On Tuesday, the Canadian government voted to cancel the Immigrant Investor program as part of the federal budget roll out. The program allowed foreigners with a net worth of more than $1.6 million to gain residency and potentially citizenship by providing the government $800,000 in interest-free loans that would be repaid within 5 years.
Tens of thousands of people who have already applied through the investor program and are on the waiting list will have their fees refunded and applications returned.
Since its development in 1986, more than 130,000 people have used the Immigrant Investor program. It has been a gateway to a more comfortable life and a means to diversify investments out of risker markets. In Vancouver, for instance, the program has helped wealthy members of the Chinese business community to obtain Canadian citizenship, buy property, and relocate their families to Canada.
However, the initiative was also considered flawed by many who viewed it as an inefficient way to lure wealthy entrepreneurs to benefit the economy. Specifically, the program was criticized for allowing rich foreigners to ‘buy’ citizenship and live abroad, without actually creating jobs or economic growth in Canada.
“This is not a program that was achieving its objectives. Canadian citizenship and permanent residency is not for sale,” Immigration Minister Chris Alexander said last Wednesday in a statement released by his office.
In the case of Vancouver, the Chinese investors, after obtaining citizenship, would relocate their families to Canada, while they themselves continued to live, and do business, in Asia. Still, according to Kenny Zhang, a senior fellow at the Asia-Pacific Foundation in Vancouver, the investor program did have a positive effect on the Canadian economy. On one hand, it generated consumer spending and created government income through property taxes. Indirectly, it also helped foster Asia-focused networks in Vancouver and other Canadian cities.
Interestingly, the Immigrant Investor program will remain in effect in Quebec, which has generated some controversy. One voice of criticism is Saskatchewan Premier Brad Wall, who said Wednesday that Quebec is “once again” getting special treatment from the federal government.Under the Canada-Quebec Accord, the province has authority over selecting its immigrants, and is set on keeping the program in place.
“We all need to understand that Quebec has had autonomy on immigration—on the selection of immigrants not on issuing visas or passports—since 1991 and it will be up to Quebec to determine the future of that program,” Immigration Minister Chris Alexander stated. “But the Quebec program is not achieving its objectives,” he added.
Wall believes the government should not cancel the program if some provinces are exempt from shutting it down.
“Based on what we know right now, we have, again, Quebec being treated differently than the rest of the country… What I am concerned about here is more asymmetry in the federation, where Quebec is going to get a different deal that the rest of us,” he told a reporter on Wednesday.
Wall maintains that the program has helped Saskatchewan economically. According to him, investments from the Investor program have helped spur the development of 1,339 homes in the province at the time of the housing crunch.
Mr. Alexander disputes these facts, arguing that there is “little or no evidence that any immigrant investors whose money was benefiting Saskatchewan to some extent were actually coming to Saskatchewan.” These comments echo the long-standing concerns about the program that led to its cancellation in the first place.