The deadline for what has been called our millionaire migration scheme (officially the Immigrant Investor Venture Capital (IIVC) pilot program aimed at attracting 500 applicants from which only 60 would be randomly selected), in fact, has been extended numerous times.
Those in the immigration industry blame the stringent new criteria for the lack of interest. Among them include a net worth of C$10 million, of which C$2 million must be invested for them by the Canadian government.
Further, applicants must speak English or French and have a Canadian or equivalent post-secondary educational qualification. Relatively few wealthy Chinese (our main source of business immigrants) appear willing or able to meet these requirements.
The business immigration program is supposed to attract the kind of people who can jump start our economy with both their financial capital and business experience and entrepreneurial instincts. We look to them to generate jobs, income and tax revenue. It does not always work.
The recently terminated Investor Immigrant Program (IIP) had been operating for 28 years and attracted 12,675 applications in 2010, its peak year. Including dependents, this comes to 42,312 wealthy potential immigrants. The vast majority were Chinese from Hong Kong, Taiwan and the Chinese Mainland, with most settling in the Greater Vancouver area.
However, it was hard to find any evidence they were having any positive impact on the Canadian economy, beyond putting upward pressure on housing prices in Vancouver. Signs of new start-ups and job generation are scarce.
Two assumptions lie behind our millionaire migrant programs, neither of which appears to be true in the 21st century global economy. The first is that rich, successful businesspeople are looking for places in which to set up operations. In fact, they are being courted by developed and developing countries around the world. An extreme example is Spain’s recent attempt to attract back the descendants of the Jews who were expelled from the country at the time of the Inquisition in 1492. It was hoped that capital and business skills would come with them.
The second assumption is that, once rich immigrants get here, they will create and operate businesses. Immigrants to Canada have created many businesses and jobs, but these people were rarely from the business immigrant category. Already wealthy, business immigrants may decide they no longer need to make the effort to start new businesses and risk their capital. If they wish to do business, they will do so in whatever part of the globe appears most business friendly. Rarely is that the case for Canada.
But there are several ways in which our business policies can be improved:
- Tear down barriers, whether between suburbs in Metro Vancouver or between provinces. Qualified businesses should be free to operate across geographic regions.
- Be more timely. A restaurant wanting to move half a block has been waiting for months for the needed approvals. Bureaucrats either don’t know or don’t care that the business is losing money and customers because of this delay.
- Fix rules and regulations so that they are known and easy to comply with. They should not be arbitrary or subject to constant change.
- Set up systems so that businesses only have to do things once, preferably online. Even today, businesses are often required to fill our multiple copies of paper forms, for example to move goods across borders.
- Make sure infrastructure (transportation, connectivity, power, etc.) is in place and reliable.
- Finally, and this is deliberately mentioned last, offer a competitive tax structure.
Canadians and their governments recognize that Canada needs and benefits from business. That is why we have business immigrant programs even if they have not been particularly effective to date. Now we need to spread that recognition throughout government and society. Those who design and deliver policies affecting business should be aware of the impact of what they do, ideally because they themselves have a business background.
By implementing policies like those suggested here, business immigrants will be more likely to set up and operate businesses, adding value to the Canadian economy. Even more beneficial, other non-business immigrants and native born Canadians will also consider starting companies now that Canada is an easier place in which to succeed in business.
Troy Media columnist Roslyn Kunin is a consulting economist and speaker.