Feds should reboot cash-for-residence immigration program

MONTREAL—The federal government has taken fire over Quebec’s immigrant investor program, which offers residency to wealthy immigrants, mostly from China. Critics accuse Ottawa of disregarding that the vast majority of these individuals settle in British Columbia and Ontario, but deprive these provinces of federal immigrant settlement transfer payments that Quebec is unfairly receiving. The critics would be better advised to appeal to the federal government to reclaim its role as a dominant player in the residence-through-investment industry, as it has the policy basis and the market demand to do so. Until 2014, the federal government gave millionaires a pathway to residency and, ultimately, citizenship in Canada through its Immigrant Investor Program. The scheme operated largely on the interest income earned from investors’ funds. The program benefits to Canada peaked during the 1990s, when interest rates were high. The program was terminated under much controversy in 2014 by the previous government, which, despite compelling favourable studies, claimed it provided no benefit to Canada. It was replaced in 2015 with an unpopular Immigrant Investor Venture Capital Pilot Program, which the current federal immigration minister has publicly stated is practically non-existent due to the lack of interest from international investors. As a consequence of this failed policy, Canada is losing out on attracting the world’s most successful businesspeople and their families who otherwise would choose to settle here. British Columbia and, to a lesser extent, Ontario are losing out on transfer payments being paid to Quebec for immigrant investors applying under its program. Statistics show only 16 per cent ultimately reside in the province. The way out of this morass is clear. The Trudeau government should immediately get on with the task of redesigning the Immigrant Investor Venture Capital Pilot Program. It just needs to create the right policies and a restructured program that will succeed in attracting carefully chosen high-net-worth businesspeople who will bring billions of dollars to Canadian businesses and create new businesses that will in turn create more jobs. The benefits of the Quebec immigrant investor program to that province are undeniable. From 2001 to 2016, it gave $714 million to 4,737 businesses in 17 territories in the province. As well, a compelling 2010 study conducted by three economists in Ontario and Quebec concluded that an average immigrant investor family directly injects more than $770,000 into the economy. Additionally, a recent Statistics Canada report on immigration and business ownership in Canada, the first of its kind, confirms that immigrants are more likely than Canadians to establish businesses. Ottawa should also consider establishing a citizenship-through-investment program for ultra-high-net-worth individuals and become a dominant top-tier country in the citizenship-through-investment arena. Currently Austria, Malta, and Cyprus are the only top-tier countries offering a direct path to citizenship while Antigua and Barbuda, Dominica, St. Kitts and Nevis, and Saint Lucia also offer such programs. In pursuing this new policy initiative, Canada would be in a position to attract the world’s most successful ultra-high-net-worth businesspeople along with their families and, by extension, their business networks. This could prove highly lucrative and provide Canada with a large inflow of cash, which it badly needs. If executed strategically, Canada would also realize significant gains to its human capital in the immediate term and, through the children of such businesspeople, in the long term. The human capital benefit that the children of successful businesspeople bring to Canada is immeasurable and invaluable. How beneficial can a new federal residency and citizenship program be? This year, some 5,000 newcomers will be admitted under the Quebec program alone, which has been selecting its own business investor immigrants since 1986. Under a revised federal immigrant investors’ program, Ottawa would likely account for more than 70 per cent of the market, a position it held at the peak of its popularity in 2010. In doing so, British Columbia and Ontario would then benefit from their share of Ottawa’s transfer payments as the two provinces would become the default choice for the overwhelming majority of applicants applying under the Quebec program. Together with Quebec, Canada could again become a dominant player in the international residency-through-investment industry and perhaps match or surpass the popularity of the EB-5 program in the United States, which admits 10,000 business immigrants annually. If Canada is to return to the forefront of the business immigration field, it must replicate a modified format of the Quebec program and other successful international programs by installing a well-devised, targeted model that creates a capital fund for Canadian businesses and attracts the right calibre of applicants on the basis of clear policy objectives featuring program integrity, international competitiveness, processing cost efficiency, and fast processing. The federal Immigrant Investor Venture Capital Pilot Program is dead but the need for high-net-worth business immigrants to Canada is not. The substantial financial benefits to Canada, a welcome advantage in the face of our current economic difficulties, could well be surpassed by the undeniable human capital benefits it would receive from the world’s most innovative and wealthiest businesspeople and their families who would choose to live in Canada. Additionally, Canada could take the lead on the global stage by creating an international charitable fund for refugees from a portion of the proceeds of investment inflow. In doing so, it would help ensure that the world’s wealthiest are directly assisting the world’s immigrant population who are most affected by international conflicts. This is one of the hallmarks of effective immigration policy. Colin R. Singer is immigration counsel for www.immigration.ca and managing partner of www.investmentimmigration.com. news@hilltimes.com The Hill Times