Canada’s Frozen Investor Immigration Program

Canada’s Frozen Investor Immigration Program

By Jérémie M. De Serres

The announcement of the 2014 Canadian budget indicated the end of the 28 years old federal Immigrant Investor Program (IIP).  The purpose of the program was to attract investors and entrepreneurs to start businesses and invest in Canada.

The upside is that at last a backlog of approximately 65,000 applications (some of which have been sitting there for years) will be cleared.  The downside is that by “clearing the desk”, the government has in fact turned down billions of dollars of financing, many potential business projects, as well as wealthy newcomers to boost Canada’s economy.

THERE IS ALWAYS A REASON

The Tories based this decision on economic and practical reasons, major ones being:

  • similar investor programs in peer countries require a higher investment, thus a greater input in the economy;
  • relative to other economic immigrants, investor immigrants pay a lower amount of taxes;
  • relative to other economic immigrants, investor immigrants are less likely to remain in Canada in the long run.

Canada’s IIP used to be one of the most popular economic immigration programs in the world.  Candidates who wish to emigrate from China, the most represented group of people, will now have to turn to other destinations.  Depending on the selected country, the investment may vary greatly. For example, for Greece, Portugal, the United-States and the United Kingdom, investments will be respectively of 250,000€, 500,000€, 500,000 USD and 1M£.

SOMETHING NEW

Whilst closing the door to the IIP program, the Canadian government has recently announced the launch of a Start-up Visa program.  The purpose of this new program is to attract entrepreneurial skills rather than capital.  According to this scheme, the applicant must obtain the support of designated Canadian investors, such as a venture capital funds, an angel investor group, or a business incubator.

This is a complete shift in the requirements for economic immigration since the investment for Start-up Visa by the candidate is limited to the living expenses of his family.  However, finding the financing can be much more challenging as an applicant will have to convince a designated investor of the merit of his business idea.  Furthermore, the program aims at projects mostly limited to fields of technology, such as IT, health, energy and clean technologies.

An applicant for Start-up Visa must be able to demonstrate his ability to communicate in English or French, and should have completed at least one year of post-secondary studies.  The objective is to attract serial-entrepreneurs, some of whom may be university drop-outs, such as Bill Gates, Steve Jobs and Mark Zuckerberg.

KILL BILL

In the meantime, the federal government is taking further measures to tighten the immigration process and the admission requirements.  The Citizenship and Immigration Minister, Chris Alexander, recently presented Bill C-24, the Strengthening Canadian Citizenship Act, the first comprehensive set of reforms of the Citizenship Act since 1977.

Apart from changes in the selection process to make it more efficient and reduce future backlog, this bill increases the period of residency in Canada from three to four years before an immigrant may apply for citizenship.  Further, it obliges newcomers to make tax declarations during the years of residency computed for applying for citizenship.  The requirements to attain citizenship are thus increased, along with the tax burden on new immigrants.

Bill C-24 also innovates since the government will be able to withdraw the Canadian citizenship of someone who has a second citizenship, and who is convicted of terrorism, treason or spying abroad, or who is involved in an organized armed group engaged in armed conflict with Canada.

A NEW ORDER

Abandoning the decades old IIP is a bold move from the government, since no other program is currently available to welcome the high net worth class of immigrants. Other competing countries will no doubt benefit from this change in the Canadian policies.

The government announced that other pilot programs would be unveiled soon.  The new economic immigration programs are still at a development stage and only time can tell if they will bring the expected results. Can the Start-up Visa scheme be the beginning of a stream of successful technology businesses emerging in Canada or is the required investment too hard to secure for having a significant amount of applicants?

The changes occurring at the moment in Canada’s immigration policies are the most important in many years. It is thus hard to predict the long term effects of such upheavals. One thing to remember however is that the reputation of the country has always been a welcoming one, and hopefully it will remain this way.

Categories: News, Opinion

About Author

Jérémie M. De Serres

Jérémie M. De Serres, LL.B., M.B.A was born and raised in Quebec City, where he attended Champlain St. Lawrence before moving to Sherbrooke to study law and business. He now works as an immigration lawyer based in Hong Kong, and shares his experience as a Quebecer living abroad. His experiences in moving from Sherbrooke to Hong Kong give him particular insight into how it is to be a Quebecer, and how someone foreign to Quebec culture sees him and his manners and habits.

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