Ben Rabidoux Profile picture
Feb 18 17 tweets 4 min read Read on X
There is an enormous scandal brewing at @IRB_Canada. Canadians are being screwed by massive fraudulent asylum claims, and it all relates to terrible incentive structures.

The thread below is email correspondence from a whistle-blower employee.

1/
First, some context.

We have half a million asylum claimants in Canada currently...triple from 2022 levels and now accounting for 1 in every 84 people in the country.

2/ Image
Now from the whistle-blower employee at @IRB_Canada:

"I worked as a decision maker in immigration. The amount of fraud and mismanagement is a massive scandal worthy of a national public inquiry waiting to happen." 3/
"The positive decision rate for refugee claims is sky high (it's probably going to exceed 85% this year) because it's impossible to say "no" in the time constraints given. The law makes saying "no" and calling out fraud very difficult and time-consuming." 4/
"The decision maker needs to spend a lot of time preparing, a lot of time holding the hearing, and the decision will be difficult to write to comply with all the requirements under the law as interpreted by the courts. There is no time." 5/
"The IRB is supposed to function in a way similar to a "court". In reality, it's a high turnover minimum-wage, entry level positive decision mill where tribunal members are treated like disposable labor and forced to say "yes" majority of the time given the time constraints." 6/
"The IRB as an institution has been emboldened by years of not facing consequences and they keep adding more work, to the point where there is barely enough time to say perfunctory yeses to nearly everyone. The result is that refugee fraud is rampant but unnoticed." 7/
"People don't know because when they look at the data, it says most claimants are refugees (some lawyers and law professors say that the rare use of the fraud provisions in the law is evidence that there is little or no fraud, that is because they don't know that it is simply not possible to issue a decision applying that provision within the time constraints given, and that to do so means working late without getting paid for long hours or facing threats of termination for not being efficient)." 8/
"It's impossible to know how prevalent it is because the people supposed to say where there is fraud are not "allowed" to (what has been going on is justified by the volume of claims according to IRB leadership). The pressure keeps going up, the positive rate keeps going up.

The word is out that it's easy to game (and that even if you lose, there are lots of recourses and little consequences)." 9/
"It is not possible to deal with the number of claims assigned given the time allowed. This means that to only work 40-50 hours a week (you're paid 37.5) and to keep your job, you have to say yes to fraud because saying no means spending a lot of time preparing, doing the hearing, and writing the decision you don't have time to write." 10/
"Overtime is all unpaid because the IRB gets away with saying all claims can be decided within the same time allotment.

Basically, they know it and make people keep their head down or quit or face dismissal/non-renewal. And even if you do a lot of free overtime (and I don't mean only a few hours), it's probably not enough if you're going to try to reject fraud because of how much there is." /11
"That was my attempt at giving you some context. What I'm trying to say is that people deciding refugee claims (to cite only one example of a really big mismanagement problem in immigration) are forced to say yes to most claims.

No one needs to take my word for it: There is a lot of data reported online, and one easy and probably persuasive way to demonstrate this would be to illustrate already available on refugeelab.ca/projects/refug…." /12
"I did an analysis of the RLL's Excel spreadsheets for yearly data to test the hypothesis that the number of negative decisions predicts turnover/time.

From the RLL files spanning 2019–2024, recognition rates rose from around 69% to over 80%, with a clear pattern where members with lower rates (more negatives) had average tenures of 1.4 years, compared to 4.2 years for high-grant members." /13
"Turnover is high, with 60–70% of members active less than 2 years.

- Trends show adjudicators adapting upward in rates post-2019

- In 2024, ~52% of adjudicator (with 30+ decisions) had positive rates >90%, with many at 95–100%

-Earlier years: ~28–35% >90% (2019–2022), rising to 48% in 2023"

/14
"The public service survey (the most recent one issued last summer) also has some interesting data about the IRB. Of all public servants across the entire government, IRB tribunal members at the ID and RPD combined report the lowest confidence in senior leadership"

/15
This is a huge scandal that highlights the magnitude of the fraud in the asylum system and the inability of adjudicators to effectively weed it out.

This is consistent with concerns raised by the @CDHoweInstitute in an study just this week:

/16cdhowe.org/wp-content/upl…
This requires immediate attention and a massive overhaul at @IRB_Canada

@LenaMetlegeDiab @MichelleRempel @PierrePoilievre

/17

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More from @BenRabidoux

Mar 14, 2024
1/ Maybe @OSFICanada can comment on the emerging practice of "blanket appraisals" by big banks on new condos. I've heard this from many in the industry and verified it myself via land registry data on some new builds.

@SteveSaretsky discusses it here

2/ The idea is that some condos that were bought preconstruction at peak pricing AND at substantial premium to resale at the time are completing today and are deeply underwater.

eg. Purchased for $700k preconstruction but comp sales today are more like $550k
3/ That means in theory, buyers face a "capital call" since banks can only lend to 80% of fair market value in most cases (notwithstanding insured loans for FTHB).

Eg banks are supposed to only lend 80% of the $550k, but buyer needs to deliver $700k (minus deposits) to builder
Read 5 tweets
Feb 10, 2023
THREAD: What's going on with these crazy Canadian jobs numbers?

Here's what I think people are missing. Start with some key lines from the report today:

"Notable employment growth among the group that includes non-permanent residents."

1/
Further:

"On a year-over-year basis, employment for those who were not born in Canada and have never been a landed immigrant was up 13.3% in Jan, compared with growth in total employment of 2.8%."

So what we have here is a boom in employment among non-permanent residents

2/
This makes sense. Job vacancies were sky-high in H2 2022.

3/ Image
Read 6 tweets
Nov 30, 2022
The recent undercover work by @cbcmarketplace to expose mortgage fraud in Canada raised questions around how these bad actors were able to operate so brazenly. Now a new audit of @RECOhelps raises further doubts that self-governance is working. 1/ cbc.ca/news/marketpla…
Some takeaways from the incredibly scathing Auditor General's report:

auditor.on.ca/en/content/ann…

2/
Re spot audits:

"RECO has never performed a full
on-site inspection at 27% of registered brokerages, and
has not conducted a full on-site inspection at a further
35% of brokerages in more than five years."

3/
Read 11 tweets
Aug 23, 2022
Thoughts on trigger rates.

Variable rate mortgages have surged in popularity, accounting for over half of new originations in the past year and now represent 1/3 of all outstanding mortgage debt.

BUT, up to 80% of those variable rate mortgages still have static payments

1/ Image
Static payment mortgages work by adjusting the share of the payment that is applied to principal. Canada does not allow for negative amortization, so once interest expenses consumer the entire payment, it "triggers" a payment reset.

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How many mortgages are at risk of reset? It's substantial. Over $260B worth of variable rate mortgages (15% of total outstanding) were originated between Mar 2021 and Feb 2022 at an avg rate of 1.58%.

3/ Image
Read 10 tweets
Jun 13, 2022
THREAD: According to new data from the @bankofcanada, a major source of incremental housing demand in Canada has come from "investors"....loosely defined by the BoC as buyers who already own at least one other property. 1/
The share is likely even higher. From the BoC's own footnotes. 2/
One major hurdle to entry into the market for new buyers in expensive cities is saving for a down payment. According to estimates from @UBC, based on the cost of houses in Ontario, it would take prospective buyers up to 28 years on average to save up a 20% down payment. 3/
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Mar 28, 2022
THREAD: House prices in Toronto have been increasing on average by nearly 4% per MONTH for the past 6 months. Bidding wars have been so insane that to win, you basically have to bid 10-15% (or more) above any recent comparable. 1/
This would normally cause issues with appraisals but with prices rising so quickly, buyers just push back the appraisal as close to the closing date as possible and let the comparables "catch up" to the sale price. 2/
This works in a hot market with accelerating prices, but things are changing at the margins in Toronto, which I think will be clear in the latest data.

What that means is that people who bought recently at prices way above comps may have issues with appraisals going forward 3/
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