’s power to enact such legislation.

The government’s decision raises fundamental questions about immigration law and policy, just as does the recently proposed changes to the citizenship law. How should would-be immigrants be chosen? What are the criteria in measuring an immigrant’s contribution to the country? To what degree should an immigrant be contributing economically to society, if they are to receive the social, health and economic benefits from the state?

The government says it will create a new immigrant investment program. It will be interesting to see what criteria it uses to select immigrants under the new program, and what economic and social benefits the new program will create for the country.

William Macintosh started practising as an immigration lawyer in 1984. You can reach him for advice or help on any immigration or citizenship matter at 778-714-8787 or by e-mail at macintoshlaw@gmail.com.