A guarantor still has the right to guarantee another person if there is an agreement to repay the government debt in installments, without having to pay it off in full. (Ioussoupov v. Canada (Immigration, Refugees and Citizenship))

In a ruling on April 4, 2019, the Federal Court concluded that for subsidized debt, if the guarantor repays the debt in full or through an installment agreement with the government, the debtor is not stripped of their guarantee rights.

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[1] This petition challenges the decision of the Immigration and Refugee Appeals Division (IAD) of the Refugee and Immigration Council, which denied the Applicant's appeal against the wife's visa denial. The wife's visa was denied because the husband was found to have no legal obligation to reimburse the Province of Ontario for social benefits paid to his previously sponsored spouse. As of June 1, 2015, the husband owed Ontario $77,987.24.

[2] The initial decision to deny the wife's visa was made by a visa officer in Warsaw, Poland. Applying Section 133(1)(g)(i) of the Refugee and Immigration Protection Regulations, SOR/2002-227, the Officer found that, until the allowance debt was fully repaid, the husband was ineligible to sponsor his current wife. This finding of the outstanding debt was made despite the fact that the husband had signed an agreement with Ontario to repay the debt in monthly installments of $150.00 and was updated on those payments. The Officer went on to deny the applicant's request for a humanitarian and compassionate (H&C) review.

[3] Prior to the IAD, the Applicant’s attorney had acknowledged the legality of the visa denial decision and pursued only the H&C recourse. Consequently, the IAD did not consider the question of whether the husband had legitimate debts and was therefore ineligible to sponsor his wife. Despite that concession to the IAD, the husband argued in this application that the IAD was not open to considering a debt repayment agreement or questioning the adequacy of the husband’s efforts to repay his debts. This is clearly the primary reason the IAD denied the H&C request as can be seen from the conclusion:

[3.3] The main issues with respect to this claim are the importance of the outstanding grant debt, the lack of effort to avoid accumulating debt in the first place, the Appellant's minimal effort to repay the debt, the lack of priority in repayment, and the lack of a concrete future repayment plan. The Court also noted that the primary incentive to repay the debt would be eliminated once the Applicant arrived in Canada.

[3.4] The Court found that these factors were not heavily influenced by the nature of the relationship and the reason for sponsorship, the difficulties faced if the appeal were dismissed, and the immigration objective of family reunification.

[3.5] The plaintiff has not established sufficient humanitarian grounds to warrant special consideration in all circumstances of the case. Therefore, this appeal is dismissed.

[4] The Applicant's concession of the IAD was surprising because, when the court read the applicable regulations, the Applicant had no default on the sponsorship commitment for his first wife. This was because the Applicant had settled his debt to Ontario in the form of a repayment agreement. Although the Applicant still owed Ontario a substantial amount, the legal effect of the repayment agreement was to get out of his prior debt situation. That was clearly the purpose of section 135:

[5] This provision was considered in Canada v Mavi , 2011 SCC 30, [2011] SCR 504, where the Court explicitly stated in paragraph 70 that s 133(1)(g)(i) “may be settled by arrangement of repayment”. Although this statement is flawed , it is consistent with the Court’s own interpretation of s 135(b). If the words “or by agreement with that government” require full repayment, they would be redundant by the preceding language. Such an interpretation would violate the assumption against inference: see Placer Dome Canada Ltd v Ontario , 2006 SCC 20 at paragraph 45, [2006] 1 SCR 715. The effect of a repayment agreement is to the extent that even if the debt is unlikely to occur. fully repaid, the debtor is not deprived of the guarantee: see Mavi, above, at paragraph 59. Accordingly, it is not open to decision-makers acting under section 133(1)(g)(i) of the Regulation to reflect on the adequacy of the repayment terms accepted by a province, provided the agreement is complied with.

[6] The question remains whether the court can resolve the application based on the strength of this issue since it has never been directly considered by the IAD.

[7] Of course, the IAD is entitled to safeguards insofar as they are exercising their H&C rights. Their decision is only vulnerable to challenge if it can be shown to be unreasonable.

[8] The difficulty the court encountered in considering the reasonableness of the IAD’s H&C assessment arose from its inability to separate that aspect of the decision from the question of whether the Applicant had actually failed to fulfill his funding commitment. The IAD’s conclusion that the Applicant had not done enough to pay what he owed Ontario was only reasonable if it were a proper consideration; and it could only be a proper consideration if the IAD had been open to considering the adequacy of the terms of the Applicant’s agreement with Ontario from the outset. Under Section 135 of the Regulation, the IAD had no jurisdiction to consider the repayment agreement because, if one party were present, there was no subject default to being exempted on humanitarian grounds.

[9] Of course, I worry that the effect of discovering the inconsistency is to bring the IAD back to consider a problem that, by no means fault of its own, had never been considered. That is not an approach that should be taken routinely.

[10] However, in the exceptional circumstances of this case, involving a disjointed and understandable issue of legal interpretation that can only be reasonably resolved in one way, this appears to the court to be the best practical option. Resubmitting the matter to the IAD would avoid the delays and administrative burden associated with a new bail application.

[11] I also felt some comfort from the decision of Alberta v Alberta Teacher , 2011 SCC 61, [2011] 3 SCR 654, where the Court was faced with the problem of assessing the reasonableness of a decision relating to an issue not raised prior to the trial. The Court acknowledged that it had the full right to make a new argument but generally should not do so when the issue could be raised below. However, the issue was considered, in part, as it concerned “the clear determination by law of the basis which may be addressed in judicial review, regardless of the appropriate standard of review”: see paragraph 28. The Court also noted the absence of any asserted bias toward the opposing party.

[12] I would like to add that the IAD's lack of justification for the meaning of Article 135 of the Statute does not disadvantage the Court. This is because there is only one reasonable interpretation of that provision, namely, that the debt of Article 133(1)(g)(i) is settled by a complete agreement.

[13] For the reasons stated above, this application is approved.

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