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Economy

Passport application backlog leads to lineups, scrambles summer travel plans

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TORONTO — Kelly Potter Scott has been looking forward to taking her 10-year-old daughter across the Canadian border for the first time for a girls’ getaway in Upstate New York in a couple of weeks.

But as she spent hours waiting outside a Toronto passport office, Potter Scott said she had to trust an official’s assurances that her daughter will have her documents for the weekend trip with family and friends.

“If we don’t get it, my daughter just won’t be able to come with us, which will be unfortunate,” Potter Scott said. “Fingers crossed, we get it in time.”

She was among dozens of people in a line that stretched down the block Wednesday, some toting fold-up chairs as they shuffled toward the door to submit their passport applications.

Some aspiring travellers expressed concern that their summer vacation plans could be scrambled as pent-up pandemic wanderlust fuelled a backlog in passport processing times.

Officials have been bracing for a rise in passport demand with the relaxation of COVID-19 border measures, bringing on 600 new employees to help sort through the influx of paperwork. Last month, Service Canada reopened all passport service counters across the country, and additional counters have been added at more than 300 centres.

But as many Canadians look to venture abroad after more than two years of pandemic-restricted travel, some passport seekers say they’ve been forced to camp outside service centres or reschedule trips because of the bureaucratic bottleneck.

It seemed to catch federal officials by surprise.

“The fact of the matter is that while we were anticipating increased volume, this massive surge in demand has outpaced forecasts and outstripped capacity,” Families, Children and Social Development Minister Karina Gould told a parliamentary committee on May 30.

“We know many people have been put in very difficult circumstances. And that is why I have directed officials to work as hard as possible to meet the demand.”

Between April 1, 2020 and March 31, 2021, Service Canada issued 363,000 passports as services were limited to urgent travel cases.

But as the world has reopened, demand has skyrocketed. Between April 1, 2021 and March 31, 2022, nearly 1.3 million passports were issued.

Since April, more than 317,000 passports have been handed out, and the federal forecast for 2022-2023 is between 3.6 million and 4.3 million applications.

Based on projections from last week, 75 per cent of Canadians who apply for a passport receive one within 40 working days, a spokesperson for Employment and Social Development Canada said in a statement. Ninety-six per cent of those who submit an application in-person at a specialized site receive a passport within 10 working days.

Nadia Elsayed in Oakville, Ont., said she mailed her infant daughter’s passport application in early April, indicating a tentative travel date of late May.

Elsayed waited for the envelope to arrive in her mailbox as that date came and went. With passport services not picking up the phone, she turned to her member of Parliament, and found out that her daughter’s documents were sitting in a stack of other applications in Gatineau, Que.

She arranged to have her daughter’s application sent to another office in the Toronto suburb of Mississauga. Officials told her they’d aim to have the passport ready 48 hours before her family is set to travel to the United States this month, Elsayed said, but that’s cutting it too close for comfort.

“It still feels a little bit up in the air, to be honest,” she said. “It just feels like we’re kind of hanging on and just hoping that things turn out.”

This report by The Canadian Press was first published June 9, 2022.

Adina Bresge, The Canadian Press

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COVID-19

Effect of pandemic border restrictions could be long-lasting: Critics

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BANFF, Alta. — The last of Canada’s COVID-19 border restrictions are set to disappear at the end of this month, but some critics say they fear the measures have already caused a lasting decrease in cross-border travel.

At the Global Business Forum in Banff, Alta. on Friday, prominent voices who have been arguing for months in favour of the lifting of restrictions such as mandatory vaccinations, testing and quarantine requirements for international visitors said they’re now worried the economic impacts of such measures could be permanent.

In a panel discussion at what is an annual conference for business leaders in Canada’s most-visited national park, Meredith Lilly – an associate professor at Carleton University and a former international trade advisor to Prime Minister Stephen Harper – said cross-border day trips by Canadians to the U.S. never fully recovered after the terrorist attacks of Sept. 11, 2001.

She said her research has showed part of that is due to the heightened U.S. border controls put in place after that event.

“Fewer Canadians travelled to the United States to shop or fill up their tank of gas because of the unfriendly border,” Lilly said.

“Canada is now doing the same thing to Americans. So it’s going to take major effort to get Americans to come back.”

Earlier this week, federal government sources confirmed the cabinet order maintaining COVID-19 border measures will not be renewed when it expires on Sept. 30.

The change means international travellers will no longer have to prove they are fully vaccinated against COVID-19. Under the current rule, Canadians returning to the country who aren’t vaccinated must show a negative COVID-19 test result before arriving, and undergo further testing after arrival. They also must quarantine for 14 days.

The expiry also spells the end of insisting travellers use the ArriveCan app to input their vaccine status and test results, though the app will live on as an optional tool for customs and immigration.

But Lilly said the two-and-a-half years that pandemic-related border rules were in place was likely long enough to change the habits of some Americans, who will now no longer consider visiting Canada in the future.

Statistics Canada reported Friday that the number of international arrivals to this country increased in July even as they remain well below pre-pandemic levels.

The agency said the number of trips by U.S. residents in July was 2.2 million, 11 times the number of trips taken in July 2021, but still about 60 per cent of the trips reported in July 2019.

“So the picture still isn’t great,” Lilly said. “And three years is a long time for people to permanently change their behaviour.”

Canadian Chamber of Commerce president and CEO Perrin Beatty, who also spoke in Banff Friday, said this country’s tourism industry has now missed out on two summer seasons.

He said multiple medical experts have argued that testing asymptomatic travellers for COVID-19 at the border is far less effective than testing symptomatic Canadians within their communities.

“We’ve maintained these restrictions that simply make no sense. The cost to us, for small businesses in every part of this country, of the friction that we’ve put on at the border has been billions of dollars,” Beatty said.

“And we’re out of step with other countries around the world, we’re out of step with the science, and we’re out of step with the rest of Canadian society because of these self-inflicted wounds we’ve put on ourselves.”

A report released by the Canadian Travel and Tourism Roundtable on Friday aimed to assess the impact and effectiveness of border measures and other travel restrictions implemented by the federal government to slow the spread of COVID-19.

The report, which was authored by four Canadian doctors specializing in infectious diseases, emergency medicine and pandemic management, concluded border measures have been largely ineffective at preventing new COVID-19 variants from entering the country.

It also said there is no convincing evidence that pre-departure and on-arrival testing and surveillance have had a significant impact on local transmission in Canadian communities.

The expiry of the cabinet order on Sept. 30 doesn’t deal with whether passengers must wear masks on domestic and international trains and planes because that rule is contained in a separate order issued by the minister of transport.

The tourism industry has argued masking on planes is also “inconsistent” from a policy perspective, given that the high air exchange rates on passenger aircraft make them one of the safest ways to travel from a COVID-19 perspective.

“But the government of Canada is saying the single most dangerous thing you can be doing is travelling by air,” Beatty said.

This report by The Canadian Press was first published Sept. 23, 2022.

Amanda Stephenson, The Canadian Press

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Business

Former BoC governor Stephen Poloz warns against entrenching inflation in expectations

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BANFF, Alta. — Preventing current high inflation levels from becoming embedded into the public’s expectations is key if the country is to avoid falling into recession, former Bank of Canada governor Stephen Poloz said Thursday.

Poloz, who was head of the bank for seven years until his term expired in June of 2020, made the comments during an interview in Banff, Alta., where he was a speaker at the Global Business Forum, an annual conference that attracts executives and business leaders from around the world.

Poloz said he believes the current cycle of high inflation is transitory, pointing to the latest monthly reading from Statistics Canada showing inflation is already beginning to ease — in spite of the fact, Poloz said, that interest rate hikes already implemented by central bankers have barely had time to have an effect.

“It means it (inflation) is going to go away more or less by itself in time. But if it takes one year for it to climb up, it has to take a full year for it to flatten and another full year for it to go away,” Poloz said.

He said it’s possible inflation could return to the Bank of Canada’s target rate of two per cent without a severe or even a mild recession. He pointed out the Canadian economy is in a strong position, with a strong labour market, high levels of income and household savings, and encouraging levels of corporate investment.

However, he also said there’s no guarantee of a soft landing. A major geopolitical event that causes a dramatic spike in the price of oil, for example, could cause a recession all on its own regardless of interest rates or any other factor.

Poloz said one of the biggest risks is actually the public’s expectations. If people become convinced that high inflation is here to stay, he said, that could lead to higher wage settlements that are difficult to reverse.

Spiralling wages in turn could drive inflation even higher, forcing the need for a more difficult economic contraction to get the cost of living under control.

“The risk is (inflation) infects our economy, it gets embedded and stays there, to some degree,” Poloz said. “Of course it would never be near 100 per cent, but it could be meaningful.”

Poloz said the fact that most Canadians no longer remember this country’s last period of high inflation, which occurred in the late 1970s and early 1980s, is a positive in that it makes it more likely they will view the current cycle as a short-term event.

Poloz’s hopeful tone Tuesday was a marked contrast to the message just one day prior from U.S. Federal Reserve Chair Jerome Powell.

Speaking at a news conference after the Fed announced a substantial rate hike of three-quarters of a percentage point, Powell acknowledged what many economists have been saying for months: That the Fed’s goal of engineering a “soft landing” — in which it would manage to slow growth enough to curb inflation but not so much as to cause a recession — looks increasingly unlikely.

 “No one knows whether this process will lead to a recession or, if so, how significant that recession would be,” Powell said, adding that before the Fed’s policymakers would consider halting rate hikes, they would have to see continued slow growth, a “modest” increase in unemployment and “clear evidence” that inflation is moving back down to their 2 per cent target.

“We have got to get inflation behind us,” Powell said. “I wish there were a painless way to do that. There isn’t.”

Earlier this month, the Bank of Canada  raised its own key interest rate by three-quarters of a percentage point and signalled this won’t be the last increase as it continues its battle against high inflation.

In Banff on Thursday, Poloz said no one truly knows what is going to happen as central bankers around the world look to downshift from an overheated economy.

“It’s like landing a plane in the fog,” Poloz said. “You won’t really know until you feel the wheels touch down, and you’re hoping it’s going to be soft.”

— With files from The Associated Press

This report by The Canadian Press was first published Sept. 22, 2022.

Amanda Stephenson, The Canadian Press

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