Refugees struggle to repay costly transportion loans
Loans add 'excessive stress' on refugees struggling to settle in a new country, says advocate
Transportation loans are too taxing for refugees already dealing with a lack of income and trauma from their home countries, advocates say.
The government loans — of up to $10,000 — cover a refugee's costs for transportation to Canada, medical exams, and documentation.
Mwumvaneza Azarias Butariho, a refugee from Rwanda and a housing advisor at New Journey Housing in Winnipeg, lived in subsidized housing when he first came to Canada in 2007 and had a $7,200 transportation loan.
Butariho says he struggled paying that off on top of his other financial obligations.
Loans to refugees for more than $4,800 and must be paid off between one to three years after they arrive in Canada.
"Within a month here, I got a letter saying I had to pay off the loan," Butariho says. "Even though I lived in [subsidized] housing, I paid 70 per cent of my gross income for rent."
Butariho says he dipped into his monthly budget to pay his loan back.
"At times, I'd barely eat. I'd eat once a day or eat terribly," he says. "I'd have to figure out what was more important—freedom or food."
But Butariho's story isn't uncommon. The Canadian Council for Refugees has called for the abolition of the loans, saying they place an unfair burden on refugees and limit their ability to integrate and contribute to the community.
Loans a costly burden
Karen Montgomery-Gibbs, assistant director for Manitoba Interfaith Immigration Council Inc. (MIIC), says it's difficult for refugees to save for down payments for rental housing once they come to Winnipeg.
MIIC's clients stay in rental housing for years after they arrive in Winnipeg because of a lack of income, added Montgomery-Gibbs.
The majority of MIIC clients mainly obtain entry-level, low-paying jobs because degrees from out of the country don't equate to Canada's standards, so they have to upgrade their education.
Organizations like SEED Winnipeg Inc. have programs to relieve newcomers, refugees, and immigrants of loans and get career certification faster.
Sandra Leone, manager of loans for skilled immigrants at SEED, says the organization's loan program — Recognition Counts — allows people only to pay interest for the first 30 months for educational fees.
After that, they pay principle and interest for up to five years. Once the clients finish their education for the fields of work they want and obtain their careers, their income increases by as much as $40,000, she says.
"The federal government gave us a million dollars for our loans program, but it stopped funding us," Leone says. "Now the provincial government helps us and it's a struggle, so we work with the Assiniboine Credit Union to keep the program afloat."
Banks, creditors, contracts can confuse
Sometimes banks create bigger financial headaches for refugees because of how agreements are made between the bank and them, says Butariho.
He believes refugees pay more for loans because they don't understand contractual language.
"Creditors tell refugees to pay a certain amount of money every month, but they don't explain that monthly payments can be broken up," he says.
"When I got my first loan, I didn't know I could break the payments up, so I starved myself to pay it."
Leone says the way banks work with refugees can lead to excessive debt.
"The trauma refugees have gone through sticks with them," Leone says.
"They shouldn't have to pay for transportation loans because it adds excessive stress on top of their other loans."
Butariho, who teaches different money managing workshops for refugees, is currently petitioning the federal government to do away with the loans.
This is one in a series of stories written for CBC Manitoba by Red River College journalism students that looks at ways conflict abroad has shaped Winnipeg.
Here are other stories in the series:
- 'Nobody cares': Soldier feels abandoned 3 years after last Afghanistan tour
- Canada's legions are changing and not all veterans are happy about it
- 'Us versus them': Programs mend strained relations between Indigenous, newcomer communities
- New Canadians say labels segregate them from others
- Sierra Leone refugee helps Winnipeggers look on bright side with colourful art
- 'It's just a waste': Refugees lack opportunity to play elite soccer
- 'When we see police, we feel afraid': Winnipeg cops work to overcome newcomers' fear