[CANADA] Canada plans to close the federal Investor Program
On February 11, 2014, Canada’s Economic Action Plan (EAP) announced the government’s intent to terminate both the Federal Immigrant Investor Program (IIP) and Federal Entrepreneur Program (EN). In doing so, it plans to eliminate several thousand backlogged applications.
The IIP and EN programs have been cornerstones of Canada’s business-oriented immigration programs. In 2011, approximately 10,000 immigrants entered Canada through the IIP, while almost 1,000 entered through the EN.
Although the programs have been longstanding business immigration programs, in recent years they suffered from significant backlogs in processing. Investors, for instance, had to wait at least 54 months for visa issuance, while many entrepreneurs faced even longer processing times.
The current inventory of backlogged applications for the IIP stands at 65,000. Citizenship and Immigration Canada (CIC) anticipates that it would take more than six years to process these cases. To move forward with programs that will more accurately capture the types of investors needed in Canada, CIC has decided to eliminate many of the files currently in the backlog.
However, to date, no official announcement has been made as to which applications will be processed and which applications will be returned to the applicants.
CIC pointed out in its press release that the minimum investment amount for IIP applicants, which is $800,000, is significantly lower than that of investor programs in countries such as the United Kingdom, Australia, and New Zealand. It also noted that investors who arrive in Canada are likely to pay lower taxes than immigrants who come to Canada through programs such as the Federal Skilled Worker Program.
In its backgrounder, CIC explained:
The existing IIP is of limited economic benefit to Canada. There is very little “new” money coming into Canada. Almost all initial investments made through the program come from loans from Canadian banks to provincial governments.
The amount of IIP capital actively invested in economic development initiatives has been disappointing. The requirement for provinces to guarantee repayment of IIP investments after five years limits their ability to invest funds into more high-risk initiatives that tend to reap greater rewards for Canada in terms of true innovation and job creation. Fifteen years after provinces and territories were factored into the equation, less than half of the funds are actively invested.
By doing away with the current IIP and EN programs, the government will “pave the way for new pilot programs that will actually meet Canada’s labour market and economic needs.” These pilot programs will enable Canada to remain competitive in the global economy.
CIC mentioned that the pilot programs will complement the Start-Up Visa program, a former pilot program that is now a permanent part of Canada’s immigration system. Two programs have already been mentioned as replacements for the IIP and EN streams. One will be a new Immigrant Investor Venture Capital Fund and the other a new Business Skills Program.
Details of the new pilots will be announced in the coming months.
The Canadian province of Québec manages its own Investor Program, which requires net assets of at least CAD $1.6 million legally acquired, management experience, and a no-interest loan of CAD $800,000 made to Québec for a five-year period. The Québec Investor Program remains open to French-speaking applicants who have an advanced intermediate level of French as evidenced by a recognized French test.