Quarterly Financial Report for the quarter ended June 30, 2026

1. Introduction

This quarterly report has been prepared by management as required by section 65.1 of the Financial Administration Act and in the form and manner prescribed by Treasury Board. This quarterly report should be read in conjunction with the 2026-27 Main Estimates Part II and the 2025-26 Quarterly Financial Report for the quarter ended June 30, 2025.

A summary description of Immigration, Refugees and Citizenship Canada (IRCC) programs may be found in Part II of the Main Estimates and the 2026-27 Departmental Plan.

1.1 Basis of Presentation

This quarterly report has been prepared by management using an expenditure basis of accounting. The accompanying Statement of Authorities includes the Department’s spending authorities granted by Parliament and those used by the Department consistent with the Main Estimates for the 2026-27 fiscal year. This quarterly report has been prepared using a special purpose financial reporting framework designed to meet financial information needs with respect to the use of spending authorities.

The authority of Parliament is required before money can be spent by the Government. Approvals are given in the form of annually approved limits through appropriation acts or through legislation in the form of statutory spending authority for specific purposes.

When Parliament is dissolved for the purposes of a general election, section 30 of the Financial Administration Act authorizes the Governor General, under certain conditions, to issue a special warrant authorizing the Government to withdraw funds from the Consolidated Revenue Fund. A special warrant is deemed to be an appropriation for the fiscal year in which it is issued.

The Department uses the full accrual method of accounting to prepare and present its annual departmental financial statements that are part of the Departmental Results Report process. However, the spending authorities voted by Parliament remain on an expenditure basis.

1.2 IRCC’s Financial Framework

In order to deliver on its mandate, IRCC is funded through three budgetary mechanisms:

1. Appropriations
   • Voted appropriations:
     • Vote 1 – Operating Expenditures;
     • Vote 5 – Capital Expenditures; and
     • Vote 10 – Grants and Contributions (G&C)
   • Special Purpose Allotments including the Interim Federal Health Program, the Visa Application Centre, the Immigration and Refugee Protection Act’s Division 9 and Advertising Initiatives.
   • Budgetary statutory authorities is comprised of Employee Benefit Plan.
2. Vote-Netted Revenue (VNR under Vote 1)
   • International Experience Canada (IEC) Program
3. Revolving Fund
   • Statutory authorities also includes the Passport Program Revolving Fund.

Additionally, IRCC’s non-budgetary authorities consist of Immigration loans, mainly to resettled refugees to help defray the cost of their travel to Canada and to their final destination within Canada.

2. Highlights of fiscal quarter and fiscal year-to-date (YTD) results

The 2026-27 Main Estimates include authorities that were approved up until January 2026. Funding approved afterwards is sought via the Supplementary Estimates process.

As of June 30, 2026, IRCC’s total authorities include full supply for the 2026-27 Main Estimates and incremental funding provided through the 2026-27 Supplementary Estimates (A) for implementation activities of the Digital Platform Modernization Phase 3 Program, to support the FIFA World Cup 26™, for government advertising programs, for a new contract for the Canadian Immigration Biometric Identification system and for the Visa Application Centre contracts.

Since 2025-26, the department’s financial outlook over the next fiscal years signals substantial shifts in funding allocations. Multiple sources of temporary funding that have supported the department in recent years are now coming to an end, including allocations for the Afghanistan Resettlement Commitment, the Canada-Ukraine Authorization for Emergency Travel (CUAET) and the drawing down of temporary accommodation provided to asylum claimants. In addition, Budget 2023 directed federal government departments to refocus government spending, including spending on travel and professional services. In response, IRCC committed to reducing its operating expenditures by prioritizing modernization to minimize impacts on clients. This represents a reduction of $116.9M in 2026-27, an increase of $13.8M compared to last year’s reduction of $103.1M. Also, due to the reduced immigration targets outlined in the 2025-2027 and 2026-2028 Immigration Levels Plans, funding is expected to decline across multiple years, starting in 2025-26. Finally, as part of the government wide Comprehensive Expenditure Review (CER) aiming to return to a balanced operating budget within 3 years, IRCC is planning a reduction of $155M in 2026-27.

These reductions will require adjustments to operational planning and service delivery strategies to maintain alignment with departmental priorities. IRCC will continue to enhance efficiency and productivity through ongoing modernization efforts, the implementation of new policies, and infrastructure investments. These investments aim to optimize operations and strengthen the department’s ability to achieve results both now and in the future.

A. Significant changes to authorities

The following table shows the total budget available for use by IRCC. Only authorities available for use and granted by Parliament as at June 30, 2026 are included.

IRCC’s total budgetary authorities available for use in fiscal year 2026-27 decreased by approximately $662.0 million (13%) compared to the same quarter in 2025-26.

i. Authorities for Vote 1 – Operating Expenditures

The Department’s Vote 1 – Operating Expenditures authorities decreased by $248.5 million (11%) in 2026-27, primarily due to the following changes:

Decreases:

• Reduced funding of $173.1 million to provide health care services to refugees and asylum seekers through the Interim Federal Health Program (IFHP);
• The conclusion of $65.9 million in funding for temporary accommodation operations for asylum seekers;
• Reduced funding of $52.9 million resulting from the government’s decision to lower immigration levels under the 2025-2027 and 2026-2028 Immigration Levels Plans;
• The end of the $13.6 million funding for the partial visa imposition for Mexico;
• Following Budget 2023 Refocusing Government Spending initiative, additional funding reduction of $11.5 million; and,
• Following the Comprehensive Expenditure Review announced in Budget 2025, funding reduction of $11.1 million.

Increases:

• Additional funding of $47.2 million for the implementation of two new asylum system ineligibility measures to help strengthen the asylum system integrity;
• Additional funding of $16.1 million for the Visa Application Centre (VAC) contract; and
• Additional funding of $10.8 million to advance the Digital Platform Modernization initiative, aimed at improving client service delivery and replacing the existing Global Case Management System (GCMS).

ii. Authorities for Vote 5 – Capital Expenditures

The Department’s Vote 5 – Capital Expenditures authorities decreased by $2.5 million (42%), primarily attributable to the following changes:

Decrease:

• Transfer of $2.3 million from Capital Expenditures to Operating Expenditures to reallocate funding towards strategic priorities.

iii. Authorities for Vote 10 – Grants and Contributions (G&C)

The Department’s Vote 10 – Grants and Contributions authorities decreased by $383.24 million (14%), primarily attributable to the following changes:

Decreases:

• Reduced funding of $142.9 million following the Comprehensive Expenditure Review announced in Budget 2025;
• Reduced funding of $133.0 million to compensate provinces and municipalities for the interim housing of asylum claimants under the Interim Housing Assistance Program (IHAP); and
• Reduced funding of $88.3 million due to funding fluctuations related to the multi-year Immigration Levels Plan.

iv. Budgetary Statutory Authorities

The 2026-27 statutory authority level in the first quarter decreased by $27.8 million (16%) compared to 2025-26, primarily attributable to the following changes:

Decreases:

• Reduced authorities of $45.6 million in the Passport Program due to a increase in anticipated revenues of $25.3 million and a net decrease in planned expenditures of $20.3 million.

Increases:

• Incremental authorities of $13.8 million for the Employee Benefit Plan (EBP), reflecting an increase in the EBP rate from 15.3% to 16.4% between 2025–26 and 2026–27; and
• Incremental authorities of $4.1 million related to other statutory authorities.

B. Significant changes to departmental budgetary expenditures by standard object

Quarter over quarter analysis

The following table shows IRCC’s budgetary expenditures and revenues netted against expenditures for the period, and their comparison with the same period last fiscal year.

Note: Numbers may not add up due to rounding.

The total gross budgetary expenditures during the quarter ending June 30, 2026 increased by $374.8 million (31%) compared to the same quarter in 2025-26, which is mainly explained as follows:

1. Salaries and Employment Benefits have increased by $37.1 million (12%) which is attributable to a timing issue in the recording of the salary accruals between June and July. This issue resulted in a temporary overstatement of Q1 expenditures by $37.7 million and will be fully resolved in Q2.
2. Transportation and Communication expenditures have increased by $5.0 million (54%), primarily due to higher transportation-related charges for the passport program, driven in part by fuel surcharges.
3. Professional and Special Services expenditures have decreased by $73.2 million (24%) driven primarily by lower costs under the IFHP. Spending declined in the first quarter of 2026-27 compared to the same period in 2025-26, largely due to a delay in invoice processing. Expenditures continued to fall within the quarter as the number of eligible beneficiaries decreased and urgent dental care utilization dropped following the introduction of co‑payments in May 2026; a reduction due lower planned expenses in the 2026-27 Service Level Agreement (SLA) with ESDC, driven primarily by a lower projected volume than last year; and a reduction in expenditures for IT consultants due to delays in Phase 3 of the Digital Platform Modernization.
4. Rentals expenditures have decreased by $9.0 million (47%), primarily due to the conclusion in September 2025 of the temporary accommodations for asylum claimants, as well as a reduction in payments to Microsoft Canada, reflecting year-over-year variations in the number of licences acquired and the timing of invoices.
5. Utilities, Materials and Supplies expenditures have decreased by $7.2 million (43%) which is primarily due to lower volumes of passport applications in the first quarter and the higher inventory levels carried forward from the prior fiscal year.
6. Acquisition of Machinery and Equipment expenditures have decreased by $3.3 million (56%), primarily attributable to the purchase of new laptops in the first quarter of 2025-26.
7. Transfer Payments have increased by $421.5 million (78%) which is mainly explained by the timing of the regular quarterly payments to Quebec under the Canada-Quebec Accord on Immigration, as well as the timing of payments related to agreements under the Interim Housing Assistance program. The increase is partially offset by a decrease in spending under the Settlement and Resettlement Assistance programs.
8. Other Subsidies and Payments have increased by $4.2 million (37%) which is primarily due to higher refunds of previous years’ revenue related to rights and privileges. This variation also reflects a review and resolution of certain files that had remained pending, which resulted in additional refunds for cases deemed eligible.

Through the Passport Program and International Experience Canada, IRCC generated $136.3 million and $3.2 million respectively in re-spendable revenues in the first quarter of 2026-27. Overall, this resulted in net budgetary expenditures of $1,442.5 million as of June 30, 2026, compared to $1,067.8 million in the same quarter of 2025-26.

3. Risks and Uncertainties

IRCC operates in a constantly changing environment. Its strategic directions as well as its policies and operations are influenced by external factors such as emerging domestic and global events, impacts of climate change on migration patterns, Canadian and international economic conditions, shifting social or political contexts, increasing cyber security threats and rapidly shifting migration trends.

Internal or management risks also may present as threats, opportunities or events that may influence the operations and service delivery of the Department. Risks such as system outages or the potential for workplace disruptions have a direct impact on IRCC’s ability to deliver on its mandate and are therefore also factored into the Department’s forward thinking and planning.

Given IRCC’s ongoing efforts to review the scope of its mandate and modernize its organization as well as its operations and service delivery model, the Department will operate in a challenging and complex environment and is expected to continue to maintain its pace and focus on the breadth of challenges, innovations and opportunities it seeks to address.

3.1 Crisis Management

As global displacement becomes more complex, Canada is increasingly called upon to address unique humanitarian situations. Canada may use a range of immigration measures in responding to international crises, alongside other Government of Canada responses (e.g., consular support, humanitarian assistance, etc.). As part of IRCC’s approach to well-managed migration, the Department uses the Crisis Response Framework (CRF) to ensure consistent strategic advice for Government decisions and well-coordinated migration responses to international and domestic crises. Building on lessons learned from recent responses, the CRF includes tools to assess and implement migration responses in alignment with annual immigration levels planning, and enable coordination with provinces and territories, partners, and stakeholders. The CRF also helps guide IRCC’s analysis and decision-making related to advice on the provision of supports and services to crisis cohorts where there is an identified need. The Department continues to process applications from clients affected by international crises (including those in Afghanistan, Sudan, and Gaza) and is working to support their settlement in Canada.

It has also become evident that unforeseen crisis events can significantly impact IRCC’s operations, particularly when they occur in regions where our offices and employees are located, complicating response efforts. IRCC also responds to wildfires and other natural disasters in Canada by supporting affected Canadian citizens, permanent residents and temporary residents through special measures and facilitation of foreign emergency services personnel.

Beyond these crises, IRCC manages irregular migration crossings at the Canada-US border, and an increased demand for services such as passports. While addressing these priorities, efforts continue to improve internal processes and systems through change initiatives.

3.2 Litigation and Legal

IRCC operates in a very high volume litigation environment which includes complex, high profile and high impact files. Sound management practices are in place to manage all of these challenges in a consistent and coordinated fashion, including consultations with Justice and other partner departments.

4. Significant Changes in Relation to Operations, Personnel and Programs

Ted Gallivan has been appointed Deputy Minister of Immigration, Refugees and Citizenship, while Dr. Harpreet S. Kochhar becomes President of the Canadian Food Inspection Agency.

Effective April 1st, 2026, IRCC will transition from 11 to 9 sectors to stabilize key functions and provide flexibility for the newly appointed Deputy Minister to assess priorities. The revised structure supports the department’s CER commitments, Budget 2025 measures, the Budget Rationalization Exercise, and immigration levels planning, strengthening IRCC’s capacity to deliver an integrated, digital organization responsive to evolving demands.

Several senior leadership changes occurred during the period. Aiesha Zafar, ADM, Migration Integrity, and Soyoung Park, ADM, Economic Programs, have departed on April 2nd. Jennifer MacIntyre, ADM, International Affairs, departed IRCC on June 19, 2026, and Heather De Santis, DG, International Platform, will assume the role of Acting ADM beginning June 22, 2026.

Approval by Senior Officials

Approved by:

Ottawa, Canada
August 21, 2026

Statement of Authorities
(in thousands of dollars)

Departmental Budgetary Expenditures by Standard Object
(in thousands of dollars)

Note: Numbers may not add up due to rounding.