What happened in 2012 that lead to such a small number of citizenship grants?
Short answer: the impact of Harper/Perrin changes dramatically increasing screening of citizenship applicants and issuance of RQ, in 2012, resulted in stalling the process to a near standstill for several months.
Longer explanation:
In April 2012 CIC (as it was then referred to) adopted and implemented the Operational Bulletin OB-407 which contained strictly applied criteria for issuing a full-blown RQ. This was NOT publicized. So we only learned about OB-407 around mid-summer, after there was a sudden HUGE surge in RQ, including a huge number of applicants getting RQ before their test and interview (we referred to it as "pre-test RQ"), and similar to what some have appropriately suggested here, many of us coordinated ATI applications to try and find out what was happening. While we managed to obtain only portions of OB-407, as much was redacted, what we did obtain in conjunction with other internal CIC documents related to the adoption, interpretation, and implementation of OB-407, and especially given a leaked copy of the FRC (File Requirements Checklist) that was widely shared (I believe it was shared here as well, but at that time I was more active in a couple other forums where it was for sure shared and widely discussed), we were able to map much of what was happening. Which included CIC revisiting the vast majority of pending applications for screening against the criteria in the FRC (which was part of OB-407). This had the in-practice impact of bringing the entire process to a near stand-still for months.
For some months during the second half of 2012 nearly one in every three applications was referred to RQ. But the intensity of the slowdown was aggravated because nearly all applications went into a queue to be screened against the FRC triage criteria.
By late 2012 CIC implemented interpretations that mitigated the impact of the strict criteria (for example, in 2012 any period of unemployment triggered RQ, which was initially interpreted, for example, in a way that resulted in all stay-at-home parents or spouses being issued RQ) and in early 2013 amended the criteria (as best we could sort out through the ATI process, since the FRC and triage criteria were "confidential" and redacted from ATI completed requests) so that not so many applicants were issued RQ (for another example, initially any period of self-employment triggered RQ, but by early 2013 this appeared to be just a factor considered and not an automatic trigger for RQ).
Comparison to the overall processing timeline around then warrants noting.
In 2012 and 2013 the CIC information, based on how long it was taking to process at least one-half of routinely processed applications, indicated a 24 month timeline. Nonetheless, scores and scores of applicants were encountering a three year plus timeline, and large numbers of those going through a full blown Residency case review had timelines in excess of FOUR YEARS.
So far, in the current situation, the delay has been six or seven months added to the pre-Covid timeline. But it is easily foreseen that overall the timeline is likely to approach and may exceed, once again, 24 months, that is two years. Current applicants with personal issues related to obtaining a Canadian passport, for example, should take this into account in their decision-making. Not sure why, but my observations about this have been characterized as "discouraging" or amounting to a judgment that it is OK. Anyone who bothers to actually read my observations should readily recognize that I focus on facts not judgments, and on how things work and how to deal with that.
The law mandates IRCC to process grant citizenship applications. There are no time requirements imposed by statute or regulation, but in such cases the law imposes a reasonable standard as part of what the Charter requires in terms of fair procedure. So it is indeed time for IRCC to make whatever accommodations are necessary to resume tests and interviews, and it is up to IRCC to figure out how to do that, and to do it within a reasonable time. There are, of course, lots and lots of differences of opinion regarding what is "reasonable" in this regard. But it has now been over six months since the last test and interview (with perhaps some isolated exceptions in special cases), with the threat of Covid-19 still looming large, so it is time for IRCC to figure out how to do what the law mandates it to do notwithstanding the logistical difficulties of dealing with the pandemic.