Three Systems, One Pattern

The World's Most Welcoming Country

Before documenting what broke, it is worth establishing what existed. For roughly 25 years — spanning the Liberal governments of Jean Chrétien and Paul Martin and the Conservative government of Stephen Harper — Canada maintained a rare bipartisan consensus on immigration: positive toward legal arrivals, firm against irregular entry, and consistent in annual intake numbers. The result was a public attitude toward immigration that had no peer among developed nations.

The demographic context amplifies what this represented. By 2016, immigrants constituted 22% of Canada's population — a foreign-born share higher than the United States had recorded at any point since the Civil War. The U.S. foreign-born share at that time was 13.5%. Canada had built, at roughly 37 million people, an immigration-dependent society that commanded near-universal domestic support and international admiration simultaneously.

How ESDC Opened the Fraud Door

Canada's Temporary Foreign Worker Program runs on a gatekeeper mechanism called the Labour Market Impact Assessment (LMIA). Before an employer can hire a foreign worker, ESDC must confirm there is no qualified Canadian available for the role. The LMIA is that confirmation. It is, by design, a fraud-prevention instrument.

In January 2022, according to a Toronto Star investigation published in August 2024 and subsequently corroborated by McMaster University's DeGroote School of Business, ESDC directed officers to bypass certain routine fraud prevention steps when processing LMIA applications. The stated rationale was to speed up processing times — volume pressure producing the same result it produced in every other case we document here.

The downstream consequence was not abstract. A CBC News / Investigative Journalism Foundation investigation in October 2024 documented that online sellers were openly advertising LMIA-approved job positions to foreign nationals for prices between $25,000 and $45,000. Under the Immigration and Refugee Protection Act, charging foreign workers any fee for an LMIA is illegal. The market for fraudulent LMIAs had become sufficiently established that sellers were operating on mainstream Canadian platforms including Kijiji.

Because a positive LMIA also functions as a major advantage in the Express Entry permanent residency system — worth more CRS points than a full year of Canadian work experience — fraudulent LMIAs were not merely work permit fraud. They were a pathway to permanent residence, purchased by those with enough money and willingness to deceive. Canada risked selecting not the most qualified immigrants, but the most financially resourced fraudsters.

The IRB's Paperless Hearing

In 2019, the Immigration and Refugee Board of Canada quietly implemented a policy called "File Review." Under this policy, asylum claims from nationals of certain countries — a list that was subsequently removed from public view in 2020 — could be approved solely on the basis of written applications and documents, without any in-person hearing and without the claimant being asked a single question.

The policy was not approved by Cabinet. It was not approved by the Minister of Immigration. It was implemented unilaterally by the IRB's Chairperson using an internal administrative instrument — a Chairperson's Instruction — that is normally reserved for tribunal operations, not system-wide policy changes with national security implications.

The stated purpose was to reduce the asylum backlog. It did not. When File Review was introduced, the IRB's pending claims inventory stood at roughly 17,000. By late 2025 — after six years of accelerated approvals — the backlog had grown to nearly 300,000. The policy that was supposed to solve the backlog is associated with a 1,650% increase in it.

The security implications are structural, not speculative. During an asylum hearing, if questioning reveals information suggesting a national security risk, the IRB member is legally required to notify the Minister of Public Safety and may be required to halt the proceeding. That mechanism does not exist if there is no hearing. The IRB told the Globe and Mail that all claimants are security screened before referral, and that CBSA and IRCC may intervene in any claim. But the C.D. Howe report notes that the notification mechanism triggered by in-person questioning is separate from front-end screening and cannot be replicated by a paper review of submitted documents.

The country list — defining which nationals were eligible for File Review — was removed from public view in 2020, one year after the policy launched. The C.D. Howe report's ATIP requests confirmed the list existed and was modified, but the criteria for additions and removals were not disclosed. A policy with national security implications, implemented without Cabinet approval, affecting nationals of countries including Afghanistan, Iran, Pakistan, and North Korea, operated with its eligibility criteria hidden from public scrutiny for five years.

The $896 Million Bill

The Interim Federal Health Program (IFHP) provides temporary health coverage — including hospital care, prescriptions, dental, vision, and mental health services — to asylum claimants and other foreign nationals who are not yet eligible for provincial health insurance. The program is designed to be interim: coverage until the claimant transitions to provincial plans or leaves Canada.

In 2020–21, the IFHP cost $211 million and covered approximately 200,000 beneficiaries. In 2024–25, it cost $896 million and covered approximately 624,000 beneficiaries. That is a 4.2× increase in cost in four years. The Parliamentary Budget Officer, in a report released February 12, 2026 at the request of the House of Commons health committee, projects the program will cost approximately $1 billion in 2025–26 and exceed $1.5 billion annually by 2028–29.

The PBO's analysis identifies two drivers. First, the number of beneficiaries has grown substantially, driven by the surge in asylum claims. Second, duration of coverage has extended as processing backlogs lengthen — because coverage under the IFHP continues until a claim is resolved, a 300,000-claim backlog means hundreds of thousands of people remaining on federal health coverage for years rather than months. The PBO noted that, based on IRCC guidance, coverage continues even after a claim is denied and a removal order is issued, until the individual actually leaves Canada.

In response to the cost projections, the government announced that effective May 1, 2026, IFHP beneficiaries will be required to pay a $4 fee per prescription and a 30% co-payment for supplemental coverage including dental, vision, and counselling. Basic physician and hospital care will remain free. The measure is framed as part of IRCC's effort to find 15% in operational savings over three years. The PBO did not incorporate this change into its projections due to data limitations, but noted it would reduce total cost estimates if included.

What the Three Failures Have in Common

The three systems documented here — TFW/LMIA processing, asylum adjudication, and IFHP cost management — each failed in the same structural way. Each was under volume pressure. Each responded by reducing procedural rigour rather than increasing capacity. Each reduction in rigour created exploitable gaps. And in each case, the government's own subsequent response — emergency fraud measures, calls for reform, co-payment introduction — confirms that the prior framework was inadequate.

The LMIA streamlining was an internal ESDC directive. The File Review policy was an IRB Chairperson's Instruction. Neither was enacted through Parliament. Neither was approved by Cabinet. Both were administrative shortcuts that bypassed the oversight mechanisms designed to catch exactly the kinds of failures that followed.

The question the documents raise — and that neither ESDC nor the IRB has answered publicly — is whether decision-makers knew the shortcuts created fraud and integrity risks and accepted them as a cost of speed, or whether they genuinely did not foresee the consequences. The answer matters for accountability. But either way, the outcome is the same: systems designed to protect the integrity of Canada's immigration architecture were quietly disabled under volume pressure, and the integrity failures that followed were predictable.

The cost of that is now visible in public opinion data. The same surveys that showed two-thirds of Canadians rejecting "too much immigration" through the early 2020s show that number has since reversed. A country that held the world's most welcoming attitude toward newcomers for two decades did not change its mind because of racism or political manipulation. It changed its mind because the systems that gave immigration its legitimacy — orderly processing, credible vetting, fiscal accountability — visibly stopped working. Public trust, once spent this way, is far harder to rebuild than any administrative process.