Immigration News

Feds Finally Clamp Down on Rogue Provincial Immigration Programs

By Randy Boldt

Over the course of the last decade, Canada's business immigration program has undergone a gradual but important evolution. Where once the federal government had complete say over what types of business immigrants were admitted to Canada, now the system allows for considerably more provincial say in selection and admission than it once did.

On balance, this has been a good thing, both for immigrants and the country. Instead of having to choose between an Investor program under which the well-heeled essentially buy a visa and an entrepreneur program that required years of waiting for the issuance of a conditional visa, now business immigrants have a plethora of "provincial nominee programs" from which to choose.

And the provinces can design programs that address their individual economic development needs and compete with each other to entice most desirable entrepreneurial immigrants to settle within their borders.

However, over the course of the last half decade, that competition got a little out of hand with some provinces designing programs that looked a lot more like the federal and Quebec investor programs - a programs that do not require an immigrant to engage in any economic activity whatsoever after admission -- than they should have.

To address this problem, in September 2008, the federal government finally introduced new regulations which effectively prohibit provinces offering "passive investment schemes" as part of their provincial immigration programs. The major impact has been the elimination of programs previously offered in Nova Scotia and Prince Edward Island.

As a former provincial immigration program manager, I can attest that this was an important issue for those provinces who were not offering passive investment schemes. Provinces such as Manitoba, New Brunswick and British Columbia used their Nominee programs to attract genuine entrepreneurs looking to start real businesses in their provinces. The use of passive investment schemes, which offered large commissions to consultants, attracted some capital to the provinces that were offering them, but brought few immigrants who stayed and lived in their provinces, and created very few new businesses. Surprisingly, it took four years for the Federal Government to finally impose these regulations, after they had first proposed them to the provinces (the wheels of government can move very slowly).

Meanwhile, the ultimate failure of these schemes is evident by the fact that the province of Nova Scotia is now offering refunds of hundreds of thousands of dollars to many of the individuals who immigrated under their previous provincial nominee program.

The new regulations require that business immigrants, who come to Canada under Nominee programs, must have at least a 1/3 ownership in any business they invest in, or alternatively, they must invest at least $1 million into the business. These regulations apply to all Nominee programs, not just PEI and Nova Scotia. These programs attracted a total of approximately 500 immigrants per year. Both provinces are now in the process of designing new programs that comply with these regulations.

The result is that all provinces that are seeking to attract business immigrants must offer nominee programs that require the Nominee to invest in a real business in which they are intending to take an active management role.

Permanent Resident Visas (PRV) obtained through a Nominee Programs are unconditional. Once an immigrant has obtained a PRV, they can live where ever they wish in Canada, and invest, or not invest as they choose. These rights are guaranteed under the Canadian Charter of Rights and Freedoms. This has meant that provinces offering business Nominee programs must find ways to retain immigrants, or penalize them if they fail to proceed with their proposed investment. For example, provinces like Manitoba and Saskatchewan require that the Nominee place a $75,000 deposit with the province until they have completed their approved investment.

The bottom line is that the introduction of this new regulation creates a leveled playing field across nominee programs, but still allows provinces to develop and offer innovative and competitive programs suited for their requirements. These new regulations are in place to ensure that these programs remain immigration programs, not investment schemes.

For immigrants still interested to come to Canada as investors, the Federal and Quebec investor programs remain your best option. For those who want to come to Canada and start a real business, there are still abundant of choices through at least 7 different provincial and territorial programs aimed at attracting real entrepreneurs.

Randy Boldt was formerly a senior government immigration official in Manitoba and Saskatchewan and has recently formed a licensed immigration consulting firm - VisaMAX Limited.