“Would you give two million dollars with no monitoring, no oversight, no control; and hope to see your money in 15 years? Would you do that with your family’s money?”
That’s what immigration lawyer Richard Kurland said when asked about the lack of interest in Citizenship and Immigration Canada’s latest immigration program targeting investors.
The program Kurland was referring to is called the Immigrant Investor Venture Capital (IIVC) pilot program. Under it, investors are required to have a personal net worth of C$10 million or more, and make a non-guaranteed investment of C$2 million over approximately 15 years.
When the program was announced last January, the federal government said that it would accept up to 500 applications, and give a maximum of 60 permanent-resident visas.
Zool Suleman believes that, by imposing tougher requirements, Canada’s new investor program has ended up being perceived as less appealing than other programs around the world.
But through a Freedom of Information request, Kurland learned that the government only received six applications as of June 8.
“There’s a design flaw in that particular system,” Kurland said in an interview with New Canadian Media. “Essentially, the public servants built a mousetrap that couldn’t catch mice.”
According to Kurland, the flaw is the lack of control investors have over the investment. The $2 million go to the Immigrant Investor Venture Capital fund, which is invested in “innovative Canadian start-ups with high growth potential,” according to the program’s website.
When contacted by New Canadian Media, Citizenship and Immigration Canada (CIC) didn’t confirm the exact number of applications it received. “While we have received a number of applications, very few were complete or met the requirements,” reads their emailed statement.
The government is still receiving applications for the program. The deadline to apply is December 30.
Is the new program too expensive and risky?
Zool Suleman, an immigration laywer based in Vancouver, believes that the previous immigrant investor program, which ran from 1986 until 2014, had earned a reputation among investors as being a safe pathway to Canadian residency and a passport. The new program, in contrast, is seen as too expensive and risky.
CIC argues that the new program not only efficiently targets investors who will contribute to Canadian society, but also ensures that they will properly support the country’s economy and work in the best interest of Canadians.
Under the former Immigrant Investor Program (IIP), applicants had to invest C$800,000 in Canada’s economy in the form of a repayable loan. The applicant’s net worth had to be at least C$1.6 million. The IIP, which was often criticized as being a way for millionaires to buy their way into Canada, was put on hold in 2012 due to a backlog in applications, and was killed two years later.
“It seems that in the new program redesign, the emphasis was in putting money at risk,” Suleman said. “And the marketplaces said: ‘We don’t want to put our money into a pool which we have no control over, and over which we have no guarantee.’”
Another big difference between the old program and the new one is the language requirement. The old one didn’t have one, but the new one requires applicants to take a language test to prove their proficiency in English or French.
Suleman believes that, by imposing tougher requirements, Canada’s new investor program has ended up being perceived as less appealing than other programs around the world.
Malta’s program, for example, requires a contribution of €650,000 from the applicant, in case he or she doesn’t have a family; payment of a due diligence fee; a commitment to remain in the country for a period of at least five years; and an additional investment of €150,000. Successful applicants become citizens of the European Union.
“Venture investor immigration funds work in a very competitive environment,” Suleman said. “Money will go where they can get the best passport and the safest lifestyle at the cheapest price.”
In order to make the new Canadian program more appealing for foreign investors, Suleman believes it needs to be reshaped.
For the New Democratic Party’s Citizen and Immigration Critic Lysane Blanchette-Lamothe, programs that give priority access to residency to rich investors – like the Immigrant Investor Venture Capital pilot – are unfair to other professionals with much-needed skills who are trying to immigrate to the country.
“I think that the one thing the Canadian government can learn from this is that if you make it too hard, you will succeed in deterring investor immigration to Canada,” he said. “I think they need to rethink the program. That’s really what needs to happen.”
CIC: We aren’t going back
But CIC believes the new investors program is fair for both the foreign investors and Canadians. In the emailed statement CIC sent to New Canadian Media, they said that the program seeks to “ensure that we attract immigrant investors who are able to make a significant investment in Canadian venture capital and who will better integrate into our society.”
The objective of the program is to stimulate Canada’s economy and promote growth by funding start-ups across Canada. The Immigrant Investor Venture Capital fund will be managed by the investment arm of the Business Development Bank of Canada and other fund managers.
CIC argues that the new program not only efficiently targets investors who will contribute to Canadian society, but also ensures that they will properly support the country’s economy and work in the best interest of Canadians.
“We want investors to choose Canada for the right reasons: we want them to settle in our country and contribute to our economy,” reads the statement. “We will not lower our standards or consider going back to a program similar to [the previous one].”
But for the New Democratic Party’s Citizen and Immigration Critic Lysane Blanchette-Lamothe, programs that give priority access to residency to rich investors – like the Immigrant Investor Venture Capital pilot – are unfair to other professionals with much-needed skills who are trying to immigrate to the country.
“It’s not fair to foreign caregivers, for example, who, because of huge backlogs, have to wait years for residency,” she said in an emailed statement. “Government must work with communities, provinces and experts to find a proper and fair solution.”
