According to Canada's auditor general, Sheila Fraser, Canada's Foreign Affairs department is collecting more than it should from Canadian passport applicants. She announced that the $25 consular service fee (which is lumped into the $85 cost of an adult passport) is more than the department should be charging, given the services that passport holder receives in return.

The consular service fee is a kind of travel insurance. It provides protection and assistance to Canadian abroad who may need help because of accident, illness, or natural disaster. This fee was used to fund the evacuation of Canadian citizens from Lebanon in 2006-07, for example. It also includes support in the case of an arrest overseas.

Fraser states that Foreign Affairs incorporated additional costs when calculating the $25 fee.

"Adult passport holders are, in effect, helping to cover the costs of activities that are outside the scope of what they would receive for that fee," she claims.

Government departments are not meant to make a profit from service fees. Fee structures should be such that the department breaks-even; amount charged should equal cost of services rendered.

Foreign Affairs insists that it runs a deficit in this area, however, it has agreed to review the calculation of consular service fees.

The Auditor General has also required Citizenship and Immigration Canada to review the fees it charges for permanent resident and citizenship applications to ensure that they are in line with the cost of services provided. She said that these departments must develop systems for periodic review of fee structures.