Andy Semotiuk – Pace Law Firm: I recently interviewed the Honourable Gerry Weiner, Canada’s former Minister of Immigration and now a member of Pace Law Firm. We talked about a prospective new investor immigration program for Canada.
AS: You were the Minister of Immigration under Prime Minister Brian Mulroney and you introduced the first investor immigration program to Canada. What happened to it?
GW: Well, initially it was a great success and a leading program in the world. Thousands of investors and their families came to Canada and invested their money here. The money went to the federal government and was used in expenditures. After five years, the money was repaid to the investors.
The program was terminated in 2014. Some critics claimed it was no more than a way for investors to “buy” their way into Canada. The financial requirement was seen as relatively low and risk-free. The program was attacked due to its lack of a language requirement and its propensity to attract “astronauts” — mainly from China — who would move their families to Canada but continue to conduct their business abroad, eluding Canadian tax authorities. Monitoring and enforcement of residence were problem areas. The claim was that the program merely attracted shopkeepers rather than a potential Bill Gates or Steve Jobs.
AS: Was that the end of investor immigration to Canada?
GW: No. Quebec had been running a simultaneous investor program which continues to this day. Since its inception in 1986, the Quebec program has pumped hundreds of millions of dollars into the Quebec economy. They had a very good year in 2015, with some 5,000 investors approved.
Quebec’s is a passive investment program. This means that potential immigrants must ante up $800,000 for a period of five years, after which the money is returned in full but without interest. The prospective investor must show a minimum net worth of $1.6 million and be able to demonstrate the legitimacy of the funds. Quebec also charges a substantial application fee, which more than pays for the program.
AS: How do you respond to the critics of these programs?
GW: The key thing is that these programs brought millions of dollars into Canada and created jobs. The “astronaut” criticism is short sighted. When looking at investor immigration, you need to think long term. You must factor in the quality of the persons brought into Canada as well as their immediate financial contribution to the country.
One has to include a calculation of the value of the children and grandchildren of investors who enter our schools and become tomorrow’s leaders in our society. We must remember the legacies that investors will leave to Canada and their now Canadian families.
Having worked with the investors who came from all over the world I can assure you they were not just ‘shopkeepers,’ but in many instances captains of industry.
I agree that some steps need to be taken to mitigate the impact of investor immigrants on the housing markets in Vancouver and Toronto, or any tax avoidance practices, but these are matters to be dealt with in
the context of the investments being made and the jobs being created.
AS: How would you model a new federal investor immigration program?
GW: A new federal program must highlight job creation and business stimulation in Canada. The program should be geared toward job creation in economically challenged areas of the country. Borrowing from the highly successful EB-5 conditional visa system in the United States, a Canadian program should provide for the creation of regional centres that would bring together investors and local and regional entrepreneurs and economic development officials to ensure the best use of funds.
In the Canadian context, the regional centre would always have as its focus the creation of new permanent jobs, especially in struggling areas of the country. The regional centre should be tasked with assisting the immigrant investor as well as other classes of immigration, including refugees, by providing integration and employment services in order to ensure that newcomers build successful lives in this country. Indeed, refugees could be major beneficiaries of the job creation component of a rejuvenated federal immigrant investor program.
Such a program could require investments of $1 million for a minimum five years with conditional two-year residence granted at inception, with permanent status granted later if conditions attached to the investment are met.
A typical immigrant investor arriving with a family in a struggling area of the country will be serious and motivated. The investor, having paid $30,000 or more in application fees along with a risk capital investment of a million dollars plus dwelling costs, clothing, schooling, vehicles and many other needed expenditures, will surely be an asset rooted in his or her chosen community. This, combined with the establishment of a viable commercial enterprise and the creation of employment opportunities, produces a winning situation that could boost the economy of many Canadian locales, especially those outside the hubs of Montreal, Toronto and Vancouver.