New Beginnings - RMO Updates Newsletter 2025 - March

new beginnings
REFUGEE MINISTRY OFFICE UPDATES
Spring, 2025  |  Subscribe here

Newcomers must file an income tax return for their first year in Canada – even if they arrived on Christmas Day.

Veteran sponsor Don Smith, who files taxes for about 18 current and former sponsored refugees, emphasizes that it is imperative that even people who have been in Canada less than one month must complete a tax return, and it is the sponsor’s responsibility to ensure this is done.

“Tax filing is the key to receiving tax credits,” he says. “Without it, they cannot receive tax credits for energy and sales tax, for example.”

The Notice of Assessment generated by a tax filing is also necessary to accessing many government programs.  Without a tax filing on record, a family will not receive Canada Child Benefit (CCB) payments in their second year. They also need a Notice of Assessment should they apply for Ontario Works once the sponsorship is over.

Don’s tax tips include:

• Sponsorship payments are not taxable income because they are considered gifts. CCB payments are not taxable income. The only income that must be declared is employment income.
• The first income tax return is filed as a paper copy.
• The sponsor should set up CRA My Account for the newcomer once they have a Notice of Assessment in hand. My Account will ensure they can receive government payments automatically. It also gives easy access to the Notice of Assessment which is required for many programs.
• In subsequent years, settlement offices have income tax filing clinics, where newcomers can have their taxes filed free of charge.

“I really emphasize setting up My Account,” says Don. “It saves so many headaches.”

Becoming tax-filing Canadians is a step forward in financial literacy for many newcomers who may hail from countries where tax filing offers no benefits. It is a cultural shift in thinking about financial responsibility.

Perth Sponsorship Success Story

Basir credits his success in Canada to the private sponsors who helped his family settle in Perth.

“These wonderful people looked after us like parents,” he says. “We cannot find the words to thank them enough.” The group stays in touch and continues to celebrate birthdays and other occasions together.

An Afghani who arrived with his wife and two small children in August 2022 during Operation Afghan Safety, Basir now has a full-time job with UPS and speaks English at a level which qualifies him for higher education.

“I arrived with $15 US in my pocket”, he recalls, “and I didn’t speak a word of English.”

Basir immediately started working in Canada, both learning English and as a dishwasher at A&W. After three months, the sponsorship group helped with a downpayment on a car, and he became an Uber driver on weekends.

The sponsorship support was more than financial, though. “They gave me confidence. I was always feeling good about myself and the future.”

Navigating Canada’s financial and economic situation was a surprise for Basir, even though he had trained as a lawyer and worked in government in his home country. He was surprised when the sponsorship group presented a family budget with money earmarked for rent, food, utilities, transportation and insurance.

“At home, you don’t pay rent, you don’t pay home or car insurance, and you don’t have credit cards, so the concept of budgeting is new,” he explained. He was astonished to learn the sponsors themselves followed monthly budgets.

“I asked my wife, what is this budgeting?” he laughs. “And she said, ‘Basir, it is why they are a developed country!’”

Basir and his wife are now giving back by joining with other sponsors in Perth to bring another family that was forced to flee Afghanistan to Canada.

We asked Basir for his advice to new Canadians and to sponsors alike.

His advice for other new arrivals is to manage bill payments and credit. They need to understand the importance of making payments on time, whether for Wifi, car, phone or utilities, and the penalties for being even half a day late.

With respect to sponsorship, Basir was highly fortunate that his sponsorship group raised funds quickly and his family arrived in Canada fast due to Operation Afghan Safety. It took only three months, compared to other families who wait years for the completion of paperwork, fundraising and then Canadian government approval. So Basir’s advice to other sponsors is to recognize the desperate conditions that many refugees abroad find themselves in during the long wait for eventual travel to their new homes, to do their paperwork and fundraising as fast as possible, and to make sure fundraising can cover some pre-travel expenses.

Calculating Housing Costs for Newcomer Families

Finding suitable housing for newcomers at an affordable price is perhaps the greatest challenge that sponsors face when the newcomers arrive.  This note explains the way we calculate the amount that sponsors must be prepared to pay to house the newcomer. We will look at four examples:

1. a single person living on their own,
2. a couple living on their own
3. a couple with 2 young children, and
4. a couple with 2 adult dependents (i.e. 18 years or older) and one child under 18.

Minimum Financial Requirements

The Sponsorship Agreement stipulates that “The level of financial support which sponsorship groups are expected to provide … must, at a minimum, match the prevailing RAP (Resettlement Assistance Program) rates …”.  For the four examples that we are looking at the RAP shelter rates, which are equal to the shelter rates for an Ontario resident receiving Ontario Works (OW) social assistance payments, are $390 for a single person, $642 for a couple, $756 for a couple with two children and $1477 for a couple with one minor child and two adult dependents.  On top of those amounts, IRCC mandates a supplement of $200 where actual shelter costs exceed the basic shelter allowance for each Principal Applicant and each adult dependent.

Minimum Housing Requirements & Housing Supplements

As a minimum, a single person would require a bachelor apartment, the couple without children would require a one-bedroom apartment, the couple with two children would require a two-bedroom apartment and the couple with one minor child and two adult dependents would require a three-bedroom apartment.  From the Canada Mortgage and Housing Corporation Ontario rental market statistics from October 2024, the average rent for a bachelor apartment in Ottawa was $1253, for a one-bedroom apartment $1520, for a two-bedroom apartment $1869 and for a three-bedroom apartment $2002.  Therefore, in all cases, the newcomers would probably be entitled to the $200 housing supplement.  This means that, in accordance with the RAP requirements, the single person would receive $590 for shelter, the couple without a child would receive $842, the couple with two children would receive $956, and the couple with one minor child and two adult dependents would receive $2077.

Need for Top-up to Basic Shelter & Housing Supplement

Besides the requirement to meet RAP rates, the IMM5373 Undertaking and Settlement Plan obliges the sponsor to, inter alia “ … Provide suitable shelter, …”  Assuming that the sponsor is not providing shelter as an in-kind contribution, i.e., the newcomer(s) is/are not living with the sponsor rent-free, the sponsor must ensure that the newcomer has sufficient income to cover the actual shelter costs, which include rent, heat, electricity and tenant’s insurance.

In the case of the single person and the couple without children, the sponsor must provide a top-up to the basic shelter and supplement to completely meet the cost of rent, heat, electricity and tenant’s insurance.  In the case of the couple with one minor child and two adult dependents, the basic RAP shelter rate plus the supplement could cover the total shelter cost, provided that the actual rent is equal to or less than the average rent in the CMHC table.

However, in the case of the couple with two minor children, the top-up required from the sponsor to meet the shortfall between the RAP basic shelter rate plus supplement and the actual shelter cost can be reduced because the couple will be receiving $1508.75 in Canada and Ontario Child Benefit payments from the Federal and Provincial governments.  An analysis of social assistance payments in Ontario suggests that approximately half of the child benefit payments need to be used to cover shelter costs and half to cover the cost of basic needs (food, clothing, etc.).  In the case of our example for the couple with two minor children, this means that $754 of the child benefit payment should be applied to shelter costs.  Assuming that that the total shelter cost (rent, heat, electricity, and tenant’s insurance) for a two-bedroom apartment is $2000 and the RAP basic shelter plus $200 supplement plus 50% of the child benefit total $1710, the top-up that the sponsor must provide would be $2000-$1710=$290 to meet the actual cost of shelter.

Summary

The foregoing is an illustration of how the support payments that a sponsor must provide should be calculated.  The important points that the reader should take away are that:

1. In many, if not most cases, the basic RAP shelter payment plus the RAP housing supplement falls very short of actual shelter costs in Ottawa.
2. Monthly support payments for shelter are calculated based on actual costs of rent, heat, electricity and tenant’s insurance.
3. The sponsor must top-up the shelter support payments when the actual shelter costs exceed the basic RAP shelter rates plus the RAP housing supplement plus 50% of the Canada and Ontario Child Benefit payments.

In cases where the newcomer family includes adult dependents, the IRCC rule that requires sponsors to support such dependents as if they were single persons adds significantly to the RAP payments for shelter and may eliminate the need for the sponsor to top-up the shelter payments, provided that the adult dependents live with their parents and share the cost of shelter with their parents (if the adult dependents refuse to live with their parents, the sponsor will have to support multiple households in accordance with the sponsorship agreement).