Canada’s ambitious pilot immigration program for attracting super millionaires has drawn a muted response. In the past six months, since the program started, there were only six applicants, which is nothing compared to the former investor class immigration program, media in Asia reported.
The latter was scrapped in 2014, amid criticism that it allowed wealthy Chinese to buy their way into Canada.
Referring to the poor response to the program named as "Immigrant Investor Venture Capital scheme," an immigration lawyer said “it is poorly designed." Richard Kurland, a Vancouver based immigration lawyer said he received this information when he filed an Access to Information request, seeking the data on the new immigration plan for the rich. The federal government had started accepting applications in January.
In December 2014, Canada announced that it was looking for 50 wealthy foreigners to join the pilot run of the IIIVC to attract applicants far richer than those who have already entered under the previous program. The previous Immigrant Investor Program was scrapped even while a huge backlog of applications were existing at Canada's Hong Kong consulate from mainland Chinese.
Kurland quipped that the revamped program will “wither on the vine and quietly go away” because of the low demand from would-be immigrants. He sees two reasons for it. One is the high price tag and second is the uncertainty about investment, reported the International Business Times.
Though the initial response is looking poor, an official at the Citizenship and Immigration department said, there is no question of the government reverting to the previous investor class visa. “We believe it is important to continue testing demand, because we know that the IIVC pilot program can deliver significant benefit to Canada," the official said.
The ambitious new program envisages would-be immigrants to invest a minimum of C$2 million in Canada for a 15-year period. They must also have a net worth minimum of at least C$10 million. “Few were prepared to throw good money away, and C$2 million is a lot of money to get a visa. There was no monitoring oversight and control after the investment is made … (and so) this is not a wise financial decision to take. I’m not surprised to see just six takers,” Kurland noted.
Not globally competitive
The flaws in the new scheme were picked by another expert. According to Hong Kong immigration lawyer Jean-Francois Harvey, the new program is "ridiculous.” The applicants have to undergo strict audits to confirm the source of their wealth besides vetting the language and education benchmarks. He said the failure to attract applications despite postponing the deadline again and again showed it is not competitive in front of the worldwide competition for investor immigrants from China and across the world.
"The failure to attract [more applications] despite the fact that they postponed the deadline again and again is simply [because] it is not competitive in front of the worldwide competition for investor [immigrants] from China and around the world," said Harvey, founder of the Harvey Law Group, which is based in Montreal, with offices in Hong Kong, Beijing, and Vietnam.
Harvey said the immigration industry in Asia "did not even try to market the deal" because it compared so unfavourably with schemes offered by other countries, notably those in Europe. For instance, Portugal offers permanent residency under its "Golden Visa" scheme to immigrants who spend 500,000 euros (HK$4.24 million) on Portuguese real estate and retain it for five years.
Harvey said the new Canadian program was a "not-so-subtle way to block the Chinese applicant."
Under the old IIP, investment took the form of an interest-free C$800,000 loan to Canada, which was returned intact to the immigrant after five years. The IIVC scheme's C$2 million investment will be held by Canada for about 15 years and will be fully at risk of loss.
But interest in the new program has been paltry. According to Citizenship and Immigration Canada (CIC), responding to an access-to-information request, the IIVC scheme received just six applications worldwide, as of June 8.
Kurland, according to The South China Morning Post said the IIVC scheme was "a mousetrap that doesn't trap mice." "The design is flawed. It doesn't reflect market realities," said Kurland, who said would-be immigrants were put off by the risky nature of the investment, as well as the requirement for financial audits.
He also said Canada's recent habit of "retroactively changing the rules" for immigration applicants was acting as a major deterrent. When the IIP was shut down last year, the backlog of about 60,000 applicants and family members, including about 45,000 mainland Chinese, was simply dumped.
Published in partnership with Asian Pacific Post