This is straight from the CIC guide dated 03/2010 (old form)
Application process at the Visa Offices
Upon receipt of your application or the expiry of the 120 day deadline, a visa officer will make a final determination of eligibility for processing based on the information on file.
If your application does not qualify for processing under the Ministerial Instructions, you will be sent a letter that:
•provides details on the reason why your application is not eligible for processing, and
•confirms that a refund for the processing fee will be issued.
Selection and Admissibility
If the Visa Office finds your application to be eligible for processing, it will then be assessed against the following:
•minimum requirements
• selection factors
• sufficient funds
•admissibility (criminality, security, medical)